ICT Shotgun Saturday - The Measure Of The Tape

Date: February 18, 2023

Outline

00:19 - Today’s Topic: The Measure Of The Tape -.

06:25 - Gap risk and the potential draw on liquidity.

12:48 - No secret weapon in Enigma.

17:13 - When you get invited to a party, bring your favorite outfit.

23:35 - Using a bullish divergence and a slow stochastic.

27:34 - What really makes the market go up or go down -.

32:57 - What has helped support the narrative that the market is in a range?

37:59 - The problem is you’re not spending enough time looking at what market profile you’re in.

43:58 - What to Expect From The Market In February.

50:34 - Daily High and Low of the Week.

55:20 - What was the range of the weekly high and low over a 15 minute timeframe?

01:01:19 - How do you know when a bearish breaker is going to happen?

01:06:34 - You can’t fake price.

01:16:46 - Are you more fearful of losing your job or not being able to pay for groceries because the world is about to go upside down?

01:22:55 - Why am I doing this? Why am I doing this?

01:26:58 - What difference does it make if you don’t have boundaries?

01:32:22 - Why he stopped the 2021 mentorship.

01:39:07 - Mentorship is not something that makes one exempt.

01:45:47 - How to live your life the way you want to live your life -.

01:52:03 - How to overcome the fear of hurting yourself in these markets.

01:59:13 - The first half of my life was very selfish.

02:03:38 - It’s therapy, it’s therapy.

02:08:21 - Your best friend is your journal -.

02:14:06 - Don’t live your life like you don’t have any money.

02:21:17 - The money in my bank account doesn’t make me happy.

There are three uncertainties you must embrace.

1. Black swan events – unpredictable events that no one can foresee or time. They appear suddenly, often during seasons where they’re more likely. In recent years, examples include COVID, wars, and economic upheavals. A looming example now is the introduction of central bank digital currencies, which will inevitably impact markets and currency trading. Such events can cause markets to crash or soar depending on the driver.
2. New week opening price – no one knows where price will open on Sunday.
3. New day opening gap – no one knows where the 6 PM gap opening will be.

These three uncertainties—black swans, the new week opening gap, and the new day opening gap—must be accepted. The key is that, aside from black swans, we don’t need to know them in advance. Once they occur, they provide valuable insight. This requires patience: sitting on your hands, letting the tape reveal the narrative, and not trying to guess or forecast the openings. At times, however—not always—we can anticipate whether the gap may move in our favor at either the new week or new day opening.

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I don’t hold many trades over the weekend anymore because the gap risk is too high.

It could be an enormous gap from Friday’s closing price, higher or lower. You have no way of knowing what it will be or if it will gap sharply and continue in that direction. I don’t know that, you don’t know that. We always have to see what those opening prices do. Once revealed, sit on your hands and wait—are we looking for continuation, or failure and rejection back into the range between the gap opening price and the previous session’s close? These uncertainties often create fear and anxiety, which can spill over into other times when the market is more predictable.

What I’m teaching you with tape reading is how to recognize what will be most relevant to you as a trader—what makes you tick. We’re all studying price delivery and understand that these concepts influence price, but you don’t yet know which ones you’ll use for your setups. Some of you can see them clearly in hindsight when I point them out, but not in real time. That’s normal.

We’re not lost in the candlestick jungle—we’re waiting for a clear path to a destination we’ve already mapped out. This is where price is likely to go, but we must wait for the market to signal it. First, it does its damage by tricking traders into believing it’s heading the other way—that’s manipulation. That’s what we wait for: after gaps, after the 9:30 session open, after the 8:30 news embargo lifts. We wait for those little traps that catch uninformed speculators who rely on breakout strategies from books or chase price after it has already moved.

In my live sessions, I often draw on how retail traders—those outside our community relying on retail logic—are likely to perceive price in the moment. When I reference their mindset, where they might go long or short, or where their stops would be, I want you to note it. Think of it as an arm-wrestling match: real market makers versus those trading patterns for pattern’s sake. Billions of dollars are not hinging on harmonic animals, Fibonacci ratios, or Gartley formations. Institutions and banks aren’t trading those gimmicks—they operate on real order flow, above or below the marketplace.

