ICT Month 3 | 2016 Flashcards
When looking at IOF what should I focus on?
Think like Market efficiency paradigm. I am the MM so I am loooking for where the liquidity is resting (maximum level of liquidity) in the relationship to where market has traded from & where is now?
What does mean market is trading efficiently?
Where ever there si ablack candle there has to be green candle.
IF there is expansion lower offering sell side liquidity meaning there has to be makret offering some buy side delivery (upside). If offered sell side delivery (lower) so to bealance it out they have to offer green candles.
Why should I focus on the bodies of the candles?
Bodies of the candles is where all of the Volume is. Institutional Volume.
Wicks are always going to be directly related to Retail. Bodies are Institutional.
That is also the reason why run on liquidity is considered also when price trades only below the bodies of the candles on a swing low.
How can the Institutional Order Flow be defined?
By looking at the Monthly, Weekly, Daily TF.
Why are FVGs sometimes going to stay open?
If they are coupled with the EQ of a graded price swing or BRK is the reason why many times the FVG is most likely going to stay left open or not fully filled.
What is relationship between buy curve and sell curve?
Everything that occurs on buy curve occurs on the sell curve.
Down close candles on buy curve that are ares where SM is buying and on sell side of the curve that is where they are going to be selling.
How do I know where SM was buying on Buy curve? Because of the expansion higher.
*Bullish OB from buy curve - SM buying - they are going to UN - DO the longs on the sell side of the curve.
Everything on the bank level is a hedge. Between market extremes there is hedging gooing one.
Is stop hunt below the bodies of the candles enough?
Stop hunt below the bodies of the candles is considered a stop hunt.
In which candles is SM buying and in which selling?
- Down close candles: SM is buying
- Up close candles: SM is selling
Because their positions are so large they are going to be getting in prior to the market turn.
But how can I know that SM was buying there or Selling there? becausae of the EXPASNION that takes place afterward.
What is going on on the sell curve?
On the sell curve they have to take the orders off that they used on the buy curve to go long. That is why I see price go into small rnages on sell curve inside bullish OB from buy curve.
Everything is a mirror, what ever SM used to go long, they are going to undo that on sell curve.
What is occurring inside of the mitigation block?
Price retraces into the mitigation block to un do the shorts (example). As price trades into the range from mitigation high to open. That is the are where SM is going to mitigate shorts and buy more.
After mitigation I should see explosive price higher because of buying More & turning shorts into longs.
- BRK and Mitigation blocks are pure form of mitigation
What are nested PD arrays…give one example…
Nested PD arrays for example are daily bullish OB inside of the weekly bullish OB.
On Which TF are Large funds?
Large funds are operating on M & W TF. That are funds that are controling billions.
Daily will trade to M & W Liquidity pool. IOF is seeking lrage institutional liquidity that could be seen on M & W TF I can see that traded to on Daily TF.
How does Institutional Sponsorship in Long Setups look:
- HTF Price Displacement: Note the HTF displacement & that can come in form of Reversal Expansion or Return to Fair Value.
- Intermediate Term Imbalance in Price - move to Discount or Sell Side Liquidity Run. price retracing or going below STL to purge liquidity.
- Short Term Buy Side Liquidity Above the Market: BSL is ideal for pairing long exits to sell to
- Time of Day influence ideal. London Open Low of day or NY Low formation.
*Number 1 & 2 are criteria fo the expectation of Institutional Sponsorship.
How does Institutional Sponsorship in Short Setups look:
- Higher Time Frame Dispalcement that - could be in a form of Reversal, Expansion or Return to Fair Value
- Intermediate Term Imbalance in Price - price Move to Premium or Buy Side Liquidity Run
- Short Term Sell Side Liquidity Below the Market - target, ideal for pairing short exits to buy from
- Time of Day Influence - London Open High of Day or New York High Formation.
What is Institutional Sponsorship?
It is the willingness to protect an underlying price swing that has high probability of unfolding. Impac tof large Institutions, Banks, coming in to fund the side of the marketplace that I anticipate seeing it t run to.
What do I need to do after I see HTF Displacement?
After I see a HTF displacement I have to go back to where did that move begin. Everything has to have a ORIGIN or beginning. That HTF Displacement has to have a Origin Price Level which I can clasify as Institutional Sponsorship level.
How can I Identify Institutional Sponsorship at specific price level?
To identify institutional sponsorship at a particular price levl I need to see immediate dynamic response after price trades to that level.
If it is NOT dynamic and it is rather lathargic lazy reaction that means there is NO Institutional Orders in that area.
*If I see No dynamic reasponse in a position then I should be removing risk or completely exiting the position.
How do I know that large entity entered the market?
Because of the large displacement higher or lower. Meaning if price now gets back to this level where the displacement has started there should be response higher or lower.
What should occur at the graded price swing levels (25%, 50%, 75%)?
Institutions should support price at those graded price swings.
* At 25% the move is usually pretty quick
* EQ (50%) there is usually conoslidaiton and that is where the trade dea should form.
