How to use this Bible

Think of this Bible as your trusted companion on your trading journey, a

knowledgeable friend who's always there to guide you. Whenever you
encounter uncertainties about ICT concepts, turn to these pages for clarity
and insight.

Consider this Bible your shortcut to understanding the world of trading

through the lens of ICT's wisdom. No need to scour endless hours of
mentorship videos or take exhaustive notes – I've done that for you. This
compilation is the result of my dedicated study, meticulous note-taking,
and countless revisions, all to simplify your learning experience.

Each chapter begins with a direct link to the corresponding ICT video. So,
if a specific topic leaves you wanting more, you can effortlessly reinforce
your understanding by watching the accompanying video. This way, you
can cement your knowledge and gain a rock-solid grasp of the material.

Remember, this Bible is a product of thorough research and dedication. It

contains all the core content from ICT's mentorship, meticulously
organized for your convenience. I spent countless hours studying this
material when I started my trading journey, wishing for a resource like this
to save me time and effort.

Now, it's my pleasure to share it with you. I hope you find value in this
comprehensive guide, making your trading experience smoother, more
informed, and ultimately more successful.

Enjoy your exploration of the ICT Trading Bible!

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Introduction
Hello, fellow trader! If you're here, you're about to step into the exciting world of
trading. Trading, at first glance, may appear to be a complex puzzle of numbers,
charts, and financial jargon. But don't be intimidated; it's not as complicated as it
seems. I'm here to simplify it all and equip you with the knowledge and skills to
navigate the financial markets successfully.

You might be wondering who I am. Just think of me as your 25-year-old trading
enthusiast. I've been through the highs and lows of trading, learned from the best
(and the not-so-best), and I'm here to share the strategies, wisdom, and insights that
have transformed my trading journey.

The ICT Trading Bible is not your typical trading manual. It's your comprehensive
guide to understanding trading, from decoding market sentiment to mastering risk
management, all while maintaining your composure during trading's most intense
moments.

Throughout this guide, we'll cover everything you need to know, from the
fundamentals of market analysis to the finer points of risk management. We'll delve
into patterns, setups, and psychological techniques that will elevate your trading
skills. And yes, we'll discuss the psychology of trading because, believe me, it's just
as important as knowing when to buy or sell.

But let's be clear – I'm not here to promise you overnight wealth or a shortcut to
becoming a millionaire. Trading is a journey, one that requires dedication, practice,
and patience. What I can assure you, however, is that if you're ready to learn, stay
disciplined, and put in the effort, the ICT Trading Bible will provide you with the
guidance to become a knowledgeable and confident trader.

Whether you aspire to trade professionally, boost your income, or simply demystify
the world of finance, this guide is your ultimate resource. So, get ready to start on
this exciting trading journey. The markets are open, and together, we're going to
navigate them successfully.
Chapter 1.1: Elements of a Trade Setup
Link to ICT Video

In this chapter, we will delve into the critical elements of a trade setup
according to the principles of ICT Trading. Understanding these elements is
essential for making informed and strategic trading decisions. There are two
primary concerns when assessing a trade setup:

A. Context or Framework Surrounding the Idea

When considering a trade, it's vital to assess the context or framework in
which it exists. This context can be categorized into four main conditions:

1. Expansion: This occurs when the price is making a significant move in

one direction. Recognizing an expansion phase is crucial as it often
precedes substantial price movements.

2. Retracement: After an expansion, prices may retract partially. Identifying

retracement levels helps traders determine potential entry points or
reversals.

3. Reversal: A reversal signifies a

change in the current price trend.
Recognizing reversal patterns is
essential for traders looking to
capitalize on trend changes.

4. Consolidation: Consolidation
refers to a period when prices move
within a relatively narrow range,
indicating a lack of a clear trend.
During consolidation, traders often
adopt a "holding pattern" and wait
for clearer signals.
B. Reference Points in Institutional Order Flow
To make informed trading decisions, it's crucial to consider reference points
within institutional order flow. These reference points include:

1. Orderblocks: These are specific price levels where significant

institutional orders are likely to be placed. Recognizing orderblocks can
help traders anticipate price reactions at these levels.

2. FVG and Liquidity Voids: Understanding Future Value Gaps (FVG) and
liquidity voids is essential for identifying potential areas where price may
experience rapid movement due to a lack of orders in the order book.

3. Liquidity Pool and Stop Runs: Recognizing liquidity pools (areas with a
high concentration of orders) and stop runs (intentional market moves
designed to trigger stop-loss orders) can provide insights into price
manipulation and potential reversals.

4. Equilibrium: Identifying points of equilibrium in the market can help

traders gauge the balance between buying and selling pressure.
Trade Setup Characteristics
To make the most of these elements, it's crucial to consider the
characteristics of your trade setup. Always ask yourself, "What characteristic
are we trading in?" The four primary conditions of trade setups are:

- Consolidation: Occurs during consolidation when prices move within a

narrow range, signaling indecision in the market.
- Expansion: Marks the start of significant price movements, either
continuing in the same direction or leading to retracement or reversal.
- Retracement: Follows an expansion and offers potential entry points or the
possibility of another expansion phase.
- Reversal: Indicates a shift in the current trend, presenting opportunities for
contrarian trading strategies.
It's important to note that these four conditions interchange throughout the
market, and traders must adapt their strategies accordingly. You will
typically encounter one of these conditions at any given time, so
understanding where price currently stands, where it might go, and where
it came from is essential.

In conclusion, remember that patience is key in ICT Trading. Always wait

for the first expansion before making trading decisions, as this provides
valuable insights into the market's direction and momentum. In the
following chapters, we will explore how to apply these principles in
practical trading scenarios.
Chapter 1.2: How Market Makers
Condition The Market
Link To ICT Video

In this chapter, we will delve into the intricate dynamics of market

conditions as influenced by market makers, a fundamental aspect of ICT
Trading principles. Gaining insights into these conditions is crucial for
developing a well-informed trading strategy that can navigate the
complexities of the financial markets.

We will explore the various phases and patterns that shape trading activity
and uncover the subtle maneuvers employed by market makers.
Understanding these nuances is paramount for traders seeking to make
informed decisions and ultimately achieve success in the world of trading.

Its a small group of traders that move the markets

We saw this in our last chapter:

Let’s fill this in more:

1. Price Equilibrium = Asian Range
The trading day often begins with a period of price equilibrium, known
as the Asian Range. During this phase, prices typically move within a
relatively narrow range as Asian markets set the initial tone for the day.

2. Manipulation = Judas Swing

Manipulation refers to deliberate market moves designed to trap traders.
One common form of manipulation is the "Judas Swing," where prices
briefly move in a direction to trigger stop-loss orders before reversing.

3. Reversal = London Open

The London Open often marks the start of a reversal phase. This is when
significant price shifts occur, leading to the establishment of the high or
low of the day.

4. Expansion = London Open

Conversely, the London Open can also trigger expansion phases,
characterized by substantial price movements. These expansions can
either continue in the same direction or lead to retracement or reversal.

5. Consolidation = 5 AM to 8 AM
The period from 5 AM to 8 AM is commonly associated with
consolidation, where prices move within a narrow range, indicating
indecision or a temporary balance between buyers and sellers.

6. Retracement = 8 AM to 8:30 AM
Following the consolidation phase, between 8 AM and 8:30 AM,
retracement often occurs. This retracement can provide potential entry
points or set the stage for another expansion phase.

7. Reversal or Expansion in New York Sessions

During the New York trading sessions, prices may experience either
reversal or expansion, influenced by various factors, news releases, and
trading sentiment.
 8. London Close Reversal
The closing of the London session can also trigger reversal patterns,
offering trading opportunities based on this market event.

9. Consolidation
Consolidation often follows other phases, providing traders with
opportunities to reassess the market and prepare for the next potential
move.

Trading Phases Sequence

- Everything Starts with Consolidation: Regardless of the phase, every
trading move starts with a period of consolidation, where prices consolidate
within a range.

- Next Stage Is Always an Expansion: Following consolidation, the next

stage is typically an expansion phase, characterized by substantial price
movements.

- Expansion Can Lead to Retracement or Reversal: Once in the expansion

phase, prices may either retrace to a previously established order block or
reverse, leading to another expansion or consolidation.

Possible Sequences:
- Consolidation ➔ Expansion ➔ Retracement ➔ Another Leg Up or Down
- Consolidation ➔ Expansion ➔ Reversal

Impossible Sequences:
- Consolidation Cannot Lead Directly to Reversal
- Consolidation Cannot Lead Directly to Retracement
- Consolidation ➔ Expansion ➔ Another Consolidation
General Trading Observations:
Understanding the High and Low (H/L) bias can be instrumental in
predicting price movements. The following pattern is often observed:

- Sunday Open = Consolidation

- Monday = Expansion
- Tuesday = Reversal
- Wednesday = Expansion
- Thursday = Consolidation (Midweek)
- Friday = Reversal or Retrace

These patterns provide valuable insights into weekly trading dynamics.

Understanding and recognizing these phases can significantly enhance your
trading strategy and decision-making process.
Chapter 1.3: What To Focus On Right
Now
Link To ICT Video

In this mentorship, the main focus is understanding the 4 pillars:

consolidation, expansion, retracement, and reversal. Understanding
emerges from exposure, and exposure creates experience.

A. Creating daily price action logs with price charts:

1) Daily chart - 12 months, no less than 9 months view.

2) 4-hour chart - 3 months view.
3) 60-minute chart - 3 weeks view.
4) 15-minute chart - 3 to 4 days view.

B. Resist the urge to forecast price movements right now:

1) Note where price has shown a quick movement from a specific level.
2) Note recent highs and lows that haven't been retested yet.
3) Note areas on the charts where price has left "clean" highs or lows.
4) Note on which days weekly highs and lows form and the corresponding
killzone.
5) Note the daily high and daily low every trading day and the respective
killzone it formed in.
Old Highs – Buy Stops or Buy Side Open Float

Old Lows – Sell Stops or Sell Side Open Float

Clean Highs – Liquidity Pool of Buy Stops

Clean Lows – Liquidity Pool of sell stops

Sharp Runs In Price – Liquidity Voids
Swing High – Three Candle Pattern. The Up Candle

Swing Low – The Three Candle Pattern – The Down Candle

Deal with 1 pair:
Start by marking the most recent highs and lows where markets have shown
a willingness to repel from on the daily time frame (TF).

Next, drop into the 4-hour TF and do the same thing, looking for areas where
it's too clean. Note where the market has moved quickly away from a level,
including Future Value Gaps (FVGs).

Afterward, go to the 1-hour TF. On the 1-hour chart, look at the individual
days over the course of 1 or 2 weeks, focusing on intraday highs and lows,
which serve as a good bellwether.

Keep this chart separate from the lower time frames when moving down, as
it helps maintain clarity.

Use 3 different charts:

1. Executable chart.
2. Multi-Time Frame (MTF), 15 minutes.
3. High Time Frame (HTF).

Finally, go to the 15-minute chart and do the same thing you did on the HT
charts, but only for the last 3/4 days. Note the Previous Daily Highs (PDHs)
and Previous Daily Lows (PDLs) and the days of the week.

Repeat this process every single day.

Chapter 1.4: Equilibrium Vs. Discount
Link To ICT Video

Fibonacci (Fib) by itself is of limited utility. To understand what a buyer is

truly seeking, we must focus on movement. Impulse represents
displacement, a crucial concept to grasp.

When applying this knowledge to your trading strategy, a valuable practice

is to wait for the occurrence of four candles and a swing high. Subsequently,
observe the price as it returns to the equilibrium (EQ). This principle applies
across all timeframes.

A swing high typically comprises three candles, and when the fourth candle
trades lower, it confirms a likely move lower with retracement. It's important
to note that Sundays' candles should not be counted in this context.

Markets tend not to linger in the premium or discount zones for extended
periods, especially when the market narrative supports this trend. The most
attractive buying opportunities often emerge at EQ or lower, as prices at a
discount are unlikely to persist.

Pay attention to the low from which the impulse originated; it should not
dip below this level. In a bullish market, whenever the market establishes a
low and subsequently surpasses it, it often signals a stop-run to push prices
higher. When anticipating higher prices and a low is breached, it can signify
a "turtle soup" scenario.

Operating within the Order of Execution (OTE) zone carries a high

probability of witnessing bullishness. Market makers distribute orders above
old highs, which can be any previous high, not necessarily the highest or
oldest high.

An interesting observation in the trading approach of ICT (Inner Circle

Trader) is the use of Fibonacci once the price returns to EQ and surpasses
the previous high. This is when the Fibonacci tool is employed on the new
leg that surpasses the old high, indicating a bullish sentiment.

Consolidation typically occurs at EQ before transitioning into an expansion

phase. Price often extends 10-20 pips or sometimes even 30 pips above a
high to trigger stop orders, a practice employed by market participants.

If price moves lower than the OTE, and you align with a bullish bias,
consider waiting for a "turtle soup" buy opportunity, as it may present a high-
probability trade.
Chapter 1.5: Equilibrium Vs. Premium
Link To ICT Video

In this chapter, we delve into the distinction between equilibrium (EQ) and
premium levels, shedding light on essential trading concepts.

When considering selling opportunities, it's crucial to aim for levels at or

above 62%, rather than solely focusing on EQ. This approach can help
optimize trade entries and increase the probability of success.

In the context of anticipating bearish price action, be prepared for a

potential "turtle soup" scenario when price moves through EQ and the
Order of Execution (OTE) levels. This is an important consideration for
traders looking to capitalize on bearish trends.
When you encounter a clear, pure, and evident price swing, it's advisable
to measure it and apply Fibonacci retracement levels using a Fibonacci
tool. This practice can aid in identifying potential reversal points and setting
profit targets.

In situations characterized by consolidation, traders often turn to trading

"turtle soups" or utilize the Fibonacci tool. These strategies can be valuable
when navigating markets with limited directional bias.

Selling in premium levels may initially seem intimidating, but with

experience, you'll become more comfortable with this approach.
Recognizing premium levels and understanding how to execute trades in
these areas can be a valuable skill for traders.

Remember that in certain market conditions, knowing the overall bias is less
important than understanding how to effectively trade within a range. This
chapter highlights the significance of mastering trading techniques that can
be applied in various market scenarios.
Chapter 1.6: Fair Valuation
Link To ICT Video

In this chapter, we explore the concept of fair valuation and its significance
in understanding price movements.