When we study price, we’re looking at specific times of day for specific expectations. We’re not entering trades yet—we’re waiting for the market to tip its hand with an algorithmic display in price action. That means one of two things: a shift in market structure or a run on stops. That’s it. After that, we look for rejection or a breaker, or if there hasn’t been a proper break yet, we look at prior imbalances. It’s simple logic once you see it.

Not every PD array will appear in every price run. The benefit lies in understanding them holistically, not just individually. Each PD array could fill pages of explanation without fully covering its depth, but it doesn’t need to be that complicated. The focus should be on which one resonates with you most right now—start there and build. That initial foundation is critical for growth as a developing student. Avoid constantly jumping between teachers, concepts, and approaches, which only leads to confusion. Instead, focus on one specific model, study it deeply, and grow from there.

When I say “gun to my head,” that’s the moment of decision for a retail trader, because otherwise they have no idea what they’re doing. They need a catalyst, an abrupt trigger for action. Most traders, lacking true market understanding, rely on patterns or techniques they’ve learned, using them as faith-based logic to justify their decisions. What I’m teaching you is different: I’m showing what truly drives the market up or down, not arbitrary tools like the 50-day moving average.

When I was trading in the ’90s, I relied on the 50-day moving average on a daily chart. If the value was higher than nine days ago, I assumed the market would keep going up. But what actually happened? Price would reach a fair value gap just below my target high, then retrace, scaring me into setting my stop too tight, and I’d get stopped out. Sometimes it never reached my target. All the while, that moving average was supposedly telling me it was bullish—it was nonsense.

I was basing decisions on something that had no real impact on where price would go next. Simply observing open, high, low, and close would have told me the market’s direction. You don’t need moving averages or overbought/oversold indicators to see what price is doing. Those tools only serve traders who need a catalyst because they don’t truly understand the market and rely on faith-based logic that patterns will behave a certain way.

The only thing I’ve been doing is redirecting your attention from all that nonsense and putting it squarely on price itself. Price tells you everything: when it’s about to reverse, when it’s ready to explode in one direction, and when it’s consolidating and difficult to trade. Open, high, low, and close reveal everything—there’s no need to look elsewhere for bias, narrative, or trade ideas.

Regarding new week opening gaps: on trending days or weeks, where the market moves strongly in one direction, the new week opening gap often has little significance. It may only be relevant once, and then it’s never revisited. If you keep gravitating toward it, it signals sustained consolidation, meaning the market is unlikely to produce those big, fast moves.

I took you through the daily chart and showed you where we’re at—we’re in this range. Supporting that narrative, we had two volume imbalances on the daily chart within that small range, which helped build confidence.

The new week opening gap represents fair value; it’s a static value between Sunday’s opening price and Friday’s closing price. The midpoint of that gap, along with the opening and closing prices, creates three very sensitive levels throughout the trading week, especially if the market remains range-bound.

My tools operate in every market profile, which is why I teach market profiles—not just a single template. Think of them as schematics showing what the market should do conceptually, on a line-by-line basis.

The market tends to behave in predictable ways with a degree of repetition and transparency. You simply align your expectations and wait for the right time of day or day of the week for it to play out.

I said we’re likely to see a risk-off scenario. Risk-off means the Dollar Index rises while all other markets fall. If you haven’t noted this yet: • Risk-off: Dollar higher, markets lower • Risk-on: Dollar lower, markets higher By “markets,” we mean anything other than the dollar and against the dollar — yen, pound, gold, oil, equities, and index futures.

If the dollar is rising, it becomes easier for other markets to drop. In that case, your sell models, institutional order flow when bearish, and premium arrays can be trusted.

If the Dollar Index is consolidating and stuck, other markets will often reflect that. It doesn’t mean all markets will be stagnant, but that’s the expectation you should hold.

For example, in Forex, if the Dollar Index is range-bound, pairs like EUR/GBP may still move. When the dollar is held in consolidation, crosses like EUR/GBP, AUD/JPY, and GBP/JPY will see more manipulation and runs than the direct dollar pairs.

My techniques work in every market profile, but you need to pay attention to which market profile you are in.

