ICT Gems - ICT Teaches Quarterly Shifts

Summary

Highlights

• Quarterly market shifts indicate potential changes in market direction 🧭
• Studying historical trading days helps anticipate future market changes ⏳
• Institutional order flow provides insights into market strength or weakness 💪
• Liquidity pools can reveal potential market targets 🎯
• Analyzing dollar index and euro charts helps understand market trends 📈📉

Key Takeaways

• Understanding quarterly market shifts can enhance trading strategies 🎯
• Institutional order flows and liquidity pools are crucial in market analysis 📊
• The 2016 Dollar Index and Euro charts reveal insightful market patterns 🔍
• Recognizing bearish and bullish market structures aids in anticipating market movements 📈📉

Overview

Chapters

• 00:00 - 02:00: Introduction and Overview The chapter provides an introduction to analyzing the dollar index using a monthly chart. It covers the significance of observing price swings within a full calendar year, from January to January. The discussion highlights various market shifts by comparing chart setups segmented every three months versus every four months. This analysis aims to help readers better understand market dynamics by examining the differences in these segmentation approaches.
• 02:00 - 04:00: Quarterly Shifts and Market Analysis The chapter discusses the analysis of market shifts using the dollar index as a case study. It describes the process of observing quarterly shifts in market structure on a weekly time frame, then further analyzing these shifts on a daily chart. The analysis utilizes calendar months from January to the following January to observe and predict market trends.
• 04:00 - 07:00: Identifying Institutional Order Flow and Liquidity Pools The chapter 'Identifying Institutional Order Flow and Liquidity Pools' discusses the market dynamics through the lens of annual price swings and shifts. It emphasizes understanding the market's macro view to establish a structural framework for trading. The focus is on trading from one side of the marketplace by understanding the concept of a 'quarterly shift' as illustrated in chart analysis.
• 07:00 - 10:00: Applying the Look Back Technique The chapter focuses on the 'Look Back Technique', a method used to anticipate potential shifts in a trading environment on a quarterly basis. The approach involves analyzing the past month to calibrate expectations and make informed decisions. Users are instructed to draw vertical lines on their calendars or charts, representing anticipated shifts, and begin analysis from the most recent past month's trading data, specifically the first trading day of that month.
• 10:00 - 13:00: Calibration and Structure Shift In the chapter titled 'Calibration and Structure Shift', the narrator explains how to analyze trading data effectively. The focus is on looking back to the left, specifically 60, 40, and 20 trading days, which approximately covers three trading months. This period is considered average, although sometimes further back ranges are analyzed. The aim is to identify the most salient points in trading data using these parameters.
• 13:00 - 19:00: Applying the Technique to Dollar Index and Euro Dollar In this chapter, the focus is on analyzing the Dollar Index and Euro Dollar using technical charting techniques. The technique involves referencing the daily chart and marking the 60, 40, and 20 trading days before the most recent calendar month with vertical lines. These marks serve as reference points to determine the beginning of the analysis. The primary goal is to delineate the trading days in these brackets as opposed to calendar days. By observing these 60, 40, and 20-day ranges, one can identify institutional order flow and gain insights into market activities during these periods. This technique allows traders to understand what the market was doing 60 days ago up to the present or related to the most recent vertical line marking, providing a structured approach to analyze market behavior.
• 19:00 - 24:00: Market Structure Breaks and Projection This chapter focuses on analyzing market structure breaks and making projections based on past trading data. It emphasizes the importance of looking at historical data, specifically the past 20, 40, and 60 trading days, to identify institutional reference points. These reference points include old price highs and lows, which can indicate potential liquidity pools. The chapter notes the significance of identifying wicks on these highs, as they can help traders make informed decisions about market trends and projections.