One of the simplest ways to gauge where price is headed is by assessing

whether it recently broke a swing high or swing low. This can provide
valuable insights into the market's directional bias.

Combining multiple ranges can offer a more comprehensive view of

whether the market is currently oversold or overbought. This analysis helps
traders make more informed decisions.

In the context of "turtle soups," it's important to note that once a high or low
is taken out, the market should move swiftly rather than consolidating.
Equilibrium (EQ) represents fair value, and deviations from this point can
indicate potential trading opportunities.
On a higher time frame (HTF), observing the strongest move out of EQ can
provide valuable clues about the market's intended direction. This can help
traders anticipate significant price movements.

Consider several factors, including:

- The total range within which you are trading.
- The EQ of the range.
- The presence of buy stops, sell stops, and buy stops within the market.
- The transition between fair value, discount, premium, and back to fair
value.
These dynamics often repeat on a daily basis, providing traders with
recurring patterns to analyze and act upon.

Don't be overly concerned if you miss a particular price move. Patience

can be a valuable asset in trading. Focus on evaluating your current position
relative to the existing range and consider the perspective of smart money
in the market. Determine where fair value lies for these influential players,
as this can offer valuable guidance for your trading decisions.

Another example to conclude this chapter:

Chapter 1.7: Liquidity Runs
Link To ICT Video

In this chapter, we explore the concept of liquidity runs and their

significance in trading.

Liquidity refers to the presence of buy and sell orders in the market. It plays
a crucial role in determining price movements.

Liquidity often exists both above old price highs and below old price lows.
These areas are important to monitor as they can influence market behavior.

A high resistance liquidity run is characterized by a low probability of long

positions being successful. To overcome this level, a high-impact news
driver or a significant market event is typically required. Traders are advised
to exercise caution and avoid entering long positions in these
circumstances.

*High Resistance Liquidity Run

Conversely, a low resistance liquidity run presents a high probability trading
opportunity. When the market returns to the order block (OB), it often
transitions into a high resistance zone. This can be a favorable setup for
traders.

*Low Resistance Liquidity Run

It's important to note that the level of price action around a low or high can
provide valuable insights into the strength of liquidity defense. The more
price action that occurs in these areas, the more likely it is that they will be
defended by market participants.

Understanding liquidity runs and their impact on price movement is

essential for traders looking to make informed decisions and navigate the
intricacies of the market.
Chapter 1.8: Impulse Price Swings &
Market Protraction
Link To ICT Video

In this chapter, we delve into the dynamics of impulse price swings and
market protraction, essential concepts for understanding price movements.

There are three primary protraction moves that occur within a 24-hour
trading cycle:

1. 00 GMT: The start of a new trading day.

2. Midnight New York: A significant transition in market activity.
3. 1100 GMT, New York open: The opening of the New York trading
session.

These moments, often referred to as MNO (Midnight New York), 7 am New

York, and 8 pm New York, mark key shifts in market behavior.

We will talk about specific Killzones later in this book.

Protraction is a form of manipulation and represents the opposite of the real
price move. Its primary objective is to seek liquidity in the market.

Following an impulse price swing, where prices move decisively in one

direction, the market typically enters a protraction phase. During this phase,
prices may consolidate or exhibit choppier movements as market
participants seek to establish positions. Ultimately, this protraction phase
leads to the formation of a new order block (OB), setting the stage for
another impulse swing.

Understanding the interplay between impulse price swings and protraction

is crucial for traders aiming to decipher market dynamics and make
informed trading decisions.
Chapter 2.1: Growing Small Accounts
Link To ICT Video

In this section, we explore strategies and principles for growing small trading
accounts, emphasizing prudent risk management and thoughtful decision-
making.

A. What You Need to Avoid

1) Do not try to rush to make massive gains in terms of pips or percentage

returns. Growing an account takes time and patience, and attempting to
expedite the process can lead to unnecessary risks.

2) Avoid exposing yourself to significant risk in the hope of equally

substantial returns or profits. High-risk trading can quickly erode a small
account, making it challenging to recover losses.

3) Do not assume that taking small risk trades will not contribute to
account growth. Small, consistent gains can accumulate and lead to
significant account growth over time.

4) Avoid sacrificing your trading equity due to poor planning or a lack

thereof. Proper preparation and strategy are essential to safeguarding your
trading capital.

B. What You Need to Aim For

1) Determine how to realistically anticipate a favorable reward-to-risk

model. Prioritize setups that offer a reasonable potential reward relative to
the risk involved.

2) Learn to respect the risk side of trade setups over the potential reward.
Assess and manage risk diligently to protect your account from significant
drawdowns.
3) Identify trade setups that allow for a minimum of three reward multiples
to one risk or higher. Favor trades with a strong potential for positive risk-
reward ratios.

4) Frame good reward-to-risk setups that have little impact if they turn out
to be unprofitable. Maintain discipline in your trading approach to
minimize the impact of losing trades.

Remember that growing a trading account, especially a small one, requires

time for compound interest to work its magic. Selectivity in choosing trades
is paramount. It may not take many trades to achieve a 50% return in a
month, but those trades should be highly selective and well-reasoned.

Pay close attention to drawdown, as it is a critical metric in risk

management. Strive to minimize drawdown and focus on limiting it to
around 6% of your equity per month. This disciplined approach can help
protect your account and promote steady, sustainable growth.
Additionally, it's important to have profit-taking strategies in place before
entering trades. Consider that banks often base their trading decisions on
daily levels, and having a clear plan for taking profits can enhance your
trading success.
Let’s look at an example:

Daily: price touched the bullish Order Block and also had was at OTE

When going to the 1H, it looks like this:

There are buy stops resting above those highs. Combined with an expective
BIG reaction from the Daily OB, this could be a low resistance liquidity run.
Your entry can be in the FVG/OB that is highlighted Blue.

Where will you take profit and partials?

If you know where the buy stops are, go can frame your trade to see what R
multiple you want to take partials at and take full Take Profit.

Preferably, take 100% profit here at RR5 (risk 1, reward 5)

Chapter 2.2: Framing Low Risk Trade
Setups
Link To ICT Video

In this chapter, we delve into the art of identifying low-risk trade setups that
offer not only potential profits but also enhanced risk management.

A. What makes the setup worth taking?

1) Selecting trade setups on higher time frame charts is ideal. By focusing

on higher time frames, we gain a broader perspective that can reveal more
reliable and long-lasting opportunities.

2) Large institutions and banks analyze markets on daily, weekly, and

monthly bases. Aligning our strategies with the practices of major market
players can significantly increase the likelihood of successful trades.

3) Locating price levels that align with institutional order flow is key. These
levels often serve as magnets for price movement and represent areas where
significant buy and sell orders are placed.

4) Higher time frame setups form slowly and provide ample time to plan
accordingly. Patience is a virtue in trading, and setups that evolve over
longer time frames allow for more thoughtful analysis and strategic decision-
making.
B. What can we do to lower the risk in the trade?

1) The higher time frame has more influence on price, so we focus there.
Recognizing the dominant time frame and trading in alignment with it can
reduce the risk of being caught in counter-trend moves.

2) The conditions that lead to a trade setup on a higher time frame can be
refined to lower time frames. This process enables us to fine-tune our entries
while maintaining the core principles of our strategy.

3) Transpose the higher time frame levels to lower time frame charts. This
technique helps us pinpoint precise entry and exit points while keeping a
close eye on market dynamics.

4) Refining higher time frame levels to lower time frame charts allows
smaller stop-loss placement and risk. Minimizing risk while maximizing
profit potential is a hallmark of low-risk trading.

Remember that merely going below old lows is not a sufficient reason to
expect a reversal. We must always seek a higher time frame premise behind
our trades to ensure that they align with the broader market context. In the
quest for low-risk trade setups, patience, analysis, and risk management are
our most valuable allies.

Let’s go back to our example from the last chapter, where we were looking
at the 1H timeframe
Our entry from the 1H was at 0.7542 with a 20 pip stop

But with the knowledge we now have, we should look at getting a better
entry while looking at the lower timeframes:

We can instead of the green square, take our entry at the blue square, with
the run on sell stops and entry on the OB at 0.7520 with a 17 pip SL
Let’s make this even better, and go to the 5M Timeframe:

We can even get a better entry from the 5M OB, at 0.7515 with a 8 pips SL

Look at the difference compared to the 1H entry:

With our better entries from the lower TF (15M and 5M), we get way higher
RR, more return for the risk we are taking,
Chapter 2.3: How Traders Make 10%
Per Month
Link To ICT Video

It's the management of small risks that paves the path to consistent
profitability.

Trade from levels that are likely to attract institutional sponsorships, such as
daily, weekly, and monthly levels.

Remember to reward yourself when the opportunity presents itself.

Chapter 2.4: No Fear Of Losing
Link To ICT Video

Why Losing On Trades Won’t Affect Your Profitability

A. What Trading With Fear Of Taking Losses Actually Does To Your

Trading:

1) Staying concerned about taking a loss promotes Fear-Based Decision

Making.

2) Equity that is managed by traders that cannot accept a loss often struggles
to profit long-term.

3) Losing is inevitable, but Fear-Based Decision Making keeps the focus on

the adverse outcomes.

4) Fear-Based Decision Making fosters trader paralysis or the inability to

execute trades efficiently.

B. Why Profits Are Achievable Despite Taking Reasonable Losses:

1) The professional equity manager understands that "losses are costs of

doing business."

2) Using sound equity management and high probability setups can yield
handsome percentage returns.

3) Trading scenarios that encourage potential 3:1 reward ratios provide the
initial foundation.

4) Defining trade setups that frame 5:1 reward to risk or more can efficiently
cover losses.
Chapter 2.5: How To Mitigate Losing
Trades Effectively
Link To ICT Video

Let’s do some recap of the OB and FVG:

Note the open to high on the order block; that's the fair value gap,
representing the highest probability support.
So again: OB + FVG = HIGH Probability

We aim to avoid seeing the mean threshold of order blocks violated with
bodies.

Remember that a 1% risk can pave the way to millionaires, while a 2% risk
is considered the industry standard.

When dealing with losing trades, consider the following strategies:

1) If you lose on the initial trade, then take 50% off the risk on the next trade
within the same trade idea.

2) As a beginner, if you experience a loss, focus on trying to go back to

breakeven (BE) and take off the risk. Especially if it's the end of the week,
consider taking it off, regrouping, and aiming to end the week at breakeven
or, at the very least, trail the stop loss.

Mitigating losses is an essential aspect of successful trading, and these

strategies can help you manage risk effectively.

Let’s look at the example again where you were entering on the OB/FVG
If you had a loss, go with the following game plan:

1. Go Long With 1⁄2 Of The Position Size Used On The Initial Loss.

2. If The Initial Loss Was 2% Of The Equity Base – This Trade Would Be
1% Of The Equity Base In Risk.

When you do this, as shown in the above picture, the price has not even
breached the High and you already have your loss from the first trade
mitigated.
Please check the following numbers to see how losing is NOT a bad thing
while becoming profitable:

30% hitrate with 3:1 trades = 2% return

30% hitrate with 5:1 trades = 8% return

Optimal Trading goal:

Chapter 2.6: The Secrets To Selecting
High Reward Setups
Link To ICT Video

This chapter delves into the core principles of the ICT (Inner Circle Trader)
mindset, emphasizing its significance in achieving trading success. This is
an high level overview of all the components. If you cannot follow all the
terms and definitions, don’t worry, we will discuss them in much detail in
later chapters.

A Microcosm of Trading Plan Development

This teaching serves as a condensed version of the comprehensive trading
plan development series. It is essential to recognize that ICT's approach
doesn't encompass every aspect covered in the full series.
The Holistic ICT Mindset
The ICT mindset is an integrated and systematic way of thinking about
trading. It involves:

- Determining the market direction: Are we planning to buy, sell, or remain

on the sidelines?
- Understanding the trading process: What steps must be followed to make
informed decisions?

Experience as a Guide
Experience plays a pivotal role in discerning when not to engage in trading.
It sharpens your ability to identify opportune trading scenarios.

The Power of a Defined Narrative

A clear and binary trading narrative is indispensable. Trading without a
well-defined plan often leads to impulsive and emotionally-driven
decisions.

Unique Trading Plans

Every trader's trading plan is distinctive, tailored to their specific objectives
and risk tolerance. It is advisable to keep your trading plan confidential and
not share it with others.

Developing Process-Oriented Thinking

The initial focus should be on cultivating a process-oriented mindset rather
than fixating on specific entry points. Total understanding of the trading
process is paramount before diving into the market.

The Pitfalls of Impulsive Trading

Many traders, especially beginners, fall into the trap of impulsive and
reactionary trading. They rush to make trades without a clear understanding
of what defines a trade setup. Trade setups are refined through experience
and exposure to various trading ideas.
Waiting for the Right Moment
Professional traders understand the value of patience. They do not rush into
trades but instead wait for scenarios that make sense. This patient approach
allows for better decision-making and reduces the likelihood of impulsive
actions.

Sharing Experience and Processed Thinking

ICT (Inner Circle Trader) emphasizes the importance of sharing decisions
made before executing a trade. These decisions are rooted in experience
and a well-thought-out process. By sharing insights, traders can benefit from
collective knowledge and refined thinking.

The Secrets to High Reward Trading Setups

A. Big Picture Perspective:

1. Macro Market Analysis
2. Interest Rate Analysis
3. Intermarket Analysis
4. Seasonal Influences

The key principle is to primarily focus on two of these factors that align with
each other; all four do not need to concur. The dynamics of inflationary and
deflationary markets have substantial impacts on both stocks and
commodities. Additionally, understanding the interplay of interest rates in
two different markets is vital.

When your big-picture perspective, intermediate outlook, and short-term

analysis all align, it creates the conditions for identifying high-reward
trading setups.

B. Intermediate Perspective:
1. Top Down Analysis
2. COT Data
3. Market Sentiment

To make sound trading decisions, it's crucial to have at least two of the
above factors in agreement. Intraday charts are often noisy and have
minimal impact on overall price movements, whereas daily, weekly, and
monthly charts provide a more reliable picture of market trends.

