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ICT > ICT Month 6 | 2016 > Flashcards

ICT Month 6 | 2016 Flashcards

1
Q

What are elements of Successful Swing Trading Hallmarks?

A
  • HTF Charts -> price left consolidaiton and it is now trending
  • IOF on HTF charts is clear (higher or lower)
  • Interest Rates (Bonds) support the idea (SMT)
  • COT
  • Seasonal Tendency
  • Opposign PDA on M W D TF
  • Supporting Intermarket Analysis
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2
Q

How can Instutional Sponsorship be measured. Give example with buying EURUSD and selling USDCHF

A
  • When buying, relative strength analysis support the idea (SMT between EURUSD and DXY)
  • When selling, relative strength analysis support the idea (SMT between USDCHF and DXY)
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3
Q

How does bank accumulation look like?

A
  • Are down candles supporting price and sending it higher
  • Swing highs being broken thru and are swing lows rejected and price is sent higher.

The way I look at bank accumulation is - Am I seeing down close candles supporting price and up close candles breaking. Because new buying is going to occur when market is going to come back lower to down close candles.

SM is not going to buy at higher prices they can only buy at lower prices when the ALGO allows htem to buy at lower prices.

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4
Q

How does bank distribution look like?

A
  • are up candles becoming resistance and rejecting price lower (bearish PD arrays)
  • Are down candles (bullish PD Arrays) being broken.
  • Are swing lows breaking and seeing lower lows.
  • Swing highs rejected (SM selling above the old high) and breaking swing lows

IN down trends focus on UP candles (Bearish PD arrays) because the market rallying higher is going to build SHORT TERM PREMIUM where SM is going to be allowed to sell in PREMIUM. Inside of the premium SM is going to establishe NEW Shorts, add new shorts.

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5
Q

Explain simply accumulation and distirbution.

A

Distribution: Bearish PDA (up candles) resisting and sending price lower.

Accumulation: Bullish PDA (down candles) supporting and sending price higher

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6
Q

When looking at the Monthly or Weekly TF which levels are going to be high draw on liquidity?

A

Levels where price has not traded in recenet weeks or months OR it has a imbalance which is still open I can anticipate price trading back to that level.

Price will return back to Fair Value [Equilibrium, Fair Value in regards to MMs (FVG)] OR it will create new level of imbalance meaning if price is at EQ I will be looking for price to move to Imbalance.

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7
Q

In which stages is IPDA (ALGO) going to move price and WHICH stage should I anticipate first and then what should be the second stage?

A

Consolidation -> Expansion -> Consolidation -> Expansion -> Consolidaiton and in between those stages there are going to be reversals and retracements.

FIRST I want to see price in consolidation and then move out of that consolidaiton (displacement). IF displacment higher then price should trade into the Premium.

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8
Q

What does mean Rule Based conecpt?

A
  • I have to follow some rules
  • Every trade has to pass a certain filter -> no exception
  • RULES has to be static - not changing them for each trade setup
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9
Q

When determening market conditions in which terms should I think for?

A

I should think in terms of WHERE (Fair Value, Liquidity) price COUld reach for HIGHER or LOWER, that is going to help me determine most likely market conditions

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10
Q

What are the PD arrays that have been most recently traded to indicate?

A

They indicate the price should REACH for the oppposite PD array spectrum.

Meaning if price recently traded to Discount PDA then it should trade for the Premium PDA.

If Discount PDA provide support: price should reach for premium PDA.

If Premium PDA provide resistance: price should reach for Discount PDA.

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11
Q

How do I determine the PD arrays that are active in the current market price?

A

First determine the most recent active dealing range in which price is trading in. Then look for the PD arrays that are above and below market price. Look in this order: Mitigation Blocks, Breaker, Liquidity Void, FVG, OB, Rejection Block, Old high or Old low.

For high probability trades I should look for PDA on the M W D and 4h first for high probability.

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12
Q

How can I determine which direction price is most likely going to trade?

A

Which side of the market place has most recently showed a displacement. Where has price moved away aggressively, large ranges most recenlty that is indicaiton of LARGE push of Smart Money. They are pushing price on the HTF (M, W, D, 4h). There is probability that direction will be traded to.

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13
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A
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13
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13
Q

When is the easiest trading going to take place in terms of TF sequence?

A

The easiest trading is done when all TFs [M, W, D, 4h] are all in alignment that is a opportunity for high probability trade.

I want ot have M W and D in sync to offer me easy trading.

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14
Q

Where is Smart Money going to buy and sell?

A

Smart Money selling above old highs.
Smart Money buying below old lows.

