Tuesday June 06, 2023 \ Market Review & Price Action Lecture

Date: 2023-06-06

URL: https://www.youtube.com/live/wWvXWmC_gqU?si=3gEHkRDJnqtcHv2Y Watched Date: June 6, 2023

It’s important for you to keep up with the ICT Mentorship 2023 playlist. So anything I put up, whether it’s a livestream like this or another lecture, I add it to the 2023 Mentorship playlist on my YouTube channel.

If you’re new, let me get this out of the way here — some housekeeping. If you’re brand new to my channel and you want to know where to start, my advice is to go into the 2022 Mentorship playlist.

The 2022 Mentorship playlist has 41 videos. The first video, you don’t really need to watch, but for completeness’ sake, needless to say, watch it. The first one kind of sets the tone for what you should be expecting.

If you have never seen any of my content, if you really don’t know how to read price action, and you just want to get down to the brass tacks — understand that I am long-winded because I want to give you value. If I’m going to teach something, I want to communicate the highest form of understanding to those individuals who genuinely want to learn.

If you have a short attention span, or if you’re not really interested in knowing everything about why you would be taking on risk or incurring risk, then anything less than that is really setting yourself up for failure.

So if a teacher or educator is making themselves available, it’s important that their passion is behind that education, because your results are a direct reflection of my ability to communicate the logic.

I want to convey as much detail as possible instead of simply saying, “This is what a buy setup looks like,” or “This is what a sell setup looks like,” and then giving you a static screenshot as if that is what it looks like all the time.

It doesn’t look like that all the time.

There are subtle little variances in the way price action is delivered. That’s important for you to understand, especially if you’re new, or if you only refer to price action through a retail perspective.

And when I say we don’t trade retail, or we don’t follow retail logic, I mean we are not looking at the things that permeate this industry — the things repeated collectively in books, courses, and regurgitated material.

That is what sometimes makes my content feel overwhelming or overcomplicated: you are trying to force-fit the things you think you know into what I’m teaching.

My challenge has always been this: don’t believe what I say just because I say it. Go into your charts and see whether what I’m saying is there or not. I’m confident that if you do the due diligence, you will find it.

So if you’re new and you want a study program, I tweeted this the other day on my Twitter account: the shortest path to the point is the 2022 playlist.

That is the model I designed for my daughter. My heart went into it. I wanted to make it streamlined. I wanted to present something time-based so it removes a lot of the confusion around questions like:

“When does it form?” “When should I look for a setup?” “What session should I trade?” “Should I trade London?” “Should I trade New York?”

That pattern of looking for a run on liquidity, a shift in market structure, and then trading into the fair value gap can be traded in Forex, futures contracts, index futures, and currency futures.

That model can be used on intraday charts, and it can also be used on higher-timeframe charts.

Lately, I’ve been getting a lot of requests to come off the lower intraday charts. A lot of you don’t want to trade, or can’t trade, those one- to five-minute charts. I understand that. But I also include them — as I’m including them right here — because that same approach can be used on those shorter timeframes.

The only reason I use those lower timeframes is because they afford me lots of examples. We can see consistency. Using the logic, you can find continuity in your analysis, and therefore the results can be expected to become routine — businesslike.

If you go to your job, you’re not changing what you do every single day. You’re doing the same monotonous tasks over and over again. As a trader, that’s what you’re trying to do. You want it to be boring and monotonous.

The best way I could communicate that was through the 2022 model. I couldn’t make another model simpler than that. And it’s working. It’s working in the hands of other people. Even people who just started following me last year have gotten funded, are receiving payouts, and are doing well.

Some of them are trading their actual live money. This is my personal opinion, and it’s not meant to discourage any of you, but I don’t think you should be trading in your first year. There are a lot of things you need to learn about yourself, and there are also a lot of things about price action that you need to learn.

But that can’t be appreciated if you just watch a couple of videos and say, “Let me see if this works with my account,” then risk real money, or risk failing a combine or funded prop firm challenge.

So go slow.

I promise you, the people who are doing very well — especially the six-figure earners — put a lot of work into this before they did it.

Take your time. Nothing is going to change. The algorithm is not going to change and turn around just because ICT has taught too many people about it. The markets have always booked like this.

The only thing that will change in the future is that it will become much more efficient. There will be less choppy consolidation because more people will be involved, and therefore liquidity will increase. So the growth of our community and more people using my content is not a disadvantage to you. It is not something to be concerned about. It will literally create more liquidity and more efficiency.

We are not going to be the buy-stop raid, then reversal. We capitalize on that retail mindset. My approach to trading, and the way I teach you, is that we harvest liquidity. We hunt it. It is prey.

Retail logic — things like moving average crossovers and similar concepts — has its place. You can make money with it. You can make money flipping a quarter. But predominantly, there is a large degree of neophytes entering the marketplace.

In my first year and a half, I was constantly insisting on buying oversold conditions. I didn’t understand bear markets. A market can stay oversold for a long time, and you can end up buying falling daggers. It is very painful trying to catch that.

What I have tried to do throughout my career is communicate things you wouldn’t really learn from anyone else, and turn them into a language that can be communicated through charts — even though the things that actually make these price moves run are not always visible on the chart. I know that sounds almost impossible.

There are things occurring outside the kill zones I talk about. There are trades that occur there too. But I could never bridge the gap between what I know is going on there and a chart-based setup that repeats often enough to teach it clearly.

So the things I teach you — like specific PD arrays and multipliers — are the things I can communicate through price action.

When I say that when you’re looking for a setup, you’re looking for your multiplier, the multiplier is the thing that gets you into the trade. That is not the full model. It is the specific mechanism that puts you in.

That could be my order block method. It could be a fair value gap, whether inversion or standard. It could be an Institutional Order Flow Entry Drill. It could be an Optimal Trade Entry. It could be a propulsion block.

All of these things are specific multipliers — specific things you are looking for in price action.

I teach this, I believe, in month four of the core content. Forgive me if I’m not being exact, but I think that’s where it is: month four, where I go through the PD Array Matrix. In my opinion, those are the easiest ones for me to communicate using a time-based chart.

Now, I do have other PD arrays that don’t require a chart. I don’t even need a chart for some things, but that is so complicated that I’m not even going to touch it here. Some of you already complain that what I’ve taught is complicated, so I’m not going there.

I don’t need to have a chart. I could be driving around in my Corvette and know that, between these three minutes, price is likely to do this, then do that. I know that’s algorithmic.

But you are here to learn something that repeats over and over again — something you can visually see and learn to trust.

And the 2022 model, I promise you, if you study it and spend time with it between your practice sessions and backtesting — meaning going back and looking at chart moves that have already happened — it builds the experience base you need in order to lean on it.

I’ve had a lot of requests for longer-term swing trades. In the core content, I teach quarterly shifts. That means every two to three months, there is usually a major intermediate-term price swing that takes place on the daily and weekly charts. That is more of a macro perspective.

If you feel like I’m not getting to the point, the point is this: I’m teaching you how you’re going to have to navigate these things.

One of the things I talk about in the realm of psychology is that if you’re under a lot of stress, if you’re not feeling well, if you’ve had a loss in your family, or anything like that, it’s important not to trade. It’s important to stay away from the charts because you’re going to be hurting.

In that pain, discomfort, or even boredom, you can be spurred into doing something impulsively.

So I’ve been going through something emotionally with a pet, and I can’t focus. That’s why I’ve spent some time away.

If you feel an overwhelming desire to trade because you need something to make you feel good, or to get high off of it, don’t look at my concepts as the “silver bullet” to fix that for you.

You can still fail, even with these high-precision elements I’m teaching you. You, as the operator, can fail yourself — just like I would have failed myself if I had pushed last week and done things when I knew I wasn’t going to be focused.

That doesn’t mean the logic is flawed. It doesn’t mean your ability to trade has expired. It simply means you are not firing on all cylinders. You are not focused, and you are likely to be impulsive and reactive.

We don’t react to price. We anticipate it.

But if you go into the charts with a need to be right, a need to feel better, or a need to prove you’re not worthless because maybe someone broke up with you, those things will channel into your trading. You’ll actually see a setup because you want it to be there, not because it is there.

So be mindful: when I’m teaching you, you still have a great deal of responsibility. That responsibility is yours. Your success is solely yours, but your failures are yours too. You have to own them.

I don’t cosign either one.

So with all that preamble and monologue out of the way, let’s get into it.

I mentioned the last few times we were doing market reviews and analysis that this is the Dollar Index, shown on a weekly chart. I said we would likely reach up into the halfway point of this last up-close candle prior to this rotation lower.

So this up-close candle over here — the initial draw was the order block’s opening price, which was being denoted here. We saw price expand up from that. I also told you that this gap here was something I wanted to see treated as an inversion gap, or an inversion fair value gap. That is what IFVG stands for.

Now, this is the problem that arises when you watch someone trying to teach my concepts before they are even fully taught. They would see this gap here, watch price run up into it, and think, “Okay, that’s a short, because look at these relatively equal lows down here.”

No.

There is logic that has to be applied to it, and there has to be a narrative.

The fact that we have unfinished business in this order block, along with the uncertainty surrounding the U.S. debt ceiling and the potential default, the war scenario, and all the broader concerns around the world — all of those things create concern. And that concern can become a catalyst for flight to quality, or a safe haven.

At the present time, the Dollar is still considered that, although I do think that is waning. Nonetheless, that typically sends the Dollar higher and foreign currencies lower. We’re going to talk about Forex today as well, not just ES.

But I started with the Dollar Index because the Dollar gives me the risk-on / risk-off scenario. If I believe the Dollar is likely to go higher, I need to know where it is likely to draw to. I can’t just indiscriminately say, “Well, it’s going to go up, let’s see where it goes.”

That is not good enough.

To me, that is myopic. You need to have a specific level, not a zone.

There are specific levels that I’m teaching.

This last up-close candle over here has the low, the opening price, and the mean threshold, which is the halfway point from high to low. Those are the levels.

The last time we talked, I said we would like to see price get up into this area. More specifically, I said we would see whether it wants to get up to the mean threshold of that order block right there.

Nothing I said implied that we were going short on the Dollar. I didn’t say we were shorting anything in the Dollar. We were looking for lower prices on EUR/USD, and we’ll cover EUR/USD once we get there.

So, in fact, we saw price run up into that level last week.

Now here we are on the present week. This is the current weekly candlestick for the Dollar Index.

Did this gap over here act as support? Yes. Intraweek, it did that this week. But it also did it last week as well — price traded down into it, and now we’re trading here.

When we get down to the lower timeframe, the daily chart, this will be more impactful too.

But whenever I give analysis, whether it’s through a tweet or in a video, invariably there is this sect of my followers that says, “Okay, now what’s going to happen?”

What you should be doing is thinking about what you just watched.

Have you broken it down yourself? Have you spent any time in the lower timeframes, studying individual sessions, individual days, and the scope of each individual weekly candle to see where the setups form with the 2022 model?

Because that’s what you’re supposed to be doing.

If you’re just waiting for me to put up a new video or talk about something on Twitter, you’re doing yourself a disservice. Because 90% of the work required for you to succeed is done by you. It isn’t just done by listening to me.

If it were that easy, everybody watching my videos would be funded, making money, quitting their jobs, and getting rich. So where are all the yachts?

They don’t do the work.

