ICT Mentorship Core Content

Month 1
1-Elements Of A Trade Setup
2-How Market Makers Condition The Market
3-What To Focus On
4-Equilibrium Vs. Discount
5-Equilibrium Vs. Premium
6-Fair Valuation
7-Liquidity Runs
8-Impulse price swings & Market protraction
 Elements Of A Trade Setup
A. Context or framework surrounding the idea.
1) Expansion
2) Retrenchment
3) Reversal
4) Consolidation

B. Reference points in institutional order flow

1) Order blocks
2) Fair value gaps & liquidity voids
3) Liquidity pools & stop runs
4) Equilibrium

The inter-bank price delivery algorithm ( the algo )

it is the actual artificial intelligence it’s a price engine that when we receive our price for
our currencies it’s actually 90% done by electronic algorithms and it’s based on principles
.
There is a movement away from human involvement with market making it’s become
much more efficient to be electronically based and these things are programmed by
humans and those intelligence are limited . It’s actually not a free market you are trading
in it’s highly manipulated especially the foreign exchange which is what we’re primarily
dealing with here because of the nature of it being so manipulated.
The fingerprints if you will are easy to see once you understand the operation and the
conditions that the market maker inter-bank price delivery algorithm functions so when
the market does what it’s doing it gives you indications and fingerprints or clues as to
what you should be expecting next and that’s where your anticipatory skills are going to
be coming in .
there will be times where the market goes sideways and consolidation (holding patterns)
When this happens the market will be looking to do an expansion, all markets start from a
consolidation and move into an expected (. That means there’s an impulse move or an
impulse price swing after the impulse swing it either goes back to a consolidation again
or it goes to a retrenchment when retrenchment happens it goes back down into another
level of expansion or after expansion it can go to a reversal pattern after the reversal
pattern it’ll see another retrenchment then back to potentially consolidation these four
conditions they interchange throughout the ups and downs and ebbs and flow the market
place you’re only going to get one of these four conditions .

The consolidation begins with everything all the moves that take place in the marketplace
start from a measure of consolidation because that’s where the market is building orders
so the market maker keeps the market in a tight range or defined range until there is
enough money on both sides of the upper and lower of the range that’s being defined by
the consolidation whichever one has highest amount of money to be absorbed that’s the
direction it’s going to move in , wait for the expansion when the expansion occurs that’s
when we get the clue as to what the market is most likely going to be doing and then we
wait for either retrenchment or another consolidation or reversal but we always wait for
the first expansion that gives us all the insight that we need to make a decision.

What is expansions ?

Expansion is winning prize moves quickly from the level of equilibrium

Now expansion couples quickly with the tool of an order block order block

What is the importance ?

When you brought slaves a little quickly is indicates a Willingness on the part of market
makers to Reveal their intended the pricing model.
If we are in the consolidation or point of equilibrium If price were to move up quickly That
would give us an indication Looking for A bullish order block We don't want to chase
priceWe are going to wait for price to come back Down Into the order block Where is the
going to occur We look for In price The order block the market makers leave Near or at
equilibrium Price point .
What is retrenchment ?

It is when price moves back inside the recently created price range.
When price returns inside a recent price range this indicates a willingness on the part of
the market makers to reprice to levels not efficiently traded for fair value.
In retrenchment we are looking for liquidity gaps and liquidity voids
When we see real quick rallies up or real quick rallies down in price many times that
range that created will want to come back in and close that in.

What is a reversal ?

It is when price moves the opposite direction the current direction has taken in so if we
are looking for a reversals we are directly coupling that with an ict tool of liquidity pulls.
When price reverses directions it indicates that the market makers have ran in level of
stops and a significant move should unfold in the new direction .
We look for the liquidity pools just above an old high and just below an old low.

What is consolidation ?

It is when price moves inside a clear trading range and shows no willingness to move
significantly higher or lower .
We wait for the impulse move or impulse swinging price away from the equilibrium price
level that is found exactly in the halfway point of the consolidation range.
 How Market Makers Condition The Market

this is the market efficiency paradigm and it is we as new traders are

collectively part of this larger hole over here of uninformed money and
whether we acknowledge it or whether we believe it or what we will invariably
come in contact with the understanding that there is a smart money group of
traders out there when traders look at the marketplace as new investors new
traders new speculators we may or may not have the understanding that there
is a smart money entity out there and we as the larger populace of retail-
minded trading we tend to think of ourselves as the drive axle of what makes
the markets go up and down which is the face that's the facade of supply and
demand that's the facade of trend lines driving price when it touches it that's
the facade of moving average crossovers causing prices go up or down that's
the facade that's perpetuated and we are led to believe that that's exactly
what takes place either in books or in seminars or in webinars or gurus
people.
group over here that doesn't like to draw too much attention to itself but
contrast that with everybody in the retail we all have twitter accounts we all
have my effects books that we're sharing we're all trying to be on Instagram
showing lamborghinis and whatever else houses cars boats yachts girlfriends
they ain't even yours everybody is living large over here in the uninformed
money and smart money is up here quietly just doing their thing who's inside
this small circle over here the banks who's in here everybody on social media
everybody in a retail account at all the gurus and teachers out there that have
things that they're selling service this group this large populace of people they
think and i was part of this group initially they think that the sheer vastness of
the size of them is much more controlling in terms of where price is going to
be driven higher or lower because of the buying and selling pressure that's
equated to their mere involvement in price and that's a facade this huge
populace of trading people or traders community in the retail realm
The ones that influence this entire mechanism that we call the markets this
small little group of traders is actually the drive shaft and if this was a belt like
on a car okay like an alternator this is the actual motor spinning the whole
price higher lower it's not this big circle of people so it has to be a paradigm
shift see if you're over here thinking that it's the group of traders that is online
talking among stem cells as a whole they are the ones that make price go up
and down because of their buying and selling interest because the supply and
demand factors around them that's what pushes price around that's a facade.

how the markets are efficient because they're not efficient for the speculators
they're efficient for the smart money the banks drive price whether you want to
accept it or not that's what's going on and the sooner you get to that
understanding and expectation of what it is that's going on in price it's not for
your well-being it's for the bank's well-being it's their business they have a
liquidity provider everyone else is liquidity are you a lamb or a lion which one
because one of us is going to eat meat and the other one's going to stand
there looking stupid eating grass .