ICT Gems - ICT Teaches Quarterly Shifts Transcription

• 00:00 - 00:30 okay what we're looking at here is the dollar indexes a monthly chart and what I did was outlined a full year January to January and I want you to take a look at the price swings in between all of these reference points vertically as you can see there's a couple different Market shifts that take place and this is what it looks like if you have it set up on every four months versus the last slide being every 3 months and I'll give you an example of seeing it again this is your chart divided up on every 3 months and every 4 months and you can
• 00:30 - 01:00 still see it gives you a really good context of where the market structure is and what Market shift should take place next this is that same dollar Index that's viewed on a weekly time frame and we're looking at every 4 months for quarterly shifts and we're going to drop down into a daily chart you can see here we have the dollar Index daily and what I did was again I'm only using calendars of each month here from 1 January to the following year January I want you to
• 01:00 - 01:30 take a look at how many times the market shifts back and forth and how many price swings that you see over the course of a full year I want you to see how the market does in fact give us a very good macro view of the marketplace where it gives us framework and structure to work within so that way we can trade on one side of the marketplace and focus primarily there all right let's deal with a little bit more detail about what is a quarterly shift okay on your chart you're going to delineate with a
• 01:30 - 02:00 vertical line on your calendar and we're going to be viewing that as the anticipated quarterly shift now we don't know that's going to be true but we're going to do some things to arrive at how we can calibrate that level and this is called the look back what you're going to be doing is you're going to look back from your month of study wherever that is in time regardless of what when you start your analysis the most recent past month okay uh you want to be using that first trading day of that month put a veral line on your chart and then from
• 02:00 - 02:30 that point on you're going to be looking back to the left you're going to be looking back to the left 60 trading days 40 trading days and 20 trading days now why am I giving you those three parameters the algorithm will reach back about three trading months worth of data that's the like the average where it'll reach back for now there's other times where it will go into further ranges but for now I'm just teaching you how to look for the most Salient points of
• 02:30 - 03:00 reference on the daily chart the 60 the 40 and the 20 trading days left of the most recent calendar month put your vertical line on that that's your beginning Mark point and you're going to delineate what 60 days to the left of that is what 40 days to the left of that is and what 20 days and they're all trading days not calendar days and you're going to basically in those ranges you're going to identify institutional order flow what was the market doing 60 days ago to now or to uh vertical line of that most recent month
• 03:00 - 03:30 that's delated on your chart also to the left of that vertical line you place on your chart you're going to be looking back over the 60 the 40 and the 20 past trading days to the left of that past month and you're going to look for recent institutional reference points you look for an old price high you're going look at an old price low why are you doing that you're looking for a potential liquidity pool that would be resting above it or if those highs have a lot of wicks you're going to be
• 03:30 - 04:00 looking for rejection blocks which would be a move above the bodies of the candles for a potential selloff or below an old low that has long Wicks on it you'd be looking for the bodies of the candle to house some cell side liquidity below that for a rejection block or cell stops below an old low if there's not a whole lot of Wicks to the lows that would be uh defined in the last 60 to 40 to 20 trading days you going be looking for bearish order blocks bullish order blocks in the last 60 days and you're going to look specifically around the last 60 around 40 in the last 20 days
• 04:00 - 04:30 basically you're looking back the last three trading months and you're going to be looking for fair value gaps and any liquidity voids as well once you identify over the last 60 trading days okay you're using the previous closed calendar month as your beginning reference point again as an example right now today it's January 6th 2017 and if I were to use this method I would look at December 1st 20 2016 my
• 04:30 - 05:00 vertical line would be on that calendar day and then I would look 60 trading days to the left of that on my chart I would look 40 trading days to the left of that and I would look 20 trading days to the left of that December 1st or whatever the first trading day would be for December 2016 and I'd be looking for over those three months where's the high and where's the low if the market has been trading higher I'm going to frame everything off of the the market low if it's been trading low I'm going to tra
• 05:00 - 05:30 frame everything off of the market high once you do that what you're doing is you're anchoring your vertical line to a previous Market structure shift okay so let's go back to our daily chart of the dollar Index okay and this is what we had earlier in the presentation I had January 1st 2016 to January 1st 2017 okay and I'm going to do what I just explained to you if we were looking at the market in January 1st of 2016 we're going to actually do what I explained and this is what we
• 05:30 - 06:00 will end up at we will be moving to December 2015 the first trading day there versus January 1st of 2016 so we moved to the left and we noted that high and we're using the first calendar day of the month and we're always using that reference point to calibrate and begin so now we know how we can calibrate just like the algorithm will will Define it in the sense of every 3 months there is a shift also in the last 3 months where is the liquidity at over the last 60
• 06:00 - 06:30 trading days what we saw is the market traded higher from around October 2015 so it made an intermediate term low the market traded up and created that shortterm or intermediate term high at December 1st or thereabouts in the last 40 trading days to the left of that December 1st 2015 delineation with that vertical line we also see there was a consolidation and it expanded again once more time higher in the last 20 days to