Top-down analysis, which involves examining various timeframes,

becomes particularly insightful when two aspects align. The chapter also
sheds light on the significance of conducting Saturday studies to gauge
where price may be heading.
Market sentiment, while noteworthy, is considered of lesser significance
compared to the other factors explored in this intermediate perspective.

C. Short Term Perspective:

1. Correlation Analysis
2. Time & Price Theory
3. IPDA – Interbank Price Delivery Algorithm

To achieve success in the short term, it's essential for at least three of the
above factors to align and provide a clear trading signal. Recognizing that
market shifts occur every three months, traders can anticipate consolidation
periods following extended trends.

To conclude:

- The big perspective and intermediate perspective are typically established

over the weekend before the next trading week.
- In contrast, the short-term perspective can change daily.

When ICT identifies a trading opportunity, it's primarily derived from his big
and intermediate perspectives.
While ICT operates as a day trader, short-term trader, and one-shot kill
trader, he predominantly relies on the short-term perspective page.

It's important to note that the big picture and intermediate perspective tend
to result in fewer losses.

In total, seven factors (2 big, 2 intermediate, 3 short- term) need to align

for high-reward setups, providing you with clarity.

Ultimately, entry signals are of lesser concern in comparison to these

factors.

This is the routine you will follow

Chapter 2.7: Market Maker Trap: False
Flag
Link To ICT Video

Trading is an intricate dance with financial markets, and not everything is

as straightforward as it appears. In this chapter, we delve into the
complexities of false flags in price action, a favorite tool of market makers
to confound traders. These traps can be particularly deceptive, especially
when markets stand at a crossroads. By comprehending the subtleties of
these patterns and learning how to spot them, you will enhance your ability
to navigate the intricate world of trading.

False Bull Flags In Price Action:

- Not all abrupt Price Rallies that shift into short-term consolidations are
genuine Bull Flags.
- In mature Bull Trends or within Higher Time Frame (HTF) Distribution
Levels, Price can masquerade with false Bull Flags.
- Retail Traders might perceive these as classic "continuation buy
patterns," but they can result in unexpected Reversals.
- Discerning these traps becomes easier when one grasps the dynamics
of Higher Timeframe Charts & Premium Markets.
False Bear Flags In Price Action:

- Contrary to popular belief, not every sharp Price Decline followed by

a brief consolidation is a Bear Flag.
- In mature Bear Trends or at HTF Accumulation Levels, Price can craft
convincing false Bear Flags.
- Retail Traders may be misled by these setups, viewing them as typical
"continuation sell patterns," but they often lead to surprising Reversals.
- The ability to identify these traps is sharpened through a deep
understanding of Higher Timeframe Charts & Discount Markets.
These patterns tend to appear when price is on the verge of changing
direction. Recognizing them can be pivotal in avoiding costly mistakes.

Nope… it is a trap:
It's crucial to remember that when evaluating these patterns, the mean
threshold is calculated from the body high/low to body low/high, excluding
the wicks. Additionally, traders should refine a daily order block to a 5-
minute unmitigated order block.

Market sentiment plays a significant role in these traps, in addition to

institutional order flow on a Higher Time Frame (HTF).

Trading is more than just numbers and charts; it's an intricate interplay of
human psychology and market dynamics. False flags represent one of the
many challenges traders face, but armed with knowledge and vigilance, you
can navigate these traps with confidence. By understanding the context of
these patterns, you'll enhance your ability to distinguish genuine market
movements from market maker manipulations, ultimately becoming a more
successful trader.
Chapter 2.8: Market Maker Trap: False
Breakouts
Link To ICT Video

As we continue our journey into the depths of trading, we encounter another

cunning tool employed by market makers – false breakouts. These
deceptions often occur within price consolidations and can catch traders off
guard. In this chapter, we explore the mechanics of false breakouts, both
above and below price consolidations, and equip you with the knowledge
to spot and navigate these treacherous waters.

False Breakouts Above Price Consolidations:

- This scenario predominantly unfolds within Primary Bearish Markets.

- When the market reaches a state of equilibrium in price, it often transitions
into a trading range.
- Novice Traders or those inclined towards breakout strategies may set
orders that straddle the price range.
- Market Makers, cognizant of these orders, frequently orchestrate a surge
in price above the range to trigger Buy Stops.

False Breakouts Below Price Consolidations:

- In contrast, this scenario is more prevalent in Primary Bullish Markets.

- When price reaches equilibrium, typically within a trading range, traders
employing breakout strategies or inexperienced traders set orders spanning
the range.
- Market Makers, with their shrewd understanding of market dynamics, often
drive price below the range to trigger Sell Stops.

Navigating the intricate world of trading requires a keen understanding of

market maker tactics, including false breakouts. These traps, whether above
or below price consolidations, can disrupt even the most well-thought-out
strategies. By staying vigilant and recognizing the telltale signs of these false
moves, you'll be better prepared to protect your trades and capitalize on
genuine market opportunities.
Breakout traders Short and Breakout traders long are now trapped because
of the false breakouts in the picture above.

Not once, but twice…

But we know better by now: looking for liquidity

There u go.

Navigating the intricate world of trading requires a keen understanding of

market maker tactics, including false breakouts. These traps, whether above
or below price consolidations, can disrupt even the most well-thought-out
strategies. By staying vigilant and recognizing the telltale signs of these false
moves, you'll be better prepared to protect your trades and capitalize on
genuine market opportunities.
Chapter 3.1: Timeframe Selection &
Defining Setups
Link To ICT Video

Selecting the right timeframe is a pivotal decision in trading that can

significantly impact your strategy's success. In this chapter, we will delve
into the art of timeframe selection and explore various setups that align with
your chosen timeframe. Whether you are a patient position trader or a swift
day trader, understanding how to pick the appropriate timeframe and define
setups is crucial to your trading journey.

Timeframe Selection:

- Monthly Charts: These charts are best suited for position trading, offering
a comprehensive market perspective with a focus on long-term trends.

*Here price trades into Monthly PD Array and went into the SSL
- Weekly Charts: Ideal for swing trading, these charts capture intermediate-
term price movements, making them suitable for traders looking to hold
positions for several weeks.

*He uses that breaker because its lower then the other one

- Daily Charts: Commonly used for short-term trading, daily charts provide
a daily market bias, making them valuable for traders who want to hold
positions for several days.
At the grading swings setups should
form, every 25% of the range

Lots of Entry points!

- 4 Hours or Less: These timeframes are favored by day traders, focusing on
intraday price action and short-term market movements.

We look at OTEs (Optimal Trade Entries), orderblocks, stop runs (turtle soup,
false breakout), breakerblocks. They absorb orders on the buyside and then
quickly move to the downside. We look for these false breakouts when we
know price will likely be bearish; we can anticipate them.

First, you have to know why the stop run is happening, and you get that
context from, in this case, the monthly chart. Hold on to the bias until you're
clearly shown you're wrong; until it does that, we stay with the mindset of
going short.

You only need one good pattern. ICT has three: trading inside a range,
waiting for the pullback, or selling at a bearish orderblock. He also sells
short at a sweep of buy stops. Understanding when it's necessary to run the
stops or if it will hold comes with experience. These patterns include
orderblocks, stop runs, and liquidity voids, which are the only three patterns
ICT trades. With this knowledge, you'll have everything you need to know
how to trade any market profile.

Defining Setups For Your Chosen Model:

1) Trend Trader: This strategy involves trading exclusively in the direction

of the Monthly and Weekly Chart trends, aligning your trades with the
broader market sentiment.

2) Swing Trader: A swing trader concentrates on trading intermediate-term

price action observed on the Daily Chart, seeking to capture price swings
that last several days to weeks.

3) Contrarian Trader: Contrarian traders specialize in identifying reversal

patterns at market extremes. They go against the prevailing trend, looking
for opportunities when markets overextend.
4) Short Term Trader: Short-term traders focus on trading within the weekly
ranges, typically holding positions for 1-5 days. They aim to profit from
shorter-term price movements.

5) Day Trader: Day traders engage in intraday swing trading with the goal
of exiting positions by 2:00 pm New York time. They capitalize on short-
term price fluctuations.

The choice of timeframe and the corresponding setup model should align
with your unique trading personality, risk tolerance, and objectives.
Whether you prefer the patient and calculated approach of position trading
or the rapid-paced world of day trading, your strategy should cater to your
strengths and preferences.

Remember that trading is a highly individualized endeavor, and finding the

right combination of timeframe and setup model is a pivotal step toward
becoming a successful trader.
Chapter 3.2: Institutional Order Flow
Link To ICT Video

Institutional order flow is a crucial aspect of understanding market

dynamics. To grasp this concept effectively, let's delve into some key
insights and strategies.

When analyzing institutional order flow, it's essential to adopt a market

efficiency paradigm. Think about where the maximum liquidity lies
concerning where the market has traded from and where it stands currently.
In this analysis, we ignore the wicks of the candles and focus solely on the
bodies, as they reveal valuable insights into institutional liquidity.

Institutional volume typically accumulates above and below the bodies of

the candles, while the wicks are predominantly influenced by retail traders.
As a result, the bodies represent the real lows and highs, which are crucial
in identifying institutional liquidity levels.
The wicks, on the other hand, do not present significant barriers in terms of
institutional order flow. While there may be some stops below the wicks,
our primary focus remains on getting below the bodies of the candles.

Price movement doesn't necessarily have to pierce through the wicks of the
candles; what matters is that it goes below the bodies. The key ingredient in
this trading recipe is the high timeframe (HTF) liquidity. In essence,
institutional players are engaged in a constant dance of buying and selling
within the boundaries of price ranges. This intricate maneuvering is akin to
a hedge, allowing them to navigate market extremes with precision.

Understanding institutional order flow involves recognizing that institutions

continuously seek to hedge their positions. This involves both buying and
selling between range extremes. These institutions operate based on a
model that requires them to take long orders off at specific levels, often
leading to price unwinding.
At this point, they are obligated to close their long orders, which is why you
observe this unwinding phenomenon. This forms the foundation of the
market maker's selling model.

Institutional traders employ various strategies, such as order blocks, to

navigate the market efficiently. These order blocks serve as significant levels
where explosive price action often occurs. Institutions use these moments
to cover their shorts and initiate new positions.

ICT employs order blocks in a similar fashion.

Institutional order flow primarily manifests on monthly and weekly

timeframes but has a noticeable impact on daily charts. Trading around
these institutional levels allows traders to anticipate significant price swings
before they occur. Institutions often target stops on monthly, weekly, and
daily timeframes, either to remove traders from the market or to draw them
in as counterparties to their intended trades.

Mitigation block, thats where you will see explosive price action when price
reacts off of that level. Institutions covering their shorts and buying more

Conclusion

Understanding institutional order flow is fundamental to navigating the

intricacies of financial markets. It provides traders with valuable insights into
liquidity levels, which can inform their trading decisions and help them stay
ahead of significant price movements.
Chapter 3.3: Institutional Sponsorship
Link To ICT Video

In the world of trading, success often hinges on the ability to sell high, which
inevitably means looking for buyers willing to support prices above old
highs. To identify such buyers, we delve into the concept of institutional
sponsorship, a critical factor in assessing the viability of trading setups.

Institutional Sponsorship In Long Setups:

1. Higher Time Frame Price Displacement: This occurs in the form of

reversals, expansions, or a return to fair value.
2. Intermediate Term Imbalance In Price: Look for signs of a move to the
discount side or a liquidity run on the sell side.
3. Short Term Buy Liquidity Above The Market: Ideal for matching long
exits with willing buyers.
4. Time Of Day Influence: Pay attention to key moments such as the London
Open Low Of Day or New York Low Formation.

Institutional Sponsorship In Short Setups:

1. Higher Time Frame Price Displacement: Similar to long setups, keep an

eye out for reversals, expansions, or a return to fair value.
2. Intermediate Term Imbalance In Price: Observe indications of a move to
the premium side or a liquidity run on the buy side.
3. Short Term Sell Liquidity Below The Market: Look for opportunities to
match short exits with potential sellers.
4. Time Of Day Influence: Note crucial moments like the London Open
High Of Day or New York High Formation.
This chapter focuses on long setups, emphasizing the need for institutional
sponsorship to increase the probability of successful trades. Institutional
sponsorship reflects the willingness of major players to safeguard a
particular price swing with a high likelihood of holding. It's essentially the
influence of significant equity traders who step in to support a move in the
direction we anticipate.

Remember… Price is Fractal: Everything you see on one timeframe happens

on other timeframes as well

If we anticipate a move higher,

the first question that’s need to
be asked is: Where can it go to?
Daily charts are not moving this dynamic without institutional sponsorship
If they activate sell stops, they're likely in the process of accumulating buy
orders. When we observe indications of this accumulation, such as liquidity
voids and pending buy stop orders, it often suggests a high likelihood of a
bullish move.

To identify institutional sponsorship, we rely on a set of criteria:

1. HTF Displacement: Institutional sponsorship often involves significant

price shifts that are beyond the capability of daily charts to generate
independently.

2. Where Did It Start? We examine the origin of a move, which can often
be traced back to an order block. Understanding this starting point is crucial.
To identify institutional sponsorship in a particular segment of price action
you NEED to see immediate dynamic response.

If its lethargic and not willing to move right away that means there is no
institutional orders in that area. So if you see that when you are in a trade:
either reduce risk or just cut the trade completely.

Don’t marry the idea. If you are on the right side, price will move dynamic
immediately.

We got criteria (1) and (2) now: HTF displacement and price traded back
into a discount.
 4. Short Term Buy Liquidity: Institutional sponsorship involves the
presence of short-term buy liquidity, which is vital for their trade
execution.

Where is the short term buy liquidity? Where can institutions sell their orders
to willing buyers.

And if institutions are willing to hold to this point, what will be the next
likely target?
Once we hit that Buy Stop Liquidity, what is price doing? Its pairing orders
with buy stops.

So, whats the next institutional orderflow suggestion? The next high…

If the price intends to move upwards toward that level, it becomes highly
improbable for it to reverse all the way back to the bullish order block. This
shift in market structure occurred when we surpassed that previous high,
and institutional buyers had already entered the market at the order block
during the initial purchase.

The 4 Stages of a price swing (long):

1. First buying after sell stops

2. EQ/Midways point
3. 75% of the range
4. Ultimately Terminus, above the high (external range liquidity
Let’s Take A Closer Look…

1.

