ICT Concepts - Elements To A Trade Setup

Summary

In this video, the trader outlines key elements of a successful trading setup, focusing on the opening price, key levels, stop hunts, and the concept of Smart Money Trigger (SMT). The video introduces a structured approach using higher time frame institutional order flow, explaining how to identify crucial candlestick patterns and use tools like FVG (Fair Value Gaps) and order blocks for entries. The Blitz Model by MMXM trader is highlighted as an effective strategy, emphasizing the importance of distribution candles, stop hunts, and the timing of trades during key market events, such as 9:00 and 10:00 AM.

Takeaways

• 😀 Focus on the elements of a trade setup: opening price, key level, stop hunt, SMT, state change, and PDAs.
• 😀 You can trade without PDAs but it helps if you use higher time frame institutional order flow for better clarity.
• 😀 Understanding the structure of a buy candle is crucial: opening price higher, key level, stop hunt, SMT, and the change in the state of delivery.
• 😀 Key levels are identified using H4 and H1 internal range liquidity, which guide the price movements and potential setups.
• 😀 Watch for SMT (Smart Money Trap) as it signals when a market may reverse, with a focus on lower time frame charts like M1 and M5.
• 😀 Pay attention to time-specific setups, such as the London session highs, 9:00 a.m., and 10:00 a.m. for key price movements.
• 😀 The change in the state of delivery (CSD) marks a potential reversal or continuation of price action after a stop hunt.
• 😀 Look for FVG (Fair Value Gap) as a signal to enter trades, particularly after a price retracement.
• 😀 The Blitz Model focuses on H4 candles with specific formations, emphasizing the third candle in a distribution setup for entries.
• 😀 The 9:30 key time on indices like the NASDAQ is essential for capturing price movement after a stop hunt and consolidation.
• 😀 Focus on entry points around M15 FGs, internal range liquidity, and specific time-based price actions like 10:00 a.m. to maximize trade setups.

Q & A

What are the essential elements of a trade setup mentioned in the video?

The key elements are the opening price, key level, stop hunt, SMT, change in the state of delivery, and PDAs. However, PDAs are not essential for trading but can be helpful in some cases.

What does the video say about the relationship between price action and higher time frame order flow?

The video emphasizes focusing on the higher time frame institutional order flow to frame your trades. Understanding the price action on these higher time frames is crucial to spotting significant setups.

What is the significance of the opening price in the trade setup?

The opening price is the starting point for identifying the trade setup. It's essential to recognize the opening price and its relationship with key levels to understand the market’s direction.

How is SMT (Smart Money Technique) used in the setup?

SMT is used to identify disparities between related markets or instruments. The video explains that SMT can be a signal of market manipulation, and recognizing it helps in timing the trade more effectively.

What happens after a retracement in price action, according to the video?

After a retracement, an expansion typically follows. The video points out that after a market retraces, it is likely to continue in the direction of the initial move, leading to a larger price expansion.

What is the concept of 'stop hunt' and why is it important?

A stop hunt occurs when price moves to trigger stops placed by retail traders, often leading to a sharp price reversal. Recognizing a stop hunt can provide traders with entry opportunities after liquidity has been collected.

How does the M1 chart relate to the higher time frame setups?

The M1 chart is used to refine entries based on the higher time frame setup. The video shows that the M1 chart helps in identifying more precise entries after key levels and market conditions are established on higher time frames.

What is the significance of the 'FVG' and how is it used in trading?

FVG stands for Fair Value Gap. It's a key concept where price gaps are seen as areas of imbalance. Traders wait for the price to fill this gap before entering trades, as these areas are often seen as price inefficiencies.

What does the Blitz model by the MMXM trader focus on?

The Blitz model focuses on identifying trade setups using specific candle formations, particularly the third candle in a distribution. It also combines this with other elements like H1 runs, M15 FGs, and stop hunts to form a trading strategy.

How does the MMXM trader's method apply to the NASDAQ chart in the video?

In the NASDAQ chart, the MMXM trader's method is used by focusing on key elements like SMT, order blocks, FVs, and stop hunts to frame the trade setups. These techniques help in identifying optimal entry points, particularly in relation to the market’s opening and closing times.