ict2 Flashcards
What are key factors that indicate the market is likely to go lower?
Seasonality, Fed raising interest levels, Earnings season, Underlying market tone
What are the three steps of a typical ‘sucker play’ in a bearish week?
- Takes out sell stops
- Takes out buy stops
- Continues downward
What is a stop hunt in trading?
A stop hunt occurs when the price is intentionally moved to trigger stop-loss orders placed by traders.
How does a stop hunt work in a sell market?
- Takes out sell stops → Traders enter sell orders
- Takes out buy stops → Traders enter buy orders
- Reverses downward and continues lower
How does a stop hunt work in a buy market?
- Takes out buy stops → Traders enter buy orders
- Takes out sell stops → Traders enter sell orders
- Reverses upwards and continues higher
What is Break in Market Structure (BMS)?
For sell, when the price creates a short-term low and then breaks below it, signaling a potential shift in market direction.
For buy, when the price creates a short-term high and then breaks above it, signaling a potential shift in market direction.
What should traders look for a Break in Market Structure (BMS)?
for sell, look for imbalance once the STLis broken (FVG), Opportunity to sell when price re-enters that area, Possibility to enter as long as the market has not taken out another low.
for buy, look for imbalance once the STH is broken (FVG), Opportunity to buy when price re-enters that area, Possibility to enter as long as the market has not taken out another high.
When does an efficiently delivered price move occur?
When price goes below the 50% mark of previous leg to take out imbalance, known as a Buy Side Imbalance.
When price goes above the 50% mark of previous leg to take out imbalance, known as a Sell Side Imbalance.
What are the preferred trading hours for futures charts?
Between 8:30 AM and 11:00 AM.
Why is it important to analyze a weekly chart in futures trading?
It helps identify the overall market trend, key support and resistance levels, and potential reversal points.
What are the three key elements of market bias?
- Macro Factors – Interest rates, economic policies, earnings season.
- Market Sentiment – Bullish or bearish underlying tone.
- Liquidity Areas – Where large players are likely to place orders.
Why is analyzing a daily chart important?
It provides insight into short-term trends and key entry/exit points.
What is the purpose of a 1-hour chart?
To refine trade entries and confirm short-term market direction.
What is the significance of a 15-minute chart?
It is useful for intraday traders to identify precise entries, stop hunts, and liquidity runs.
What is a false breakout?
When price temporarily moves beyond a key level, triggering stops, before reversing.
How do traders recognize a stop hunt in real-time?
By observing sharp price spikes into areas of known liquidity before reversing.
Why should traders expect stop hunts before major moves?
Because market makers and institutions use them to accumulate liquidity.
How does liquidity affect market movements?
Large institutional orders require liquidity zones to execute efficiently, often leading to stop hunts.
What happens when price fills an imbalance?
It suggests that the market has efficiently delivered price and may continue trending or reverse.
What is a ‘liquidity sweep’?
A deliberate move targeting stop-loss levels before a market reversal.
What is an ‘efficiently delivered price move’?
A price move that fills liquidity gaps and balances market structure.
What is a ‘run on liquidity’?
A move where price sweeps liquidity levels before reversing.
What is ‘buy-side liquidity’?
A zone where buy stop orders are clustered, making it a target for liquidity hunts.
What is ‘sell-side liquidity’?
A zone where sell stop orders are clustered, often hunted before reversals.
