Advanced ICT Market Structure Shift

Summary

In this video, the speaker delves into the concept of advanced market structure shifts, explaining how to identify and capitalize on early shifts in price action without waiting for the typical market structure indicators. Through examples from recent trading sessions, the video highlights key concepts like inversion fair value gaps, order blocks, and the importance of volume imbalances. The speaker emphasizes combining multiple price signatures for high-probability trades, offering traders practical insights on catching market moves earlier and optimizing entries while managing risk effectively.

Takeaways

• 😀 A market structure shift occurs when price breaks past a significant swing high or swing low, indicating a change in trend direction.
• 😀 Traditional market structure shifts often wait for price to retrace into a fair value gap before entering trades, but this doesn’t always work in practice.
• 😀 An advanced market structure shift can be detected without waiting for the typical shift to occur, using confluences like inversion fair value gaps and order blocks.
• 😀 A bullish fair value gap can be respected, but if price breaks aggressively past it, an inversion gap is created, signaling a shift in structure.
• 😀 To confirm a shift in structure, one must look for multiple price signatures, such as an order block forming after an inversion fair value gap.
• 😀 The size and aggressiveness of a move (such as a large, whole-bodied candle) are key indicators that a shift in market structure has occurred.
• 😀 Once a market structure shift occurs, price should not retrace back above certain key price levels (e.g., inversion gaps or order blocks) if the move is genuine.
• 😀 Advanced market structure shifts require confirmation from price delivery, including respecting previous resistance (order blocks) and rejecting key price levels.
• 😀 A breaker block (a break above a down-close candle) signals a change in delivery direction, further confirming a shift in market structure.
• 😀 The combination of inversion fair value gaps, order blocks, and breaker's confirmation allows traders to enter earlier in the shift with higher confidence and better risk management.

Q & A

What is a market structure shift in trading?

A market structure shift is when price breaks through a previous swing high or low, indicating a potential change in the market's direction. This is usually seen when price action breaks past key levels, such as a swing low for a downtrend or a swing high for an uptrend.

How does a typical market structure shift occur?

In a typical market structure shift, price breaks below a swing low for a downtrend or above a swing high for an uptrend, then retraces into a fair value gap to continue in the new direction. Traders often look for these retracements to enter trades with a higher probability of success.

Why doesn't a typical market structure shift always work?

A typical market structure shift doesn't always work because sometimes price moves in the desired direction without respecting the usual retracement patterns or the fair value gaps that would confirm a shift in market structure.

What is an advanced market structure shift?

An advanced market structure shift goes beyond the typical shift by utilizing additional indicators such as inversion fair value gaps, order blocks, and price delivery. These elements help traders identify earlier shifts in the market even without the usual structure break or retracement.

What is an inversion fair value gap?

An inversion fair value gap occurs when price breaks past a previous bullish or bearish fair value gap, indicating that price action has shifted and potentially signaling a change in direction.

What role do order blocks play in advanced market structure shifts?

Order blocks act as key price levels where price has previously reversed or consolidated. In advanced market structure shifts, order blocks are used to confirm the validity of a shift, as price action should not breach these blocks if the shift is genuine.

How do you determine when to take a trade based on advanced market structure shifts?

When identifying an advanced market structure shift, traders should look for a combination of factors: inversion of fair value gaps, formation of order blocks, and the change in price delivery. Once these elements align, the trader can enter the market with greater confidence, often placing stop-loss orders above critical price levels like the inversion gap or order blocks.

What are the implications of price closing below or above key price levels?

When price closes below a key down-close candle in a downtrend or above a key up-close candle in an uptrend, it indicates a change in the state of market delivery. This suggests that the market is shifting direction and can be used to validate a new trend.

How does the market respect or disrespect fair value gaps in advanced market structure shifts?

In advanced market structure shifts, fair value gaps are used to identify where price may retrace before continuing in the new direction. If price disrespects a fair value gap, it can indicate a shift in market sentiment, leading to an inversion of the gap and providing entry signals for traders.

Why is it important to combine multiple confluences in advanced market structure shifts?

Combining multiple confluences—such as inversion fair value gaps, order blocks, and price delivery—ensures a higher probability of success in trades. The more supporting price structures and patterns you have, the stronger the indication that the market is truly shifting in the desired direction.