Market Context
"A lot of objectives have been met recently both in dollar and Euro and index futures... the market will tend to do what—consolidate."
This teaching addresses conditions where multiple markets have reached their objectives simultaneously, requiring patience before the next high-probability setup develops.
"Because I can justify both sides of the marketplace right now... it's a neutral position for me. That means I want to only be trading when it's high probability and with low resistance liquidity run signatures."
"It's easy to predict where price is going to draw to when it's one-sided in a low resistance liquidity run—that means it's very easy to see one side, either a buy or a sell, and very very difficult to justify the opposite side of the marketplace."
Four Stages of Price Delivery
"In month one of my mentorship core content on my YouTube channel, I introduced the idea of the four stages of price delivery—consolidation, expansion, retracement and reversal. Those four stages of price delivery... we are in now a consolidation, so we have to wait."
"You have to simply wait. You don't want to push the envelope here and try to predict what it's going to do when it's like this."
"Consolidation profile after multiple markets have met their objectives... dollar Index hit straight up into our premium objectives, Euros traded down into our discount objectives, and ES has traded into its premium objectives—so when that occurs, the market will tend to do what—consolidate."
High Resistance vs Low Resistance Liquidity Runs
Low Resistance Liquidity Runs
"Low resistance liquidity runs are high probability and they are immediate gratification that this immediately run to your objectives. It's very fun to trade them. It's almost immediate feedback once you get into the trade."
High Resistance Liquidity Runs
"A high resistance liquidity run is a trade that's met with a lot of resistance in getting to where your objective may be... it's resistance in the form that it's very hard for it to be one-way delivery."
"It's going to be a lot of consolidation, move a little bit, come back, retrace much more than you're probably comfortable and then consolidate more and then go a little bit further in the direction you were hoping for—that's high resistance."
"When they are met with those kinds of conditions in the marketplace, it tends to create very sporadic emotional responses in their psyche. They become agitated. They will many times get stopped out because they want to move their stop loss too aggressively too soon or they're afraid to get stopped out and open their stop loss a little bit further and it runs for that as well."
"Understanding what a high resistance liquidity run is will help you to filter those types of trades out. Doesn't mean you can't trade them or paper trade them or tape read—it just means that you don't want to be putting a lot of emphasis on trading in those environments but more specifically waiting for low resistance liquidity runs."
Balanced Price Range
"We have only sell side here offered, so that means the candle went through—between this candle's low and this candle's high—it delivered on the downside so it's sell side delivery. Inefficient in the form of buy side delivery."
"This is a balanced price range. Balanced price ranges tend to either stop at their high or low or midpoint—or what shall be consequent encroachment, midpoint of the gap."
"Buy side, sell side has been offered. It left that range right here. If it ever comes back down into it, it's highly unlikely that we'll trade to the low of this gap again and through it. So that's what makes a ICT balanced price range."
Gap Hierarchy
"Gaps are just like a PD array matrix—they have an hierarchy. You have a breakaway gap, you have common gaps. Common gaps can be reclaimed, that means treated multiple times. Measuring gaps tend to leave a portion open just like a breakaway gap."
"This is a breakaway gap. What is it doing—it's breaking away from this important higher time frame high."
"Breakaway gaps must have some context as to why price should see—for instance this is a bearish breakaway gap, it's breaking away from a level that we would already anticipate being some measure of a short."
"Breakaway gaps tend to leave a portion of the gap unfilled."
"This gap right there is simply a fair value gap—it's a common gap. They can be traded though with the context I've already taught you."
"Standard fair value gaps which are common gaps—they can be reclaimed or traded back to as resistance or support."
"Common gaps can be retraded to multiple times and they reclaim them sometimes as support or resistance."
"This is the fair value gap in the form of a sibi—sells on imbalanced, buys on deficiency—and it's a measuring gap. What's that mean? We can take this range and use it for projection."
"Measuring gaps tend to leave a portion open just like a breakaway gap. So if we're expecting it to go lower, it stands the reason that we expect it not to trade all the way up here. And if we're expecting it to be a measuring gap, guess what—we want to see it not go up there, and that confirms and qualifies it as a measuring gap."
Qualifying a Breakaway Gap
"It's qualified as a breakaway gap because it leaves and goes lower to another new low and leaves that portion open. At that time we get real confident that it never will come back up to this level here, so we can drop our stop right to that level there and let it roll."
If It's Not a Breakaway Gap
"If it doesn't and it completely fills it in, that's not a breakaway gap then—it may need to come back up and tap this one more time. So if you were to get stopped out, you have to wait for it to hit this fair value gap and then break one more time, create another imbalance or a fair value and then use that to go short."
Measuring Gap Application
"We can take this range and use it for projection."
"If we're expecting it to be a measuring gap, guess what—we want to see it not go up there. And that confirms and qualifies it as a measuring gap. Then we can take the high, project it down to the low of the gap if we're bearish, and then get our standard deviations."
"That standard deviation negative one has to be in agreement with moving below an old area of liquidity. So that's between these two things makes us have the precision."
"It's not simply you take a fib, put it over two different price swings and then you're going to get the same math that I have."
ICT Swing Projection Theory
"If we take the high of that price swing and draw all that Fibonacci all the way down to that candle's high right there—from high to lower the gap—why this gap? Because this is the measuring gap."
"What that does is gives you a projection to a standard deviation of negative one."
"The negative one standard deviation comes in at 4269.25... the low comes in exactly at 4269.25 folks, that is the daily low—to the tick. Right there and it never went lower today, even after our session didn't go lower."
The Fulcrum Point Concept
"Do you take the high here and add your fib to it here and draw it down to that low—one standard deviation would be 4278.75. That's a pretty handsome objective if we treat that high to that low, this low being a fulcrum point."
"That means if this move from high to that low—is like a door okay, and it swung, this was the hinge of the door. This high—if it was allowed to swing completely all the way around, it would come right down right below that low here. It would come to that price point."
Reading Price: Bodies vs Wicks
"The bodies tell you the story. The Wicks do the damage—the Wicks is what everybody else gets messed up with. Dojis and specific, you know, types of candlestick formations—nonsense, it's all nonsense."
"Reading price action naked with time and looking for these types of signatures here—the open and close of these two candles here are supporting the idea that this low of that inefficiency is being respected."
Smooth Edges and Market Structure
"Notice how it left clean highs here. So that looks like perfect textbook resistance—I don't like that. I never like that. Smooth edges like to be made jagged."
"I think this will be disrupted. Now how and when it will occur—we have to watch and see what price does at each kill zone."
2022 ICT Mentorship Model Context
"That move right there—that is the 2022 ICT mentorship model. Buy side taken into a premium, shift in market structure, fair value gap, trades up into it—there's your show go short. What do you aim for? Relative equal lows and liquidity."
"If you're trading the ICT Silver Bullet which is the model that I've taught you for 2023 for the YouTube—I teach mentorship. We have a shift in market structure and it's much more pronounced."
"This swing low here is broken. We have a fair value gap between this candle's high and that candle's low. This is a sibi—cells on imbalanced, buys on efficiency. Price returns back up—there's your short."
Study Flashcards
Study Assignment
"I want you to go back and look at old price swings. Look at all these old price swings and start breaking down the gaps and use this hierarchy. I have more to teach you that's deeper in that error because there's other gaps that I'm going to teach you that I haven't even taught my charter members yet."
"For now use this as a benchmark to go and look at your other old price swings and start measuring them out and journal them in your trading journal."