ICT Gems - ICT Teaches Algorithmic Trade Entries

if you look at what we have the time of day here and the next one's here okay so what I'm watching is we had already traded up into this volume imbalance there we went lower and then we went one

more time bumped it and remember I was telling you earlier that the bodies of the candles can go just a little bit outside of the the PD array the the high of that PD array is this candle's close

so when we went above it here with this candle's close the fact that it did that it's so subtle that it's permissible I I I allow that to to happen and not change

anything that I expect in price action it's doing everything it's normally going to do and the next candle confirms it because it stays where inside of that volume imbalance so the market shows a willingness to go lower so we had stops

taken here the market drops and then right in here what is this if this run up takes out the liquidity and this Gap with this volume imbalance anyone else that doesn't know really what's going on

they may look at that and say oh this is a buy and then look for it to go higher so you can see that we have this inefficiency that's overlapped I love the fact that when we drop down and we

had this little Wick that little Wick right there is a mohawk and a mohawk is just where price has been allowed and you you as the analyst afford it to behave in a certain manner that is just

outside of what would be perfect perfect would be to stop at right at that candle's open because there's a volume imbalance whenever you have a volume imbalance that's part of a buyid imbalance or cellid efficiency you

cannot just just use the low of the wick you got to use the volume IM balance that's the true range of that inefficiency because you have technically you have two PD arrays agreeing with the same context of price

being offered what strongly with buy side inefficient and sell side it means it's got to offer this type of price action where it's dropping down over that same range between this candle's

high and this candle's open which is the volume IM balance so we have now two deliveries up and down and then we have this one one more attempt to do

something above it and it Wicks see that it Wicks that little tiny coloring outside the lines of that volume of balance high that right there and where we close with the bodies tells me that

this should drop lower the next candet we open drops lower one more time to consequent encroachment we break lower we create an order block this order block is part of this one what kind of

order block would this be propulsion block so we have order block that reaches the high end of the inefficiency

over here there it drops this one here this candle's body cannot breach half of the order block that it's traded back into when you get that it's kind of like

a tipping of the hand it says we have an order block that should send price lower and then there's another one that's digging into that previous order block so you're really getting a lot of

conviction placed around the idea that prices should be repelling away from this one and certainly away from this one but we have this order block forming inside of a inefficiency and the

consequent approachment of that inefficiency is right here see that so we Wick up into I was using this order block as my initial entry and then as we went into consequent encroachment of

this Wick as soon as we hit half of that right there I went in on that candles I'll say I take that too I'm not afraid that it might go higher why am I not afraid because I have an inefficiency

here that has changed into an inversion this this is a little coloring outside lines could it hold on to that no and then we Clos here not at the high of the fair value gy near the metal and then

the next one we do what we confirm it we open trade outside of it so what is it what is it done here on that candle what has it done it's left this Gap

energetically and look how it closed so that means we can still trade up to consequent encroachment of this inefficiency because that's normal that's normal and it could be normal

through the lens of the wick doing it only what do we see here we open the body goes all the way up here stops just by a little bit so that little movement above that midpoint of this inefficiency is the same thing I've outlined here

that's a mohawk but when it's a boldfaced bullish candle and it's all way at the highest high it's going to be terrifying to you in the beginning you're going to second guess everything then the market comes down here and

closes outside the fair value Gap validating this right here so this is just returning back to a level that's permissible then the Market opens indecisive candle we want to see it drop

away it does now we know that this is a propulsion block why because its Candlestick body did not close above or across mid part of this Candlestick

which is the order block the propulsion block its entire range needs to be referred to and it it went just a little bit above halfway point of that inefficiency now we're expecting this to

be treated as an inversion fair value Gap whenever I have a range like this that's highlighting a fair value Gap if it's ever a hue it's an orange what I'm saying is its roll has reversed so

whatever it would have been initially expected to deliver over here dropping down it should go higher that's what the myopic view is but then when it gives up The Ghost and leaves it here and then we get it confirmed there everything going

future allow for it to trade back up into here but stay out of what what should it stay out of what should price not do explore in the upper part that

means this this shaded area here should not be traded to in this inefficiency we worked the lower half of it we mohawked above it but this portion let me take

the halfway off we had enough confirmation here with a mohawk above the halfway point of that inefficiency so this is the portion if it's really valid if it's very very strong if it's

going to send price lower we will be encouraged and we'll know we're on side that means we're on the right side of the marketplace if any rallies that can be done with a wick because the Wicks

can do what the damage that run running up into that we should not be fearful of that we should be comfortable with it and my stop loss was above the rejection block which is the up close in this

swing here we have high higher high lower high the up close the highest up close in there so I've used the rejection block because it's already worked it here we traded above that

