2022 ICT Mentorship Episode 18

Main Ideas / Lessons Conveyed

• Purpose of the lesson: Demonstrates a streamlined ICT-style trading workflow for EUR/USD (forex) using a consistent chart layout and a top-down analysis process (Daily → Hourly → 15-minute → 5-minute).

• Core trading premise: Start with a daily bias (in the example: bearish) and look for price to interact with specific market structures—especially:

  • Fair Value Gaps (FVGs) / imbalances
  • Liquidity at prior highs/lows Then execute intraday entries aligned with that bias.

• Streamlining analysis: The method is presented as simpler than relying on many extra tools (e.g., dealer ranges, Asian ranges, etc.). The key is to annotate and follow the rules rather than switching logic mid-day.

• Fair value gap & direction logic:

  • On the daily chart, an FVG can be treated as a target area where price might trade upward before later moving lower.
  • The speaker emphasizes that a “bearish breaker” interpretation is not automatically correct here. The correct comparison is whether the relevant level aligns with:
    • the FVG’s discount/low, or
    • the candle’s high.

• Time-of-day matters (“Kill Zone” concept):

  • Trades are planned for New York session timing.
  • The specific window used is 7:00 AM to 10:00 AM (New York time) for setups and order placement.
  • If the trade doesn’t develop by the end of the window, the order plan should be canceled and you wait for the next opportunity.

• Trade management mindset:

  • Avoid chasing during the day—commit to the one direction (bias).
  • Bias doesn’t need to be perfect; it’s a framework until invalidated by price.
  • Losing trades are normal; “never losing” is dismissed as unrealistic.

• Risk and leverage emphasis:

  • Profitability doesn’t strictly require a high win rate or a mandatory “risk:reward model” (as supported by referenced live/personal account demos).
  • The more important control is position sizing / leverage, not just pip counts.

• Order block clarification:

  • The speaker critiques common misunderstandings of order blocks and argues many tutorials are inaccurate.
  • Rule stated: an order block is tied to a change in delivery/state, and it is valid in relation to imbalance (FVG/imbalance parent–child structure).

• Backtesting via annotation (study journal workflow):

  • Chart annotation is used as a backtesting method: log daily/weekly/intraday “snapshots,” then review them like a personalized technical analysis book.
  • The goal is to build pattern recognition so setups “leap off the chart.”

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Step-by-Step Methodology (As Presented)

A) Chart Layout and Workflow (TradingView Multi-Timeframe)

• Use a layout workable even on one monitor (the speaker’s original example may show multiple screens, but the essential setup is single-screen friendly).
• Chart placement in the layout:
  • Upper-left: Daily
  • Lower-left: Hourly
  • Right: 15-minute
• Use a linking feature so drawings/annotations on one timeframe appear across the linked chart:
  • Click the link button/icon so annotations “flip plotted” to other timeframes for the same symbol.
• 15-minute is described as the “bellwether” intraday reference:
  • Used throughout the day to manage positions and validate intraday bias.

B) Top-Down Analysis: Daily → Execution Plan

1. Start on Daily to set bias

   • Example bias: Bearish daily bias.

2. Identify daily FVG / imbalance

   • Price may draw up into the daily FVG, but trading direction remains short because the bias is bearish.

3. Define daily draw vs intraday target

   • Daily expectation: price may go lower toward a liquidity draw (daily low).
   • Intraday targets rely on previous day highs/lows (liquidity pools), not necessarily the full daily draw.

C) Intraday Framework Using Prior Highs/Lows Liquidity

1. Mark previous day’s high and low

   • Emphasizes doing this for the last 3 days to create repeated liquidity-pool setups.

2. Build the intraday scenario

   • If price revisits an FVG area and revisits levels tied to prior highs, it can set up a short toward the next liquidity pool (e.g., the daily low).

D) Timing Rules (“New York session” / Kill Zone window)

1. Convert chart timing

   • Set TradingView session reference to New York time.

2. Mark the Kill Zone window

   • 7:00 AM to 10:00 AM New York time (forex).

3. Execution timing logic

   • Look for a setup that forms within that time window.
   • If it doesn’t execute by the planned end, cancel/pull the order and wait (don’t let it remain active indefinitely).

E) 15-Minute Execution “Threshold”

1. On 15-minute, wait for evidence including:

   • Displacement in the direction consistent with bearish intent.
   • Formation/refinement of an FVG/imbalance inside the 15-minute structure.

2. “Minimum expectation” described

   • Once price trades up into the parent 15-minute imbalance area, it’s reasonable to look for selling toward a defined level (not necessarily the absolute extreme).

F) 5-Minute Fine-Tuning (Entry Refinement)

1. Drop to 5-minute within the 15-minute range:

   • Look for a subordinate (child) fair value gap inside the 15-minute parent.

2. Plan entry types:

   • Low-threshold entry: sell limit lower (more likely to fill; higher pip risk).
   • Higher-threshold entry: sell limit higher (better price; may miss fill).

3. Tie the chosen entry zone to:

   • Where the 5-minute imbalance sits (optionally including where it may rebound to a secondary FVG/imbalance area).

G) Order Placement & Stop Logic

1. For the short entry:

   • Stop loss placed above a relevant structural level.
   • The speaker often uses imbalance/swing-high context and may reference an area above the “high” created by the setup.

2. If the setup doesn’t trigger as planned:

   • Pull the limit order rather than leaving it active indefinitely.

H) Order Block Rules (As Corrected by the Speaker)

1. Identify the “bearish order block” based on their rule set:

   • In the example: a consecutive run of three bearish candles on the 5-minute chart.

2. Invalidation logic:

   • The move does not need to reach the “last up-close candle” concept often taught by others.
   • Key requirement: the order block must be supported by/linked to the imbalance (parent 15-minute context). Without the imbalance, it isn’t an order block.

3. Their definition of the order block:

   • Represents a change in state of delivery, i.e., the market shifts from buy-side dynamics to sell-side delivery after breaking down below the relevant level.

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Market Example / Scenario Explained (EUR/USD)

• The speaker narrates a concrete EUR/USD scenario:
  • Daily: bearish bias; daily FVG and liquidity draw toward lower levels.
  • Hourly/15-minute/5-minute: shows how an intraday rally into the FVG and equal highs leads to displacement down through bearish structure.
• Targets:
  • Focus on an achievable intraday downside range, not necessarily the full daily extreme.
• A concrete intraday move is described as producing roughly 10–40 pips (with 40 pips referenced as achieved).

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Additional Claims and Guidance

• No “sexy” indicators needed: The framework relies on price action and mapped areas (rectangles highlighting imbalance), not traditional indicator signals.

• Study discipline: Build a study journal by annotating daily/weekly/intraday outcomes and reviewing it weekly to improve decision-making.

• Hindsight vs learning: Trading education is compared to medical training: study past outcomes, then apply what was learned.

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Speakers / Sources Featured

• Speaker: The video instructor, referred to as “ICT” / Michael (teaching within the “ICT 2022 YouTube mentorship”).

• Platform / tools mentioned (not speakers):

  • TradingView
  • TD Ameritrade (referenced via an account/log)

• Other sources mentioned (not directly featured as speakers):

  • MT4 (older platform)
  • TradeStation
  • BabyPips (historical reference)
  • “Other YouTube channels” (generally referenced as potentially inaccurate/less precise)