And that’s why it’s sometimes offensive when I tell people, “You’re not putting in the work.” Because what you think the work is, many times, is insignificant. It’s not enough.

You have to put real time into it. And what you’re doing with that time is spending it in old price moves, using the logic and experience I’ve shared.

I told you I wanted the Dollar to go higher. Go back and listen to the commentaries. It’s there. It’s not ambiguous.

But because I state my opinion, and because there are a lot more of you publicly following me now, some of you are waiting with bated breath just to hear me say something. Then you take that and go out there and bet real money with it.

That’s why I constantly remind you: don’t bet the farm on it. There is risk.

If you don’t know what you’re doing, don’t be deceived into thinking you know what you’re doing simply because you watched a few of my videos.

It takes time to learn this, and you have to give yourself the time and patience needed to do it.

So we did, in fact, see the inversion fair value gap form here, and then we rotated up into the daily bearish order block.

This right here will be much easier to see and understand when we go into the daily chart.

Okay, so here is that daily candle. It looks just like that weekly candle, where we had this big run off here.

Now listen, folks: it does not need to be an engulfing candle. That is not what makes it an order block. So many people out there are typing that stuff up in pseudo-mentorships, and that is not my order block.

The idea is that the market rotates after hitting a key level, and you take it right to the last candle. That candle does not need to engulf anything.

The narrative is what matters. That is the thing missing from these 20-year-olds running around thinking they know how to teach this stuff.

So here’s the bearish order block opening price.

Now, why am I using the opening price versus the low?

Whenever there is a short little stubby tail or wick, generally — not always, but as a rule of thumb — I’m going to go right to the opening price.

The reason is this: with that small little tail on the candle, I know there is probably something on a lower timeframe that I’ll be able to use, even if price wants to go outside the realm of the opening price. So I may be able to look at something in that range that may or may not be supportive for a trade.

But for anchoring on a higher-timeframe basis, I’m anchoring it to the opening price.

Now, let’s assume for a moment that it had a longer tail. If this little segment down here on the candle was longer, and the opening price was somewhere up here, then I would use the low. And I would also use the consequent encroachment of that tail, or the halfway point of that little wick.

So those are the two key levels I’ll use for a candlestick that has a longer wick.

There’s a little more insight about order blocks. I’m telling you why I’m using the opening price versus the low or high. Add that to your notes and go through your studies. You’ll see that it’s a very good general rule to help you.

There will be instances where it does other things, okay? I’m not done teaching. But grow with what I’m telling you and what I’m sharing now. I’m giving it to you.

So we have the weekly order block. Price traded up into it and through it, hit the daily bearish order block, and traded up into that.

Now look at the bodies of these candles.

Weekly order block, daily order block — look at all that encapsulation in price action, the volume of all that trading. The majority of it is shown in the candlestick bodies.

Yes, price expanded, as we would like to see anyway. We were expecting the Dollar to go higher. It went above these levels, and we don’t expect it to stop dead in its tracks when we’re bullish. We really want to see it go to it and through it, because the narrative and expectation we had was that the Dollar should go higher.

Notice that all of the sustained price runs were on the buy-side delivery. That means the candlesticks going up were occurring with frequency. These are daily candlesticks, by the way.

Look at it: price opened here, traded away from it. Then it opened, rallied up here, and traded down. We expanded through and fell short of the mean threshold of the weekly order block.

It’s important that you annotate your levels.

We’re seeing price dig into these levels, expanding up, reaching, reaching, reaching. And then finally, once it pierced the mean threshold — and we color-blocked that at 104.540 — we had a rotation lower.

Where did it go back to?

That weekly inversion gap, the fair value gap that we anticipated seeing act as support.

Folks, that’s narrative. That’s not picking both sides of the marketplace.

If I’m telling you a specific PD array, and a level on that PD array — if it’s a range, like a fair value gap — then I’m referring to the high, the consequent encroachment, which is the midpoint, and then the low of it.

My students are always making fresh bread. They do it on their own. They don’t ever run out of yeast.

Just like this month, while I’m talking to you, I don’t ever run out of yeast. You’re never going to run out of opportunities. It’s never going to happen. There’s no reason for you to rush it, because once you get it, nobody can take it from you.

Nobody can say you can’t do it because they don’t like you, or they don’t like your personality, or whatever. Once you have the understanding, you can find these setups. You can go into any market, any timeframe, and murder it — literally murder it.

But you are too quick to assume that everything you already know will complement what I’m teaching you.

No, no, no.

What I’m teaching you will make the things you tried to be profitable with actually become profitable, if you include what I’m teaching about how to read price and how to identify the draw on liquidity.

That’s the first lesson.

The first lesson I start driving home in a student’s mind is: where is price trying to gravitate to? Where is it trying to get to?

Initially, I started with the weekly order block, then the daily order block, and the mean threshold of that weekly order block.

Why does your chart show this? Because you’re looking at a live chart right now. I mean, in the livestream, did it pan out like I showed? Absolutely, it did.

It delivered in the same direction I was looking for, and into the specific levels I was looking for. I gave you the logic. I talked about it beforehand. It’s here now.

So this wasn’t done with a one-minute chart. It wasn’t traded or worked with on a seconds chart, or a sub-one-minute timeframe. It wasn’t even an hourly chart.

I used weekly charts.

It works, folks. You can make this work for you, wherever you are in your life.

Your relationship may create constraints that prevent you from trading intraday charts. I get it. But don’t think this is a one-trick pony that only works on a one-minute chart.

There are a lot of one-minute setups that allow me to teach you that there is no short supply of setups. You will always find setups. But there are also going to be times when the market is messy.

Look at all this mess in here. I don’t like these types of periods. I don’t like that. And that’s why you saw me take time away and go on road trips.

Now, looking at the price action in hindsight, it probably makes perfect sense to you why I was doing what I was doing. But at the time, some of you were thinking, “Oh, they changed the algorithm. ICT is on the run.”

No. I’m relaxing, because I know that all I need to see is a shift in market structure.

What was that?

See this high? Price breaks it. What does it leave? A fair value gap.

Now we’re going to talk about gaps today.

The majority of you here are constantly asking this question:

“Can you talk about breakaway gaps?” “Can you talk about when fair value gaps should not fill?”

I’m going to teach you about that today.

So if we’re looking for a draw on liquidity, and we are in this vicinity right here, the first thing we want to draw our attention to is this imbalance here — that shaded area.

Now, I’m showing it to you on a daily chart, and that is the timeframe being shown right now for the Dollar Index.

I promise you, all of this works in ES. It works in Forex, because I’m starting this whole presentation with Forex in the beginning. Then I’ll end today’s discussion on the index futures.

But everything I’m teaching you here is applicable to Forex, futures, commodities, gold, and bonds.

We’re going to talk about bonds today too.

All of this higher timeframe analysis gives you, in my opinion — and you’re welcome to disagree, but you’re never going to convince me otherwise — the framework where the majority of your time should be spent.

It’s so easy to get lost on the lower timeframes. It’s like a mirage. You’re thirsty. You want that new drink of success. And just like in the desert, sometimes you think you see something out there that looks like water. But when you get up to it, it’s just more sand.

You don’t want to fill your well with sand by chasing setups that aren’t really there.

Higher timeframes remove most of that. Not all of it, but most of it.

The reason I’m drawing your attention to that is this. Let me take this away for a second.

Can you see how this candle dropped and stopped? Then the next candle opened, traded all the way down here, came back, and stopped. Then the next week opened, traded up a little bit, but did not come all the way back to that candle’s low. See that?

So there is this thin gap separation between those two key levels. Then we expand lower, open, and trade up, leaving this little portion of price action between this candle’s low and this candle’s high still open.

So it only delivered to the downside. What is it inefficient in? Buy-side delivery. So it is a SIBI: sell-side imbalance / buy-side inefficiency.

That little distinct gap stands out.

If we were standing over here on the right side of all this price action, look how fortified all these back-and-forth movements are. All these candles are moving back and forth inside this range. See that? Back and forth, back and forth, back and forth.

That is not inefficient at all. That is a lot of back-and-forth delivery.

Think of the analogy I often use: paint being applied to a wall with a roller. In this area, paint has been distributed back and forth. In this analogy, paint is price. So this range has offered liquidity up and down inside that shaded area. There is no inefficiency whatsoever on this timeframe.

So where does the inefficiency exist?

Right there.

It only has one roll down, and nothing back through it until we get over here. So that fair value gap there was the draw. And the context was: I want to see price trade up through it, then come down and act as support. That would make it an inversion fair value gap.

If I didn’t hold that expectation, then it would be treated as a standard fair value gap in a premium relative to this high and this low here.

The way you know that is by anchoring the Fibonacci from the high down to the low. Here is equilibrium. If the fair value gap exists at equilibrium or above, it is in premium. If it is at equilibrium or below, it is in discount.

But I did not say we were looking for lower prices when price got to this fair value gap. I said we wanted to see price go to it, trade through it, and then come back down and treat it as support.

That is an inversion fair value gap.

Don’t take my word for it here. Go back and look at the other reviews I’ve shown.

Don’t think that just because we see these back-and-forth moves on a daily chart, it now makes this a balanced price range. It doesn’t.

Why? Because on the weekly timeframe, it is still inefficient. The higher timeframe has to have “bodies hit the floor,” meaning it has to cover that gap.

Even though these individual daily candles have worked inside that range, what you’re really seeing on the daily chart is the formation of that weekly fair value gap, with all of this price action inside it.

This is something you have to study on your own: working from the higher timeframe down to the lower timeframe.

The higher timeframes are parent. The lower timeframes are subordinate.

Lower timeframes are only going to behave in a manner that allows certain price delivery within the context and construct of a higher-timeframe imbalance or liquidity pool.

That’s the liquidity continuum.

What are you looking for?

The market has to go up into a premium for only two reasons: it is either going up to take buy stops, or it is going up to reach some inefficiency, some gap.

The market only goes down for two reasons: it is either going down to reach an inefficiency, a fair value gap below current market price, or it is going down for sell stops.

These markets are absolutely controlled. Period.

If we can see the likelihood of price action wanting to at least get up to this level here, why did I use that fair value gap? Remember? Why did I say this was something important? Why did I pick that weekly level?

There you go.

And why did I want to see it trade through it and become support? Because it is at a level that, on a simple run of the daily chart, using this dealing range from this low to that high — remember, I had the Fibonacci anchored to it — shows us something important.

Folks, this is real learning. This is the point.

The point is: you want to know what you’re doing. If you want to go out there and gamble your money, go watch somebody else. You’re welcome to do that. But if you want to learn, and you want to learn correctly, you’re in the right place.

That Fibonacci 50 level is halfway, or equilibrium, relative to this high and this low.

So if I’m waiting to see price try to gravitate to this level, I want to see whether it performs what I would rather see happen. I don’t want to see it go up there and then sharply break lower. Because if it does that, then I have to drop down to a lower timeframe and look for a fair value gap, or something else, in a short-term premium to sell short from. Then price would likely run into these relatively equal lows.

But my experience — 30 years — told me that with all the factors going on right now in the world, geopolitically, all the turmoil, everything going on in the economy, all of that creates uncertainty.

And because of that, yes, I want to see my PD array become a draw on liquidity. I want to see price draw up to that weekly fair value gap. But I already announced to you that I wanted to see it do something other than simply trade up into it and treat it as an area to sell short from.

I wanted to see it trade through it.

