EP1: Introduction to Dealing Range Theory (DRT) — Transcript

Full transcript

1. 0:04hello and welcome to episode one of the
2. 0:08ICT Forex 2024 mentorship now I have
3. 0:12received a ridiculous amount of messages
4. 0:14and questions regarding this mentorship
5. 0:17and I'm going to spend the first 5 or 10
6. 0:18minutes of this lecture to answer some
7. 0:21of those questions and get you into the
8. 0:24mindset of how you should approach this
9. 0:26mentorship and hopefully what you should
10. 0:28learn from it now the focus of this
11. 0:31mentorship is going to revolve around
12. 0:33DRT or dealing range Theory before the
13. 0:36trolls start coming out and saying I'm
14. 0:38rebranding I'm not right everything that
15. 0:40I'm going to discuss in this mentorship
16. 0:43is pure ICT right ICT is the only person
17. 0:46I have learned all of these Concepts
18. 0:48from they are not my own I am coining
19. 0:51the term dealing range Theory because
20. 0:53it's just easier for me to explain
21. 0:56certain things when I'm referring to DRT
22. 0:58or dealing range Theory it encapsulates
23. 1:00a number of things right ICT has taught
24. 1:02everything that I'm about to show you
25. 1:04all I'm trying to do is use this
26. 1:06mentorship to bring in a few different
27. 1:08components of ICT and show how they all
28. 1:11blend together and how you can build
29. 1:13multiple models I'm not here claiming
30. 1:15that I'm the best educator or Mentor in
31. 1:17the world I'm a student just like you
32. 1:19guys are and ICT hasn't yet released
33. 1:21everything so I'm still learning just
34. 1:23like you guys I'm just a little bit
35. 1:25ahead in the journey than the majority
36. 1:27of people out there this is my seventh
37. 1:29year with ICT Concepts and I learned
38. 1:31directly from ICT as one of his private
39. 1:33students in my opinion this is the gold
40. 1:35standard of technical analysis whether
41. 1:38you like Michael or you don't there is
42. 1:40no denying that the impact he has had on
43. 1:42the trading industry has been huge in my
44. 1:45opinion over the next 5 to 10 years I
45. 1:48think ICT Concepts will become The
46. 1:50Benchmark for retail Traders ICT has
47. 1:54finally given us a curriculum that
48. 1:55actually gives us a reason of why price
49. 1:58is going to move how it's going to move
50. 2:00where it's going to move to now despite
51. 2:03this being my seventh year I have still
52. 2:05an element of impostor syndrome teaching
53. 2:07this because I know that all of the
54. 2:09information hasn't been released but
55. 2:11what I want to do is give you my
56. 2:12experience with using ICT Concepts the
57. 2:14pitfalls that I've had what's helped me
58. 2:17in this journey and hopefully somebody
59. 2:20can take something away from that there
60. 2:21are other great Educators in the space
61. 2:23like myself who have come out and tried
62. 2:25to make ICT Concepts a little bit more
63. 2:28digestible because his Li is absolutely
64. 2:30enormous right now I know that ICT gets
65. 2:33a lot of stick on social media and I
66. 2:35think that's predominantly down to the
67. 2:36way he conducts himself online in my
68. 2:39opinion I don't think he needs the
69. 2:41theatrics and the drama because his
70. 2:43Concepts alone are good enough now a lot
71. 2:45of my old students who have been with me
72. 2:47for a number of years they know my
73. 2:50teaching style and I try to keep things
74. 2:52extremely concise this is why I'm
75. 2:54spending the first 5 10 minutes of each
76. 2:56lecture just talking a little bit about
77. 2:58psychology a little bit of mindset
78. 3:01motivation and to answer the many many
79. 3:04many questions that I get on a daily
80. 3:05basis I feel like this is an easy medium
81. 3:08for me to answer those questions rather
82. 3:11than typing an essay to each of you
83. 3:13individually and what I have found is
84. 3:15many of the questions are repeating a
85. 3:18lot of those which I'm going to answer
86. 3:20within this mentorship how to determine
87. 3:22bias which order block am I choosing
88. 3:25which fair value Gap am I choosing I'll
89. 3:27be going into time and macros I'll be
90. 3:30going into the many different personal
91. 3:32models that I use I'll be showing you
92. 3:34where to place your stops where to take
93. 3:37your profits and how can we use dealing
94. 3:39range Theory or DRT to help flesh out
95. 3:42where high probability setups will form
96. 3:45now the advanced course on the market
97. 3:47maker model which I released last year
98. 3:49was the language that I needed to teach
99. 3:52an order for me to run this mentorship
100. 3:54because it is very very detailed
101. 3:57although I've done I think a reasonable
102. 3:58job of keeping it under two hours in
103. 4:00length it's very concise and packed with
104. 4:02a ton of details but I had to teach it
105. 4:05conceptually first otherwise I'd be
106. 4:07having to explain everything in this
107. 4:09mentorship again and just be hours and
108. 4:11hours long now it's not important if you
109. 4:13haven't gone through it but it will give
110. 4:14you a huge Advantage because I've really
