EPISODE 2

ICT MENTORSHIP 2022

EP2
Summary
Please, refer to ICT original content
 Michael talks about 2 important concepts:
Liquidity & Imbalance

the PRICE is
attracted by
Download PDF - link in the description
liquidity
or
is running towards an
imbalance
Michael is able to keep in mind different logics and many different actors
while trading. It is hard to follow him for this reason, I will try my best to
make these logics apparent for us

Michael very often shifts its talk from the

price perspective (what will the price do), to
the market perspective (how much money do
we have in the market at any given time/
liquidity), to the little-investors perspective
(where they will place their stop losses), to
the big-decision-makers (banks), to the
algorithm (mechanics).

Each perspective plays a role in how / where

the price will move to, but usually we are not
even aware of them!
 Weekly chart. Start developing an
expectation of where the price will be
going
Example of
ICT trading strategy Daily chart. Here we will be searching for
liquidity

Hourly chart. Here we will search for

imbalances

15-min chart. Here we will search for

opportunities

2-min chart. Here we will look for entries

 Start developing an expectation
of where the price will be going.

Weekly-chart
Price expectations
What is the overall trend been so
far?
Do we see any pattern?

Can we predict if the price will

close higher or lower than the
previous week?
Direction of the price, not
precision!
Daily-chart
Liquidity

This is an example of Strategy building

Find the lower price point of each single day / or even
better if few days have a similar low-point it will be an
even "stronger" price level
We are looking at short-term-lows in the price levels

This level is important for us --> let's see why

Daily-chart
Liquidity
 Daily-chart
Liquidity

Now: think like a little-investor

The price did not go below this red lines for few days,
this will look like a resistance to many investors! (not
to us!)
There are many investors in the world that will believe
the price will go up at any given time

Those bullish investors will place their stop-losses right

at / or / below this red line / price level
Daily-chart
Liquidity

Majority of bullish investors will place their stop-

losses right at / or / below these red lines

Consequently, if the price goes BELOW this line,

many investors will automatically close their
position, losing money - injecting money into the
markets - injecting liquidity!
*my own example for visual purposes only

Daily-chart Stop-loss placement

Liquidity

Stop-loss placement

Majority of investors use old lows & old highs

to place their stop-losses when trading

The stop-loss will be old-highs or old-lows of

the price
*my own example for visual purposes only

Daily-chart Stop-loss placement

Liquidity

Stop-loss placement

The price is attracted by liquidity or is running

towards an imbalance

Above old-highs in price, we will find buy-stops

Below old-lows in price, we will find sell-stops
*my own example for visual purposes only
Liquidity

Daily-chart Liquidity

Liquidity

Liquidity

Liquidity

So these are the price levels below / above

which we can find higher liquidity

When the price crosses these lines money will

be "injected" into the market
 Hourly-chart
Imbalances

Download PDF - link in the description

Always use NY time and set it up in your charts.

Divide the days by vertical lines
When dropping to the hourly, keep on your chart
the price levels you noted before
Now, let's look at the price movements of the
early morning
 Hourly-chart
Imbalances

Download PDF - link in the description

Always use NY time and set it up in your charts.

Divide the days by vertical lines
When dropping to the hourly, keep on your chart
the price levels you noted before
Now, let's look at the price movements of the
early morning
 *zoom in

Hourly-chart
Imbalances

As the day starts, the price forms level, then it crosses

them away. First it goes down, clearing a low. Then it
goes right up crossing a previous high.
That is engineered-liquidity. Injects money into the
market. Makes people think that they know right away
where the price will go - make them thinks that they can
predict the direction in which the price will move that
day. And they end up being wrong.
 *zoom in

Hourly-chart
Imbalances

This is when we know we should short.

Anytime a significant price move lower than expected,

always anticipate some measure of a stop-hunt of
buy-stops

Now let's drop to the 15-min time frame

15min-chart
Opportunities

Traders see 2 wicks at the same-relative price levels,

and think "oh this is resistance" - and they place their
stop-loss there. So the market takes them out right
away! This could be an opportunity for us!
When the market takes them out, it is time to drop to
the 5-min chart and search for a possible entry -
looking for something more specific
15min-chart
Opportunities

Traders see 2 wicks at the same-relative price levels,

and think "oh this is resistance" - and they place their
stop-loss there. So the market takes them out right
away! This could be an opportunity for us!
When the market takes them out, it is time to drop to
the 5-min chart and search for a possible entry -
looking for something more specific
2min-chart
Entries

The market creates a short term level, and then it breaks

them
That is key! That is the BREAK in MARKET STRUCTURE we
were looking for
Now stop and think! Weekly market bias: bearish (down), the consolidation
already happened earlier, the liquidity is high as it just broke the previous stop-
losses. Interesting! but not enough for us to enter --> we look for a specific
signature to occur

Let's zoom in .....

2min-chart
Entries

The market creates a short term level, and then it breaks

them
That is key! That is the BREAK in MARKET STRUCTURE we
were looking for
Now stop and think! Weekly market bias: bearish (down), the consolidation
already happened earlier, the liquidity is high as it just broke the previous stop-
losses. Interesting! but not enough for us to enter --> we look for a specific
signature to occur
 *zoom in

2min-chart
Entries

We are waiting for a Fair Value Gap to form, FVG, and

then we will enter there
As soon as the price enters again that area, the
algorithm will start pushing the price
 *zoom in

2min-chart
Entries

Where to put our stop-loss?

Above the wick / candle of the 2 previous candles of
the FVG
We have to learn to trust this pattern

To understand where to take-profits: go back to the

hourly-chart for that day
Hourly-chart
Double check & take-profit

Divide your daily price range in 2 - you can do that with a

simple Fibonacci retrecement and 50 would be your mid
level. Everything above is "premium", everything below is
"discount"
The price will probably touch the opposite range/side, the
other 50%. Now think: what is right below that 50% line?
So you could place your take profit at the line or just below
it. Or even better at the previous price sell-stops... BUT-->
Hourly-chart
Double check & take-profit

Divide your daily price range in 2 - you can do that with a

simple Fibonacci retrecement and 50 would be your mid
level. Everything above is "premium", everything below is
"discount"
The price will probably touch the opposite range/side, the
other 50%. Now think: what is right below that 50% line?
So you could place your take profit at the line or just below
it. Or even better at the previous price sell-stops... BUT-->
 *zoom in

Hourly-chart
Double check & take-profit

Ohh look there, another Fair Value Gap

The price will touch that point to "close the gap"
and this is how you maximise profits
 Weekly chart. Start developing an
expectation of where the price will be
going
Example of
ICT trading strategy Daily chart. Here we will be searching for
liquidity

Hourly chart. Here we will search for

imbalances

15-min chart. Here we will search for

opportunities

2-min chart. Here we will look for entries

 On TradingView - look at Emini Futures
intraday charts

In hindsight!
Homework
Follow the steps described in this
summary and journal/log your steps

Do you see what ICT sees? Do you see the

Download PDF - link in the description
break in market structure?

Train yourself to see

This is The Way


Homework
Download PDF - link in the description
On TradingView - look at Emini Futures
intraday charts
In hindsight!
Follow the steps described in this
summary and journal/log your steps
Do you see what ICT sees? Do you see the
break in market structure?
Train yourself to see
This is The Way
ICT MENTORSHIP 2022

Summary of episode 2

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