Elements Of A Trade Setup

A. Context or framework surrounding the idea.
5) Expansion = Judas Swing
6) Retrenchment = New York Session
7) Reversal = London Session
8) Consolidation = Asian Range

B. Reference points in institutional order flow

5) Order blocks
6) Fair value gaps & liquidity voids
7) Liquidity pools & stop runs
8) Equilibrium

at the daily range suddenly expansion retrenchment reversal and

consolidation mean something every day starts with consolidation Asian
range after midnight there's a manipulation that takes place
that's expansion it's coming in the form of a Judah swing what is it doing it's
making the higher low in London that's the London swing for a reversal that's
a run on stops then there is another expansion move okay down into the new
York session then there's going to be what another consolidation that's the
new York consolidation going into the 8 to 8 30 news embargo lift where
there's going to be another injection of liquidity or a reversal then there will be
another expansion
and then we go into London close which is another reversal condition and
then what happens the market goes in consolidation for the rest of the day so
we have a way of looking at these things and applying these concepts to time
of the day and repeating characteristics.
inter-bank price delivery algorithm the daily range structure can be really
broken down and simplified with it starts with a price equilibrium that's Asian
range then there's a manipulation and that's always going to come by way of
some news
event some news driver either at the time of the manipulation or just before it
that's the Judas swing then we'll see a range expansion in other words after
the higher low is formed the range will start expanding it'll go down into five
o'clock in the morning new York time or go up into that time window depend
upon the daily direction we're going to use the perspective as a by day that
means that Asia the Asian range has a small consolidation and then right after
midnight new York time there's a drop
down in price that's the manipulation making the false move for the low there's
a range expansion then it goes into the reversal that's classic London open
scenario where it shoots down runs the stops and then what happens it
expands again there's another range expansion into what five o'clock in the
morning new York time between five o'clock in the morning to eight o'clock in
the morning in that time window the market will go back into consolidation
then it will have a retrenchment between
8 o'clock and 8 30 in the morning new York time then it will have either a
reversal in new York session or another expansion move the range will
expand and make the rest of the day going up into 10 o'clock or 11 o'clock in
the morning new York time where it will have a reversal again that's London
close then the market will go into consolidation ending true day at 1900 on
forex ltd's platform.

The Inter-Bank Price Delivery Algorithm ( Daily Range Structure ):

1- Price Equilibrium

2- Manipulation

3- Expansion

4- Reversal

5- Retrenchment
6- Consolidation

# it all starts with a consolidation nothing can happen until consolidation #

why is that important because that's when the orders are building up in the
marketplace the market makers will allow orders to build up above and below
the range the next stage is always expansion it's not consolidation to
retrenchment it can't retrace it hasn't moved anywhere it has it can't go
consolidation reversal because it has to come out of the consolidation so
when you see a consolidation or holding pattern you got to think the next leg
is going to be in price it's going to be an explosive move or an impulse like
impulse price swing movement you need to see movement by determining
what that movement is and what direction is relative to the conditions you're
trading in once we're in the expansion stage we have a choice it can retrace
come back to the order block it just left behind and then recapitalize that and
then make another leg up or down relative to the direction it's moved or once
it's moved in the expansion it can reverse once it reverses there will be
another expansion then it goes back to a consolidation.

# it never goes consolidation retrenchment it never does consolidation

reversal it's always consolidation expansion and then from expansion it goes
either retrenchment or reversal it does not do consolidation expansion
consolidation that does not happen it does a consolidation expansion it
retraces for another move into a order block and then recapitalize it and do
the same direction it moved when it made it expansion or it goes from
expansion to reversal.
 What To Focus On
only to focus on what the smart money view is on the marketplace and that
begins by understanding that there is a huge vast enormous new pool of
liquidity coming into the marketplace every single day even though there's
new busted accounts all the time the statistics stated tell us that 90 of traders
lose their money large funds are in the same category not every fund is
profitable just because there's a lot of people that are investing money into
this fund or this fund manager does not no way guarantee that that fund will
exist a year two years five years from now so we as informed traders our
perspective is to hold the perspective of what a liquidity provider or smart
money view is on the marketplace and they put a spotlight on the aspects of
uninformed money because that's what makes the world go around in the
marketplace the smart money is there to provide liquidity but they're doing it at
a exchange premium in other words they're putting in in trades that they're
gonna most likely come back to to either offset or neutralize for their interests.

the smart money knows in fact that there is a large body of uninformed money
out there contrast that with what we spoke of concerning the uninformed
money's perspective is there's a lack of an entity out there that has a smart
money perspective on the price they don't have an opinion or an idea based
uh perspective that there is someone or some entity or entities out there that
have a smart money perspective or that the banks would actually you know
trade against large uh firms or funds that that goes against the grain of what a
free market is so when we have a smart money perspective in the
marketplace we actually use their perspective as everybody else is liquidity
and price is delivered to engineer efficiency for the smart money entities only
it's not anything outside that so to hold the perspective of a liquidity provider
you are adopting a smart money perspective and everybody else is liquidity
and the liquidity is going to be in the form of buy stops sell stops pending
orders above and below the market highs that are most recently formed on
your charts once we understand that there's two distinct perspectives,

understanding the inter-bank price delivery algorithm

Understanding come by exposure & exposure creates experience

is going to give you the understanding going into the charts seeing what they
ex what they should be doing with price what you should be seeing in price by
seeing each individual component explained in detail and context each
individual part or component of the hole will be able to dovetail nicely and
you'll understand how everything fits together .