111. 4:17broken down every single component of
112. 4:19the market maker model and dealing range
113. 4:21theory in that course now if you haven't
114. 4:23gone through it it's not the end of the
115. 4:24world because I'm going to teach a lot
116. 4:26of it within this mentorship itself my
117. 4:28goal here is to help you you read ICT
118. 4:31algorithmic price action I cannot teach
119. 4:33you how to trade unfortunately that's
120. 4:35going to come by way of experience it's
121. 4:37going to come by a lot of trial and
122. 4:39error a lot of lessons that you're going
123. 4:41to learn along the way a lot of draw
124. 4:43down but nothing worth having comes easy
125. 4:47right I'm going to try to not go into
126. 4:51the crazy detail that I went in with my
127. 4:54last mentorship that was really for
128. 4:57advanced students and when you join that
129. 4:59mentor ship program that gives you
130. 5:01direct access to myself and my community
131. 5:03now the reason I've done that is because
132. 5:05I want a certain standard in that
133. 5:06Community we have some monsters in that
134. 5:09community and I don't have to babysit
135. 5:11them right when there's a question then
136. 5:13usually it's quite an advanced question
137. 5:15which I can answer but the reason I
138. 5:16haven't opened up my community to
139. 5:18beginners is because from past
140. 5:20experience it's Relentless with the
141. 5:23questions that I get and it was pissing
142. 5:25the wife off I was checking my phone
143. 5:26every 2 minutes and it unfortunately it
144. 5:28is just something that I have to
145. 5:31consider right this mentorship is
146. 5:33designed for more of an intermediate
147. 5:35level unfortunately it is not beginner
148. 5:37friendly I have created a free ebook
149. 5:40which I'll link in the description below
150. 5:42which will help you get started with the
151. 5:43main ICT Concepts there is a video
152. 5:46version of it available on the website
153. 5:48in the summer maybe July August time I
154. 5:51am looking to do an eight or nine week
155. 5:53intense boot camp so that will get you
156. 5:56from a beginner level to a good
157. 5:58intermediate level and that will Bridge
158. 5:59you nicely into the advanced Market
159. 6:02maker course where I really go deep into
160. 6:04dealing range theory for the purposes of
161. 6:07this mentorship I'm going to try to keep
162. 6:10it simple I'm going to use a handful of
163. 6:12ICT Concepts that repeat in price and
164. 6:16hopefully during the course of this
165. 6:17mentorship I'm going to help you train
166. 6:19your eyes to see these signatures in
167. 6:21price and I believe that understanding
168. 6:23the dealing range unlocks all of ict's
169. 6:26Concepts now I haven't done mentorship
170. 6:28slides for a while so when I sat down to
171. 6:30do these I got a little excited and 200
172. 6:33slides deep I thought I'm going to kill
173. 6:36them off on the first day so this is
174. 6:38going to probably be a little bit longer
175. 6:40than I was anticipating it's great value
176. 6:43stuff I mean really get a notepad and if
177. 6:46you need to stop and Rewind and go back
178. 6:49then please do so when I get into the
179. 6:51teaching portion of this mentorship I'm
180. 6:53very concise I don't digress and I pack
181. 6:56it with a lot of detail again all credit
182. 6:58to the boss I see
183. 7:00without his work none of this would have
184. 7:02been possible now before I forget I
185. 7:05really need to make this clear as well I
186. 7:07am not a financial advisor right
187. 7:10anything that I say within this
188. 7:12mentorship or if I am calling where the
189. 7:15market is likely to go these are just my
190. 7:18opinions only and I could be wrong the
191. 7:21goal here is for you to be independent
192. 7:23of anybody myself or ICT and all I am
193. 7:26doing is giving you my internal dialogue
194. 7:28of what I can see in the markets using
195. 7:30my experience with ICT Concepts I get
196. 7:32dozens of emails every single day from
197. 7:35people who want to better their lives
198. 7:38but can't afford the education so I hope
199. 7:41you guys can get something out of this I
200. 7:43will do my best to guide you through
201. 7:46these charts as well as I can but
202. 7:48ultimately it's going to be down to you
203. 7:51now normal retail logic really relies on
204. 7:54stuff like support and resistance right
205. 7:56all of us learned that when we were
206. 7:58coming up as Traders and in here I want
207. 8:00to show you what true support and
208. 8:02resistance looks like in the market now
209. 8:04dealing range Theory or DRT will
210. 8:07encapsulate both forms of support and
211. 8:09resistance in the market which is based
212. 8:11on number one a raise in price and
213. 8:15number two grade levels now what are
214. 8:17grade levels if we grade this entire
215. 8:20range from high to low and we split this
216. 8:24range into four equal quadrants this
217. 8:26gives us our grade levels or you may you
218. 8:29hear me referring to these as DRT levels
219. 8:33just to show some sort of distinction
