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e
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okay folks welcome to the first teaching
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tutorial from the ICT monthly mentorship
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for month of September
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2016 this is the first of eight each
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month you'll get eight individual
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teaching tutorials that will complement
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the general theme for the month uh this
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particular teaching is going to be
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elements to a trade set up and as you
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probably noticed uh this month so far
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we've been focusing primarily on showing
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the consistency that's able to be
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delivered to you as a developing Trader
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after you've submitted the time and
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you've done the work with the exercises
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and the content uh materials that we're
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going to be presenting to you um when we
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refer to elements to a trade setup
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there's really just two primary uh
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concerns and one is obviously
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context or
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framework surrounding the idea in other
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words what makes the idea uh favorable
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for a trade it's not just simply well my
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indicator tells me this or my support
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and resistance level tells me that there
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has to be something that builds a reason
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to want to do this trade in my material
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we're going learning four specific
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principles and we're going to be dealing
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with them in general terms and then what
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we do in those conditions what are we
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specifically pairing up with in terms of
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the ICT tools the first one is going to
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be expansion okay uh we're going to talk
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about expansion and what we look for in
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that
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condition we're we're going to be
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talking about
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retracements and what tool or concept we
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used for
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retracements
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reversal and lastly consolidation now
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each one of these four give a specific
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framework and a context to the
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marketplace that you're going to be
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trading in they can only be one of these
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four conditions either the Market's
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going to be expanding running away in
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other words uh trending a
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retracement or pullback uh allog
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together
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reversal and obviously when the Market's
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doing nothing it's consolidating but
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really we all learned in the market
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maker uh series there's really no such
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thing is the market doing nothing in
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consolidation exactly accumul ating
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orders now the
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other characteristic we use for defining
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elements to a trade setup is using these
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four criteria for context and framework
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to specific reference points in
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institutional order
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flow the first one is order
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[Music]
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blocks the second one is fair value gaps
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and liquidity voids
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liquidity pools and stop
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runs and lastly
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equilibrium now understanding these two
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characteristics together will give you a
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greater understanding of market
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efficiency
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Paradigm how the smart money interprets
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price and how they influence the general
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populace or the speculative uninformed
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money it's going to be a rather
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Illuminating to uh tutorial actually
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you're going to be able to look at the
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marketplace with an expectation of
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knowing what tool to apply based on what
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the Market's providing you right now it
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only takes a second or two to look at
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the marketplace determine okay what
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characteristic are we trading in so that
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way you can build a context or framework
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on how you're going to approach the
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marketplace sometimes you'll have right
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away
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an issue where you can say I'm not going
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to do anything because the Market's
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consolidating I am going to be waiting
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the other three conditions are going to
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be providing you an opportunity to take
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action relative to the tools that we
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couple with those conditions or
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context now the interbank price delivery
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algorithm or what I always refer to as
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the algo or interbank algo uh is the
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actual basically artif intelligence uh
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it's a price engine that um when we
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receive our price for our
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currencies it's actually 90% done by
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electronic um algorithms so it's all
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computer-based now it used to be open
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out cry in the pits uh but there's no
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longer an auction Market it's all Ai and
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it's based on the principles I've been
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teaching for about seven years now um
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you're not going to learn these things
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because number one no one's going to
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believe that it exists uh there is this
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movement away
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from human involvement with Market
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making um it's become much more
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efficient to be electronically based and
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these things are programmed by human
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beings obviously and those intelligence
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are limited so while that is probably
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unsettling for some of you that are
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listening to this thinking well I
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thought I had a free market I was
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trading in uh it's actually not it's
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highly manipulated especially in the
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foreign exchange which is what we're
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primarily dealing with here because of
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the nature of it being so manipulated
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manipulated
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the the fingerprints if you will are
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easy to see once you
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understand the operations and the
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conditions that the market maker uh in
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Bank price delivery algorithm functions
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so when the market does what it's doing
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uh it gives you indications it gives you
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fingerprints or Clues as to what you
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should be expecting next and that's
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where your anticipatory skills are going
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to be coming in you're not going to know
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these things right away the first time
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watching this video it may go over your
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head but for some of you that have
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already went through the prerequisites I
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believe that are in my free tutorial
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section on my website if you haven't
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gone through the sniper series prision
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trading Concepts and the market maker
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series yet you're going to need those
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okay so don't be discouraged if you hear
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some terms in here that go over your
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head because they're all taught in those
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three tutorial series for free it's a
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lot of material over there so dig into
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not only the stuff you're getting in
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this curriculum with the mentorship but
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fill in the space when I'm not giving
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you content with the free tutorials
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those three tutorials and I'm going to
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say what they are they
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are Market maker series Precision
