ICT 2024 Mentorship Key Notes Lecture #19

Significance: Noting the highs and lows of the last three trading days is crucial as they serve as liquidity pools.
Liquidity Reference: Even if stops are hit, the algorithm will refer back to these levels as significant points.
Institutional Interest: Large institutional traders often have buying and selling interests around these levels, making them dynamic.
Application: Traders can use these levels for identifying potential entries or exits, especially when targeting liquidity pools.

Use of Highs and Lows: The algorithm uses past highs and lows as reference points, even after stops have been hit.
Relevance: The market doesn’t stop considering these levels; the algorithm is programmed to revisit them due to large institutional interest in those zones.
Dynamic Adjustment: Stops are dynamically adjusted by institutions, keeping these levels relevant for future trades.

Approach: When shorting in a bearish market, traders should be cautious when price approaches liquidity pools around old daily lows.
Patience: It’s advisable not to take profits immediately upon the first touch of a previous day’s low. Instead, allow the price to break below, retrace, and then target further down for maximum gains.
Rationale: The initial break may not represent the full move, and the real opportunity lies in the continuation after a retracement.

Role: The fair value gap (FVG) between 9:30 AM and 10:00 AM acts as a key area for price inefficiency.
Usage: Traders can look for price to return to the FVG, which provides an opportunity to enter the market, especially when aligned with other factors like liquidity pools.
Predicting Moves: FVGs often act as magnets, pulling price back toward them before continuing the trend.

Crucial Timing: Identifying the first FVG at 9:31 AM is critical because it signals the market's first inefficiency after the opening.
Strategy: Traders should aim to take positions around this gap, especially if the market trades into the FVG and shows signs of a continuation in the trend direction.

Institutional Strategy: Institutional traders use old daily lows and highs as key levels for building larger positions.
Pyramiding: They often enter positions in phases, using pyramided entries, adding to their positions as the price moves favorably around these levels.
Building Position: This technique allows institutions to manage risk while increasing their exposure as the trend unfolds.

Concept: Breakaway gaps occur after consolidations or at the beginning of a new market phase.
Watch for Acceleration: Traders should look for price to accelerate once the breakaway gap forms. If the gap remains open, it signals strong momentum in the direction of the breakout.
Importance: Breakaway gaps provide clear entry points and strong indications of future price moves.

Crucial Patience: Traders should exercise patience when waiting for retracements to take out an old daily low in a bearish market.
Holding Position: Allowing the market to retrace and then break further lowers the risk of prematurely exiting a trade.
Managing the Trade: Traders can manage this by using dynamic stop losses to maximize their gains during large moves.

Definition: A dynamic trailing stop adjusts with price movements, allowing traders to capture larger runs without closing their entire position.
Effective Use: As the price breaks through key levels, traders can trail their stop losses behind significant candles, such as bearish candles in a downtrend.
Advantage: This method helps in securing profits while allowing the trade to run further, maximizing the potential profit.

Shift Indication: A shift in market structure indicates a change in the market's direction, either bullish or bearish.
Daily Opening Gap: The daily opening gap, especially between 9:30 and 10:00 AM, is an important indicator. If price moves into the gap and fails to close it, this suggests continued movement in the direction of the initial trend.
Strategic Importance: Monitoring the market structure shift around these gaps provides opportunities to enter trades in alignment with the broader market direction.

Disclaimer: Please note, this is not financial advice—always consult with your financial advisor before making any investment decisions.

This playlist is created based on my understanding from the ICT Mentorship 2024 Program.

It is purely for learning purposes, and I am uploading condensed versions of my notes from what I've learned in the ICT Mentorship 2024.

For the full videos, you can visit the official ICT main playlist.

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