ICT Mentorship Core Content - Month 1 - How Market Makers Condition The Market

Summary

The speaker discusses how new traders are unaware of market dynamics dominated by 'smart money' - large institutional players and banks that quietly control price movement. Retail traders falsely believe their collective actions drive market trends, when in reality a small group of insiders dictate expansions, retracements, reversals and consolidations using an AI price delivery algorithm attuned to human behavior. The speaker urges not sharing this paradigm-shifting perspective, as it challenges the facade that markets operate on supply/demand. By tracking smart money maneuvers over time, retail traders can better predict price action based on understanding the deliberate, methodical stages through which markets cycle.

Takeaways

• 😀 The market has two main groups - the uninformed retail traders and the smart money institutions that actually drive price.
• 👥 Retail traders mistakenly think they drive the market with supply/demand, but it's actually the banks and institutions.
• 💼 Institutions quietly trade and profit while retail traders try to get attention on social media.
• 📈 There is a clear market structure and algorithm institutions use to manipulate price that retail doesn't see.
• 🤯 Understanding how institutions manipulate price is key to trading success instead of using indicators.
• ⏰ The daily range has clear manipulation events tied to London/NY session opens you can track.
• ➡️ Price delivery follows expansion->retracement/reversal not random consolidation and reversals.
• 📊 All timeframes have the same structure - consolidate, expand/impulse, retrace/reverse, repeat.
• 🤝 Keep this institutional knowledge private to preserve its edge rather than marketing it to everyone.
• 🎓 Studying intraday gives feedback to apply concepts long-term without needing years of data.

Q & A

What is the market efficiency paradigm depicting?

The market efficiency paradigm is depicting how new traders are collectively part of the larger uninformed money group, while there is a smaller smart money group of traders that actually influences and drives market prices.

Why do new traders tend to think they drive market prices?

New traders tend to think their sheer numbers and buying/selling interest pushes prices up and down based on supply/demand. This is a facade perpetuated in books, seminars, etc.

Who is actually driving market prices?

Banks and other institutional traders make up the 'smart money' group that actually drives market prices, not the larger retail trader group.

What is the daily range market structure?

The market starts with Asian range consolidation, then a manipulation/expansion, a London reversal, another expansion, New York consolidation, a retracement, more expansion/reversals, and ends with consolidation.

What is the market delivery algorithm sequence?

It starts with consolidation, then expansion, then either retracement or reversal, never consolidation to retracement or reversal directly.

How can you apply the concepts to longer timeframes?

The same sequences happen on daily, weekly, monthly timeframes - starting with consolidation, expansion, retrace/reverse. Intraday shows this best.

Why is order flow and structure context important?

To properly apply the expansion/retracement/reversal concepts, you need institutional order flow context - where are the blocks, stops, liquidity.

Why shouldn't this knowledge be shared publicly?

Sharing detailed institutional order flow and manipulation tactics publicly could undermine the edge and allow banks/firms to adapt their behavior.

What mindsets are most important for traders?

Patience, suppressing fear/greed emotions, and having no ego desires to make money quickly - consistency over profits.

How much detail is provided on tracking smart money?

Very specific tracking tactics will be taught to locate blocks, stops, and predict exact turning points based on the order flow concepts.

Outlines

00:00

😊 Introducing market efficiency paradigm

The speaker introduces the market efficiency paradigm diagram representing uninformed retail traders versus informed smart money traders. He explains how retail traders wrongly believe their trading drives market prices, when actually it is the small group of smart money traders that truly moves markets.

05:02

😲 Retail traders are actually not driving markets

The speaker further elaborates that the idea of retail traders with their vast numbers moving the markets is actually just a facade. The real driver behind markets is the small circle of institutional traders and banks, like an engine driving the whole system.

10:02

🤓 Four key stages of market price delivery

The speaker outlines the four key stages of price delivery and movement: consolidation, expansion, retracement, and reversal. He explains these four concepts in relation to market open/close times and typical daily price patterns.