WHAT TO FOUCAS ON RIGHT NOW IS :

1- Creating A Daily Price Action Logs With price Charts:

A. Daily Chart - 12 Month No Less Than 9 Months View

B. 4 Hour Chart - 3 Months View
C. 60 Minute Chart - 3 Weeks View
D. 15 Minute Chart - 3 To 4 Days View

2- Resist the urge to forecast price movements :

A. Do - Note Where Price Shown A Quick Movement From A Specific Level

B. DO - Note Recent Highs & Recent Lows That Hasn’t Been Tested Yet
C. Do - Note Areas Where Price Has Left A Clean Highs & Lows
D. DO - Note What Days Weekly HI & LO form & What Kill-Zone It Formed In
E. DO - Note The Daily HI & LO Every Day & What Kill-Zones Formed In

daily chart needs to show 12 months no less than nine months view you have
to have that much perspective on your chart don't have so much of a
perspective you have multiple years on your chart 12 months to nine months
ideally okay you have a four hour chart and your four hour chart needs to
have three months of price action viewed the 60 minute chart or one hour
chart has to have at least three weeks view and the 15 minute chart needs to
have at least three to four days view that means for every chart here I'm
recommending a specific amount of data that needs to be displayed for that
respective time frame what you need to resist doing right now is you need to
resist the urge to forecast price movements that's not for your stage of
development right now do not try to rush ahead and try to figure out what the
market's going to do next because that's going to be a problem for you and it's
only going to lead to frustration we will get you there and it's going to happen
in due time but for now resist that urge but there are some things you need to
be specifically dealing with these charts you need to note where price shown
a quick movement from a specific level in other words if it's run quickly higher
or lower from a particular level that's noteworthy you need to note that on your
chart you need to also note recent highs and lows that haven't been retested
that means if a high's formed on your chart if the price has not come back up
to that level in recent time okay you need to make a special note of that
because it's going to probably be influential going in the future vice versa just
contrarily speaking you're going to be able to look for the lows that have
formed that have not been recently traded to and that low will be influential
later on in future price delivery as well note areas on the charts where price
has left clean highs and clean lows basically that looks like two equal highs
that formed in close proximity to one another um when we whenever we see a
high go up and form and then it trades away from that for a little while and
comes right back to it and doesn't make a new high or maybe it falls just a
little bit shorter just a little bit above it i note that as a clean high and usually
buy stops will form above that and the market will usually come back up there
and run through that it doesn't mean it won't continue through it but it's usually
a big bullseye for a price to want to go up into that area and the reverse is
said for double bottoms or equal lows when a low is formed and another low
is equally formed in close proximity to the initial one that's a big area for sell
stops to pull or build up underneath those lows and
the market tends to have a willingness to go down there and test that liquidity
that means the market will go down into that area whether it continues to go
lower or if it goes down and then reverses there's conditions that we look for
to frame all that and you will know when to expect the specific conditions but
for now i want you to start practicing looking for that in your charts and having
them noted on your chart note what days the highs and the lows form and this
is for the weekly range and you want to know what time of day that occurs
what kill zone is it the high and low of the week forming in London or is it
forming in new York because all those things are going to lend well to
prognostication and what should happen going forward and you want to note
the daily high and the daily low every single trading day and you want to note
when the daily high and the daily low forms for every individual
 Equilibrium Vs. Discount

The very first baby step to understanding institutional order flow

the first thing you need is movement you have to understand that to be a
buyer there has to be a willingness of somebody with bigger uh bigger
pockets than you more money than you and they are the ones that move
price around and they are the banks okay uh they're they're only going to let
price go higher when it suits their purpose.
it's not going to be a supply and demand factor it's going to be a greed factor
they want money they're in the business of making money after all that's their
nature their business that's a bank.

EXAMPLE BY USD/CHF :
Between August 14th all the way to the 29th of September
there was only been one major price swing higher and lower
going to use Fibonacci to illustrate equilibrium we have very strong impulsive
move away then it comes back retraces and then have another strong
impulsive move away and comes all the way up here to the high this is the
indication that there has been displacement now displacement is where
someone with a lot of money okay comes in the marketplace and they have a
strong conviction to move price higher we already know that price is going to
be set by central bank so if they're letting price run this high they're offering at
a higher price as long as there's buyers coming in they're going to keep
offering that price there as long as they keep finding buyers as they keep
raising price up they'll keep expanding price higher higher until there is no
longer any interest for them to pair up orders with participants okay other
open interest in the marketplace so they'll allow price to retrace a little bit until
they can get more buy stops above the marketplace it is not a buyer buyer
buyer buy a buyer market and they keep stretching price .
Then they're allowing price to be uh offered to the marketplace at higher price
and as that happens there all they're doing is is selling off their positions they
establish at a lower low from here the banks are assume long positions in
here they accumulate long positions once they accumulate a position they
allow price to go higher okay once that price goes higher higher higher it
keeps going higher until their position is funded and they no longer want any
more position held so they're going to be looking for liquidation areas where
they know that they're going to be willing participants to buy that's going to be
above this old high back here why would they want to take price above that oh
high here because there's going to be buy stops on a fund level that means
big money managed funds will have stop loss orders right above that high.

