ICT Course By - Michael J. Huddleston (ICT) (Notes by - Dan Dowd)

Episode 2 (Elements to a Trade Setup)

Weekly & Daily Bias

• Looking for a likely move higher or lower based on the weekly candle. That sets your initial bias for the week. (Weekly bias) The market is drawing to 2 things; price is either running to take out highs and lows or running to fill an imbalance. When it's not doing those its consolidating.
• The majority of finding the draw on liquidity will be found in the daily timeframe analysis.
• Any time a significant price move lower/higher is expected, always anticipate some measure of a stop hunt on short-term highs, whether sell-side or buy-side liquidity.

Example - see how the draw on liquidity was lower but traders who got in shorts early below the low were induced with the price running above the high which is buy-side liquidity.

• When price runs highs/lows on higher timeframes we wait for a market structure shift (MSS) on lower timeframes. See how the price ran above buy-side liquidity and then quickly reversed in the blue-shaded area and created an MSS. See how price makes a low than takes out that low now creating a lower low, that is the MSS.

• We wait for the price to fill an imbalance such as an FVG once that MSS is created. The orange-shaded area is the fair value gap. It is from the 1st green candle low to the 3rd green candle high, the area in between that creates an imbalance which is labeled a FVG. Focus on the imbalance after the MSS.
• Learn to trust going short as the market is moving higher into that imbalance. Selling green candles and buying red candles. Retail books tell you to wait for confirmation candles of a reversal which is BS and makes you chase higher prices.
• Pay attention to when price creates a MSS and also creates an FVG while doing so.

• When we draw a Fib from the swing low to the swing high the 50% level is called the equilibrium, above the 50% level from an algorithmic perspective is called a premium, and below it is a discount. Targets can be placed below 50% of that swing move which would be in a discount but partials should also be taken below each low (sell side liquidity).

• Within the discount of the range, we are looking for lows or imbalances (FVG) for targets, there is a fair value gap which is categorized as a buy-side imbalance and SellSide inefficacy (BISI FVG). When the price trades below the old low or into the FVG within the discount that is where we would sell. We want to use the closest target (low-hanging fruit).

Episode 3 (Internal Range Liquidity &MS)