ICT Mentorship Core Content - Month 05 - Quarterly Shifts & IPDA Data Ranges

Summary

This ICT mentorship video from January 2017 teaches long-term macro analysis in Forex, focusing on quarterly market shifts and institutional order flow. The instructor emphasizes that markets are controlled rather than random, and traders can gain an edge by analyzing underlying assets versus benchmarks. Key techniques include anchoring vertical lines at the start of the most recent closed month, looking back 60, 40, and 20 trading days to identify liquidity, order blocks, and fair value gaps, and casting forward 20–60 days to anticipate future market shifts. The content equips traders to understand smart money accumulation and distribution, forecast intermediate-term retracements, and structure trades within predictable quarterly cycles.

Takeaways

• 📈 Markets are not random; Forex and other asset classes are controlled and engineered with precise price movements.
• 🕒 Quarterly market shifts occur every 3–4 months, creating changes in trend, sentiment, and market structure.
• 💹 Always analyze macro-level charts (monthly, weekly, daily) to anticipate intermediate-term price swings and retracements.
• 💰 Smart money accumulation (buy programs) and distribution (sell programs) can be identified through manipulation of the underlying versus a benchmark.
• 🔍 Key indicators of smart money programs include relative highs and lows between the underlying asset and benchmark, showing areas of liquidity accumulation or distribution.
• 📅 Place vertical lines at the first trading day of the most recent past month to begin quarterly shift analysis.
• 📊 Use look-back periods of 60, 40, and 20 trading days to identify institutional order flow, key highs/lows, liquidity pools, fair value gaps, and voids.
• ➡️ Cast forward the same 20, 40, 60 trading day ranges to project the next likely market shift, providing a framework for potential setups.
• 🔄 Dollar Index and Euro Dollar often move inversely; understanding their relationship helps anticipate market direction based on smart money activity.
• 📝 Always calibrate market structure using prior closed months, observe obvious structure breaks, and identify liquidity levels to guide trading decisions.
• 🎯 The methodology supports both long-term positioning and daily bias, enabling traders to align with institutional activity and avoid randomness.
• 💡 Seasonal or major events, like elections, can influence price action within expected data ranges, reinforcing the importance of structured analysis.
• 📚 Homework: Apply the look-back and cast-forward methodology on personal charts to observe liquidity, market shifts, and smart money patterns.

Q & A

What is the primary belief about market behavior according to this ICT mentorship lesson?

The primary belief is that markets are engineered and controlled, not random. The instructor emphasizes that precise forecasting and price level prediction indicate the presence of an underlying algorithmic price engine, particularly in the Forex market.

What are quarterly market shifts, and why are they important?

Quarterly market shifts occur every 3–4 months and represent changes in market direction, sentiment, or structure. They are important because they influence intermediate-term price movements and help traders anticipate potential retracements or consolidations within broader trends.

How should traders analyze markets to identify these quarterly shifts?

Traders should examine markets from a macro perspective using monthly, weekly, and daily charts, looking for market structure shifts, highs and lows, institutional order flow, and liquidity pools. This helps in anticipating intermediate-term price swings.

What is the difference between a 'buy program' and a 'sell program' in smart money analysis?

A buy program (accumulation) occurs when institutional traders manipulate price to accumulate assets, often visible as the underlying making higher lows while the benchmark shows relative weakness. A sell program (distribution) occurs when institutions manipulate price to sell or distribute holdings, often visible as the underlying making lower highs while the benchmark shows relative strength.

How do traders use the 'underlying vs benchmark' concept?

Traders analyze the relationship between the asset being traded (underlying) and a correlated benchmark, such as the Dollar Index for currencies. By comparing highs and lows, they identify smart money accumulation or distribution and predict potential price moves based on relative strength or weakness.

What is the purpose of placing vertical lines on charts in this methodology?

Vertical lines are placed at the first trading day of the previous closed month to serve as reference points. They anchor market structure shifts and provide a framework for analyzing historical price action and projecting future movements using look-back and cast-forward methods.

What does the 'look back' process involve?

The 'look back' process involves examining the 60, 40, and 20 trading days to the left of the vertical line to identify institutional order flow, old highs and lows, fair value gaps, and liquidity voids. This helps determine whether price action was bullish or bearish and locates areas of liquidity.

How is the 'cast forward' method applied?

After anchoring the vertical line and analyzing past market structure, traders project 20, 40, and 60 trading days forward to anticipate the next potential market shift. This provides a time range for when setups may occur and helps align short-term and long-term trading objectives.

Why is the daily chart emphasized in this teaching?

The daily chart provides sufficient macro-level perspective to observe quarterly shifts, liquidity patterns, and institutional manipulation. It allows traders to identify intermediate-term setups while remaining aligned with broader market trends, without the noise of lower time frames.

How does this methodology help in understanding liquidity and order flow?

By analyzing past highs, lows, and price reactions in the 60–40–20 day look-back, traders can identify where liquidity is resting (above or below price), spot accumulation and distribution zones, and anticipate where smart money may engineer movements. This provides a clear framework for timing trades.

What role does seasonality and external events play in this analysis?

Seasonal influences and major events, such as elections, can trigger liquidity shifts and accelerate market structure changes. The methodology accounts for these events by projecting expected movements within the cast-forward ranges while considering their potential impact on price behavior.

How can traders adjust the framework as new market structure shifts occur?

Traders can recalibrate vertical lines when a new structure break occurs, and then perform a new look-back and cast-forward analysis. This maintains an up-to-date framework to identify upcoming setups, ensuring the methodology adapts dynamically to changing market conditions.