ICT FOR DUMMIES | Market Structure EP. 3 — Transcript

Full transcript

1. 0:00What is going on, guys? Welcome to
2. 0:01episode three of ICT for dummies. We
3. 0:04just did candlesticks and now we're on
4. 0:06to market structure.
5. 0:07And now we're going to help you
6. 0:08interpret these candles so you can
7. 0:09actually understand the trend of the
8. 0:11market.
9. 0:11you can see, I have two different types
10. 0:12of market structure. On the left side,
11. 0:13you have the bullish market structure.
12. 0:15On the right side, you have the bearish
13. 0:16market structure. What does bullish
14. 0:17market structure look like? Well, it
15. 0:19starts with a low and then a high and
16. 0:20then a higher low and then a higher high
17. 0:23and then a higher low and then a higher
18. 0:24high. Continue, continue, continue. As
19. 0:25for the bearish market structure, you're
20. 0:27going to have the opposite. You're going
21. 0:28to have a high, you're going to have a
22. 0:29low, you're going to have a lower high
23. 0:31and then a lower low, a lower high and
24. 0:33then a lower low.
25. 0:34Okay, so now this is what it looks like
26. 0:35on an actual candlestick chart. So, we
27. 0:37have a low, then we have a high, then we
28. 0:39have that higher low, then we have the
29. 0:41higher high, higher low, higher high.
30. 0:44Guys, this is going to be like really
31. 0:45simple and I know you do not want to be
32. 0:47learning this right now, but I promise
33. 0:48you it is going to help you in the long
34. 0:50run, okay? I know we're going to get
35. 0:52into models later, we're going to get
36. 0:53into a fair value gaps, and you know,
37. 0:55liquidity sweeps, all that stuff, but
38. 0:57you need to know the basics to
39. 0:58incorporate everything that we're going
40. 1:00to learn in the future. And then for the
41. 1:01bearish structure, it's the same thing
42. 1:02on the candlestick chart, guys. So, we
43. 1:04have a high put in place, then we have a
44. 1:06low, then we have a lower high, then we
45. 1:09have a lower low, lower high, lower low,
46. 1:12lower high, lower low. And this shows
47. 1:14bearish market structure and this shows
48. 1:15a bearish trend in the market.
49. 1:17Now, we're going to show you some
50. 1:18real-time examples so you can have a
51. 1:19better understanding of this.
52. 1:20Okay, so we're going to play this out in
53. 1:21real time. You have your low, right? You
54. 1:24have then your high that gets put in
55. 1:25place, your higher low,
56. 1:28you have your higher high, your higher
57. 1:29low,
58. 1:31your higher low, your higher high, then
59. 1:33you have a low, and then we have our
60. 1:35little liquidity sweep, we'll get into
61. 1:37that later, then your low gets put in
62. 1:38place,
63. 1:40your higher low, and then a high. Okay,
64. 1:42you got it.
65. 1:42And although we are not trendline
66. 1:44trading and that's not what we will be
67. 1:45teaching you, it is still incredibly
68. 1:47important for you to understand the
69. 1:48foundational movement of price action.
70. 1:51And guys, it's a little bit cringe, but
71. 1:52the trend is your friend. At the end of
72. 1:54the day, higher time frame is always
73. 1:56going to hold higher power. So, I often
74. 1:59times see a lot of people just fading
75. 2:01the overall trend. We're at all-time
76. 2:03highs right now. Stop trying to catch
77. 2:05the top and short this, right? We're
78. 2:06clearly in bullish market structure. So,
79. 2:08catch those longs and you will get the
80. 2:10best possible risk reward. You're going
81. 2:12to get the best entries and obviously
82. 2:14we're going to get those entries using
83. 2:15our models that we're going to teach
84. 2:16later on, but this is again the
85. 2:18foundation that is necessary here.
86. 2:20All right, guys. Little quiz time. Let's
87. 2:21see if you can identify the trend here.
88. 2:29BEARISH.
89. 2:32WHY IS IT BEARISH NOW? Let's do a little
90. 2:34mark out while Patty dances for me.
91. 2:41So, as you can see here, we made the
92. 2:43high, the low, the lower high, the lower
93. 2:45low. If you didn't mark this out
94. 2:47correctly, you might want to reconsider
95. 2:49trading and you might want to
96. 2:51I'm just kidding. And then your lower
97. 2:52high, exactly like this is not going to
98. 2:53be perfect, too, guys. I want you to
99. 2:55know also in a market, it's not going to
100. 2:56look perfectly just like this how we
101. 2:58draw it out, right? It's most likely
102. 3:00going to look something more like this,
103. 3:01you know, where we'll do something like
104. 3:03this.
105. 3:04Like this is the reality of how the
106. 3:05market is actually going to be moving.
107. 3:07So, spend some time on the charts
108. 3:09identifying trends, marking out your
109. 3:11lows, your highs, your lower lows, your
110. 3:13higher highs. Guys, also, if you want
111. 3:15to, looking at this on a line chart
112. 3:17makes it also a lot easier. If you look
113. 3:19at the low, you have your high, your
114. 3:21higher low, right? And you can identify
115. 3:23trends simply using the line chart if
116. 3:25you can't understand it with
117. 3:26candlesticks yet.