Look for impulsive price swings okay and since we're primarily looking for
discount markets okay and relative terms to equilibrium we first have to
understand what an impulse price swing is so let me take the fib off real quick
and go back to that price leg right on the 14th of August take all this stuff off
over here okay so we have one big strong impulsive price swing right here
comes off this low and rallies up the low to this high in here okay that rally up
or that impulsive price swing we only require price to start coming down off of
that and it takes at least four candles no matter what time frame you're on you
need four candles okay from when the market makes a low and starts rallying
up what you're going to look for is once you see a high form you need four
candles why four candles you need to have one candle to the left one candle
in the center of the most highest one then a lower candle to the right that's a
swing high and then you've got to see price go lower when that happens you
start waiting for price to retrace back to equilibrium now what is equilibrium
equilibrium is a midway point of a price move okay so we're measuring the
high from this low you take your fib you draw it up to the low and you drop it
equilibrium we have this price leg up so impulsive price swing goes higher as
soon as we get three candles then and only then will we start watching for
price to come down to the equilibrium price point and that is basically the
Fibonacci level 50 okay we're looking for price to come down to that level and
soon as it comes back to that level and we're on a daily chart we go down into
a lower time frame and we hunt buying opportunities we're only focusing
primarily on equilibrium versus discount we have a price swing that moves
from a low aggressively up we don't do anything until we start seeing a down
move and it has to happen after three candles basically making a swing high
you can see it has a high and a candle to the left that's lower and a candle to
the right that's lower that's a swing high and once that swing high forms we're
waiting for the fourth candle okay to start coming lower in other words we're
looking for four candles to start turning around when that happens okay it
gives you now you're allowed to start looking for the market to come down into
equilibrium that means the 50 level okay once you're on a 50 level and you're
in a higher time frame and we start everything at a daily chart at the daily
chart we know we know now that between the low here and the high here the
market now has gone back to equilibrium so it's at fair value or at fair market
value if you get something at fair market value obviously you're not paying a
premium but you're not really getting a discount either but it's still a neutral to
bullish condition that means you're not buying at an inflated price so this time
period right here the market is offering an opportunity to be long
When it hits the equilibrium we start to study price on the lower time frames
we'll look for entries as soon as we get to equilibrium we are now at fair
market value so the market is permitted to be bought okay at the banking
level they will be able to buy at these levels because they're not at a premium
based market the levels that are trading at this level here are at fair market
value now banks are just like anyone else if you go to the grocery store and
you see steaks for ten dollars of uh i don't even know what they cost because
my wife does all the shopping the uh if a state costs ten dollars at the market
and it drops down to eight dollars and fifty cents a steak that's probably you
know a discount and it may not be that price i don't know but for the sake of
analogy we're using it that means that we are now at a discount anything
below equilibrium is now a discount market when markets go below
equilibrium they do not spend much time below equilibrium and there's usually
a very dynamic price move away from that especially if the context behind the
marketplace is bullish now looking at this framework we have here we had an
impulsive price swing here a little tiny little tracing came back to equilibrium
rallied one more time took out the high over here and then sold off okay went
back down into equilibrium again and went to a discount below 50 of the
impulse price swing that is now at a discount so the market on the banking
perspective is that this now is now at a discount it is allowed to be bought now
you just don't go indiscriminately in there trying to buy it just because it goes
back to 50 or less that's not enough you got to have more information when
we have a bullish scenario for a marketplace okay if we think it pairs bullish
we look for impulsive price swings on the daily chart the frame higher time
frame ideas there's other trades that you can take in lower time frames

based on equilibrium and discounting okay you can frame the ideas in which
the market should react it should be viewed as a discount across the board
and if it is in fact bullish the banks will dog pile on this and send the price
higher and it should be with quick dynamic price action understanding where it
should be reaching for above old highs above equal highs okay above um
closing a range okay which we don't really have in here we have another price
move all the way up here this there's no real retrenchments in here because
lots we have a high equal a little bit lower here and then here's one here if we
were to measure the low to this high it doesn't come down to 50.
we would have measured just this impulsive price swing right here notice that
even though we had the the candle here lower on the fourth one it kind of up
close but it was still lower nothing came back down the equilibrium it stayed at
a high price and it just kept going higher and higher and higher and higher
higher so if we go back to adding the fib to that initial price low here and we
stretch it because now we we bro we broke this high we're going to keep
drawing the fib up on swings that move up dynamically so we have this big
parent price swing.
So now we're going to wait until price gets back down to equilibrium when do
we start waiting for that when the market
shows a swing high which it does here then we start counting to the fourth
candle where it drops so the fourth candle has to move lower or be lower than
the highest candle that makes the swing high it's all it's a very simple thing
and then from there we just start waiting and we count down every time it
goes down to a newer low low lower low lower low and finally what's a hit right
here equilibrium that's that 50 mark since it does that the market is at a fair
market value so that it can be bought on the banking level it cannot be bought
until it gets to that level or below it.( we are speaking at the 11th of December )

Friday's close of September 16th ( The Next Year ) okay so right now we are
in the range that's been defined by the high and the low here so that level of
equilibrium still exists which is here so any by condition that occurs below this
level here is high probability what does that mean that means you just
measure every single impulsive price leg higher when it moves up
anything below the equilibrium that's in a high probability or discount market
okay so now when we when we understand that we can define every single
price leg that moves up which is an impulsive price swing when it moves
higher all we have to do is measure the new equilibrium point that which it's
created .
 Equilibrium Vs. Premium

premium relates to price action actually referring to the current range that
we're uh trading in.
# the first thing we look for in price is an impulse swing

EXAMPLE BY USD/CHF IN THE PERIOD OF 1ST OF MAR TO 22ND OF SEP :

So we have 3 impulse moves and they are between the 11th of MAR to the 6th
of APR so the first thing we look for in price is an impulse swing and we see
one here we see another one here we see another one here and these three
price swings actually make up one larger price swing which is an impulse leg
or impulse swing by itself by its own right so when we define our ranges the
use of the Fibonacci is helpful in this case because we can take the fib draw
from a high down to a price low

