ICT Mentorship - Month 1 Core Content: Elements Of A Trade Setup
ELEMENTS OF A TRADE SETUP
Important thing to do, calibrate your TradingView account or any
other platforms towards the NY time zone. Everything related to time
in in this ICT mentorship 2023 is referred to the NY time zone.
The best time to execute trades is between 8:30 and 11:00 in the NY
trading session.
High frequency trading algorithms execute their trades on the 1-5m.
This is based on the given market structure on that moment of time.
Key Elements
1. Expansion (Trend)
2. Retracement
(Pullbacks)
3. Reversal
4. Consolidation
These are the elements you should look out for when it comes to a
trade setup:
You want to see a run on liquidity either on BSL or SSL.
You want to see a shift in market structure by breaking a short
term high/low.
You enter a trade in a FVG.
You should target liquidity or imbalances.
Context or Framework surrounding the idea:
1. Expansion – Judas Swing.
2. Retracement – NY Session.
3. Reversal – London Swing.
4. Consolidation – Asian Session.
*Every day starts in consolidation (Asian Range).
After midnight (NY time) there is an expansion. It comes in
the form of the Judas Swing.
Consolidation
By using the Fib extension tool in TradingView, you can identify if you
are in premium or in discount:
Above the 50% level Premium market.
Below the 50% level Discounted market.
Reversal
PRICE
Expansion
→
→
Retracement
Expansion
Expansion is when price moves quickly from a level of
Equilibrium.
This shows a willingness from the Market Makers too
reprice to the next objective.
If markets start from a Consolidation, a Displacement
will be used to break out of the Consolidation.
Price will then print an Order Block whilst breaking out
of the Consolidation.
The Order Block will be found near or at the
Equilibrium of the Consolidation.
LUMI
Retracement
LUMI
LUMI
TRADERS
All markets start off with a
Consolidation Then move into an
Expansion with an Impulsive Price
Swing.
That Impulsive Price Swing then leads
towards:
a) Consolidation after the Impulsive
Price Swing
b) Retracement after the Impulsive
Price Swing
If a Retracement occurs, we can
“anticipate” another Expansion.
After this Expansion however, a
Reversal is Possible.
After a Reversal Price will:
A) Retrace after the Reversal
B) Consolidate after the Reversal
There will be times when the market is in
a consolidation.
When this happens, the market will tend
to expand.
All markets start with a consolidation
and move on to expansion.
After an impulse move, it either returns
to consolidation again, or we see a
pullback. When a pullback occurs, the
market returns to another impulse move.
Or, after a pullback, the market may turn
to a reversal. After a reversal, we may
see another correction and then a return
to potential consolidation. These four
criteria constantly replace each other.
TRADERS
[FVG/Imbalance]
GENERAL STRUCTURE
Retracement is when price retraces back within the price range formed by
the Displacement.
Retracements inside of a price range seek areas that were not efficiently
traded.
Fair Value Gaps and Imbalances show us areas that were not efficiently
traded.
When thinking of retracements, you should instantly think of Fair Value
Gaps/Imbalances
Price Equilibrium - Asian range.
Manipulation - this will always happen through some kind of news event, news driver. During
manipulation or right before it. This is Judas Swing.
Expansion. In other words, when a high or low is formed. It will drop before 5:00 AM NY or goes
up before that time (depending on the daily direction of the price, we will use the buy day
perspective). This means that the Asian range has a slight consolidation and then after
midnight NY there is a drop in price - a manipulation that makes a false move to the low. There
is a range extension.
Then the market moves to Reversal. A classic scenario for a London opening. When the market
goes down, taking stops and then it expands again - Expansion. Until what time? - Until 5am
NY.
TRADERS
Between 5am and 8am EST, during this time frame, the market will return to Consolidation .
Then there will be a Retracement pullback, between 8:00am and 8:30am EST.
Reversal
Consolidation
Reference Point in Institutional Order Flow: Liquidity
Pool
Reversal is when Price completely reverses its current
trend established.
Reversals occur at Liquidity Pools.
Bullish Liquidity Pools are found under old lows.
Bearish Liquidity Pools are found above old highs.
Reference Point in Institutional Order Flow: Equilibrium
Consolidations occur when the price is constricted by a trading range and
has no willingness to break out yet.
Consolidations show us that the Market Makers are building liquidity above
and below the market.
We can anticipate Expansions to occur after Consolidation.
Be patient and look for a Displacement away from the Equilibrium price
point of the Consolidation.
lumitraders.com
Then there will be either a Reversal in the NY session, or an Expansion move. The range will
widen over the rest of the day, going up to 10:00am or 11:00am EST then the Reversal is back
(that's the London close).
The market will enter Consolidation , ending at the end of the day around 19:00 EST.
LUMI
TRADERS