# 2022 ICT Mentorship [No Rant] ep. 3 - Internal Range Liquidity & Market Structure Shifts

https://www.youtube.com/watch?v=vJWdXPe8Reo
Translation: zh-CN

[00:03] all right folks welcome back this is the

[00:05] internal range liquidity and Market

[00:07] structure shifts lecture again 15-minute

[00:10] time frame on the e- mini NASDAQ 100

[00:13] Futures Contract for March delivery

[00:16] 2022 and take your attention over here

[00:19] okay this old

[00:22] low and these relative equal highs see

[00:25] that old low below that is sell

[00:28] stops and relative equal highs above

[00:31] that is buy stops now you could have

[00:33] used this High here there's nothing

[00:35] inherently wrong about that but whenever

[00:36] I see equal highs like this might and if

[00:39] it's higher than an old high over here

[00:40] I'm going to use that so that way

[00:42] there's a little bit of insight for you

[00:43] for your study

[00:45] journal the sell side liquidity you can

[00:48] see that the market trades down hits

[00:50] that runs through

[00:51] it then rallies all the way back up

[00:54] clearing equal highs so the buy stops

[00:56] have been taken here okay so at both of

[00:59] these price points here and here that's

[01:04] the I guess the point at which you'll

[01:07] look for or anticipate a market

[01:09] structure Shift You Don't Force It okay

[01:11] I see a lot of people try to teach my

[01:13] Concepts that'll talk about Market

[01:15] structure breaks or shifts and we'll use

[01:16] that term interchangeably but for

[01:21] intraday I want you to think about

[01:22] intraday Market structure shifts because

[01:24] it's not necessarily A break-in Market

[01:27] structure that leads to prolonged

[01:31] multi-day movement okay what do I mean

[01:34] by that if you see a market structure

[01:37] that's bearish and it's broken to the

[01:40] downside intraday that may just lead to

[01:43] an intraday price leg that may

[01:45] eventually see that high be taken out in

[01:48] the same day so that's why I'm using the

[01:50] term Market structure shift not Market

[01:52] structure

[01:53] break for our conversation here on this

[01:56] mentorship just know that when I'm going

[01:58] to lean on that term Market structure

[02:00] break it means a little bit more in

[02:02] context versus an intraday shift in

[02:05] Market structure just means there's

[02:07] likely a downside draw or an upside draw

[02:10] intraday by seeing the term shift okay

[02:13] so there's a little bit of semantics

[02:15] there all right so we have both of these

[02:18] areas here and here where there would be

[02:21] a likelihood of a market structure shift

[02:24] up here we look for a fake run above

[02:27] here so that fake run above how do we

[02:30] know it's going to be a market structure

[02:31] shift that's bearish now keep this price

[02:33] level in mind so it's essentially 14,600

[02:36] and 14,820 which're is eyeballing it

[02:38] okay now dropping all the way down into

[02:40] a two-minute chart this is that same

[02:42] particular day here's those relative

[02:43] equal highs and this run down here if

[02:47] you recall 146 and around that 14860 or

[02:51] so if you look at this Market structure

[02:53] without having the levels on your chart

[02:55] it's easy to get lost when we had this

[02:57] low form right before this low was

[02:58] formed there's a swing high right

[03:01] there now in the first mentorship video

[03:04] I gave you I mentioned that high

[03:05] frequency trading algorithms will use

[03:07] marked structure on a 3 minute 2 minute

[03:08] 1 minute chart many times sub 1 minute

[03:11] that would be like 45 second 30 second

[03:13] 15c intervals if you look at this

[03:15] short-term High here right before this

[03:16] low formed when this high is taken out

[03:18] right there on that candle that's

[03:20] significant only if this run down here

[03:22] has traded into cell stops okay below an

[03:25] old low of some kind it could be a

[03:26] double bottom it could be a single low

[03:28] but it's got to be Trading under some

[03:30] retail idea that would be viewed as

[03:32] support up here the same thing when this

[03:35] run above these relative equal highs

[03:37] happens right there you're anticipating

[03:39] a market structure shift let me go back

[03:41] to this for a second we had this high on

[03:43] this candle then we had the candle right

[03:44] after that here the highest one and then

[03:46] the lower high of this candle here so

[03:48] that's a swing High very simple little

[03:50] pattern but it means a lot when it's in

[03:53] the proper context when this high is

[03:54] broken with this particular candle right

[03:57] there that is significant only on the

[03:59] basis that we have taken liquidity out

[04:01] of the marketplace that's it so when it

[04:03] broke this short-term high this is more

