Trading Strategies and Market Analysis

I'm gonna teach you a little bit more about gaps, but for now, here

is the AM session ICT Silver Bullet trading up into that gap

high. Swing low is right there. So it hit our higher time frame weekly

objective. That's a key level. It hits it, breaks lower, shift in

market structure, that's bearish. Small little imbalance here.

This right here, that move right there, that is the twenty

twenty-two ICT mentorship model.

So buy side taken into a premium, shift in market structure,

fair value gap, trades up into it. There's your shell. Go short.

What do you aim for? Relative equal lows and liquidity.

And if you wanna be overzealous, you can aim for the weekly gap low.

I personally wouldn't have, but for the sake of argument,

you could have.

Now, if you're trading the ICT Silver Bullet,

we have a shift in

market structure that's much more pronounced. So this swing low here

is broken.

We have a fair value gap between this candle's high and that candle's low.

This is a SIBE, sell-side imbalance, buy-side inefficiency.

Price returns back up. There's your short.

You'd have to endure one more time and a small amount of drawdown in here.

It spends a little bit of time, and then finally gives up the ghost,

breaks one

more time below that low, digs into this sell side, but notice

that that low is

just barely below those. You know what it's reaching for,

new week opening gap.

They're like a magnet, okay? The market drops, comes back up,

another fair value

gap. So you could have taken this one if you didn't take that one, or you could

have traded this one short, pyramided more in here. Drops down.

Look where that low is on that candle right there.

That's the new week opening gap low. Bang. Perfect. Right to the tick.

Runs right back up in. Returning back to the old fair value gap,

dropping

aggressive. Small gap in here around new week opening

gap.

Trades up into it here, which is institutional order flow entry drill,

which is a

partial return into, not a complete closure of that gap.

That candle's high, that candle's low, just a little bit above the low, and then

consolidates and tears off and goes lower.

And I'm gonna tell you how that low would be significant.

If you take the high here and add your fib to it here and draw it

down to that low, one standard deviation would be forty-two

seventy-eight

point seven five. That's a pretty handsome objective

if we treat that high to

that low, this low being a fulcrum point.

That means if this move from high to that low was like a door,

okay, and it swung, this was the hinge of the door.

This high, if it was allowed to swing completely all

the way around

and would come right down right below that low here, it would come to that price

point here. So all I'm saying is, is this range from that low to high

subtracted from that low takes us right to this forty-two seventy-eight point seven

five. Now I'm gonna teach you advanced gap

theory.

We're gonna take a look at that same price swing.

All of this is the, the initial runoff.

This is a Judas swing in the first thirty minutes of trading.

So at nine thirty opening bell, we see the price run higher,

stops dead in its

tracks at the weekly gap high, the gap high that I told you about weeks

ago. Having that level on your chart and then anticipating

price reacting there. Swing low, it breaks lower, and that gives us this

small little gap right there. This gap right there

is simply a fair value

gap. It's a common gap. They can be traded, though,

with the context I've already

taught you. Twenty twenty-two model, buy side, higher time frame level.

Takes buy side, does it go after the short-term low? Yes,

it does.

Did it leave a gap? Yes, it did. Go short, stop above this candle's high right

there. If you're really scared and you don't wanna take a larger risk,

put your

stop right above here and trade with le-less leverage.

The market, uh, breaks lower, and we have this gap right here.

This is a fair value gap in the form of a SIBE just like this is, but this is a

breakaway gap. What is it doing? It's breaking away from this important

higher

time frame high inside the model of the twenty twenty-two ICT mentorship

model that I taught you, and it's moving aggressive.

So we have one, two.

Two times there's a shift in market structure that's bearish.

This is a breakaway gap. Breakaway gaps must, it

must have some context as to why price should see...

For instance, this is a bearish breakaway gap.

It's breaking away from a level that we would already anticipate being

some

measure of a short, okay? Some context around this level, we would

expect to see some kind of respect of that level, okay?

So it's a higher time frame weekly gap high.

We've already been there on Monday, repelled lower.

We created a short-term high prior to it here, and then ran up to it there, and

then it took that low out there. Left the gap.

That in itself is the twenty twenty-two model. Then it breaks again.

Returns back into it here. What did it leave? Relative equal lows.

So there's your fulcrum point from low to high.

You may have missed the twenty twenty-two model entry here. No problem.

The return back into this gap here.

Breakaway gaps tend to leave a portion of the gap

unfilled. From this candle's low to this candle's

high, it retraces all the way

up into this level. So between these highs of these candles

and that candle's low,

there's a small portion that's left open. We would expect to see that.

If this is gonna be a gap, say you went short into it here

and you're seeing it and

watch it in here, your stop if you were shorting in here would be above this

candle's high, not fearing any return back into this

because we have

had two shifts in market structure.

This return in here, you're anticipating

while entering this trade, you're

expecting this portion to stay open.

If it does, you wanna see that happen anyway for your trade.

But if it doesn't and it completely fills it in,

that's not a breakaway gap, then

it may need to come back up and tap this one more time.

