2022 ICT Mentorship Episode 34

Summary

In this trading session, the speaker walks through detailed market analysis using tools like order blocks, fair value gaps, and fib retracements. The focus is on understanding price movements, identifying key levels like the Sunday gap opening, and using past price action to predict future behavior. The speaker highlights the importance of being patient and strategic, emphasizing that real trading success comes from learning, observing market conditions, and applying these principles without relying on signals or hand-holding. The session concludes with a personal reflection on teaching and trading for fulfillment.

Takeaways

• 😀 The speaker demonstrates the process of analyzing the opening price on ES, using price action tools and strategies from the forex and futures markets.
• 😀 There’s an emphasis on the importance of gaps in price action, specifically Sunday’s opening gap, and how they are treated as dynamic support/resistance levels.
• 😀 The speaker highlights the use of fair value gaps and order blocks, showing how they act as areas of interest for potential price reversals or continuations.
• 😀 The speaker makes a distinction between clean, clear setups and more challenging, 'sloppy' market conditions that require more precise analysis and patience.
• 😀 Throughout the session, the speaker provides live analysis, pointing out key levels and demonstrating real-time decision-making in the market.
• 😀 The speaker stresses the importance of teaching over providing trade signals, advocating for self-sufficiency and understanding in trading rather than dependency on signals or constant guidance.
• 😀 Price action is viewed as being dynamic, with gaps, fair value zones, and order blocks frequently revisited by the market throughout the week.
• 😀 The speaker suggests that while perfect price delivery is the goal, they don’t expect perfection, but rather emphasize understanding the tools and mechanics of price movement.
• 😀 The value of learning from failure is highlighted, showing that mistakes are part of the process, and there is no guarantee that every trade setup will be profitable.
• 😀 A focus is placed on understanding retracements and using tools like Fibonacci levels in the context of discount and premium pricing zones to determine optimal entry points.
• 😀 The speaker discusses the broader context of market conditions, including range-bound markets and the impact of events like FOMC on price action.

Q & A

What is the main focus of the analysis in this video?

The video primarily focuses on analyzing the price action of ES (E-mini S&P 500 futures), with particular attention to gaps, fair value gaps, order blocks, and relative equal highs in the market. It also discusses key price levels and their relevance for trading.

What is the significance of the Sunday gap mentioned in the analysis?

The Sunday gap represents a key reference point for price action throughout the week. The speaker uses it as a dynamic support or resistance level, depending on the market's position relative to the gap. This gap helps in predicting price movements and potential reversals.

How does the speaker use fair value gaps in their analysis?

Fair value gaps are used to identify areas where price imbalance exists, indicating potential support or resistance levels. The speaker notes the importance of these gaps and how the price often reacts when approaching them, either by filling the gap or bouncing off it.

What is an order block, and how does it impact trading decisions?

An order block is a specific price area where significant buying or selling has occurred, often resulting in price reversals. These blocks act as key levels to watch for entries and exits. The speaker references several order blocks in the video, showing how price reacts when it approaches them.

What does the speaker mean by a 'sloppy' market?

A 'sloppy' market refers to a trading session where price action is unclear and does not provide obvious signals for trading decisions. The speaker describes a 'sloppy' morning session where the market lacked clear direction and proper setups, making it difficult to make definitive trades.

Why does the speaker emphasize the importance of teaching rather than providing trade signals?

The speaker believes that teaching and sharing knowledge is more valuable than providing direct trade signals. They want to empower viewers to understand the market and develop their own trading skills, rather than creating dependency on others for trading decisions.

What role do relative equal highs play in the speaker's analysis?

Relative equal highs are used to identify liquidity pools where the market may reverse or consolidate. These highs represent areas where price tends to react, either by breaking through to new highs or retracing back to test previous levels.

What is the difference between using a fib retracement tool for long vs. short trades?

For a long trade, the fib retracement is drawn from the low to the high of a price leg, and traders look for a retracement below 50% of that range to enter at a discount. For a short trade, the fib is drawn from the high to the low, looking for retracements to below the 50% level to enter at a discount for the short position.

What is the importance of understanding market behavior during range-bound conditions?

In range-bound markets, such as during events like the FOMC, price tends to consolidate without strong directional movement. The speaker stresses that understanding this type of market behavior is essential for adapting trading strategies, as the market may not provide clean, one-way moves.

What are the key takeaways from the speaker's approach to price delivery?

The key takeaways are that the speaker uses a combination of technical tools—gaps, order blocks, relative highs, and fib retracements—to predict market movements. They emphasize a methodical approach, relying on price action, and recommend waiting for the right setups before taking a trade.