2.
The blue lines are Midnight Open New York Time

If we suspect price will be bullish, what we will see in the form of

institutional sponsorship: price below the Midnight Open (MNO) line
should be accumulated.

If were bullish we dont care what price does above the MNO, only below
it and where does it reach for below it, a liquidity void? Orderblock?

3.

When we find the New York opening price, were going to be looking for a
downcandle, it should be a capitilization of new longs. We see that come
to fruition when the downcandle is violated.

So when a downcandle forms, a candle trades trough it on the upside, at a

later time when we come back to it we can buy at it, and the buying has to
be below the opening price of that day.

This can happen during both London OR New York Session

When were at an EQ of a range we want to see an orderblock to see a

justification of wanting to go higher to expand away from EQ
4.

5. Power of 3

Accumulation, Manipulation, Distribution

Buy near the opening and exit at the close Sounds easy, but this is how you
do it:

1. Look at what happens at the old high, its consolidating trapping support
and resistance traders to then expand to the upside

2. Right before the terminus it stops, getting everyone excited that it will go
lower, tricking everyone. It will retrace back to an old high, thats when
support and resistance does work, because it has an unfullfilled objective to
the upside.
If there are multiple Order Blocks as in the images below, which one
should you choose?

Each order block mentioned here is closely tied to either the London or New
York trading sessions, typically from the previous day or a couple of days
ago.
Capitalizing on these order blocks is essential because there's a persistent
interest from market makers to drive prices higher, and they won't allow
significant retracements.

If a retracement occurs, it's likely to revisit logical areas, such as a bullish

order block or a previous low, which can also be the low from prior London
or New York sessions. They clear out these lows (SSL) and subsequently
rally.

The same principle applies to order blocks, and your focus should be on
those associated with the London and New York sessions. Utilize the down
candles from previous sessions to identify new buying opportunities.

If you observe these dynamics in the charts, you are effectively recognizing
institutional sponsorship. Every successful trade exhibits these
characteristics.

With this understanding, you'll find clarity in your trading, eliminating

anxiety when retracements occur. Concentrate on specific order blocks
occurring during the London and New York sessions. They serve as valuable
indicators of institutional sponsorship, and if you perceive their absence, it's
prudent to step aside or reduce your risk exposure.
Chapter 3.4: The Next Setup -
Anticipatory Skill Development
Link To ICT Video

Monthly charts are primarily influenced by significant capital movements.

To develop your anticipatory skills effectively, take a deep dive into the
nuances of these charts.

Begin your journey by thoroughly analyzing the open, high, low, and close
prices from the past three months. Focus your attention on identifying the
most recent downward candle on the monthly chart.

Then, shift your gaze to the upward candle that directly precedes this
monthly downward candle. Make a distinctive mark at this particular price
level.

By doing so, you will have successfully delineated your trading range. This
development of anticipatory skills will empower you to make well-informed
trading decisions based on historical trends and crucial price levels.
The key takeaway here is that when you designate the latest downward
candle and patiently observe price action as it surpasses this candle's level,
you should be prepared for a potential retracement back to the opening
price of that downward candle. This retracement presents a trading
opportunity, and your strategy should involve trading toward the closing
price of the last upward candle within your designated trading range.
As soon as we trade above the downcandles high, the downcandle becomes
a daily orderblock, so we can be a buyer at the open of the orderblock or
less
Use the left order block because that’s one is larger than the one on the right

Let’s Look At Another example:

Everything above the monthly OB we can refine to a lower timeframe OB
Conclusion: we use the monthly chart to get our orderblocks and define our
range, and then we look for lower timeframes to get closer to the market
and refine our risk.
Chapter 3.5: Institutional Market
Structure
Link To ICT Video

Understanding Institutional Market Structure

Institutional Market Structure analysis involves examining the relationships
between correlated and inversely correlated assets to discern the actions of
"Smart Money" – the institutional traders who wield significant influence in
the forex market.

This approach is particularly useful in the forex market, where currencies

are interrelated and can be analyzed in conjunction with the US Dollar
Index (USDX).

The key objective is to determine whether Smart Money is accumulating or

distributing assets.

To successfully identify Institutional Market Structure in forex trading,

consider the following steps:

Identifying Institutional Market Structure in Forex

1) Compare every price swing in the USDX (US Dollar Index) with the
foreign currency pair you are trading.

2) When the USDX is trading higher, anticipate a lower price swing in

foreign currency pairs.

3) If either the USDX or a foreign currency pair fails to exhibit symmetrical

movement, it suggests that Smart Money is actively engaged in trading.

4) Conversely, when the USDX is trading lower, expect a higher price swing
in foreign currency pairs.
5) Similar to the previous point, an absence of symmetrical movement in
either the USDX or a foreign currency pair indicates Smart Money's
involvement in trading.

Analyzing Institutional Market Structure allows traders to gain insights into

the actions of institutional players and make more informed trading
decisions in the forex market.
This is one of the ways we can anticipate a turtle soup likely will happen
before it actually happens.
An example:

GPBUSD makes a Higher High

USDX does NOT make a Lower Low

This will tell us that on USDX the Smart Money is accumulating orders on
the long side. So we will be bullish on the dollar, bearish on GBP
Chapter 3.6: Macro Economic To
Micro Technical
Link To ICT Video

Transitioning from Macro to Micro Perspective

The macro perspective is not designed for day trading; it primarily involves
analyzing long-term daily charts. In this realm, ICT utilizes this perspective
to gain a deeper understanding of the market. He emphasizes that relying
on information from banks is not a reliable strategy, as banks have no
incentive to disclose their intentions. It's akin to a football team revealing
its playbook for the Super Bowl.

ICT adopts a long-term outlook, typically spanning 3 to 6 months, for this

macro perspective. One of his key tools for this analysis is monitoring
interest rates, particularly in the bond market.
Using the December contracts, as an example, ICT relies on data from
Barchart.com. He observes that approximately every 3 to 4 months, there is
a quarterly shift in the market. This shift can manifest as either a reversal or
an extended period of consolidation, followed by a resumption of the
existing trend or a reversal.

While ICT doesn't heavily rely on fundamentals, he employs a visual

interpretation of data, focusing on the bond market and 10-year notes. These
indicators provide him with valuable insights into the likely movements of
interest rates.

Here's a simplified breakdown of how interest rates and market behaviors

relate:
- When interest rates rise, the value of the dollar tends to increase.
- Higher interest rates are associated with a drop in the bond market.
- Conversely, when the bond market rises, interest rates often decline.
- A lower bond market typically leads to higher interest rates.

Applying the Smart Money Tracker (SMT) methodology from Chapter 5 to

this macro perspective, ICT identifies correlations between the bond market
and the dollar. With this understanding, he can anticipate shifts in the
market, which typically occur every 3 to 4 months.

The goal of this macro-to-micro transition is to provide traders with a 3- to

4-month outlook on the potential direction of currency pairs. By analyzing
macroeconomics and then applying these insights to technical analysis,
traders can start looking for reasons to adopt a long or short position in USD
pairs.

This approach builds a market outlook based on fundamentals, without

getting bogged down in numerical data. ICT underscores that interest
markets play a fundamental role in controlling global financial movements,
making them a crucial focal point for traders.
Chapter 3.7: Market Maker Trap
Trendline Phantoms
Link To ICT Video

In this chapter, we delve into the concept of Trendline Phantoms, which are
essentially false trendlines that can trap unsuspecting retail traders.

It's crucial to understand that trendlines are often based on opinions and
lack a statistical edge. In reality, the market is driven by the search for large
pools of liquidity, including new buy stops, new sell stops, and even old
buy and sell stops. Market movements are primarily influenced by the
actions of large traders, making them the prey of the market. Consequently,
understanding their behavior is essential to gaining a trading edge.
Diagonal Trendline Support:
1) This scenario occurs when the market starts forming higher highs and
higher lows.
2) It gives the appearance of an imaginary diagonal line that repels price
higher.
3) Many retail traders extend these imaginary lines into the future and
formulate support theories around them.
4) Retail traders tend to buy when price reaches the extended imaginary
diagonal line connecting the higher lows.

ICT employs a strategic approach when dealing with Trendline Phantoms.

He looks for Order Blocks (OB) or turtle soup setups above the high after
the second touch and before the third touch of the imaginary trendline,
especially when bearish and trading at a Higher Time Frame (HTF) Price
Displacement (PD) array. Such setups often present a sell scenario.
Diagonal Trendline Resistance:
1) This situation arises when the market begins to establish lower highs and
lower lows.
2) It creates the illusion of an imaginary diagonal line that pushes price
lower.
3) Retail traders often project these imaginary lines into the future and
develop resistance theories.
4) Retail traders typically short when price hits the extended imaginary
diagonal line connecting the lower highs.

It's worth noting that many buy stops tend to accumulate at the second high,
making it a significant target for traders. Similarly, a considerable number of
sell stops gather below the second low, offering a potential target for trading
strategies.

Understanding these Trendline Phantoms and knowing how to navigate

them can be a valuable skill for traders looking to avoid common traps and
make more informed trading decisions.
Chapter 3.8: Market Maker Trap Head
Shoulders Pattern
Link To ICT Video

Picking Tops And Bottoms is the worst thing you can try..
Chapter 4.1: Interest Rate Effects On
Currency Trades
Link To ICT Video

Interest rates play a pivotal role in influencing currency market movements

and are a fundamental aspect of Smart Money Accumulation and
Distribution.

Smart Money Accumulation & Distribution [Fundamentally Speaking]

1) Interest rates stand as the single most influential driving force behind
market moves in the world of trading.

2) Gaining a deep understanding of Interest Rate Shifts and changes can

provide invaluable insights when it comes to selecting your trades.

3) Technical Analysis applied to key Interest Rates can unlock the door to
understanding professional money movements in the market.

4) Interest Rate Triads, which involve the analysis of various interest rates,
offer a visual representation of how Smart Money accumulates and
distributes funds strategically.

Interest Rate Triads

1) The 30 Year Bond represents a crucial Long-Term Interest Rate that plays
a significant role in the financial landscape.

2) The 10 Year Note is an Intermediate-Term Interest Rate that sits at the

core of market dynamics.

3) The 5 Year Note represents a Short-Term Interest Rate, which also has its
unique influence on market behavior.
4) Overlaying or employing Comparative Analysis on these three distinct
Interest Rates unveils critical insights into Price Action.

5) Identifying Failure Swings at opportune moments can serve as validation

of Institutional Order Flow, shedding light on the intentions of Smart Money
in the market.

Understanding the intricate relationship between currency trades and

Interest Rates is an essential skill for traders looking to make informed
decisions and navigate the complexities of the financial markets effectively.

To accumulate more of it, Smart Money will force it into premium, it wont
go into discount.

Confirming a long position on the dollar involves spotting a lower high in

the 30-year bond market as a sign of a potential trend reversal.
Keep in mind that interest rates play a crucial role in driving currency market
movements.

If there's a difference in the behavior of the three components, and the dollar
provides a clear order block for trading, it's a signal that you can consider
for a potentially successful trade.
Action Plan:
Chapter 4.2: Reinforcing Liquidity
Concepts & Price Delivery
Link To ICT Video

External Range Liquidity

1) The existing trading range will contain Buy Side Liquidity positioned
above the range or its High.
2) The existing trading range will encompass Sell Side Liquidity located
below the range or its Low.
3) Liquidity Runs - the objective is to match orders with the pending order
liquidity - forming Liquidity Pools.
4) External Range Liquidity Runs can either exhibit Low Resistance or High
Resistance characteristics.

Internal Range Liquidity

1) When the current trading range is expected to persist, Liquidity Voids will
be filled, posing Gap Risk.
2) When the current trading range is anticipated to persist, Fair Value Gaps
will be filled, also entailing Gap Risk.
3) Order blocks within the trading range will be populated with new Buy
and Sell orders.
4) Market Maker Buy and Sell Models will take shape within trading ranges.

Whenever the market establishes a new range, simply mark the newly
formed high and low, and you will find yourself trading within that range.
For instance, if you decide to trade at a bearish order block, you'll essentially
be planning for a return to internal range liquidity while simultaneously
searching for external range liquidity to use as your exit strategy.

ICT's entries predominantly revolve around internal liquidity, while his exits
are based on external liquidity. Once you gain an understanding of where
the higher timeframe (HTF) intends to go, you can structure your setups for
lower timeframes accordingly.
While we can execute external range liquidity runs on a daily timeframe,
on a monthly basis, it might still be categorized as internal liquidity. When
we grasp the trading levels that the weekly and monthly charts are willing
to reach, it sets the stage for low-resistance liquidity runs on the daily
timeframe.

So, when we anticipate a price surge due to monthly and weekly biases,
these surges translate into low-resistance liquidity runs because the price
has a predefined direction. This perspective enables us to differentiate
between high-resistance and low-resistance liquidity runs.
On the 4-hour chart, you can easily observe that there is minimal resistance
as price surges through the highs. This phenomenon occurs because it is
structured around low-resistance liquidity runs, primarily based on the
higher timeframe (HTF) monthly analysis.

This approach is how ICT identifies which stop orders are likely to be
triggered. He relies on HTF institutional order flow to delineate the
boundaries of internal range liquidity versus external range liquidity. This
enables him to pinpoint the locations of buy stops, determine the
appropriate entry strategy to employ, and align it seamlessly with the HTF
analysis.

It's important to note that ICT doesn't focus on the lows associated with
consolidation periods; instead, he targets the dynamic lows, particularly the
one highlighted with the red arrow in the chart below.
You're aiming to enter the market by either targeting internal range liquidity
or identifying a bullish order block within the previous range. The goal is to
secure profits at or above an old external high, all while staying aligned with
the higher timeframe (HTF) directional bias, determined through
institutional order flow analysis, which involves examining monthly ranges
and their intended destinations, as exemplified by a monthly Fair Value Gap
(FVG) in this case.

Given the bullish outlook, the strategy involves anticipating an upward

displacement followed by a retracement into an order block. However, if
there aren't any new ranges that present fresh buying opportunities, you can
shift your focus to lows. In this scenario, you should survey the market for
swing lows and patiently await price to breach them on the downside, a
strategy akin to "turtle soup."