Does it do so? Yes. Look, we closed above it.

I taught this in real time during livestreams, showing you how to discard or disqualify a fair value gap so it doesn’t look like cherry-picking when I show examples.

I’m not pulling things out of thin air. I’m pulling them from 30 years of experience. I authored these things, so I’m sharing that language with you so you can learn how to do it.

So this fair value gap was the initial draw on liquidity when we shifted above this high here.

That candle right there, the one that runs above that short-term high, is a shift in market structure. Now the market is in a buy program.

A buy program is when you start looking for premium arrays.

Where do you look for those premium arrays?

Well, what is the dealing range? It is this high to that low. We are only interested in premium, so we don’t look at this short-term high as a turtle soup run above it, thinking, “Dollar, dollar,” and then shorting. We don’t look at this high here as a run above it, turtle soup, and then short lower.

No.

We’re looking for the first PD array at equilibrium or higher. We started with the higher timeframe. You want to do top-down analysis because large institutions and big funds are going to be using higher-timeframe charts.

So we’re going to cannibalize their long-term models. Their long-term model through here was bearish. So we’re looking inside the scope of this high to that low right there. The midpoint is here. That shaded area in orange is the weekly inversion fair value gap.

That is the first level of interest for me.

So this specific weekly point of interest — I gave you the context for what I wanted to see with it. If it wants to go higher, great. But I need to see something specific. I want to see price trade to it and through it.

We’ve seen it close right there. If a market closes above a fair value gap that you think should be bearish, that is not a good shorting opportunity. Many times, it is communicating to you that it will become an inversion fair value gap.

You want to be trading with precision. You want to be able to read the charts without me or anyone else helping you. To be independently wealthy, all of these things require a lot of understanding and logic so you can trust it.

It’s not changing and morphing all the time. The rules aren’t changing. The goalposts are not being moved. You know that this logic is sound because you’ve seen it many times before.

That way, when you go forward and you’re forward-testing, doing a compounding challenge, or trading your own account, you’ll trust it. You won’t be nervous.

It’s the same kind of thing as going to work. You know the different routes you can take to get there. Is the map changing? Sometimes there’s a detour. Sometimes there’s construction.

Well, guess what? Sometimes the market will do a little hiccup, and maybe you didn’t see a specific timeframe do something, and it might stop you out. Okay, recalibrate — like a GPS. What does it do? It reroutes you.

As long as the weekly order block objective was the draw on liquidity, this was the multiplier: the inversion fair value gap.

So I wanted to see: does price get to it and through it? Yes. Does it treat it as support on the lower timeframes? It does. Then it trades up to that weekly order block and daily order block.

And the last level you heard about was this: we want to see if it wants to get up to 104.540, which is the weekly bearish order block mean threshold.

Now, that’s a lot of stuff. There’s no way I could say that in less time and still teach you what I just talked about — what was going through my mind, why I talked about that level right there.

That is the absolute shortest way around getting from point A to point B.

That was the logic I used.

Think about how you could have said it with fewer words and still made it make sense.

Stop expecting something to be condensed when this already is condensed.

It is specific so you can understand the logic behind it.

So now let’s go into grading a price swing.

We have these levels here. The first one I drew your attention to was this one.

Now, I could have very easily laid all of these levels out in advance and said, “Watch all three of these get hit.” But you’re learning, and your understanding is a graduated experience.

Charter members could go right into this and see it right away. People who have been with me for a very, very long time could see it. But if you’re new or relatively new, and I lay this level here and say, “I like this level,” you might foolishly go out there and try to trade with your own money, risk your funded account, or risk your combine challenge just because ICT said it’s going to go up here.

Between this point here and this point down here, there is a lot of room for error. If you don’t have a lot of experience, if you don’t know what you’re doing, or if you’re impulsive and chase price, even with a stop loss, you’ll get caught up in these retracements that you didn’t expect or anticipate.

Then you’ll walk away thinking this stuff doesn’t work.

And yet, here we are: price goes right to the levels I talked about.

So between these two price points, with this shift in market structure here, price runs up into that weekly bearish order block mean threshold.

Again, this level here — right there — let me take the Fibonacci off because it adds more lines. I want to show you that this level here is not anything important within this fractal itself. It comes from the weekly chart.

It is this one here: the mean threshold. This is the halfway point of this candle. And you get that by taking the Fibonacci, placing it from the low to the high — bam, right there: 104.540.

That’s why that level is there. It is half of that candle.

Now let’s drop back down into the daily chart.

So we had a market structure shift here, and right away we have this fair value gap.

Now watch, folks: this is not quarters theory.

This is what grading a price swing allows you to do.

You have to know: where is the draw on liquidity? Where is the terminus — the end of the line? Where do you think price is going to go?

That doesn’t mean that is where it ultimately stops and reverses. It means: where do you see your setup forming? Where is the framework? Where is the dealing range you’re going to work within?

That dealing range is always in the past: high to low.

We frame the equilibrium price point here, and we’re aiming for a premium. Why do we want to see that? Because we want to see price trade into this fair value gap and above it, which would nullify it. It would remove any need to anticipate lower prices on the Dollar.

It is signaling to you algorithmically that it is not going to go lower. In fact, it wants to go higher.

So if we see price do that — and it does, closing here — that really increases the opportunity for this fair value gap to become an inversion fair value gap. That means it is going to act like resistance broken, then turned support, to use retail-minded logic.

But this would never be construed that way from a classical perspective because it doesn’t fit the type of thing you would expect with retail support and resistance. Nor does it meet the criteria for supply and demand.

Before you go out there and wreck yourself in live trading or whatever, it’s important to know these types of rules.

You need to be slow in making money and fast in preserving or keeping it. Those should be the two modes of thought conducting your daily routine.

Move very, very slowly when you’re trying to make money, because there are lots of opportunities to do that. Every single day, there are opportunities. Every single week, every single day, every single session, there is something you can capitalize on.

In fact, in specific hours of the day, you can trade one-hour candles and treat them just like this whole idea I’m showing here on the basis of that weekly candlestick. All of this is applicable inside a 60-minute candle. It all exists there. It is like a tiny little universe inside that one timeframe.

You can break these things down smaller and smaller and smaller. But you don’t have the experience yet, and you have to give yourself the time to acquire that experience.

Once you have it, then it gives you confidence. But you have to be very, very careful that once you gain confidence and know what you’re doing, it doesn’t evolve into egomaniacal potential whore behavior.

This price range — this shift in market structure here on this candle — at that moment, we have entered a buy program.

So we have to go back into this range and anchor it to where we anticipate price is going. That draw on liquidity, the initial one, was here. This one, I don’t believe I mentioned it — I’m going to say I didn’t — but you can clearly see it is anchored on the daily chart.

But I did tell you this one here: this is where we want to see whether price wants to get up into that level.

So through all of this run here, we could be sitting still, anticipating — not reacting — anticipating a run above that short-term high here.

Why are we using this high? Why didn’t we use this high? Why not that high? Why not that high?

Low, lower low, lower low.

We consolidated all through April and May. I want the market to show me something. I want to see it move out of this range.

Let’s bring in the bond market for a moment.

During this consolidation here, I wanted to see price perform in a specific way. I wanted it to show me something. All through here, I wanted to see the Dollar go lower. I expected it to take out that low.

But because it was showing an unwillingness to perform lower, or any real willingness to go lower, how did I get to the point where I didn’t trust it?

This goes back to what I’ve talked about before: when there is something in price action that says, “Don’t do anything,” we don’t take a trade.

Here we have this low right there. See that little pierce below it? That tiny little short move below that low right there?

Price could have very easily traded back up to this level and then resumed lower. If it had done that, then the Dollar really would have been bearish longer-term.

But because it consolidated, I wanted to see whether there was confirmation through the bond market.

All of this consolidation is going to be shown in the bond market when I go over to the chart for ZBM2023, which is the symbol used for bonds. That is not the contract month you should be trading or tracking now, because volume has rotated into the September contract, but I’ll show you what I mean in a second.

To understand how the Dollar is likely to perform, I use the bond market.

Right away, some of you just want to have one market. You want it to be real simple, short, and sweet.

This is where most of you drop off, because it feels too complicated.

If that’s how you feel, folks, don’t watch my videos. I promise you, you’ll either go do something else and be successful at what you’re doing, or you’ll hurt yourself, come back here, and learn how the markets really work.

This consolidation in here — I wanted to see whether it would perform as a mirror image of what the bond market was doing.

The bond market, ZBM2023, was in a range, and I wanted to see it go down into a discount. If the bond market goes down into a discount, that would result in the Dollar Index moving into a premium.

Here is that range.

We were inside this range, and until this range was given up — until price left this range — the Dollar wasn’t doing anything. Equities were going to range down. I don’t care about price action when it’s inside here like this.

Can I trade that? Absolutely.

Can you trade it? Absolutely.

But to meet the expectations of the community, which has been craving higher-timeframe charts and swing-trading ideas — “Can you do something off the one-minute charts?” — yes, we can.

I don’t know why people keep asking why I’m always talking about one-minute charts. The reason is simple: they give me lots of teaching examples where I can call something before it happens, and then it pans out precisely.

That is where you should study. Whether you trade those lower timeframes or not, you should study them, because you gain so much experience from using lower-timeframe charts.

Does the daily chart and the one-minute chart print different market prices while it’s trading live?

No. It’s the same price.

So don’t listen to these goobers who tell you, “There’s noise on the lower timeframes.” You’re looking at the same price. Price is doing the same thing across all timeframes.

But the narrative for what price is likely to do next is going to be derived from the timeframe you’re using.

In layman’s terms, I’ll say it like this: price is going to behave in a manner that the higher timeframe outlines.

I needed this range here to be left behind. I didn’t care whether it left higher or lower, because at the time I didn’t know which one to trust.

Remember, on the daily Dollar Index, I wanted to see that low taken out. That’s what I wanted. But I had to submit myself to what price was showing me. It was not willing to go there yet.

So I had to take a step back and wait.

“Wait a minute, man. You’re supposed to have 30 years of experience, right?”

That 30 years of experience gave me the insight to say: sit still, bro. Sit down. This dance isn’t for you. Sit down and wait. Let the elephant enter the swimming pool.

Think about a children’s swimming pool — a tiny little pool. If you fill that pool with water and an elephant comes over and sits down in it, what happens to the water? It gets displaced. It leaves the pool because it is replaced by the mass of that elephant.

Smart Money is like that.

In this range here, when we saw price close outside of that range, right there, that set the stage for an upside move in the Dollar.

But I had to wait. I had to wait for something.

This is Wednesday, May 17.

Let’s go back over to the Dollar Index. I know I should have charged you money for this.

Alright, so here is May 17. That is the day the Dollar Index is trading inside its fair value gap, right there, after the shift in market structure.

So this high broke to the upside.

How can we qualify that as a shift in market structure for the Dollar to keep going higher?

I just taught you.

Are we seeing a mirror image that would constitute an expectation for the bond market to enter a sell program? That would mean bonds going down and the Dollar going up.

We’re in a consolidation. We’re in uncertainty here, so I have to wait.

When this happened, all focus goes to this fair value gap.

But now, I don’t want to see price go up here to go short.

Why?

Because of all this stuff that’s happening in the outside world.

Just think about the geopolitical backdrop: war, uncertainty, the debt ceiling, the potential default — all of that was a catalyst from a macro perspective.