220. 8:35between different grades and grade
221. 8:37swings and standard deviations which
222. 8:39again I will get into but when I refer
223. 8:41to DRT levels I'm specifically referring
224. 8:44to graded levels inside of a dealing
225. 8:47range now you can use your Fibonacci
226. 8:49tool or I use this little box thingy
227. 8:53down here I'm not sure what it's called
228. 8:54I think it's like a gun box or something
229. 8:57and I adjust the levels so I have it
230. 9:00going across horizontally and we have
231. 9:02the levels at 1
232. 9:050.75 0.5
233. 9:080.25 and zero or this is the 25% DRT
234. 9:13level of this range this would be the
235. 9:1550% DRT level the 75% DRT level and the
236. 9:20100% DRT level which is obviously this
237. 9:23High over here now the 50% level is also
238. 9:27known as equilibrium now this is the
239. 9:30most important level inside of dealing
240. 9:32range Theory why is it such an important
241. 9:35level well according to ICT the market
242. 9:38operates on Fair Value I classify fair
243. 9:41value with three different things one
244. 9:44fair value is going to be the midlevel
245. 9:47price of Any Given dealing range now why
246. 9:49would the mid price be cluster's fair
247. 9:51value well this high would be the
248. 9:54highest price inside of this range and
249. 9:57this price down here would be the lowest
250. 9:59price therefore the mid price is a fair
251. 10:03price between the highest price and the
252. 10:05lowest price the market will gravitate
253. 10:08back towards equilibrium since
254. 10:11equilibrium is fair value now the other
255. 10:13two parameters would be to offer buy
256. 10:17side delivery to areas where we have
257. 10:19only had sells side delivery so like we
258. 10:22have this sells side and balance over
259. 10:24here and then we've had buy side
260. 10:25delivery back through that range and the
261. 10:28third type of fa value would be offset
262. 10:31accumulation and offset distribution
263. 10:33where liquidity in the form of willing
264. 10:35buyers above old highs is distributed to
265. 10:39willing sellers below old lows and vice
266. 10:42versa this is a fair exchange so in
267. 10:45short the algorithm is really going to
268. 10:47do three things reprise to equilibrium
269. 10:50reprise to Old highs and old lows to
270. 10:52seek liquidity and to rebalance
271. 10:55inefficient price action above
272. 10:57equilibrium we have a premium Market
273. 10:59which can be split into premium in the
274. 11:03lower quadrant and extreme premium in
275. 11:05the upper quadrant and Below equilibrium
276. 11:08we will have a discount Market where the
277. 11:10upper quadrant is our discount and the
278. 11:12lower quadrant is our extreme discount
279. 11:15now despite being in a discount Market
280. 11:17we can still view these as a premium and
281. 11:20discount inside of a discount market and
282. 11:22we can view the upper quadrants as a
283. 11:24premium and discount inside of a premium
284. 11:27market and each quadrant can be further
285. 11:29divided into premium and discount this
286. 11:31is a TW monthly chart so this is a very
287. 11:34high time frame and since price is
288. 11:35fractal so are dealing ranges now the
289. 11:39market will move from premium to
290. 11:40Discount and discount to premium and if
291. 11:42you break each of these quadrants down
292. 11:44and you study how price moves from
293. 11:46premium to Discount and discount to
294. 11:48premium there is a lot of insight that
295. 11:50you can glean from doing that study now
296. 11:52how does a dealing range actually form
297. 11:55so in this example you can clearly see
298. 11:57that the highest high on this chart is
299. 12:00up here and the lowest low on this chart
300. 12:03is up here but for this to qualify as a
301. 12:06valid dealing range it has to do two
302. 12:08things it has to run previous liquidity
303. 12:11on the buy side which we have done here
304. 12:13and it has to run previous liquidity on
305. 12:15the sell side which we have done here so
306. 12:18both buy side and sells side liquidity
307. 12:21inside of this range which is a dealing
308. 12:23range in itself has been purged thus
309. 12:26making this High to this low the new
310. 12:30dealing range high and low or DRT high
311. 12:33and DRT low now that we have established
312. 12:36our dealing range let's look at what's
313. 12:39happened in price action inside of this
314. 12:41dealing range in order for us to
315. 12:43forecast future price Movement we must
316. 12:46understand what price has already done
317. 12:48where has price come from where is it
318. 12:50likely to go next and where is it not
319. 12:54likely to go these are questions I'm
320. 12:55asking every single time I pull up a
321. 12:57chart now how did the dealing Range High
322. 13:00form in this example we have this down
323. 13:03Clos candle when the market runs above
324. 13:05the opening price of this down closed
325. 13:08candle this down closed candle becomes
326. 13:10an order block now ICT hasn't released
327. 13:12all his information around an order
328. 13:14block yet and this is my seventh year in
