2022 ICT Mentorship Episode 21

Main ideas, concepts, and lessons

• Purpose of the episode:

  • Use the Dollar Index (DXY) on the hourly chart to explain intermarket relationships between “risk-on” vs “risk-off” conditions.
  • Show how DXY behavior often aligns with direction in other markets, especially:
    • EUR/USD
    • stock/index futures (e-mini S&P)
    • and broadly all assets

• Risk-on / risk-off relationship (core intermarket concept):

  • When DXY rises → “risk-off” typically increases.
  • In a risk-off environment:
    • Money flows into the dollar (flight to quality / safe haven).
    • Risk assets tend to decline, including:
      • Foreign currencies vs USD
        • pressure on EUR/USD and similar pairs
      • Equity/index markets
        • inverse relationship with the dollar, including e-mini S&P

• Analytical framework used (price-action / order-block / imbalance / time models):

  • The speaker references prior episode forecasts tied to:
    • Order blocks, including:
      • a daily bearish order block on the dollar index
      • related levels on other charts
    • Relative Equal Lows (daily chart liquidity draw logic)
    • Fair Value Gaps (FVGs) and imbalance concepts
    • Relative Equal Lows / liquidity draw
      • price tends to gravitate toward these daily levels over time
    • Fib / threshold “midpoint” and “high of the order block” as levels of interest
      • areas where price is expected to be less likely to travel

• Forecast and “what happened” (DXY and e-mini S&P connection):

  • The speaker claims he previously stated:
    • DXY would likely drop to around 99.92 (for a specific setup)
    • then later rally higher, with upside targets including 102–103 (also referenced as objective levels)
  • For e-mini S&P, he emphasizes an inverted relationship:
    • when the dollar makes key lows, S&P faces downward pressure (especially around the seasonal window moving into May)
  • Expected behavior includes:
    • May typically bringing seasonal decline signals
    • downward “signatures”
    • movement toward relative equal lows

• Seasonality + structure = directional bias:

  • He argues that combining:
    • order-block logic
    • daily liquidity levels
    • seasonal pressure (May decline)
    • and ~30 years of experience
  • can support a directional bias and expectation of continued drawdown on daily charts.

• Time-of-day “Power 3” model (how the day is framed):

  • He uses session open reference prices and specific times:

    • London session framing
      • uses the “midnight New York time” opening price
      • described as roughly 2:00–5:00 AM New York local time for London context
    • New York session framing
      • uses the “8:30 AM New York opening price”
    • 9:30 AM
      • described as when equities begin trading
      • associated with more volatility/acceleration

  • “Judas swing” concept (important instruction):

    • If the market is bearish, he looks for a short-term false rally above an opening reference price (midnight open or 8:30 open).
    • If price fails to rally above those reference levels:
      • interpreted as extremely bearish
      • heavy downside
      • fewer “easy” long opportunities

• Coaching on mismatch between expectation and real outcomes:

  • He says he “didn’t get it right” for expecting a bigger rally (possibly a poke toward a level around 4320).
  • Why setups can fail:
    • Power3 may exist but be too small/anemic to matter
    • timezone conversion issues (e.g., daylight savings/local session times), especially if TradingView isn’t set to New York time
  • Discipline reminders:
    • use stops
    • don’t assume the “ideal” path
    • be flexible—not every setup materializes

• “Extremely bearish” market conditions = different trading approach:

  • When the market is heavy bearish, it may:
    • not produce reliable “rally then short” patterns
    • instead wilt and continue down
    • require smaller microstructural opportunities (smaller imbalances / FVGs)
  • Even during bearish regimes:
    • there are still tradable signatures
    • but they may be less scalable and require experience

• Specific trade example style (London open / microstructure logic):

  • “Sound entry” sequence described:
    1. Displacement
    2. FVG rallies into a bearish structure (bear shoulder block / FVG)
    3. microstructure shift below a short-term low
    4. continuation lower
  • Key entry/risk rules:
    • Entries tied to the lower fair value gap region
    • Stops may need to allow price to trade back into the related structure/FVG (increasing risk)
    • If price never reaches the “best” entry spot, traders must accept what price actually did

• Overnight holding rules (personal trading discipline):

  • He states he does not hold overnight.
  • He stopped overnight/weekend holding years ago.
  • Trades are typically within a session, often 90 minutes to 2 hours, then reassess.