That is why I didn’t believe that fair value gap would be a short.

Now, if price had gone up here and started to sell off, like I said, I would have used a lower timeframe — a four-hour or one-hour chart — to look for a short in a premium, get in sync with that, and then run for these lows here.

But the context I went into and shared with you was this: I wanted to see that weekly fair value gap trade above it, then come down and treat it as support.

Look — this is the daily chart for the Dollar Index. Look where the bodies are on the lower end of that gap. Look where the bodies were.

Was that not respecting that weekly gap?

This is algorithmic. It is referring back to a level I drew your attention to beforehand.

Now, how can I do that? I’m not a time traveler. There’s logic there. That means there is something going on in price delivery that is well beyond buying and selling pressure.

It’s rigged.

And there shouldn’t be any reason for you to be upset about that. It shouldn’t scare you. You should be thankful. You should be thankful that they rig these markets, because that presents opportunity. As long as you are in sync with what price is likely to do next, you can use that.

There is a statistic that 90% of new traders will lose their money in the first 90 days or less. But on the other side of those trades, there are people with lots of experience who know what they’re doing. They are the winners on the other side of the losing crowd’s trades.

There is a buyer and seller for every trade. It is a net-zero-sum game, but the game is rigged.

There’s no reason for you to be mad about it and start punching the air, saying, “That broker did this to me.” The broker didn’t do anything to you — unless you’re trading Forex, because they have individual liquidity pools.

When you’re trading futures, everyone is getting the same price. That’s the difference. It’s a gentleman’s market.

If you want to be savage, you trade Forex when it’s wild and moving around.

That’s why I left futures in the 2000s. Forex had really big, wide price ranges — 300-pip range days on the regular. Well, that dried up, and the market started getting really consolidated. So I went back to what I started with, which is index futures.

I don’t care if the S&P trades with a five-handle day — and I said that correctly. I don’t care if the S&P trades a five-handle day, folks. That’s exactly what we were looking at in the 90s. In the early 80s and around that period, those kinds of days were normal. You didn’t have this wild, crazy volatility.

It’s great, don’t get me wrong. But if things slow down to a snail’s crawl, that’s okay. You can still do all these things in very small ranges. It will look just like the charts look now, but the amount of movement will be much more condensed.

A lot of you aren’t even prepared to trade in a market like that because you’re so used to, and baptized in, all this high volatility.

When Forex shrank up and all the pairs had smaller ranges, social media was full of constant bellyaching. “When are the big days coming? When is it going to move?”

Folks, it is moving.

If you can get 10 handles or 10 pips from a price swing, that’s good. What’s wrong with that? What’s wrong with getting five pips? Who cares if the range is really small?

But you have to calibrate your expectations to the market profile right now.

That means if we’re in consolidation, what do I need to see? I need to see bonds leave their range, because bonds will qualify whatever the Dollar is going to do. I’m going to look for a mirror image of it.

Bonds broke lower. That means this is qualified as a break in market structure, and it shifted higher.

Fair value gap right there.

Let’s play devil’s advocate for a moment, because this is a daily chart — and this is the Dollar Index, by the way. So if you’re a Forex trader, this is the goldmine you want to be in. This is where you want to be mining these things from.

“ICT, the things you think are boring, other people say are bullshit.”

This is the stuff that makes you wealthy. This is the stuff that creates consistency, continuity, and trading longevity. If you want to be around for longer than a couple of months, hopefully, it is this insight that gets you there.

Let’s say you saw this happen after the fact. Maybe you were working, sleeping, running a business, or just couldn’t be in front of the charts. Then afterward, you saw the daily candle close like this.

The very next day, folks — the very next day — what should the bias be for your analysis?

Bullish.

Reaching for what?

That fair value gap.

So from May 17 until we reached the first objective, which is that weekly order block here on this day — from May 17 to May 24 — that run right there is a sell program in EUR/USD. That means selling short.

That means every day you’re going in with a bias to avoid longs in EUR/USD. It’s also a bias to be short GBP/USD. For AUD/USD and NZD/USD, because the Dollar is going higher, that also implies shorts there as well.

So it would be:

short EUR/USD, short GBP/USD, short AUD/USD, short NZD/USD,

because the Dollar is going higher.

It would be long USD/JPY and long USD/CHF, because we’re looking at the Dollar Index.

So there’s a fair value gap. After that forms, from the next day until price reaches your premium array, where is the draw on liquidity?

The weekly order block.

What’s the multiplier? If you’re a swing trader, price needs to find support here. That sets the stage for your swing trade.

But as a day trader, you don’t need that. You’re in there before that, which is why I don’t do swing trades. I’m using the information I’m showing you here from this point, the very next day.

The idea of expecting higher prices on the Dollar Index every day until it reaches this first objective sets the tone for bias. That gives you your bias, because that bias is derived from the news narrative shown through higher-timeframe weekly and daily charts, intermarket relationships, the bond market versus the Dollar Index, and market profiling.

So we are in a consolidation. We have a shift in market structure. How do we qualify that?

The range I told you bonds were in.

I said, “Why is the market consolidating?” Because bonds are in a range. Until bonds leave that range, all markets will be in consolidation, because interest rates make the world go round.

After that narrative is set, then we can have a bias.

So the bias is bullish here for the Dollar. Bullish here. It’s even bullish on this day, but not in the sense that we would expect it to open and immediately go up. We are inside that fair value gap range now.

So what would we expect? Consolidation or retracement.

Does it support the low end of that range? Look at the bodies showing you that. That is an algorithmic signature.

As a swing trader, you could use this day here as an entry, then pyramid in here for a run into that level, using the implied dealing range.

An implied dealing range is not a dealing range like this, where we have a real high and a real low. Those are actual levels. Here, we are looking for a price run from this low up to this weekly order block. Until price does that, it is an implied dealing range.

We don’t know if it’s actually going there. Anything can happen. A bomb could drop somewhere. Some kind of hack could hit the markets — and I expect that’s going to be used in the future, by the way.

But this run here is an implied dealing range. It has not fully manifested yet, but we are anticipating that this is where the draw on liquidity is. The initial one is here.

So now let’s add our Fibonacci to this.

Look, I know this stuff is amazing, and I can talk about it all day long.

Right there — from this low to that high. What is the weekly order block? What I’m showing you there is the range. It’s an implied dealing range.

If we have that, look at the levels I have here: 75, 50, which is equilibrium, and 25. Then here is the high — the high of the run, which is terminus, the end of the run, if you’re going to use this as your dealing range.

Not that it’s the only means of defining it, but this is your implied dealing range. That is where you think price is going to go.

So before the candlesticks even form — before they even form, folks — you could have this on your chart like this.

Say it’s meandering around like this in consolidation, and you need to start doing your analysis and think: okay, what happens if we break lower in the bond market?

That would give rise to the Dollar Index.

That sets the stage for this idea: if we’re going to go higher, I’d like to see price remove the bearish stance I held on the Dollar during this time period.

If it goes to the weekly SIBI, trades above it, and then treats it as support — an IFVG — then I’m not bearish on the Dollar.

Because we have this range here, we can take the low up to that weekly order block. I’m teaching you how to grade a price swing. I’m teaching you how to anticipate where the next setups are going to form before they ever come into the chart.

I’m going to teach you where they will form before they form.

“Where do setups form?” “Show me how to buy and sell, Michael.” “Where are these PD arrays that work?” “How does it look on the chart before it gets there?” “What should I anticipate?” “How can I trust this?”

Okay, let’s do some time travel.

Low to high. That’s terminus. We have 25%, 50%, and 75% of the range.

We require bonds to do one or the other: go up or go down and leave that range I showed you on the daily chart. It broke lower.

We have a shift in market structure right there on the bond market. We qualified it by seeing bonds go lower — it left its range to the downside.

That is going to support upside momentum in the Dollar. Not that it is directly driving price, but it sets your mindset in motion: we’re going into a buy program for the Dollar.

So right away, we can anticipate that somewhere in this area, there is going to be some kind of accumulation. We consolidate here, and then we run.

What does that make this right here?

That’s a fair value gap, right? Yes, it’s a fair value gap.

More specifically, it’s a breakaway gap.

What is it breaking away from? It is breaking away from this consolidation. It has a shift in market structure. So this is your gap to trade. This is the gap you use to qualify it as a breakaway gap.

Then you can trust that price is likely going to draw here, which is why I communicated this to you. I said we wanted to see price trade to this level, but I was more interested in seeing it trade above it, then come back down and find support there — which would make it an inversion fair value gap.

If you want to learn how to read the markets and really know what to do, come back here.

Fifty percent — equilibrium. Look where the fair value gap forms: right at equilibrium.

What do you think is significant about that 50% level? And why didn’t that gap fully close?

It’s a measuring gap.

That fair value gap is a measuring gap. This candle’s low does not come back to that candle’s high. We’re seeing context and narrative that just isn’t in your books, baby.

That means we can anticipate this price run here to here being duplicated to the upside.

So let’s say we have this low. It is lower than that low and that low, and relatively equal to that one. We don’t need this low here. We want to see the energetic price run. That is this one here.

So where does that price run begin?

That low right there.

If we take that and measure it up to the high of that fair value gap — why that level? Because that is the highest range, so you want to use that as your base point — then extend it from there, placing it right on that same level.

So now we are seeing a range that is projected to go above this gap, which is why I was saying I wanted to see it go through it and then treat this gap as support.

This was the draw. Now, it does go through it. Here is the upper 25% of it. It comes back down — immediate rebalance.

Remember when I talked about immediate rebalance? It is that next day, or the very next day after that. Then you’ll see price do it. Right there it is.

Price goes into the weekly order block, trades up into the daily order block, and trades up into the weekly order block mean threshold. It trades all up into those levels.

With each one of these targets, you’re looking for price to continuously reach for them. You don’t want to think, “Okay, this is my first objective, and once it trades there, I’m going to try to find something else in another market.”

No. You want to stick with it.

Does it continue to keep digging into the next level? It does.

In the last review I did, I said, “Okay, this is the level we’re looking at next. We want to see if it wants to reach up.” And then it did.

Every time it was digging higher, if the Dollar was going to go higher, EUR/USD was going to fall. It was going to go lower.

And then it drops from there down to some random level? No.

It drops into the down-close candle inside the order block, the weekly fair value gap, which is now an inversion fair value gap. This is the treatment of it on the daily chart. It comes down and hits it.

Let’s go over to EUR/USD and finally get the hell off the Dollar Index. Let’s get to something that makes sense. We don’t trade the Dollar Index around here, right?

So here is EUR/USD, and this is the daily chart. This is the immediate rebalance right here on Euro. And this was the fair value gap I mentioned that we were drawing down into. From up here, we drew down into it, and then we rallied one more time into this up-close candle right here.

That is a bearish order block.

“Oh, here we go with the hindsight.”

Folks, listen. Your surgeon did surgery before he ever got his license. He was cutting on cadavers — dead bodies that had been donated to science for research. That is hindsight. He is studying something in a safe environment. He doesn’t want to do exploratory surgery on you while you’re alive and try new things. Those things have to be done clinically first, on cadavers.

You need to go through these exercises yourself. Look at price action and study it. Not just recently — go back through all this stuff here. That is what backtesting is.

Backtesting is not just going into Forex Tester and testing something. That is more like a mock-up forward test without live data. That stage can be included, yes. But when I say backtesting, I mean going through old moves, studying them, and breaking them down.

