ICT 2024 Mentorship Key Notes Lecture #20

 

 Check This Out!

Our latest YouTube playlists are up, packed with key insights! Plus, I've added text summaries to the blog for quick reading. Please like, subscribe, and share – your support helps us do more great things. Thanks for being with us!

Institutional Entry Drills

• Understanding the Setup:
  • Institutional order flow entry drills are used to identify key price levels where institutions are likely to enter the market.
  • They work by targeting fair value gaps (FVGs), which act as zones of price inefficiency. These gaps attract price back to them, offering a low-risk entry.
  • Traders should look for quick reactions when price enters these FVGs. If momentum doesn't swiftly move the price higher or lower, it may signal weakness.
• Why Crucial for Low-Risk Setups:
  • These drills help in spotting precise entry points with minimal risk by aligning with institutional buying or selling. When done correctly, traders can get into trades with a higher probability of success and controlled risk.

Market Maker Sell Models

• Role of Market Maker Sell Models:
  • The sell models are used to identify liquidity runs where the market seeks to clear out buy-side liquidity (i.e., stop-loss orders placed by retail traders).
  • The model identifies areas where price is likely to reverse after targeting these liquidity zones.
• Liquidity Runs:
  • Liquidity runs happen when the market aggressively moves to clear these zones before reversing, making them prime areas for entry or exit based on how price reacts.
  • Recognizing these patterns allows traders to position ahead of time, expecting the liquidity sweep to reverse price.

Managing Stop Losses

• Using Fair Value Gaps (FVGs):
  • FVGs play an important role in managing stop losses. A trader can set stop losses just beyond the fair value gap to avoid being prematurely stopped out by small retracements.
• Avoiding Premature Exits:
  • To avoid premature exits, it is crucial to wait for price to move at least halfway to the first partial target before adjusting stops to cover costs.
  • This practice ensures that minor fluctuations don’t trigger stop-loss orders, allowing for more flexibility in trade management.

High vs. Low Resistance Liquidity

• High Resistance Liquidity:
  • High resistance liquidity runs occur when the market struggles to move through significant zones (e.g., multiple opening gaps). These can slow down price momentum and lead to choppy conditions.
• Low Resistance Liquidity:
  • Low resistance liquidity is the opposite; the market moves swiftly, with minimal friction, providing clearer directional moves. Differentiating between these two conditions is crucial as low resistance conditions offer better trade opportunities with higher potential returns.

Smart Money Reversal

• Identifying the Turtle Soup Pattern:
  • The "Turtle Soup" pattern is a smart money reversal technique where price aggressively runs below old lows (or above old highs) to trap traders.
  • After this liquidity grab, the market swiftly reverses, catching those who entered the wrong side off guard. Traders can use this pattern to position themselves opposite to retail traders​.

Liquidity Pools & Premium Arrays

• Assessing Liquidity Pools:

  • Liquidity pools are key areas where clusters of stop orders are likely to exist, typically around relative highs or lows.
  • Premium arrays (price zones offering optimal trades) align with these liquidity pools. When a liquidity pool and premium array align, it becomes an optimal zone for profit taking or initiating a trade.

• Maximizing Profit Potential:

  • Understanding the relationship between liquidity pools and premium arrays allows traders to enter trades where smart money is likely to execute, increasing the potential for profitable moves.

Market Structure Shifts

• Applying Market Structure Shifts:
  • A market structure shift occurs when the price breaks previous support or resistance levels, signaling a potential trend reversal.
  • Traders can use these shifts to confirm trade entries by ensuring the market has transitioned from one phase (e.g., accumulation to distribution) and is now moving decisively in one direction​.

Partial Profits & Risk Management

• Benefits of Taking Partial Profits:
  • Taking partial profits at predefined targets reduces the psychological pressure on traders.
  • This practice ensures some profit is locked in, allowing the remaining portion of the trade to run with less stress. It mitigates the anxiety of price reversals while still offering profit potential.

Smart Money vs. Retail Trendlines

• How Smart Money Targets Retail Trendlines:
  • Smart money often targets retail traders by manipulating trendlines. Retail traders frequently place their stop losses around trendline support or resistance levels, which smart money exploits by pushing price through those areas to trigger stops.
• Positioning to Benefit:
• Traders can position themselves to benefit from this manipulation by fading trendline breaks. Instead of following the retail move, they can anticipate a reversal after the stop run is complete.

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.