Summary of "Broadening Formations - Strat and ICT Part 1"

The video serves as the first part of a two-part series that explores the concept of Broadening Formations in trading, particularly in relation to the ICT (Inner Circle Trader) methodology. The speaker discusses how to identify and utilize Broadening Formations effectively in Trading Strategies.

Main Ideas and Concepts:

Broadening Formations: Defined as a pattern where one high takes out another high (and similarly for lows). It indicates potential price movements and market behavior.
Market Structure: The importance of recognizing Market Structure shifts and breaks, which can signal reversals and trading opportunities.
Consolidation and Expansion: When the market is range-bound, it often leads to an eventual expansion of the range, which traders can capitalize on.
Liquidity Levels: Running Liquidity Levels (taking out previous highs or lows) is crucial for identifying points of interest for potential trades.

Methodology:

Identify Consolidation: Look for periods where the market is range-bound.
Draw Broadening Formations:
- Identify significant highs and lows.
- Draw the broadening formation by connecting these points.
Monitor Price Action:
- When Liquidity Levels are run (i.e., a high or low is taken out), look for a potential reversal.
Set Points of Interest:
- Use the drawn broadening formation as a guide for where to look for trades.
Execute Trades:
- Enter trades when Price Action confirms a break in the opposite direction after running liquidity.
- Set risk management parameters, such as risking the low of the previous move.
- Take partial profits at significant highs or lows.

Example:

The speaker illustrates these concepts using a past Price Action example from May 22nd, highlighting the consolidation phase and the execution of trades based on identified Broadening Formations.