[04:05] meaningful and then the market will

[04:07] start to seek buy stops okay or buy side

[04:10] liquidity that would rest above here

[04:13] here and here so here's those sell stops

[04:16] so this little area here shaded in

[04:18] that's a area where sell stops would be

[04:20] residing below that 14600 level okay on

[04:23] that 15 minute time frame so the market

[04:25] dove into that liquidity and you may or

[04:27] may not know that is a buy you don't

[04:29] need to anticipate a shift in Market

[04:32] structure when the market rallies above

[04:34] when does that happen on this candle

[04:35] right here see that little light bulb

[04:36] that's when you're thinking okay now I

[04:39] have a condition in the marketplace that

[04:42] I might see an opportunity intraday

[04:45] let's see if there's further evidence to

[04:46] that short-term high is taken here we

[04:49] traded above it it does not need to

[04:52] close above that okay really important

[04:55] once that candle closes and this candle

[04:58] opens you're going to monitor this

[05:00] candle and you want to see as soon as

[05:01] this candle closes does it create that

[05:03] fair value

[05:04] Gap If it creates a fair value Gap again

[05:07] that's a candle with a high one single

[05:09] pass up next candle has a low that

[05:11] doesn't completely overlap all this

[05:13] that's fair value Gap real simple okay

[05:15] this candle is where you would look to

[05:17] potentially trade at the earliest

[05:18] because now there's a gap there the

[05:20] market trades down into that boom takes

[05:23] off see these down closed candles see

[05:26] that that's all one continuous order

[05:29] block

[05:30] what's it

[05:31] doing it's inside that pool of liquidity

[05:34] sell stops where's the open on that

[05:37] series of down Clos candles right here

[05:40] that's the price level extending out in

[05:42] Time Boom so inside this fair value Gap

[05:46] this opening price on the order block

[05:47] that's your buy plus three Pips or

[05:50] whatever for spread and that's what you

[05:52] would use for a limit order well price

[05:55] starts to run where above the highs

[05:57] where buy stops will be here Above This

[06:00] High here and above this High here so

[06:03] the buy stops above here that was taken

[06:06] this swing low forms once this candle

[06:08] closes so this candle we're watching

[06:10] does it go below that short-term low it

[06:11] does so now we have a shift in Market

[06:13] structure that is now bearish only

[06:15] because we've taken buy stops fair value

[06:18] Gap forms the market rallies up into

[06:20] that you go short there what are you

[06:22] looking for below here sell stops below

[06:26] here sell stops below here sell stops

[06:28] and in this Fair Val

[06:29] here so if you are in a position that

[06:32] has multiple contracts you can take

[06:35] partials below here I really wouldn't do

[06:37] it there but below here here and some

[06:40] you saying why wouldn't you take them

[06:41] below their ICT well if you're trying to

[06:43] get short here that's not really that

[06:44] much movement so if you're going to take

[06:46] something off your trade below that low

[06:48] why not just try to reach for that one

[06:49] and you could get it there right here

[06:51] okay and then below that low is nice as

[06:53] well this is below the 50 level of this

[06:57] high and that low okay okay so 50% level

[07:01] that's what we targeting now this

[07:03] candle's low was the high end or first

[07:06] objective inside this Gap so that's your

[07:09] target you're going to look for that so

[07:11] you're looking for low hanging fruit the

[07:12] easiest Target to get to you're not

[07:14] trying to be perfect and you grow into

[07:16] eventually holding to see if it will

[07:17] fill in that Gap okay this Fair B Gap

[07:20] was going down to this candle's High

[07:21] that's something that you strive for

[07:23] over time if you understand what I just

[07:25] showed you here that's a very simple

[07:27] process of looking for number one

[07:29] liquidity gauging what happens without

[07:31] having to know for certain because you

[07:32] don't know you're not going to know

[07:34] until the market shows its hand this is

[07:36] it showing its

[07:41] hand now let's go into a one minute

[07:44] chart and see how that looks a little

[07:45] bit different but still has the same

[07:46] characteristics here's that same price

[07:48] structure just on a one minute chart the

[07:50] same logic still there right swing High

[07:52] taken after liquidity has been traded

[07:54] into this short-term High gets violated

[07:58] right when this trade down in here

[08:00] what's actually occurring okay put this

[08:01] in your notes high frequency algorithms

[08:03] are hammering they're just throwing

