Core Concept: Hourly Reset
"At 7 o'clock, that starts the hunt for relative equal highs or lows... at 8:00, and at 9:00, what you're doing is you're starting the whole process all over again."
The hourly reset model establishes that price action resets its hunting behavior at specific times during the morning session. At each of these hours, you begin fresh identification of relative equal highs or lows.
"7:00, 8:00, 9:00, these are your three windows of opportunity."
"You're waiting for relative equal highs to form or identifying relative equal lows. At 8:00, you can look prior to 8:00. You just can't look prior to 7 o'clock for relative equal highs or lows because you're trying to work inside the range of the morning session."
The Three Time Windows
Morning Session Timeframe
"The morning session is essentially 7 o'clock to 11 o'clock in the morning technically until noon, but 11 o'clock for me. I like to be done by then. Frankly, I like to be done by 10:15, 10:30."
Looking Back Rules
"At 8:00, you can look prior to 8:00. You just can't look prior to 7 o'clock for relative equal highs or lows because you're trying to work inside the range of the morning session."
"At 9:00, the same thing. You can look at any relative equal high or low prior to 8:00 up to 7 o'clock."
"We were not trying to trade relative equal highs and lows prior to 7 o'clock in the morning."
Pre-Session Range: First 30 Minutes
"I mentioned yesterday I talked about the first 30 minutes after 7:00 and after 8:00 and after 9:00. That is your preession range."
"It is 30 minutes of you expecting something opposite."
How It Works
"If there's relative equal highs that form after 7 o'clock, after 8:00, and after 9:00, that first 30 minutes, you want to see the market drop."
"If there is relative equal highs or relative equal lows below the marketplace, then you want to see a move the first 30 minutes going the opposite direction up."
Judas Swing / Manipulation
"In other words, if you see relative equal highs, what would you expect after 8:00? You would expect a low or a price run lower. What is that by definition? Opposing directional run that's against where you think it's direction to go. That's a Judas swing. That's manipulation. It's something that goes against the grain of what you're expecting."
"You want to see a measure of manipulation. It doesn't have to only be in that first 30 minutes, but in my mind, I'm thinking, I want to see that. And if I got that and it was given to me in delivery price, then my interest in this move is even more peaked. I'm really interested in it."
Fair Value Gaps: Priority & Usage
The First Fair Value Gap Prior to a Stop Run
"The very first fair value gap prior to a stop run, always, always, always have that one noted."
"And what this is doing is acting just like an order block. It's just change in the state of delivery."
"That changes the state of delivery, meaning that we went up to stop out and then this is where everything algorithmically changes. Now we're going to start going lower. It's going to seek sellside liquidity. It's going to reach for sellside. It's going to expand lower."
When the First Fair Value Gap Doesn't Form
"There's going to be lots of times where this doesn't form. And that's okay. If it doesn't form, what do you do?... This fair value got, okay, if it's not there, then you use the breaker. It's very simple. It's the last down close candle."
Stop Placement with Breaker
"Your stop needs to be above the highest high of the consecutive down close candles because this is all the bearish breaker, both of these candles here. So, your stop has to be above that. Okay. How much? Two. Two ticks. Maybe one tick."
"Many times I've used this the high because if it's really good, it won't... it really won't like to go back up into the full range of that."
Extending Inefficiencies to the Right
"If you remember on Twitter, I would tell you note a specific fair value and I'd say extend it to the right."
"So every single one of these inefficiencies over here, here, here, here. Even though it's been used already, you extend them in time. And they will be places for you to anticipate price going up to and pushing into it and then resisting and going lower as it works and gravitates to that low right there."
Focusing on One Side Only
"So, buy sign and balance sign and efficiency. Okay, I'm not looking at that one. I won't highlight that one. I won't extend it forward because it's... it's against the underlying direction and the state of delivery, which is it wants to go lower."
Inefficiency That Has Been Overworked
"I wouldn't want to see it as a trade back in this civi again because we've already done once, twice, over overlapped it, respected it, and now we're back inside of it again. That is low probability."
"It's been overlapped and worked multiple times and it's done enough."
Structure & Price Action Patterns
Optimal Trade Entry
"You have a stop hunt. The market broke down. So this is a shift in market structure. Okay? And this is a optimal trade entry. Even if you didn't have all the stuff I'm teaching you here and amplifying it, you already know this. This was the flagship pattern of my channel since 2012."