We’re not trying to predict the weekly closing price. Your focus isn’t on knowing that exact number. Your job is to anticipate the market’s general direction on the weekly chart—dollar expanding higher, other markets expanding lower.

The challenge is that, for tape reading over the week, we’ve been stuck in a range on the daily chart since early February. So when I give a bias like “risk off,” we watch how the market consolidates through the week, with possible expansion Thursday or Friday.

If you review the core content, particularly the day trading section, you’ll find the daily and weekly templates already outlined. This week is a consolidation week with higher dollar, so we wait for something to occur. It will be choppy and tradable, especially considering the big event on Tuesday—the CPI number.

Not every weekly profile delivers a clear bias up or down. Some weeks are expected to move sideways, and you can’t force a prediction, because that skews your output. Numbers, like anything, can be tortured to say anything—that’s what indicators do. They manipulate past data you can’t trade, and if you tweak them long enough, they’ll “confirm” whatever you want. I fell into that trap, and so do many authors—they fit hindsight to a model that never actually played out in real time.

I’m referring to the candle that’s forming. Based on what I discussed on Sunday before the market opened, we’re in a range-bound environment. We expect the dollar to move and other markets to weaken, but it doesn’t happen as a straight decline. We have to navigate through consolidation and choppiness, focusing on areas that fair value highlights.

I told you to watch the two daily chart volume imbalances on the ES and use those levels. Many key levels I mentioned frame the entire week. Students who keep these on their charts will see by week’s end how the market moves up or down to those levels and doesn’t do much else.

You want to identify conditions that signal a range-bound environment—difficult times without big trending days. Trending days are easy to trade, but opportunities are limited and fleeting. In range-bound consolidation like we have now, you need to be nimble: pick your shots, exit at your levels, and understand the market will stay within a predetermined range.

For this week’s profile, it’s risk-off: dollar higher, markets lower. Throughout the week, the largest moves in magnitude and speed will come from dollar strength and corresponding weakness in S&P, Euro, Cable, and other assets. On Tuesday, the CPI report was the key factor—an example of potential volatility and manual intervention. You can’t predict exact outcomes or key levels because events like CPI, FOMC, or surprise central bank moves can drastically shift markets.

Even within consolidation, the overarching expectation is clear: dollar up, all other markets down.

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We have a range bound consolidation week, with a Thursday or Friday expansion. Okay. What would that look like based on what I gave you on Sunday? A range bound market.

If we're going lower, that means for S&P, if we're going lower because we're expecting risk off, that means the dollar is gonna go higher. That means on Tuesday, CPI should do some kind of manipulation and create what for the dollar on Tuesday? The low of the week. What's it mean for S&P and forex? It should be making what? The high of the week. Okay, when should the new move occur? Because if we don't trade the manipulation, we're waiting for what to occur? Thursday and Friday's expansion lower for S&P and higher for the dollar. Look at your charts. Did it do it? Yes.

Let's go further. Let's look at the Tuesday high. What's some of the observations there? Well, the February 3 of 2023, the daily with constant encouragement to premium wick. Okay, if you look at that Tuesday's high, it just goes like one point, maybe a point a quarter past that constant encouragement of February 3 daily wick. So the wick above that daily high on the third of February—split that in half.

Look at your high on Tuesday. Well, that's random.

It also swept February 9 spice liquidity. And it was all manipulated by what? CPI. Okay, let's flip it. Let's look at the other side of the weekly range. The low of the week. Look at January 30, 2023, that candle mean threshold. It's a bullish order block, the level actually is 4057 three quarters. So 4057.75 just happens to be a level I've already talked about, those you have on your chart. It purged the daily low on February 10 of 2023, which that low comes in at 4060.75. And suddenly, the only discount rate that I mentioned on the February 12 commentary was first of February discount consequent Kurzman, 4067.25.

So inside that range, that weekly range, what were the factors that you should have been paying close attention to? Go back to the daily chart. What did I talk about on the 12th of February? I said those two volume imbalances there. You want to extend them throughout the entirety of the week all the way through Friday.

We had a range-bound consolidation week with Thursday or Friday expansion. Based on Sunday’s guidance:

• If S&P is going lower (risk-off), the dollar should go higher.
• On Tuesday, CPI manipulation should create the dollar’s weekly low and S&P/forex weekly high.
• The next move should occur during Thursday and Friday’s expansion: lower for S&P, higher for the dollar.