329. 13:16so talk about drip feeding right but
330. 13:20when we are in an uptrend we want to see
331. 13:22down candle supporting price you can see
332. 13:24how we run lower into the order block we
333. 13:28tap the mean thread threshold of that
334. 13:30order block also notice how the mean
335. 13:32threshold overlaps with the 75% DRT
336. 13:36level we then form this swing High We
337. 13:39form this swing low which runs below
338. 13:42this candle's low or closing price now
339. 13:45that's an important signature since this
340. 13:47run higher is actually forming these
341. 13:50three consecutive up Clos candles which
342. 13:52will become our order block but for now
343. 13:55this down Clos candle here is going to
344. 13:57act as our breaker with the high low
345. 14:00high high this last down Clos candle if
346. 14:02we extend that out in time you can see
347. 14:04how we've traded into it recently the
348. 14:06high is rejecting the mean threshold of
349. 14:09that breaker the three consecutive up
350. 14:11close candles after running this swing
351. 14:14high is our bearish order block and
352. 14:17again if we extend that out you can see
353. 14:19how we have traded into it we've
354. 14:21rejected from the mean threshold after
355. 14:24we have seen price turn around over here
356. 14:26creating this failure swing which failed
357. 14:29to go above this High we then have
358. 14:31displacement lower in the form of this
359. 14:33cell side imbalance notice where it
360. 14:36closes below the 75% level and also
361. 14:40closes below the low of that order block
362. 14:43this creates a valid structure break why
363. 14:48because we have left this cell side
364. 14:49imbalance again you can see that we've
365. 14:51traded up into this cell side imbalance
366. 14:54I do apologize it should actually be
367. 14:56anchored to this low so we've completely
368. 14:58closed that in price has dipped into
369. 15:00that cell side imbalance here sweeping
370. 15:03Above This high this is something known
371. 15:05as IED or institutional orderflow entry
372. 15:07drill it's a bit of a mouthful but this
373. 15:10is a continuation pattern where we can
374. 15:12get in sync with the move lower also
375. 15:15notice the closing price of this down
376. 15:17Clos candle and the opening price of
377. 15:20this up Clos candle we have our breaker
378. 15:22and our order block the opening price of
379. 15:24the order block to the wick is going to
380. 15:26be sensitive now there is further
381. 15:28confluence built for a down move here
382. 15:30because we also have this down Clos
383. 15:32candle we nail the opening price of that
384. 15:35down Clos candle over here this is going
385. 15:37to act as an area of mitigation now once
386. 15:40this reversal has been put in place we
387. 15:43can measure how low the dealing range
388. 15:45will extend using deviations of this
389. 15:48range projected lower and again I've
390. 15:51taught where to Anchor these price
391. 15:53points in the advanced course on the
392. 15:54market maker model so again I'm not
393. 15:56going to be reteaching that here but if
394. 15:58you look closely we have four standard
395. 16:01deviations that gives us a price point
396. 16:03of 72.4 70 now this would be a good
397. 16:07Target for the market to reach for why
398. 16:10not three standard
399. 16:11deviations because we have this low to
400. 16:14the left and what sits below this low we
401. 16:16have sells side liquidity right so the
402. 16:19market is drawing down to this
403. 16:21mathematical level we have four
404. 16:23deviations of this range lower giving us
405. 16:25this specific price level if I extend
406. 16:28this out you can see the bodies over
407. 16:30here respecting this level now the
408. 16:32bodies tell the story The Wicks do the
409. 16:34damage if I take the opening price of
410. 16:37this up close candle so I'm hovering my
411. 16:40cursor over it the opening price comes
412. 16:42in at 72.4 70 so that's perfect now that
413. 16:46we have this price level and it's been
414. 16:48confirmed with the opening price of this
415. 16:50candle if we anchor a fib from the
416. 16:53body's low to the body's high up here
417. 16:57you can see that the equilib ium level
418. 17:00perfectly overlaps the equilibrium level
419. 17:02of the entire dealing range right now
420. 17:05this is a question that I'm often asked
421. 17:07is how do you calibrate a dealing range
422. 17:09when do you know when to use the highs
423. 17:11or when do you know when to use the
424. 17:13bodies I'm looking for confluences what
425. 17:16you're going to find here and I probably
426. 17:18should say this I don't have my charts
427. 17:21with these lines all over it to me I
428. 17:24find it distracting right so I trade
429. 17:26predominantly with very clean charts I
430. 17:28may have a few levels from the weekly or
431. 17:30the daily but I've taken a leaf out of
432. 17:32ict's book and I actually note down the
433. 17:35price level that I'm looking at in the
434. 17:37beginning it might be a good idea for
435. 17:39you to have these levels actually on