Use the LTF to get in sync witht eh HTF.

Remember price is fractal meaning they will be selling above old highs on D TF and it is also going to selling above old highs 15min.

I use the idea on HTF of SM selling above the old highs and then on The LTF look for the same thing STHs taken out and displacement lower

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15
Q

How should the general concept look like when I have a HTF KEY level where I want to be buying or selling.

A

I wait for price to trade into my Key price level from HTF and then on LTF look for the idea to be supported or neglected.

HTF KEY level&raquo_space;> LTF Market structure SHIFT!!!!

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16
Q

When Swing trading and for example market on HTF Is poised to trade higher what other things apart from Market price should I consider?

A
  1. Seasonal Tendency
  2. Interest Rates Driven - pairing strong currency with the weak currency (high interest rate vs low interest rate)
  3. Commitment of Traders. What are the commercials doing. Where is their Net position-
  4. Intermarket Analysis. Look at correlated pairs. SMT, Market structure.
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17
Q

For example HTF is bullish and price has exapnded higher how should I act. What is anticipated for the market to do next? And where should I be buying?

A

Market will rally higher and the next logical think after expansion is to again go into consolidation or retracement. Lets say it retraces. Retracement lower is going to give me stage where I could enter and anticipate market trading higher.

I want to see displacement from HTF PD array (M, W, D) as that is indication that market is telling me it should trade higher.

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18
Q

What is DISPLACEMENT? What is displacement indicating, displacement filter?

A

Displacement higher or lower is agressive price move where price moves with large magnitudes and low amounts of time.

Displacment should break a swing high or low and create an Imbalance. That is criteria for a valid displacement.

Usually before displacement there is going to be some measure of Stop hunt.

Displacement is the CLUE that price made a low and took out the sell stops (and vice versa for when bearish) -> then I anticipate retracment lower where I will be permitted to buy.

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19
Q

In what sequance of Impusle Price Swings does price move AND describe each part of the sequance?

A

Impulse Price Swing -> Retracement -> Expansion Swing.

Impulse Price Swing: Displacement and it is indication of SM making a low. Anticipate price to make a high and some PD array and then retracement lower back into the Fair Value.

Retracement: Anticipate price trading back to fair value for more buying. Determine the range from displacment low and high AND then look for PD arrays inside of the displacement range where I could be buying.

Expansion swing: Price should reach for some HTF PD array and trade in same direction as first expansion.

20
Q

What is the Swing Trading Procedure in general. How should I move across TFs when determening PD array where should I be buying and where scaling out (9 points)?

A
  1. Determine 9 to 18 month market profile on M or W TF (Trending or consolidation), look for markets that recently left consolidation
  2. Determine Monthly PDA
  3. If monthly PDA are active - move to weekly
  4. Determine Weekly PDA
  5. if weekly PDA are active - move to daily
  6. Determine Daily PDA
  7. if daily PDA active - move to 4h
  8. Determine 4h PDA
  9. Buy or sell all 4h PDA and scale out on D, W, M TF
21
Q

How does the Setup Failure Protocol look like when Swing Trading (buying opportunity) ?

A

If a 4h Discount Array fails -> look for price to mowe to a lower 4h Discount Array.

If the 4h chart does not have Discount Array to buy at -> refer to D, W, M

At the lower discount buy with 50% of the position size.

Always confirm the LTF 4h Premium Arrays give away as price moves higher AND new discount arrays are supporting price.

if 4h discount array fails -> move to D TF Discount array.

if Daily discount array fails -> move to W TF Discount array.

if Weekly Discount array fails -> move to Monthly Discount array.

22
Q

How does Swing Trading Progression look like when bullish? (Price is fractal)

A

If the weekly TF there is price moving higher making impulsive swings retracements and then expansions higher.

Inside the Weekly TF Impulsie price swing, daily TF is going to have another Impulse swing -> retracement -> expansion swing.

And if I break down the Daily TF impulse Price Swing the 4h TF is going to have Impulse Swing -> retracement -> expansion swing.

EVERYTHING in price is fractal.

HTF is goioing to have impulse price swings and then the LTF is going to have more impulsive price swings as price is fractal.

When I am buying at 1h Discount Array and it fails then I just go higher to 4h Discount PD array because that is most likely what they are reaching for.

23
Q

How is the algorithem going to refer to price?

A

In terms of the PD Array matrix, in terms of premium and discount, fair value and liquidity.

24
Q

How does Bullish MWD Sequential look like?

A

Monthly TF: Discount arrays enduce buying as evidence by price moving higher. Displacement higher from PDA indication that SM is buying.

