Friday, February 10, 2023
I think of Impulse Price Swings as elastic bands
If price on one asset (A) went very far down while it’s correlated asset (B) didn’t, then it is likely that on the way up B will go higher than A
How is this used: Turtle Soup
Turtle Soup is ICT’s term for a false breakout of a Liquidity Pool. Price crosses the Liquidity Pool level and then quickly reverses back the other direction.
In the example above NQ went down through several Sellside Liquidity levels while ES could not get through one.
This means that NQ was stronger to the downside so we should expect NQ to be weaker on the upside Impulse Price Swing.
We can use this process to frame our trades.