ICT Mentorship 2022 - Episode 9 - Notes

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EPISODE 9: Power of 3 and New York PM Session Opportunities
This is the NASDAQ continuous daily chart (1D). If we look inside the daily range, where we’ve been, we see a swing
high (3) and swing low (2). Why are we picking these two reference points? Well because, the low at (2) took out the
short-term low at (1). So, we’ve dug into all the sell side liquidity resting below that low. We retraced back up into the
previous swing high at (4), and the market has traded back to premium of that range. Notice at the creation of Fair
Value Gap, the market traded into a discount but did not take out the Sell Side Liquidity at (2) there. But look at the
close on that day. We have an indecisive candle i.e. the open and the close of the market is near/ at the same level.
If we have that and the market is trading down into a discount, even though we might have a low / SSL that we are
targeting, this may require a retracement as the market is unsure about what to do. The equities market had a run up
into the Fair Value Gap created. The low and the high, we will look at that in reference to lower timeframes.
The areas highlighted in Red are the lower end and the higher end of the FVG / Imbalance formed previously.
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The power of three: It refers to accumulation, manipulation, and distribution.

If bullish, we are expecting the opening price to be near the low of the day (OLHC) or the session, then it trades lower
making some important low and then rallies. Creates a high and then closes near the high of the day. Now, it’s not
important for us to predict the closing of the day. What we are trying to anticipate is the likelihood of the market
making some kind of fake move or a JUDAS SWING. Typically, in London and New York Session, there are fake runs
that start off a move.
On Monday (M), the price drops down overnight and begins to consolidate around 8:30 and we have a little bit of rally
ahead of the equities open. If we look to the left, we have the Relative Equal Highs formed around (3:00 PM) and
ahead of 8:30 we had this huge imbalance, a 15-Minute Fair Value Gap. So, if we run these highs out i.e. take out the
buy side liquidity after the open at 9:30 it’s likely to trade down into that FVG and rebalance. We trade up to Monday’s
level, which created the Fair Value Gap on the higher time frame, and it sells off. We are looking at the likelihood of
price coming back into the 15M FVG/ Imbalance area, after taking the Relative Equal Highs out. If it does trade into
the imbalance, that’s a good candidate to go long. Further, to the left of the order block, there are bullish order blocks.
The market trades down, hits the order block and starts to rally and then consolidates.
Like said previously, we don’t need to catch the high of the day. If we’re bullish, where we think it’s going to trade
higher, it’s likely going to be a small little move lower. That’s the move you want to go in and hunt along. If you miss it,
you want to try and get long real close to where the opening price is. You can use the 8:30 AM opening price and mark
that level horizontally (previously said).
Let’s look at the 5-Minute Chart now:

That Imbalance / FVG, the lowest portion of it here (highlighted by pointer) with all the down close candles. The level
marked out (dotted) is the anchor to the daily order block, but we can see how we traded into the Order Block with 4
consecutive down close candles which are complete order blocks on this time frame. So, consecutive down close
candles right before a price surge that has an imbalance is generally an order block. A HIGH PROBABILITY ORDER
BLOCK would be: Narrative / Bias is bullish, we’re looking for a displacement where the market runs real quick higher
and we can anticipate a return back into the down close candles/ order block. The high highlighted in Red was bit
marked out until Monday’s Close.
3
Let’s look at the 1-Min Chart:

Look at the 14,140 & 14,120 level a bit closely: the small little gap created (highlighted area). See the swing high just
prior to that, we trade above it, create a Fair Value Gap, trade down into it. This sets up the stage of a market run into
a higher retracement. We don’t know yet if that high is going to be the closing parameter for a daily Fair Value Gap.
We don’t need to know that yet but it’s a likely scenario to go long.
Here’s the price action for 15th February 2022:

We had an enormous price run overnight into the London Session. When we have these overnight runs (i.e. big moves
overnight) before the session begins in New York, there is a consolidation that takes place shortly after (not always).
If there is a lot of range movement overnight (2:00 AM to 5:00 AM NY Time), when we open at 8:30, we must wait for
the consolidation to occur and be patient.
4
If there’s a big move overnight (for equities), avoid the morning NY session. Wait until the other side of Lunch at 1 O’
Clock in the afternoon and then anticipate the New York Lunch Lows taken out or the NY morning session lows to be
taken out.
The following steps are to be followed:

• Mark out the 8:30. Look at the most recent swing high (marked as Buyside Liquidity) in the above diagram
and the most recent swing low. Why did we not consider the low at (1) with relative equal highs but the low at
(2)? Because of the Fair Value Gap at (3). We prefer (2) as the market algorithms are efficient.
• Did the market create a pseudo – judas wing between 9 – 11 AM? Yes, because the price action after the low
is formed is choppy and created equal lows where there will be sell side liquidity in form of sell stops.
• Watch how price reacts (Area B1) when it breaks the structure of the low created at (2). The price action is
sloppy and there is no clear indication that it actually wants to move higher as opposed to price action in (Area
B2) once that sell side liquidity is taken i.e. a clean upside delivery.
• It’s even better as the market did not take the buyside liquidity but rather targets the Sell Side Liquidity. This
is engineering Liquidity.
Notice we don’t have a Fair Value gap in the area highlighted but it gives us the basis for expecting the price to start
to rally into the afternoon. Now, at 2 O’ clock in the afternoon, we have the market trading down into the Fair Value
Gap / Imbalance formed during 13:15 to 13:30 in the chart and the liquidity resting below the relative equal lows
between 13:30 to 13:45.
What are we looking at?
• We see price run that we don’t think needs to come back down here because the logic is that overnight stops
have been ran out. There’s no reason for the market to come back down there.
• We have two lows post NY Lunch – look at the low near the FVG. The likelihood that the price comes all the
way through the imbalance and going after the first low is not likely, especially after that run up. They don’t
want to give the trades another chance to get back in.
Alternative entry: Find the logic yourself.

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1

EPISODE 9: Power of 3 and New York PM Session Opportunities

The power of three: It refers to accumulation, manipulation, and distribution.

Let’s look at the 5-Minute Chart now:

Let’s look at the 1-Min Chart:

Here’s the price action for 15th February 2022:

The following steps are to be followed:

Alternative entry: Find the logic yourself.

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