the most lowest in contrast to this high and price comes all the way back up to
the optimal trade entry which is a standard 79 to 60 retrenchment level on the
fib simply looking at that alone 62 percent to 700 levels looking for buys and
sells there everywhere we loaded it would be no no work at all in terms of
taking trades.
swings we have in this larger price swing we have a smaller price swing here
okay and we have the high down to this low and the market starts to retrace
equilibrium or half of the impulse price swing has to be at least touched and
then once it hits that we watch for price to reach up.
you have to see a market price a move above the halfway point once it does
that start it starts going into what is referred to as a premium market that
means it's at a really high price relative to its current trading range we don't
need overbought never sold indicators to help us classify an over-voter we're
sold market we just simply need to know the current price range we're trading
in and if we get above the 50 level okay we start getting into what would be
deemed as overbought or at a premium level on this pricing here it obviously
never gets above the 50 and everything touches it so it never gives us an
opportunity to get short relative to this time frame or this price swing so there
would be nothing to do there the next price leg here okay the same thing from
this high to this low not nothing in terms of that price swing there it doesn't get
back up to the 50 uh level but look closer there's another smaller price swing
that has formed so we could look at that measure the high to the low and the
market gets right to a equilibrium but does not stay above to go to a premium
market it only goes right to the Fibonacci 50 level or what we deem as
equilibrium.
so price goes to an equilibrium price point and then immediately sells off this
would be a missed opportunity in regards to looking at equilibrium to premium
the reason why we want to focus primarily on the 62 or 79 trace levels in that
range to be selling short is because the market's going to be really pressed
higher and would be really in terms of overbought never sold it would be very
overbought and it would be expecting a willingness to to sell softer and go
lower there's going to be times when the market does not give that scenario to
you and you just got to let those particular price links go without you the next
price swing is this high to this low market trades back up to equilibrium.
Market trades back to equilibrium goes back above it into a premium market
and it goes right on through what would be deemed as an optimal trade entry
okay or selling at a premium so here's a wonderful thing about this you can
look at this and say okay if I'm measuring this high to this low and I'm going to
be selling I'm above equilibrium i want to get short in this area between 62
and 79 chasing level okay you look over here maybe there's something over
here institutionally in terms of a bearish order block or something like that you
can define we're going to say that's not there we're going to say that we went
short just purely on price action retracing back into the Fibonacci level here it
comes all the way up and hits you where your stop would be when you see
these conditions where the market trades above equilibrium and goes through
the levels of 62 and 79 certain trace levels what that does is it gives you a
condition that we saw in the equilibrium to discount if it takes out a previous
low when it's in discount it's probably going to be a turtle suit by in this case
it's going to be a turtle soup cell it's going to be reaching for stops above the
impulse swings high and you see that here it goes up runs out the stops here
and then goes lower where is it going to go where do you take profits at below
lows it's already established in the marketplace here and here you see that's
exactly what the market does you can also use when you're defining your
ranges all price swings from high down to low okay you you want to anchor
your your Fibonacci on the market goes down from this high all the way down
to here okay and creates that low as soon as we start seeing it bounce up you
need four candles remember it's the same thing we just saw on the
equilibrium to discount once you see a a swing low form you're watching that
fourth candle to show willingness to go higher it does but then you simply wait
here's the equilibrium price point this this fifty percent level in the fifth price
goes through that so now you're gonna be watching it you're gonna want to
see if price gets to sixty two the seven tracing levels it does and it does it
while it's running out that high here so two scenarios one you could have used
this high down to this low and got a stop out in the initial uh 62 to 700
tracement levels where we saw earlier but it ran right through it if you had not
anchored your fib to this high to this low you would never see this optimal
trade entry okay or return to a premium to go short is above the equilibrium
price point and it takes out an old high so we're running stops at an old high.

Fair Valuation
This is ict with a sixth installment of the eight teachings of September 2016 ict
mentor-ship
fair evaluation comes in the form of two perspectives fair value in regards to
equal distance of a high or low or what we would call equilibrium or fair value
for the perspective on valuation in regards to market makers and combined
both of them to give you the perspective that you have to have when you look
at price this is actually a chart that we mapped.
we're going to cover again both concepts in regards to equilibrium and the
fair valuation for market maker participation in price action.
swing here is making this high here the market broke down and it quickly ran
away and this is what we call a liquidity void where the market makes a a
sudden movement lower and large ranges very little wicks very quick
movement that is avoid that means the price spent very little time trading at
these price levels and it was in a hurry to get down to this area here where it
started trading more efficiently back and forth on both sides of the candle and
ultimately having a retrenchment this range in here as soon as we see
pockets of price action where there's sud movement lower just like we saw a
quick sub movement lower here this up candle at the bottom of that that's
where we start watching and measuring fair value and the down candle here
very next candle is up candle so we start looking at the range between this up
candle and this up candle between those two up candles there's what's
referred to as a fair value gap okay a fair value gap the reason why this is
important is because there was no up candle or up movement between the
break of that low and the high of this candle here it was all just straight down
movement so nothing filled in this area once price broke this low it left it open
basically it's like a gap the same thing occurs here when this up candle is
broken here on this candle once it started breaking lower there's a gap
between this candle's low in this candle body or wick okay so i defined it by
the body i like to use those the range in which it causes this void okay when
price is below that this is going to be fair value okay the market's going to
want to come back to that because there was very little trading in there just
like we said there was a gap because there was no movement up in this area
here between this up candle's low and this up candle is high this area in price
action only saw down movement didn't have any up candle movement only
down movement all this down here is down candle price action only big
ranges so this is a liquidity void the fact that it creates it in big ranges and
speed that's what defines it now because price moves so quickly in these
areas fair value is established because there's going to be a willingness to
want to see price trade back up into these levels and here and close in all this
in other words there's going to be up movement later on it won't happen
immediately always sometimes it takes a little bit of time sometimes
depending upon the time frame you're looking at it may take a great deal of
time but when price starts to move higher we know that we'll try to trade into
this range here and fill that in at a later time that is where market makers view
fair value.

equilibrium or fair value in regards to equidistant uh range between high and

low of a defined high and low range that being if we have this low here and
this high here if we define that with fib okay we have equilibrium right here or
50 percent of that range from this high this high to this low there's equilibrium
okay look how the bodies that again will stay above that but we have a lot of
work around that equilibrium price point that in it that in itself is significant
because it's showing you that the market ran through a short-term high once it
ran through it it came back down right back to the middle of the range or fair
value which is equilibrium at this moment price could stay in this consolidation
for a period of time of any length we don't know how long price is going to stay
in a consolidation but at equilibrium you need to refer to where the most
recent price swing took place in other words if we're at equilibrium here or at
fair value the market can go either way at this price level the easiest way to
determine where its most probable direction is is where did market structure
break most recently did it break a swing high or did it break a swing low most
recently well there's no swing low in here of any significance but there is a
swing high up here that it broke through here so when we made this low price
ran through it clearing out these highs right on this up candle price come back
down into equilibrium do we define the range from here to here as you're
looking at price you always want to get a feel for where you're at in regards to
the most current trading range also notice that we are in the lower portion of
the range defined by this high in this low so we're in a real low area where it
would be deemed over sold so we have a range concept blending with the
fact that we're moving back in the middle of a smaller consolidated trading
range with a market structure break of recent high in here broke that high and
it came back to equilibrium so the highest probability in terms of direction is
going to be going short or going long well obviously it's going to be going long
but the mechanics behind it was that the fact that we broke this swing high we
have this void in here okay we had weakness in the dollar which we're not
going to talk so much about correlation between dollar based uh analysis but
we're only specifically dealing with price action alone here but what led to this
bullish move in the ulti dollar this week was the fact that we moved back into a
fair value or equilibrium so that way it's fair value for the market makers to
build in long positions or build a net long book that means they're building
accumulating long positions the down candle right before this move up
through a short-term high that is a bullish order block so price comes down
into that hits it at the same time it's hitting at equilibrium. and it's deemed fair
value it's fair value because the market traded back down into an area where
it would be bought again and where it should be expected to see buying
pressure come in we don't want to buy it up here because we've already
broke a swing high what are we doing up there we would be we would be
buying at a premium that's not what you want to do so you're going to blend a
couple things when you're looking for high probability setups to get fair
valuation going to be looking at the current range from high to low in this area.