436. 17:41your chart so that you can see them
437. 17:43eventually you want to be aware of them
438. 17:45but try to keep your chart as clean as
439. 17:47you can now as you're going to see in
440. 17:48future slides it can get a little bit
441. 17:50messy but I'm going to try to do my best
442. 17:52to keep it as clean as possible it's
443. 17:54just really so you can visually see the
444. 17:56levels that I'm highlighting especially
445. 17:58when when we move from a higher time
446. 18:00frame down to a lower time frame right
447. 18:02note where this up closed candle is
448. 18:04forming at the 75% DRT level we then
449. 18:08break and close below this swing low
450. 18:11making this Gap over here a breakaway
451. 18:14Gap we do not anticipate price to come
452. 18:17back up into this Breakaway Gap we've
453. 18:19already had institutional orderflow
454. 18:21entry drill here we've already mitigated
455. 18:24we've already tapped the order block now
456. 18:26notice where all of this is occurring
457. 18:29in the upper quadrant of this graded
458. 18:31range so as price runs lower our stops
459. 18:35will be safe above this swing high now
460. 18:38this creates another fair value Gap if
461. 18:40we extend that out you can see how we
462. 18:42tapped into it here and we have the low
463. 18:44of this order block giving us Confluence
464. 18:47over here and you can see how we've
465. 18:48reacted right we moved from a premium up
466. 18:52here back into a discount we also have
467. 18:54this fair value Gap that forms here
468. 18:56notice where this up closed candle is
469. 18:57forming we fully rebalance this fair
470. 19:00value Gap and again if you look left we
471. 19:03have these two down closed candles so
472. 19:04there's an area of mitigation
473. 19:07overlapping with this fair value Gap the
474. 19:09market then breaks again Lower closing
475. 19:12back below this swing low leaving
476. 19:14another fair value Gap note where inside
477. 19:16of the dealing range this fair value Gap
478. 19:19is forming we'll come to that in a
479. 19:21minute but before we see this price run
480. 19:23lower to purge the cell side liquidity
481. 19:25below this low we create a double bottom
482. 19:28here right so these are equal lows why
483. 19:31is the algorithm creating equal lows
484. 19:33down here because it wants to induce
485. 19:35buyers into the market because we're
486. 19:37taught as retail traders to place our
487. 19:40stops below double bottoms this is
488. 19:42occurring in the lowest quadrant of this
489. 19:44dealing range in an extreme discount now
490. 19:47we have run above this swing High we
491. 19:49have run below this swing low and this
492. 19:51has created a new dealing range from
493. 19:53this candle's High down to this candle's
494. 19:56low notice these two up closed candles
495. 19:59and where they form notice where this
496. 20:02down close candle is forming notice
497. 20:04where we have this cell side imbalance
498. 20:08and notice where we have these two down
499. 20:09closed candles forming inside of the
500. 20:11dealing Range High and the dealing range
501. 20:14low notice how we're accumulating over
502. 20:16here around the equilibrium level and
503. 20:18notice how we run through the high with
504. 20:21an up close here now what do we have
505. 20:24here this is a
506. 20:26consolidation notice where this
507. 20:28consolidation is forming around
508. 20:31equilibrium how did this consolidation
509. 20:33form well we run the relative equal
510. 20:36highs here so we swept buy side and then
511. 20:39we run the relative equal lows down here
512. 20:41so we swept sell side this forms a new
513. 20:44dealing range look where we get
514. 20:46equilibrium it overlaps with the parent
515. 20:49dealing range right so inside of this
516. 20:53parent dealing range which is the major
517. 20:55range here we can get smaller dealing
518. 20:57ranges that form now now note this down
519. 21:00close candle here we have a sell side
520. 21:02imbalance if we extend that across you
521. 21:05can see how we're finding support at the
522. 21:07consequent encroachment of this fair
523. 21:09value gap which becomes an inverse fair
524. 21:12value Gap right why because it's on the
525. 21:15left side of this Market maker model
526. 21:18notice this sell side imbalance here
527. 21:21again if we extend that out you can see
528. 21:23how the candles here are respecting the
529. 21:26equilibrium price point of this inverse
530. 21:29fair value Gap notice where it's forming
531. 21:31inside of the range from this high down
532. 21:33to this low and notice where this is
533. 21:36forming inside of this High down to this
534. 21:38low price finds Support over here and
535. 21:41then really makes a run higher clearing
536. 21:43the buy side liquidity above these
537. 21:45relative equal highs reaching into an
538. 21:48extreme premium relative to this dealing
539. 21:51range and fully rebalancing this cell
540. 21:54side imbalance over here notice the
541. 21:56bodies of the candles here failing to
542. 21:59close above the consequent encroachment
543. 22:01of this cell side imbalance this is
