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ICT > ICT Month 1 | 2016 > Flashcards

ICT Month 1 | 2016 Flashcards

Learn Month 1 ICT

1
Q

What are the 4 context points surrounding the trade idea?

A
  1. Expansion
  2. Retracement
  3. Consolidation (accumulating orders)
  4. Reversal
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2
Q

Which are 4 Institutional Reference points that can be found in Price Action?

A
  1. Orderblocks
  2. Fair Value Gaps and Liqudity Voids
  3. Liquidity Pools and Stop Runs
  4. EQ
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3
Q

What are the 4 stages that the Market can move (continuation2x, reversal etc).

A

Consolidation -> Expansion -> Consolidation (CONTINUATION)
Consolidation -> Expansion (ALWAYS)
Consolidation -> Expansion -> Retracement -> Expansion (CONTINUATION)
Consolidation -> Expansion -> Reversal -> Expansion -> Consolidation (Reversal)

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4
Q

How does continuation IPDA pattern look like?

A

Consolidation -> Expansion -> Retracement -> Expansion

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5
Q

How does the Reversal IPDA pattern look like?

A

Consolidation -> Expansion -> Reversal (Liquidity) -> Expansion

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6
Q

What questions to ask yourself?

A
  • Where is price right now?
  • Where is price most likely going to go?
  • Where is it coming from?
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7
Q

What is importnat about consolidation?

A

Consolidaiton is the START of every move, that is where MM are building orders, keeps market in defined range UNTIL there is enough money on both sides of the RANGES. Which every side has more money to absorbe that is the direction price is going to go. IDK which direction that will always but I wait for the first expansion which is going to give me the clue to where price should expand next.

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8
Q

What am I waiting for after the consolidation?

A

I am waiting for EXPNASION to occur. The first expansion after consolidaiton is going to give me clues what is market most likely be doing.

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9
Q

What to do after First Expansion out of consolidation?

A

Wait for either retracement, reversal or another consolidaiton. BUT ALWAYS wait for the first expansion and if it expands too far then wait for retracement.

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10
Q

Explain Expansion?

A

*Price quickly moves away from level of EQ
* Expansion is paired with bullish OB. OB creates the expansion.

When price leaves a level to quickly that is a SIGN of willingness on the MM side to reveal their intended direction.

If price is in consolidation and then it expands quickly I would be looking for a bullish OB near the EQ of the consolidaiton.

Looking at the bullish OB that has been left behind near the EQ of the consolidaiton based on the bodies

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11
Q

Explain Retracement?

A

*Price moves back inside hte recently created range.
*When price returns back to inside of the recent range this indicates a willingness on the part of MMs to reprice to levels that are NOT efficiently traded for Fair Value

  • What to look for? Fair Value Gaps and Liqudity Voids (Inefficiencies)

Real quick Expansions will usually create a range where price would want to come back for rebalancing.

Quick suddent momvent higher or lower -> there is going to be infficiencie areas -> price will tend to retrace to close those ranges.

After rebalancing the FVG (retracement) price will tend to move in its intended direction.

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12
Q

Explain Reversal?

A

Reversal is when price moves in the opposite direction. The current direction is taken

When price reverses direction it indicates the MMs have ran a levle of Stops nad a significant move in other direction should take place.

What to look in Price? Liqudity pools above old highs and below old lows.

Before signficiant move there is ALWAYS going to be some measure of STOP hunt.

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13
Q

Explain Consolidation?

A

Price is moving inside of the clear defined range. NO sign of moving higher or lower.
Indicating the MMs are allowing Orders to build up & I should anticipate expasnion near term higher or lower.

Wait for impulsive move or swing price away from EQ (50% of the consolidaiton based on BODIES of the candles.)

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14
Q

Define the Daily Range?

A

Expansion = Judas Swing London
Retracement = New York Session
Reversal = London Swing
Consolidation = Asian Range

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15
Q

How does the daily range start?

A

Everyday starts with some measure of consolidaiton (Asian Range).

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16
Q

What is after the initial asia consolidation?

A

There is manipulation that takes place (EXPANSION) in form of Judas swing. Making the high or low in London for a reversal.