118. 3:27Look how easy it is to spot trends,
119. 3:28guys.
120. 3:30Bullish.
121. 3:31Bearish.
122. 3:34Bearish.
123. 3:35Bullish. I identify the trends for
124. 3:37breakfast.
125. 3:38And you guys, just to reiterate this,
126. 3:39like the trend is your friend. For
127. 3:42example, when you're swimming, right?
128. 3:44You want to be swimming with the current
129. 3:46if you're in a little river, right?
130. 3:47You're swimming with the current. It's
131. 3:48really easy. You're just swimming. You
132. 3:50don't even have to put much effort into
133. 3:51it.
134. 3:52Versus, if you're swimming against the
135. 3:55current, what is going to happen? It's
136. 3:56going to be a lot harder to push through
137. 3:58that, right? And it's, you know, you're
138. 4:00going to hit stop Oh my goodness, hit
139. 4:01stop loss, bro.
140. 4:04That wasn't on purpose.
141. 4:05you're probably going to drown, okay?
142. 4:08Of course, if you're hyper-fixating on
143. 4:09the lower time frame right now, it
144. 4:10doesn't take a big brain to realize that
145. 4:12the lower time frame is currently in a
146. 4:14bearish trend. But, if you focus too
147. 4:15much on the lower time frame and
148. 4:17distract yourself from what's actually
149. 4:18happening on the higher time frame,
150. 4:20which is clearly a bullish trend, then
151. 4:22that's where you'll most likely find
152. 4:23yourself getting manipulated out of
153. 4:25trades and stopped out. So, in a
154. 4:26scenario like this where we analyze that
155. 4:28there is clearly bearish structure on
156. 4:29the lower time frame, but there is
157. 4:30bullish structure on the higher time
158. 4:31frame, we want to wait for bullish
159. 4:33structure to form on the lower time
160. 4:34frame. Maybe something like
161. 4:36and we're going to get a little bit
162. 4:37complex here, but if we came down,
163. 4:39little liquidity sweep, and then started
164. 4:41seeing some bullish structure form, and
165. 4:43we can catch some longs from there. So,
166. 4:44the whole point of ICT concepts, really,
167. 4:48is it allows you to understand the
168. 4:49higher time frame narrative, and then
169. 4:50use the lower time frame to find the
170. 4:52most optimal entry points.
171. 4:54Okay, so now we're going to get into the
172. 4:55market structure, drum roll, shift.
173. 4:59Shift in the market. So, a market
174. 5:01structure shift indicates a change in
175. 5:04trend. So, it is shifting from either
176. 5:06bullish structure to bearish structure
177. 5:09or bearish structure to bullish
178. 5:11structure.
179. 5:12Bullish structure
180. 5:14to bearish structure.
181. 5:17Okay, and here on the left we have
182. 5:18bullish market structure, right? We have
183. 5:21our low, we have our high, we have our
184. 5:23higher low, right? We just learned this.
185. 5:26When we get a shift in structure is when
186. 5:28we break through
187. 5:30the last higher low, okay? So, once we
188. 5:34break through this higher low that we
189. 5:36have, and we get a closure below this,
190. 5:39this can indicate a change in trend, and
191. 5:42then we start seeing bearish structure
192. 5:44form here, right? We then have our lower
193. 5:46high, our lower low, lower high, lower
194. 5:49low.
195. 5:49Domain expansion, market structure
196. 5:52shift.
197. 5:53And this market structure shift can then
198. 5:55happen back again to the upside. How? By
199. 5:58closing above the previous lower high,
200. 6:02right? So, a bullish market structure
201. 6:04shift looks something like this, where
202. 6:05we close above the previous lower high,
203. 6:09and then we keep trending upwards versus
204. 6:11a bearish market structure shift, where
205. 6:12closing below the recent higher low. All
206. 6:15right, so now we're going to show you
207. 6:16what a market structure shift looks like
208. 6:18on the actual charts, okay? You can see
209. 6:20here we're in bearish structure, right?
210. 6:21I don't have to explain this, we just
211. 6:23learned this. And then, once we get a
212. 6:25closure above this recent swing high
213. 6:29that we made, this is a market structure
214. 6:31shift, okay? This is going to indicate
215. 6:33that price is reversing, and we are
216. 6:35going to put in bullish structure. And
217. 6:38it has to be a candle closure, okay? I
218. 6:40see a lot of times people getting faked
219. 6:42out thinking market structure shifts can
220. 6:43happen just when the candle, you know,
221. 6:45goes over this. Wait for the candle to
222. 6:47close. It has to be the body closing
223. 6:49above. It cannot be a wick, okay? If
224. 6:51it's a wick, that is not a market
225. 6:53structure shift. It's not a true market
226. 6:54structure shift.
227. 6:55we get deeper into concepts and a little
228. 6:57more complex, you'll realize that the
229. 6:59bodies and wicks make a huge difference.