Looking at the Tuesday high:

• February 3, 2023, daily wick provided a constant premium reference. Tuesday’s high barely exceeded that level.
• It also swept February 9 liquidity, all manipulated by CPI.

On the other side of the weekly range:

• January 30, 2023, candle forms a bullish order block at 4057.75.
• The daily low on February 10 was 4060.75.
• February 12 commentary noted a key level Feb 1 Discount Wick C.E. at 4067.25.

Within that weekly range, key factors to watch were the two volume imbalances on the daily chart, which should be extended through the week to Friday.

Charts

m5 RTH chart

m1 RTH Charts

m1 ETH charts

But Michael, my charts are cluttered with so much stuff, how am I supposed to even see price? You need different templates for different purposes. For example, new week opening gaps should have their own template. If you try to keep five of them on the same chart at once, especially if they’re close together, it quickly becomes overwhelming. Then you add in rectangles for fair value gaps, and suddenly your chart is a mess. That’s why I use a notepad. I don’t keep everything on the screen—I write it down in my notes.

Whenever I need to reference something, I go back to my notes. Maybe I wrote a number down wrong, or maybe I didn’t mark a specific level correctly. I’m constantly double-checking and recalibrating my notes to make sure they’re accurate. Then I watch closely to see if price gravitates toward those new week opening gaps.

It doesn’t mean you’re limited to just five NWOGs, but you need to have at least the last five. Why? Because I’ve taught that you’ll see the overlap every month—that shift in money flow that enters the marketplace. By tracking the last rolling four and the one you’re currently working with, nothing will catch you off guard. You’ll see how price gravitates toward or away from it. If it lingers around that new week opening gap, we’re in consolidation. But if it moves sharply away, and your analysis already points to a major trending event, then you’ve got confirmation. That’s the signal everyone chases with indicators—you don’t need them. Price itself will tell you.

So, if you look at the weekly range—both the high and the low—what was happening throughout the entire week on the 15-minute timeframe in relation to those daily volume imbalances?

What observations do you see there?

Notice how all the intraday and intra-week imbalances cluster within those two daily volume imbalances. That’s what’s driving the spotty price action on the daily chart. Spotty meaning it creates small inefficiencies or gaps at the new day’s opening. Y

ou can clearly see this if you plot your 15-minute chart with those two daily volume imbalances I’ve mentioned.

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Show the entirety of Sunday’s opening to Friday’s close. That’s the full range of price data you need on your chart. Have those daily volume imbalances marked on your 15-minute timeframe. Then, in TradingView, go to the lower right-hand corner and toggle from ETH (electronic trading hours, the default) to RTH (regular trading hours).

When you do that, you’ll see how each new day’s open tends to converge inside those two daily volume imbalances for most of the week. Visually, this shows you why markets consolidate. The mechanism behind it is that gaps and inefficiencies keep forming, and price must repeatedly return to reprice them. With no overwhelming liquidity pool above or below to pull price further, it stays trapped in that cluster.

That cluster has been clear on the daily chart throughout February. There’s no reason yet for price to break outside it because it’s being held where it is—a point where it could go either way. On the higher timeframe, it’s 50/50: price can go up or down. But on intraday and intraweek terms, we can still frame a bias. I said on Sunday: range bound, yes—but with the expectation of dollar expansion higher, and S&P, foreign currencies, and other markets moving lower.

All of those imbalances you’ve been watching through the week on the 15-minute RTH chart occur within those two daily volume imbalances.

Go into Thursday. You can see that gap lower I mentioned. I said we would trade back up into it, but not likely all the way back to the previous closing price.

Look at the bearish breaker from Wednesday, February 15. On a 15-minute chart, it shows up in the 14:45 candle.

Notice how price reacted when it came back up into the New York session opening gap at 9:30. The difference here is that we had already traded and closed the previous session, and now the new session was opening.

As a day trader in index futures, you’ll do this every day: toggle from electronic trading hours (ETH) to regular trading hours (RTH) to see this gap clearly. That gap—the difference between the previous session close and the new session open at 9:30—matters. Yes, overnight trading occurs, and prices move back and forth, but the premium or discount relative to the previous close is what counts.