So if you were to get stopped out, you'd have to wait for it to hit this fair

value

gap and then break one more time, create another imbalance

or fair value gap, and

then use that to go short. So what I've just taught you

is how you navigate.

If you're wrong and it doesn't become a breakaway gap, you wait for it to trade to

the higher time frame fair value gap and then break lower again, create another

fair value gap, and then treat that as a potential later breakaway gap.

But the context is it's running up here to get traders thinking it's going

higher. Bullish, okay? From this low up to this high in here,

this looks like a

bull flag, I guarantee you, to most retail traders.

And when it went above that high here, that validated everyone thinking

that it's a

bull flag, then it broke lower. Now, if you didn't have that weekly gap high,

you

would never understand what I'm showing you here, but you've known that level for

weeks. It broke down, and in here is a breakaway gap.

It's qualified as a breakaway gap because it leaves and goes

lower to another lo- new low and leaves that portion open.

At that time, we get real confident that it never will come back up to this

level here, so we can drop our stop right to

that level there. And-Let it roll.

Then we have these two candles here.

These are one-minute candles, so this is essentially two minutes of a fair value

gap. So this is a standard, typical ICT fair value gap in the form of

a SIBI,

and you can see them come back and trade back to them.

They're like, again, a common gap.

Common gaps can be re-traded to multiple times, and they reclaim them

sometimes as support or resistance.

And then we have this large gap here, these two down close candles.

That's one big fair value gap in the form of a SIBI.

If we were looking at a two-minute chart, right now it's one minute.

If you do this on your own charts, look at this area here on a two-minute

chart.

That's one candle down, so it's only trading back up into

consequent encroachment

of the two-minute range of these two specific one-minute candles.

So in easy language, in layman's terms, from this candle's low and this

candle's high on a two-minute chart, this is one down close candle.

Midpoint of that is where it's trading here. That's consequent encroachment.

This is a fair value gap in the form of a SIBI, sell side imbalance, buy side

inefficiency, and it's a measuring gap. What does that mean?

We can take this range and use it for projection.

The market breaks lower, and then we have another fair value gap in

the form of a

SIBI. You can look at this on a two-minute

chart.

This will be one down close candle, and again,

essentially working into consequent

encroachment, taking buy side here, and then breaking lower to a lower low

below that weekly gap low. Standard fair value gaps, which

are common gaps,

they can be reclaimed or traded back to as resistance

or support.

Market trades back up to here. Look at the bodies of the candles here.

That's telling you what? The narrative, if you're reading my

gap theory in price, if you see these signatures like this,

see here, I tell

you all the time, the bodies tell you the story.

The wicks do the damage.

The wicks is what everybody else gets messed up with.

Reading price action naked with time and looking for these types of signatures

here, the open and close of these two candles

here are supporting the

idea that this low of that inefficiency is being respected, and

then price does what? It trades lower. Where does it trade to?

Below the sell side here, but not some random level.

If we take the high of that price swing and draw that Fibonacci

all the way down to that candle's high right there,

from high to

low of the gap. Why this gap? Because this is the measuring gap.

It's approximately half of a implied dealing range.

Implied meaning we're looking for it to go lower, but we haven't seen price go

there yet. We're not reacting, remember. We're predicting price.

So the high here, draw that down to that candle's high right

there. What that does is gives you a projection to a standard

deviation of negative one. The negative one standard deviation comes

in at

forty-two, sixty-nine point two five.

The low comes in exactly at forty-two, sixty-nine point two five.

Folks, that is the daily low to the tick right

there, and it never went lower

today, even after hour session, didn't go lower.

So this is my ICT swing projection theory.

When I break the market down... See, gaps are just like a PDRA matrix.

They have an hierarchy. You have a breakaway gap.

You have common gaps.

Common gaps can be reclaimed. That means traded multiple times.

Measuring gaps tend to leave a portion open, just like a

breakaway gap. So if we're expecting it to go lower,

it stands to reason that we

expect it not to trade all the way up here.

And if we're expecting it to be a measuring gap, guess what?

We wanna see it not go up there, and that confirms and qualifies it as a

measuring

gap. Then we can take the high, project it down to the low of the gap

if we're

bearish, and then get our standard deviations.

But that standard deviation neg- negative one has to be in agreement with

moving

below an old area of liquidity. So that's between these two things

makes us have the precision, okay?

It's not simply you take a fib, put it over two different price swings,

and then

you're gonna get the same math that I have.

But understanding that gaps have an hierarchy, okay?

And this is how I qualify my gaps. Every time you watch me do a

recorded trading episode where I'm going in and I'm trading live data

and I'm pyramiding and adding and pyramiding and adding

and I'm taking partials off

and I'm looking for a specific level, I'm using this logic here when I'm

drawing out, when I say, "I wanna leave this,

see this portion of the gap stay

open. I wanna see this portion of the gap stay

open." Ideal if it leaves this

portion open, unfilled. It's this theory I'm teaching you right

here.