The type of trader you become is largely determined by the setups that you
find most visually appealing and easy to spot on the charts. Whether it's
turtle soups or returns to fair value within the range, you don't need to force
yourself to identify setups every day; instead, aim to find a suitable
opportunity once a week.
When you're aware of the higher timeframe (HTF) being bullish, your focus
should shift towards locating the sell stops that market participants are
reaching for. If the market is aiming higher but experiences a drop, you
should be on the lookout for external range liquidity. Once you see a quick
reaction indicating institutional sponsorship, wait for the appearance of a
bullish order block. Keep in mind that the bullish order block may not
always materialize immediately. It typically involves a sequence starting
with external range liquidity and then transitioning into an internal range
liquidity setup to confirm the trade.

Understanding this concept helps you distinguish between low resistance

and high resistance liquidity runs. The monthly chart plays a crucial role in
framing low resistance runs. If you struggle to determine where the monthly
chart is headed, you can drop down to the weekly chart for additional
clarity.

Consider this: each time you plan to buy from a bullish order block, you
should anticipate that the market will aim to breach the previous high. On
the other hand, trading against the HTF narrative and institutional order flow
often results in a high resistance liquidity run.

Before taking a trade, glance at a monthly and weekly chart to gauge the
likely direction. In bullish scenarios, you'll search for long setups on lower
timeframes, such as turtle soups and order blocks, with the expectation that
the previous highs will be surpassed.

Keep in mind that when the 1-hour chart retraces back to an order block
and the target high is only 20 pips away, it might not be the most attractive
trade for ICT. Aiming for at least 40 pips is often preferable, though this can
vary depending on the timeframe.

The teachings provided in December emphasize the importance of properly

identifying the right swings and selecting the appropriate order blocks.
Remember that you don't need to predict every single market movement
perfectly. Aim for a 3:1 risk-reward ratio, and you're on the right track.

Select a timeframe that aligns with your trading model and stick with it.
Understanding and mastering the HTF is crucial, as everything in trading is
fractal. Staying aligned with the directional bias of the monthly, weekly, and
daily charts increases your chances of experiencing low resistance liquidity
runs, characterized by immediate responses, minimal drawdown, and swift
market actions – qualities that every trader desires.
Chapter 4.3.1: Orderblocks
Link To ICT Video

Bullish Orderblock:

- Definition - The Lowest Candle or Price Bar with a Down Close that
has the most range between Open to Close and is near a “Support”
level.

- Validation: When the High of the Lowest Down Close Candle or Price
Bar is traded through by a later formed Candle or Price Bar.

- Entry Techniques: When Price trades Higher away from the Bullish
Orderblock and then Returns to the Bullish Orderblock Candle or
Price Bar High – This is Bullish.

- Defining Risk: The Low of the Bullish Orderblock is the location of a

relatively safe Stop Loss placement. Just below the 50% of the
Orderblock total range is also considered to be a good location to
raise the Stop Loss after Price runs away from the Bullish Orderblock
to reduce Risk when applicable.

When people with a lot of money in the market get involved you will notice
it in price action. When we get a BIG candle we can be assuming we get a
orderblock.
Even in the candle that broke the high, if it immediately retraces, we can
enter on the same candle that broke the high. If you haven't entered yet,
we'll wait for a retracement after the displacement.

Our primary focus is on the candle

bodies. Consequently, we enter
positions based on the body's high.
However, there are situations where
we consider wicks, especially when
they overlap with orderblocks and
FVGs, and this is when ICT
incorporates wicks into the analysis.

When employing this strategy, set an

alert at the orderblock and exercise
patience. Waiting can be challenging,
but it's crucial. Ensure you have
determined your risk and established
your target levels in advance.

This is where you enter. If it is a

limit order, add some pips for
spread because you are buying.
The most favorable orderblocks typically won't see trading activity dip
below the 50% mark of the orderblock. To clarify, this 50% measurement
is based on the distance from the body's open to close, representing the
mean threshold.

For our stop-loss placement, it's common

practice to position it below the low of the
wick. However, our primary preference is to
set the stop loss below the body of the
candle.

With the lessons from the previous chapter,

here is where Internal and External Liquidity
is:

If you wanted to trade this, this is where you enter and exit and why:
Liquidity Bases Bias

Bearish:
Monthly Chart = Bearish
Weekly Chart = Bearish
Daily Chart = Bearish

Intraday Charts 4 hour and less will be

correcting or retracing higher. This is where
you anticipate the market to enter a
Premium and seek Buy Side Liquidity to Sell
to.

Protective Buy Stop Raids or Returns to

Bearish Orderblocks or Fair Value Gaps and
or filling of a Liquidity Void. Each offering a
potential Low Resistance Liquidity Run –
Shorting for a target under a recent Low.

Bullish
Monthly Chart = Bullish
Weekly Chart = Bullish
Daily Chart = Bullish

Intraday Charts 4 hour and less will be

correcting or retracing lower. This is where
you anticipate the market to enter a Discount
and seek Sell Side Liquidity to Buy from.

Protective Sell Stop Raids or Returns to Bullish

Orderblocks or Fair Value Gaps and or filling
of a Liquidity Void. Each offering a potential
Low Resistance Liquidity Run – Buying for a
target above a recent High.
Our primary approach revolves around trading in alignment with the
monthly chart's direction.

It's worth noting that the daily chart may exhibit more frequent shifts
between bullish and bearish tendencies, while the monthly chart tends to
sustain its overarching bearish bias. Weekly and monthly charts are higher
odds trades if you have a clear target.

Orderblocks are formed at Retail support levels

Smart Money is pushing price down to buy at a cheaper price.

A refined OB to the weekly that reacted off of the monthly OB

In a bullish context, our trading strategy revolves around capitalizing on
market dips for buying opportunities and selling when prices experience
rallies.

To refine our buy trades, ICT often seeks a scenario where the price has
advanced about two-thirds of the order block's size. Subsequently, he
patiently anticipates a retracement. It's important to emphasize that a
retracement doesn't qualify as "mitigated" if the price has merely touched
the order block immediately upon its formation.

Instead, it commonly retraces back to the order block after the price has
already moved two-thirds of the order block's size away. This refined bullish
order block should feature an open price higher than the original one and
exhibit a response from a support level, meeting all the necessary criteria.

In the examples below, you can observe three order blocks situated closely
together in succession.

OB 1:
OB 2:

OB 3:

If theres 2 downcandles in a row or more, then that counts as one full

orderblock.
In this particular scenario above, there was a clear run on stops, prompting
ICT to adjust his expectations. He did not anticipate the price to retrace all
the way to the refined order block due to the stop run it experienced.
Therefore, he opted for the larger order block and relied on the mean
threshold for his trading approach.

Wait for the price displacement and then exercise patience as these levels
are retested.
You have the option to refine these levels down to the 5-minute time frame
(5m TF) if desired. However, the primary focus should always be on the
monthly, weekly, and daily time frames (TF), as these are the order blocks
you want to consider for your trades.

Bearish order blocks can serve as profitable exit targets, especially if you
reach them during periods when profit-taking is likely, such as the London
close. In such cases, you can close your position at the bearish order block
and anticipate a retracement the next day, followed by a potential move
above the high.

It's essential to concentrate on bearish order blocks primarily when specific

times of the day come into play. If time of day doesn't have a significant
impact, you may want to disregard the bearish order block, as it could be
breached.

Sometimes, there may be a pause and consolidation at this level because

major players prefer not to take profit directly at an old high; instead, they
aim to secure profits above it, triggering stop-loss orders placed by other
traders in the process.

For bullish order blocks, it's crucial to consider them when they align with
the support indicated by the monthly, weekly, and daily time frames.
Chapter 4.3.2: Mitigation Blocks
Link To ICT Video

The Mitigation Block is a M pattern - swing failure.

Inside that range there have been buyers, but those buyers are now
underwater due to the drop of the price.
Inside that low, we will be focusing on the last down candle, because thats
where the last orders where placed before the short rally up
Let’s check out an example:

1.

2. If we anticipate prices going even lower, then we can use that as another
selling opportunity
3. Here we can go short, the buyers are out, their risk is “mitigated”

4. This is where you close the trade and wait for new opportunities
5. This is called: Buyer’s Remorse
Chapter 4.3.3: ICT Breaker Block
Link To ICT Video

To see what a breaker block is, let’s take a look at an example:

As you maybe are noticing, this looks a lot like a mitigation block… What
is the difference between a Mitigation Block and a Breaker Block?

A breaker is a 1-time thing, where as a mitigation block can form constantly

Ideal Set Up: In Major To Intermediate Term Downtrends

Bearish Breaker Block is a bearish range or Down Close Candle in the
most recent Swing Low prior to an Old High being violated.

The Buyers that buy this Low and later see this same Swing Low violated –
will look to mitigate the loss. When Price returns back to the Swing Low –
this is a Bearish Trade Setup worth considering.
The same is for a bullish scenario:

Ideal Set Up: In Major To Intermediate Term Uptrends

Bullish Breaker Block is a bullish range or Up Close Candle in the most

recent Swing High prior to an Old Low being violated.

The Sellers that sold this Low and later see this same Swing High violated –
will look to mitigate the loss. When Price returns back to the Swing High –
this is a Bullish Trade Setup worth considering.
Example:

ICT employs the highest up-candle that precedes the downward movement
and the subsequent raid on sell stops, encompassing the entire range.

In addition, ICT prefers utilizing the bodies of the breaker candles rather
than considering the entire candle, as I observed in another video.

It's important to note that this point in price action often witnesses traders
exiting their short positions while also opening new long positions. This
phenomenon contributes to the explosive nature of price movements that
follow.
Chapter 4.3.4: ICT Rejection Block
Link To ICT Video

What do you see in the blow chart?

Turtle soups, the classic signs of buying and selling.

Whenever a new high or low appears, we expect some Rejection. This is

the first skill you should work on because it can be challenging.

Bearish Rejection Block:

Ideal Set Up: In Major To Intermediate Term Downtrends

Bearish Rejection Block is when a Price High has formed with long wicks
on the high(s) of the candlestick(s) and Price reaches up above the body of
the candle(s) to run Buy Side Liquidity out before Price Declines.
This is when we step into a Premium/Discount (PD) array, which also
resembles a bull flag pattern.

You don't necessarily need price to reach a higher high for a failure swing
to occur.

To understand price action better, focus on the open, high, low, and close
prices. Pay specific attention to the swing highs and lows, and chart the
open and close. This will help you identify distribution and accumulation
patterns at these turning points.

In this analysis, we're not giving much attention to the wicks; they mainly
emphasize the pattern forming.

Our focus is on finding the highest close or open at the swing high,
regardless of whether the highest candle is bullish or bearish when it closes.

We view the wick as a bearish Orderblock.

In rare instances, ICT employs selling on a stop order as an entry pattern.

You could also enter immediately at the close or wait for it to trade slightly
below the close. Alternatively, like ICT does, you can use a sell stop order,
placing it at the close to execute when price retraces downwards.

These patterns can span multiple candles; they are not limited to just one.
Bullish Rejection Block:

On a bullish rejection block its the opposite, so we take the lowest open
(incase of a bullish candle) and the lowest wick and that is in theory our
bullish orderblock, the wick.

Ideal Set Up: In Major To Intermediate Term Uptrends

Bullish Rejection Block is when a Price Low has formed with long wick(s)
on the low(s) of the candlestick(s) and Price reaches down below the body
of the candle(s) to run Sell Side Liquidity out before Price Rallies higher.
We don't consistently require price to extend beyond the wicks; in fact, we
primarily focus on the candle bodies. These bodies provide the closest
approximation to institutional levels.

In cases where the old low or high exhibits numerous lengthy wicks, your
objective shifts from sweeping the wicks to sweeping the bodies, and you'll
be seeking a rejection block instead.
Chapter 4.3.5: Reclaimed ICT
Orderblock
Link To ICT Video

The Market Maker Buy Model comes into play when we descend into a
Higher Time Frame (HTF) Price Displacement (PD) array. This model
involves a distinct market behavior.

As the price is in a downtrend and we observe a slight upward displacement,

this is indicative of the smart money accumulating long positions. However,
it's important to note that the real impulsive upward movement begins when
we reach the HTF PD array. Unfortunately, many traders attempt to enter
these early rallies while smart money is still in the accumulation phase and
often get stopped out.

The essence of the Market Maker Buy Model is recognizing that the market
initially heads lower to eventually move higher.

In the context of the provided image, the same principle applies in reverse.
On the buy side of the curve, smart money initiates hedging, which is why
you'll notice premature bearish orderblocks forming.
As you can see in the examples above: price reacts off the reclaimed OBs.
Same goes for the opposite, on the buyside of the curve smart money starts
hedging their positions. That is why you already see premature bearish
orderblocks forming.
Chapter 4.3.6: ICT Propulsion Block
Link To ICT Video

The newly formed higher orderblock is quite delicate; it should never

breach the mean threshold, which is the 50% level of the candle's body.
Typically, it retraces back to the high of the candle and experiences an
immediate reaction, resulting in a rapid upward movement.
If it breaks the mean threshold (50%) of the propulsion block, chances are
its not a good trade and you should collapse it or take something off.

ICT uses the lowest wick here,

so not the body.

This gives you very little

drawdown and immediate
price response, it repulses
price.
Chapter 4.3.7: ICT Vacuum Block
Link To ICT Video

The ICT Vacuum Block is a peculiar market occurrence that frequently takes
place during significant events, session openings for futures, or the Sunday
market opening.

To better understand the Vacuum Block,

it's essential to consider the context of the
preceding price action. If a swing low
forms after a period of lower trading,
there's a higher probability of this being a
Vacuum Block. Conversely, if the price
was already in an uptrend, this might
indicate an exhaustion gap, signifying the
last burst of momentum in that direction.

Vacuum Blocks are particularly intriguing

when we're in a retracement within a
bullish market or when we anticipate
bullish news after a downtrend, which has
driven the market into a discount.
When the price starts to trade lower, two scenarios come into
play:

1. If we're bullish, we examine whether there's a bullish

orderblock capable of closing the gap entirely. Witnessing this
occur provides immediate feedback.

2. In cases where we don't want to

buy immediately, perhaps due to
stronger conviction that the price will
trade to the lowest downcandle and
fill the gap, time of day sensitivity
becomes critical.

For instance, if it's the beginning of

the New York session, it's more likely
that the entire gap will fill.