[08:06] orders in buy buy buy buy buy that is

[08:08] not okay here's an important thing that

[08:10] is not causing the market to go higher

[08:13] it's just volume that's coming in the

[08:15] algorithms that deliver price that offer

[08:17] price that are constantly offering price

[08:19] in the

[08:20] marketplace that's what's beginning to

[08:22] spool and go higher okay and regardless

[08:25] of where you want to trade at your limit

[08:27] orders they may not get filled where

[08:29] you're trying to buy with a market order

[08:31] you may think you're getting in at

[08:34] 14662 but by the time your order is

[08:36] executed and confirmed you're in

[08:40] 14664 that's slippage okay that's

[08:42] negative slippage if you were trying to

[08:44] buy it at

[08:45] 14662 and it filled you at 14661 that's

[08:48] positive slipage that's better than what

[08:49] you were expecting

[08:52] so when price starts to Rally all this

[08:55] is is a default to the algorithm

[08:57] constantly offering price at a higher

[08:59] price so we're looking at the swing low

[09:02] right here Market breaks down trades

[09:05] break back up into this back up in this

[09:06] fair value Gap here and sells off and

[09:08] there's another fair value Gap right

[09:10] there trades up into that as well this

[09:11] is a one minute chart so it's giving you

[09:14] multiple points of execution that you

[09:15] could trade on and then Dives see these

[09:19] two candles here that's one consecutive

[09:22] bearish order

[09:23] block the opening price extending out in

[09:27] time why is this a good bear shoulder

[09:29] block because it has that

[09:31] Gap and it's taking

[09:34] liquidity and there's a market structure

[09:36] shift there's your high frequency high

[09:39] power high probability bearish order

[09:41] block what it is it's a change in the

[09:44] state of delivery the Market's being

[09:45] offered higher higher higher higher in

[09:47] these two up closed candles how did this

[09:48] series of up closed candles begin with

[09:50] this candle's opening right there that

[09:52] opening once this candle trades below it

[09:55] that changes the state of delivery so

[09:57] you go back to that point of reference

[09:59] right there and that's why it's

[10:00] sensitive the algorithm remembers that

[10:02] right there okay that's all I'm going to

[10:03] give you on the Free mentorship level

[10:05] but that is your answer okay that is

[10:07] what an order block is it is a change in

[10:09] the state of delivery much in the same

[10:11] way all of this movement down here all

[10:13] these down closed candles the opening on

[10:15] that candle starts the series of

[10:16] delivery on the downside when that

[10:18] opening price gets violated here it

[10:21] changes its state of delivery now it was

[10:23] offering sell side when it goes above

[10:25] that opening now it's offering buy side

[10:27] what will it be doing after that it'll

[10:30] be looking for buy stops buy stops buy

[10:33] stops because it's offering buy side

[10:35] liquidity same thing here buy side is

[10:38] being offered until that opening price

[10:40] is violated right there then the change

[10:42] of state of delivery occurs now the

[10:43] Market's going to be doing what offering

[10:45] sells side liquidity what's that mean

[10:47] it's going to start going lower and

[10:49] attacking the sell stops all the sells

[10:51] side liquidity it's offering it to the

[10:52] marketplace that's what's happening

[10:53] that's what the algorithm is doing but

[10:56] the market goes down to that 50% level

[10:58] because it's going down to what but I

[10:59] teach you what did I say in the first

[11:00] video it's going down from a premium

[11:04] Market relative to this low in this High

[11:08] 50% is here that's equilibrium so it's

[11:09] going to go down to a discount and

[11:11] that's that Gap right here it doesn't

[11:12] look like a gap so much here but if you

[11:14] go back up one more time that's that

[11:16] single opening right there on a

[11:18] two-minute chart and then on a one

[11:20] minute chart it's two candles that make

[11:21] that up but you're going to have to do

[11:22] is go through a progression of going

[11:24] from the 3 minute 2 minute and one

[11:25] minute chart and you'll get your Market

[11:27] structure and your areas of where it

[11:28] wants to look for an imbalance or old

[11:30] low old high and it just makes it easy

[11:32] and here's the lipstick on it on the one

[11:34] minute

[11:35] chart swing high is broken Market

[11:38] structure is now

[11:39] bullish rallies taking buy stops taking

[11:43] buy stops taking by stops this right

[11:46] here these highs right here is just

[11:48] staying below that low it's building up

[11:51] more interest that this is what

[11:53] resistance that is engineering liquidity

