2022 ICT Mentorship [No Rant] ep. 3 - Internal Range Liquidity & Market Structure Shifts

Summary

This lecture focuses on identifying market structure shifts in e-mini NASDAQ 100 futures contracts using a 15-minute timeframe. It explains how to spot potential shifts by analyzing old lows and highs, sell and buy stops, and the significance of equal highs. The presenter emphasizes the difference between intraday market structure shifts and breaks, highlighting the importance of high-frequency trading algorithms and how they influence the market. The lecture also covers the concept of internal range liquidity and provides practical tips for identifying and trading market structure shifts during key market sessions.

Takeaways

• 📈 **Market Structure Shifts**: The speaker emphasizes the importance of understanding intraday market structure shifts, which are not necessarily breaks but can indicate a change in market direction.
• 🔄 **Liquidity and Stops**: The concept of sell stops below old lows and buy stops above old highs is introduced as a way to anticipate market movements.
• 📉 **Internal Range Liquidity**: Focusing on short-term highs and lows within a retracing price leg to identify potential areas for market structure shifts.
• 📊 **High-Frequency Trading (HFT)**: The impact of HFT algorithms on market structure is discussed, highlighting how they can influence short-term price movements.
• 🎯 **Identifying Key Levels**: The speaker advises using specific price points, such as old highs and lows, to anticipate market structure shifts.
• 🌐 **Global Market Sessions**: The significance of different global market sessions (London, New York, Asia) and their session highs and lows are highlighted for trading opportunities.
• 📅 **Time Frame Importance**: The speaker suggests specific times of the day to look for key intraday highs and lows that can lead to profitable trades.
• 🚫 **Avoiding Problematic Hours**: It's advised to avoid trading during certain hours, like noon, as they can be problematic and less predictable.
• 📝 **Homework Assignment**: The audience is tasked with analyzing intraday charts to identify stop hunts and market structure shifts, reinforcing the learning through practical application.
• 🔑 **Key to Success**: The ability to identify pools of liquidity and anticipate market movements is presented as a critical skill for successful trading.

Q & A

What is the focus of the lecture?

The lecture focuses on internal range liquidity and market structure shifts within a 15-minute time frame on the e-mini NASDAQ 100 Futures Contract for March delivery, 2022.

What are sell stops and buy stops?

Sell stops are orders placed below a certain price level to sell, and buy stops are orders placed above a certain price level to buy. These are used to identify potential market entry points.

Why are 'relative equal highs' preferred over a single high when identifying potential market shifts?

Relative equal highs are preferred because they provide a more reliable indication of potential market resistance levels, as they represent multiple tests of the same price area.

What is meant by 'Market structure shift' in the context of intraday trading?

A market structure shift refers to a change in the intraday market trend, which may not necessarily lead to a prolonged multi-day movement but indicates a potential change in the direction of the price movement within the day.

How does the讲师 define 'internal range liquidity'?

Internal range liquidity refers to short-term highs or lows within a price leg that the market is retracing back into, which includes stops above or below these levels.

What is the significance of the market trading down and hitting a previous low?

When the market trades down and hits a previous low, it indicates that sell stops have been triggered, potentially leading to a market structure shift.

What is a 'fair value gap' and why is it important?

A fair value gap is a situation where the high of one candle is significantly higher than the low of the next candle, indicating a potential change in market sentiment and a possible entry point for trades.

How does the讲师 suggest traders should react when the market rallies above a certain level?

Traders should anticipate a market structure shift and look for potential trading opportunities, rather than forcing a shift in market structure.

What is the role of high-frequency trading algorithms in creating market structure?

High-frequency trading algorithms contribute to market structure by constantly offering and changing prices, which can lead to the formation of new highs and lows and influence market liquidity.

Why is it beneficial to look at the 3-minute, 2-minute, and 1-minute charts?

Examining these shorter time frame charts helps traders identify high-frequency trading patterns, potential market structure shifts, and areas of liquidity more precisely.

What homework is assigned at the end of the lecture?

The homework involves going through e-mini Futures intraday charts to identify stop hunts leading to market structure shifts, and logging these examples with annotations for a study journal.