2022 ICT Mentorship Episode 2

Introduction

In this tutorial, we will explore the key elements of a successful trade setup in futures index trading, primarily focusing on the Nasdaq E-mini futures. This guide is designed to help you understand the concepts presented in the 2022 ICT Mentorship Episode 2 video, enabling you to develop your trading skills effectively.

Step 1: Understand the Basics of Futures Trading

• Familiarize yourself with futures contracts, especially the Nasdaq E-mini.
• Recognize that trading can be done in a paper trading environment, such as TradingView, to practice without financial risk.
• Note the significance of price action in understanding market movements.

Step 2: Analyze Price Action

• Focus on intraday price action to identify potential trading opportunities.
• Use a one-minute chart to observe market movements and identify standout trades.
• Look for reversal patterns, where a long position may reverse and indicate a short position.

Step 3: Identify Trading Setups

• Develop a framework for identifying specific setups in your trading account.
• Recognize that a "handle" refers to a minimal price movement in futures trading (e.g., four ticks).
• Calculate potential profits based on handle movements (e.g., Nasdaq is $20 per handle).

Step 4: Establish Weekly and Daily Bias

• Before a new trading week, assess the likely movement of the weekly candle (higher or lower).
• Analyze the daily chart for swing highs and lows, which indicate liquidity levels.
• Determine your weekly bias (expecting higher or lower prices) to guide daily trading decisions.

Step 5: Look for Liquidity and Imbalances

• Understand that liquidity can be found in old highs (buy stops) and lows (sell stops).
• Identify imbalances in price action, which indicate potential entry points.
• Use Fibonacci levels to determine whether the market is in a premium or discount phase.

Step 6: Execute Trades Based on Market Structure

• Wait for a break in market structure after identifying a liquidity run.
• Use lower time frames (like 1-minute or 2-minute charts) to pinpoint precise entry levels.
• When the market retraces into an imbalance, consider entering a short position.

Step 7: Manage Risk and Set Targets

• Set stop-loss orders above the recent highs to manage risk effectively.
• Aim for nearby liquidity targets rather than far-off levels to secure profits.
• Monitor the market closely for signs of reversal or continuation, adjusting your strategy as needed.

Conclusion

This tutorial outlines the foundational concepts and actionable steps for trading futures, particularly in the Nasdaq index. By understanding price action, identifying setups, and managing risk, you can develop a systematic approach to trading. As you practice these techniques, focus on consistency and refining your strategy based on your observations. Consider revisiting the charts regularly and logging your trades to build confidence and skill over time. Happy trading!