ICT Advanced Price Action Trading Concepts
- Thread starter TheInnerCircleTrader
- Start date
Live Stream 2014-05-09 Notes (The Poor Man's Plan to Progress & Process)
(Hoping I can include a copy of the Excel file he shared)
(Hoping I can include a copy of the Excel file he shared)
First Question, did ICT finally buy a mouse? [Looks like no...]
(New-ish Trading Teaching today)
Initial Expectations that are Wrong of new Traders.
Removing false expectations.
FX as an asset class is extremely versatile because you can gear your leverage, exposure and trading styles to anything that you want. You're not locked into the vehicles offered by others.
ICT's work stimulates the $_$ thinking. You don't have to run quick to do well.
Certain steps to go through before you can reach the Level to live solely by trading.
1) Trust you can do it.
2) Have the tools & mindset going in that you can remove yourself from the marketplace.
Tools & Thought Processes to help you get into this World of Trading.
You have to submit to the element of Time.
ICT would like Email responses from this Webinar.
a) What are your Top 3 Goals?
b) What is "Wealth", in your terms (dollars)?
c) How much would you need to make, to step outside the Workforce, assuming you're a consistent trader?
ICT wants to know what the "universe" of his audience is.
innercircletrader@gmail.com (Email account he uses for GoToMeeting stuff)
** -- Just those details. He doesn't need more information. -- **
If you have the thought process going into this that is so lofty and so unrealistic, it WILL be toxic to you. It will plague you.
It's unrealistic to "be ICT". You can see the fingerprints of all of the people that he learned from.
Don't be in a Rush. This teaching is about removing the Rushing capacity in us. He sees it in his own Son, whom he is teaching.
ICT doesn't share his trades because he's seen everyone beat themselves up when they're not "as good" as ICT on his trades.
The important part is always: did you learn something new about yourself as a Trader today? That's what is important.
We all will skip to the "Give me the Entry & Exit" when we come into this type of learning, which is why he does this all in tidbits.
Returning to the 25 pips a week teaching: it lowers your expectations and let's you enjoy the work.
25 pips per week = 100 per month.
If you net 100 pips over a month, that's an amazing opportunity to build consistency, proper trading Mindset and keeping your level of Goals & Focus in a small threshold. In time, you can find making 100 pips is very easy to find.
For USA people: did you know you can trade Forex in a self-directed IRA?
For non-USA people: can you trade Forex on a tax deferred basis?
ICT's View: look at trading as a vehicle where you can retire early. He got in to make $1000 extra a month to retire at 40. (When he was 24 or so)
[ICT's Birthday is August 8th.]
6 months is the MINIMUM you have to spend learning these tools in Demo. MINIMUM FOLKS!
The Money is a result of doing the Right thing over a period of time. The emotional aspects is far more important.
ICT never sells anything! (He wanted this noted)
A 20 pip (80 pips a month) course probably wouldn't sell. But you can make a career out of it.
Focusing on the "One Shot, One Kill" approach is, in ICT's view, the best way to approach this type of trading for most traders. It lets you ignore all of the other things going on with your charts and just take the high probablity trades.
Homework/study/teaching series coming for June, even though ICT will be gone.
Will do commentary again mid-July. Next "Series" in October (on Stocks), then some Commodities teaching in November.
ICT wants us to focus on the TIME. Spend time on the tools, like a college course. Spend time on certain small parts of the Marketplace.
By having that, you'll build an understanding around how you operate & think. Hopefully, it'll show you the errors you make, so you can learn & correct them.
Stay positive: setups always come around again. This is part of why trading Real Funds at the beginning will screw you up. Leads to toxic thinking.
You're going to be Wrong at times. The point of demo trading is so you can learn how you respond to being wrong. ICT wants his concepts put to demo trading for a number of months so you "know" and understand the setups. Are you going to keep to the process?
ICT frames his trading on 50 pips a week, 200 pips a month. He doesn't need more than that.
He's teaching us to be a Money Manager.
The "easy" part is making the money, after you've found a repeatable trading process. The "hard" part is submitting to the time you need to get to that point.
Ask yourself: how much money are you willing to invest in (and ultimately lose) to trading? If you lost it, it wouldn't do anything to your livelihood.
