ICT
This is my ICT notes. I started learn it in the end of 2023, but topic is quite big and complex. ICT said that hist students should make a notes because its not realistic to keep everything in memory...
2023
February 15, 2023 ES Live Commentary AM Opening Session
February 15, 2023 ES Live Commentary AM Opening Session
We should always look on multiple chArts: ES, NQ, YM, DXY. All markets should agree: if Dollar is going higher, then we are looking for short setups on indexes (risk-off mode); if Dollar is moving lower, then we are looking for longs on indexes (risk-on mode)
February 15, 2023 ES Session Review
February 15, 2023 ES Session Review
NDOG (New Day Opening Gap) is price in between 5pm market close and 6pm market open its a reference point where algorithm will refer and come back later.
The Bodies tell the story, the Wicks do the damage.
If we expect that market is going to be hard to read (for example due to high impact news), we can trade on 7:00am-8:30am to utilize that interval during pre-market before news driver (medium to high impact news) and expect that we can reach our target at 8:30am
Symmetrical market is when for example we have lower low in NQ and ES and higher high on DXY. This is we want to see to trade, if at any time we see non-symmetrical market we want to step away because of sentiment shift unfolding. Example: if we for example cannot see dollar index higher high when it was expected - it's a dollar index divergence, and it's a signal for smart money, so they probably will seek for liquidity (external - Buyside or internal - 50% of dealer range, bearish gaps or blocks...)
Buy model on last hour macro 15:15-15:45 after stops (liquidity) has been taken is not a Market Maker Buy Model is when market starts booking higher price until we get a pool of liquidity (Buyside liquidity) or premium inefficiency (FVG SiBi)
Order Block it's a Change in the State of Delivery. Order block start on opening price of consecutive sets of down close candles after its validation. Order Block is valid as soon as upper close candle goes 1 tick above Order Block. Order Block is fair value, it means that algorithm with offer that fair value to the Smart Money.
February 16, 2023 ES Opening Session Commentary
February 16, 2023 ES Opening Session Commentary
New Week Opening gap (NWOG) is gap between 16:00 on Fri and 18:00 on Sun. New Week/Day Opening gap (NDOG) is gap between 16:00 and 18:00 of current. Opening Range Gap (OR) is gap between yesterday's 16:00 closing price and today's 9:30 opening price.
If we had news drivers and big run before 9:30 then we can expect price choppiness and/or run agains profitable traders (who was able to catch this move) stops. For example after bin market drop if we're not going to go lower ask yourself "where is the money?" right, - higher buyside liquidity on bearish inefficiencies, order blocks, or previous highs, or relative equals highs...
Breaker Block is: Low, Higher High, Lower Low, retrace to block and go higher. Mitigation Block its almost opposite to Bullish Breaker Block: Low, Higher High, Higher Low, retrace to block and go higher.
If we want to confirm that our Bullish Breaker Block invalid - price should at least go lower through it and then back upper, so Breaker will act as resistance (similar to -iFVG).
ICT February 24 - Conquering Fear Of Being Wrong Vs. Profitability
ICT February 24 - Conquering Fear Of Being Wrong Vs. Profitability
Market Structure Shift (MSS) is short term change in market sentiment and it will deliver on a short term basis. MSS doesn't require close above a STH, its just need to trade above it.
Market Structure Break (MSB) is where entire trend in marketplace changes, and we're going into longer higher timeframe delivery of the price (where if its bullish, and we have MSB that is bearish, then we would say that is change in trend, aka reversal).
Once MSS occur algorithm will start a macro for price delivery.
Macro is a short list of instructions that algorithm will run in a price engine which creates these fluctuations in price action, and it doesn't matter what buying and selling pressure currently is.
+SMTD is only confirmation tool that showing that Sellside Liquidity was taken, and we're going higher if we are bullish.
You do not ever want to be trading ahead of CPI numbers, it will rip your face off.