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Trading cont Concepts and a sniper
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series okay the interbank AL go okay
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obviously uh there's going to be times
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when the market goes sideways at or in a
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consolidation or what I refer to as a
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holding pattern now when this happens
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the market will be looking to do an
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expansion okay so all Market start from
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a consolidation and move into an
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expansion that means there's an Impulse
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move or an Impulse price swing
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uh after that impulse swing okay either
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it goes back to a consolidation again or
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it goes to a retracement when the
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retracement happens it goes back down
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into another level of expansion or after
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the expansion it can go to an reversal
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pattern after the reversal pattern it'll
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see another retracement then back to
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potentially
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consolidation these four conditions they
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interchange
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throughout the ups and downs and Es and
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flow of the
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marketplace you're only going to get one
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of these four conditions now you're
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probably saying okay well that's a lot I
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need to know one of these things to make
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a trade no you just need to know where
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it's at right now where it's likely to
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go where it came
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from and over the course of the month of
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September you're going to get a lot of
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understanding about how to know where
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the Market's going to go next and that's
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going to to fill in a lot of the gaps
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that you've had with teach me
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directional bias
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ICT the main thing is is the
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consolidation begins with everything all
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the moves that take place in the
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marketplace start from a measure of
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consolidation because that's where the
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markets are building orders so the
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market maker keeps Market in a tight
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range or a defined range until there's
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enough money on both sides of the uh
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upper and lower end of the range that's
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being defined by the consolidation
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whichever one has the highest amount of
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money to be absorbed that's the
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direction it's going to uh move in we
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don't always know what that is but we
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wait for the expansion when the
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expansion occurs that's when we get the
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clue as to what the market is most
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likely going to be doing and then we
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wait for either retracement or another
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consolidation or a reversal but we
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always wait for the first expansion that
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gives us all the Insight that we need to
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make a decision now sometimes it may
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expand so far that we can't do anything
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with it we have to wait for the
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retracement or the next consolidation
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there's nothing wrong with that it's all
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normal you're not going to catch every
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move the main thing is is understanding
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these four individual uh characteristics
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to a trade setup because price is
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delivered by one of these four
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conditions it can't be any other
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way now what is expansion now expansion
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is when price moves quickly from a level
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of equilibrium now
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expansion couples directly with the toll
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of an order block now what is the or
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what's the importance of knowing
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expansion well when price leaves a level
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quickly this indicates a willingness on
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the part of the market makers to reveal
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their intended repricing model now what
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does that
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mean well if we're in a
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consolidation okay or a point of
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equilibrium if price were to move up
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quickly
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that would give us an indication of
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looking for a bullish order block we
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don't want to chase price we're going to
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wait for price to come back down into
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the order
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block where is that going to occur well
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what do we look for in price the order
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block that the market makers leave near
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or at the equilibrium price point so I
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don't know what you're thinking okay
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Michael this is already going over my
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head give me some examples no problem
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I'm going to show you that right
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now as you can see here there's a
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consolidation and the BL BL shaded area
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very clear defined consolidation it's
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got a clear discernable high and low and
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the equilibrium price point is directly
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in the middle of the high and the low
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end of that range you can simply take
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the Fibonacci tool that you have in all
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your platforms lay the Fib from the high
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and the low in the general consolidation
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find that midpoint and you can check
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yourself also by looking at how many
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times the market
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touches up up against it from below and
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from above it going down into how many
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times it's touching and hanging around
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that level eventually the market will
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move outside of the consolidation you
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can see that impulse move in that tan
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shaded box it moves away from the
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equilibrium price point and then all we
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have to do is go back to the down candle
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right before that up move that down
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candle or Black Candle I'm drawing a
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small little segment off of that's the
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bullish order block when the price comes
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back down into that and hits it that's
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where we would be buying and then
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obviously you can see it hits that level
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and expands to the upside over 100 Pips
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just by using that simple principle it
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repeats itself all the time it's in
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price action all the time and if you
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study just to the left of the
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consolidation we have shaded in blue
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there's actually a consolidation uh in
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the cell side where the market broke
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down and came right back to the
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equilibrium Price Point again and then
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sold off I'll leave that for your study
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now but we're going to move over to the
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next characteristic of a trade setup
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the next one is a retracement now what
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is a
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retracement retracement is when price
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moves back inside the recently created
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price range now years ago I think it was
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in
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2012 I did a a webinar called trading
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inside the range and a lot of folks that
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were following me on uh one of them uh
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forums that is pretty popular on
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internet um they went Head Over Heels
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when they learned this this simple
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principle of understanding how you can
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trade inside of a range and it doesn't
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even have to break out doesn't have to
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Trend you can Define the range by a high
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and a low and trade inside that range
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and that was the beginning basis point
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of how I brought a lot of people from