That's what you start your Retirement Account with. This is your "garden" that you build with.
ICT has a passion for teaching; maybe not always the skill.
Would you trust a Doctor that only went to school for 12 months? ICT wouldn't. Think about what you're expecting in the market.
ICT kept his goals realistic. He just got lucky. Greed gets in the way, always.
20 pips should be the minimum amount targeted on a trade.
Could use this as a way to fund your children's Start of Life: we don't understand how rewarding it is to have your children's Home, Car & Education already funded.
Think about the 20 pip method over 18 years.
Starting with this focus keeps things in line. Once you're good at this, there's plenty of potential for more.
When you're thinking "This isn't that much. That's easy", that's where ICT wants you. Once you can nail these, you can start making more, later. Starting from the Simple, rather than the Extravagant.
If you've been trading Real for a while, doesn't 6% a month, compounding, sound awesome? Yet simple.
Self-directed Roth IRA trading account? (Look into it!) Tax deferred basis is pretty nuts.
{sqa note on IRAs} Yes, it is doable. It's always doable, actually, and has been for years, per some basic research. However, you need a "trust" or "management" company for the IRA account, not the Broker. The account is effectively held by the Trust company, while you control it via a normal broker & trading. {end of sqa note}
After 6 months of Demo trading, hopefully, you'll replace the desire for making money with the desire for following the process. Every. Single. Time.
Deferring big amounts by adding more Time. It also drastically lowers the Stress.
Do you trust yourself with the foresight?
Your other accounts are fine, but have you allocated just that little bit of equity to this type of thinking? Over these periods?
Once ICT was making 3% a month, suddenly everyone was knocking at his door. He didn't want to manage their money.
On the 20 pips per week, on 1.5% risk on a 20 pip Stop Loss, starting with 2k becomes 1.7 million in 9 years.
Look at money as a tool, rather than being subservient to it.
How to stay Calm & Cool when the trade goes against you?
How much are you leveraging? That's going to be most of it. Cut your Risk. If that's not enough, cut it again.
Main teachings are actually a library of teaching for his children. This is also a legacy to his Children, in case anything does happen to him.
The first 4 ICT videos (the ones without any audio) were enough to make you a "Pro" Trader. You just didn't realize what you were learning at the time.
When a mentor doesn't give you a Time expectancy, you rush things. It impedes your development.
Larry Williams' YouTube plug that ICT was trying to find. He says it's 5-6 years for a Trader to get "good". Not profitable; "good". That's a realistic time frame.
Understanding yourself and your own problems... tends to be the Key component to getting there.
Once you're "there", you won't be chasing other systems, ways or means to trade. You know yourself and the way you trade.
Retail treat the money as "casino money". Doesn't matter how much money you have, a Professional looks at it to be protected. It's Money, it's not meant to be Lost.
ICT is building his "Fantasy Forex Team". (As in Fantasy Football-style)
Review of the Cable & Euro and their huge moves.
USDX Chart first. The benefit of the Levels: you sit and you wait for the Key levels.
Sitting and waiting costs you a lot.
Pulls out ICT Reflection pattern. May 6-8 action.
ICT Reflection Pattern on EURUSD on May 8-9 action.
Need some big cohones to catch a high like that Euro move, as it was a news event and you're risking hitting a Big Fig.
ICT isn't as smart as we think: he knows Himself, Charts and the psychology of other Traders. He just doesn't have the ability to understand Bank reports and other fundamentals.
It adds an area of dynamic understanding of the Higher Time Frames, but it's not something ICT is good at. It could be your thing, but you have to use other resources.
Looking at Cable, Cable wasn't responding the same as the Fiber. Smart Money Divergence!
Fiber was taking a "Nestea Plunge", lol.
ICT was quiet on May 8th, trying to figure out what to do with his Cable trades.
Having a lower expectancy of Exit, drastically increases your Profit. By not being Greedy.
How to avoid missing big moves? Have your entry from the day before.
Most of ICT's stuff is taken from others (whom he credits), put on steroids.
On the 8th, ICT realized that the Cable was going to follow the Fiber, but figuring out "where to get in" is the really hard part. Especially with an expected fast moving day to come.
He took shorts on his "5k to 1million" account, presentation Demo and his real, large account.