Weekly TF: Discount arrays shown buying (by form of price moving higher)

Daily TF: Discount Arrays show evidence of buying by sending price higher.

.

25
Q

How does Bearish MWD Sequential look like?

A

Monthly TF: Premium array has shown to induce selling as evidence by Price moving lower

Weekly TF: Premium array has shown to induce selling as evidence by Price moving lower

Daily TF: Premium array has shown to induce selling as evidence by Price moving lower

In All TFs - up candles should provide new resitance and priec ot trade lower.

26
Q

How to act and where to buy when MWD are all bullish.

A

MTF -> WTF -> DTF all of them are in sync and price is trading higher.

Displacement on those TFs is confirming that SM is anticipating price to trade higher and I would be buying all 4h discount arrays

Anticipating injection of buying volatility at 4h PDA and meaning expansion higher should occur.

27
Q

How to act and where to sell when MWD are all bearish.

A

I am looking to sell all daily bearish Premium Arrays.
Also anticipating to sell all 4h premium PDA that are also nested in the Daily Premium Array.

28
Q

How to act and where to buy when MW bullish while daily is bearish. Also where should I avoid to buy.

A

Daily is inside of a correction.
Buying Discount DTF PDA at or “nested” with Weekly TF PDA.

Coupling W PDA with D PDA.

Buying 4h Discount PDA at Daily or “nested” with W TF PDA.

Avoiding buying D TF Discount PDA if D TF has created a bearish BRK and I do not want to be buying against that as that is dominant PD array and would negate my sequential.

29
Q

How to act and where to sell when MW bearish while daily is bullish. Also where should I avoid to sell.

A

Daily is inside of a correction higher.

Selling Premium D TF PDA at or “nested” with Weekly TF PDA.

Coupling W PDA with D PDA because Daily is inside of correction higher.

Selling 4h Premium PDA at Daily or “nested” with W TF PDA.

Avoiding selling D TF Premium PDA if D TF has created a bullish BRK and I do not want to be selling against that as that is dominant PD array and would negate my sequential.

30
Q

How to act and where to sell when M bullish while W & D TF are bearish. Also where should I avoid to buy.

A

Buying D TF Discount PDA nested within Monthly Discount PDA.
Buying all 4h Discount PDA at weekly and or nested in monthly bullish Discount PDA.

Avoid buying weekly discount PDA if the W TF has just create a bearish BRK (dominant PDA)

31
Q

How to act and where to sell when M bearish while W & D TF are bullish. Also where should I avoid to sell.

A

Selling D TF Premium PDA nested within Monthly Premium PDA.

Selling all 4h Premium PDA at weekly and or nested in monthly Premium PDA.

Avoid selling weekly Premium PDA if the W TF has just create a bullish BRK (dominant PDA)

32
Q

What are the only three things that matter in price action?

A

Imbalance, Swing high and Swing low.

Any kind of Imbalance or Ineffiicency, FVG, Volume Imbalance, Opening Gap etc.

Swing high and Swing low for Liquidity

33
Q

How should I PD array if I for example have Monthly PDA?

A

I have a monthly PDA and in order to refine it I have to drop to Weekly TF and look for NESTED PD arrays that are inside of the Monthly PDA.

HTF PD arrays are going to give me the context but to order to refine them I have to look on LTF and that are then going to be high probability PDA.

34
Q

Which levels in OB are importan.

A

Bullish OB: focusing on swing high and opening price. Price should not on CLOSING basis trade pass the MT of the bullish OB. It can wick into it

bearish vice versa.

35
Q

On which TF levels are swing trades usually framed?

A

On Monthly and Weekly TF.

36
Q

What things will confirm explosive swing trade (8points)?

A
  1. Major Market Analysis
  2. Intermarket Analysis
  3. COT Hedging Program
  4. Open Interest
  5. Seasonal Tendency
  6. Volatility Filter Confirms Contraction
  7. Major News Headlines
  8. Market Sentiment
37
Q

What should I be aware when doing the Major Market Analysis being one sided?

A

Currency, Stocks, Commodities and Interest Rates.

At least 2 of them have to be trending. For the other two means just lagging and eventually move into trending.

Commodities & Stocks -> one should move
Currencies & Interest Rate -> one should move

38
Q

What is Intermarket Analysis Confluence for the Swing Trading?

A

For Example if bullish on EU that means the DXY should be bearish and trading at resistance levels.
Commodities on the other hand should also be trading at support level.

DXY UP -> commodities down
DXY DOWN -> commodities up

39
Q

What should I be focusing on when looking at COT Data?

