Market Efficiency Paradigm & Price Delivery Algorithm

ICT Mentorship Core Content - Month 1 - How Market Makers Condition The Market

The Market Efficiency Paradigm

"This is the market efficiency Paradigm and what this generally is depicting or what I was trying to communicate by drawing it out is we as new Traders are collectively part of this larger hole over here of uninformed money" (0:38)

UNINFORMED MONEY Retail Traders Social Media Gurus & Teachers Indicators & Tools Supply & Demand Facade SMART MONEY Banks Liquidity Providers Quiet Operation DRIVES THE DRIVE SHAFT THE HERD

"This huge populous of trading people or Traders community in the retail realm is really not that big but we are led to believe that we are huge and it we are given this this idea of ourselves that we're Giants we push price around and we don't" (4:13)

"It's this small little group of Traders okay they're the ones that influence this entire mechanism that we call the markets this small little group of Traders is actually the drive shaft" (4:43)

Smart Money Reality

Who Controls Price

"The bank's Drive price whether you want to accept it or not that's what's going on and the sooner you get to that understanding and expectation of what it is that's going on in price it's not for your well-being it's for the bank's well-being it's their business they are the liquidity provider" (6:03)

The Facade of Retail Concepts

Supply and Demand Facade

"That's the facade of supply and demand that's the facade of trend lines driving price when it touches it that's the facade of moving average crossovers causing price go up or down that's the facade that's perpetuated and we are led to believe that that's exactly what takes place" (1:55)

AI and Algorithmic Control

"They're absolutely controlled it's an AI it's artificially intelligence and it's you are not trading against a person anymore it's a computer program that delivers price and it knows human behavior because it's the same way it's been always fear and greed" (10:09)

The Paradigm Shift Required

"There has to be a paradigm shift see if you're over here thinking that it's the group of traders that is online talking amongst themselves as a whole they are the ones that make price go up and down because of they buying and selling interest because the supply and demand factors around them that's what pushes price around that's a facade and I'm here to tell you that you need to put that to bed now" (5:12)

The Interbank Price Delivery Algorithm

Core Definition

"The daily range structure can be really broken down and simplified with it starts with a price equilibrium that's Asian range then there's a manipulation and that's always going to come by way of some news event some news driver either at the time of the manipulation or just before it that's the Judah swing" (15:04)

The Algorithm Sequence

INTERBANK PRICE DELIVERY ALGORITHM CONSOLIDATION Orders building up ALWAYS EXPANSION Impulse move OR OR RETRACEMENT Back to order block REVERSAL Direction change EXPANSION Same direction EXPANSION Opposite direction CRITICAL RULES NEVER: Consolidation → Retracement NEVER: Consolidation → Reversal ALWAYS: Consolidation → Expansion → (Retracement OR Reversal)

Algorithm Rules

The Impossible Sequences

"The main thing is I want you to understand is is it never goes consolidation retracement it never does consolidation reversal it's always consolidation expansion and then from expansion it goes either retracement or reversal" (18:35)

Expansion First, Always

"Nothing can happen until consolidation consolidation is when the Market's quiet why why is that important because that's when the orders are building up in the marketplace the market makers will allow orders to build up above and below the range the next stage is always expansion" (17:26)

The Choice After Expansion

"Once we're in the expansion stage okay then you have a choice it can retrace come back to the order blocket just left behind and then recapitalize that and then make another leg up or down relative to the direction it's moved or once it's moved into expansion it can reverse" (18:09)

Daily Range Structure

Time-Based Framework

"Every day starts with consolidation Asian range after midnight there's a manipulation that takes place that's expansion it's coming in form of a Judah swing what is it doing it's making the higher low in London that's the London swing for a reversal that's a run on stops" (13:57)

DAILY RANGE STRUCTURE Asian Midnight London 5:00 AM 8:30 AM London Close CONSOLIDATION Asian Range MANIPULATION Judas Swing EXPANSION London Reversal CONSOLIDATION 5-8 AM window RETRACEMENT 8:00-8:30 AM EXPANSION New York Session REVERSAL London Close CONSOLIDATION Rest of day "The general structure is consolidation in Asia expansion reverse in London make a higher low of the day then expand small consolidation in New York retrace between 8:00 and 8:30 in the morning New York time another expansion move reverse back to consolidation"

Daily Range on Buy Day

"We're going to use the perspective it's a buy day that means that Asia the Asian range had a small consolidation and then right after midnight New York time there's a drop down in price that's the manipulation making the false move for the low there's a range expansion then it goes into to the reversal that's classic London open scenario where it shoots down runs the stops and then what happens it expands again" (15:43)

