Trading 4 Noobs
Trading with ICT signatures & Time principles
A convenient and Webflow friendly patch for the Lenis Smooth Scroll library.
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Context
Before we approach the market
USD ∝ 1/EUR - The U.S Dollar is inversley proportional to the currency it is paired with
Interest rates - cost of borrowing or reward for saving
Yield ∝ Currency Price
Interest rates - cost of borrowing or reward for saving
Yield ∝ Currency Price
Lower bond price
Higher bond yield
Higher interest rate
More valuable currency
Buy side - upwards|higher pricing
Sell side - downwards|lower pricing
Trend - direction in which price is presently moving
AAA - Most confident trading opportunity
Open float – refers to the open interest within the market,
the side liquidity is being drawn to
Turtle soup - when a candle prints then quickly shortens leaving behind a wick of length - if in favour of draw on liquidity, these can be confirmation to enter the market
FUD - Information shared with the intent to push pice down
FOMO - Information shared with the intent to push price up
PIP - price interest point - the smallest whole unit price move, the integer after the fourth decimal place
EUR/USD- 1.13215
USD/JPY - 113.215
OLHC - open low high close - what we expect from a bullish candle formation [daily candle - low in london open, high in new york]
OHLC - open high low close - what we expect from a bearish candle formation [daily candle - high in london open, low in new york]
LOT - 1 lot = 100,000 units of a currency
What is the market and how is price delivered?
The market is orchetrated by an algorithm which seeks to deliver liquidity buy side to sell side confirming price action and rebalancing imbalances in price delivery offering a 'fair entry' for everyone in the market
Who owns the currency?
Central Banks [not JP Morgan, not HSBC] - Bank of America, Bank of England...
Price signatures|arrays [indidication of where price is moving to]
volume imbalance, order block, fair value gap, breaker block, accumulation, equal wicks
Market
Before we look at a chart
Day Trade
Buying and selling financial instruments within the same trading day, aiming to profit from short - term price movements
Swing Trade
Capturing price legs in the market over a period of days to weeks, taking advantage of previous price action to determine the present trend and therefore future price delivery
Arbitrage Trade
Automated trading opportunities (ATO), involving using the algorithmic nature of the market to execute intra-day trades based on predefined criteria
What is a market?
The construct that embodies the mechanisms that facilitate the exchane of goods and services:
physical, digital, virtual, official, financial, and commercial
embracing economical competition, harnessing algorithmic price delivery
physical, digital, virtual, official, financial, and commercial
embracing economical competition, harnessing algorithmic price delivery
Goals & Risk
Before we look at making amillion bucks
What is your goal?
What specific finncial objectives do you aim to achieve through trading?
Are your goals focused on short-term gains, long-term investments, or a combination of both?
How do you priorotise your financial goals personally, and are they alined with your overall plan?
How comfortable are you wth delayed gratification and short-tem losses in pursuit of long-term gains?
What is your trading objective?
Are you looking to capture an instantaneous movement in price?
Are you aiming to take advantage of prevoius price action to fall in line with present price delivery?
Are you looking to find a suitable entry to move with the market and capitulate on a prie leg?
What is your risk association?
Have you experienced and assessed your emotional response to fnancial losses [ context assessment ]?
What is your desired profit target for a trade, does it align with your trading objective [ realism assessment ]?
What is the % of your capital/liquidity you are open to willingly lose on a single trade [ tolerance assessment ]?
Are you aware you must periodically assess your risk exposure basd on your trading objective in relation to current market conditions [ reflection assessment ]?
Time principles
Before we look to place a trade we must be able totimeframe cycle
When you look at a chart, it may be unclear exactly how it is that you read and use what's presented before you. Some of us may see just red and green, some of us may just see a graph that goes up and down, and those with some knowledge will see highs and lows. The takeaway here is that on just one time frame the chart means nothing, so do not be alarmed, only when we learn how to cycle through timeframes do we unlock the ability to see beyond the axis of price against time. Below is how you approach the chart, cycling from HTF [ Higher Time Frame ] to LTF [ Lower Time Frame ]. What to look for is to follow under price signatures [ ICT signatures ], for now we must get comfortable with the notion of not being able to see what we want but finding what we see through timeframe cycling.
Swing Trade[ timeframe cycle ] 1W -> 1D -> 4H
Entry: 1H -> 15min
Entry: 1H -> 15min
Day Trade[ timeframe cycle ] 1W -> 1D -> 4H -> 1H
Entry: 5min -> 1min
Entry: 5min -> 1min
Arbitrage Trade[ timeframe cycle ] Approaching signature -> local high/low
Entry: 3min -> 1min
Entry: 3min -> 1min
APPROACH:
On th HTF, is price moving towards buyside, sellside, or accumuating?