When we're watching +OB, we are looking on its high and Mean Threshold and expecting a reaction higher from it.
Bullish Propulsion Block its nested OB within another OB.
February 25, 2023 Market Commentary
February 25, 2023 Market Commentary
Before trading week routine: 
Here 👆
- 1 - +FVG (Bullish Fair Value Gap)
- 2 - Price retrace into this +FVG Consequent Encouragement (C.E.)
- 3 - +MSS (Market Structure Shift)
- 4 - Price retrace into +BB (Bullish Breaker)
- 5 - Price retrace into +OB (Bullish Order Block) which is candle with lower body
- 6 - Price retrace into +VI (Bullish Volume Imbalance)
- 7 - We expect price will reach +VI higher
- 8 - We also can expect that price should at least touch Equilibrium (50% or Dealer Range)
- 9 - Finally our expectations is that price can potentially reach -FVG (Bearish Fair Value Gap)
On a weekly charts each Saturday or Sunday we should anticipate where candle is likelihood should expand, lower or higher? - This is our weekly bias. Benefit of doing this is our orientation for lower timeframe, because we will know what we will expect from price, so we submit ourselves to believe that price should go in our direction according to our biggest odds and our idea comes from weekly and daily charts...
HRL (days with lots of chop) vs LRL (days with big movement candles): We should learn when whey are occur to focus on LRL for our trades.
When we see that price did big movement prior to 9:30 then we should expect that at lease NY.AM session (but maybe and NY.PR) will be choppy. We gonna miss some moves and it's okay.
-BB (Bearish Breaker Block) can be treat if price was closed below Breaker down close candle, so even if price did -MSS and has -FVG upper we should not expect that price will come back up to that -FVG, but if we see -VI lower than -BB or -FVG, then we can expect that price will just touch -VI and drop lower.
Engineered Liquidity can be formed for example near old relative equals highs, when we are not swept it and form -BB initial down move candles to make believe retail crowd that they must sell shorts, so on next -BB upper move we will take their buy stops (break all short traders).
-IOFED is when market touched a little bit -FGV and drops.
In bearish market every time when market goes up it's returning to take buy stops or repricing inefficiencies.
Wicks are inefficiencies, so we can expect price reach mid. point of these wicks (C.E.)
Dress your charts correctly.
We can use SMT not only with highly correlated markets but also USDX SMT. For example if ES made a higher high and in according normal situation DXY should do lower low, when DXY wasn't able to make lower low it is USDX SMT.
March 06, 2023 Live Tape Reading \ Baseline 1 of 3
March 06, 2023 Live Tape Reading \ Baseline 1 of 3
We're going to do wrong. So baseline measurement 1 of 3 Drawdown Mitigation & Rebuilding.
Do not trade on Non-Farm Payroll, Federal Funds Rate, FOMC, CPI, PMI, etc... See: https://www.forexfactory.com/calendar
Opening Range (OR) it's 1st 30 minutes of trading (09:30-10:00) and we are not trading during this period of time. We are wait for 09:50 macro to see how market will reach for liquidity or reprice inefficiencies and when market will show his hand we can try to trade next hour NY.AM Silver Bullet in between 10:00-11:00
On ORG if we see ES or NQ price is above it and making higher high, but Dollar Index is not confirming it with lower low, then we might expect that price will pull back into this ORG
OR (09:30-10:00) it is not a ORG (17:00-09:30) or NDOG (17:00-18:00) or NWOG (Fri 17:00-Sun 18:00).
In HRL run conditions the market is in no hurry to get to an opposing discount or premium array. Because liquidity or inefficiency is encapsulated be that idea. Where in environment like a LRL run it's in a hurry very quickly to get where it wants to go (reach opposite premium or discount array).
In HRL run conditions market is no hurry to reach opposing PD Array (choppiness or consolidations...) In LRL run conditions market is in a hurry to reach opposing PD Array (big candles or push-push-push...)