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17
Q

What occurs after manipulation in london?

A

Thereis another expansion move into NY Session.

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18
Q

When is the second consolidation?

A

Usually after the end of LOKZ there is consolidation where price will consoolidate between 5AM to 7AM. OR price will even have a consolidation into the 8AM to 8:30AM.

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19
Q

What is occuring at 8:00AM to 8:30?

A

There is usually some form of consolidaiton. Then at 8:30 price will have injection of liqudity (expansion) or reversal. And then another leg of expansion going into LCKZ.

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20
Q

What is characteristics LCKZ?

A

LCKZ is another market reversal profile. I anticipate opposite end of the daily range to be created and after LCKZ price should enter another stage of consolidaiton.

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21
Q

Define the Daily Range Structure?

A
  1. Starts with Equilibrium or consolidation (Asian Range)
  2. Manipulation on some news event (always) at the time of manipulation or just before it. That is the judas swing After NY midnight
  3. Range expansion after the london creates high or low and expansion should take place till 5AM
  4. 5AM to 8AM market will go in some measure of consolidation
  5. New york retracement between 8AM and 8:30AM then reversal or expansion move.
  6. 10AM to 11AM during LCKZ market will usually create the opposite end of the daily range, meaning reversing back to retrace into the daily range.
  7. Consolidation ending True Day.
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22
Q

When is manipulation going to take place related to news time?

A

There is going to be some form of MANIPULATION at the news event or just before it.

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23
Q

What is the other characteristic of LCKZ beside reversal and creating the opposide end of the daily range?

A

It can be used to get in sync with the HTF IOF.

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24
Q

Define the classic London Condition?

A

London is all about judas swing.

  1. Consolidation
  2. Expansion (manipulation) into the liqudity pool and HTF PD array.
  3. Reversal
  4. Expansion.
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25
Q

How does the delivery of price start?

A

Delivery of price always starts with a measure of consolidaiton as that is where orders are building. MMs are letting orders build on both sides of the ranges.

Consolidaiton -> Expansion ALWAYS.

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26
Q

What are the two forms of IPDA algo delivery? (continuation, reversal)

A

CONTINUATION:
Consolidation -> Expansion -> Retracement -> Expansion

REVERSAL:
Consolidation -> Expansion -> HTF PD Array -> Reversal -> Expansion -> Consolidation.

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27
Q

General Daily Range Structure?

A
  • Consolidation in Asia
  • Expansion in London then reversal to create the high or low.
  • Expansion till 5AM
  • Small consolidaiton in NY retracement between 8AM to 8:30AM
  • Injection of liqudity (another leg of expansion)
  • LCKZ 10AM to 11AM creating opposite end of daily range and then reversal profile.
28
Q

General Weekly Range Structure?

A

Sunday Opens is consolidation. Expansion on Monday. There is Reversal on Tuesday or Monday to create High or Low of the week. Then there is another expansion after that price goes into consolidaiton mid week, then it is either going to reverse or retrace.

29
Q

What does retail think how does the price move?

A

Retail thinks the price is moved by indications

30
Q

How does Smart Money move the price?

A

Every day there is huge injection of liqudity. They are putting in traders to where they are most likely going to come back to offset or neutralize.

Liquidity in market can be found in form of BSL, SSL and pending orders.

31
Q

What are the 4 primary drivers in price delivery?

A

Expansion, retracement, reversal and consolidaiton.

32
Q

How much Price should I have on Daily Chart, 4h Chart 60min Chart and on 15min Chart

A

D TF -> 12M to 9M View
4h Chart -> 3Months View
1h -> 3 weeks view
15min -> 3 to 4 days view.

33
Q

What things should the new trader NOTE on the chart.

A

Note where price has shown quick movement away.
Recent highs and lows that have not been retested.
Note areas on chart there are equal highs and equal lows. That are signs of LRLR patterns.
What days weekly highs and lows form and in what KZ do they form.
Note the daily high and low what KZ they formed.

34
Q

How should be your approach on the TFs?

A

Approach from HTF down to the LTF. As the HTF is always going to have dominance over the LTF.