closing price on the next candle then it rejected it we went right up to it here and delivered the same price look like the same price doesn't it what's the high of that 592 and three quter and the close is 592 and three quter so it just

tagged it right there how is that not proving the logic of a rejection Block it's it needs to be traded to one time and then if it's good it should not go back there again and here it is it stops dead in its tracks it never goes above

it see that and then this little run here it's me using this Wick and as it slammed up into that I said oh I'll take that too trusting that my stop loss is

not going to get hit because the logic at this outline all here but it slams up into it as soon as it touches the went cach from that level I'm Haring it right at the market selling more now I'm

expecting because it did this it should not trade back into this portion of this inefficiency okay so in other words I don't want to see the upper half traded

to I want it to stay keeping that portion open because we had so many qualifiers in here saying that the rejection block has done its job that's algorithmic so the market gives me a

perfect execution for another pyramided entry so as it slams into that level right there I'm confident that it's not going the rejection block which is this up Clos candles closing price because everything I've outlined here has

fortified and solidified my confidence is valid and I don't need to worry about it it's not going to my stock so if it gives me another premium level which is this one here because it should not touch the low of that upper half of that

inefficiency why because when it's bearish the upper half the premium aspect of that individual PD array the upper half once it leaves it or it

assumes that should not come back there in my mind I want to see that area failed to ever be redelivered to but uh what was the other thing I was going to do es i't been messing with the es for a

while uh as the market was dropping down this was Monday's um Monday August 26 2024 it's daily low and below that low

is sells side that means there's sell orders so if we look at it like this here is Monday that's the low the liquidity below the previous days lows

the highest high and the lowest low in the last three trading days you have to have you have to have that information all the time no matter what Market you're trading the last three days whatever the highest high was and the lowest low you have to have that

information because the market will refer back to that the previous day high and the previous day prior to that so what you're looking for is the highest high and the lowest low in the last

three days then you're looking at the high and the low of the day three days ago it's not the same thing the listen to what I just said the highest high and lowest low because you're going to also

refer to like for instance say today's Tuesday we're going to look at Monday's highest high lowest low of the day or it's daily range high and low then you look at Fridays high and low and then

Thursdays high and low not Sundays Sundays are treated differently the only information I pull from Sunday is the opening on the new week opening Gap I don't care about anything else on Sunday

I'm looking just for the opening gaps that form on Sunday's 6 p.m. opening

that's Forex and that is Futures it's everything okay main thing is is daily highs and lows the liquidity above and below those reference points you want to have that in your in your list of things

to observe they will act as draws on liquidity the market will gravitate to those just like a new week opening Gap just like a new day opening Gap so I'm going to teach you the basic elements of what I was teaching when I was on baby

Pips back in 2010 the liquidity below the previous day low and when we start getting in close proximity to it okay so what that means is we're

watching price dropping down and everything in price action was supporting the idea that it's going to keep going how do I know that how can

you know that how can you trust that it isn't going to reverse what's the logic that tells you this is going to keep dropping ICT well number one it's trying to get down to the previous days low

where there's real orders resting below that what kind of orders sell stops okay so if I know that we're pretty uniform in the way we keep dropping my eye goes

to what I teach you this Candlestick right here is an order Block it's an up closed candle if I find that and then every successive subsequent candle after

that to the right as it's forming as we move away from it if he comes back up into this Candlestick is it able to overtake half of this Candlestick L think about like this I'm teaching you

order flow this is real order flow so here is half of that order block okay did this Candlestick or this Candlestick come up and touch that halfway point or which would be mean threshold no that's

exactly what I want to see on over block okay the market Trad lower this Candlestick trades up into this Candlestick so what does that make this

propulsion block so price should do what it should trade away from that now in this little area right here we have a volume imbalance that's what this order

block delivers to this Candlestick this candles sck and this Candlestick is working inside of this inefficiency where we had the body here this candle's indecisive it's just basically the open and close is the same price and we have

a high and a low that's indecisive usually when you see an indecisive candle like that you're building a volume in balance and the next candle you'll see it's there boom but the uh the rally back up just fills in that

little void there it's no bodies it's absent of having any bodies so the market will do Patchwork that's the technical term for it by the way I wasn't supposed to say that but [ __ ] it's a live tram the the algorithm is

doing Patchwork where it fills in these inefficiencies okay so when it does that then the market displaces and goes lower at this moment we can now see it goes back up trades one more time what is it

digging into the original order block that is a reclaimed bearish order block why because we've already moved away from it and it's coming right back up into it here it needs to show immediate

response drop lower does it yes it does and then we ret Trace back into this little area here fair value Gap trades back back up into it hits it does that send price lower yes price displaces

lower takes out this low trades up into this area here matches the high here does it have any willingness to get up in this inefficiency no and it breaks lower right there what I have right

there is a market indicating in every shape facet or form that it's heavy it means it's really really heavy and it's going to be easy for it to fall so what

is it reaching for well what are we close to the heaviness in price is proven right here so I'm confident that when we trade it up into this area here