• 06:30 - 07:00 the left of that vertical line the market just kept pressing higher institutional order flow was bullish so where is the liquidity at it's going to be below the marketplace because the market has already traded higher that's this reference point here right below that October low the market trades lower after or to the right of December 1st 2015 once the market trades lower in between this reference point once we identified where the market structure starts to break down that means a key
• 07:00 - 07:30 low was broken and that key low is seen right here any retracement higher or movement higher at this moment we're going to be anticipating a move lower because the market has already been moving bullishly we seen a market structure break lower and now we're going to be anticipating a potential move lower in the dollar Index it could be a consolidation sideways but we're still expecting a measure of bearishness in the dollar Index post December
• 07:30 - 08:00 2015 the 60 the 40 and the 20 when we look back like this again we're focusing primarily on where has the market traded from what was the institutional order flow at that point and at this this time we can see clearly between the October and November into December 2015 the market had been trading bullishly so by using this higher time frame daily chart when we see the market structure shift bearishly we're ing now the next 3
• 08:00 - 08:30 months to be a potential correction so using this last 60 40 and 20 idea we want to look at how price in those ranges what is it created well the market has moved higher so prior to December 1st 2015 the marketplace had had an Institutional order flow that was moving bullishly so that means as the market was moving higher every short-term low is going to have sells side liquidity or sell stops below
• 08:30 - 09:00 so in each one of these ranges what we can do is Define the range find the low and then we can note that as where all of the sell side liquidity is now once you have your vertical line calibrated to the most recent Market structure shift and you've done the look back and you've defined all of the liquidity reference points on the 60 40 and 20 last trading days to the left and you identified institution orderflow and you referred to all the recent institutional reference points that we've identified in brief listing now you're going to be doing the cast
• 09:00 - 09:30 forward okay the cast forward is when you look ahead with the same parameters we used when we looked back we're anticipating the next Market shift in 20 to 60 trading days we cast forward 20 days to the right of our vertical line when the last shift was 40 days ago we cast forward 40 days when the last shift was 20 days ago we do this until we reach the extreme of the projected 3month limit in other words where there
• 09:30 - 10:00 would be another vertical line drawn on our chart or capping 3 months so what does that look like this is what it looks like here this is called the cast forward where we have delineated a calendar first trading day at 2015 December 1st as we did moments ago we have a 20-day range a 40-day range and a 60-day range added to the right of our December 1st 2015 delineation of the vertical line and now what we have is a
• 10:00 - 10:30 future day range or a data range the algorithm is going to anticipate doing a shift in the marketplace in that range between 60 and 20 days if we seen the market structure break down as we saw moments ago by delineating this low here then we're looking for a market move going lower to fill in a potential liquidity void seen here in the range of 60 days to the right
• 10:30 - 11:00 of our Market structure shift delineation that we have at December 1st 2015 we expect a set up on the daily chart essentially in the next 60 days so that tells you a time Horizon you could have to wait sometimes as long as 60 trading days but it doesn't have to require you trading for that entire duration you can use this to get daily bias context you can get short-term setups and you can get long-term objectives where the market should be moving over weeks and months versus
• 11:00 - 11:30 limiting your scope on a short-term intay basis and marrying those lower time frames now we're looking at the euro dollar in the same way but obviously like we mentioned earlier the US dollar is going to be inversely related to the euro dollar if we're expecting bearishness on the dollar Index we would be expecting bullishness on the euro dollar so in the same way we're going to add 20 days to the right of our 25 December 1st 40 days to the right of
• 11:30 - 12:00 that vertical line and we're going to add 60 days to the right I want you to see that the high formed here on the euro dollar look how it falls directly right at the 60-day IPA data range Nails it on the very high the algorithm will seek to do something in the first 20 days the first 40 days and up to 60 days after the most recent Market structure shift we saw saw a high form on the
• 12:00 - 12:30 dollar Index and expected the market to move lower because it broke its Market structure bearishly we can see the euro dollar made a low here December 1st 2015 and price moved higher breaking Market structure bullishly for it in between the vertical lines okay once you have calibrated your Market structure on a quarterly basis if we see that we're expecting bullishness on the part of the euro because the dollar Index was
• 12:30 - 13:00 expected to go bearishly that means all the way up into March 2016 we have a stance that the bearishness in the dollar should bode well for bullishness on the euro dollar so between those two reference points because we understand that December 1st okay we go out forward 3 to four months we go as far as March 1st and by having March 1st defined as the beginning of the new month out that that far away we reject that limit on
• 13:00 - 13:30 the quarterly range in between December 1st and March 1st we would be expecting a bullish signal to form in the euro dollar and a bearish signal to form in the dollar Index getting back to what we mentioned earlier about buy programs and sell programs the scenario would be even looking at a daily chart there's going to be a manipulation that takes place even on a higher time frame daily let's go back to the dollar Index do you see the highs here all these these Highs are forming inside of the data range of 60
• 13:30 - 14:00 days to the right of the beginning of December 2015 so all these highs in here higher higher higher higher is seeing what after the market structure break below this low here all these retracements higher all that did was close in this liquidity void when this void closed in up here inside of the data range of 60 days we had to measure is there all this Justified by using a
