Since all you guys have been so nice in trying to helping me understand how to expect price movement, I thought I would post my idea of what the Fiber might do next week.
I’m expecting price to rise to between 1.3400 and 1.3485, where it will hopefully turn on tuesday or wednesday. So on tuesday and wednesday I will be looking for signs of a reversal between those two price levels. What I will be looking for is SMT divergence, stochastic divergence, judas swing and OTE for my entry.
I think price will reach that level for a couple of reasons. Firstly, we seem to have a WW pattern forming on the 4H, which would suggest that point 5 could very well form somewhere between those levels.
Secondly, if I draw a fib from my point 3 to point 4 on my WW pattern, the 127.2 extension lines up very well with the 1.3400 level, and the 161.8 level lines up pretty well with the 1.3485 level.
Both of those levels are a previous resistance point, and the 1.34 is also a big figure, so I would also expect some sort of stop raid at that level.
In one of the videos there was a nice explanation.
Lets say your watching the 4H chart and are anticipating a 4H move. The 4H markets structure has broken upwards and has come down into the OTE area and has just hit a S&R level. You would then zoom into the lower time frames (1H maybe 15m) to see a market structure break in your anticipated direction.
In terms of market structure being used to confirm an opinion of the market direction you could now go down to the 1H time frame. Then enter on the break in your direction. Simply put you are entering on a smaller time frame with the bias of the higher time frame.
This is my most vital part of my trading plan. I cannot call highs and lows through analysis. I know ICT does sometimes in his videos, I know some people here do too. I just can’t. I do get it right sometimes but thats luck.
I’m going to go off on a pretty long post now so you may want to stop reading but this is basically how I understand some of ICT’s tools so far and how I use them.
Example of price structure with support and resistance on the four hour chart:
Support and resistance is drawn at the ends of price structure moves.
Market structure breaks are what defines trend direction. Breaks upwards mean upward trends and breaks downwards mean downward trends.
If price has broken upwards then you look for it to retrace again then expect it to bounce at a support within that previous range before breaking upwards again.
In an uptrend you look for buys in the area highlighted green. You look for buys by entering the smaller time frame and buying when its structure breaks upwards after coming into contact and reacting with one of the higher timeframes support levels. All of this occurs within the range (Top-Bottom) of the previous higher time frame move.
You would then buy that smaller timeframe moves retracement in the hope that as the higher timeframes trend continues you’ve managed to enter within it’s (the higher time frame) range/consolidation and have not bought after it has broken out and is already trending.
When price has broken out on the higher time frame then this is the area where price is extended. This is the red area in the picture.
It is also possible to sell in an upward trend. This is possible in the area shaded in red. When price reacts to one of the higher timeframes resistance levels and the smaller time frame reacts with a structure break downwards then sells can be entered targeting areas where support may be found.
Here the smaller time frame structure can be seen breaking higher within the above charts higher time frame move.
It would be possible to enter on these moves to still catch the highest time frame move higher.
While entering on these smaller time frame swings the expectation of where price will move to comes from the analysis of the higher time frame. That is the swing being targeted.
The ICT Market Maker Profile:
Lets say we are looking at 4 Hour market structure breaks to the downside. The above profile would be a way of looking at what is happening on the 1 hour time frame. Although this profile is applicable to all time frames.
Green:
At the first green box we are looking at the extension of the previous move downwards hitting some sort of support. This a place where we would expect to see divergences on SMT or Indicators etc. On the Hourly chart this would look like a price consolidation range. This range will then break and if it breaks up we could assume that that is the beginning of the retracement of the four hour charts move downwards.
Blue:
We could then look on the hourly chart for point where that market break may retrace back down to. For example that green ranges top it just broke out from or perhaps a 61%-79% retracement. Zooming in to the smaller time frames we could then look for entry to go long. This would all take place in the blue box. We would be targeting areas of resistance on the four hourly charts move where we estimate price could be retracing to.
Grey:
At a level of resistance on the 4 Hour moves or OTE fibbs the grey box will occur. It won’t be easy to spot as it could just be another blue box type move upwards but after price breaks down wards out of the consolidation on the hourly charts price structure then we would assume that was the grey area. The turning point for price to start heading downwards.
Green:
The red boxes are areas where price is moving down towards the four hour price structures extension targets. It’s at these hourly structure retracements that we look to enter going short. When the four hour structure has broken downwards again and price is extended then we can begin looking for our targets from the red boxes to be met and for price to react on a long term support level creating the next green box region of price action. Then the cycle repeats.
When talking about entries we are using the same sort of profiles to enter. Looking for entry at the grey or red boxes on the five minute chart using the hourly in the place of four hourly structure on the above example. Its also worth noting that the red boxes are all before the next structure break. They are in before the previous green bottom is taken out.