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that form into the understanding of an
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order block the order block was
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introduced in the sniper series tutorial
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on my website but uh prior to that I
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just gave indications and clues about
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what an order block was without actually
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really referring to or spelling it out
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for everyone
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what's the importance of the retracement
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well when price returns inside a recent
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price range this indicates a willingness
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on the part of the market makers to
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repic to levels not efficiently traded
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for fair value when we're thinking
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retracement the goto is for ICT tools
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we're looking for liquidity gaps and
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liquidity
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voids when we look for
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price when we see run UPS real quick and
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run Downs in price in other words real
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quick Ries up or real quick rallies down
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in price many times that range that's
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created will want to come back in and
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close that in and I'll give you an
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example what that looks like
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now this is example of a retracement as
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you can see here the orange shaded area
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we had a real quick sudden movement away
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from a price level and that quick sudden
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movement creates what we call as a
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liquidity void in other words as the
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market drops aggressively like that uh
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there's going to be Pockets where the
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price wasn't actually delivered on every
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um oper uh available price level at that
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in that range it moved too quickly it
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skipped or it created gaps Well what
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we'll do is is we'll wait as a Trader we
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won't chase price we'll wait and say
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okay there's going to be either an
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indication that get long and try to fill
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in that range or we can wait for the
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come all way back up to it and fill in
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the liquidity void once it hits it then
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it'll probably resume going lower and
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that's what we're looking for in terms
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of liquidity void so we've covered three
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conditions the next
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one is the
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reversal the reversal is when price
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moves the opposite
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direction current Direction has taken in
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so if we are looking for reversals we're
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directly coupling that with an ICT tool
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of liquidity pools now what's the
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importance of it when the price reverses
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Direction it indicates the market makers
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have ran level of stops and a
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significant move should unfold in the
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New
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Direction what do we look for in price
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the liquidity pools just above an old
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high and just below an old
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low okay and we're looking at examples
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of reversals here every X indicates
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where stops would be and the market goes
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just above those levels and rejects and
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goes the other way or goes just below
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those levels or there's an X and rejects
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and goes the other way look how many
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times there's so many opportunities just
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on this one chart and it's on a pair I
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don't really like to trade the US versus
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the
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swissy uh this pair is real choppy it
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tends to have a lot of this type of
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price action so it has a characteristic
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that is very favorable if if you're into
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type of trading like this Turtles slps
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and false uh breaks are really really
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good um in the
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swissy and lastly we
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have
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consolidation and whenever we're
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referring to consolidation we're
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directly relating that to an ICT toll of
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equilibrium but what is consolidation
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consolidation is when price moves inside
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a clear trading range and shows no
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willingness to move significantly higher
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or lower now what's the importance when
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price consolidates it indicates the
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market makers are allowing orders to
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build on both sides of the market expect
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a new expansion near term now what do we
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look for in price we're waiting for the
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impulse move or impulse swing in price
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away from the equilibrium price level
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that is found exactly in the halfway
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point of the consolidation range and
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I'll show you an example what that looks
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like here we see here where we've
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identified a range defined specifically
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by the bodies of the candles not the
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Wicks as you can see price moves out in
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an expansive Manner and then comes right
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back down to the equilibrium price point
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and then expands to the outside by
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having an understanding of these
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specific characteristics and elements of
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trading a setup you'll give yourself
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framework to First learn how to practice
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and study price action and eventually
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work towards understanding consistant
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setup uh Discovery and by utilizing the
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time with me on a daily basis will be
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able to frame these characteristics and
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pull out specific elements to a trade
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setup by repetition and by
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using the daily time with me where we
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can outline the elements of a trade
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setup we'll be able to do all these
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things in a manner where you'll able to
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retain
00:18:48
it make it yours you'll be able to
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discover really what type of trade
00:18:52
you're going to be because one of these
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characteristics is going to be your
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bread and butter condition some of you
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will trust the equilibrium some of you
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will trust the order block some of you
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will look for the void or the liquidity
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gaps to trade into uh some of you will
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have one or two of these characteristics
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and you'll trade within uh those
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parameters they'll they'll frame your
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trades some of you will eventually grow
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into understanding all of them and be
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Universal but don't think that you have
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to have all of them well known and under
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your belt before you're actually
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consistent because you can just find one
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element as we described here if we just
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find one for you just for you one you
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can start being consistently profitable
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in your trading it only takes one setup
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you need know what context or framework
00:19:39
you're going to trade in couple that
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with an ICT tool and then wait for those
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conditions you're not going to get a
00:19:45
trade every single day but you can get a
00:19:47
couple of them every single
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week if you look at four major pairs
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with one condition or criteria you'll
00:19:54
find a trade every single day but that's
00:19:56
not what you're trying to do right now
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you're going to grow into that over time
00:20:00
but for now just go through your charts
00:20:02
and try to look at all the examples
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that's already happened in the left side
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of your chart and outline them
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individually based on the
00:20:08
characteristics and elements that we've
00:20:09
identified here in this teaching until
00:20:12
next time I wish you good luck and good
00:20:14
training
00:20:16
[Music]