Conversely, if the gap appears late in

the afternoon, chances are it might
remain open. A gap like this is more
likely to happen during a news
embargo at 8:30 AM but is highly
improbable in the London session.

If the gap remains open late in the day, after 10 o'clock in the morning New
York time, it can provide a fair value gap for a later time, with expectations
of price returning to fill it in.
A fully rebalanced gap can be a buying
opportunity at the blue arrow if we have
bullish liquidity. It signifies a complete
return on the Vacuum Block.

When the gap is closed, and a rally ensues, it's

essential to note that we should not see the price
drop below the level that closed the gap. There's
no valid reason for it to retrace in this manner.

The ICT Vacuum Block essentially represents a breakaway gap. Since it

trades within a liquidity vacuum, it may not always fill completely. If a
bullish orderblock is present, the price might only return to that level within
the gap and then rally higher, leaving a small gap. In such cases, we can
use that gap as a reference for future trading. However, if the gap remains
open, especially when we're in a bullish stance, we categorize it as a
breakaway gap. It showcases determination and strength in the market,
suggesting an inclination toward higher prices.

If we anticipate a bullish market and the price has successfully filled the
gap, meaning we had an initial gap up followed by selling and then a rally
back up with both selling and buying activities, there should be no reason
for the price to drop below the low of the first upcandle. If it does, it raises
suspicions, as there should be no justification for such a retracement when
the gap has already been closed.
Chapter 4.4: Liquidity Voids
Link To ICT Video

A liquidity void represents a situation where absolutely no trading activity

occurs, creating a stark absence of both buy-side and sell-side participation.
It's essentially a scenario where a significant price move takes place, and
during that move, no trades are executed. An excellent example of this
phenomenon is the CPI candle from October 11, 2022, where a massive
candle formed without any trading occurring within it. This is a prime
example of a liquidity void.

Liquidity voids, where there is a

complete absence of trading,
provide a prime opportunity to
capitalize on liquidity. These
scenarios are the ideal hunting
grounds for drawing in liquidity.

In the world of trading, when the

price is confined within a narrow
trading range or consolidation, it is
referred to as being in balance or at
equilibrium. However, this state is
not permanent, and at some point,
the price will break free from this
equilibrium, creating a price
imbalance or what we call
displacement.

The duration for which a price imbalance or liquidity void remains open
can vary widely. It is closely tied to the price action surrounding the void
and is relative to what is observed on the charts.
A liquidity void is characterized by significant price swings occurring
predominantly in one direction, with occasional small gaps separating these
substantial price moves.
Occasionally, during consolidations, market participants may trigger buy
stops and then initiate a drop in price. However, the focus of this discussion
is not on this specific pattern.

In the future, the liquidity void created during such price movements is
typically filled by bullish price action that covers the entire price range.
When this occurs, the price imbalance is rectified, and trading has now
taken place on both the sell-side and the buy-side. This you can see in the
image above.

While it's expected that the price will completely fill the void, it's worth
noting that sometimes it may not happen instantly. In certain instances, the
price may initially drop lower, potentially catching traders off guard, before
ultimately filling the void, as illustrated in the example on the right.

This will be a perfect buy scenario:

When the price moves away aggressively with a noticeable gap, there's a
high likelihood that it will continue to move in the same direction. In such
cases, the price may make several attempts to reach a particular level, often
running away from it and then gradually returning to that level before selling
off again. This process represents institutional order stacking, where orders
are strategically accumulated to drive the price lower.

In summary, a liquidity void is characterized by a gap in price trading,

usually from the close of one candle to the opening of the next. Recognizing
a liquidity void provides insight into the likelihood of the price moving
lower, making it a potential opportunity to initiate a sell trade.
Chapter 4.5: Liquidity Pools
Link To ICT Video

Liquidity is the “open interest” of

buyers and sellers in the market and
can be further defined by those
entities at or near specific price levels.

We want to make smart trades –

selling when others are eager to buy
and buying when others are keen to
sell. Our aim is to sell at a higher price
and buy at a lower one. Interestingly,
many regular traders do the opposite –
they buy when prices are high and sell
when prices are low.

When the market is in a bearish mode (prices are generally falling), our focus
shifts to selling above previous high points. Why? Because we expect to find
less-experienced buyers who either already own assets at higher prices or
have placed orders to buy at levels just above these prior highs. These
buying orders are often called "buy stop orders."

Our strategy involves entering the market at these levels where there's a
cluster of such buying orders above past high points.

To do this effectively, we use a bit of role-playing. We ask ourselves

questions like, "If I were currently in a short (sell) position, where would I
put an order to buy?" Conversely, if we were in a long (buy) position, we'd
think about where we'd set our order to sell. This exercise helps us
understand where other traders are likely to have their buy and sell orders.
But here's the key: We need to figure out the market's overall direction,
whether it's more likely to go up or down in the higher time frames (HTF).
Once we've got that figured out, we can be patient and wait for the right
moments to make our trades. For instance, if the market seems inclined to
go up, we patiently wait for an old low point to be crossed before we start
buying.

Run On Bullish Liquidity Pool:

Definition - The Low that is Under the current market price action will
typically have Trailed Sell Stops under it on Long Traders. Or Sell Stops for
Traders who wish to Trade a Breakout Lower in Price for a Short Position.

Validation: When the Low is Violated or Price moves below the recent Low
– the Sell Stops become Market Orders to Sell At Market. This injects Sell
Side Liquidity into the Market – typically paired with Smart Money Buyers.

Entry Techniques: When underlying is Bullish. Before Price trades Under

the recent Low – place a Buy Limit Order just below or at the recent Low.
You are Buying the Sell Stops like a Bank Trader or any other “Smart Money”
entity would.

Defining Risk: The Low

you are Buying Under –
can see a swing of 10 to
20 pips in mos tcases. A
30 to 50 pip stop is ideal
if your entry is Under the
Low and not above it –
fearing a missed entry.
When trading this: Expect a 10-20 pip sweep - if you instantly want to buy
under the low then use a 30-50 pip stop loss.

Don’t FOMO by buying at the low or above it, buy under it.

If it starts moving beyond 25 pips its probably not a sweep and its likely a
contuniuation of the decline.

Accumulation sellside for longs and distributing the longs to buyside

Another example:
Chapter 4.6: ICT Fair Value Gaps
(FVG)
Link To ICT Video

A Fair Value Gap is a range in Price Delivery where one side of the Market
Liquidity is offered and typically confirmed with a Liquidity Void on the
Lower Time Frame Charts in the same range of Price. Price can actually
“gap” to create a literal vacuum of Trading thus posting an actual Price Gap.

Daily:

The gap occurs on the timeframe you are looking at, you can break it down
further on smaller timeframes but then it would probably be a liquidity void
and not one gap
4H:

Why do we anticipate the gap will get filled? Well, it's because we've
already initiated a trade by taking out the SSL below that low using a turtle
soup strategy. Additionally, we've identified EQH in that area, and above
EQH, there's an FVG. This combination makes it a high-probability trade.
During December, markets often move within a range, and in such
situations, this trading style comes in handy. We're on the lookout for stop
orders and Fair Value Gaps (FVGs).

It's worth noting that Fair Value Gaps, liquidity voids, orderblocks, and
liquidity pools often coincide. When there's a run on liquidity, like when a
liquidity pool encounters an FVG, it frequently results in the creation of a
liquidity void on lower timeframes.

That circled range is already efficient price, once we break the orange line
to the downside thats where only sellside is delivered.
Chapter 4.7: Divergence Phantoms
Link To ICT Video

There are two types of Divergences to consider:

1. Type 1 Divergence: This occurs when the price chart makes a higher
high, but other relevant factors do not confirm this upward movement. It
suggests a potential change in the current trend.

2. Type 2 Divergence: This is a form of divergence that indicates a

continuation of the current trend. It happens when the price chart forms a
higher low, but something else (which could be various factors) moves in
the opposite direction, suggesting that the trend is likely to persist.

ICT likes to see that happen when we’re looking for higher prices, while
retail looks at the bearish divergence on the top.

Banks are not looking at what indicators are doing, but they are looking at
where the stops are.
Here you can see a Bearish divergence for retail and we expect higher
prices still so we buy

We Do the opposite of retail.

Chapter 4.7: Double Bottom Double
Top
Link To ICT Video
This is wat retail thinks:

THIS IS INCORRECT

The algorithm recognizes double tops and bottoms as key points of

reference. We can use them to execute calculated sweeps for liquidity.

It's important to understand that double tops and double bottoms are not to
be trusted. We should always anticipate that they will be cleared or swept.

High-probability trading often occurs at the extreme ends of a range, while

the middle presents lower probability opportunities.

While we typically think of 10-20 pip sweeps on a 15-minute chart, we can

be more precise on the 1-hour chart. The algorithm is aware of these
reference points and their significance.
Chapter 5.1.1: Quarterly Shifts & IPDA
Data Ranges
Link To ICT Video

If markets were completely random, it would be challenging to gain an

edge.

These quarterly shifts apply to all markets and occur to generate new
interest.

To analyze price effectively, always consider it on a broader scale, looking

at monthly, weekly, and daily timeframes.

Approximately every 3 to 4 months, the market experiences a shift, which

might result in either consolidation or a retracement of the prevailing price
trend.

During a strong uptrend, you may see consolidation rather than a

retracement. This allows market participants to build new long positions
while potentially taking a short-term dip on the daily chart before resuming
the uptrend.

In this discussion, we're primarily focused on the daily timeframe. Buy

programs can be implemented on various timeframes.

It's essential to understand the underlying asset you're trading, like the dollar
in the case of USDJPY.

When the underlying asset forms a lower low while the benchmark makes
a lower high, this can be observed in pairs like GBPUSD and the dollar. Our
primary emphasis at the moment is on the daily timeframe.

Let’s take a closer look at the quarterly shift:

When things like this happen, you can anticipate it being a turtle soup on
the daily timeframe

If the old low/high has a lot of long wicks then you’ll be looking for a
rejection block, instead of a sweep of the wicks it will be a sweep of the
bodies.
Look Back Period:

The algo will do a shift between 60 and 20 days in the look forward phase
We expect a setup in the next 60 trading days, you dont have to trade the
daily if it doesnt suit you, this also helps with daily bias context

Applying this to the chart:

Cast Forward

This will help map out WHEN the setups occur, time is very important.

The algo will seek to do something in the first 20 days, 40 days, 60 days
after the most recent market structure shift.
Let’s look at an example with a SMT on the Daily:

There's a SMT relationship between the dollar and the EU, where the
underlying asset is forming higher lows, and the benchmark is creating
higher highs. This pattern occurs within the 3 to 4-month timeframe and
aligns with the 60-day look forward phase.
Price movements exhibit a certain rhythm, characterized by a sentiment
shift happening approximately every 3 to 4 months.

In May, there was a notable shift in market structure following six months
of bearishness in the dollar, particularly in relation to the SMT with the EU.

This suspected rally can be considered as part of the SMT dynamics.

To assess the market's potential, it's crucial to examine the past liquidity
zones while also looking forward to identify potential setups and estimate
the timeframes involved.

When pinpointing such shifts, it's advisable to begin by referencing the

previous closed month as your starting point for IPDA (lines, especially
when a clear market structure shift becomes apparent.
Chapter 5.1.2: Open Float
Link To ICT Video

Open Float is the total open interest. It is every order in the market. We
look at Open Float to answer the question in which direction the market
will likely go to next.

Let’ look at the example below:

Whenever we get a bearish shift, your eyes should go right to the high it just
came from thats going to have a lot of liquidity above it on the daily chart.
Market is not trading against retail, they are trading against large funds.
1.

2.
3. Market Structure Shift in the red box, after that there is a stop raid, see 4

4. Notice how there wasnt any significant move on sell stops during the
push above BSL of 1.1515 from 1.0530. Once we took the liquidity above
1.1515 we took sell stops.

This is your first clue that were probably going to work towards sellside now.
We came a long way from 1.0534 (the low) without taking sell stops once
and now we took sellstops after an important high was taken.
5. Now you see more unraveling: another buy stop-raid into SSL. The SSL
at the low is highly favorable now.

6. And yes there it goes, into the SSL.

The chances of it going above 1.1515 are very low right now. That's because
it keeps hitting stop-loss levels (SSL) and with each hit, it drops further. Even
when it has short bursts of rising, it struggles to make substantial gains on
the upswing. It's clear that every high point is being sold off.

On the flip side, it's making more headway in the downward direction.
When a market consistently moves in one direction, it indicates a strong
bias in that direction.

If it keeps moving lower, it's a sign that it wants to explore stop-loss levels
and trade below the current market price. This information can help you
determine which side of the market it's favoring.

An Intermediate Term High (ITH) is a high point with smaller Short-Term

Highs (STH) on its sides, and a Long-Term High (LTH) has Intermediate Term
High (ITH) on both sides, resembling a head and shoulders pattern. The
same idea applies to market lows when you reverse it.

By studying daily charts as we did today, you can grasp the concept of "open
float." Understanding how the price moves above and below the market
price provides you with a framework for identifying which side of the market
is likely to dominate. This analysis on daily charts gives you a long-term
perspective and insight into institutional support for your trades.
Chapter 5.1.3: Using IPDA Data
Ranges
Link To ICT Video

Author’s note: As this is the longest lecture from the whole ICT Course and
most overlooked by students, it’s recommended to watch this video to get
a more in depth understanding of the application of the IPDA Ranges.

To establish a longer-term market bias, it's valuable to consider the futures

contracts of currencies in addition to the forex market. This is because
certain data points, like accurate volume information, can be less reliable
in forex but are readily available in futures trading.

When seeking to identify displacement and Market Structure Shifts (MSS) on

a daily basis, keep an eye out for quarterly market shifts.

These quarterly shifts tend to occur every three months.

Here's a practical approach involving various lookback and cast-forward

ranges:
- A 20-day lookback and cast-forward range.
- A 40-day lookback and cast-forward range.
- A 60-day lookback and cast-forward range.