15:02

😃 Simplified daily range structure model

A simplified model is presented for the structure of the daily price range: starts in equilibrium/consolidation, then expansion off a news event, followed by potential retracement and/or reversal at different times of day.

20:03

☝️ Key takeaways about market price delivery

The speaker reiterates that price moves through the four stages of consolidation, expansion, retracement, and reversal in a specific order. Understanding this algorithm along with higher timeframe context allows anticipating impending price movements.

25:05

🤐 Keep this powerful knowledge discreet

In closing, the speaker urges viewers to keep the insights shared in the video private and not publicly share or market them, as they represent very valuable trading knowledge.

Keywords

💡market efficiency

The concept that markets accurately incorporate all available information into asset prices. The video introduces the idea that markets are not actually efficient for retail traders/speculators, but rather for "smart money" - large institutions like banks that control order flow and price movement.

💡smart money

A group of influential institutional traders and funds that have access to information and tools that allow them to control markets. Contrasted with retail traders and speculators who falsely believe they drive market prices.

💡order flow

The continuous sequence of orders to buy or sell an asset in a market. Understanding who is buying/selling in large sizes, and when, provides insight into future price direction. Smart money controls order flow.

💡liquidity provider

Typically a large bank or fund that supplies liquidity to markets by constantly providing buy and sell orders/volume. This allows other participants to easily enter and exit positions. Smart money acts as the key liquidity provider.

💡manipulation

The video argues markets are manipulated by smart money through controlled order flow and liquidity to trigger retail stops and engineer moves. For example, the "Judas swing" down to run stops, then push price up.

💡stops

Refers to stop loss orders retail traders place to limit losses on their positions. Smart money manipulates price to deliberately trigger these stop losses and force traders out of the market.

💡facade

The surface-level perception of markets as driven by retail supply/demand, technicals, etc. is a facade masking the underlying control and manipulation exerted by smart money according to the video.

💡algorithm

The video introduces an algorithm or model for how interbank order flow delivers price to markets. Following this algorithm can predict market movement.

💡expansion

Period of increasing volatility and directional price movement out of consolidation/ranges. Understanding the sequence of expansion > retracement > reversal is key to tracking the market algorithm.

💡paradigm shift

Moving from traditional perceptions of the market to understanding the control that smart money exerts. A complete change in perspective on what moves markets.

Highlights

As new traders, we are collectively part of the larger uninformed money group

There is a small group of smart money traders that influence the entire market mechanism

Retail traders think their sheer size makes them the market driver, but that's a facade

Banks and institutions drive price movement, not retail traders

You need a paradigm shift to understand how markets are efficiently controlled by smart money

Learn to track smart money moves to become part of that influential group

Understand expansion, retracement, reversal and consolidation in context of order flow

There is a systematic price delivery algorithm you can learn to anticipate

Consolidation always precedes expansion in directional price moves

Expansion moves retrace to order blocks or reverse into consolidation

You can apply this algorithm model to any timeframe - daily, weekly etc.

With directional context, you'll easily know each day's most likely price action

Suppress desire for money; develop patience and ability to anticipate moves

Don't market this knowledge; keep it quiet to maintain advantage

Refer back as we cover more details; this builds your understanding

Transcripts

okay folks

we are in the second teaching of the

series of eight for the month of

september 2016.

