Lecture 9: Post-News Expansion, Over-Extension & Reversion Rules

Title: Post-News Expansion, Over-Extension & Reversion Rules
Date: August 15, 2024
Mentor: Michael J. Huddleston (The Inner Circle Trader)

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1. Executive Summary & Core Objective

Lecture #9 focuses on evaluating explosive post-news expansions (8:30 AM Retail Sales release), recognizing when price becomes over-extended ('too long in the tooth'), and executing reversion protocols [551, 552].

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2. Core Concepts & Technical Mechanics

A. Evaluating Post-News Displacement (8:30 AM Catalyst)

• When high-impact news causes violent upward expansion through multiple HTF targets in seconds, traders must evaluate whether the move has fulfilled its algorithmic narrative [551].

B. The 'Too Long in the Tooth' Filter

• Rule: If price has already expanded 150-200+ handles vertically during pre-market or early session, entering long via standard FVGs carries extreme risk of deep retracement [551].
• Reversion Signature: Once HTF rejection blocks or premium gap CE levels are hit during extreme extension, expect price to retrace toward Opening Range Gap CEs or internal discount NDOGs [551, 552].

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3. Trading Discipline, Mindset & Psychology

A. Resisting Euphoria & FOMO

• Chasing parabolic news candles is a hallmark of amateur trading [551].
• Professional discipline requires standing aside when price reaches extreme extension and awaiting clean consolidation/reversal structures [551].

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4. Step-by-Step Action Plan & Homework

1. Measure the total handle expansion post-8:30 AM news releases [551].
2. Check if major daily/weekly targets have been completely fulfilled [551].
3. If targets are fulfilled and price is over-extended, avoid taking continuation entries [551].

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Reference Source Link:
Watch ICT 2024 Mentorship - Lecture #9 (August 15, 2024) on YouTubeWatch on YouTube