Once you've identified a liquidity grab and a quarterly market shift, draw a
reference line at the beginning of the month when these events transpired.
This reference point is crucial as it marks the starting point. Consider what
the Interbank Price Delivery Algorithm (IPDA) has most recently executed,
and identify the most prominent instances of liquidity grabs and quarterly
market shifts. Then, extend your analysis forward by 20 days, starting from
the beginning of the relevant month.
Chapter 5.1.4: Defining Open Float
Liquidity Pools
Link To ICT Video

Intermediate term basis is around 3/4 months. Every quarter a large liquidity
pools is going to be targeted.

Open float is simply taken the last three months or taking last 1.5 months to
the next 1.5 months in the future and marking that time.

You are basically looking at three months of data (orange lines are months):
When you have the high and low of the lookback of 20, 40, 60 days and
you cast forward then thats your open float. You want to find the highest
high and lowest low in between those 2 reference points in time

On a near term basis we can look back 60 days and look what the range
was (the high and low)

As you can see below, the High and the Low of the previous 60 days are
marked with a green line:
In the above illustration, we're focusing on the overall open float.

Here's the breakdown:

- Consider the recent 20-day period to identify the near-term highs and lows.
- Examine the 40-day timeframe to pinpoint short-term highs and lows.
- Extend your analysis to the last 60 days to identify intermediate-term highs
and lows.

Now, let's break it down further:

- Within the next 20 trading days, anticipate the formation of a high and low
range. By noting the high and low within the previous 20 days, you can
identify the liquidity pool for the near term. These near-term highs and lows
are particularly useful for scalping and intraday trading.

- Expanding your view to the past 40 days provides a better understanding

of short-term liquidity pools on the daily chart. Look for the most recent high
and low within this timeframe.

- A 60-day forward projection gives you a boundary point for the

culmination of the open float in terms of time. This involves looking ahead
60 days and back 60 days to encompass a total of 120 trading days, defining
the open float. Identify the highest high and lowest low within this range.

One noteworthy observation is that buy stops tend to be triggered, whereas

sell stops are rarely hit. This default behavior suggests a bullish inclination
in institutional order flow.

Large funds, often resembling long-term trend traders like the turtle traders,
influence these dynamics. The term "turtle soup" derives from their
approach.
You can do this for every month:

October:

November:
December:

January
Important:

What makes these false breakouts particularly profitable is our awareness

that large fund traders have their stop orders positioned just above and
below these price lows. Every 20 trading days, a fresh liquidity pool
emerges, encompassing both the buy and sell sides. The key is identifying
these ranges based on where the most conspicuous swing highs and swing
lows have materialized. We then project forward to determine the high and
low for the next 20 days.

When we analyze the past 60 days and anticipate the next 60 days, we gain
insight into the open float's range. This involves identifying the highest high
and lowest low within a span of 120 days, which corresponds to the macro
perspective of large funds. This is where they strategically aim to trigger buy
and sell stop orders.

Our approach is to continuously monitor price action as it establishes new

highs and lows. We position ourselves relative to the last 60 trading days:
Are we currently forming a higher high above the highest point within that
timeframe? Conversely, are we setting a lower low beneath the lowest level
in the past 60 days? We also look ahead 60 trading days into the future
while maintaining this forward-looking basis each month. Over time, this
allows us to naturally discern the flow of institutional orders.

One noteworthy observation is that institutional traders consistently target

buy stops for activation while rarely triggering sell stops. This trend signals
their intent to drive prices higher and reflects the persistent efforts of large
funds. The opposite holds true when the market sentiment turns bearish. If
we find ourselves below the lowest low of the past 60 days during a bearish
phase and start witnessing the activation of buy stops with sell stops rarely
hit, it indicates the potential onset of a quarterly shift and a new market
direction.

Integrating open interest data with our quarterly shift analysis, especially
when the market approaches a support level, can provide valuable insights.

When open interest is in decline, it signifies a reluctance among market

participants to make sell-side liquidity available to potential buyers. This
hesitancy can induce rapid price drops, essentially unsettling these market
participants.

In simpler terms, low open interest implies that the smart money,
represented by institutional traders, is not inclined to take short positions.
Conversely, high open interest serves as an indicator that a substantial
liquidity program is in place for buyers. Usually, this program is facilitated
by a bank willing to bear the associated risks.

However, if open interest experiences a decline, and simultaneously the

market's value decreases, heading toward a support level, it suggests a
noteworthy change.

This transformation can be attributed to the influence of long-term

fundamental factors that guide the market's trajectory. Nonetheless, it's
crucial to acknowledge and capitalize on the opportunities presented by
market manipulations that occur during the periods between these
fundamental shifts.
When analyzing market dynamics, particularly at critical support levels, the
interplay between open interest and stop hunts can provide valuable
insights.

Firstly, when open interest is low and coincides with a support level,
especially after a series of stop hunts below the market price, it suggests the
potential for market strength. This scenario indicates that the market has
likely cleared out many traders' stop loss orders and may be poised for an
upward movement.

Secondly, it's essential to pay attention to the frequency of stop hunts. If the
market is consistently triggering stop loss orders (SSL) and rarely triggering
buy stop orders (BSL), it implies a bearish sentiment driven by institutional
order flow. This bearish sentiment is expected to persist until a significant
directional change occurs.

To simplify this concept, consider a revolving 120-day range, known as the

"open float." Regardless of the specific trading day, you examine the highest
high and lowest low within the past 60 days while also looking ahead 60
days. This ongoing monitoring provides crucial insights into the locations of
buy stops and sell stops within the range.

The "lookback phase" within this range identifies the potential locations of
hard stops, representing actual buy and sell orders. Meanwhile, observing
new price action as it unfolds allows you to gauge where you are within the
last 60 days' trading range. Are you near a high or a low? This positioning
provides hints about the likelihood of the next quarterly shift.

In most cases, markets move from one range to another, following the
principles of supply and demand. Understanding your position within these
ranges and which side of the market is being targeted for stop hunts can
guide your trading decisions. When a range is about to break, signaling a
significant price move, you can prepare and execute trades accordingly,
even on daily charts.
Chapter 5.1.5: Defining institutional
swing points
Link To ICT Video

Let's break down these concepts in a straightforward manner.

Conceptually, there are two primary forms of swing points: the stop run and
the failure swing.

1. Stop Run Swing Point:

The first swing point is known as the "breaker." It typically starts with a
higher high (HH) in price, followed by a failure to sustain that high.
Eventually, it breaks down and often experiences a rejection at the previous
highs. In a selling scenario, the market usually rallies toward a resistance
level but fails to reach it. Instead, it falls slightly lower before rallying above
the prior swing high (STH). When price hovers below a significant
institutional reference point, it suggests an impending move toward those
levels.

Example: Consider an order block just above the breaker. Many times, the
order block isn't immediately filled with every Fresh Versus Original Gap
(FVG). Instead, the market may rise to fill all the FVGs into the order block
before a potential drop occurs.
Having these levels on your chart allows you to anticipate setups, providing
a valuable edge. Without these levels, you might find yourself surprised by
market movements.

- You can choose to sell at the breaker level.

- Alternatively, you can sell when stops are triggered, but this requires
experience and confidence.
- Ideally, the recent high or low that was breached is the most significant,
as this concept is fractal and applies across various timeframes, including
daily charts.

The breaker structure offers the highest probability for trade setups.

2. Swing Failure:
In a swing failure, the market cannot surpass a specific reference line, such
as the Price Delivery (PD) array we trade above or below. This failure to
breach the reference line can signal a potential change in market direction.

- Example: Imagine a scenario where price attempts to cross a blue line

representing the PD array but fails to do so.
We’re aiming for breaker swing points, but if we dont get that we can use
this.

We dont know if it will give a breaker before we get the swing failure. The
SL can be placed above the swing failure, doesnt have to be above the
extreme

The magnitude at which they

move away indicates that they
have already trapped sizeable
number of orders. They won’t
take out the STH/STL.

Breaker is the best, because it

allows you to buy/sell in super
discount or premium

These concepts provide valuable insights into market behavior, and having
them on your chart allows you to anticipate potential trading opportunities
with greater confidence. Understanding the breaker structure and swing
failures can be instrumental in your trading strategy.
Chapter 5.2.1: Using 10 Year Notes In
HTF Analysis
Link To ICT Video
Let's simplify the discussion of the seasonal tendencies in the dollar:

1. Bearish Tendency Mid-June to July:

From mid-June to July, there's a bearish tone in the dollar. This means that
during this period, the dollar tends to weaken.

2. Rallying at the Beginning of the Year into March:

At the start of the year and into March, there's often a rally in the dollar.
During this time, the dollar can strengthen.

3. Seasonal Decline from March to May:

From March to May, there's a seasonal tendency for the dollar to decline.
However, this decline occurs in bearish markets. In bullish markets, you
might observe buying opportunities in November, May, and January for the
dollar index. The selling tends to happen in March, June, July, and one in
September.

4. Interest Rates Impact:

The direction of interest rates plays a crucial role. If interest rates are
decreasing, yield-oriented trades tend to avoid the dollar index. When
interest rates drop, it's not a signal to buy dollar-based assets.

5. Inverse Correlation with Notes:

It's important to note that the notes (likely referring to U.S. Treasury bonds)
and the dollar are inversely correlated. This means that when one goes up,
the other tends to go down, and vice versa. This correlation provides
valuable information for understanding quarterly market shifts.

Understanding these seasonal tendencies and their correlation with interest

rates and other assets can help you navigate the dynamics of the dollar in
different market conditions.
Analyzing Dollar and 10-Year Note Movements

When the dollar and 10-year note move together, it suggests a scenario of
large consolidation. In this situation, we watch for previous highs and lows
to be broken, as this can indicate a potential trade back toward the middle
of the range.

In essence, when these two assets move in sync, it often means the market
is in a period of consolidation, and we monitor key price levels for potential
trading opportunities within that range.
Again: When the dollar and the 10-year note move together, it indicates a
prolonged period of consolidation in the market. This happens because both
assets are moving in sync, reflecting long-term uncertainty. The likelihood
of a sustained trend in either direction becomes highly unlikely during such
times. In such situations, we shift our focus to activities like stop raids or
analyzing IPDA data ranges for both the treasury and the dollar index. This
pattern also tends to affect foreign currencies, causing them to enter long-
term consolidation phases.

However, if we observe the treasury following its seasonal trend while the
dollar aligns with its seasonal pattern, there's a strong probability of a long-
term trend forming. This is where major funds tend to allocate their capital,
and the market can move consistently in one direction for several months.

There are two scenarios to consider when trading:

1. Consolidation: If the 10-year treasury note follows its seasonal trend or

moves in sync with the dollar, it suggests a period of significant
consolidation in the market. During such times, we focus on short-term
trading opportunities, which have lower probabilities for long-term success.
Explosive trending trades are less likely in this situation.
2. Trending: When the 10-year treasury note aligns with its seasonal trend,
and this alignment is supported by contrarian price action in the dollar, we
have a higher probability of experiencing a strong, long-term trend. This is
when we look for trades that can potentially be highly profitable.

Additionally, if we notice that the usual seasonal tendency, like a strong buy
signal in June or July for the 10-year treasury, is absent, we shift our focus
to identifying where the highs are forming in the 10-year treasury. This helps
us align our trading strategies with the opposite market direction. So, if the
seasonal tendency doesn't hold, we might concentrate on bearish trades for
the 10-year treasury, which could lead to opportunities around the
November high.
Chapter 5.2.2: Qualifying Trade
Conditions With 10 Year Yields
Link To ICT Video

How can we predict the seasonal tendency? It starts by looking at the swing
patterns in relation to the dollar index and the 10-year T.

In the 10-year T, we see lower lows, which should ideally correspond with
a series of higher highs in the dollar index. However, we notice that the
dollar is forming lower highs, indicating a mismatch or a Shift of Market
Type (SMT). This mismatch suggests a potential trading opportunity in the
10-year T against the dollar index.

To strengthen this idea, we check if the interest rate market is also following
the seasonal tendency, usually decreasing as yields go down. Additionally,
we observe that the futures price on the 10-year note is experiencing an
upward rally. These factors combined provide further confirmation of the
trade idea in the 10-year T against the dollar index.

2015:
Do you see in the above images: that the yield stayed in the consolidation
which also led to a consolidation in the dollar index, 10 year note and
foreign currencies at the same time.

And again notice the consolidation, and its a contributing factor as to why
the currencies also had consolidation

2017:
When we examine the relationship between the 10-year T-note and the
dollar, we typically expect to see a lower high on the 10-year T-note
corresponding to higher lows in the dollar. However, we often notice a
lower low in the dollar instead. This divergence signals a break in
correlation, indicating an underlying trend or manipulation in progress.

Another piece of evidence supporting this idea is the decline in open

interest, which suggests short covering in the dollar index. Additionally, as
interest rates on the 10-year bond increase, the dollar tends to rally. So,
when interest rates rise, the dollar usually strengthens.
To make informed trading decisions, we combine these observations with
quarterly shifts. Typically, these trade ideas materialize within 1.5 months,
although they can extend for the full 3-4 month duration. ICT primarily
focuses on 3-month trends.

You can identify high-probability trade opportunities by aligning seasonal

tendencies, qualifying SMT divergences between the dollar index and the
10-year note, and considering the interest rate triad or foreign currency pairs
against the dollar index. This alignment enhances the accuracy of your
trades, filters out market noise, and provides valuable insights into
institutional order flow, even if you don't primarily trade long-term
positions.
Chapter 5.2.3: Interest Rate
Differentials
Link To ICT Video

You can go to FXstreet.com for more details

1. Look for a country with high interest rate
2. If you want to buy, it makes perfect sense to buy Australian Dollar (1.5%)
or New Zealand Dollar (1.75%)
3. The low interest rates on other currencies means their currency is weak,
like the Swiss National Bank
4. With this informationwe can look at long term trades
5. Funds will seek to trade high yielding currencies against weak yielding
currencies

Complete Action Plan:

Chapter 5.3: How To Use Intermarket
Analysis
Link To ICT Video

All 4 groups are all moving closely related.

Stocks and bonds usually move together, with bonds impacting the stock
market. When the bond market rallies, it generally supports a bull market
for stocks. Conversely, if the bond market declines, it can make it
challenging for stocks to rally. This doesn't mean stocks can't go up, but the
downward trend in the bond market will eventually catch up with the stock
market, requiring a correction to align with the bond market trend.