He saw a rally during the Dealer's Range, with an expected big move the next year. This is a unique example, as it was an Interest Rate announcement. This is the one exception to the Kill Zone timing rules.
{answers a question I had about a Swing Low in the USDJPY during the Dealer's Range May 8th}
Picture #3: That ended up a happy trade.
Asian Range Concept: If Selling, your price *has* to be above the Asian Range Low. (Flip for Buys) For London Setups.
Continuation setups in 1800-1900 are on Interest Rate announcements. Only exception to getting out by then.
ICT's life mission was to learn how to be the "guy" that gets the trades in the counter-move of the Day. Power of Three concept, again.
Attachments
And, if anyone is thinking it, did I just post notes from 6 hours of ICT talking today?
Why, yes I did. After I went through the process of converting both videos, I then watched them and took notes. That's about 10 hours of note taking. The start of the 20 pip teaching actually took nearly 3 hours to take notes for the first hour. ICT was dropping knowledge bombs.
Also, hit up the Feedback Email for Michael. He wants this stuff.
Why, yes I did. After I went through the process of converting both videos, I then watched them and took notes. That's about 10 hours of note taking. The start of the 20 pip teaching actually took nearly 3 hours to take notes for the first hour. ICT was dropping knowledge bombs.
Also, hit up the Feedback Email for Michael. He wants this stuff.
I'm kind of amazed how quickly I got likes. When these posts effectively went up in what I would suspect is a quiet period on the forums.
I think didn't anyone else worked Friday Night/Saturday morning on this stuff.
Edit: Also, if anyone cares, I think I'm starting to hear ICT in my sleep. And I'm pretty sure I know his voice better than my own family at this point. haha
I think didn't anyone else worked Friday Night/Saturday morning on this stuff.
Edit: Also, if anyone cares, I think I'm starting to hear ICT in my sleep. And I'm pretty sure I know his voice better than my own family at this point. haha
Why dont the ICT candles on the chart match on closing and opening of next candle??
look at the candles on the chart, the open and closes (on this 5min chart) dont make sense as they dont match. look at the 14 bear candles on the blue line before the move up, they are all black candles (ie bearish) but price doesnt move down - why is that??
look at the candles on the chart, the open and closes (on this 5min chart) dont make sense as they dont match. look at the 14 bear candles on the blue line before the move up, they are all black candles (ie bearish) but price doesnt move down - why is that??
Attachments
I wanted to drop this sort of side point, due to some of my own due dilligence.
Note: This only applies to US Citizens. AND IMPORTANTLY! This isn't tax or trading advice. This is just research on the topic as a whole.
If you're thinking about the "slow growth" approach with your account, and you're looking at this as a Retirement Planning, I would *really* advise to research Self-Directed IRA funds. ESPECIALLY the Roth version.
Roth is post-Tax money, so there's 0 for taxes on the backside. 401k accounts are generally pre-tax money, so tax-deferred, but it wouldn't accumulate tax bills while you're building it.
The reason I say this is pretty straight forward: oh Lord is the tax code a damn mess for trading Spot Forex. You'll be paying someone to do your taxes, in the first place, and a huge chunk of the "controlling authority" on the topic is court cases. So you also end up needing a lawyer involved.
Now, most of the problems are if you're going "full time" and can qualify for Trade Tax Status. However, that first year you're making good money, you're going to feel the pinch of the Tax Man hard. Especially if you're still working. Welcome to a massive jump in tax brackets.
So, it's something to think about. After ICT said it, which he didn't know more about than he saw it on IB's website, I went looking. It's just part of the due diligence on this stuff. The last thing you want is an IRS Audit for 5k in Forex Profit. ( <--- this can easily happen because of the complexity involved. ) So, if you're looking at a slow growth, retirement-planning style account, look into this.
Also, this is probably a "wiser" setup to trade for those in their 50s that are picking this up. They can pull money out at 59.5 years, so if that's just a few years out, it's very different than making money in the account in your 20s.
Just some thoughts stimulated by something ICT mentioned and my own necessary preparation (and head-desking) going through all of the details.
Note: This only applies to US Citizens. AND IMPORTANTLY! This isn't tax or trading advice. This is just research on the topic as a whole.