35
Q

What is the lookback period I should be focusing on 15min TF?

A

3 days lookback.

36
Q

When focusing on the range in price on which highs and lows should I focus for my range extremes?

A

Focus on the highs & lows with STRONG reactions. Impulsice price swing = displacement that is a sign that someone with a lot of money is moving price.

37
Q

How will SM move price once they accumulate enough Positions.

A

Once SM accumulate position they will allow price to go higher until their positions is funded AND SM no longer wants to hold the position. SM will be looking for liqudation areas old high -> BSL on a funded level above the high.

38
Q

After the expanson higher when should I anticipate for retracement to form?

A

After a big expansion swing higher it takes 4 candles for the retracement to come back lower. 3 candles for the swing high and then 4th Candle should be trading lower. EQ is the first price level to when bullish am I anticipating the price to retrace to.

4 candles (3 for swing high, 4th should trade lower and confirm) -> anticipate price trading back to the EQ of the range.

39
Q

In terms of premium and discount where is SM going to be allowed to buy and where to sell?

A

When bullish SM is allowed to buy at EQ and below it of the Range. When HTF Key Level is identified drop lower to LTF and hunt for buy opportunities. IF SM is really bullish on price DISCOUNT prices should not stay in very long.

When bearish SM is allowed to sell at EQ and above it of the Range. When HTF Key Level is identified drop lower to LTF and hunt for selling opportunities. IF SM is really bearish on price PREMIUM prices should not stay in very long.

Once price hits the HTF Key Price Level study the LTF.

Best Buys come from EQ & in Discount.
Best Sells come from EQ & in Premium.

40
Q

If market is bullish can it spend a lot of time in disocunt?

A

If market is bullish and it is in a DISCOUNT, price should NOT spend a lot of time in discount of the market place.

41
Q

What is the point of retracement?

A

Once the high is created MMs only allow price to retrace so the Buy Stops can build above the old high -> engineering Liquidity.

42
Q

Where inside of a range can I anticipate a measure of consolidation.

A

Around the EQ of the range there is some sort of consolidation anticipated.

43
Q

On intraday TF (1h) How many pips will market move above equal highs for a stop hunt?

A

Around 10 to 20 pips and then it should reverse and continue trading lower.

44
Q

What occurs after consolidation and where it will be reaching for?

A

After consolidation there is expansion and expansion will be reaching for liquidity.

45
Q

How should B be trading inside of the range when price is bullish

A
  1. First ALWAYS look for impulse Price Swing higher
  2. On the retracement, EQ has to be at least touched & then once it is I cananticipate price driving into OTE.
46
Q

Which two perspectives of Fair Valuation exist?

A

In terms of Equilibrium and Fair Value in regards to MMs

47
Q

What is liquidity Void?

A

It is large price ranges very little wicks one sided delivery very little time.

As soon as I see sudden price moves lower or higher tht ais where I start measuring Fair Value. In SIBI there was no up candle only sellside delievry.

Focus on odis of the candles the range which is caused the void & then anticipate price traidng back to the Liquidity Void / FVG / Fair Value for the reason of realancing.

Liquidity Void lower is only price range where there is Sellside Delivery

48
Q

Where can price go once it is at the EQ of the price range?

A

Once price is at the EQ of the price range it should consolidate and it can rally go anywhere (higher or lower) I have to use the HTF to determine the likely BIAS.

49
Q

How can I filter a Turtle Soup above the STH if it is really a STH and price should go lower.

A

Market takes out the high and then goes into consolidation. If it is a turtle soup and price takes out high it should go lower quickly IF it does NOT do that, staying in consolidaiton meaning building EQ (in range) and then price is most likeyl going to continue higher.

50
Q

If MMs are long where can they liquidity their positions?

A

They can liqudate their positions at Fair Value or above STHs.

51
Q

Are inefficiencies going to be revisited?

A

Yes sooner or later inefficiences are going to be revisited because there was only one sided delivery inside of the FVG (higher or lower) and now that is not efficient delivery. Price will tend to move back to those logical areas for the reaosn of reaccumulation or redistribution basically allowing banks new shorts or longs or providing banks with exits.