A

Look for the last 12 month range based on the commercial positions. As commercials are providers of commodity or currency.

Hedging is usually done over the 12months time period.

  1. Determine the 12 Month range based on commercial net position
  2. Are commercials bullish or bearish.
40
Q

What is Open Interest & how should I work with it.?

A

It is X Ray of what Smart Money is doing. Open Interest tells me how many contracts are currently outstanding in the market.

  • HTF Discount PDA -> OI declines 15% = bullish
  • HTF Premium PDA -> OI increases 15% = bearish.
41
Q

What could seasonal tendency tell me when selecting key swing trades?

A

It should act as a roadmap to tell me when market should be trading higher or lower.

Seasonal tendency are a roadmap and not be all end all.

Seasonal Tendency is the TIME aspect of price as it should tell me WHEN price should trade during WHICH time of the year what moves are most likely going to occur.

42
Q

What is Volatility Filter confirming contraction?

A

Contraction of price. Meaning price moves from big ranges into small ranges.
When focusing on those ranges I should focus on bodies of the candles.

Small Ranges (bodies - SMT accumulating positions) -> big ranges (distribution) -> Small ranges (SM accumulating positions)

43
Q

What Insight can Major News Insight give me?

A

Major Market News are going to build Market Sentiment [Retail - dumb money]

If I am bullish on GC then I would love to see some bearish Major News Headlines as that is going to build bearish sentiment and then price is going to do the opposite.

44
Q

What Indicator can I use for market sentiment?

A

For market sentiment I can use William %R with a 14 period.
I can use it with 20, 14 or 10 period. Basically I have to calibrate the indicator and see with which EMA the highs and lows are most overalpping

45
Q

Which things need to be taken in consideration for Million Dollar Swing Setup?

A
  • Seasonal Tendency
  • Major Market Analysis
  • Intermakret Analysis
  • Top Down Analysis
  • Tade Setup
  • Trade Managment
46
Q

When doing seasonal tendency analysis what should I ask myself for million dollar setup?

A

Is there one directional seasonal tendency presently or soon.
* If yes then I continue my analysis
* If NO then I wait or move to another market

For million dollar swing setup there HAS To be seasonal tendency in play.

47
Q

When doing Major Market Analysis what should ask myself (two questions)?

A

Are Interest Rate markets &or currency markets trending?
* If YES then look at Commodities & Stocks
* If NO consider Day Trading. Wait for stage for swing trading.

Conditions have to be there for a Swing trading model otherwise Day Trade or Short term is the way.

Are Commodiites &or Stock Market Trending?
* If Yes then continue my analysis.
* If NO consider Day Trading. Wait for stage.

Both of the groups have to be in agreement to confirm that there is trending environment.

48
Q

What does it mean to do the Intermarket Analysis when preparing for million dollar swing setup (4 conditions) ?

A
  • COT -> where are the commercials what is their NET Position telling us based on the 12 months range.
  • Correlation Analysis Process: Is DXY supporting the trade idea that I am trying to take (SMT)
  • Commodity Filter Process: Are commodities moving, breaking old highs for example and rejecting old lows.
  • Open Interest Filter: Is Open Interest dropping/increasing 10-15% while price is at the key Level.
49
Q

How does the Top Down Analysis Process look like for million dollar swing trade (6 points)?

A
  1. Note 9 to 18 months History of price action on M TF
  2. Identify present PD arrays M W D and 4h TF chart.
  3. Note IPDA Data ranges 20-40-60 days back from today.
  4. If all PD Arrays are exhaused or traded to in the last 20 days move out to the 40 day lookback.
  5. Look for IPDA Data Ranges and PD to converge with one another to determine high probability IOF.
  6. Based on the Bullish or Bearish stance or premise I am trading - focus on the respecting PD arrays for trade setups (if bullish focus on M, W, D discount)
50
Q

What is most likely going to occur at the EQ of the total graded price swing (bullish example) and what should I anticipate after that?

A

After the EQ of total graded price range is reached there is going to be a stop hunt there

(usually they come back and take out the scared bulls),

then price trades higher thru the EQ again and breaks the high. Once the high is BROKEN, price will try to come back and retest that EQ high (bullish BRK).

Inside of the retracement lower down to the bullish BRK there is most likely going to be stop hunt occuring and that will many times be the last one.

After the stop hunt at the EQ price should run directly to my objective. Usually tehre is then another stop hunt at that bullish BRK at the EQ and hten price makes a run higher.

  • Stop hunt at 50% graded price swing
  • Stop hunt at 75% graded price swing.

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