2022 ICT Mentorship Episode 23

Summary

In this video, the speaker analyzes the E-mini Micro Nasdaq 100 index around a FOMC event, demonstrating how to identify imbalances, fair value gaps, and order blocks to anticipate market moves. He explains the difference between sweeps and runs, highlights key trading setups, and shows how price interacts with liquidity zones. Emphasizing independent analysis, he encourages traders to apply concepts like institutional order flow and Fibonacci targets rather than copying trades. Using real-time examples, the video provides a detailed case study of post-FOMC market behavior, offering insights into both risk management and strategic price action observation.

Takeaways

• 📉 The FOMC event creates an initial shakeout, a possible fake-out leg, and then a main market move.
• 🔵 Price is expected to drop into the blue-shaded fair value gap (FVG) area before reversing higher.
• 📊 Order blocks and liquidity pools are key zones where price reactions can occur, providing potential trade opportunities.
• 📈 Running an old high means price breaks through and continues upward; sweeping means briefly exceeding a level and reversing.
• 💡 Traders can use short entries below recent green candles or above bearish order blocks, targeting FVG or support zones.
• 💰 Long trades can be entered at the bottom of FVGs or imbalance areas, with targets at previous highs or Fibonacci objectives.
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• 📏 Fibonacci expansions should be anchored from key high-to-low swings post-FOMC to identify objective targets.
• 📝 Not all trades need to be taken; setups should be adapted to individual trading styles and criteria.
• ⚠️ High-impact events like FOMC or Non-Farm Payroll are extremely risky and better suited for study and analysis rather than live trading.
• 🎯 Observing price respecting fair value gaps, order blocks, and liquidity zones provides insight into institutional order flow.
• 🔄 Post-event review helps understand market structure, liquidity flow, and how price interacts with key levels for educational purposes.
• 🖌️ Visual cues, such as shaded areas and anchor points, are essential for tracking market flow and planning trades accurately.

Q & A

What market is being analyzed in the transcript?

The speaker is analyzing the E-mini Micro Nasdaq 100 Index during a FOMC announcement period.

What is the significance of the blue shaded area mentioned throughout the script?

The blue shaded area represents a fair value gap, which is a critical zone where price is likely to react, serving as a target for drops or potential reversal points.

What does the speaker mean by 'sweep' versus 'run' when referring to price movements?

A 'sweep' refers to a temporary move past a high or low before reversing, while a 'run' indicates a sustained move through a level, such as running through Tuesday’s highs.

Why does the speaker caution about trading during FOMC events?

FOMC events create extremely high volatility, making live trading very risky. The speaker suggests using such events for study or backtesting rather than aggressive live trading.

How does the speaker suggest using order blocks and liquidity pools in trading?

Order blocks and liquidity pools are used to identify potential short or long entries. Traders can place shorts just above recent green candles at order blocks or take longs after price respects these zones.

What role do Fibonacci expansions play in the analysis?

Fibonacci expansions are used to project upside or downside targets from measured price swings, helping the trader anticipate where price might move after initial reactions.

How many trade setups does the speaker outline, and how should traders use them?

The speaker outlines eight potential trade setups, but emphasizes that traders should select setups that align with their own strategies and risk preferences rather than attempting to take all eight trades.

What is meant by 'running Tuesday's high'?

'Running Tuesday's high' refers to a price movement that sustains above the previous high (Tuesday’s high) rather than just temporarily surpassing it, signaling continuation.

How does the speaker differentiate between initial shakeouts and real trade setups?

Initial shakeouts are quick knee-jerk reactions immediately after the FOMC announcement. Real trade setups are identified after price moves into critical zones such as fair value gaps or order blocks, where institutional activity is likely influencing price.

What educational insights does the speaker intend for viewers to gain from this analysis?

The speaker aims to teach viewers how to identify high-probability setups, understand institutional order flow, interpret liquidity capture, and apply technical concepts dynamically rather than simply following pre-set trades.

Why does the speaker mention that the replay button is dim or not used?

The speaker emphasizes that the analysis is based on live price action and dynamic trading rather than replayed historical data, ensuring that viewers understand the real-time decision-making process.

What is the importance of the 'checkered flag' area mentioned in the transcript?

The checkered flag area marks the target zone where the initial bearish move is expected to end, indicating the point where bears have exhausted momentum before a potential reversal or rally.