This is all my interpretation of what has been taught in terms of price action. This is something I am always following no matter what bonds or divergences are saying. This is a fundamental rule for me as it’s the closest thing I have to a confirmation on the charts of my technical analysis being correct.
Learning form a thread from a person half way around the world who posts videos which are a 1 way road is already making the whole learning experience hard enough. ICT for no money at all is giving it his best effort to share information with thousands of people. Naturally a traditional learning environment with a productive student/teacher relationship is impossible due to the logistics of it all. So the students need to work together and share what they understand then openly discuss what they think they have learned. That way we can hopefully all learn whats being taught and make some progress. Thats only possible through sharing our collective understandings.
It’s not effective to learn alone and by yourself only with the source material.
I don’t teach chemistry by handing out a text book with some hydrochloric acid and copper sulphate then tell the kids;
“Alright have at it, you’ve got what you need to learn so with no discussion and no questioning I want you to write up the reaction and explain to me exactly whats going on.”
Instead:
I introduce the topic explaining it from my experts perspective. (ICT videos)
I set the class a task for discussion on the topic (The forums)
I then check to ensure everyone fully understands the topic. (Not possible because ICT’s class is bloody massive)
Then the practical can be set, with the students not working alone and in silence but in small groups discussing the material and learning while they get there practical experience (This thread our demo accounts)
Thats is why it’s vital to share what I think I understand. As a student it’s the only way for me and perhaps others to progress.
Anyway the point i’m trying to make is simply there is plenty of evidence from studies in education to conclusively show that the majority of students learn better through discussion and continual/formative assessment from peers than independent study and summative assessment by a teacher.
The summative assessment in the case of ICT’s classroom would be a account balance. We don’t want to fail that “test”.
As a newbie, I appreciate your effort and way of thinking. ICT 'videos are very rich of knowledge. But I learn from this forum’s members very much. Trial and error , discussion and opinions are very valuable .
Thank you and every one who share his knowledge with others.
Woolo, you’ve summed up everything that is good about this thread.
Nobody on an ego trip - all students (do’nt like the term newbie) working together, learning from each other, no ulterior motives, using the teachings from ICT to help steer us in a constructive and meaningful way - one goal in mind - consistency.
Every question, every answer, every comment helps to contribute to my learning and ultimately to that goal.
I only thing I would add to Woolo’s post is to urge anyone learning from the thread but not yet posted - please do so.
Noobs (or beginners) need help too, remember them days? I do and I’m glad I could (and still will) ask questions from the community. I only use a small part of the concepts so far and I will need clarification and support as I progress through the more detailed aspects. The whole point of the forum is to help and share with each other, just like the original mentor? No?
Hi all - vis a vis what may or may not happen next week, particularly the seemingly prevalent view that we will see a correction of sorts, then take a look at this video. Gotta make you smile at least!
Hi all I am hoping that someone can comment on market structure for me. I have been through all of the MS videos ( thanks to Clint Peterma for the fantastic documentation). My goal for last week was to get a handle on MS which I thought I did have until the Fiber took off last week.
The screen shot bellow I had MS for the daily time frame turn bearish at the Red line and arrow when price moved lower. Was this correct?
Did MS even turn bearish there or was it just a retracement. After watching the videos I was looking for the STL price between a ITH to the left and STH to the right. When price broke bellow the STL MS turned bearish?
Did MS then turn at the arrow and green line? Will MS turn that fast on the Daily time frame?
While you’re attached image isnt great quality, you can still see where it takes out a short term high, it then retraced to that 1.3020 level (OTE for the long on Monday) and then off it went from there.
And yes, I would say for the short term below your red line, we were indeed bearish, until we broke MS again (where I indicated on the chart in yellow)
This was one of the hardest things I’ve had to “relearn”. Totally ignoring what I think and therefore reestablish a bias based on what the charts alone are telling me…
Thanks for the comments Jonny Cab. I just realized that the first chart was a 1H. The second is a daily (which I meant to post) as I am trying to get the higher time frame bias per ICT . Is the green line where MS broke bullish. This would mean missing a big move is that just part of the process of trading the daily?
For me, MS didnt turn bearish on the Daily because the swing low (just visible in your bottom left on your chart?) wasnt broken. I like to use the daily as a long term indicator, so I like to see big significant swing points get taken out before I’ll adjust my daily bias one way or another. Any smaller swings that occurred within that consolidation, Id be viewing those as retracements towards the previous key swing, using 4H and 1H as my time frames to look for a break (usually the 1H, unless we’re approaching a significant level on the 4H).
So if we were trading the daily TF, Id have been looking to get in Long @ 1.30 on the retracement, which was bang on the OTE and pretty much exactly were price bounced and continued.