230. 7:01As you can see here, the body failed to
231. 7:03close below this last low, ended up
232. 7:05wicking this low. That's a liquidity
233. 7:07sweep, but we'll get into that later.
234. 7:08Now, if you look at this price action,
235. 7:10what does this look like? Bullish market
236. 7:12structure, right? We have a sequence of
237. 7:14higher highs followed by higher lows
238. 7:16with every swing. Now, what happens? We
239. 7:19break through this low, we get a bearish
240. 7:21market structure shift. And once we get
241. 7:23a body closure below this low, you can
242. 7:24see that the trend has now flipped to
243. 7:25bearish, and we get bearish market
244. 7:27structure. All right, guys, now we're
245. 7:29going to show you the importance of body
246. 7:30closures in real time. Clearly here, you
247. 7:32can see that we have bullish market
248. 7:34structure, right? Price is trending
249. 7:36upwards. We get higher highs with every
250. 7:38swing and higher lows. And what happens
251. 7:40now? Price starts coming down. You think
252. 7:42it's going to break through that low,
253. 7:43but no. There's a zero body closure
254. 7:45below this low. You end up wicking this
255. 7:47low, and what happens? Price continues
256. 7:49higher, right? So, this is a fake out.
257. 7:52This is not an actual market structure
258. 7:53shift, and this is why it is so
259. 7:55important to understand that in order
260. 7:56for a market structure shift to occur,
261. 7:58you need a body closure.
262. 8:00All right. And as you can see here, we
263. 8:01are clearly in bearish market structure.
264. 8:04So, what would a bullish market
265. 8:05structure shift look like in this
266. 8:07scenario? Well, it will be a closure
267. 8:08above the recent lower high. So, if we
268. 8:11play out price here,
269. 8:14we do not get a closure above the recent
270. 8:16high. This is not a market structure
271. 8:18shift. Why? Because we did not have a
272. 8:19body. So, this is a fake market
273. 8:21structure shift, right? A true market
274. 8:23structure shift needs a body closure,
275. 8:25okay? And then as you can see, we
276. 8:27continue with bearish structure. Okay.
277. 8:29So, in this example, we have bullish
278. 8:31structure, right? And you wait for now a
279. 8:33body closing below this low. Is this a
280. 8:35market structure shift, guys?
281. 8:41No, it is not, right? Is this a market
282. 8:44structure shift?
283. 8:49We get a body closing below this recent
284. 8:52swing low. This is a market structure
285. 8:55shift. I hope you guys are seeing this.
286. 8:57Start marking out on your charts. That's
287. 8:58going to be your homework for today.
288. 9:00Mark out your market structure shifts.
289. 9:01Mark out trends. Try to identify a
290. 9:03bearish trend versus a bullish trend,
291. 9:05and try to identify when the trend is
292. 9:07changing. And then once we get this
293. 9:09closure,
294. 9:10it also create this bearish fair value
295. 9:11gap. We get a turtle soup at these
296. 9:12highs, and we get a CRT
297. 9:15Once you guys get a little bit more
298. 9:15advanced and know all these ICT
299. 9:17concepts, you'll be able to find stuff
300. 9:18like this. Nice little low resistance
301. 9:19liquidity resting down here. You're
302. 9:21going to have a sweep of this buy side
303. 9:22liquidity up here, and then you're going
304. 9:23to come down, tap into this fair value
305. 9:25gap after the market structure shift,
306. 9:26and get this beautiful closure down
307. 9:28model.
308. 9:28All right, guys. Now, a quick little
309. 9:29refresher before we let you go. All the
310. 9:31way to the left here, you have the
311. 9:32bearish structure. Right next to it, you
312. 9:34have the bullish structure. Right next
313. 9:35to this, we got the bullish market
314. 9:37structure shift. We start with a
315. 9:38downtrend in price and then we break
316. 9:40through this high, which creates a
317. 9:42market structure shift, and then we get
318. 9:44an uptrend in price.
319. 9:45And then for the bearish side, we have a
320. 9:47bearish market structure shift. Why? We
321. 9:49were first in bullish price action and
322. 9:51then we get a closure below the recent
323. 9:54higher low, creating a bearish market
324. 9:57structure shift. Please remember,
325. 9:59it has to be with a body, not a wick.
326. 10:02Okay, as you can see here, we were in
327. 10:03bearish structure and then we got a
328. 10:04shark structure shift.
329. 10:06Thank you guys so much for watching
330. 10:08this. Sorry for the lack of uploads. It
331. 10:09was Thanksgiving break. I was spending
332. 10:11time with the family, so it was Blake.
333. 10:12But we are [ __ ] back and we'll be
334. 10:14uploading two to three times a week. So
335. 10:16stay tuned. We're going to be doing fair
336. 10:17value gaps next and dropping tons of
337. 10:19psychology in between there as well. So
338. 10:21stay locked in.
339. 10:23And this was
340. 10:24ICT for Dummies, episode 3.
341. 10:28We teach you how to make market
342. 10:30structure shifts.