"The optimal trade entry, a shift in market structure. Measure your high to your low, 60 to 72% retracement, 62 to 72% retracement level, and 70.5 level."
Inversion Fair Value Gap
"You'll see in old tweets where I'll say we want to see this fair value gap act as an inversion fair value gap. Well that means it... it ran above it. It's got to go below it and do this right there. That function of redelivering to it."
Consequent Encroachment
"Look at the work around the halfway point which is consequent encroachment."
Jagged Price Action
"When you have a disruption... where it's jagged. You see how it's nice and jagged, that's... that's indicating it's probably going to go the opposite direction."
Handling Both Relative Equals
"I said yesterday when you have both of them, you wait. You wait for them to take one side out. What does it do? It runs higher. So, what's it going to attack now? That one. And it runs down below it."
"We have relative equal highs and we have relative equal lows. You're... you're going to be playing the breakout game. And I'm not a breakout artist. I'm not trying to guess. I want to see what the market's going to do."
Rules & Practical Guidelines
Stop Management
"Your stop needs to be above the highest high of the consecutive down close candles because this is all the bearish breaker, both of these candles here. So, your stop has to be above that. Okay. How much? Two. Two ticks. Maybe one tick."
"Not not if you have this gap here inside the leg that has a stop on. Because if you have that, then you... you could potentially see a whole return back up into this and maybe a little mohawk, a little... a little tiny little spike above outside with the wick of the candle with the body be inside or below that gap."
What to Do If Manipulation Doesn't Appear
"If it doesn't do it, I'll wait for more information because it might have a deeper retracement than I would have expected initially. And then I'll wait for a breakdown. And in having all these inefficiencies extended over, the market will refer back to them."
"And then all I have to do is wait for a bus to get there and then ride that thing down to southern town and that's it and be content with."
Waiting Through Consolidation
"When you have these long protracted consolidations like that, it's really better for you to sit still. Let them do whatever they're going to do."
London Session Context
"What I'm interested, I'm only interested in seeing anything before 7 o'clock if the range of the morning session trades to the London session low or the London session high. Other than that, I don't want to see anything on your charts beyond this."
Chart Setup
"All your charts are going to have about uh 6:00 or so, just to get a little taste of what London was doing. And then everything else in your charts need to be very, very simple. But I want 9:00 delineated, 8:00 delineated, and 7:00 delineated."
Annotating Relative Equals
"Any formation of relative equal highs or lows, I want you to annotate them. Okay? And the way I want you to annotate them is don't use this... I want you to draw, hold down shift as you drag it over. It'll keep it straight. And I want you to annotate it like that."
Journaling & Psychology
Annotation Method
"And then you would annotate it like this would be an area where you could highlight or type out any observations or what you felt about this movement here. In this little area here, you would annotate in text. So, you would just take the text and say something like this, like simple little statements like this."
"And what you're doing is you're highlighting your focus here and here and here and up here in this segment."
Subconscious Reinforcement
"And when you see the chart again the next day, like tomorrow, when you sit down, you look at price action, you refer to what it did yesterday. And these levels will be subconsciously retained as significant and it'll reinforce it subconsciously as a memory worth holding on to."
Weekend Review
"And then when the weekend comes and you go back through your journal and your charts and you have these little annotations, it is a positive reference."
Critical: Positive Focus Only
"You do nothing negative. You say nothing negative. You criticize nothing negatively and you draw out the things that are useful information."
"And when you do that and you look at it on the... on the weekend as a reflection, you're never looking at things through the lens of regret."
Managing Emotions
"And what does that do? It manages your fear and greed. It manages regret. If you missed a move, you've logged what you're focusing on. So, when you look at an old chart, you're not looking at, man, I could have went short here, or I could have went short here and held for all this move down here. That's what everybody does wrong."
ICT's Personal Experience
"And I tortured myself as a 20-year-old doing that. I literally whooped my ass every day in a journal telling myself everything I did wrong and then wondered why it took six years for me to get it figured out that I was doing this to myself... like I was doing all those things holding myself back, but I thought, well, I'm going to be hard on myself because that's... that's what I need to do. And that... that was actually detrimental to my development."
Study Flashcards
Click each card to reveal the answer (direct quotes from transcript).