We should always take partial profit, or close a trade if there are only 1 contract to not allow us be frustrated by think to being right and loose money instead of taking some money. Risk management is #1
If we're expecting price go higher, then down close candles should support price.
SMT: If YM made a higher low, but ES or NQ made a lower low, then it's SMT Divergence.
March 07, 2023 Live Tape Reading \ Fed Chair Testimony 10am
March 07, 2023 Live Tape Reading \ Fed Chair Testimony 10am
We should always think like so: if I would control market price, whe would I steer a price to and why? So what we need to do is annotate on 5m and 15 m timeframes liquidity pools that hasn't been reached yet. Its formation can be related to previous day or earlier... So SM, algo and those who controls price, they will go where wouldn't be too much to expect to reach those lever with liquidity pool (too clean, too smooth retail support/resistance levels, old lows/highs, FVGs, order blocks...)
When we annotated both (Sellside and Buyside Liquidity Pools) 2nd thing we will do - we can study and watch which of these levels market will reach first
If market will take Buyside first, then we should see if it is going to reach opposite (Sellside) Liquidity and vise versa...
It's not about be right or wrong! It's not yet about trade setup. We should view this as a personal exercise in observation, so in that way we are not just looking at the chart blindly, not knowing what we are paying attention to, what's relevant to us... It's just helps us with reading the tape and reading the tape it's not about pushing a button, and it's not about trading... it's about observing price and getting feel what it's doing right and that's experience chart times, it's how we train ourselves with online charts price data
When we have price in between two NWOGs and it reaches mid. point, it's always reasonable to expect that price can reach that NWOG its moving towards
We shouldn't regret if we did not catch some move. Big moves happens very often. This is a way of forging of patience and self-control
We should be not afraid of using stop lose
If we see like DXY made a higher high, but ES not make a lower low then we can expect that ES should eventually make lower low... But, if YM made lower low and ES is not (+SMT Divergence ES), then we can expect short-term consolidation or even potential reversal
In other words, if we are in a position and for example YM is making a lower low, but ES with NQ is not then we should take ofo more than half of our position, because it could mean it could create a replacement higher against the position that would have open
If later after ES/DXY Divergence will be declined, meaning markets back to symmetrical behavior, than we can assume that markets movement are in sync and we can expect normal, not unexpected
March 08, 2023 Live Tape Reading \ Fed Chair Testimony 10am
March 08, 2023 Live Tape Reading \ Fed Chair Testimony 10am
Once we reach a weekly objectives we should stop.
The weeks of Non-Farm Payroll which is typically not always, but typically the first Friday of every month, so we don't trade the day before, and we don't trade on that Friday because the probabilities for precision fall off precipitously. So protocol for such Non-Farm Payroll weeks is next: our task as a trader is to get all our business done on Wednesday NY.AM, once it's 11:00 - it's over, we are done
Inside us 3 people:
- analyst - person in charge of what we're going to be doing? Buying or selling?
