2022 ICT Mentorship Episode 12

Main Ideas / Lessons Conveyed

• The “market structure for precision technicians” is framed as an advanced, repeatable price-action system, not something you can learn in one viewing.
  • It requires study, homework, and backtesting on historical price data.
• The speaker emphasizes context over retail-style trend labeling (e.g., “higher high / higher low” by itself).
  • The key question is:
    • Is price likely to move up to take liquidity (buy stops / buy-side liquidity) or down to take liquidity (sell stops / sell-side liquidity)?
    • Is it likely to rebalance an imbalance (e.g., fair value gap / FVG) by moving up or by moving down?
• He teaches a top-down workflow:
  • Daily = defines the parent narrative (bias/likelihood)
  • Hourly → 50-min → 15-min → 5-min/4-min/1-min = used to find entries and manage risk, not to invent bias independently
• Institutional behavior is described using two core concepts:
  1. Imbalance → Rebalance (often discussed via Fair Value Gaps / imbalances)
  2. Liquidity runs (prices move where stops are)
• He argues that market algorithms/logic explain consistent level respect more than:
  • harmonics
  • Elliot Waves
  • indicator-based approaches
  • Fibonacci used as standalone “signals”
• He explicitly states he abandoned indicators for this reason.

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Methodology / “Instruction Set” (Step-by-Step)

A) Define the Key Market Question (Bias/Likelihood)

Before trading, ask only:

• Will price go up to take buy-side liquidity (buy stops)?
• Will price go down to take sell-side liquidity (sell stops)?
• Is price more likely to rebalance upward (fill an imbalance / FVG) or downward?

Avoid relying primarily on:

• harmonic patterns
• Elliot Waves
• Fibonacci ratios as standalone signals
• simplistic retail trend patterns (like only HH/HL)

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B) Identify Higher-Time-Frame Structure (the “Parent”)

On the daily chart, identify labeled swing types:

• Long-term High / Long-term Low
• Short-term High / Short-term Low
• Intermediate-term High / Intermediate-term Low between those swing points

Use the daily chart to set the expectation for where price is likely to move next (the “narrative”).

• Example described:
  • price trades up into the high end of a daily FVG
  • then breaks lower and revisits lower zones (discount levels)

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C) Use “Imbalance Rebalancing” to Drive Intermediate Swing Labels

Principle:

• When an imbalance is rebalanced, the swing formed at that moment becomes an:
  • intermediate-term high or intermediate-term low

Practical marking logic (conceptual):

• A large imbalance candle move (up or down) that later becomes rebalanced creates a key intermediate swing label.
• That label should generally act as a decision level later—price should not violate it in a way that invalidates the setup.

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D) Intermediate-Term Structure Validity Checks (Don’t Force Trades)

He introduces rule-like expectations:

• An intermediate-term high may be expected to have short-term highs around it that it does not “overtake” cleanly (in his model, this helps infer weakness).

If the intermediate-term high/low is violated after the trade idea is formed:

• the idea is considered flawed
• the trader should cancel
• wait for new alignment
• do not “force it” or overtrade

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E) Entry Logic via Order Blocks + FVG

(Higher timeframe sets expectation; lower timeframe triggers)

After the hourly/daily narrative suggests a move toward imbalance/liquidity, look for:

• fair value gap formation
• followed by displacement/disruption consistent with a structure shift

Hourly → lower timeframe confirmation

He often uses:

• 50-minute and 15-minute as intermediate steps
• 5-minute and 4-minute for more precise execution

Order block framing (his stricter interpretation)

Instead of defining an order block as only:

• “the last up candle before the move”

…he treats an order block as:

• a consecutive series of up-closed candles (in bearish cases, these are described as bullish candles that should cap price)
• located within a larger bearish market-structure context

Entry archetypes described

• Aggressive entry: short at/near a bearish order block zone, expecting price won’t break above the intermediate-term high
• Typically involves:
  • price trading into the imbalance / FVG
  • then rejecting in line with the order block logic

Risk placement

• Stop is typically above the relevant order-block high (or above the bullish candles acting as resistance)
• Target aligns with higher-time-frame objectives (e.g., lower liquidity / discount targets)

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F) Targeting / Measurement Rules (Two Approaches)

1) Primary directional framework targeting

• Use the range between the long-term high and long-term low as the measurement basis for projections.

2) Fibonacci alternative

• Anchor Fibonacci to specific swings (the speaker stresses that changing the anchor changes projections).
• Example described:
  • anchor Fibonacci from intermediate-term high to long-term low
  • use projections like “standard deviation / -1.5 SD” (as described in the lecture)

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G) “Institutional Order Flow” Validation (Behavior Inside/Around Order Blocks)

In practical terms (bearish scenario):

• Up-closed candles act like speed bumps/resistance
• When price returns into these up-closed candles:
  • it should not overtake them
  • otherwise, it undermines the bearish thesis

He reiterates:

• Intermediate-term high/low is the key invalidation level
• multiple violations imply the model is wrong

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H) Trading Management Stance: When to Be Neutral

He ends with a “no forced bias” rule:

• He is not trading when he cannot justify one-sided bias
• If he can’t confidently frame both:
  • a high-probability bullish case, and
  • a high-probability bearish case,
  • then he recommends:
    • do nothing / stay neutral

Emphasis:

• avoid regret-driven trades
• don’t trade simply because “it could go either way”

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Concrete Concepts Repeatedly Emphasized

• Fair Value Gap (FVG) / Imbalance as the movement engine
• Liquidity runs as the “why” behind direction:
  • buy stops above old highs
  • sell stops below old lows
• Imbalance rebalancing creates intermediate-term highs/lows
• Intermediate-term highs/lows as invalidation points
• Order blocks as zones of expected rejection, defined with his stricter logic:
  • consecutive candle series within structure
• Top-down hierarchy:
  • daily defines narrative
  • hourly builds the setup
  • 15-min/5-min/4-min supports execution
• Refusal to rely on “pattern astrology” and indicators as primary logic:
  • harmonics, Elliot Waves, etc.

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Speakers / Sources Featured

Speakers

• ICT (lecturer; referenced as “ICT” throughout)

Sources / Authors Mentioned

• Larry Williams (market structure ideas; via books/courses)
• John Murphy (Technical Analysis of the Financial Markets)
• Community/retail traders / educators (general, unnamed references)