Dropping one timeframe, where has the preset trend began?
Dropping one timeframe again, range from the end of the previous trend [ previous high|low ] to the start of the present, and mark halfway [ consequent enroachment|50%.
Is price below this mark [ discount ], above [ premium ], or near to [ATO]?
Dropping one timeframe, is there a local high/low|top/bottom or opposing price signature [ DOL ], that if priced through favours continuation of the present trend?
Dropping one timeframe, await the formation of a price signature in direction of continuation.
Does pricing through the DOL lead into a HTF price signature? [ AAA ]
On th HTF, is price moving towards buyside, sellside, or accumuating?
Dropping one timeframe, where has the preset trend began?
Dropping one timeframe again, range from the end of the previous trend [ previous high|low ] to the start of the present, and mark halfway [ consequent enroachment|50%.
Is price below this mark [ discount ], above [ premium ], or near to [ATO]?
Dropping one timeframe, is there a local high/low|top/bottom or opposing price signature [ DOL ], that if priced through favours continuation of the present trend?
Dropping one timeframe, await the formation of a price signature in direction of continuation.
Does pricing through the DOL lead into a HTF price signature? [ AAA ]
ICT Signatures
Signatures of the price delivery algorithmPDA
Indications of where there isresting liquidity for the algorithm to obtain
How the signature would be used to enter the market in abullish scenario
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IMPORTANT: You must look for these signatures on each timeframe as you cycle down, there may be multiple.
Economics
Bonds, Macroeconomics &Further Context
As bond prices increase, bond yields decrease which correlates into interest
ratesReward for saving|Cost of borrowing
ratesReward for saving|Cost of borrowing
What is the market & how is price delivered?
The market is predetermined and monitored by an algorithm which seeks to confirm price action. This is achieved by delivering liquidity buy side to sell side to rebalance imbalances/inefficiencies and offer fair entry for new liquidity.
The market is owned by no-one, currency is owned by central banks.
How does the Monatery Policy Committee combact inflation?
When the MPC think that inflation is due to consumer spending being too high, they will increase rates to reduce spending on credit, and finance to cool down the economy thus bringing rates down.
Quantitative Easing - where a central bank purchases predetermined amounts of government bonds in order to stimulate economic activity, increasing bond rices,decreasing yields thus decreasing interest rates
Quantitative Tightening - where a central bank sells predetermined amounts of government bonds in order to reduce economic activity, decreasing bond rices, increasing yields thus increasing interest rates
Gross Domestic Product [ GDP ] - measure of production & manufacturing
Non Far Payroll [ NFP ] - measure of employment
Consumer Price Index [ CPI ] - measure of inflation
Monetary Policy Committee [ MPC ] - control policy to do with the change in intrerest rates and the money supply
MMXM
Market MakerModels
Approaching Trading
Where to begin (bullish narrative) - bias is determined by you,
something that comes with practice and time
something that comes with practice and time
Weekly Profiling
The expansion of the weekly range (Tuesday - Thusday) is what we are looking to trade.
For a bullish week:
Monday or Tuesday will usually make thelow of the week, then the high will be made towards the end of the week to allow for expansion in the candle.
Thursday will usually make the high of the week, unless there is a high impact new event on Friday, in which case the high will most likely be made on this day.
For a bullish week:
Monday or Tuesday will usually make thelow of the week, then the high will be made towards the end of the week to allow for expansion in the candle.
Thursday will usually make the high of the week, unless there is a high impact new event on Friday, in which case the high will most likely be made on this day.
Daily Profiling
The expansion of the day is what we're looking to capture for our day trade or the swing into as the day opens.
For a bullish day:
The low will be put in as the day opens, within london open session [7am-10am] UK
The high will be made later on in the day, within new york open session[12pm-3pm] UK
When anticipating a bullish week, we are looking to only entertain buying opportunities in our daily candle.
For a bullish day:
The low will be put in as the day opens, within london open session [7am-10am] UK
The high will be made later on in the day, within new york open session[12pm-3pm] UK
When anticipating a bullish week, we are looking to only entertain buying opportunities in our daily candle.