You are going into detail, looking at what price did and what it didn’t do. Where would you have been stopped out? Be honest about that. How much risk would have been incurred? Don’t use the best possible entry. Use the worst potential entry, then ask: does it still pan out?

So here is the fair value gap potential we were all gravitating toward.

Now let’s go back over the last few days here. Here is your order block on the daily chart.

Let’s drop into a 60-minute chart.

From this high down to that low here, do you see anything that stands out?

I’ll give you a minute while I get a drink.

But what did I just teach you about dealing ranges?

You break the dealing range down.

If we were seeing the Dollar trade down into that inversion fair value gap on the daily chart — and remember, that inversion fair value gap is based on the weekly chart — that is a discount for the Dollar. We could likely see it rally.

Dollar rallied. That means we’re likely to see EUR/USD sell off.

How can we anticipate that, and where would it form?

Here’s your high down to that low right there. Where’s equilibrium? Fifty percent — right here.

In close proximity, what do you see as a PD array that would be at that level or higher, meaning in premium?

Remember, if we want to be short, the highest-probability shorts occur in premium markets above equilibrium. In a continuation pattern, or a continuation premium for selling short in a bear market — if it has been in a bear market for a while — you can sell right at the 50 level.

But specifically, in a premium, we want to see it get into this range.

Here to here is premium.

Within that range between this low and that high, where is the first PD array that exists at a premium in the dealing range from this high down to that low?

When we retraced higher, price went into this area right here. It went into this fair value gap, which is a SIBI: sell-side imbalance / buy-side inefficiency.

So if this is what you saw, congratulations — you did it right.

Price trades up into it here. The Dollar goes higher because it is in its inversion fair value gap, and EUR/USD sells off.

This area right in here is also running what?

Buy stops.

Retail traders see this run here and all this consolidation, and they see that as a bull flag. They’re thinking something like this: EUR/USD has been going down for a long time; it must have made a low. Then they see this right here as a flag pattern. You see how it looks like a big flagpole, then consolidation? They think if it can break above this high here, it will duplicate that same run.

Once it breaks the high, they want to see it trade back up into here, or something to that effect. I’m drawing it very loosely because bull flags and bear flags are trash.

But the logic here is opposed to what a retail-minded trader would say, and it takes liquidity into account.

That means the market went lower, traded here, and started to move a little bit here. Nobody in their right mind — keyword — would have trailed their stop loss on shorts to that level right there.

But on this move lower, I promise you, especially if you trade Forex, because traders are ultra scared and don’t want to get stopped out or see their profits erode, they trail their stop losses too tightly. And you know who I’m talking about. You’re nodding your head.

They couldn’t stop talking about me.

There is liquidity above old highs and lows. That is one-on-one in terms of understanding where the market is going to reach for liquidity.

But if you can see that liquidity and pair it with a retail-minded idea that would be opposed to what I’m teaching you — where I’m teaching you how Smart Money sees price and engages it — then you’re learning what the algorithm does.

The algorithm will deliver price above this high to account for buy stops being brought to the marketplace. Those are market orders buying at the market, and Smart Money will offer shorts to the marketplace at that same time.

Where are we in price?

Inside this fair value gap.

Where would the opposing draw on price be once it went into it?

Right above this high here, where the buy stops are. So price trades there, which is the opposite of what we saw the Dollar doing at that moment.

Dollar Index — see right at 2:00 AM on Thursday, June 6th, the Dollar Index was making that low here in the fair value gap. See that?

So it’s a mirror image.

You’re qualifying setups not just on the basis of what you see on the chart you’re trading. You also have to use intermarket relationships that would show the opposite.

For instance, if we’re trying to go short on EUR/USD, we want to see something that would constitute a long setup in the Dollar.

If you can’t really see something in the Dollar that opposes your Cable trade — GBP/USD — or Fiber — EUR/USD — or whatever Forex pair you’re trying to trade, then you have to be careful. It needs to align with an opposing setup in the Dollar, especially if the pair has a currency other than the Dollar first in its name.

If we see this setup here, that is potentially long for the Dollar, because we are trading in that fair value gap. If we’re expecting price to go higher for the Dollar, then we would look for pairs that begin with USD in their name, like USD/JPY or USD/CHF. Those pairs would mirror what the Dollar Index is doing, which is going higher.

But because the Dollar is likely to go higher here, and EUR/USD is inversely related to it, EUR/USD is likely to go lower.

But it doesn’t randomly go lower from some mysterious level. It goes lower from what I’m teaching you here.

This range — the algorithm refers back to it. So it only needs to go up to equilibrium, or slightly higher. We measure that with the 50 level.

That is the only thing I’m using Fibonacci for. I’m not using Fibonacci for entries. I’m using Fibonacci to define premium and discount within a specific range, so I know where a setup should likely form.

In that range — what range specifically?

It’s this range here, somewhere in this portion of the price leg lower. I’m going to look for a premium array.

Well, which ones exist?

We have the fair value gap here. That is your first premium array, using the Month 4 lessons on the PD Array Matrix.

So what’s the next one?

Are all these down-close candles with back-and-forth price action? All of this right here is balanced. We’ve had lots of up-and-down movement in here. Then we go back to the high.

So we had an order block, which is the last up-close candle with the highest close. The opening price would be delineated there.

Why would price need to go there?

It doesn’t.

Because it is shielded by all this up-and-down movement. There is no inefficiency there. None. Zero.

So which PD array do you use?

That one.

Which one did the market use?

That one.

What time of day did it occur?

London Kill Zone, 2:00 in the morning. That’s what I teach you.

What’s the opposing draw on liquidity?

The only difference, though, is that this chart is only showing you ranges being measured — which is what the Fibonacci is — and then looking for inefficiencies or liquidity.

I draw that out on the chart so you can see it. It gives you visual eye candy, so your attention is focused on a specific area on the chart. Then I go in and talk about what that is, so you can see it and understand how to use it going forward.

So at this moment right here, if the market does, in fact, go higher to take the buy stops here and just trade into a short-term premium — which is relative to this selling range high and this low — hopefully, you can see this run from this high down to that low prior to that retracement.

This is a significant price swing.

I’m not looking at every little thing, like this tiny move from here to here. I’m not concerned about that. I want to focus on intermediate-term price runs, regardless of whatever timeframe I’m looking at.

My eye goes to specifics in price action. I’m not taking every little micro price swing. I may look from here to here, maybe from here to here, but from here to here — absolutely.

Whenever I see these ranges, whether on the weekend or in the morning, I’ll go through my charts before the kill zones or before the sessions begin. I’m doing this with all the salient ranges: daily, four-hour, hourly, and 15-minute.

So I’m looking at all the potential dealing ranges that the market may refer back to. Then I weigh out whether or not — like I just did with this price run here from high to low — how many PD arrays are there?

Because I’ve taught you propulsion blocks, fair value gaps, Institutional Order Flow Entry Drills, bearish order blocks, vacuum blocks, and all those things, you may be thinking, “Okay, which one do I use?”

Here’s a perfect example.

What occurred in that price run?

Just the fair value gap.

That’s all.

And price only needs to go up to this level here. At the same time, the Dollar went down to its fair value gap. The Dollar went down into a discount, which is bullish. EUR/USD went up into a premium, which is bearish.

Time of day: 2:00.

What’s the candle here? What’s the time?

It’s always local New York time. Your TradingView chart should always be set to New York time. That is the time the algorithm runs on. I don’t care what anybody else says. This is the way it’s coded.

So it reports for duty at 2:00 in the morning. After hitting this, price is allowed to run higher, higher, higher, higher — and then at 2:00, off to the races. Boom.

What is it going to reach for?

How do I target? Where does it go next?

Well, we have buy-side here, and we have an inefficiency here. It’s in a premium, above 50%. And the Dollar is looking to go higher. It’s in a short-term discount, inside a fair value gap.

Nothing says the Dollar has topped. I don’t try to pick tops. I’m trading in the meat of the move — the middle.

You don’t need precision highs and precision lows. You don’t need that. In fact, you should try to avoid that when using higher-timeframe charts.

Try to avoid picking tops and bottoms on higher-timeframe charts. You absolutely can pick tops and bottoms on lower-timeframe charts, because they are going to behave subordinate to the higher timeframe.

What I mean by that is this: if we’re bullish on the weekly and daily charts for the Dollar, it’s very easy to nail down short-term lows to the pip at key times or kill zones on the Dollar Index intraday.

It’s just using these types of tools here.

But if you’re going short here, and you’re looking for the opposing draw on liquidity, that would be this low right there.

What’s the reason behind that? What would be important at that low? And why would price want to revisit that low?

Because it was a sharp rally here. That induces traders to go long.

The pattern they formed here is a pseudo bull flag. I teach that in the core content. Where do fake bull flags occur? In situations like this.

What I teach in the core content is that price only goes up enough to validate the buy-side breakout on the bull flag. But in reality, it only goes up to where I teach you the algorithm sees this area right there.

It runs above that short-term high, and because it took buy stops into the marketplace, Smart Money goes short here.

So they are selling short into the buy stops.

Two things are being accomplished here.

Premium: price trades up into it and takes the buy stops, or buy-side liquidity, right there at this high.

So your chart would look like this for annotation purposes, and for your journal entry.

If Smart Money is selling to those buyers, what are they trying to get out at?

Discount.

Your eye goes right to where retail traders would be protecting their long positions. Their stops would be resting below that low — sell-side liquidity.

So the market drops precipitously and goes right to where the sell-side liquidity is. See that?

Now, what you want to study is this: because we have that old gap here — that daily gap in orange — and we are inside that range here, we also have a gap outside of it. See that here? We have that right there.

And we have this up-close candle right there. So this is a bearish order block. It is also right in the middle of that shaded area, which is the daily fair value gap. So this is essentially consequent encroachment right there.

So in my mind, if we want to take out this low here, where would another level of sell-side reside?

Here’s your order block.

And I would want to see it stay below this candle — more specifically, using that level here.

But if it trades above this candle here, I would be sitting still on Euro. I’m not saying it’s a short. But for me, if it wants to go lower, it would need this candlestick to keep it at bay and prevent it from trading back to the high of the fair value gap on the daily chart.

It doesn’t need to do that. Because if it does, it means something else altogether, and it’s not a trading environment for me if I’m looking at it that way.

It has already fulfilled a role here: it took buy stops, then sell stops. So in my mind, it can consolidate.

But if it wants to go lower, it would need to stay in the lower half of this shaded area right in here.

Let me just drop into Cable real quick. I haven’t looked at her for a while.

Okay. Yeah, I would have preferred Euro over Cable. Cable doesn’t have that much of a clean run in here. It’s too muddy.

By muddy, I mean it has a small little gap here, another gap here, and I don’t like that. It’s not as clean and obvious.

Now, take a look at this chart in this area here. Look at this area here on Cable — GBP/USD, Pound versus U.S. Dollar.

Look at that and compare it to Euro. I’ll toggle back and forth for a second.

You see how obvious that is? That gap really stands out, and it’s a singular one. One gap.

Now look at the same area on Cable. Gap, gap.

Which one has cleaner price action?

Euro.

So if I were trading last night in the London session, which one would I have traded?

I would have traded Euro. I would not have taken any trade in Cable, even though Cable did in fact run lower. It didn’t go down to take out its sell-side because it only needed to go down into this imbalance here, and that’s where we saw it trade to.