544. 22:03important this gives us Insight now note
545. 22:06the consequent encroachment of this
546. 22:08inverse fair value Gap if we split this
547. 22:10section in half you can see how the
548. 22:12midpoint overlaps perfectly with the
549. 22:15consequent encroachment of this cell
550. 22:17side imbalance over here also notice
551. 22:20that we have this swing low high lower
552. 22:23low making these two consecutive up
553. 22:26close candles a bullish breaker
554. 22:29if we take that entire range and we
555. 22:30extend it to the right again you can see
556. 22:33the midpoint of that breaker or the mean
557. 22:35threshold overlaps with the consequent
558. 22:37encroachment of this inverse fair value
559. 22:39Gap how do you know which levels to
560. 22:41select and where your high probability
561. 22:43entries are going to occur by blending
562. 22:46all of these ideas together why is a
563. 22:49breaker going to be a breaker and why is
564. 22:51it going to hold why is an order block
565. 22:53going to be an order block and why is it
566. 22:55going to hold it all depends on where it
567. 22:58is and side of the dealing range it all
568. 23:00depends on the Confluence of different
569. 23:02arrays and levels in price from a higher
570. 23:04time frame down to a lower time frame
571. 23:07the more levels that overlap the
572. 23:09stronger that level is going to be and
573. 23:11when you bring time into it this is
574. 23:13everything that you need to hunt for
575. 23:14high probability setups So currently
576. 23:17we're sat around this level and we've
577. 23:19fully rebalanced this sell side in
578. 23:21Balance so let me zoom into this piece
579. 23:23of price Action Now given everything
580. 23:25that price has already done how can we
581. 23:28use that information to forecast what
582. 23:30price is likely to do next you have to
583. 23:32make a logical Choice based on
584. 23:35probability of why the market should
585. 23:37move in One Direction Over another
586. 23:40sometimes is going to be difficult to
587. 23:42read right from where we stand we have
588. 23:45completely rebalanced a higher time
589. 23:48frame fair value Gap inside of an
590. 23:50extreme premium and then we've seen
591. 23:53price run lower close below the 75% DRT
592. 23:57level and the candle bodies here are
593. 24:00failing to close above the consequent
594. 24:02encroachment of that cell side imbalance
595. 24:04to the left we have then traveled
596. 24:07through the opening price of this up
597. 24:09close candle and closed below this buy
598. 24:12side imbalance so I'm looking at this as
599. 24:14a potential balance price range now
600. 24:16inside of this consolidation again we've
601. 24:19closed above the dealing Range High with
602. 24:22this up closed candle and we've run
603. 24:24below this swing low over here so the
604. 24:26dealing range low or the DRT low will
605. 24:28stay in place but we will extend the DRT
606. 24:31High to the high of this candle so now
607. 24:34we have a new dealing range from this
608. 24:36candle's low to this candle's High
609. 24:39notice how the bodies of the candles are
610. 24:41reacting here at equilibrium or that 5dt
611. 24:45level notice that we have this buy side
612. 24:48imbalance which also closed above the
613. 24:51equilibrium price point if we extend
614. 24:53this b side imbalance to the right you
615. 24:55can see how we've touched and rejected
616. 24:57the con quent encroachment level of this
617. 25:00bide imbalance and again the bodies
618. 25:03suggesting that they do not want to
619. 25:05close lower failing to get back inside
620. 25:07of this bide imbalance we also have this
621. 25:10low high lower low making this up close
622. 25:15candle here so I'll take the whole range
623. 25:18our bullish breaker you can see how the
624. 25:20mean threshold of that bullish breaker
625. 25:23overlaps with a consequent encroachment
626. 25:25of this buyid imbalance and price is
627. 25:27really respect expected this area above
628. 25:29the market you can see between this
629. 25:31candle's low and this candle's high that
630. 25:34we have this cell side IM balance notice
631. 25:36where the bodies of the candles are
632. 25:38closing at equilibrium they are failing
633. 25:41at the minute to get back above the
634. 25:42consequent encroachment of this cell
635. 25:44side imbalance now I'm going to take
636. 25:46this piece of price action and zoom in
637. 25:48onto the weekly time frame and this is
638. 25:51what we get here the first thing we can
639. 25:53see is that we run the cell side
640. 25:54liquidity below these relative equal
641. 25:56lows dipping into to that consequent
642. 25:59encroachment of that TW monthly fair
643. 26:01value Gap we have these two down Clos
644. 26:03candles that run the sell side liquidity
645. 26:07into this higher time frame level and
646. 26:09then we had a reaction from this level
647. 26:11running back through the opening price
648. 26:14of these two consecutive down Clos
649. 26:16candles this is where we have our change
650. 26:18in state of delivery in between this
651. 26:20candle's high and this candle's low