If the gap opens higher than the prior close, it’s a premium. If it opens lower, it’s a discount. On Thursday, we opened in a deep discount. Price traded back up, but it didn’t necessarily need to reach the previous session’s close. Now you might ask, how do you know when it won’t?

The 12:45 candle on the 15-minute chart marks a key moment. Its high tick is the high of the daily volume imbalance. Then at 14:30, that candle’s high aligns exactly with the high of that same daily volume imbalance.

What happened after that? Price went into a freefall. Nothing here is random—there’s no chaos, it just looks unfamiliar. Everything I laid out on February 12—key levels, what to watch—is playing out on your chart.

The method of price delivery over the week matches the framework: the dollar went higher, other markets went lower, and we navigated consolidation. CPI manipulation set the tone: Tuesday’s manipulation provides the Tuesday low of the week for the dollar and the Tuesday high of the week for other markets.

The weekly consequent encroachment levels I provided over the last two weeks were crucial. On the February 12 review on my YouTube channel, I highlighted the 4178.25 and 4161.25 levels. These were key levels to have on your charts—go back and see how significantly they influenced price action.

I will get it wrong, folks. Sometimes something will happen and I’ll be wrong. You won’t hear me whine or freak out — I won’t throw a tantrum. I’ll simply say, “I did it wrong,” step back, and reevaluate. You need to experience that. That’s the reason I switched from twice a week to every day: I want to be in front of the charts when I read them wrong. You need to see my humanity and fallibility — to watch me make mistakes, follow my instincts, and sometimes try to finesse something I shouldn’t. I’ve been doing this a long time; I’m human, and mistakes happen.

You can be as rigid as you want — have all the rules memorized — but when the itch to press the pedal comes, you’ll be tempted to break them. That little rationalization (“just one mile over”) is the same trap in trading. When you give into it, you’re going to be punished. You’ll feel the pain of that choice, and you’ll see me experience it right in front of you. There’s no shame in that. I’m not afraid of it.

What if you got off your ass and started training with us every day? What if you actually did the things I told you to focus on — and stopped chasing the things I told you to ignore?

I know — I did the same silly stuff when I started. I procrastinated because I was afraid. So ask yourself: what are you more afraid of? Losing your job and not being able to pay the bills? Or being afraid to learn, make normal mistakes, and grow in a safe environment where you’re not risking real money and no one’s judging you on social media?

This is the place to be wrong while you learn: no ego, no pressure, no pride. There’s a right way to learn and a wrong way. I’m doing everything humanly possible — and then some — to help you get this.

Don’t talk about what you make. Don’t talk about what you’re doing. Don’t share your plans. All that does is invite opinions from people who don’t understand, people who aren’t doing it — and if they could, they’d already be doing it themselves. Proof? The moment you mention trading, they’ll say, “You’re going to lose your ass, that’s a pipe dream.” That’s not their wisdom — it’s borrowed from someone else who’s never done it either.

Now, ask anyone who’s actually making money if you should pursue this — their answer will be the opposite: “Hell yes. Why did it take you this long? Get in here, you’re missing out!” That’s the difference between naysayers and people who’ve made it.

In the beginning, you’ll feel like you need support from friends or family. You don’t. I thought I needed it too, but that was a mistake. Your real best friend is your journal. That’s where you pour yourself out. Confide in the one place that will never expose you, never judge you, never laugh at your mistakes. Track your progress there. It becomes your personal therapy, your mirror, your most powerful learning tool. It’s the best trading book you’ll ever read — and you’re the author.

Stop wasting money on other people’s books filled with recycled ideas. Put all your energy into your own work, your own journey. And once you’ve built yourself up, take what you’ve learned and what you’ve earned, and pour it into others. Give back. Not to faceless organizations, but directly to people in need.

Go out, observe. You’ll see it in people’s faces at the grocery store. Buy someone’s groceries. Watch their reaction when they realize a stranger just changed their day. They won’t even be able to speak. Their eyes will fill with tears, and so will yours. That’s when it hits you: this is real wealth, this is real impact.