So I wouldn’t touch Cable here. But EUR/USD last night was really nice.

Here is the business on the weekly chart for the E-mini S&P.

So for all you diehard Forex folks who don’t think you’re ever going to learn anything from me because I’m teaching Forex concepts through ES trading — understand that my concepts are not limited to Forex.

What I teach is price delivery.

Smart Money Concepts, SMC — that’s my work. These are my creations. This is my stuff. If you want to learn how to do this, I’m showing you that it does not have barriers by asset class. It is not limited.

Because my focus has primarily been on index futures, the teachings are obviously being seen through this medium or asset. That doesn’t mean it can’t work in Forex, or that it stopped working in Forex. It simply means my attention is in this market here.

Alright, now think about what we were talking about in relation to the bond market.

We’re going to take a little step back.

If the bond market was signaling that it wanted to go lower recently out of that range — and I’ll take you back to that chart in a second when we get to the daily chart of the E-mini S&P — then that bond market moving lower sets the tone for a market that will see movement.

Why?

Because we left a range in bonds. Therefore, all other asset classes are free to move. They are free to move and leave consolidation.

Once we are in that profile — and by profile, I mean we are in a trending environment, not consolidation — price swings can now evolve and allow daily charts to start booking sustained runs. Not just intraday volatility only, where that’s your only cuisine to eat from.

You get a more sustained price run when the bond markets are trending.

If the bond market is consolidating, that is a true testimony to anticipate consolidation in your specific market — whether that is bonds, index futures, or Forex. It is a precursor that tells you what type of environment we are in from a macro stance.

That does not mean you can’t make money within it or outside of it. It only means that, from a market profiling standpoint…

Everything you need is in the chart. A time-based chart will give you everything. You’ll be able to forecast where and when these setups are going to form.

I’m teaching you how to anticipate where and when these things will form. And by doing it over time, you desensitize yourself to the uncertainty that right now may feel like paralyzing fear.

You’re thinking, “I don’t know what I’m doing. This is so complicated.”

Go slow.

I’m not telling you that you should be trading with real money in your first year. So why are you insisting that you should?

Is it because everybody else out there is doing it?

You don’t know how long they’ve been studying. You don’t know how long they’ve worked very hard. Nobody just comes out here and has it instantly. There is always some measure of learning required, and some people are faster than others.

Give yourself permission to grow at your own pace. I’m not grading you on the speed at which you find continuity and consistency.

I’m looking at the weekly chart on ES, the E-mini S&P.

When we were down here in this gap, I said we were going to look for price to trade up into this volume imbalance, which is the shaded area in white.

The volume imbalance is between the opening price of this candle here and the closing price of that candle here. There has been no candlestick body inside that range ever since that formation — until this candle and this candle, which were last week and the week prior.

Notice that.

So this was the draw on liquidity.

And then I said, inside of that, the real sweet spot would be that little separation right there. That separation, marked with the blue lines — that, my friends, is a real liquidity void.

That is an absence of any trading. No booked price, no delivery, no trades were engaged, no stops were taken, and no entries were given.

There was no trading between those two price points.

So while this was enough for the draw — which is the volume imbalance, because we only had this little wick between this closing price and this opening price — my eyes go right here.

That same thing, this right here, looked like that here.

When we were down here, I said, “Watch this fair value gap and this order block opening price extended.”

Now, don’t take my word for it. I have it recorded. Go look at it on the YouTube channel. I do not delete tweets. I do not change anything on my videos. Once they’re up there, you can’t edit them. They’re there.

So we did, in fact, draw higher, jump to that, and you can see the other level I’m looking for. If we continue on the upside, it’s here.

Now, here is one of those things that will make a lot more sense for the diehard students who really want to know what makes price behave a specific way.

Bonds moved lower.

That means the consolidation was freed up, allowing the markets to behave in a trending manner, causing the Dollar to go higher.

Dollar going higher is what?

Risk-on or risk-off?

Risk-off.

That means foreign currencies go lower.

It also means that rallies in equities, while they can still manifest and materialize, are going to be held at bay. They won’t usually be explosive types of runs. They’re more likely to keep creeping higher with small retracements, then creep higher again.

That is profiling.

That is market profiling — understanding the behavior of how price will deliver.

Now, let me make a distinction and contrast it with something like this.

Let’s say, for instance, that we did not need to come back up to here. Let’s say this didn’t exist as a volume imbalance, and we didn’t have this gap here. Then the E-mini S&P, NASDAQ, and Dow could accelerate lower in shorts.

But because it is being manipulated heavily, the stock market should not be where it is, folks. I’m going to be honest with you: this thing should not be here.

But I have to follow the breadcrumbs that the algorithm is laying out. This is what the Smart Money entity — the people who are not making video courses, not on YouTube, not on Twitter, and not on TV as talking heads — is doing. They’re not out there telling you what to do with your money, because they’re actively fleecing large funds. They’re trading against them. They are their counterparty.

They are the people inside the measurement of the net trader position chart. When you see large traders trading, Smart Money is opposing them. They are providing the liquidity. That is Smart Money.

And they are constantly in a dance with large funds.

You learn to place your stop loss with the same logic that large funds do, and that’s why you fall victim to it.

So while Smart Money is not out there looking for your one micro lot in Forex, or your mini contract in the S&P, they don’t see you. They don’t see your one contract. They don’t see your micro contract or your tiny, insignificant position. They are not looking at you.

They are looking at the large pools of liquidity that large funds bring to the marketplace.

Think of it like a large fishing boat dragging a net. They’re out there trying to catch fish, but sometimes innocent dolphins and sea turtles get caught in that net too.

You’re that dolphin or sea turtle.

You are simply a casualty of an event that was going to happen whether your stop was there or not. They’re not out to get you. They’re out to get the large fish. And if you’re in the wake, or in close proximity to where they are, you get scooped up in that net too.

So it’s imperative that you understand how they go after that large liquidity.

You have to learn how to navigate markets because certain markets will sometimes behave explosively, and other times they will behave in a way you simply shouldn’t fight.

We’ve been calling ES higher. We’ve been looking for these very specific levels, and it delivered like gangbusters.

I told you that NQ, or NASDAQ, was the stronger one to the upside.

Why didn’t I do all my trading in NASDAQ?

Because I’m teaching that if you use one medium, one market, you can use the stronger market to trade the slower market in sympathy. It will move with it.

Look at NASDAQ, NQM2023, on the weekly chart. Which one was more explosive?

Clearly NASDAQ.

You were told that NASDAQ was the stronger one to the upside. So the sister pair is what?

ES.

So ES will move slower, but it will still go higher.

But this imbalance over here was reached strongly and quickly by NQ.

Now, back to ES. ES has made its way up to its respective imbalance, this volume imbalance. See that?

Still, ES has moved higher. But how does it perform? Lethargically — just as I told you it would, because NQ was stronger.

I’m teaching you visibility. I’m teaching you how, even if you were only following ES and never wanted to touch NASDAQ, you could still understand what’s going on through that relationship.

NASDAQ is a little wider. It’s thinner. And because it’s thinner, it moves faster. It runs for liquidity faster because there are fewer contracts in close proximity to market price. So it will quickly run farther away. It will run 100 handles much faster than ES will.

NASDAQ doesn’t need much to move 100 handles, which is why you shouldn’t be trading a lot of contracts in ignorance, not knowing what you’re doing. That thing will roast you, rip your face off, and cremate you right there where you stand.

But I can teach you how to find when it is going to be the outperformer.

Sometimes NASDAQ will be lethargic, and the reverse will happen: ES will outperform it. Someone who is new, or recently started trading, might think, “There’s no way it does that.” Listen, I’ve been around this for 30 years. I’ve seen it.

But to know what it’s going to do beforehand — that’s visibility. That’s experience. You learned that and experienced it in real time with me over the last few weeks.

The benefit now is that, knowing what it did, you can see we have tools, concepts, and logic that can be transferred to your understanding. You can take that going forward.

This also helps relieve the frustration of people who are new. When they hear me say, “Just follow ES,” they shouldn’t be upset because ES didn’t perform as explosively as NASDAQ.

Now, if you’re saying, “You told me to follow ES. I’m studying ES. And even though you said NASDAQ was going to be the upside leader and stronger, I’m regretful because I could have taken live trades before you showed up and made money in NASDAQ. You’re a jerk. You’re a terrible mentor.”

That’s not a student trying to learn. That’s someone looking for fault in something external to themselves.

The reason they didn’t make money, or didn’t make more money, is always somebody else. The reason they lost money is always somebody else.

They’re never going to be responsible.

And you have to be responsible. You are in the driver’s seat.

Nothing I tell you should be a reason for you to press a button and risk real money. Nothing. Not one thing.

That’s why, sometimes, I’ll say things like I mentioned when the senators were all given telephones ahead of Memorial Day weekend: “Anything can happen, folks. Don’t bet the farm on it. Be careful.”

Because I know there is a small group of you — and probably larger than I realize — who are taking what I’m saying and going out there trading with real money. So I want to remind you: there are real risks here.

I’m never painting this as, “You’re going to get rich.” I’m never doing that.

But I am teaching you, and promising you, that you’re going to read price action better than any book, course, or educator is ever going to teach you. They’re never going to get you this. They’re never going to teach it like this.

There are so many facets to this that help you become a freak — a precision freak.

And when you understand the markets to this degree and this depth, there’s no reason for you to be scared. You’re not fearful. You respect the risk the markets provide and offer many times, but you are not paralyzed by uncertainty.

You know exactly what you’re looking for. You know what you’re going to wait for. And when it forms, you take the trade. You take the entry. You know where your stop is going to be. You know where your first partial is, where your second partial is, and where your target is going to be.

You’re not worrying about it because you understand yourself, and you understand what the market is likely to do, because you’ve studied it in great detail.

Not, “Oh, I watched a couple ICT videos. I got this. Let’s go.”

No.

That’s not how this works.

So yes, we had a real gap here, and that is where I took your attention very specifically.

Look here. That is going to be the draw: the imbalance, the fair value gap. Price rallied right into it.

So between here and here, let’s do the same thing we just did.

There’s our low. That is where our price point started, up to here. In that run right there, you can go into the lower timeframes for your own homework. I’m not going to do it here. This is for your study.

These levels down here — the 0.25, the 0.50, and the 0.75 — are going to give you your gradient levels for grading a price swing, which we’re going to go into next.

But on the lower timeframes, like one-minute and five-minute charts, look at that range around the 75, the 50, and the 25 respectively, and see if you don’t see my PD arrays manifesting there.

We have this run down here. Same thing — you’re going to do this for homework — from this low up to the high of that gap right there. That’s the draw.

So if you’re a swing trader, a short-term trader, or a day trader working within this profile and trying to find longs, where do they form?

Price-wise, they form around this gradient: the 50% and the 25%.

Go into your lower timeframes. I promise you, if you go into your lower timeframes, you’re going to see these levels. There are PD arrays and setups that form there. Study that.

This will help you see algorithmic price delivery, and it will help you anticipate where these things are likely to form, while everybody else is waiting for something like a VWAP retest.

Where is the VWAP going to be on Thursday at 10:00 a.m., right?

I can tell you where price is going to be. And then I have elements in time that I use where I know they’re both going to meet.

