2022 ICT Mentorship Episode 2

Summary

This video script introduces a futures index trading mentorship focusing on paper trading via TradingView.com. The instructor emphasizes learning to read intraday price action, particularly for NASDAQ e-mini futures, to identify trade setups. They stress the importance of understanding market structure breaks and liquidity pools for precise entries and exits. The goal is to teach independence in trading, avoiding reliance on black box systems or signal services, and to practice and analyze past trades for consistency and profitability.

Takeaways

• 📚 The video is an introduction to a trading mentorship focused on futures index trading, specifically using paper trading on TradingView.com.
• 🌟 The mentor emphasizes the importance of establishing proper expectations and watching an initial introduction video for better understanding.
• 📉 The mentor discusses live executions made during the day, using Thinkorswim's live data, to demonstrate real trading experiences versus theoretical teaching.
• 🔍 The focus is on intraday price action for NASDAQ e-mini futures, with an emphasis on learning to read and anticipate market movements for trading opportunities.
• 🚫 The mentor clarifies that the teachings are not about enticing viewers to trade with live funds but about learning specific setups in a demo or paper trading account.
• 📊 The concept of 'handles' is introduced as a measure of market movement, with one handle equaling four ticks, representing a significant amount of potential profit.
• 💡 The mentor encourages viewers to think about the significance of capturing large movements in the market and the value of learning to identify these opportunities.
• 📈 The video discusses the importance of understanding market seasonality, interest rates, earnings season, and overall market tone when analyzing and trading.
• 📝 The mentor stresses the need for practice and experience in trading, stating that successful trading is not about following a black box system or signal service, but about independent thinking.
• 🎯 The video outlines a framework for identifying trading setups, including watching for breaks in market structure, identifying imbalances, and understanding the concept of 'fair value gaps'.
• 📉 The mentor provides a detailed example of a trade execution, explaining the thought process and strategy behind entering and exiting a position for maximum profit.

Q & A

What is the main focus of the mentorship being discussed in the video?

The main focus of the mentorship is on futures index trading, specifically on paper trading for NASDAQ e-mini futures using TradingView.com, with an emphasis on teaching students to read intraday price action and understand market movements.

Why does the educator emphasize watching an introduction video on their YouTube channel?

The educator emphasizes watching the introduction video to set proper expectations for the mentorship, to break the ice, and to contrast what viewers might expect with what the educator intends to deliver.

What is the significance of comparing live data executions with educational content found on YouTube?

Comparing live data executions with educational content helps validate the educator's trading strategies and skills, showing that they can execute trades in a live market environment rather than just demonstrating hypothetical scenarios.

What does the educator mean by 'framework for a trading model'?

A framework for a trading model refers to the foundational understanding and components needed to identify and execute trades. It includes recognizing specific setups, market structures, and patterns that can lead to profitable trades.

How does the educator define a 'handle' in the context of trading?

In the context of trading, a 'handle' is defined as four ticks or price movements. The value of a handle varies by market, for example, it's $50 for the NASDAQ e-mini futures and $12.50 for the S&P e-mini futures.

What is the importance of understanding 'price action' in trading?

Understanding price action is crucial in trading as it allows a trader to anticipate market movements and make informed decisions. It involves reading the market's behavior and predicting future price movements based on historical patterns and current market conditions.

Why does the educator stress the importance of not being dependent on a black box system or signal service?

The educator stresses the importance of independence to empower students to make their own trading decisions without relying on automated systems or signal services. This approach promotes a deeper understanding of the market and fosters the development of critical thinking and analysis skills.

What is the purpose of analyzing the weekly chart at the beginning of a new trading week?

Analyzing the weekly chart at the beginning of a new trading week helps to establish a weekly bias, which is an initial expectation of whether the market is likely to move higher or lower. This sets the stage for the trader's strategy and expectations for the week.

What is the concept of 'fair value gap' mentioned by the educator?

The 'fair value gap' is a concept introduced by the educator that refers to an area of imbalance in the market where the price is expected to gravitate towards to achieve equilibrium. It is identified after a break in market structure and is used as a trading entry point.

How does the educator define 'liquidity' in the context of trading?

In the context of trading, 'liquidity' refers to the presence of buy or sell orders at specific price levels. It is the pool of orders that the market can trade through, and it is used by algorithms to drive price movements up to buy stops or down to sell stops.

What is the 'Liquidity Matrix' and how is it used in trading?

The 'Liquidity Matrix' is a tool used to determine the range within which the market is trading. It involves splitting the range from the day's low to the day's high to find the midpoint. Anything above the 50% level is considered a 'premium market', and anything below is a 'discount market'. This matrix helps traders identify the market's state and make decisions accordingly.