• Motivation + realism about missing moves:

  • Even with a strong model, you’ll miss opportunities.
  • The market doesn’t always provide perfect execution paths.
  • Missing one portion of a move doesn’t mean the concepts are broken.

• Closing / next episode tease:

  • Next episode (Thursday) will demonstrate useful items inside TradingView, including likely setting up Fibonacci for beginners.

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Detailed methodology / instructions (as presented)

1) Use Dollar Index for risk-on/risk-off bias

• If DXY rises:
  • treat it as risk-off
  • expect:
    • foreign currencies to struggle (USD stronger)
    • risk assets (including e-mini S&P) to decline
• If DXY falls:
  • treat it as risk-on tendency (implied inverse effects)

2) Use daily order-block + liquidity draw concepts to form expectations

• Identify a daily bearish order block (on DXY context, translated to other instruments).
• Track order-block levels conceptually:
  • open / midpoint threshold (lesser retracement marker)
  • high of the order block (described as a level less likely to be traded to)
• Expect price to route lower and draw toward:
  • relative equal lows (liquidity targets)
  • then possibly older lows (next draw)

3) Power 3 / “opening price” timing framework (session opens)

• Ensure TradingView is set to New York time to avoid daylight savings confusion:
  • toggle chart timezone to New York
• Reference points:
  • Midnight New York opening price
    • used for London session analysis (roughly 2:00–5:00 AM New York local time)
  • 8:30 AM New York opening price
    • used for New York session Power 3
  • 9:30 AM New York
    • equities begin trading; expect initial volatility and often acceleration
• Directional expectations based on bias:
  • If bearish:
    • want price to fail to rally above the relevant opening price
  • If price rallies above the opening price during a bearish day:
    • call it a “Judas swing”
    • instruction: fade/sell into the suspicious rally (requires experience/backtesting)

4) “Heaviness” condition handling (when rallies don’t happen)

• If price stays below both opening prices (midnight and 8:30):
  • interpret as extremely bearish/heavy
  • expect:
    • fewer “nice premium” short setups
    • more small-pockets entries using imbalances
• If the normal scenario doesn’t trigger:
  • avoid forcing trades
  • use microstructure tools (FVGs/imbalances)
  • accept missed moves as part of trading

5) Fair Value Gap / imbalance execution logic (micro setup style)

• London open structure described:
  • Displacement
  • FVG
  • rally into a bearish structure (bear shoulder block / FVG)
  • microstructure shift below a short-term low
  • then continue lower
• Entry/risk rule:
  • use the lower fair value gap as the entry region
  • stops may be placed to allow price to trade back into the opposite side of the structure (risk adjustment)
• Warning:
  • don’t assume price will always reach the “best” spot; it may never get there

6) Trade management discipline

• Always use a stop loss (linked to the possibility of being wrong about expectations).
• Don’t move stops prematurely (“jam” stop loss) without structure/time confirmation.
• If you can’t monitor due to life constraints:
  • close positions entirely rather than staying exposed.

7) Position duration / holding rule

• Typically hold 90 minutes to 2 hours maximum.
• No overnight holding (not 24-hour or 12-hour holds).
• Exit before the close and reassess next session.

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Speakers / sources featured

• Speaker: Main presenter (unnamed in the subtitles) leading “2022 Free ICT YouTube Mentorship,” trading forex and futures.
• Source referenced:
  • TradingView (timezone setting and chart tools like Fibonacci).
• Other named speakers:
  • No other clearly identified speakers in the subtitles.
  • A commenter (“Michelle in the comment section”) is mentioned but not shown as an active speaker.