I'm not going to see the upper half of this Clos in Upper half of this watch see that now what what have I been teaching in 2024 mentorship PD arrays the highest form the highest order of

order flow around them is when you're bearish the upper half are not traded to when they're bullish the lower half are not traded to that's the signature but the upper half here never trades to it

there so I'm getting short on this candle as it's already proven here here and here and I need to be in I need to be in on the move so that's here I don't

trust that U or I'm I trust rather I do trust that we're not going in the upper half of this range here so this is what I'm visually seeing as a barrier it's

not going to go it's not going to go up into this portion here that's my belief why because everything all through here is indicating that it's heavy we're real heavy we couldn't even do institutional orderflow entry drill here and we had

this big drop down now when you're watching this this this might feel like oh well it's been dropping it's got to turn around it's got to turn around it's keeps dropping that's not what I'm thinking why why am I not thinking that

because this is the previous day's low it's indicating every way it can that is in a hurry to go down below the previous day's low the previous day's low is like

a honey pot it literally is like a Honeypot it's always there every single day previous day's high and previous day's low if we open in the lower half of the previous day's range you should

always look for some kind of return back to the previous day's low that's simple market 101 like it it's it's a normal thing for that to happen I am not wanting it to trade up here once it does all these things in here I want to be in

on a trade because I know it's getting ready to take off the very next candle what does it do it opens and Off to the Races we go and then we create what another opportunity for it to create a volume imbalance in here so I'm

expecting price to it opens it trades back back up into this candlestick's range so this Dig Down close candle when this candle opens up here I'm watching to see it dig back up into this candle I

am trusting that it's not going to go back into the upper half so I just want to get in any portion of this lower part of this Candlestick watch my fill see it here's the low of that candle right there it opens and it's digging into

this this portion of the range I want to add to it there you go selling more and then I get another opportunity here what's it digging into the volume imbalance I want to be filled there as the candle's going up I'm filled it

right there bang and then what does the market do rolls over energetically runs right below some random level the previous day's low and there it is

that's my fill look closely folks look real close see that fill that's one tick from the low to get that exit price I have to have the fill that the low of

the candle forms it's only one tick it's one tick difference so anticipating this large range is down is because we were approaching Monday's low and it's going to dig aggressively and fast to get down there

and get those orders because as it's going closer to that previous day's low anyone that has their stop down there has the ability to do what quickly say I'm getting out and I'm going to protect

myself and remove the order but anyone that's short they need those orders to be there to get out so the first run into them is always going to be fast and sudden boom sudden real quick because

they don't want to let them pull the order and that's the signature that when I am saying I'm expecting speed I want to see distance and speed or I want to see the magnitude of the move to

increase right here I'm indicating that I'm expecting the pool of liquidity that's next in order of business going lower or higher they're going to quickly run for that because they are not going

to let them pull those orders so as the algorithm delivers lower lower lower when it gets in a proximity of this low it will naturally speed up that's why when you're watching price it's here

then it's here and you think it's took a long time for that one minute CLE to do all that it's gapping down it's very speedily dropping and it's keeps

offering lower prices and it gaps lower and lower and lower and lower and inside these individual candles look at them study them if you have access to do like a onec chart 5-sec chart you'll see it's

poorest price action it's not a smooth one single Candlestick of movement going lower it's jumping and skipping down there because it needs to get quickly down below that previous day's low

that's a mechanism that's CED inside of the algorithm what is it doing over here we have a low a lower low and digs in one more time right in here so it's

absorbed all of the liquidity below Monday's low and then it rallies up liquidity easily digs into it into here easily above the relative equal highs

then back down when you start studying the price action like that who's at the most vulnerable pos position right now who's making money what are they targeting and how can they upset them

and why would they being upset be profitable to some other entity out there okay well going below uh Monday's low buying up all the sell side with the expectation that you're going to run the

highs over here this is obvious right when you start seeing these things like this these are the easy lwh hanging fruit objectives they just cannot hide them from you they are the setups that

are just like one or two or three a week they're the easy ones you want to start looking for them and then as you get better you'll be able to work with smaller ranges and the things that you use when you're trading these bigger

ones you're just going to use it because it's fractal you're going to use these on a smaller price runs and you'll have sheer Precision that evades everybody else