Key Time Windows

5:00 AM to 8:00 AM Consolidation

"Between 5:00 in the morning to 8:00 in the morning in that time window the market will go back into consolidation then it'll have a retracement between 8:00 and 8:30 in the morning New York time" (16:16)

London Close Reversal

"The range will expand and make the rest of the day going up into 10:00 or 11:00 in the morning New York time where it will have a reversal again that's London close then the market will go into consolidation ending true day" (16:34)

Price Process Rules

The Generic Systematic Process

"When you understand this algorithm the way it moves and way it operates it's very generic it's very systematic it has only a few options to go to and they're time sensitive they're day sensitive okay they're intermarket related" (19:13)

Weekly Range Application

"That same thing happens with a weekly range the weekly range is the same thing Sunday's open consolidation then there's an expansion move in Monday then what there's a reversal on Tuesday or or Monday and then what there's another expansion move then it goes back in consolidation midweek and then it's either going to do what it's going to reverse or it's going to retrace" (24:04)

Identifying the Next Move

"When you get to the the level of month 8 and month nine in the mentorship you're going to be so strong at knowing what the next thing's going to happen in your in your price that you're studying you'll know all these four things okay there's only certain processes that have to take place in a certain order" (20:12)

Repeating Characteristics

"We have a way of looking at these things and applying these Concepts to time of the day and repeating characteristics" (14:48)

"When you have higher time frame directional premise understood and then you look at this price delivery algo it's so easy to know what the price is going to do every single day" (21:46)

Study & Review

Click each card to reveal the answer (direct quotes from transcript)

Who really drives price in the markets?
"The bank's Drive price whether you want to accept it or not that's what's going on... they are the liquidity provider" (6:03)
What is the Market Efficiency Paradigm showing us?
"We as new Traders are collectively part of this larger hole over here of uninformed money... this small little group of Traders is actually the drive shaft" (0:38, 4:52)
What is controlling price movement today?
"It's an AI it's artificially intelligence and it's you are not trading against a person anymore it's a computer program that delivers price and it knows human behavior because it's the same way it's been always fear and greed" (10:09)
What is the first stage that all price movement must start with?
"Nothing can happen until consolidation... that's when the orders are building up in the marketplace the market makers will allow orders to build up above and below the range the next stage is always expansion" (17:26)
Can price go from consolidation directly to retracement?
"It never goes consolidation retracement it never does consolidation reversal it's always consolidation expansion" (18:35)
What are the two options after an expansion move?
"Once we're in the expansion stage okay then you have a choice it can retrace come back to the order blocket just left behind... or once it's moved into expansion it can reverse" (18:09)
What happens in the Asian session to start each day?
"Every day starts with consolidation Asian range after midnight there's a manipulation that takes place that's expansion it's coming in form of a Judah swing" (13:57)
What is the Judas swing?
"There's a manipulation and that's always going to come by way of some news event some news driver either at the time of the manipulation or just before it that's the Judah swing" (15:14)
What happens during the 5:00 AM to 8:00 AM window?
"Between 5:00 in the morning to 8:00 in the morning in that time window the market will go back into consolidation then it'll have a retracement between 8:00 and 8:30 in the morning New York time" (16:16)
What is the London close reversal?
"The range will expand and make the rest of the day going up into 10:00 or 11:00 in the morning New York time where it will have a reversal again that's London close then the market will go into consolidation" (16:34)
How systematic is the price delivery algorithm?
"It's very generic it's very systematic it has only a few options to go to and they're time sensitive they're day sensitive okay they're intermarket related" (19:13)
Does the weekly range follow the same structure as the daily range?
"That same thing happens with a weekly range the weekly range is the same thing Sunday's open consolidation then there's an expansion move in Monday then what there's a reversal on Tuesday or or Monday and then what there's another expansion move then it goes back in consolidation midweek" (24:04)
What is the facade that retail traders believe?
"That's the facade of supply and demand that's the facade of trend lines driving price when it touches it that's the facade of moving average crossovers causing price go up or down that's the facade that's perpetuated" (1:55)
What paradigm shift is required to trade like smart money?
"You need to leave this realm and this circle of people in their thought processes and transition and have a paradigm shift in your thought process about how the markets are efficient because they're not efficient for the speculators they're efficient for the smart money" (5:47)
Why is intraday study important for learning?
"I want you to give you immediate feedback and the way you get that is by using intraday study because you get a lot of feedback in intraday action that is applicable to longer term charts... with intraday it's like compressing years of data in just 30" (13:13)