Opening Range Gap Repricing Macro

Date: 2023-06-26

Explanation: https://x.com/I_Am_The_ICT/status/1673344154967973888?s=20 URL: https://youtu.be/Sf_uYZBWTrA?si=rvfMYGcLlYM2PV4c Watched Date: June 27, 2023

This is a weekly candlestick chart.

You can see we did fill in all of this fair value gap, which is a sell-side imbalance, buy-side inefficiency, with this overshoot, with this wick, and the buy-side here.

So we worked above that.

This presentation is really going to focus primarily on ES.

You’re welcome to look at the tweet below, where you watch me trade live, both ES and Nasdaq this morning.

So that weekly fair value gap in the form of buy-side imbalance, sell-side inefficiency, we’re zoomed in here on a daily chart.

Here’s the 15-minute timeframe.

So we’re going to get down into the nitty-gritty, if you will.

We have a very huge gap in the form of a sell-side imbalance, buy-side inefficiency, with only this little area remaining.

So when the market traded up to this point here, it didn’t completely go back up to that point there.

Because it didn’t completely reprice that, this is the exposed area of inefficiency.

Was it inefficient in buy-side delivery?

Because it’s a SIBI, sell-side imbalance, buy-side inefficiency.

That means the market will want to likely draw back up in there with delivery to the buy-side. That means upward motion.

And buy liquidity, or buy stops, will be resting just above this.

I’m showing you the New Week Opening Gap high and low here.

Moving down to a 5-minute chart.

Here’s the brass tacks of today’s delivery.

New York midnight opening price, that is this candle’s opening price, extended throughout the day all the way to 11 a.m. That’s the rule I give.

In here, you see the delivery of price.

The market rallies at 9:30, trades up to the buy-side liquidity pool that I showed you on the 15-minute timeframe, inside that 15-minute fair value gap, SIBI.

We’re zooming in on a 5-minute chart inside this price action right here.

Okay, that’s this on a 5-minute chart.

I’m bringing in the New York opening price. So the algorithm is going to reprice to a premium, to some random level? No. To reprice up to an old inefficiency.

And the best shorts are what?

What do my lectures tell you?

Above the opening price at midnight New York local time.

The market rallies up multiple times.

Then, we also have, what is this over here?

The buy-side of the quarter.

Why am I picking these highs here?

The question always comes up, ICT, why are you picking that high for your buy-side liquidity pool? Why not this?

I want that high.

Because I just taught you with the lecture from last week, one setup for life.

What I did in that lecture was teach you how to find a setup that will serve you for the rest of your life.

And I teach you how to look for liquidity.

What specific liquidity am I referring to?

Which one am I aiming for all the time?

Which one am I utilizing if I’m entering at that liquidity?

That lecture is not a specific entry pattern. It’s how to find setups in perpetuity.

That means you’ll never run out of setups, and all you’ll need to do is pick one of them.

And if your setup forms around that basis, that means what liquidity is going to be drawn to.

All of this run here is a Judas swing.

A Judas swing is what I’ve dubbed a false run that gets people to chase it. They get offside.

It goes to a very specific price, PD array.

The element is what we’re going to enter. A sell program is going to go to a very specific price level, not a supply and demand zone, not a harmonic pattern, not Elliott Wave, and Wyckoff is asleep in this.

This level right down here.

I’m showing you here, running out buy-side.

What kind of buy-side is that?

What are these highs anchored to?

London session liquidity.

Then we have the low of the London session. What is that?

That’s the London session sell-side liquidity.

So notice how the market opens at 9:30, rallies up, sucks everybody in thinking it’s going to go higher, goes into a level I’m teaching you, runs above the New York midnight opening price. That’s exactly where the highest probability shorts are going to form.

If you’re bearish, the best short entries are going to occur at the price, not the time, the price of New York opening price.

What time is the Judas swing going to form?

At 9:30 to 10 o’clock.

That is your opening range.

So we’re expecting this rally higher to be opposed to the direction we’re expecting from last Friday, down there.

So retail sees all this and thinks, wow, man, it’s really going up.

Yeah, it’s going up for Smart Money to go short.

Counterparty, London session liquidity, aiming for London session liquidity.

Utilizing what?

What are we using here?

I’m going to teach you something in addition to everything else you’ve already learned so far.

This is the opening range gap.

Okay, and what you’re looking at is this candle here. This is Friday’s data.

You’re going to be showing this on your TradingView chart with, down here in the lower right-hand corner, regular trading hours toggled, not electronic trading.

So the difference between the closing price on Friday and the opening price on the next trading day, or Monday, that is the opening range gap.

This happens to be the opening range gap lower, because we opened lower than where we closed on Friday.

If we opened higher than where we closed on Friday, it would have been an opening range gap higher.

Whenever the opening range gap is lower than Friday’s close, we are opening with a discount opening range gap.

If we are opening with a gap that’s above Friday’s close, we’re opening with a premium opening range gap.

There are two specific levels, and the one that makes the middle, or consequent encroachment.

Any gap is always going to be utilizing the midpoint as consequent encroachment.

Any order block, whether it be a breaker block, whether it be a bullish or bearish order block, propulsion block, every middle point or midpoint of it is mean threshold.

There are two different viewpoints of a midpoint.

So a gap or wick, the midpoint of that range would be consequent encroachment.

Any other order block is going to be mean threshold, which is 50% of that range.

So now that we have the opening range gap defined, let’s take that information and apply it to the 1-minute chart.

