ICT Gems - Entering Before the News | Trade Management

Summary

Highlights

• Market anticipation strategies are key in trading before news events. 🕒
• Fair value gaps serve as crucial indicators for potential trade entries. 📉
• Bearish order blocks provide strong signals for market direction. 🛑
• Liquidity zones beneath short-term lows are a target for traders. 🎯
• Relative highs and lows impact the market's pricing behavior and should be closely monitored. 📊

Key Takeaways

• Market strategies around news events help anticipate movements even before news releases. 📊
• Understanding fair value gaps and bearish order blocks is crucial for effective trading. 🔍
• Liquidity zones can signal potential market direction and entry points. 💧
• PDR arrays help map out probable market shifts, especially in anticipation of news. 🗺️
• Consistent analysis of market trends leads to better trade management decisions. 📈

Overview

Chapters

• 00:00 - 00:30: Approaching the News Hour The chapter titled 'Approaching the News Hour' discusses the anticipation in the market as it approaches a significant time for news release. At 12:42, the market is observed to be trading up but then begins to experience a rollover as it nears 1:00 PM, the scheduled time for the release of important news—specifically, the bond auction number. Market participants are preparing to respond to this information as it becomes publicly available, indicating an active and reactive market environment during this period.
• 00:30 - 01:00: Market Movements and Fair Value Gaps The chapter titled 'Market Movements and Fair Value Gaps' discusses trading strategies in relation to fair value gaps and market news events. The transcript mentions the decision-making process involved when dealing with fair value gaps, especially in timing trades ahead of significant news or events like a bond auction. Instead of entering a trade at a fair value gap, the focus is on anticipating market movements and executing trades before news releases or market openings. The chapter emphasizes the importance of strategy and pre-planning in trading.
• 01:00 - 01:30: Understanding Market Downtrends The chapter 'Understanding Market Downtrends' explains the significance of market downtrends using chart analysis. The transcript describes how to identify market downtrends by looking at the chart patterns and recognizing the indicators of an impending downward exploration. It highlights the concept of 'liquidity' and how the market's movement towards it dictates the downtrend. The discussion touches on the fair value gap, and the body's respect for it indicates a likelihood of further downward movement, especially if the market has been declining throughout the day.
• 01:30 - 02:00: Liquidity and Short-term Trends In this chapter titled 'Liquidity and Short-term Trends', the discussion revolves around identifying short-term market movements and understanding key liquidity indicators. The presence of a short-term low is highlighted as a reason to consider short selling, particularly when combined with factors like the new day opening gap. The chapter emphasizes the significance of minor sell-side liquidity, represented by sell stops below certain levels, while cautioning against being distracted by relatively equal highs. The narrative focuses on the market's downward movement and its attraction to specific points, even if they are not actualized during the trading day.
• 02:00 - 02:30: Market Dynamics and Equal Highs The chapter 'Market Dynamics and Equal Highs' focuses on market behavior, specifically addressing the concept of relative equal highs and how they can indicate market conditions. The session discusses how stops are set below session lows for individuals trying to push the market higher, suggesting that if these equal highs remain undisturbed, the market tends to remain bearish. The experienced perspective of ICT (Inner Circle Trader) indicates that despite potential bullish attempts, the market is expected to continue its downward movement. This insight is connected to market activities observed in the London session.
• 02:30 - 03:00: Anticipating Market Behavior during Bond Auction This chapter discusses the anticipation of market behavior during a bond auction, focusing on the concept of liquidity. The narrator highlights various lows in the market which represent significant factors influencing price movements. The market appears to be operating on a narrative expecting a price drop to tap into available liquidity. Furthermore, the market activity during specific time frames around 7, 8, and 9 o'clock hours is portrayed as a process of trapping and confusing traders, characterized by price volatility and grinding movements, reflecting the complexity and unpredictability often present during such events.
