Summary of "ICT Mentorship Core Content - Month 1 - Fair Valuation"
Summary of "ICT Mentorship Core Content - Month 1 - Fair Valuation"
Main Ideas and Concepts:
- Fair Valuation Perspectives:
- Fair Valuation can be viewed from two angles:
- Equal distance between a high and a low (equilibrium).
- Market Maker valuation, focusing on where they see fair price levels for buying or selling.
- Fair Valuation can be viewed from two angles:
- Market Ranges and Trading Decisions:
- Understanding the current trading range is crucial:
- Buyers should look for discounts (lower third of the range).
- Sellers should look for premiums (upper third of the range).
- Equilibrium is the midpoint where the market can move either way.
- Understanding the current trading range is crucial:
- Liquidity Voids and Fair Value Gaps:
- Liquidity Voids occur when the market moves quickly through price levels with little trading activity, creating gaps.
- Fair value gaps are areas where price action has not filled in due to rapid movement, indicating potential future buying or selling interest.
- Market Maker Behavior:
- Market makers accumulate long positions at discounted prices and sell at premiums.
- They operate based on liquidity pools and gaps, aiming to optimize their trades.
- Price Action Analysis:
- Price action should be analyzed in terms of:
- Current range (high to low).
- Proximity to equilibrium.
- Areas of Liquidity Voids.
- Anticipating market moves based on these factors can guide trading decisions.
- Price action should be analyzed in terms of:
- Contrarian Perspective:
- Traders should adopt a perspective that contrasts with retail traders' common beliefs to better understand market movements.
- Consolidation and Expansion:
- Markets often consolidate before expanding. Recognizing this pattern can provide insights into future price movements.
Methodology and Instructions:
- Identify Trading Ranges:
- Define the high and low of the current price action.
- Determine if the price is in the upper or lower third of the range to decide on buying or selling.
- Evaluate Fair Value:
- Look for areas where price has moved quickly (Liquidity Voids) to identify potential fair value zones.
- Assess whether the market is at a discount or premium relative to the defined range.
- Monitor Market Structure:
- Observe recent swing highs and lows to gauge market direction and potential breakout points.
- Anticipate Market Moves:
- Use the understanding of liquidity gaps and fair value to predict where the market may move next.
- Look for signs of accumulation (at discounts) and distribution (at premiums) by market makers.
- Avoid Retail Mindset:
- Shift focus from common retail strategies to understanding the motivations and actions of market makers.
Speakers/Sources Featured:
- ICT (Inner Circle Trader) - The primary speaker and educator in this video.
Category
Educational
