About this video

• Video Title: ICT Top Down Analysis SIMPLIFIED
• Channel: Kimmel Trading
• Speakers: Kimmel (implied, as the narrator is speaking directly to the audience and referencing "me")
• Duration: 12:17

Overview

This video explains a simplified approach to top-down analysis for trading, aiming to make it accessible even for beginners. The presenter breaks down the process into three key components: identifying relevant levels (order blocks and fair value gaps), selecting appropriate timeframes (daily, 4-hour, 1-hour, 15-minute), and asking strategic questions to forecast market movement. The video also demonstrates how to apply this analysis to execute trades, focusing on a repeatable daily process.

Key takeaways

• Three Core Components of Top-Down Analysis: The process is simplified by focusing on three elements: 1) identifying key price levels (order blocks and fair value gaps), 2) choosing relevant timeframes (daily, 4-hour, 1-hour, 15-minute), and 3) asking specific questions to guide trading decisions.
• Identifying Key Levels: Order blocks are defined as counter-trend moves within a trend, while fair value gaps (or inefficiencies) occur during impulsive moves where not all traders are filled, creating a price gap.
• Timeframe Selection: The video emphasizes using daily, 4-hour, 1-hour, and 15-minute timeframes for analysis, explaining that lower timeframes like 1-minute and 5-minute are better suited for execution due to the difficulty in forecasting them.
• Strategic Questioning: The crucial questions to ask are "Where will we go first?" and "Where will we go after?" This is determined by observing which levels (bullish or bearish) the market is respecting.
• Trade Execution: The process culminates in moving to execution timeframes (like the 5-minute chart) to look for a market structure shift after price has reached a higher timeframe key level, aiming for a 1:2 risk-to-reward ratio.

The three core components of the simplified top-down analysis method presented are:

1. Levels: Identifying key price zones like order blocks and fair value gaps.
2. Time Frames: Utilizing specific time frames for analysis, including daily, 4-hour, 1-hour, and 15-minute charts.
3. Questions: Asking strategic questions to forecast market direction, such as "Where will we go first?" and "Where will we go after?"

The video defines order blocks as counter-trend moves within a trend. For example, in a bullish trend, pullbacks creating order blocks are counter-trend moves.

A fair value gap (FVG) is described as an inefficiency created by a very impulsive move where not every trader was filled at their desired price, resulting in a gap in fair value on the chart. This is often seen as a three-bar pattern leaving a visible gap.