See, you’re a victim. You’re a casualty of uncertainty. You have to wait around for something to react to, just like with an overbought or oversold indicator. You can’t do anything until that indicator tells you. You can’t do anything directionally until your MACD says it’s sloping down or sloping up.

I don’t have that.

My students don’t have that.

So here’s that weekly discount fair value gap.

The market rallied, consolidated, and worked inside this imbalance into this breaker.

We have a low, high, then lower low. The last up-close candle is extended into the future. It’s here. It’s here.

My eyes don’t ignore that. See?

I’m not sure if this one hit it, but it hit here multiple times.

My PD arrays, as long as the narrative stays intact and we are looking for higher prices, can be reused. Their sponsorship doesn’t expire simply because price has traded to them before.

We’re in a large consolidation here. Buy-side is here. The market rallies up, creates another area of equal highs, then drops back down.

Where is it dropping down into?

Inefficiencies here.

And look real close. See that right there?

What is that?

What is this little thing right there?

What did I tell you ES was going to do?

Go higher, right? Up into that gap. That’s it. Those two blue lines are up here — that real liquidity void, which is the highest portion of that volume imbalance on the weekly chart.

So if the market is going to gravitate up to there, we are not looking for shorts, folks. We would not look at this as a rally up into it to go short.

We want to see price go above it and close above it. It does that on this candle here. Now, we’re on a four-hour chart, so it’s definitely going to show a close on an hourly chart or a 15-minute chart as well. But we’re going to do this top-down.

This fair value gap would be treated the same way I told you I wanted to treat the Dollar Index fair value gap: as an inversion fair value gap.

That means we see price go above it, then treat it as support.

Look at the bodies of the candles. That’s the narrative. The real story is in the bodies. The wicks do the damage.

Yes, we wicked through it, but look where it closed. We traded down, and look where the bodies closed — right there. That’s consequent encroachment. It’s the midpoint of that gap right there.

I’m telling you something that works phenomenally in terms of how these markets really book price.

Inversion fair value gap.

If you ever have an inversion fair value gap — and this is for your notes, folks; I was going to save this for the book, but I’ll give it here today — if you have an inversion fair value gap like that, and you have a fair value gap just below that level inside your dealing range, meaning you have this low to the high, then we would want to see price trade through that inversion fair value gap because we are bullish.

Later on, this fair value gap forms. We don’t know it’s going to form yet because, at this point, we’re here. Price rallies through it.

You ask, “ICT, tell me how to know when fair value gaps shouldn’t close in.”

Here’s one of those signatures: inversion fair value gap.

All of this area should stay open, or at least a portion of it should stay open. This is what you would anticipate as a fair value gap.

Some of you would see this entry in this shaded area here. My students would see this as their multiplier, meaning they would go long when price drops into it right there.

Other students would see this and say, “Okay, I want to see it show me proof with the bodies respecting either consequent encroachment or the high of the fair value gap.”

Is there any body closing at the high?

No.

But we do have a body close right here on this candle at consequent encroachment. As soon as it does that, we can now trust that this area here should not be traded down into.

Technical science, baby.

Take notes.

If a student used this fair value gap for an entry, what kind of entry would that be specifically?

Ready to hear it?

That would be an Institutional Order Flow Entry Drill.

That means you are only allowing price to go to that level, or just below it, within this fair value gap. You’re trusting it because we have an inversion fair value gap here that is going to support price, provided we get a signature showing one of these conditions:

Either a body closes at the high of the fair value gap, or a body closes at consequent encroachment.

As soon as that happens — as soon as that happens — the algorithm will immediately spool and go in the other direction, aiming for upside delivery, targeting buy-side liquidity or an inefficiency above old highs.

Buy-side is here. Did it look like it wanted to hurry higher?

I mean, my chart looks like this, and yours looks like that.

Price draws to this area here, right in here, and then what do we get?

Open, immediate rebalance.

Bang. It hits it.

If you get an immediate rebalance, you know where it’s going to go. I told you weeks ago that it was going to go up here. It’s on YouTube. It’s on Twitter. It’s all over the place.

We were going long. We were focusing on longs. Longs, bullish, buying, long.

Where to?

Right here. Right up here.

Immediate rebalance.

Even though we took out buy-side here.

How do you know when it’s going to take out relative equal highs and reverse, versus when it’s going to keep continuing?

When you have a higher-timeframe PD array that has not yet been traded to.

So I’m not going to look at these equal highs being traded to and expect an automatic rejection lower. That’s just a partial.

I’m holding on, looking for higher prices and expecting price to continue running higher still.

Now, what happens if it’s trading like this going into a Friday or Thursday, and we’re getting into this area here, but it doesn’t quite get to the high?

It could wait until the next week’s Monday, or if it’s a holiday, into Tuesday. Wherever we open up, all of these things have to be weighed out when you’re reading price and trading.

It’s not as simple as getting in there and just holding over the weekend, because over the weekend there is enormous gap risk.

Gap risk is the likelihood of an opening that is unfavorable to your position.

For instance, say you’re long and you’re up 80 handles in a position you’re holding. ES could open up where you’re now only up 40 handles. Or, in a better scenario, it could open up and now you’re up 120 handles right from the opening.

And if you get something like that, you should just take your profits there, because it’s likely to come in and close that gap.

And you don’t know — because you’re probably just now learning — whether it’s going to fill that gap and continue higher, or close that gap, sputter higher a little bit, and then careen lower even still.

So there are lots of things you have to know.

Let’s go into a 15-minute timeframe.

So here we have today, Tuesday, and Monday.

Monday was the day we traded up into the high end of that gap on the weekly chart. The gap is defined by this level as the high and this level as the low.

And all through here, see how we ran up into this?

This is all Non-Farm Payroll garbage. This is trashy delivery.

Then we rally. See how we fell short of the weekly liquidity gap low?

It did get a little bit here, and then careened all the way back down into this down-close candle.

Then back and forth, back and forth.

It opened down one more time. This low right there is consequent encroachment, or just below it, of this wick.

Then it rallied strongly up into the low of that weekly gap and traded up to consequent encroachment, or the midpoint, of that range — the high and low of the weekly gap.

You think success is only if it goes to the target you called for. That’s not true.

Success is making money. Success is being profitable.

Do you have more money in your pocket than you had last week? Do you have more money in your account than you had yesterday? That’s success.

It’s modular.

Long-term consistency, or longevity in trading, means long-term profitability that will absolutely include periods of drawdown where you are losing trades. And that’s okay.

You limit your risk. Cut your position size in half each time you take a loss, and then try to get back 50% of the previous loss. When you get that, then you can go back to a little bit higher risk, then a little bit higher risk.

Going slow in the beginning is important.

But you also need to keep the proper perspective on what you’re looking for in price action.

Where is it going? How should you expect price to deliver?

I covered all of that today. I covered how price should deliver. I showed you where it was going to go. I told you specifically where it was going to go weeks ago, and we got to here on Friday.

Let’s go into Thursday and Friday.

Here is the current new week opening gap — very small, just a tiny little opening gap.

Did price gravitate back to it?

Yes.

Everybody in Smart Money is aiming for that.

We’re consolidating, consolidating, consolidating, and then we break lower, trapping traders short.

Why?

Because they think price has gone up too long and now it has to go lower. So sell-side has been taken. They trap traders short, price rallies, leaves a small little gap, trades down into here, but then gravitates back to that new week opening gap.

Go back over here.

You see this little section of price action here? If this stays open and we take out that low, then we’re going lower.

Until that happens, I’m staying bullish on ES. Simple as that.

Very simple, right?

It’s not complicated. It’s not making something bloated with too many moving parts.

Friday, post Non-Farm Payroll, we have a gap in here.

If we’re bullish — okay, if we’re bullish — are we looking for premium fair value gaps to sell short from?

Hopefully, you’ve been watching this livestream closely enough to know that’s not what we want.

So how do I know when to anticipate a fair value gap performing as an inversion fair value gap?

You have to have narrative.

Where are you? Are you looking for bullish or bearish price action? Has the market traded to your higher-timeframe draw on liquidity?

You haven’t done enough study to learn it yet, but it’s always there.

The Silver Bullet is there every day, in the times I’ve told you.

And the things I’m teaching — market structure shifts and draws on liquidity — those are the most important lessons.

That’s what you need to know.

So when you see things like this and you anticipate that a fair value gap would become an inversion fair value gap — meaning we would want to see price trade above it, come back down into it, and then rally — we want to see that.

And if we don’t see that, we do nothing.

Because the bullish narrative we’re holding — in your mind, or in my mind — is that we fell short of the low of the gap on the weekly chart, which is this level here. This is where I’m thinking price is going to gravitate toward. It’s going to go up there.

Every retracement, every discount, is an opportunity for a high-frequency trading algorithm to go long.

What do I have to say?

Yes, every single short-term discount PD array is utilized by high-frequency trading algorithms to go long, and then throw their orders into this abyss up here, in this area up here, because of that inefficiency.

The average trader doesn’t think the way I’m teaching you. They’re not even aware of that volume imbalance. They weren’t even looking at that.

You have to really make an effort to learn this, and give yourself permission to know that it’s going to take you longer than you probably thought.

But there are people out there absolutely murdering it. Murdering it. They’ve never made this kind of money in their lives before — ever. And they had the same thoughts you’re holding right now:

“What if I can’t do it?” “What if I can’t make this work for me?” “I’ve done all this studying. What happens if I fail?”

What happens if you just keep going?

Because that’s what happened for them. They did the work. They stayed at it. They didn’t talk themselves out of it, and they didn’t let other people on the internet talk them out of it.

You roll your sleeves up and say, “You know what? This stuff works. It only feels complicated right now because I’m brand new. So I’m going to sit down and be disciplined. I’m going to put myself in there and show myself that I can do this.”

Let’s say, for instance, that you’ve done the work. You spend the full calendar year doing everything I tell you to do.

Think about it: some of you are in college, or you went to college. You submitted to four years of bullshit, and 90% of the things you learned in college, you don’t even use in your career. That’s just the truth. I don’t care where you are.

The fact that you were willing to put that much time into something — and probably paid for it, and probably are still paying loan payments that you can’t even file bankruptcy on if you go broke — means you were willing to commit. You still have to pay for that whether you’re doing that job or not.

All that effort and time, four years, with no certainty that you’re even going to love what you’re going to school for.

If you don’t love the opportunity that these markets present, don’t touch them. Don’t trade. Don’t learn to trade. Don’t do it.

If you are not 100% convinced that this is for you, do not touch these markets. Period.

Don’t let anybody entice you into thinking you can learn it easily with some black box or some easy system. If you are not absolutely convinced that this is for you, do not go any further. Stop.

You will save yourself so much pain, misery, and probably money.

If you are not 100% convinced that this is what you see yourself doing, don’t touch it. You’re going to lose money. You’re going to make money if you stay with it long enough, but it’s always going to be a give-and-take.

You are never going to be perfect. You don’t have to be perfect. You just need to be profitable.

And I teach with a demo account to desensitize yourself from needing to be right or wrong.

What would you do if you made $300,000 in the last three months?

Do you think you would believe anything anybody else has to say if it contradicts what you’re doing?

No. You’re not going to give a shit. You’re not going to care what anybody says.

Nobody in your family, nobody at your job, nobody you know, and nobody on the internet is ever going to be able to talk you out of what you have now mastered for yourself.

And that is a skill set you carry with you.

As long as the days are long, as long as you can breathe, and as long as your mental faculties are there, you have that skill set.