If you're thinking about the "slow growth" approach with your account, and you're looking at this as a Retirement Planning, I would *really* advise to research Self-Directed IRA funds. ESPECIALLY the Roth version.
Roth is post-Tax money, so there's 0 for taxes on the backside. 401k accounts are generally pre-tax money, so tax-deferred, but it wouldn't accumulate tax bills while you're building it.
The reason I say this is pretty straight forward: oh Lord is the tax code a damn mess for trading Spot Forex. You'll be paying someone to do your taxes, in the first place, and a huge chunk of the "controlling authority" on the topic is court cases. So you also end up needing a lawyer involved.
Now, most of the problems are if you're going "full time" and can qualify for Trade Tax Status. However, that first year you're making good money, you're going to feel the pinch of the Tax Man hard. Especially if you're still working. Welcome to a massive jump in tax brackets.
So, it's something to think about. After ICT said it, which he didn't know more about than he saw it on IB's website, I went looking. It's just part of the due diligence on this stuff. The last thing you want is an IRS Audit for 5k in Forex Profit. ( <--- this can easily happen because of the complexity involved. ) So, if you're looking at a slow growth, retirement-planning style account, look into this.
Also, this is probably a "wiser" setup to trade for those in their 50s that are picking this up. They can pull money out at 59.5 years, so if that's just a few years out, it's very different than making money in the account in your 20s.
Just some thoughts stimulated by something ICT mentioned and my own necessary preparation (and head-desking) going through all of the details.
TheRumpledOne
IT'S NOT WHAT YOU TRADE, IT'S HOW YOU TRADE IT!
I have a problem watching the videos on my Win 8 machine.. works on my Win 7.
It requires GoToMeeting's proprietary video codec.
If you're on Windows, you can just download GoToMeeting and play it in VLC or WMP.
If you're not on Windows, or don't want to give GoToMeeting the time of day, then I'll post the converted / transcoded video (which doesn't require any proprietary codecs) later today for your viewing pleasure.
If you're on Windows, you can just download GoToMeeting and play it in VLC or WMP.
If you're not on Windows, or don't want to give GoToMeeting the time of day, then I'll post the converted / transcoded video (which doesn't require any proprietary codecs) later today for your viewing pleasure.
TheRumpledOne
IT'S NOT WHAT YOU TRADE, IT'S HOW YOU TRADE IT!
OK..thanks
feroz said:
Too small. While on the Hourly it likely shows an Order Block, that's actually a Judas Swing you tagged.
For that trade, on the M15 chart, look at the 29 Oct 17:30 or so Bullish Candle. That's where the Order Block is. It appears to have hit it within 1/2 a pip.
Live Stream Notes 2014-05-12
Note: No recording was taken.
Note 2: I'm only including 1 picture, even though I have them listed. They're just shots of Barchart.com
Note: No recording was taken.
Note 2: I'm only including 1 picture, even though I have them listed. They're just shots of Barchart.com
Bond & COT Data today. ICT aiming for 30 minutes. I don't believe it.
No recording, just general commentary from previous teaching. Note action go!
Looking at Euro FX - Weekly Continuation Chart. (Pick #1)
Hasn't been an extreme either way on the COT data.
Not sure if 1.4000 on Euro is off the possibility this year.
Without extremes in COT data, have to rely on other tools.
9/18 EMAs on Weekly/Daily charts. Yet still Range Bound.
So in a day trade scenario (Euro) for now.
(Pic #2) Pound
Commercials are extreme Net Short.
Seasonal Tendencies can be overlaid with COT data, so you can look for the seasonal influence on positions.
[Reviewing Extreme sides on COT]
COT data isn't a Timing Tool.
Pic #3, closer chart.
His early study with it, ICT had a lot of faith in COT data, but he over did it.
Judges a lot of Price Action on the Future's Data.
If the Commercials are Net Short, but quickly lessen their selling, when in a consolidation, there's another Tool we use to see if the Range is going to break up. And the Commercials are expecting a further run up.
Markets are selling devices: they're selling Risk to you.
Oct-Nov 2013 Cable (1.5900 & Pic #4)
Futures is a X-ray view behind the FX market.
No dog & meat chasing.
