Good Order Blocks vs Bad Order Blocks - full details coming soon!
Low faith in 15 & 5 minute Order Blocks, without the "Parent", HTF Order Block.
Don't force the Idea of an Order Block.
Step Back, look at where Price is Running Away From.
Forcing an Order Block on the Chart, is the same as forcing a Trade. If it's not there, it's not there.
Layout the Potential ones. See what Price does when it returns to a potential Order Block.
We like to see Candlestick patterns as confluence for an Order Block.
We WAIT. We haven't missed the boat, ours just hasn't come in yet.
"Qualified ICT Swing", needs a range of at least 40 pips, as it means it sets the stage for at least a 20 pip trade to take (with Spread).
ICT talks with his hands... while screen is captured. (I do this too, haha)
Should always take notes during a Live Session (he said it!)
Laying out reaction levels & using Limit Orders let you get in on moves.
Be sure to include the Spread.
For Buys: Don't cheat yourself on Entries. ICT will go 5 pips away from the level as part of the Spread.
For Sells: Right on the Level.
(Remember, the Bid Line is what is displayed on most Platforms)
When the Price moves hard into a previous Order Block (where you expect to take a trade), you want to see a reaction at your key level & think "future Order Block".
If a Trade is causing you problems in your head, either collapse it or take 1/2 the position off.
You want to get to the point where you aren't thinking about the Profit; you want to know that you're Losing when you take the Trade.
If you start "What If?" on the Trade, just close 1/2 of the trade. If you're that invested in losing 1%, then you shouldn't be in this business.
What happens AFTER you get into a trade is crucial to how you develop as a trader.
If you're asking God to fix your trade, you need to get out.
When ICT trades news, he's looking for the Over-reactions. Which includes a lot of major Funds.
ICT doesn't like to trade NFP, but he studies the Price Action, so see what the Price is showing for the future moves.
How to know Bull Market: Buy Order Blocks are respected, Sell Order Blocks are blown through. (Reverse for Bear Market)
5 Minute Chart for Timing, not Trade Setups.
Learn from mistakes, don't beat yourself up.
50% Fib into an Order Block is as far as ICT likes to see an Order Block violated. If it goes past that, it likely won't hold.
Central Bank's Dealer Range - use "CDR", as ICT is quite OCD.
ICT's Spin on Dealer Thinking:
(Picture #1)
Dealers have a large set of Orders, but they need to see where they are all stacked. In this scenario, they need to bring in the Large Funds (that trend follow) first, so they setup the Judas, to then get the pricing for the Smart Money.
It's not the Retail Stops they're after, but the training is the SAME! They're after Large Stops. This is why you need to know where the Stops are at.
"If everyone is doing this, why do I expect to make money?"
Trading is far easier when you strip away the nonsense in the trading culture/teaching.
Large Funds have juicy Stop Orders out there.
ICT using the Bus Riding analogy again. I have "Ghost Ride the Whip" stuck in my head.
Simply don't trade when things aren't clear. Don't force it.
With practice, you'll be able to judge if the market has the ability to blow through levels.
Those Highs & Lows before a Range Pull back, is generally where the Spread on a Dealer Desk (brokerage) will get wide enough to take out stops.
It's really about blowing out Stops and taking the positions of those that were "Right" on the move, but in too early.
Current Market Conditions (May 7th, London Close period):
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Website being redone, that'll make things a lot easier. So, bear with it. -
On May 6th, ICT missed the big run up in the Cable. Tools weren't giving a very solid entry. He was looking but didn't get in. Was a pre-London Open ADR blown through.
Was looking for a retracement on more than a very short period.
Days like this... ICT would try to go opposite on trending days like the 6th on the Cable. Lost a lot of money as an early trader doing that. Don't get in the way of a Freight Train.
The intra-day was giving high Risk to low Reward, after the ADR got blown early. Little certainty with a trade like this.
Volatility in the process of returning.
Market is holding higher than he likes. Seems like a trap for Shorts. ICT wasn't looking at any type of trade to take at that point.
Fiber doing the same type of event.
Explaining ICT Reflection pattern.
It let's you predict where pending Orders are, above a High/Low.
Which of the OTE (62, 70.5, 79) level to use? No way to know. ICT uses all 3, then searches for where the reaction levels would be. (Picture #2)
This is useful for Swing Highs & Low.
O-Row Pattern. (After ICT Reflection) Overlapping Reflection & Optimal Trade Entry. OROE or OROTE. Not sure I've seen ICT mention this before. (Picture #3, though short by a few pips)
Taking Questions for 20 minutes. With 75 minutes let on the video. We love Michael's thoroughness.
Question Period:
Once a 79% Fib is blown, a Range is "filled".
Picture #4: asked if this is a Bear market.
Notes on it: With this type of L-Range, the market has fulfilled all of its Selling, which means Buyers are now in control.
Also a "Wolf Wave" formation, which I haven't studied. (Street Smarts book plug)
Silver Chart: Looking at what to use: H4 or H1 Order Block.
Picture #5: Green Box is area that might also be sensitive, as the Order Block (for the Parent Price Swing) was retraced before the big move up. This is why ICT pulled from the Fib from the higher Low.
Looking at USDJPY Low on May 7th. The Low would be retested during Dealer's Range on the 8th.
Real example of the ICT Reflection pattern.
Yen-crosses make their moves earlier. If you trade them, be mindful.
Several people in the Webinar took this trade. (Good for them, this is a Swing Low)
Feedback is that people are starting to "get" the Order Block concepts. It pops out on the Charts to people. But you *need* the other tools to understand it all work it together.
If we're hunting Elk, we have to learn to track... Elk. You have to start at the beginning. That is what ICT has been up to.
If you submit to the process of learning, that's what it takes to learn to trade well.
Learn the Skill Set first, then you can trade real money. But only a very small amount at the beginning.
Focus on 1 pair (or 2 if they closely correlate), as you'll end up looking at too many things, while learning.
Picture #6: Exercise to do.
- Lay out Major S&R on H4 Chart
- Mark out the response Area
- Go to H1 Chart
- Identify a tradeable range (40+ pips)
- Go to M15 Chart
- See the Order Block formation (the rapid move away)
You have to get into the charts and see this stuff. STUDY! But this is a good way to practice it. Honestly.
ICT might finally buy a mouse for his Laptop.
When do you trust the Order Block?
- Have to look at the current Range, the HTF and what the market is currently doing. Just because an Order Block is created, it doesn't mean it'll be respected.
All of ICT's tools blend together. Not just 1 "works". It takes a lot of time and it's not just mechanical. Learn the skills. Over time, you'll find what you want.
It is rigged! That's why we want to follow the people that know what they're doing.
If you stay in the business long enough, you will lose a lot of money, just due to volume. (2% of a Lot of Money, is still a Lot of Money) Be mindful of what you're doing in a Demo Account is there for and why you practice in it. You're far more likely to lose money than make money.
Moral Discussion (Christian perspective on Trading):
- If you have Gifts, use them.
- And give of yourself.
A lot of opportunities evade retail traders due to time. That's what all of the tools are lining up to. The ability to place a limit Order for both Entry & Exit.
Filtering out the non-Institutional side will make you miss trades that are counter-trend, but it gives you time to get into the bigger trades.