and you've seen this before

but i just want to bring this up to you

one more time

this is the market efficiency paradigm

and what this generally

is depicting or what i was trying to

communicate by drawing it out is

we as new traders

are collectively part of this larger

hole over here

of uninformed money

and whether we acknowledge it or whether

we believe it or what

we will invariably come in contact with

the understanding that there is a smart

money group of traders out there

and when i first got involved in trading

i didn't know anything about smart money

i just knew that the markets were

potentially there and i could be

profitable and in fact i was going to be

profitable i knew it i couldn't believe

that i ever lose money until i lost it

so

when we

as traders look at the marketplace as

new investors new traders new

speculators

we may or may not have the understanding

that there is a smart money entity out

there

and

we as

the

larger populace of retail-minded trading

we think because of our sheer vastness

okay we are the driver okay of this

apparatus that's called the marketplace

and we tend to think of ourselves as the

drive axle of what makes the markets go

up and down which is the face that's the

facade of supply and demand that's the

facade of

trend lines driving price when it

touches it that's the facade of moving

average crossovers causing prices go up

or down that's the facade that's

perpetuated and we are led to believe

that that's exactly what takes place

either in books or in seminars or in

webinars or gurus people

and i've done this when i was younger

too i i was convinced that indicators

drew price up and down and i i

packed houses on america online when i

got on a chat room and people were in

there flocking to here the things that i

would discuss about stochastic and rsi

and williamsperson r

and i was talking about three momentum

indicators when if you're just going to

follow momentum just follow one

so if anyone

knows more about being in this group

over here trust me it's me i've been

i've been in this group enough to know

that

i learned more about this group over

here that doesn't like to draw too much

attention to itself

but contrast that with

everybody in the retail we all have

twitter accounts we all have my effects

books that we're sharing we're all

trying to be on instagram showing

lamborghinis and

whatever else

houses cars boats yachts

girlfriends they ain't even yours

everybody is living large over here in

the uninformed money

and smart money is up here quietly just

doing their thing

who's inside this small circle over here

the banks

who's in here everybody on social media

everybody in a retail account

at all the gurus and teachers out there

that have things that they're selling

services and

yes i have a new service but

what i'm teaching you

ain't available anywhere else

see this group this large populace of

people

they think

and i was part of this group initially

they think that the sheer vastness of

the size of them

is much more controlling in terms of

where price is going to be driven higher

or lower because of the buying and

selling pressure that's equated to their

mere involvement

in price

and that's a

facade this huge populace of trading

people

or traders community in the retail realm

is really not that big

but we are led to believe that we are

huge

and we are given this

this idea of ourselves that we're giants

we push price around and we don't

we don't

in fact it's this small little group of

traders

okay they're the ones that influence

this entire mechanism that we call

the markets

this small little group of traders is

actually the drive shaft

and if this was a belt like on a car

okay

like an alternator

this

is the actual motor spinning the whole

price higher lower it's not this big

circle of people

so it has to be a paradigm shift

see if you're over here thinking that

it's the group of traders that

is online talking among stem cells

as a whole

they are the ones that make price go up

and down because of their buying and

selling interest because the supply and

demand factors around them that's what

pushes price around

that's a facade

and i'm here to tell you that you need

to put that to bed now because i'm going

to level everything you've ever imagined

about the marketplace and how it really

works

you have no idea where we're going and

you need to leave this realm in this

circle of people and their thought

processes and transition

and have a paradigm shift in your

thought process about how the markets

are efficient because they're not

efficient for the speculators

they're efficient for the smart money

the banks drive price

whether you want to accept it or not

that's what's going on

and the sooner you get to that

understanding and expectation of what it

is that's going on in price

it's not for your well-being it's for

the bank's well-being

it's their

business

they have a liquidity provider

everyone else is

liquidity

are you a lamb

or a lion

which one

because

one of us is going to eat meat and the

other one's going to stand there looking

stupid eating grass

i don't want to be a part of this herd

i didn't want to be a part of it once i

understood where i was i wanted to get

out of there and i'm going to live over

here in a small little area

and for years i quietly made money doing

nothing but focusing on the things i

knew that this small group of entity of

traders did

and i looked at these individuals

initially with disdain

thinking i'm gonna come after you i'm

gonna i'm gonna devour you i'm gonna do