• 03:00 - 03:30: Bearish Order Block and Trade Decisions The chapter titled 'Bearish Order Block and Trade Decisions' discusses market dynamics, focusing on a significant time event—specifically a bond auction scheduled for 1:00. This event is highlighted as a medium impact driver, which although not of high impact, is expected to influence market movements substantially. The chapter emphasizes preparation for market movements around this scheduled time, suggesting a strong likelihood of a substantial market reaction due to the auction. The anticipation is that market levels will be breached as a result of these economic indicators, particularly emphasizing potential bearish movements. The analytical approach includes detailed examination of historical data, patterns, and behaviors to make informed trade decisions during the auction period.
• 03:30 - 04:00: Fair Value Gaps and Market Strength This chapter focuses on the observation of market behavior following a news release, particularly in relation to fair value gaps. The speaker discusses a specific instance where the market drops after the 1:00 news release and examines whether the market approaches or touches the fair value gap. Despite the market moving up towards the gap, it does not reach the consequent encroachment or midpoint, indicating a specific market behavior.
• 04:00 - 04:30: Trade Execution and Risk Management In this chapter titled 'Trade Execution and Risk Management,' the focus is on trading strategies involving order blocks and risk management. The narrator discusses a bearish order block and explains how to trade after the subsequent candles approach and interact with the lower boundary of this block. The strategy involves waiting for the price to move away from the block and then re-enter it, allowing the trader to short. The analysis includes careful observation of candle movements, ensuring they don't breach specific levels, such as the candle's high or the midpoint. A cautious approach is advised, where the trader waits for repeat patterns before deciding to trade. This careful consideration helps manage risk effectively.
• 04:30 - 05:00: Narratives and Market Inefficiencies The chapter discusses the concept of narratives and market inefficiencies, focusing on specific trading strategies. It addresses the use of PD arrays—price levels that are used for entering and exiting trades as well as measuring market strength and weakness. The text highlights the importance of these arrays in identifying algorithmic signals, as illustrated by a candlestick pattern that fails to reach a certain price level but gets close enough to signify market behavior.
• 05:00 - 05:30: Inefficiencies and Liquidity in Market In this chapter, the discussion revolves around market inefficiencies and liquidity traps. The focus is on understanding how certain patterns in market movements, specifically candlestick patterns, can signal a bearish order block, indicating a potential downtrend. The concept of fair value gaps is introduced, highlighting their significance in predicting market behavior. The speaker explains how to utilize these gaps effectively, either by taking partial profits at certain levels or by setting limit orders with the expectation of a price movement beyond London’s trading session lows.
• 05:30 - 06:00: Real Orders vs Market Inefficiencies The chapter 'Real Orders vs Market Inefficiencies' discusses the dynamics of market movements and the anticipation required when engaging with trading. It particularly focuses on the concept of anticipating market movements upwards to the 'Higher One' price point and the implications of failing at 'lower ones'. The narrative emphasizes staying open in the market and not fearing trades even if there is a failure to reach certain price midpoints. If certain points fail, traders should maintain their strategies. The speaker reassures readers of their confidence despite the challenges of dealing with anticipated or minor market movements.
• 06:00 - 06:30: Sell-side Delivery and Market Behavior The chapter discusses trading strategies focusing on the sell-side delivery and market behavior. It explains the significance of candle patterns, stop-loss placement, and market rebounds. The author mentions expecting the market to move up into the higher part of the candle, while maintaining a stop-loss above the midpoint of 'consequent encroachment.' Despite an anticipated market drop, there was an immediate rebound. The chapter further delves into managing trades during market fluctuations, noting how the author mitigates risk with strategic contract entry and avoiding going underwater, thanks to a larger trade setup at a higher price.
• 06:30 - 07:00: Assessing Market Heaviness In this chapter, the narrator discusses their trading strategy involving four contracts that allow them to trade above a certain entry point. They express concern about market fluctuations, particularly about a fair value gap that could potentially be revisited. The narrator notes that although the market approached a critical level, it did not fill the gap or reach the anticipated swing high. This observation leads them to conclude that they should remain calm and refrain from taking immediate action.