[11:55] that way when this runs above it those

[11:57] individuals that know what you're

[11:58] learning today they know that that's a

[12:00] pull of liquidity for buyers coming in

[12:02] at a high price why is that useful

[12:04] because smart money they bought down

[12:05] here or here or here or here or here

[12:09] that's where they sell to high seeking

[12:11] buyers real nice delivery here as well

[12:13] filling that fair value Gap change in

[12:15] the state of delivery now it's offering

[12:16] sell side what's that mean it's going to

[12:18] match up sell stops it's going to keep

[12:20] going below old

[12:21] lows into an imbalance until we get down

[12:24] to a discount so with that I want you to

[12:28] think about how this is useful number

[12:29] one you're looking at London highs and

[12:31] lows a session for London open okay for

[12:33] instance like 2:00 in the morning to

[12:34] 5:00 in the morning New York time every

[12:37] every time I tell you just always set it

[12:39] with New York local time 2 o'clock to 5

[12:41] o'clock in the morning that's your

[12:43] London session what's the highest in

[12:44] lows of that session okay that's

[12:46] important because the Market's going to

[12:48] probably sweep above those highs or

[12:49] sweep below those lows and create

[12:51] situations like this okay and the New

[12:54] York session is 7:00 in the morning to

[12:56] 10:00 in the morning New York local time

[12:58] okay what's the session high and low for

[12:59] that and do the same thing for Asia okay

[13:02] 7:00 p.m. to 9:00 p.m. and that's it

[13:04] those are the three times of the day

[13:06] that I'm looking for specific key highs

[13:07] and key lows and any intraday high and

[13:10] low forming right before the equities

[13:11] open at 9:30 pretty easy right the hours

[13:14] of operation again are generally between

[13:16] 8:30 in the morning to 11:00 but it can

[13:18] be extended all way to New York lunch

[13:19] noon I do not tend to take trades after

[13:22] noon local time New York uh that hour is

[13:25] usually very problematic and it's just

[13:28] it's better not to even look for any

[13:29] kind of setups wait until 1:00

[13:31] preferably really 1:30 to 4:00 then you

[13:33] got the afternoon Trend typically you'll

[13:34] see between 2:00 and 3:00 there's a

[13:36] setup that usually forms in the

[13:38] afternoon Trend or setup in the period

[13:39] of the time of the day that will also

[13:41] offer opportunities but that's outside

[13:42] the scope of what I'm going to be

[13:43] teaching in this mentorship all right so

[13:45] we talked about internal range liquidity

[13:46] and internal range liquidity is looking

[13:48] for short-term lows or short-term highs

[13:51] inside a price leg that we're retracing

[13:53] back into okay that's all it means

[13:54] internal range liquidity is a short-term

[13:57] higher low with stops above below it or

[13:59] an imbalance in that same range of price

[14:02] action and I taught you Market structure

[14:04] shifts showed you exactly all that's

[14:06] necessary that is all that you require

[14:08] and the skill set of identifying pools

[14:10] of liquidity that is going to be

[14:12] something you learn rather quickly just

[14:14] by going through old data and looking at

[14:15] the times of the day I gave you in this

[14:17] lecture all right your homework is

[14:18] you're going to go through your em mini

[14:19] Futures intraday charts and you're going

[14:21] be looking for stop hunts that lead to

[14:23] Market structure shifts intraday you're

[14:25] going to log your examples with your own

[14:26] annotations for your study Journal so

[14:29] what I showed with the break in the

[14:30] market going higher and lower above old

[14:33] highs or lower below and old low that's

[14:34] running for stops that's a stop hunt

[14:36] then you're looking for that signature

[14:37] for the market structure shift on the

[14:39] three two and or one minute charts okay

[14:42] if you look for that between 8:30 in the

[14:44] morning to noon New York local time in

[14:46] the eem mini markets or if you're

[14:47] watching the micro markets the same

[14:49] logic exists okay but you're going to

[14:51] start going back from today and go back

[14:53] as far as the data will allow you and

[14:55] you annotate your 15-minute time frame

[14:57] for your buy side liqu pool and your

[14:59] cide liquidity pools and then going down

[15:01] into the 3 minute 2 minute one minute

[15:02] chart so for every individual day that

[15:04] you're logging and you're back testing

[15:05] back testing is just Dressing Your Chart

[15:07] out like I'm showing you here and then

[15:08] studying it not just do it until account

[15:10] done really go into to see how price

[15:12] moved and how it

[15:14] [Music]

[15:23] delivered