the same thing and then as i looked at

it more and more and heard stories about

people

and their lives losing their homes

marriages

it tugboat me and i didn't want to just

be over here

being like the banks

and then i bridged over into what you

saw me do in 2010

and i revealed a lot of things

in this mentorship you're going to learn

a whole lot

but it's not meant for you to share it

on your youtube channel it's not meant

for you to share it on your blog it's

not meant for you to pass it around on

twitter

instagram

make torrents

it's not supposed to be there

it's only supposed to be

between you and i

you're welcome to share this with your

this information with your children and

your family members

start a legacy

but don't make this common knowledge

it's gonna happen some goobers gonna

take this stuff and

be the one that you know i'm the cool

guy i'm the one that

got in there and made it all

accessible to everyone else and she

could feel the hit like the hero

that you're not really doing yourself a

favor

let this stuff stay

well hidden

you're paying for it

appreciate it for what it is

and don't share it

it's not going mainstream

you're this is the group that we have

whoever can make it in between october

1st and now that's it

that's it because when we leave

september in october we're buttoning up

all of the free tutorial stuff and we're

going right into

the nuts and bolts of where we got to go

to to get to the latter months

see when we come into the marketplace

we don't understand this we think that

this group that we're part of we are the

the the market we are the market we're

the traders we push price up and down

but

if you're honest with yourself if you've

traded at any time and you look back on

your trading you probably looked at the

market you saw something like this

you knew

something was going on and you just you

just couldn't put it together you you

see

these vague things that take place in

the marketplace your stop gets run it

looked exactly like it was going to go

up but it came all the way down knocked

you out and then went up

you see these things happening to you

you just can't figure it out you know

there's something to it

you you've had the sensation that you

know yes this is rigged my brokers have

to get me it's not really your broker

it's the interbank feed that drives

price against the funds

and the brokers are going to expand the

spread as well on you and knock you out

when you look at the price action as a

new trader

and you didn't have this exposure to

understanding how the markets are being

driven and manipulated to the degree of

every single

minute detail

they're absolutely controlled it's an ai

it's artificially intelligence it's you

are not trading against a person anymore

it's a computer program that delivers

price and it knows human behavior

because it's the same way it's been

always

fear and greed

so when you look at price and you've

been trading for a while and you had

this

fuzzy picture about something going on

behind the scenes but never really

understanding what it was

until you met me

and suddenly there's clarity

suddenly you understand that there's

something that's been there all

along now you can identify it and what's

more important is you understand how to

track it

and do the same thing it does

and by default you become

a resident of that small circle because

this small circle is the drive shaft it

which makes the markets go around

it's not the big populous of traders

it's the liquidity provider

so you need to be thinking like this

small group is over here they're not

trying to draw attention to themselves

they're not trying to be online flashing

this and flashing that they're just

quietly in here skinning people alive

and you've been there before and just

just as well as i have you either stay

in this business long enough to lead

this group and come over here

or sit back in the middle here you get

real close to being there and you get

bounced back to this group get real

close to uh you know getting over here

and you start developing a little bit

more and you play tug of war

some of you in my group right now in

this mentorship you're in this little

area right here where you can see

there's some signals and signs of a real

entity of smart money in play

but you're not fully convinced to leave

this group yet you have too many

convictions about

your tools

your indicators

your your pet guru your buddy that has a

website that's so cool to you

it's it's not enough you got to be able

to release all that stuff and just leave

it all behind and join the smart money

because trust me

we're not serving cookies but it's a way

better lifestyle over here than it is

over there

now the first video i gave you elements

to a trade setup and i gave you

two characteristics to it there's

context and framework around the trade

and then obviously those refer back to

institutional order flow

so you have to be able to bridge the two

understanding expansion retracement

reversal and consolidation and applying

them to respectively order blocks fair

value gaps liquidity voids liquidity

pools stops online i'm sorry stop

runs and equilibrium

what does that mean for us

for instance in its scope of price how

can we use these ideas and make them

applicable to price

now i know some of you are chomping at

the bit to learn long-term trading

because you can't do day trading but

bear with us as we go through these

first couple months because i want to

give you immediate feedback and the way

you get that is by using intraday study