equilibrium we are now at fair valuation for what for longs so market makers
can build a net long book at this price level now if they're going to do that
they're going to look for fair value above the marketplace where they can do
what sell their positions at a fair value for them up here if traders are buying
this chasing price are they buying at a fair value no they're buying at a
premium.
equilibrium to premium the range from this high to this low we're above 50
level and here we're in that upper portion of the optimal trade entry or 62 to 79
cent tracing level.
in a slow a smaller scale so you have high to low we're in a lower one-third
here and we're in deep discount here's equal distance for equilibrium we're
below it so we're a discount so fair evaluation for the market makers
to build a book long would be so many overlapping factors there they could be
building long positions or accumulating long positions here looking for what
liquidity above the marketplace that means where above these highs that
initially sold off of then you have the buy stops about here so the market runs
through that takes those stops runs through this short-term high here and then
what does it do it goes into consolidation now if it's a turtle soup and it wants
to go lower after blowing out buy stops it should go lower quickly it doesn't do
that it's staying in a sideways consolidation.
market was going pointing to higher prices it went back into consolidation
which means it's going back into what it's building equilibrium okay so
equilibrium is building again in that small little range so you define the high
and the low right there and look how much price taxes spend around the
middle point at equilibrium price point okay so it's hanging around fair value
okay one spike move lower doesn't see price go lower any aim it's any
significant doesn't break the range and it expands to the upside once it
expands the upside it starts filling in all of this again this is another area of fair
value the market's fair for those long positions for the market maker that have
already accumulated longs.
this is a good place for them to sell the longs that they started accumulating
down here look how much time they whip back and forth in that range all
these wicks okay they're selling they're selling they're selling all the positions
they've accumulated here accumulated here and down here on the initial run
down into the support once this range is closed in the next area of concern is
above this short term high so our void filled in right here it's filled in so this is
no longer of area of interest no no more now we still look for higher prices why
would we still look for higher prices because they went long here okay so if
they're gonna look to sell their position where would they look to sell their
positions at discount prices are premium premium but the premium price that
speculators would trade at by buying and chasing price it's a premium to price
chasers people that feed off the desire of being in a price to move it's already
been moving higher it's fair value to the market maker to liquidate their
positions at this small little pocket between this lows this up candle is low and
this up candle is high so we can now create a new specific area of fair value
for the market maker to liquidate their long positions in here right in here to
draw that out in time that's what you see here price coming right into the
bottom of that candle hits it perfectly to the pit bodies of the candle are still
deep inside the shaded area for fair evaluation what makes it fair is because
they bought it at a deep discount and they're liquidating at a premium it's fair
for them to accumulate here and it's fair for them to liquidate see market
makers have to deal in terms of valuation for their longs and their shorts and
they have to do that same evaluation for their exits on both sides of the
marketplace so when we see inefficiency in price like we see here with these
candles just only going down no up movement only going down here not
moving in until later on all of this area they're scaling out their positions that
they accumulate down here here and here when price moves in defined
trading ranges there's going to be equilibrium equilibrium is in itself fair value
that means the market makers are holding it in a consolidation when that
consolidation gives way the strongest move out of that consolidation on alarm
on a hard time frame chart will give you a great deal of prognostication.
 Liquidity Runs
what is liquidity ?

liquidity refers to the degree to which a market or asset or security can be

quickly bought or sold in the market without affecting the assets price.

when we look at price it doesn't matter what time frame you're looking at time
is irrelevant for right now the specifics about price action as it relates to
liquidity we as price action traders we're looking specifically for reference
points where we can hone in on where there is a high probability of liquidity
resting in the marketplace now liquidity as it relates to ict concepts it relates to
buy orders and sell orders it's as simple as that when we have a swing in the
marketplace as we note here and the market trades lower our understanding
is there is someone that went short here this position would be net positive or
profitable as the market moves lower as the market turns around if those
same positions were still held their open profits would be eroding and at some
point at this point right here they would be at a losing position our
understanding is if there's a short position or traders that are bearish on the
marketplace if they have positioned a profitable trade here and moved lower
their stop loss order would be resting right above this high or generally many
times just rate at that high the market tends to find an interest in going back to
where that large body of interest or what we call liquidity in the marketplace it
would be by liquidity as the market finds these lows down here as the market
rallies away we are our understanding is that there's going to be buyers that
have positions that are net positive or profitable as it trades higher.
at some point when the market starts to trade back down lower back into the
area in which the buy orders would have originated from their open profits
would be eroding until eventually moving into this area here it would be at a
net loss position so when we look at when we look at price the idea is we're
not looking for specific patterns for the sake of patterns we're looking at where
existing orders will reside so essentially what you do is you're targeting areas
at which the market has already seen a willingness to go higher or lower in
this case we see a swing high and the market moves lower we view that as a
smart money trader or as a market maker perspective we know that there's
going to be buy stop or buy liquidity above that high when we look at the lows
when the market moves away from these lows we see that as cell liquidity
identifying both of these positions on both sides of the marketplace called
open float.