• 14:00 - 14:30 inversely related currency like the euro dollar now we can go and take a look at the lows that were forming in the euro dollar here's 20 days 40 days and 60 days to the right of the delineation setting our new marker for the quarterly shift look at the lows here in the euro dollar all the way up to the 60-day data range the lows were higher in the euro dollar so this was under what accumulation the underlying is failing to make a lower low again at the same
• 14:30 - 15:00 time that the Benchmark is making higher highs by all standards this looks like bullishness every time a new high is formed and it looks like it's trying to go higher all it's doing is inching up the close in this liquidity void that reference point that we talked about at the beginning of this teaching this is what it's looking to close in it's pressing higher at the same time all this higher high business is not being seen with lower lows in the euro dollar and it's occurring in between where we delineate the market structure shift here we go out 3 months that means
• 15:00 - 15:30 there's going to be a move that takes place in the next 3 months on the daily chart we're looking for it to happen within 60 days of a new calendar month if this data range will go out and project that long the 60-day delation nails the very high so you have a buy in here and it ends right here after closing in this void you can see here at the lows we had a market structure shift that was bullish on the dollar and we had these
• 15:30 - 16:00 highs in here taken out on the upside so no highs were violated on the upside prior to this High here on the daily so institutional order flow broke to bullishness here because of the shift in Market structure the Market's trading lower here okay now we have another divider okay at June 1st 2016 so all you're doing is adding another vertical line once you have one you go out in time you add these individually okay now you can calibrate them as you see fit
• 16:00 - 16:30 based on what the Market's doing but I'm going to resist the temptation to calibrate it based on this Market structure shift here because you could do the same thing here once this Market structure breaks bullishly here you can go back to May 1st and use that as your delineation and then start going 20 days 40 days 60 days to the right of it okay and then draw another vertical line every 3 months or so but I want you to take a look at what this is done we have a low here on the dollar Index we have a low here on the dollar Index that's lower and we have another lower low on
• 16:30 - 17:00 the dollar Index after the market structure has broken to the bullish side so on we have an interruption and the down move okay notice also it's been essentially six months of down movement on the dollar that's about when you're going to see the shake up that takes place but for this movement here I want you to take a look at the relationship of how the dollar makes these lower lows in here let's go back to the euro dollar at the same time let's see what was going on around June of 2016 in the euro well we're not seeing that high or high
• 17:00 - 17:30 that would be reasonably expected as we saw lower lows in dollar let's go back again we have lower lows in the dollar at the same time we should be seeing higher highs in the euro dollar it's not happening we see a higher high here but you have to look at every institutional reference point we have an old high back here relatively this is not higher it's actually lower this is a market that's heavily being distributed this Market run up here is just a runon buy side liquidity taking the buy stops out on short players already and then the market trades lower in between the
• 17:30 - 18:00 vertical lines that delineate the next Market shift okay there's a quarterly shift that takes place every 3 or four months and you can see that these smart money accumulation and distribution programs are very easy to see in price action but you have to Define it in such a way where you now look for it to occur also notice and I'll leave this for your own personal study how many days away to the right of this calendar start does this high form I'll leave that for your
• 18:00 - 18:30 personal study I also Council you to take a look at this day right here this is the election okay even on the day of the election there is exactly out to 60 days to the right of of here 60 days on the Mt mt4 platform na is the very very high that gives us the selloff so initially it opened up traded higher on the euro dollar and then rejected and traded aggressively lower this higher high again here's the old High this higher high is not being seen with a
• 18:30 - 19:00 lower low in the dollar Index so dollar is being accumulated the underlying strength is in dollar can't go lower and the euro dollar only went higher to take out the buy stops they're going to reject that as false strength or a suspect rally and the price moved lower and again in summary all you're doing is you're looking for a obvious break and shift in uh Marketplace like this was one here okay the market trades higher and then if we were looking at the
• 19:00 - 19:30 market in February we could go back to January 1 and put our marker there and then go out 20 days 40 days 60 days and you'd get something here or go looking back and see where the liquidity is resting you're looking back to find where the liquidity is and you're looking forward or to the right of it to get the very next setup in terms of the data range you're going to know how long it takes potentially before the next setup forms and how far back you look for the liquidity reference points for where the stops are on above or below
• 19:30 - 20:00 the lows and where the liquidity voids and gaps are that you want to be referencing like for instance say it was November 14th 2016 what month would you calibrate your vertical line to to start if you said October 1st 2016 you're accurate you're correct if you said anything other than that you're wrong okay you want to go back to the previous closed month you want to go back one full calendar month where it traded from the first trade day to the last trading day and then created
• 20:00 - 20:30 a new month by doing that you calibrate yourself that way you'll be able to see what IP is doing reference wise and then you start walking forward from there when you see an obvious change in Trend which we saw up here we have a market structure break here bearishly for the Euro all this rallying up is just another attempt to do what we saw happening in the dollar back here when it had a market structure break bearishly it traded higher up the Clos in a void and then sold off the same things just being seen here Market structure break here Market comes up
• 20:30 - 21:00 take out buy side liquidity and underlying weakness seen here heavy distribution and the market goes lower as a result of it