652. 26:22there's a small fair value Gap and you
653. 26:24can see how we've dropped into the
654. 26:26opening price rebalancing that fair
655. 26:28value Gap and price has again run away
656. 26:30running into that higher time frame cell
657. 26:32side imbalance and touching the
658. 26:34equilibrium of this dealing Range High
659. 26:38to this dealing range low notice the
660. 26:40bodies of the candles here price rejects
661. 26:43the equilibrium or midpoint of the
662. 26:45dealing range and goes lower into where
663. 26:48the equilibrium of the higher time frame
664. 26:51parent dealing range that also overlaps
665. 26:53with these two consecutive down Clos
666. 26:55candles the mean threshold which is this
667. 26:58this dotted line in close proximity to
668. 27:00that equilibrium level and again the
669. 27:02body is not closing below the mean
670. 27:04threshold do we see a reaction from this
671. 27:06level yes price runs higher running back
672. 27:10through the opening price of this down
673. 27:13Clos candle so there's these three
674. 27:15consecutive down Clos candles again and
675. 27:17closing in this cell side imbalance and
676. 27:20breaking above this swing high price
677. 27:23then retraces into the opening price of
678. 27:26the parent order block over here this
679. 27:28this is what we call a reclaimed order
680. 27:29block now we can reclaim an order block
681. 27:33if we haven't yet run the existing High
682. 27:36since we have swept buy side liquidity
683. 27:38to the left and sell side liquidity to
684. 27:41the left what does this make this range
685. 27:43low to this Range High a new dealing
686. 27:46range right if price fails to take the
687. 27:49dealing Range High after running into an
688. 27:51order block we can reclaim that order
689. 27:53block now by itself that's not enough
690. 27:56what else can you notice over here in
691. 27:57price you see this sell side imbalance
692. 28:00that overlaps with the opening price of
693. 28:02this order block we also have these
694. 28:05three consecutive down Clos candles if
695. 28:07we extend the mean threshold across and
696. 28:09you can see the bodies here failing to
697. 28:11close below the mean threshold and again
698. 28:14price runs away buy side liquidity above
699. 28:17the equilibrium in the form of this high
700. 28:19and this high and we also have the
701. 28:21remainder of this cell side and balance
702. 28:23still open and this also overlaps with
703. 28:25the higher time frame monthly fair value
704. 28:28Gap and it takes us back into an extreme
705. 28:30premium relative to that parent dealing
706. 28:32range now pric is showing signs of
707. 28:35Support over here we have this cell side
708. 28:38imbalance that if we extend across
709. 28:40becomes an inverse fair value Gap and
710. 28:42you can see the consequent encroachment
711. 28:44showing support we have the opening
712. 28:46price of this down Clos candle as an
713. 28:48order block if we extend that across
714. 28:50again you can see the overlap and we
715. 28:52also have this buy side imbalance and
716. 28:55the body of this down Clos candle is
717. 28:57fail in to close below the discount low
718. 29:01of this buy side imbalance we also have
719. 29:03this low high lower low this last up
720. 29:08close candle if we project that out you
721. 29:10can see the mean threshold again
722. 29:12overlaps with the consequent
723. 29:13encroachment of this sell side imbalance
724. 29:15and the opening price of this down Clos
725. 29:18candle which is our order block now I
726. 29:20want to see price remain firm here and
727. 29:23run for the buy side liquidity above
728. 29:25these highs and see if we want to get at
729. 29:27least to rebalance the higher time frame
730. 29:30for a value Gap it doesn't need to go
731. 29:33all the way back to this level now let's
732. 29:34drop down to a daily time frame and I'm
733. 29:36going to zoom into this piece of price
734. 29:38action here now we're finally down to
735. 29:40the Daily time frame everything that I'm
736. 29:42showing you in terms of this top down
737. 29:44analysis It Takes Me Maybe 5 10 minutes
738. 29:46to do it and once I've got them higher
739. 29:48time frame levels on I don't need to
740. 29:50mess about with them again I'm just
741. 29:51focusing on the lower time frames so
742. 29:53apologies cuz this is obviously a lot
743. 29:55longer as a lecture than I anticipated
744. 29:57but we have to get this out of the way
745. 29:59right I made a video on YouTube uh a few
746. 30:02months ago on how to identify ICT
747. 30:06directional bias and I did that study on
748. 30:09the dollar Index right now I said this
749. 30:11was going to be an initial draw when we
750. 30:14were up here and now you can see the
751. 30:16reasons why we were inside of a premium
752. 30:20relative to this dealing range we had
753. 30:22the fair value Gap we had the Confluence
754. 30:24of all those higher time frame levels
755. 30:26and being around equilibrium I always
756. 30:29anticipate a run below stops right the
757. 30:32other clue here that was suggesting
758. 30:34lower prices was this Divergence between