because you get a lot of feedback and

intraday action that is applicable to

longer term charts but you can't i can't

teach long-term day trading i'm sorry

long-term trading on daily chart inside

of 12 months adequately it can't be done

because you're only looking at a scope

of one year

but with intraday it's like compressing

years of data

in just 30 years what's it not even 365

days really 200 some days that we're

gonna be together

so let's look at the daily range

suddenly expansion retracement reversal

and consolidation mean something

every day starts with consolidation

asian range

after midnight there's a manipulation

that takes place

that's expansion

it's coming in the form of a judah swing

what is it doing it's making the higher

low

in london that's the london swing for a

reversal that's a run on stops

then there is another expansion move

okay down into the

new york session then there's going to

be what another consolidation that's the

new york consolidation going into the 8

to 8 30 news embargo lift where

there's going to be another injection of

liquidity or a reversal

then there'll be another expansion

and then we go into london close which

is another reversal condition

and then what happens the market goes in

consolidation for the rest of the day

so we have a way of looking at these

things and applying these concepts to

time of the day

and repeating characteristics

now let's get back to the interbank

price delivery algorithm

the daily range structure

can be really

broken down and simplified with

it starts with a price equilibrium

that's asian range

then there's a manipulation and that's

always going to come by way of some news

event some news driver either

at the time of the manipulation or just

before it

that's the judas swing

then we'll see a range expansion

in other words after the higher low is

formed the range will start expanding

it'll go down into five o'clock in the

morning new york time

or go up

into that time window depend upon the

daily direction we're going to use the

perspective as a by day

that means that asia

the asian range has a small

consolidation and then right after

midnight new york time there's a drop

down in price that's the manipulation

making the false move for the low

there's a range expansion

then it goes into the reversal that's

classic

london open

scenario where it shoots down runs the

stops and then what happens it expands

again

there's another range expansion into

what five o'clock in the morning

new york time

between five o'clock in the morning to

eight o'clock in the morning in that

time window the market will go back into

consolidation

then it will have a retracement between

8 o'clock and 8 30 in the morning new

york time

then it will have either a reversal in

new york session or another expansion

move the range will expand and make the

rest of the day going up into 10 o'clock

or 11 o'clock in the morning new york

time where it will have a reversal again

that's london close then the market will

go into consolidation ending true day at

1900 on forex ltd's

platform if you follow along with the

videos we've been doing so far this

month you'll know exactly what i'm

talking about

so we can see the interbank price

delivery algorithm

on a daily basis by studying these

events and then seeing it over a period

of time you'll know

what is most likely to happen now let's

look look at a little bit further

if we're looking at price delivery and

this is the model that comes by way of

my understanding of how the interbank

feeds price to everyone

if we're focusing on delivery of price

we have to understand that it all starts

with a consolidation

nothing can happen until consolidation

consolidation is when the market's quiet

why is that important because that's

when the orders are building up in the

marketplace the market makers will allow

orders to build up above and below the

range

the next stage is always expansion it's

not consolidation to retracement it

can't retrace it hasn't moved anywhere

it has it can't go consolidation

reversal because it has to come out of

the consolidation so when you see a

consolidation or holding pattern

you got to think the next leg is going

to be in price it's going to be an

explosive move or an impulse like

impulse price swing

movement you need to see movement

by determining what that movement is and

what direction is relative to the

conditions you're trading in

once we're in the expansion stage okay

then you have a choice

it can retrace come back to the order

block it just left behind and then

recapitalize that and then make another

leg up or down relative to

the direction it's moved

or

once it's moved in the expansion it can

reverse once it reverses

okay there'll be another expansion then

it goes back to a consolidation

the main thing is i want you to

understand is it never goes

consolidation retracement it never does

consolidation reversal

it's always consolidation expansion and

then from expansion it goes either

retracement or reversal

it does not do consolidation expansion

consolidation

that does not happen

it does a consolidation

expansion

it retraces for another uh

move into a order block and then

recapitalize it and do the same

direction it moved when it made it

expansion or it goes from expansion to

reversal

when you understand

this

algorithm the way it moves and where it

operates

it's very

generic it's very systematic it has only

a few options to go to and

they're

time sensitive they're day sensitive

okay they're inter market related so so

when one market is moving real fast

