ICT Month 5 | 2016 Flashcards
What is Quarterly market structure shift?
Algo will provice efficency to trade at evrey price in market or asset. Meaning Efficient Delivery. Markets are not randomg. Controlled & engineered. Everey 3 to 4 Months there is going to be a major market structure shift. Universal. IPDA has data ranges that it works withing that should give me the idea where the algo should do its work. The market has to generate new interest.
Every 3 to 4 months there should be MSS that would cause consolidaiton or retracement of price swing.
How does SM accumulation (buy program) look like?
Manipulation in underslying VS Benchmark (DXY) -> Buy program
* Benchmark makes a LL (Stop hunt) - Underlying makes a HL (Failure Swing)
* Underlying makes LL (Stop hunt) - Benchmark makes a HL (Failure Swing)
How does SM distribution (sell program) look like?
Manipulation in Underlying VS Benchmark.
* Benchmark HH (Stop hunt) - Underlying LH (Failure Swing)
* Underlying HH (Stop hunt) - Benchmark LH (Failure Swing)
* Benchmark makes LL (Stop hunt) - Underlying makes LH (Failure Swing) -> inversely correlated.
Which 4 Quarters are there by months in a year?
- Q1: Jan, Feb, March
- Q2: Apr, May, June
- Q3: July, Aug, Sep
- Q4: Oct, Nov, Dec
What is the lookback and how to do it?
Lookback is 60-40-20 trading days of lookback from my month of Study (most recent past month).
The algo will reach back of about 3 months of trading data. Markt what 6ß 4ß2ß trading days to the left of origin date are. In this Lookback period identify Institutional Order Flow & Reference Points (swing high/low, OB, FVGs etc)
I can do it from todays date, from the beginning of the month or from MOST significant market structure shift.
Ask yourself where is the liquidity at. The most important thing when it comes back to loookback is WHERE liquidity could be absorbed or engineered.
What is lookback calibration to the most recent Market Structure?
I am looking back 60 trading days. Determine what was the IOF (bullish or bearish). Was there more significant high or low formed. Put the vertical line on that high or low, that is calibration to the most recent Market Structure.
Algo is systematic meaning it is going to work with data ranges & it is going to use calendar dates. Every 3 to 4 Months there is going to be a shift. ALso in the last 4 months where is the liquidity at.
What is the Cast Forward Period?
- Anticipate the next MSS to occur in the next 20 to 40 trading days
- Cast forward 20 days when the last shift was 40 days ago -> always using 60 days reference point
- Cast forward 40 trading days when last shift occured 20 trading days ago.
How can I do my cast forward?
Adding 20, 40, 60 days range to my vertical ancor or most recent Market Structure Shift. This is a future data range. Algo will anticipate doing a shift in Market Structure between 60 & 20 trading days.
In the range of 60 trading days to the right of my MSS I anticipate a setup to FORM. I migh have to wait as long as 60 trading days for Setup to form.
The Algo will seek to do something in the FIRST 20, first 40 & 60 trading days after the most recent MSS.
Inside of the Cast forward I would anticipate some setup to form.
What is Open Float?
Current Interest above & below market price. Pending buy orders above old highs. Sell orders below lows. Sell Stops for entry& colapse.
Shorts use protective Buystops above STHs above last beairhs MSS. Above STH, BSL above high in last 3 months, 6 months, 12months.
Long protective (Sell Stops) under last bullish shift. Below STL, SSL below 3months low, 6months low and 12months low.
How much data should I have on D TF.
When focusing on D TF focus opn the last 3months. If looking at AUDUSD today, then I want to go back 3 months. Where was the last market structure shift.
- Open A pair
- Start from today looking back
- Lookback 3 months
- Where was the last market structure shift.
FOCUS on most OBVIOUS market structure shift in the last 3 months. Algo is looking for liquidity of 60 trading days in the past. Where is SSL, BSL, FVG, Where are EQ price levels.
How can ALGO know where everyones stop is? It has to have a range of data. Lookback period 20-40-60
When can the open float move outside the dealing range?
When there is a near high or low just outside 60 trading days that is where there are going to be moves outside of the 60 trading back anc open float is going to shift outside of the current dealing range.
How are funds trading by nature?
Funds are trend following in nature. Every 3months that occurs. Every 3 months at Major Support / Resistance.
What makes these false BOS higher & lower so significant?
Large traders in a fomr of fund traders they have their Buy Stops above these levels (old highs and old lows) and they have their Stop Loses around those swing points.
Which forms of swing points are out there?
Stop hunt and Failure Swing.
What is a stop hunt turning point on selling scenario?
Market will generalle make a run higher into Resistance HTF PD array it may even come short of resistance area & trade lower. The market will make than ONE more run higher to scare of the marketplace. And that second tun higher goes ultimately into a level I would anticipate selling at.
ICT loves this pattern usually forms when price just falls short of the levle. HTF PD array have to be on my chart otherwise I can not see those ideas on the chart.
I Do not want to see price create a HH and then WAIT for a while, RESPONSE has to be immediate.
There are two entry points, Selling on the stop hunt high or confirmation entry at the BRK.
What is failure swing turning point?
Price trades to the HTF Support level displaces higehr & then coming back and retesting it. I do not know with great edal of conviction IF I am going to get the BRK or NOT. Meaning look for that retracement lower to see if price offers failure swing or stop hunt.
The magintude of price expansion higher after the retest indicates that they have trapped traders.