Here’s the ES 1-minute chart, September 2023 delivery.

We can see that rally here at 9:30.

All of this is a Judas swing, running up above the buy-side liquidity in the London session. You’d see this with electronic trading hours toggled on down here.

So the market rallies up into that premium fair value gap in the form of a SIBI, and that buy-side liquidity here.

You’re going to need to watch this video a few times so that you don’t lose yourself in the different timeframes.

And we’re trading above the New York midnight opening price, which is this level right here.

We have a more definitive drop here, where we’ve taken out this low and this low, and we have a fair value gap right there.

You could have used this one to enter, but you would have had to use a stop that factored in this fair value gap.

So that means you would have needed a stop-loss above that short-term high.

I didn’t like that. I had to wait for this.

Price ran up to it once more, and then broke down.

Now, because we had a shift in market structure here below that low, we could have used that low. There’s nothing wrong with that.

But that high wasn’t pierced by this high.

The only thing it was doing was running one more time above the New York midnight opening price and back inside that fair value gap, SIBI.

So it was one more run into a premium, and then we broke down.

And we had two gaps here: this one that’s shaded in white, and this one here in purple.

If you watch the recording in the link that I share in the description of this video, you’re going to see that there is a measurement I’m running from this candle’s low to this candle’s high, and I’m finding half of that, or 50% of it.

So, consequent encroachment.

I placed my stop-loss just above that.

Why did I do that?

Because we’ve already proven algorithmically that we’re not going higher. So it should drop down, even though it didn’t take out that low.

I have to use the two-gap rule.

When there are two gaps, you have to factor in the higher gap.

So how far was I willing to be traded against in terms of drawdown and place my stop-loss without taking on the full risk of that open gap?

The difference between the high and low of that higher fair value gap.

So, consequent encroachment.

My stop-loss was just above that. You’ll see it in the execution.

So, the shift in market structure.

Even though it didn’t take this low out, it didn’t need to for me to enter, and I’m entering inside this.

So I’m going to anticipate the algorithm repricing back down into the opening range gap.

This is a repricing macro.

All of this is a Judas swing.

I just used the simple Silver Bullet rules that I taught you, which would be to take the low to the high and find equilibrium.

What PD array would be a discount array below 50%, or below this level here?

There is a gap here.

So I was looking for it to trade toward the opening range gap, enter into a discount, and I just used an imbalance there and worked below the New Week Opening Gap low.

Here’s the 1-minute chart zoomed in.

The opening range gap, the Judas swing up, and we have buy-side liquidity.

This is Friday’s New York session liquidity.

This is another factor and the reason why I wanted to wait.

All of this run-up here is the Judas swing.

The ideal scenario would be, I want to see it run what liquidity?

We had two forms of liquidity.

We had the London session buy-side, and we had Friday’s New York session buy-side.

Both go back to this presentation.

Again, go into your own charts and annotate them just like I’m showing you here. You’ll see all of these things are exactly why I was taking the trade.

Fair value gap, using just the Silver Bullet mentality, back inside of the opening range gap.

But more specifically, using a run below the New Week Opening Gap low.

And I don’t need to be all the way down here to make what would be equivalent to both trades taken by you.

But the ES and the Nasdaq trades, as you watched me, I did dual dealings. That means I’m doing both indices.

I traded short one Nasdaq, and I traded short one ES.

If you were taking the same trades, your funded account or your live account would have gone up $16,000.

You would have had the full run also.

Now, I taught you in that one setup for life. I teach you liquidity.

If I’m bearish, and notice that we did not get down to that 4370 level.

Did it get to the 4370 level yet?

No.

What do we have here?

What’s this?

The opposite of this.

So if this is New York lunch buy-side liquidity, then where’s the liquidity at the lows?

During the lunch hour?

Well, here’s noon. We’re here.

So we have a high here, we have a high here, and we have the opening range gap.

What’s that shaded area?

So it makes perfect sense for it to do what?

Reach up into half of that yellow shaded area.

Right?

So that’s reasonable.

Why would it be possibly advantageous to see price do that?

Who would be better equipped to make a trade with that idea?

Everyone who knew that price was likely to go down to 4370 from Friday of last week.

Shorts.

So Smart Money can wait for the algorithm to reprice back up into half of the shaded area, or just above these relatively equal highs.

So the algorithm runs quickly to get to that level, and then it spends time here until we get to what?

The 3:15 to 3:45 Market on Close algorithm.

3:15 to 3:45.

Boom.

It runs to what?

The target I told you it would trade to on Friday at 9 o’clock in the morning, attacking the opposing side, the sell-side liquidity of the lunch hour.

Go back and watch the One Trade Setup for Life.

I promise you, if you listen to what I’m teaching you there, this is exactly what I have been doing for years.

Every single time I take a trade, every single time I’ve ever shown you an execution, I’ve used the logic in that teaching.

So many people over the years have asked me, teach me liquidity. Teach me how to pick the right liquidity. Teach me bias. Teach me how to know where the market is going to go next.

Because if I could just learn that, I would know.

There are other things you have to learn, but that’s the lesson you’re looking for.

That’s the one.

Because if you understand what I’m teaching you there, you will never run out of setups.

You will never run out of ways to flabbergast those individuals you share your results with.

You will never run out of opportunities to pass funded accounts.

You will never run out of opportunities to get paid in a live account.

You will never run into situations where you can’t go into any market, any asset class, any timeframe, and literally destroy it.

But I don’t want you to take my word for it.

I want you to go in and study it.