Trading London Open
If trading the LONDON OPEN, we are waiting for:
- a run below midnight price
- respect shown to a bullish signature, or rejection off a bearish, forming the day low: OLHC theory (open low)
- a clear draw on liquidity
- clear internal liquidity to favour that draw on liquidity being priced through
- a formation of a bullish price signature
- a run below midnight price
- respect shown to a bullish signature, or rejection off a bearish, forming the day low: OLHC theory (open low)
- a clear draw on liquidity
- clear internal liquidity to favour that draw on liquidity being priced through
- a formation of a bullish price signature
Trading New York Open
If trading the NEW YORK:
- a low to be made early on in the session, usually before the first hour of opening
This is offset accumulation ( the pairing of retail shorts with market money longs) - running sell side liquidity to then be used to fuel the move to buy side
Offest distribution - the pairing retail longs with market maker money shorts
- alignment with continuation (if no alignment with trend leaving london open, new york could possibly offer trend reversal)
- a clear draw on liquidity
- formation of a bullish signature to then move to put in the day high : OLHC theory (close high)
- a low to be made early on in the session, usually before the first hour of opening
This is offset accumulation ( the pairing of retail shorts with market money longs) - running sell side liquidity to then be used to fuel the move to buy side
Offest distribution - the pairing retail longs with market maker money shorts
- alignment with continuation (if no alignment with trend leaving london open, new york could possibly offer trend reversal)
- a clear draw on liquidity
- formation of a bullish signature to then move to put in the day high : OLHC theory (close high)
How do i determine bias?
Bias in trading is totally subjective to the trader, whether you anticipate the market to head up or head down is something only you decide for yourself
Building your bias before the week opens eliminates 50% of the possibility of being incorrect in your investment/trading decision during that week
bias is formed from the HTF (the 1 week), as on a larger scale the market prints in favour of where the monthly candles are heading
it may not be clear before the week opens where the market may head during that week, if so simply allow for Monday's daily candle to print, the form a bias around this
In situations where it is still unclear after marking areas of liquidity, the true investor waits for price to fall in line with time, and simply reapproaches the market the next trading day to search for opportunity again
Waiting for price to fall in line with time could have you studying the market for a whole session, and only being greeted with a window of opportunity as it looks to end
The paradox here is if no clear black and white opportunity appearsin the market aliging with your bias, simply close the day
Risk is a measure of the failure of judgement not the possibility of suffering a financial loss
To begin developing bias:
open the chart, switch to the weekly, head back in time (tradingview premium required), and note down whether you think the week will close higher or lower than the previous
Rinse and repeat until you are becoming more accurate in predicting
Now begin profiling, noting which day puts in the low of the week and which day puts in the high
Then do these steps again for the daily, noting which session puts in the low of the day and which puts in the high
Practice these steps for as much timeframe time as you can to better build your judgement
Building your bias before the week opens eliminates 50% of the possibility of being incorrect in your investment/trading decision during that week
bias is formed from the HTF (the 1 week), as on a larger scale the market prints in favour of where the monthly candles are heading
it may not be clear before the week opens where the market may head during that week, if so simply allow for Monday's daily candle to print, the form a bias around this
In situations where it is still unclear after marking areas of liquidity, the true investor waits for price to fall in line with time, and simply reapproaches the market the next trading day to search for opportunity again
Waiting for price to fall in line with time could have you studying the market for a whole session, and only being greeted with a window of opportunity as it looks to end
The paradox here is if no clear black and white opportunity appearsin the market aliging with your bias, simply close the day
Risk is a measure of the failure of judgement not the possibility of suffering a financial loss
To begin developing bias:
open the chart, switch to the weekly, head back in time (tradingview premium required), and note down whether you think the week will close higher or lower than the previous
Rinse and repeat until you are becoming more accurate in predicting
Now begin profiling, noting which day puts in the low of the week and which day puts in the high
Then do these steps again for the daily, noting which session puts in the low of the day and which puts in the high
Practice these steps for as much timeframe time as you can to better build your judgement
Trading
A swing trade would be from the high
after the upwards displacing candle
to the low of the HTF FVG
after the upwards displacing candle
to the low of the HTF FVG
Finding DOL[ Draw on liquidity ]for the below examples>
1 Wait for price to enter local array : FVG
2 Wait for formation of price array in favour of direction
3 Wait for displacement [ movement in direction ], then take entry
with stoploss below the low of the price signature
with stoploss below the low of the price signature
1 Mark clear DOL
2 Wait for an intraday high/low within arbitrage distance of DOL
[ visually a few candlesticks ]
[ visually a few candlesticks ]
3 Automate entry upon crossing of high/low with sl @ 1% profit 1% loss
Day Trade
Automated Trading Opportunity