Way to expect Turtle Soup Trades.
You can map out the Range High & Low, Look at COT fiddling.
Commercials were lessing Shorts, which is a good sign that it'll be a false breakout.
Looking at Open Interest. (Historical 2013 Futures data ended up not being available, oops!)
When Commercials lessen Shorts, if Open Interest Drops off aggressively (15-20%), that indicates Bullish move. Inside a Trading Range/Consolidation.
If Open Interest falls off at a High/Low, that's a sign of trend reversal.
Borrowing another commodity to show it happens there too.
Coffee is the commodity of choice today! (No pork. More Kosher.)
Open Interest dropping while in a Trading Range, anticipate very little movement through the Range before a trend continuation.
How to remove the subjectivity in COT data analysis:
- Have COT data on a chart
- (ICT didn't get back to finish this point...)
ICT isn't teaching Sam Seidon's (?) Support & Resistance levels is not what he's doing. Sam's approach doesn't deal with "cutting back through candles".
Pic #5 Canadian Dollar.
7-Range is coming down from a High.
L-Range is coming up from the Low.
.8900 on CAD. Look at 4+ year Long position by the Commercials.
Larry Williams point about counter moves against 1st Quarter of the year. Didn't quite get what ICT was trying to say past that. He jumped around it a bit. More of a "Yearly" dealer's range, I think.
Sustained Trends require increasing Open Interest & Volume. (Futures)
Volume precedes Price. Open Interest reflects real Buy & Selling of Commercials.
If Lower Lows are not reflected by Higher Volume, it's not indicative of new purchasing. (Same with Higher Highs) Trend reversal on deck (no size of reversal information, however).
Commercials are Hedgers, so they'll hedge their position at a different level. Thus, expect Turtle Soup/ICT Reflection/ 127%-162% Fib extension to hunt a Swing.
Pic #6 (7th screenshot) Zooming in to a Daily chart.
You want to wait for the falling dagger to hit the ground, stop moving, then gingerly pick it up. -Larry williams paraphrase.
1 hour Hit.
The One Thing here: incorporating Open Interest is the HUGE tell. They can't hide this Foot Print. This is how Order Blocks are formed.
If you're in a Trend, during a consolidation, if the Open Interest Skyrockets, it's a continuation trend.
This is how to functionally qualify Major Order Blocks.
But notice the Time it takes. You have to wait, however.
If you don't make the bigger trade, stay in the Direction of the Trend. Then just apply all of the Tools to catch big moves throughout the Trends.
Pic #7 (9th Screenshot): Forex version of those setups, which is inverted to the Futures contracts.
When dealing with HTF Order Blocks, we have to allow Price to return to the Order Block so the Monster can feed on that price level. That's why you Take Profit at logical locations.
MT4's total volume tool is worthless, btw!
ICT's Fib extensions are actually typed in wrong.
Inspecting the Moves & Order Blocks on USDCAD.
50% of the Candle in an Order Block is what we like to see respected.
90 minutes!
Monthly/Weekly/Daily is where you use Commercials doing.
ICT trolling someone that showed up late.
($100 to $12k in 6 weeks! Haha)
The COT stuff is from Larry Williams work, but this is most of it.
ICT doesn't have a clue what the Bonds are up to.
He expects Euro to head back down, but 1.4000 could be back in the cards later. But Bonds/Yields and Currencies are diverging right now. It's just a decoupling, for now.
Sometime the SMT divergence is perfect. Sometimes, for different reasons, they don't go in line. That's why we need a Toolbox. You just don't need all of the Tools to take a trade. Just a good set.
It's a hard, hard market right now.
ICT might have shot his voice for the week, hehe.
ICT has taken more Lost Trades (not value, just sheer number) this past year than in the 5 previous years combined. Hard, hard market, so keep at it.
He also closed his Cable Long, which he was finally able to not let it eat at him.
Final Tally was 1h:51m from when ICT said "30 minutes". Which is about expected. We love Michael. Just dropping bombs of knowledge.
Attachments
Since I didn't include (or actually screen capture) a chart with the CAD information we were looking at, here's a link.
Canadian Dollar 5 year Futures Weekly Nearest Chart
Canadian Dollar 5 year Futures Weekly Nearest Chart