Nobody can take it from you.

You learn a skill set. You get comfortable in yourself. You’re not recklessly trying to go out and take a trade.

One of the questions that came up was this:

“How do I know when I can go for a funded account challenge?” “When should I transition into live trading?”

The minimum expectation and threshold is that you should be completely devoid of any kind of bubbly feeling when you do it right and make money in your demo, or whatever medium you’re using.

If you don’t feel any kind of emotion — if it’s just, “I’ve been doing this for months. It’s the same stuff. I don’t feel any attachment to the outcome. I don’t care that it was right. I don’t care that it was exactly like I expected it to be” — then you’re getting closer.

If you can sit still and say, “I don’t need to trade right now,” and you let the market move around — even if it moves a lot — and you feel no regret, that is important.

All the things I just said, plus consistency in a demo for a minimum of six months. Minimum.

Now, if you’re already a better trader and you’ve been doing this for a longer time, and you’re already consistent — for instance, you’re a profitable trader who learns from me and now supercharges your trading — then practice in a demo for three months.

But if you were not profitable in general before coming to me, you need at least six months in demo.

At the end of that six months, you need to be completely desensitized to the outcome. You don’t care. You don’t feel a rush. You don’t feel like you have to get in there. You’re not salivating on Saturday, unable to wait for Monday.

If you feel like that, you’re an action hound. You’re all hopped up on goofballs because you’re gambling. You’re not trading. You’re gambling, and you want the outcome to make you feel significant again.

You don’t want to have that.

If you’re thinking or feeling like that, do not do a combine challenge. Don’t try to do a funded account because you’re emotionally charged. You will fail it, and it will set you back. That creates mental scar tissue. It builds into a callus, and eventually you won’t want to do this because it becomes too painful.

But all of it is available to you. Every single one of you listening to me right now, whether you’re watching this recorded later down the road or you’re here live, you can do this. You absolutely can do it.

I’m telling you, you can do this. If I didn’t believe it, I wouldn’t tell you.

And now you’re seeing people around the world doing extremely well. I’m so proud. I’m proud to be a small conduit in the bridge between where they were and their newfound success. I’m excited to see where they’re going to go. And I’m excited to see where you’re going to go.

But if you’re not passionate about this, if you don’t absolutely want this — and listen, I’m not selling you a timeshare, folks. There’s no upsell later on. You’re never going to send me any money. I have more faith in your success than you probably have in yourself.

Don’t sell yourself short.

It’s going to take work. It’s going to take effort.

But let’s assume, for argument’s sake, that you did everything I told you to do, and now we’re at that six-month threshold. You’ve spent time trading, and you don’t feel like you have to be in front of the charts every single day. You know what you’re looking for. You know your model. You know what you’re trying to trade. And when it happens to be there, you take those trades.

Now you’re at the funded portion.

You don’t need big account-size money. Maybe you went the shoestring-budget route and funded an account you could afford. You have a $150,000 account. You’re funded. You’re doing the things I’m teaching you to do, and you’re using the logic I’m showing you here.

This is Friday.

Okay, inversion fair value gap: price trades into it and tosses the orders up into this gap that we get. Then every discount, every short-term discount — what does that mean?

What’s this level right here?

So let’s do the 25% level of this range, from high to low. These two levels, again, are that weekly gap. So we can throw gradient levels in there — and in later teachings, octant levels.

Look at the beautiful reaction there. Look how it hovered around equilibrium. See that?

I think closing on the week, two positions scaling long, another long, partials, partial, and then stopped down.

All of this idea of “I’m trying to make a lot of money in a short period of time” needs to go away.

You’re doing this to make money. You’re following the logic. You’re doing all the things you’re expected to do based on what I’m teaching you.

If you do those things, and you stick within the narrative I share from my experience when I sit down with you — either on Twitter, in these videos, in analysis, or when I show you where I think price is likely to go next — then right now, we’re at a point where I’m neutral.

I’m neutral.

My targets have been met. So I sit still, and I let the market dictate to me what I want to do next, because it has already done its quarterly move for me.

It might continue higher, or it might reverse. At this point, I don’t have an opinion strong enough for me to say, “I’m going to take a trade in this direction.” I don’t have the next target.

And I want you to grow comfortable in those periods, because these are the periods where everyone blows their account. The people who go out and say, “Alright, now what? What’s next?” are the ones who will absolutely fail. They’ll blow their demo accounts.

They are not comfortable between trades.

If that’s how you feel, you have to work that out.

These are the periods where I sit still and stay content. I’m content. I murdered it for you on a higher-timeframe weekly and daily chart.

And for the folks who wanted swing-trade ideas — where it’s going to go on higher timeframes — well, there you go.

Over 1,000 handles in NASDAQ, and however many hundreds of handles in the E-mini S&P.

What did you do with the information?

How did you use it?

If you want to trade on Non-Farm Payroll Friday, then you do the things I just talked about here.

You wait.

You wait until the initial volatility gets into the marketplace. And as long as the objective you’re looking for on the higher-timeframe chart — the daily chart — is still valid, whether it’s buy-side liquidity, sell-side liquidity, a premium fair value gap, or a discount fair value gap, then that is your focus.

Those are the only four outcomes.

And you’re saying that’s complicated?

If you know what you’re doing, know what you’re looking for, and you just want to have one trading opportunity where you work your magic one day and stop — do nothing else — then you stay with the ideas I’m teaching you from a higher-timeframe basis.

You use the idea of liquidity and inefficiencies. You stick with the higher-timeframe bias. You only trade within that model. You look for inefficiencies on higher-timeframe charts where large pools of buying and selling will occur from the perspective of Smart Money.

That isn’t in books. They don’t know it.

The things you’re learning are ideas that every high-frequency trading algorithm implements. What constitutes a high-frequency trading algorithm buy or sell is not based on a pattern. It’s not based on harmonics. It has nothing to do with supply and demand.

There is a draw. Price will stay within a buy program and continue buying as long as certain criteria remain in play or in existence. There will also be a sub-model where they will only short when specific conditions are met.

And there are many chaos-based high-frequency trading algorithms that trade both directions all day long — up and down, up and down.

That’s the part I can’t teach you. I can’t create a language for it. I just can’t. So I’m going to leave it at that.

Therefore, what I can teach, I have taught. And I still have more things I want to teach between now and November. But any one of the things I’ve already taught — any one of these PD arrays — if you apply it with where the market is likely to go, stay within that model, and trade around specific times of day, you can find profitability. It’s not hard.

Just take the Silver Bullet. That’s another model I just gave out. I told you that you can use it in every one of the kill zones: London, New York AM, and New York PM.

Every single day, you have three solid opportunities — really good opportunities.

I taught you how to trade the lunch hour too. Think about it, folks. You have so many ways to choose from.

But which one makes the most sense to you?

Which one can you use?

You’ve seen the background of the logic I’m sharing, and how it’s in the charts every day. It repeats over and over and over again.

But is it for you?

Because I’m going to be honest: it’s not for everybody. It’s not.

For some of you, you need a moving average crossover. You need a breakout strategy. And as long as you have sound money management, folks, that can make you money.

You’re holding yourself back.

You are the one holding yourself back. It’s not me.

I’ve already taught you how to trade. I’ve already taught you how to read price. I’ve taught you models. I’ve taught you entry strategies, how to take partials, and where to move your stop.

And now, again, I’ve taught you why certain imbalances will stay open.

How do I know that? Go back and look at the example while I’m doing it. It’s there.

But I’m not obligated now.

I want to see what you all do with it.

And I don’t mean, “I bought a Lamborghini.” That’s not what I’m looking for.

I want to see what you do with this in terms of helping other people. How are you impacting other people? And I don’t mean by teaching people. I’m talking about how you impacted their lives.

What did you do for them?

Did you buy them a house? Did you pay off their student debt? Did you help them when they needed a car and couldn’t afford one? Do you support families financially who are destitute, without trying to get a reward for it?

I promise I will never, ever, ever share that publicly. I will never say, “This person told me they did this or that,” because then that becomes your reward.

My target is to transform the lives, minds, and thought processes of all of you as students — not simply so you listen to me as a mentor about markets, but so you learn how to live your life better.

Because I did not do the right things.

And I want you to know that. I did not do the right things. I was not there for my wife as much as I should have been. I failed as a dad. I should have been at their games. I should have done all these things.

That’s why I give you those lectures: so you don’t make those same mistakes in the process of finding your success and living in your success.

Because you can succeed into failure.

I did. Lots of money, the ability to live however you want, the ability to buy things — and still have a deficit in the emotional category of fatherhood and husbandry.

It’s not all about the money, folks.

Right now, it may feel like that. But there has to be a purpose for all of it — in how you live your life and what you do with it. It has to be impactful, not only to yourself, but to the people you’re helping.

As a 20-year-old, if I had this information, it would have been all about me.

And I wanted it to be about me.

Don’t give up. Keep working toward it.

If you see even a little bit of evidence that you can do it once in a while, that’s okay.

Long-term, consistently profitable trading has a period of hit-and-miss breakeven. If you get to the point where you’re breakeven — where you make a little bit, then lose it, but you don’t blow out — that’s progress.

That is progress.

You’d be surprised how many people come to me at that stage. They’ve done all this work. They make a little bit of money, then they lose it, but they don’t blow their account.

If you can get to breakeven, you are the best student in my hands. You are the best one.

So don’t think that’s a reason to feel like, “I’m failing at this because I can’t be profitable. I’m not going to waste any more time with this stuff.”

Come into these lectures. Do the things I’m telling you to do. Then sit back and watch the transformation. It will happen.

The ones who don’t do well under me are the ones who are brand new, have never learned how to trade, and don’t know anything. They don’t have the Velcro effect. I can’t cling to them, and they can’t cling to me long enough for this logic to seep into their understanding. It’s too easy for them to walk away because they don’t have anything to lean on as experience or as a reason to say, “Let me stick with this.”

I don’t want any of my students to be dependent on me. I want them to be independently minded. I want them to go out and do their own thing with confidence. I want them to say, “ICT, it’s been great. I learned from you, but I don’t need you anymore. Watch me fly.”

And I want to watch you fly. I want to see that.

But you have to put the work in, and you have to let the information be presented in the manner I’m presenting it, because I don’t know how to do it any better. I don’t know how to do it better than I’m doing it now.

But I know it’s working for a lot of people.

All you have to do is keep showing up, keep studying, and fall in love with this part of it. Because this is what you’re going to do for the rest of your life, so you might as well love it.

You might as well fall in love with it. It’s like your second spouse. You have to love doing this.

If you’re miserable and you hate trading, this isn’t for you. It isn’t.

But if you know you’re going to lose once in a while, and you’re okay with that, nothing changes. It just means you have to fix what needs to be fixed and go to the next high. That’s fine. That’s the right mindset.

And you’re not in a hurry to get there. Regardless of how old or young you are, relax. Let it happen.

It took me six years to find myself.

Many of you probably already have the thing you’re going to trade with, but you’re wrestling because every time I bring out something new, you want that to be the thing.

“Oh wow, this is new. Let me try that.”

If you already have something you’re seeing results with, stay with that. Stay with that. Find consistency with that.

Then, once you’ve done that for a few months, if you want to supplement your understanding, you can delve into new studies and explore the things you’re interested in.

But you only need one thing.

One thing, and you can make all the money you’d ever want.