understanding liquidity as it relates to buying and selling in the marketplace

our first fundamental understanding is is that there's going to be liquidity
above old highs and below old lows when we understand that we can see that
they will eventually target these same levels moving price just above the
previous high knocking out the liquidity that would be resting just above those
highs in the form of buy stops the low old lows the market will seek liquidity for
the sell side or the cell stops taking those orders out understanding this
premise when we view price action it removes all of the retail minded
perspective but heavily leaning on indicator based ideas when we adopt these
principles with study of price it gives us the most truest purest view of how
price is we have no confidence or direct relationship to our directional bias on
price relative to anything except for price itself.
# If the market's moving from an old high we know that there's going to be
liquidity resting above that old high if the market's moved from an old low we
know there's going to be resting liquidity below those lows it's just that simple.

there's another concept when we understand liquidity the market has a

tendency to run out old highs and old lows but it has a very difficult time to do
that when the market has conditions like this when the market moves higher
okay generally we can see a move higher
and then it moves lower here now in the context of this entire move lower
there's a lot of peaks and troughs here a lot of peaks and troughs the idea is if
this is an old high back here for this high to be ran out okay or to seek the
liquidity resting above that old high if this is where the current market action is
right now or current price at market price for it to get all the way up there it has
to encounter a lot of resistance in the form of old lows and old highs so you
have the old lows acting as standard
resistance then you have the old highs acting as buy stop liquidity so even if
the market's going to go up if the market's going to seek the liquidity above
this high how do we know it's going to stop there it could go another level
higher for these buy stops and it could reach for this level of buy stops and
then maybe this buy stop level here in the direction to run all these buy stops
it's got to go through a lot of resistance in the form of these old lows just to get
back up to this old high when the market presents these
opportunities and again this is not specific to any time frame it's universal but
when we see the market give this this very thick area of resistance okay it's a
lot of price action that the market has to trade through to get back to an old
high of significance we view this as a high resistance liquidity run the market's
going to have a very hard time getting through all these previous lows and
previous highs just to run out the liquidity that will be resting above this old
high when we trade we are not looking for these
opportunities while there are opportunities to trade with this in mind
.

it's important to understand that this is the least probable trading condition to
look for longs because you have so many levels of resistance and old highs to
encounter before you get back to the old significant high we understand that
the market has been presenting lower lows and lower highs and somebody in
this market is obviously would be being profitable those individuals with stops
above this old high in the form of a fund they're actually very highly defended
because of this type of price action so it's going to take a very sharp economic
market release the data kind of like non-farm payroll or fomc that type of event
will knock through all of these levels of resistance to run out thatliquidity but
generally without that type of influence or injection of volatility these old highs
generally are well defended obviously the opposite can be said when we see
the market make a low of some kind it could be a take a long time really to
form this but the old low would obviously have sell stops below it or sell
liquidity and as the market makes higher highs and higher lows if we're seeing
price action right here we can't reasonably expect the market to just drop
straight down and make a run on the sell stops below this low without
encountering first all of these higher lows and higher highs as the market went
higher so to get through each one of these highs okay there's going to be a lot
of resistance to just run down out the stops that would be resting below this
low.
with the high resistance liquidity run for old highs the same is true here for
high resistance liquidity runs on an old low it's going to be very difficult for
price to reach down through all of this price action and the more time it's spent
in this area again the more unlikely it is to make a market move all the way
down to this old low despite the fact that there may be really high levels of
liquidity resting below that whole low without the evidence of a significant
market driver.

coming into play with like an fomc interest rate announcement or non-farm
payroll or something that would be completely unexpected in the marketplace
black swan event something like that that's generally the only type of thing
you see that will cut through this type of price action to get to the sell side of
the liquidity here so for shorts we avoid these types of occurrences there are
opportunities that we'll learn with trading with this profile or this market
condition for high resistance liquidity runs.

# now we want to understand that this is the element of price action that we
want to trade very less frequent in.
There's going to be times when the market really provides us an opportunistic
time to take action in the market and trade with price action and have very
little resistance in our trades and obviously that comes by way of trading in
low resistance liquidity runs a low resistance liquidity run would be in the form
of something similar to this now the east crude depictions while they are
rather elementary in the way that they're being shown here the concept is very
easy to see in price action as we'll look at when we get done looking at the
actual crude diagrams.

If we see the market come off the old high okay and it comes down rather
quickly if there is a very sharp or one-way type direction very little
retrenchments of any kind when we see this okay once that market breaks
below an old low from that point at which it breaks the old low until it gets
through a short term high in other words the market comes down makes a low
here starts to trade off comes down makes a higher low once it starts running
through if we get a market break through this short-term high this run here
begins its climb back up into the range that's created by this low being broken.

So it's being defined by this level here all the way down to this high once it's
broken this area of price action is deemed low resistance.
 every time that a new short-term high is formed before this low is retreated to
or retested as resistance every time there's a new short-term high what's
going to form above that short term high it's going to have by stop liquidity so
buy side liquidity is going to be above these old highs if we get a buy signal
after a retrenchment we know that there's going to be very little resistance for
that move to go higher running out the buy stops just above these short-term
highs as we get closer to coming up into hitting this load that's been violated
here then we start encountering high resistance liquidity runs so the
probabilities fall off precipitously once we get back to the area which the range
is defined in terms of low resistance then it becomes a high resistance
liquidity run to make any higher highs or run on higher highs it becomes a lot
more resistance to do that because we move back into an area where the
market has moved in a range.

