Core Month 03 05 Institutional Market Structure - newsqlguru/ict-index GitHub Wiki

ICT Mentorship Core Content - Month 03 - Institutional Market Structure

Content

  • Inside PA

    • Institutional Market Structure (IMS)

    • What is IMS?

      • Analysis of correlated assets or the relationship to inversely correlated assets.
      • The purpose is to determine what the "Smart Money" is accumulating or distributing
      • Currencies are easy to analyze with IMS, using the USDX.
      • Every price swing should be studied to determine if Market Symmetry confirms it.

    • How do we identify IMS in Forex?

      • Compare every price swing in the USDX with Foreign Currency you trade.
      • As USDX trades higher, expect a lower price in the Foreign Currency pairs.
      • If USDX or or a foreign currency fails to move symmetrically, SM is actively trading.
      • As USDX trades lower, expect a higher price swing in foreign currency pairs.
      • IF USDX or a foreign currency fails to move symmetrically, SM is actively trading.

    • Stalking reversals in symmetrical markets is not high probability.

      • Symmetrical markets confirm the trend will continue.
      • We can use symmetrical market conditions to anticipate turtle soup setups.
        • e.g. USDX trades below old low, foreign currency trades above old high. Confirming trend.
          • when USDX trade higher than an old high, this will be a turtle soup setup, as USDX is just running buy stops so it can continue the downward trend.
        • reverse for bullish conditions

    • Stalking reversals in non-symmetrical markets is high probability.

      • Correlated assets do not track as normal and there are divergences in correlation (Cracks in Correlation)

      • We see this when one fails to make the correlated move as the other.

        • In negatively correlated pairs like USDX and Foreign Currency one will fail to make an opposite move.

          • e.g. If USDX makes a lower low and FC fails to make a higher high, this is divergence.

        • In positively correlated pairs one of the assets will fail to make the same move.

          • e.g. If ES makes a lower low and NQ fails to make a lower low, this is divergence.

        • Strength and Weakness

          • negatively correlated assets

            • Strong USDX Weak FC

            • e.g. If USDX makes a lower low and FC doesn't make a higher high we have divergence.

              • A trend reversal is likely.
              • USDX is raiding sell stops, accumulating new positions for a price rally.
              • The FC is weak in this case, due to the failed swing and lower high.

            • Weak USDX Strong FC

            • e.g. If FC makes a lower low and USDX doesn't make a higher high we have divergence.

              • A trend reversal is likely.
              • FC is raiding sell stops, accumulating new positions for a price rally.
              • The USDX is weak in this case, due to the failed swing and lower high.
              • USDX will most likely sell of and support the long positions in the FC.

          • positively correlated assets

            • Only difference is the assets track together rather than inversely.
            • Have the same strength and weakness pattern.
            • Failure to make a lower low is strength in the asset, showing signs of a rally in the asset.
            • Failure to make a higher high is weakness in the asset, showing signs of a drop in the asset.

    • Note, SMT Divergence can be used to play both assets in a trade.

      • Keep stop limit risk within thresholds
      • If we're wrong it will be wrong 2x.
      • If we're right it will be right 2x.

  • Turtle soup setup is a false run above/below an old high/low.

Notes

  • Find 10 occurrences in past price action and log them in your trade journal.
  • Extra credit if found on multiple time frames.