if you understand the relationships like

i'm going to teach every couple months

you'll know where the trade setting up

because one's being held and the other

one's like letting it run which is the

importance of knowing what the euro

pound is dealing for trading five or a

cable

all these things are going to blend

together and you'll know exactly how i'm

doing these things internally and i'm

doing it on the fly i'm not measuring

things and writing this down writing

that down making notes over here i just

know by looking at price what i should

be seeing and you see it i'm thinking

out loud in the videos when i'm doing

the live sessions with you

all aiming at your better understanding

of price delivery and when you

understand these things when you get to

the the level of month eight

and month nine in the mentorship you're

going to be so strong at knowing what

the next thing is going to happen in

your in your price that you're studying

you'll know all these

four things okay there's only certain

processes that have to take place in a

certain order like i said it never goes

consolidation reversal

it never does consolidation and

retracement it goes consolidation to an

expansion move there's an impulse leg up

or down

it's either going to be traced back down

into where it just rallied up from or

it's going to rally back up into where

it just dropped down from

the consolidation starts at all

they're going to run an expansion and

then once it expands he's either going

to come back and retrace and give

another leg up or down

or it's going to reverse and then from

the reversal

start applying time

the general

structure is

consolidation in asia

expansion

reverse in london make the higher low of

the day then expand

small consolidation in new york

retrace between 8 o'clock and 8 30 in

the morning new york time

another expansion move

reverse

back to

consolidation you understand price

delivery then

you will not learn it just by what i

just explained to you just there

but you'll use this as a model

that repeats itself over and over and

over again

when you have higher time frame

directional premise

understood and then you look at this

price delivery algo

it's so

easy to know what the price is going to

do

every single day since the last week of

august we've been together

and every single day i've given you

something that went right to the pip or

had an explosive direction move where

you could have taken 50 to 60 pips out

and i don't trade that much every day

but i'm showing you

by desensitizing you to fear and greed

there's no need there's no need for

those things

what we're teaching is

consistency the ability to see these

things happening all the time

and also exercising willpower on not

wanting to make money so you're

suppressing the desire to make money

you're developing your patience and

you're

learning a great deal you have no

understanding of how much you're

learning just in these first two videos

but i'm telling you

you'll be able to look back on this

months from now and say man

that was a huge step i didn't appreciate

until now

there's a certain process the way the

price is delivered and it can't be

changed it won't be changed and don't be

afraid because you're learning it 700

people is not going to turn the whole

world around okay and they stop doing

this it's not so

again in closing

take the information i'm giving you

stuff it under your mattress stick it in

a uh you know a love letter to your

grandkids on you know how to do it but

don't market it don't don't do that okay

not because i'm gonna lose sales it's

just it's too good to share

and you're gonna see why i've kept it

for so long and not wanted to do it

and

hopefully you guys will take this

information and do something really

great with it and that means

not starting a website selling it

okay

there's nothing more i can say about

this video except for

there is a process that you're going to

learn

that is very generic and it will not

break it will not stop working and when

you look at the marketplace in your

charts i want you to think

now it doesn't matter what time frame

you're looking at i'm just using the

daily range to give you how easy it is

to see on a repeating

format so simple every day you get an

opportunity to study and see how it

works that same thing happens with a

weekly range

the weekly range is the same thing

sunday's open consolidation then there's

an expansion move in monday

then what there's a reversal on tuesday

or monday

and then what there's another expansion

move

then it goes back into consolidation

mid-week and it's either going to do

what it's going to reverse

or

it's going to retrace

it's never doing consolidation

retracement it's never doing

consolidation reversal

it's consolidation expansion then from

expansion you're making a choice it's

either going to retrace back or it's

going to reverse

trust me it seems like you still have a

lot of choices to make but it's not

and when you understand what you're

looking at in terms of price you'll know

if it's really leading to a reversal or

if it's really going to retrace and give

you another opportunity to get in that

another leg up or down that you saw in

the first impulsive move

and believe me you'll need to go back to

this video even though it's the second

one you'll come back to this video as we

give more

details along the lines of price

delivery over the next couple months

in month four and five you'll still

refer back to this one and you'll see

there it is it's been there all along

so that guy's gonna wish you good luck

and good trading