we can trade inside that range so every time we create another short term
high in here if we get a buy signal that buy signal will have very little
resistance to get through the old high that it retraced from and you
continuously look for those until you fill in that break on this old low once it
gets back to this old low over here the market goes into what is referred to as
a high resistance liquidity run anything higher than this price point here
becomes a high resistance liquidity run.
 this is a sell side of the marketplace low resistance liquidity run we have a
consolidation in here the market expands goes into expansion it breaks above
a short-term high so at the moment the short-term high is broken here market
structure is bullish and then we go into a real quick run-up the market will
create a high start to break down and once the market starts trading below an
old low the market will have a very easy time trading back down into the point
which the short-term high was broken on the upside so all this one-way
direction price action where all of it looks this one-sided for buys only very
little retrenchments this is the easiest time to trade in the marketplace right in
here it's defined by the short-term high that's broken on the upside here that's
where you would begin your point which it's deemed a low resistance liquidity
run so you're focusing primarily on selling short every retrenchment is going to
find very little resistance going lower to run out the previous low there's going
to be what resting below these lows sell stop liquidity so the market goes
lower breaks below this short term low here expands has a small little
retrenchment what's going to be forming below this short-term low bottom
chasers folks that want to be long but we understand that the market has
broken an old high here and had real quick sudden price action very little
retrenchments so we have very little resistance on the downside getting back
to that point at which market structure broke so between this point here and
where the market breaks down this low here this is the easiest area to trade in
price action because you have very little resistance allowing price to just cut
through all that but you're waiting for a short term load form and every time
short term low forms there's going to be cell stop liquidity resting below those
lows.
 Impulse Price Swings & Market Protraction

we'll be looking at impulse price swings and market protraction very similar
ideas but uniquely different .
 impulse price swings a impulse price swing would be something like this okay
so we have an impulse price swing down then we have another impulse price
swing higher and we have another impulse price swing lower and the impulse
swing higher followed by an impulse swing lower and a higher swing of
impulse movement higher then we have another impulse swing lower followed
by another impulse swing higher followed by an impulse swing lower another
impulse swing higher and ultimately another impulse swing lower so we have
price swings moving from high down to a low to another high down to another
low to a high to a low to another high making another low up to a high down to
a low up to a high down to a low when you look at price action you need to be
thinking in terms of impulse price swings because inside the impulse price
swings it's going to give you a lot of detail now there are smaller more specific
impulse price swings that have a lot more influence over the marketplace in
the form of a manipulative move or market making manipulation.
n we add to it time of day by holding down control and tapping y on your
keyboard you'll add the vertical delineations for zero GMT so zero GMT
vertical line to another day divided basically when we see this okay then we
can look at time sensitive impulse price swings which is market protraction
market protraction is time sensitive it's an impulse price swing that is highly
sensitive to a time of day there are three primary probationary market moves
every 24 hours the first one is raid at zero GMT you'll see one little movement
away or lower in other words up or down right at that at delineation in time you
see one here it trades down away from it and moves higher we see this one
here trades down then moves higher you see this one here trades higher this
one here it trades higher and that's all we're going to look out for for that Asian
session i don't believe Asia is that influential initially the other market
protractionary state is in is in London now we can take the control y feature off
and just focus on the vertical lines here delineating midnight new York initially
right after midnight new York on this day we have a market move higher this
market move here is a protractionary market phase where the market trades
up initially at a specific time of day so there's an impulse price swing here but
its design is to fake out the individuals that chase that initial move after
midnight the second impulsive price swing starts in new York we delineate
seven o'clock in the morning and we anticipate if the market has moved lower
in London we're going to be looking for a retrenchment higher that impulsive
price move higher is market protraction it's designed and intended for
manipulation only it's to get traders to think that the the market's making a low
in this case it rallies up and then trades down ultimately here again here's new
York time in new York session opening market goes into another projectionary
market state right after the seven o'clock hour going into new York open small
little retracement and market trades lower again seven o'clock in the morning
the market goes into a small impulse price swing higher this is market
protraction its intent is for for manipulation its counter direction in other words
if this move occurs at this time of day if it goes higher we think the opposite
direction if it goes lower we think the opposite direction so if it initially moves
higher and the market's been going lower we see that as manipulation or
market protraction market's going to seek to draw in participants on the wrong
side of the marketplace or reach for liquidity it has to happen after seven
o'clock in the morning has to happen after seven o'clock in the morning and it
has to happen after seven o'clock in the morning the other one is in the
London session obviously and it's after four GMT on the forex ltd demo
account if we see a movement higher and more bearish we see that as
market protraction or a Judas swing it's a false rally to sell into same thing
occurs in after new York's seven o'clock in the morning time we anticipate a
round up off the London high so when we see that we expect the market to go
into a protractionary state where it rallies up to reach for liquidity and then
expand down this day here market drops initially rate from the midnight candle
drops lower then rallies up so this is market protraction it seeks liquidity below
the market over here clearing out lows and then rallies rate it new York
markets one more time little rally in here then sells off the next day London we
see initial rally after midnight candle and then it trades lower right after seven
o'clock in the morning new York we get one more protractionary state in the
marketplace where the market rallies again small minor little impulse price
swing but its design is to manipulate the sentiment and or the thoughts of
traders wanting to be participants this would look like a low in this run up here
would entice buyers in a new York session and then they reverse it having
these things in mind we can look at the market in the context of what we
shared so far for this month we see a market move down from a market
impulse price swing so we can measure that swing down from the high we
can use this one it's high down to this low it retraces back up above
equilibrium so we go into a premium market at the 62 retracement level we
can sell there with a move expecting to see a run below this low market goes
into protractionary phase after an impulse price swing we can be a seller
reaching for liquidity below the lows and looking over here in previous days
we can find an old load back here as well and market trades down into that
level market makes another impulsive price swing here in this context the
market rallies up with another move higher in the next London session it's in
Judah's swing lower or market protractionary phase faking traders out thinking
it's going to drop initially and it rallies up and it rallies up into the new York
session right into a premium market so we're blending impulse price swings
and then time of day retrade rate back into equilibrium for market protraction
right in here and then it expands going lower taking out stops below the lows
over here and aiming for the stops below these equal lows which they
accumulate here another impulse price swing here down to the low right here
impulse swing up rate at the new York midnight candle due to swing higher
fake move higher it trades down going into new York we see another
protractionary market phase where it trades up right into an area where it sold
off before lower expansion reaching down into the 3255 level why would it
reach down there and why is it quickly moving so fast to go down to that level
is because you can see the old low over here the difference in in determining
impulse price swings and in market protraction is the fact that there is a time
element applied to the small impulse swing after midnight new York time after
7 a.m new York time and 8 p.m new York time there's usually a protractionary
market phase that enters the marketplace and it's a small little impulse price
swing that's counter the major direction that you're going to see after that
specific time of day so for session trading and for session drills you can use
this concept to help give you context in your practicing and also build your