52
Q

What is EQ?

A

When price moves in defined traidng range there is going to be EQ build. EQ itself is Fair Value. MMs are holding it in a consolidation. When consolidaiton gives away the strongest move on a HTF chart will give me idea of where price should go - BIAS.

53
Q

What is the way that market moves?

A

Premium -> Discount
Discount -> Premium
Fair Value to Discount.
Discount to Fair Value.
BSL -> SSL
SSL -> BSL
Internal -> External
External -> Internal

Imbalance -> Rebalance -> Liquidity
Imbalance -> Liquidity -> Rebalance

54
Q

What is Fair Value?

A

Fair Value in realm of Liquidity or accumulating for MMs perspective.

Fair Value in Discount is Fair Value for buys (establish new longs or get rid of shorts)
Fair Value in Premium is Fair Value for sellin (establish new shorts or get rid of longs)

Anticipate MMs to SCALE or SCALE OUT at Fair Value.-

Where is Fair Value to MMs; When price expands it should be reaching into an area of Fair Value to Liquidate Smart Money positions.

55
Q

What is Liquidity?

A

Liquidity is degree to which a market can be bought or sell in the market without affecting the asset price.

Liquidity = Buy orders and Sell orders in the market place.

56
Q

What are turning points indicating in market?

A

Market creates a high & goe slower. There was someone that went short at the high. Position would be profitable as price trades lower. If there is a short position their SL would be resting at that high.

Market tends to go back to old area so Selling/Buying interest as that is where liquidity would be resting.

BSL above old highs.
SSL below old lows.

When looking for areas where existing orders would reside. DO NOT look for price pattersn. Ask Yourself where is liquidity at the market price.

57
Q

What is the Open Float concept?

A

Liquidity above old highs and below old lows.
MMs will target those levels (old highs & old lows) for liquidity.

58
Q

How can price itself give me the BIAS

A
  • If market moved from old high there is going to be liquidity resting above old high
  • If market moved from old low there is going to be liquidity resting below that.

Market has a tendency to run out old high and old lows.

59
Q

What is HRLR?

A

For price to get from old low to old high and it is a HRLR that means it is going to be a lot of resistance in form of old highs and old lows for price to get to that DOL. It would not be ideal to trade in this conditiosn.

High resistance is universal (any TF) price will be hit with a lot of resistance to trade through to get to the objective.

high impact events like NFP, FOMC can potentially run out the HRLR.

old highs and old lows those levels if formed on the basis of HRLR are going to be well protected as it is indication of SM entering.

The more TIME price has spend at old low the more unlikely it is for price to go below that low.
I will see some really easy trading when trading AWAY from HRLR and targeting LRLR.

60
Q

What is LRLR?

A

If price would be trading from old high to old low and in between those swing price proints there is not a lot of resistance in terms of old lows and old high that conditions are oging to be in form of LRLR.

Clean highs or relative equal lows that is all a sign of LRLR.

61
Q

When looking at price swings how should I think…

A

Think in terms of impulse Price Swings which are going to have a bunch of smaller Impulse Price swings inside of them.

62
Q

What is market protraction?

A

Market protraction is basically Impulse Price Swing that is purely time related.

Market protractions are time sensitive IMpulse Price Swings and they are related to Time of the Day.

63
Q

What is London Protraction?

A
  • Midnight NY (4GMT)
  • the first move is going to be protraction or MANIPULATOION
  • Design to fake out the traders that close initial move after midnight.
64
Q

What is New York Protraction?

A
  • 11GMT or 7AM NY Time
  • if the market traded lower in London then anticipate retracement that is NY Protraction (Manipulation)
  • Manipulation after 7AM is counter direction. If NY Protraction higher then anticipate market moving lower.
  • Market will draw in participants on the wrong side or reach for liqudiity & it has to happen after 7AM NY Time.
65
Q

Which three protractions are there to know?

A
  • 0GMT - Asia
  • 4GMT or NY Midnight
  • 11GMT or NY 7AM

Those are manipulation times ONLY or False moves to get tradeers on wrong side.

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