759. 30:38the dollar Index and pound at the same
760. 30:41time right time is important at the same
761. 30:45time as we were making a higher high
762. 30:47here look at the bodies staying inside
763. 30:50of that higher time frame imbalance we
764. 30:53were seeing the pound fail to go lower
765. 30:56now these are inversely correlated
766. 30:58if the dollar Index is posting a higher
767. 31:01high we should expect the pound to post
768. 31:04a lower low since the pound was failing
769. 31:07to post a lower low this is a cracking
770. 31:09correlation in an algorithmic signature
771. 31:11to suggest that the pound has strength
772. 31:14behind it and wants to go higher why
773. 31:18because we have all of this liquidity
774. 31:19here and the dollar Index is going to
775. 31:21shift in Direction and run for what two
776. 31:25things liquidity or inefficiency ideally
777. 31:30both and that's what we have here I also
778. 31:32said I wanted to see how price would
779. 31:35react when we got here do we trade
780. 31:37through it or do we find support the
781. 31:41volume imbalance is ict's strongest and
782. 31:43weakest PD it's the strongest PD when it
783. 31:48comes to a draw on liquidity because we
784. 31:50actually have a gap here right there's
785. 31:52no trading over here so the algorithm is
786. 31:54going to reach for there as a draw but
787. 31:56it also gives us an indication of Market
788. 32:00strength right now with it being its
789. 32:02weakest PD this means that it will act
790. 32:05as a magnet but it can trade through it
791. 32:08many times when we are in a situation
792. 32:10where we are seeing here the bodies are
793. 32:12failing to close below the weakest PDR
794. 32:16what does that mean it means there is
795. 32:18underlying strength behind the dollar
796. 32:22right and what do we see as a result the
797. 32:25dollar moves higher we see price run
798. 32:27above the the opening price of this down
799. 32:29closed candle why am I opting this down
800. 32:32closed candle because there's a volume
801. 32:34imbalance between this candle and this
802. 32:36candle so I elect to use the lowest down
803. 32:39close candle that also closed below this
804. 32:42swing loan down here so this is going to
805. 32:44be my order block when we trade through
806. 32:46the opening price we have our change and
807. 32:48state of delivery we also have a sell
808. 32:52side imbalance here a buy side imbalance
809. 32:54here and then we've come back into the
810. 32:56order block and touch the premium high
811. 32:59of this now balanced price range right
812. 33:02and price moves away I would like to see
813. 33:05price stay firm here we have the
814. 33:08relative equal highs which sits below
815. 33:11the consequent encroachment of that
816. 33:12higher time frame fair value Gap we are
817. 33:14at a key institutional level 104 500 now
818. 33:18above these relative equal highs we have
819. 33:20this Gap right so this is an actual Gap
820. 33:23it doesn't have any Wicks or any bodies
821. 33:26so this is what ICT refers to as a real
822. 33:28liquidity void so above these relative
823. 33:31equal highs would be my initial draw as
824. 33:33a side note look at the mean threshold
825. 33:36of this up closed candle over here I
826. 33:38mean there were tons and tons and tons
827. 33:40of things on this chart I could talk all
828. 33:42day I think I've already been recording
829. 33:44for about nearly 3 hours
830. 33:46so I'm going to have to shorten this
831. 33:48down through the edits but I still have
832. 33:51about 50 slides or so to go um I got
833. 33:54excited and I still need to edit this
834. 33:57and get out by tonight so I'm going to
835. 34:01pause it here and the remaining slides I
836. 34:03will carry forward to next week's
837. 34:05lecture where I break down the pound and
838. 34:07the euro in the context of what we can
839. 34:10see here on the dollar Index now that
840. 34:12I've been able to talk about the higher
841. 34:14time frame and where we are in price
842. 34:16future lesson shouldn't be as long
843. 34:18hopefully I can get a little bit more
844. 34:20into intraday price action I can
845. 34:22incorporate different models power 3
846. 34:25Market maker models time macros seasonal
847. 34:29Tendencies economic calendar weekly
848. 34:32profiles daily profiles there's a ton of
849. 34:34things that all blend very very nicely
850. 34:38and gives you the highest probability
851. 34:40behind your trade setups there's a whole
852. 34:43lot of detail I have missed out even
853. 34:45just in this lecture and I'm doing my
854. 34:47best to try to not complicate it so much
855. 34:50if you have any questions please leave a
856. 34:52comment below if you are looking to
857. 34:55purchase a funded challenge then please
858. 34:58use my link below you get 15% off a
859. 35:01funded Peaks challenge account and that
860. 35:03will really help support this Channel
861. 35:05and keep the mentorship going I hope
862. 35:07you've taken notes and I hope you found
863. 35:09this insightful and I will catch you in
864. 35:11next week's episode take care guys