ICT 2024 Mentorship Key Notes Lecture #21

 

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1. Understanding Market Gaps

• Opening Range Gap (9:30-10:00 AM NY Time):

  • This is the first 30 minutes after the market opens and is critical for setting the tone of the day. Monitor how price moves within this range to anticipate the day's trend.
  • If the market trades back into the gap after breaking out, it may signal a continuation of the initial move.

• Fair Value Gaps (FVGs):

  • FVGs are price inefficiencies that often act as magnets, drawing the price back to these levels.
  • They can be key areas for potential entry or exit points, particularly when aligned with other technical factors like support or resistance.

2. Trading Before and After Holidays

• Pre-Holiday Trading:

  • Liquidity often decreases before a holiday as traders close out positions, leading to erratic or choppy market behavior.
  • It's generally safer to secure profits early in the week and avoid new trades close to the holiday.

• Post-Holiday Trading:

  • The market typically needs time to stabilize after a holiday. Allow the market to establish a clear direction before engaging in trades.

3. Institutional Order Flow

• Concept:

  • Institutional orders, placed by large entities like hedge funds or banks, can significantly influence price movements. Recognizing these orders can help you align your trades with the market direction.

• Application:

  • Focus on key levels such as FVGs, support/resistance, and previous highs/lows where institutional activity is likely. These are often areas where the market will react strongly.

4. High Probability Setups

• Timing:

  • High-probability trades are more likely to occur early in the week, particularly before major news events or holidays.
  • Avoid trading on Fridays, especially before a long weekend, as market behavior can be unpredictable.

• Conditions:

  • Look for setups that align with higher time frame trends and key technical levels. This increases the likelihood of successful trades.

5. Managing Psychological Challenges

• Common Challenges:

  • Impatience: Rushing into trades without waiting for a proper setup.
  • Overconfidence: Taking on excessive risk after a few successful trades.
  • Fear and Greed: These emotions can cloud judgment, leading to poor decision-making.

• Overcoming Challenges:

  • Discipline: Stick to your trading plan and predefined setups. Avoid impulsive trades.
  • Self-Awareness: Recognize emotional triggers and manage them by taking breaks or reducing position sizes.

6. Importance of Backtesting

• Why Backtest?:
  • Backtesting allows you to see how a strategy or setup would have performed in the past, building confidence and refining your approach.
• Application:
  • Regularly review past trades and market conditions to identify patterns and improve your trading strategy. This helps you to be better prepared for live trading.

7. Trading During Low Liquidity

• Strategies for Low Liquidity:

  • Be selective with trades and focus on setups that align with broader trends or key levels.
  • Consider reducing position sizes and widening stops to account for increased volatility during low liquidity periods.

• Market Behavior:

  • Low liquidity can lead to choppy and unpredictable price movements. It's often best to avoid trading unless a clear, high-probability setup is present.

8. Navigating Complex Market Conditions

• Multiple Price Influences:

  • When the market is influenced by multiple factors like overlapping gaps (new day/week opening gaps), it can create a complex trading environment.
  • The market might act unpredictably around these areas, so exercise caution and avoid overtrading.

• Efficient Trading:

  • Trade only when there is a clear opportunity. Avoid forcing trades in conditions where the market is not providing clear signals.

9. Adapting to Market Conditions

• Flexibility:

  • Be flexible in your approach and ready to adjust your strategy based on the market’s behavior, especially around holidays and significant news events.

• Understanding Market Dynamics:

  • Learn how to identify when the market is showing signs of strength or weakness by observing how it interacts with key levels and gaps.

10. Developing Your Trading Mindset

• Confidence:

  • Build confidence by understanding the logic behind market movements and how to anticipate setups.
  • Trust in your analysis and backtested strategies, and avoid being swayed by short-term market noise or external opinions.

• Long-Term Perspective:

• Trading is a long-term endeavor. Focus on consistent growth and improvement rather than short-term gains.
  
  

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.