ICT Gems - Entering Before the News | Trade Management Transcription

• 00:00 - 00:30 here's one of those 81 PD arrays the market trades up and starts to roll over what time of day it's at it's 12:42 so what are we approaching we're fastly approaching what that 1:00 hour and the news is going to be released at 1 one minute after one okay so Bas this to one o'clock so one o'clock the bond auction number is going to be released at the marketplace and then everybody does whatever they're going to do based on that okay so what's actually happening is the Market's already starting to run
• 00:30 - 01:00 lower this Candlestick traded up into this Gap now if this was a PDR that I wanted to trade on that would be my entry but because I'm trading ahead of this is the stuff that you write down what do I do if I am not going to trade the fair value Gap what am I looking for ahead of a news D because sometimes you'll see me take a trade before the news or before the opening bell if I know at 1:00 that's when the news is going to hit for the bond auction okay we already round over here and we had a
• 01:00 - 01:30 fair value Gap there the bodies are respecting it and we started to displ lower so just with this alone looking at the chart like that okay if it's just looking like that in your rudimentary understanding of what I'm teaching you already know the likelihood that it's probably going to explore below that low why because that's where liquidity is and it's been going down all day and this is the time it stopped and came all way back up here and move lower so what is it remember what it's gravitating towards down there okay okay but now you
• 01:30 - 02:00 have this short-term low here by itself that's a reason to be short you have two factors you have that new day opening Gap then you have this low here where there's very short-term minor sell side liquidity okay so there's sell stops below there don't be worried or consumed about the fact that these Highs are relatively equal don't let that bother you why because the Market's moving lower and it's pulling to this and even if it doesn't trade there during the day
• 02:00 - 02:30 session because this is the day session low here during the 7 o'cl to this point this is the lowest it traded to at that time so there's going to be stops below that for anyone that try to chase this going higher these relative equal highs they can stay in play they don't need to be upset they don't need to do anything the Market's going to stay heavy and keep working lower how do you know that ICT experienced the fact that this is still likely to happen and think what's over here in the London session
• 02:30 - 03:00 so we have this low this low and this so what is that that's three things that's heavy factors on wanting to see price draw to it it's liquidity and the market is operating on a narrative that it's going to drop to reach into that liquidity because if they're going to spend all this time above these relative equal highs during the S o'clock hour and 8 o'clock hour and then they do to swing into the 9 o' well this this is this is all being held up there tripping people up chopping people up grinding
• 03:00 - 03:30 them all up and then finally it breaks at 1:00 today we have a bond auction that's the only point of interest that I have on F calendar and it's a medium impact driver it's not high impact but it's medium impact but now anyway we're going to go back into this area here I got to zoom in on it all right so I know that this is the the time when the market should start running because that's when the bond auction numbers come out okay we're up here I know I have a real strong likelihood that's going to at least take this out and maybe run below here going into that
• 03:30 - 04:00 1:00 news release well here's the 1:00 and then the market drops here what I was looking at is I want to see does it do this does it run up into this fair value Gap there there's your fair value Gap and what is it doing there does it at least touch the consequent encroachment or midpoint of that Gap look closely no it doesn't it gets real close to it but it doesn't just fall short of it the fact that it goes up there and doesn't touch it and then closes here I know that that right there
• 04:00 - 04:30 is a bearish order block I can trade after the next candles come up into and bump in the bottom of it I'll trade short there all all it has to do is move away from it and then come back up into that I can trust this candle not being overtaken what's the next candle do goes up to it but doesn't touch this line and it doesn't even breach the candle's high now if it would have traded up and touch that midpoint and then did that I would not have taken that trade I would have waited for another attempt to get in there there and work just a little bit
• 04:30 - 05:00 above the consequent en caching and then I would try to go short in this upper part there that's what I would have done differently but because it didn't and couldn't even touch the consequent encagement these are PD arrays and yes they're used for very specific and static levels to enter and exit on but I also use these same price points as a means of measuring strength and weakness if this Candlestick can't even touch that but gets close to it it's signaling it's a signature that's an algorithmic sign
