Core Month 03 05 Institutional Market Structure - newsqlguru/ict-index GitHub Wiki
ICT Mentorship Core Content - Month 03 - Institutional Market Structure
Content
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Inside PA
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Institutional Market Structure (IMS)
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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.
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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.
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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
- e.g. USDX trades below old low, foreign currency trades above old high. Confirming trend.
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Stalking reversals in non-symmetrical markets is high probability.
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Correlated assets do not track as normal and there are divergences in correlation (Cracks in Correlation)
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We see this when one fails to make the correlated move as the other.
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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.
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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.
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Strength and Weakness
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negatively correlated assets
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Strong USDX Weak FC
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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.
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Weak USDX Strong FC
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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.
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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.
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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.
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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.