- trader - the person who is going to be doing engagement itself with timing aspect when we are pushing the button, managing the risk, using the logic that being leaned on as the analyst
- gambler - this person we should keep out of driver seat and hold away from trading in these two days, because gambler is want to see what will happen if we will push the button
NWOG it's a true dynamic FVG. So market algorithm does is deliver price in it to offer fair value to marketplace, not necessary for us, but for large funds and SM. Once price goes here large funds either come in or get taken out
- Market goes up for Buy-stops or re-deliver into inefficiency like FVG upper. That it: it's either going up for that reason for long to sell their long positions too, or it's going up to start a new sell-off so in that way shorts can be implemented, and then it's going to be looking for an opposing liquidity
- Market goes down for Sell-stops that hold below an old low, or it will goes down for an inefficiency, or it's going lower to start new buys, so in that way longs can be implemented, and target objectives will be opposite Buyside Liquidity
- If it's not doing that, guess what it's doing - it's consolidating. Usually consolidation is happening ahead of big news, so we don't trade in consolidation
When we Bullish then we are looking for 2 things: a) it's going up for Buy-stops - above a high or relative equal highs, or b) it's going up for Premium Fair Value Gap - some kind of inefficiency where market has dropped in a previous as far as 60 days back, some old high, some old price decline where is a FVG, it's going up to that level to re-price. That's the only two reasons why price is going to go up
The market will where money is. If there are no money they will engineer it
NWOG - New Week Opening Gap
When analyzing NWOG, don't use daily charts, use something like 5m charts
Use Fri closing price. Use Sun opening price. And C.E. in between them
ICT NWOG it's a tool with is giving information on large funds fair value meaning the market will gyrate in between current and previous NWOG
NWOG it a real liquidity void there is no trading there, so when market moves away from that after re-pricing into it, it can refer back to it weeks ago, a month ago or more. So we need to keep at least of 5 of them on our charts for proper perspective of large funds valuation
If we are moving around current and previous NWOG then we are in consolidation. If in a trending days we are moving away from current NWOG then we might expect to get back to it later
There are two NWOGs, and we should prepare two templates in our TradingView for these gaps:
- NWOG Actual, which is forming from Fri 16:69 closing price and Sun 18:00 opening price.
- NWOG, which is forming from Fri 16:69 closing price and Mon 9:30 opening price.
By looking on a difference between these two NWOG and NWOG Actual we can learn how fair valuation is utilized during the week and/or even month
March 21, 2023 Live Tape Reading - Conquering Your Fear Of Entries
March 21, 2023 Live Tape Reading - Conquering Your Fear Of Entries
General rule: skip 1st 30 minutes (9:30-10:00) while forming Morning Session's OR (Opening Range) to complete because it can be Judas Swing (fake move)
ORG (Opening Range Gap) 15:59-9:30. If we opened higher, we are wait for trap (meaning price go higher but fail go higher next and can drop inside our ORG. I may just touch it or close 50% or close completely, we don't know, but this is ideal scenario for us, it's potential opportunity and it's repeat
We should always look at the Dollar Index to let it keep us out from wrong trades entries
We should also look on ES, NQ and YM for divergences. When these markets are forming SMT Divergence we should know that algo is tipping its hand, meaning that it's telling us that this rally is suspect rally, meaning it's only going up to take Buy stops of anyone that short
ICT Emini S&P 500 Review - March 27, 2023
ICT Emini S&P 500 Review - March 27, 2023
ORG can be useful when:
- Opening Range Gap is higher (meaning we opened higher than yesterday's session close price) then Market can return lower to yesterday's session closed price to re-balance or to reach discount PD Array
- Opening Range Gap is lower (meaning we opened lower than yesterday's session close price) then Market can go upper to yesterday's session closed price to re-balance or to reach premium PD Array
- Or it may return only to C.E. of that ORG
When we are Bullish and when we have 3 swing lows which showing us intention go higher and where the lowest swing is in a middle, then we can measure Standard Deviation projection from latest swing low to previous swing high. In this example from STL2 to STH2:
\ STH1 /\ / . .
\ /\ / \ / . .
\ / \ / \ / .
\ / \ / \ /
\/ \ / \/
STL1 \/ STL2
ITL
When we in consolidation od Daily chart, one possible case for trade on NY PM session on reversal after Key Level was reached is wait for MSS after 13:00 prior to run stops of NY Lunch session
Best Long positions will be below NY midnight opening price. Best Short positions will be above NY midnight opening price
We should not forget about Macro (09:50-10:10, 14:50-15:10, PM session last trading hour) during these macros algo can seek liquidity or deliver price to key levels.
2024
Lecture On ICT Order Blocks & Tape Reading April 18, 2024
Lecture On ICT Order Blocks & Tape Reading April 18, 2024
Bias must be found based on weekly and daily charts. Don't build bias based on anything what less than 1 hour.