• 05:00 - 05:30 for someone that knows what they're looking for that tells me that when this candle closes all I need to do is see it move away and come back up and tou the bottom of that and that's a bearish order block now with that logic I can be short and take a partial below here or if I know that I can trust that it's going to go down below the London lows then I'll put a limit order below that the fact that we traded up here and we didn't touch the consequent encouragement of this I like to see if you're if there's two fair value gaps because we have here and we have here
• 05:30 - 06:00 you have to at least anticipate that it may go up into that Higher One but if it fails at the lower ones consequent encroachment and there's a news driver coming I have no problem no fear of ab absolutely none of getting into the trade so I wanted to see this stay open okay I wanted to see it fail to get to that midpoint of the lower one because it because it failed there okay wonderful I not worried about it but go back to what I was saying if it would have touched the consequent GR inment
• 06:00 - 06:30 and this candle I would have anticipated trading up into the higher part of this and then my stop loss would have had to be above the midpoint of this consequent encroachment but anyway it drops down and then we have an immediate rebounds okay so we have the market trading down here we have big down close candle the market trades back up boom bumps into it here imediate rebounds and then I get a little bit of heat here but that does not take me underwater because the larger trade entry is here so six contracts at the higher price if I'm sure the secondary affords me when I'm
• 06:30 - 07:00 only doing four contracts it affords me to trade above that that entry it's forgiven because it could do what it can revisit this fair value Gap it can trade inside that but I don't want to see it do that so I had to have a little bit of heat there but it doesn't fill it it just goes up to that level there and what is it doing there is it touching the consequent encroachment before it makes That Swing High here nope so that what does that tell me it signals to me just sit back and relax don't do
• 07:00 - 07:30 anything just relax move your stop to your first entry minus two ticks and just relax and now we go into one o00 look what happens at one o'clock they pump it and then dump it small little Fair B Gap right there when the narrative's in play and it's going to go lower or your analis assuming that it will go lower you're looking at how the market is treated at every Cy sell sign and balance buy sign efficiency or a fair value Gap that has a down close so we have a little bit of overshoot there
• 07:30 - 08:00 that's called a mohawk it doesn't change anything did it take out this high no it all it this is went outside the boundaries just a little bit and the next one gives you peace of mind because what is it doing it's stopping right at the high of the fair value at but the market trades aggressively after one o'clock after we have a retracement so here we have model 2022 here we have optimal trade entry focusing on the time of day and anticipating the delivery of price based on factors that call Price to it new day opening gaps new week
• 08:00 - 08:30 opening gaps relative equal highs relative equal lows and then below that in in terms of importance you have inefficiencies inefficiencies are subordinate and less important than relative equal highs relative equal lows or New Day or New week opening gaps because their influence over price the algorithm will refer refer and prefer more INF uh importance and significance placed around them gaps when they're actual like new week open and new day opening Gap that is absolutely going to
• 08:30 - 09:00 be much more significant because there's a lack of Trades there inefficiencies I'll say this much you have one side of the delivery offered to it meaning that for instance let's go back to this one here this sell side and balance buys side and efficiency has sell-side delivery okay sell-side delivery is always one-sidedness moving lower sell-side liquidity is what's resting below that low the London low or relative equal lows that this line is here that's these over here that is sell
• 09:00 - 09:30 side on The Daily range that's the lowest that's moved for the day overnight lemon so it's going to want to try to gravitate to that too that is real orders that's not inefficiency it's There's real pending orders down there that is the lifeblood of the marketplace real buy stops real sell stops that is the heartbeat of what makes these markets go up and down in between that okay you have in efficiencies
• 09:30 - 10:00 inefficiencies have one pass through so they have delivery in this case we have sell-side delivery but what is it lacking buy side if I'm bearish I don't want to see buy side offered because what that what that's telling me is I don't want to see it trade in the upper half of this I don't want to see that at all in fact I'm enamored when I see it not even touch consequent encouragement the fact that we don't touch that consequent curent or midpoint man that tells you what it's really heavy