SM doing stop runs only to kick out everyone who can be profitable and to catch traders who created limit orders for breakouts.
Seasonal tendency take price down into the spring decline.
In days when we have high impacted news we should use 5 minutes timeframe to reduce choppiness and spottiness of price fluctuation. In all other "normal" trading days we can use 1 minute and sub-minute timeframes. On high impact news drivers we should wait and use 5 minutes charts at least 15-20-30 minutes and only then we can start dropping down below 5 minutes charts for looking for inefficiencies because we won't probably pick a right one...
When I'm bullish, my stop loss should have 3 PD arrays above it or 3 PD arrays below it when I'm bearish.
Dealer range is high that was engaged buyside and low that was engaged sellside. And it must be on a timeframe we are looking for analysis (5 minutes on high impact driver news during 15-30 minutes after release). Best moves starts from
running stops, so if we are bearish - we want to see that market take buy stops first.
Algorithm is designed to range wide to seek liquidity.
Important to keep in mind quadrants and remember that best entries when we are:
- bullish: in between 50%-100% of +OB or +FVG
- bearish: in between 0%-50% of -OB or -FVG
How To Read Price With Or Without A Bias - April 29, 2024
How To Read Price With Or Without A Bias - April 29, 2024
Wicks == Gaps. Our focus on C.E. or upper quadrants if bullish (lower quadrants when bearish).
When we have high impact news, we are wait for damage and manipulation. Only then, after all retail traders will be stopped out from their seats we are looking for turtle sups or other setups.
If there are no high impact news, then we can relay on macros (every single trading hour 20 minutes macros): 9:50am-10:10am, 10:50am-11:10am, 1:50pm-2:10pm, 2:50pm-3:10pm and 3:15-3:45 last hour macro
If bullish and want to use +OB, then there should be only few down closed candles that we should use only as opportunity to buy. If there are a lot of down closed candles, then we either on consolidation or near to high, but definitely not in up move.
Same thing in relation to FVG, we don't want to see every FVG was fully rebalanced, we do want to see price left some inefficiency stay opened, not fully closed, otherwise we maybe on end of the run
To capture nice day trades we need to look at 15m charts or 1h charts. To capture nice swing trades we need to look at 1h charts or 4h charts. To capture nice position trades we need to look at 1D charts or 1W charts.
Change in a state of delivery it's always opening price of OB. Delivery it's directional price run, so it's going to be a change in the direction of price.
Reading Price Without A Bias - April 30, 2024
Reading Price Without A Bias - April 30, 2024
Do not trade on non-farm payroll week from after lunch Wed till Fri. If we want we can trade 15-30 minutes after non-farm payroll numbers report.
Reclaimed FVG / Reclaimed OB is when initial expectations is used at later time. IFGV / Mitigation block is when its reverse the role.
Bounce price range is when you have 2 inefficiencies (BiSi and SiBi) in opposing directions in a same general area in terms of price. Best is with 1 candle in a middle because it would be sudden and more impactful. Or it could be pattern called island reversal. We can trade is as iFVG
Keynotes & Observations - May 01, 2024
Keynotes & Observations - May 01, 2024
In FOMC day is 2 stage event: 1) Move start on 14:00 and complete at 14:30 2) At 14:35 I can do either reversal or continue
Non-Farm Payroll is also nopt possible for trading - algorithm is turn off and manual intervention will be turned on
How to detect time when LRL in place? If there are no news drivers.
Session bias can be built for 4h and 1h charts: were we are? where are we going from? where are we going to (block, inefficiency, C.E, draw on liquidity etc...)?
Why we don't want Opening Range Gap fill completely if we are Bearish? Because if it cannot fill that Gap it means that it Very Bearish.
We can expect as retail traders want to go short after big down day, so smart money wants to trap them. Takeaway from this is: when retail public crowd want to sell, smart money want to move markets higher to get everybody else Byu stops.