If you're a stock trader, it's essential to consider the bond market as an

indicator of underlying strength. If the bond market is trending upward and
you're buying stocks, you have solid fundamentals on your side, which is a
high-probability scenario. However, if bond prices drop, it indicates rising
interest rates, and both the stock and bond markets tend to react negatively
to rising interest rates.
Export sales of commodities and production significantly impact various
currencies.
To spot signs of inflation, just keep an eye on commodity prices. But here's
the thing: while bond prices can go up, commodity prices might take a dip,
and you won't see the effects right away. It usually takes about 6 to 12
months for the impact to show up.

The CRB index mainly covers agricultural stuff like soybeans, wheat, corn,
cattle, and hog prices. If you're interested in energy-related prices, check
out the Goldman Sachs Commodity Index.

And when you see the Goldman Sachs Industrial Metal Index on the rise,
that's a solid indicator of a strong global trend. Just remember, it focuses on
industrial metals, not gold and silver.
If you spot these things
lining up with your
technical analysis, you're
likely heading in the right
direction. But here's the
tricky part: getting the
timing right for long-term
trends is tough.

However, this approach

benefits all types of
trading, whether it's day
trading, scalping, or swing
trading.

It'll boost your confidence by aligning with long-term trends and save you
the trouble of sifting through heaps of data every month. Essentially, it
provides similar insights to fundamental data, but keep in mind that, like
fundamentals, it can have a delay.

Just because the data is out

doesn't mean it'll
immediately show its
impact; sometimes, it takes
time.
Chapter 5.4.1: How To Use Bullish
Seasonal Tendencies In HTF Analysis
Link To ICT Video

Seaonal tendency is just another confluence.

Let’s look at the Canadian dollar seasonal tendency:

 - When were clearly bearish on USDCAD technical then don’t expect
the seasonal bullish tendency to play out.

- Now we can couple the seasonal tendencies with quarterly shifts.

Seasonal tendencies give us a roadmap, which quarter we want to be a

buyer and which quarter to be a seller

Another example, Crude Oil:

- Crude oil seasonal tendency is mostly bullish March-July.

- Canadian dollar is closely related to crude oil because its the number
one export.

- Certain markets have really strong seasonal tendencies.

Chapter 5.4.2: How To Use Bearish
Seasonal Tendencies In HTF Analysis
Link To ICT Video

Use seasonal tendencies as a roadmap

When the blue line and red line move in tendum direction, thats high
probability seasonal tendency, when its choppy and back and forth its lower
probability.

if we look at the seasonal chart, you want to be focusing on the June and
December contract because that is where the moves will happen.

Is there something technical in price that supports the seasonal tendency

idea?

This can lead us to the next quarterly shift

This is the big picture view of the kiwi (New Zealand Dollar).

We're not solely relying on seasonal tendencies; instead, we're searching

for clues. We'll examine various factors and determine whether buying or
selling makes more sense.

Sometimes significant macro events, like the 2008 crash, can override other
factors.

For example, if there's a seasonal tendency suggesting bullish prices, and it

aligns with a bullish market, during a time of day when the market tends to
be bullish, and this is supported by interest rates and the dollar index, when
all these factors align, you have a high-probability situation. Sticking to this
approach can lead to significant success.
Chapter 5.4.3: Ideal Seasonal
Tendencies
Link To ICT Video

Seasonal tendencies are good to have for your MACRO analysis of the
market. Let’s look at some examples:

This is the ideal seasonal tendency for AUDUSD, AUD goes up dollar goes
down.
Other Dollar-Bases Seasonal Tendencies:

As you can see, when the Dollar goes down, the asset goes up and vice
versa.
- Here's how you can identify the most promising seasonal tendencies:

- Keep a handy list of things to watch for this month and the next.

- Make it a habit to begin your trading day with a review of macro

analysis.
Chapter 5.5: Money Management
Link To ICT Video

This primarily pertains to managed funds and high-frequency (HTF) trades,

unless specified otherwise.

The size of your trading account isn't the crucial factor.

What truly matters is if you can demonstrate a consistent equity curve with
minimal drawdown. This consistency will attract investors, regardless of the
percentage gain, as long as it remains steady.

In the case of HTF trading, ICT preaches to a maximum allocation of 30%

of equity. For instance, if he has $100,000, he would utilize $30,000.
Therefore, when he risks 2%, it's 2% of the $30,000, not the entire
$100,000. This approach ensures there's no excessive leverage, margin
calls, or significant dips in equity, which is something investors appreciate.

Managing other people's money can be exceptionally stressful for ICT.

For managed funds, achieving an annual return of 18% to 25% is considered
good and aligns with industry standards. If you can consistently deliver these
results year after year, ICT assures you that attracting investors will never be
a problem. He will provide guidance on how to reach out to investors later
in the series.

ICT focuses on managing funds using high-frequency trading (HTF), which

means there aren't numerous setups available throughout the year.

When you allocate 30% of your equity to long-term trades, it provides you
with the margin needed for short-term trades. In the United States, traders
cannot hedge their positions, but they can engage in trading correlated pairs
alongside their long-term positions. If the long-term position experiences a
retracement, you may encounter some drawdown. To counteract this, you
can short and hedge the long-term position on a short-term basis. For
instance, if you have a long position in USDJPY and a retracement occurs
in the long-term position, you can hedge it through a short-term position in
EURUSD, among other options. Intraday market analysis is essential for this
strategy.

High-frequency trading requires patience, so it's important to resist the

temptation to move your stop loss too early.
It's advisable for everyone to incorporate long-term trades into their
approach; it's an invaluable learning experience.

Direct your attention to identifying two exceptional setups each year. This
approach is one of the reasons why large fund managers often seem to be
on vacation; they don't trade every day.

Strive to pick the low-hanging fruit, as this will endear you to investors who
will eagerly share their positive experiences with others. The key is to keep
drawdowns to a minimum, as excessive drawdowns often result from being
in the market too frequently.

Many individuals may initially test your abilities by investing smaller

amounts of money.

The goal isn't to impress anyone once you have more substantial funds
under management; it's about maintaining a consistent strategy.

Efficient money management means working smart, not hard. Achieving

excellent results on higher timeframes often requires minimal effort.
Chapter 5.6.1: Defining HTF PD
Arrays
Link To ICT Video

There exists a hierarchy of PD arrays that govern market movements.

As we analyze charts, our goal is to determine whether we are in a premium

or discount market.

For higher timeframes (HTFs), it's essential to acknowledge the potential

presence of lower timeframes' (LTFs) PD arrays, even if they are not

immediately visible on the HTF charts.

Price fluctuates between discount, premium, and equilibrium levels. The

extreme points are marked by red and blue lines, while balance is in the
middle.

A buying imbalance happens when the price goes above equilibrium (EQ)
or into the red premium area, suggesting resistance. A selling imbalance
occurs when the price falls below EQ, entering the blue discount area,
indicating support.

Let's explore how these imbalances form and how to use them based on our
market position.
When analyzing price movements, pay attention to instances where the
price moves away from an old high and drops from a premium area to a
discount. The algorithm orchestrates this back-and-forth motion until
something significant triggers a one-sided market move. Otherwise, it seeks
liquidity within the premium and discount zones.

Profitability relies on aligning time and price, but the duration of a

displacement is unpredictable. The path to a target is rarely straightforward.
Price transitions from discount to premium because the discount level
typically doesn't last for extended periods.

This lesson will guide you in determining which PD array to focus on.

What are PD Arrays?

The PD arrays are in order of importance:

When we find ourselves at EQ (equilibrium), and we're seeking premium

PD arrays to sell at, we follow a specific hierarchy. We start by looking for
a mitigation block, but if there isn't one, we move on to the next step, which
is searching for a breaker. If there's no breaker either, we proceed to check
if there's a liquidity void that needs to be filled.

In case there isn't a clear liquidity void, we then examine whether there's
an FVG (fresh weekly level) to consider. If none of these conditions apply,
we move on to the next level in the hierarchy: the bearish orderblock.

The hierarchy guides us in determining the significance of each PD array.

The order of importance starts with mitigation blocks, followed by bearish
breakers, and so on. It's essential to note that as we move up the hierarchy,
we enter deeper into the premium level of the market.

For instance, the most premium PD array includes old highs and lows.
Rejection blocks are next in significance, followed by bearish orderblocks,
and so forth.
It's important to understand that certain PD arrays can act as barriers
preventing us from reaching higher ones. For example, if we encounter a
breaker, it's less likely that we'll reach the liquidity void above it. In essence,
the presence of a breaker may keep the liquidity void open.

However, without a breaker, we anticipate that the liquidity void will be

filled, allowing us to trade into an orderblock.

These PD arrays serve as both entry points and profit-taking targets in our
trading strategy.

The same is for the Weekly And Daily Chart:

Chapter 5.6.2: Trade Conditions &
Setup Progressions
Link To ICT Video

This teaching will be for discount reaching into premium (PD Matrix)

When financial markets are either at a premium or discount, there is a

natural tendency for them to seek a rebalance, ideally returning to at least
the equilibrium (EQ) level of the most recent price range. This rebalancing
reflects the market's constant effort to find a fair and balanced price point.
Whenever we are in an uptrend, it's essential to pay close attention to the
downward-moving candlesticks because this is where institutional buyers
tend to step in.

When analyzing a supportive bullish PD (Price Distribution) array on the

daily chart, if it fails to provide a buy signal or support the price, the next
step is to examine the weekly PD array. Similarly, if the weekly analysis
doesn't yield favorable results or buy signals, you should then look at the
monthly PD array. This approach acknowledges that retracements can
extend beyond what is observed on the daily chart. It's recommended to
have the weekly and monthly PD arrays displayed on your daily chart, even
if you don't place them on your executable trading chart. This practice is
valuable for both day trading and swing trading.

For instance, if you

are monitoring the
market on a daily
chart, and you
notice it entering
an order block or
filling a gap, and it
appears to be
bullish, don't
assume that this momentum will necessarily persist. Price could retrace
further on the daily chart.

During bearish periods when prices are falling, and you observe small
rallies, this is typically where banks engage in buying. They are engaging in
long-term hedging because they cannot execute all their orders in one go.

Regarding old weekly highs, new daily order blocks tend to form around
them. This provides an opportunity to anticipate the formation of an order
block and potentially buy from it, especially when the higher timeframe
(HTF) objective has not yet been reached.

If you lose a level on the daily chart, it's advisable to drop down to the
weekly chart to gain further insights because the price might experience a
deeper retracement. If you can't find relevant information on the weekly
chart, which is relatively uncommon, then you may need to examine the
monthly chart.

When you observe significant spikes in price movements, especially on

lower timeframes (LTF) like the daily chart, and they don't seem to make
sense, it's a good idea to analyze higher timeframes (HTF) as this can help
clarify the underlying market dynamics. The algorithm primarily operates
on the daily timeframe, but if all potential liquidity has already been
absorbed, it may extend its analysis to larger open float levels, often dipping
into weekly ranges.
Chapter 5.7.1: Stop Entry Techniques
For Long Term Traders
Link To ICT Video

*This would be a daily orderblock, we should be trading higher after it forms

This entry technique can be effectively applied to both higher timeframe

(HTF) and daily Price Distribution (PD) arrays:

1. Use Buy Stop on New Downcandles: Whenever a new downcandle

forms, adjust your buy stop order to match the new downcandle's level. This
allows you to enter the market when the price exhibits downward
momentum.

2. Re-Entry after Price Moves Down and Back Up: If the price moves away
from the open and then retraces downward, you can consider entering as a
buyer again, but only if you have already taken partial profits. You can use
the same position size as when you took partial profits. This approach
allows you to capitalize on favorable price movements while managing risk.
3. Consider Entry at or Below EQ: It's essential to be mindful of the price
level concerning the monthly and weekly objectives or PD arrays. As you
move higher and closer to these objectives, the likelihood of candle
formations promoting buying diminishes. Therefore, it's preferable to look
for buying opportunities at or below equilibrium (EQ) levels, which can offer
a more favorable risk-reward ratio.

For setting stop-loss levels, it's recommended to place your stop-loss orders
below the most recent swing low. Additionally, ICT will provide specific
reference points for stop-loss placement in Chapter 5.8.

This entry technique is particularly valuable for long-term trading strategies

and can enhance your trading approach. It's a technique that can be
beneficial in the future, and it offers a structured way to enter and manage
trades with a focus on risk management and maximizing profits.

- The opening price a lot of the times it is not traded back to.
Your stop loss will be positioned below the most recent swing low, and it
will also be situated below a specific reference point that ICT will detail in
Chapter 5.8.

This is an excellent long-term trading entry technique that we can

incorporate into our trading strategy. I anticipate using this approach in the
future because I find it highly appealing and effective.
Chapter 5.7.2: Limit Order Entry
Techniques For Long Term Traders
Link To ICT Video

Your stop loss will be positioned below the most recent swing low, and it
will also be situated below a specific reference point that ICT will detail in
Chapter 5.8.

This approach works most effectively when

price has already indicated its intentions
through a market structure shift, and when it's
situated within a DAILY PD array.

By buying at an extreme discount, you'll receive immediate feedback, even

on the daily chart.
When applying this, you can catch amazing moves, but you need to wait a
little longer to get them.
Chapter 5.8: Position Trade
Management
Link To ICT Video

Your stop loss will be positioned below the most

For effective intermarket analysis,

it's essential that at least three
elements (confluents) are in
agreement to increase the
likelihood of success.

Using limit orders might cause you

to miss out on more trading
opportunities, while stop orders
can increase your risk.

When seeking a bullish move, it's

likely that the lowest low of the
past 40 moves will not be
touched. This concept ties back
to the IPDA data range videos. It's
crucial to allow some flexibility
in long-term trading and let your
trades breathe.

Once the price moves 50% of the

range target, you should adjust
your stop loss to the lowest low
of the last 20 days. The range target is based on the actual expected range
and its equilibrium, not the 50% level from your TradingView risk-reward
tool. If you're targeting a 3R fixed trade, your stop loss would still be at 1.5R.

Using a wider stop loss is generally more favorable for long-term trading.

For a 40-day lookback, your stop loss is calculated from the day you place
the order. You then look back 40 days from that specific day. Once you're
in the trade, every day, look back 20 days and trail your stop accordingly.
When you reach 50% of your target, adjust your stop loss daily while
looking back 20 days.
Chapter 6.1: Ideal Swings Conditions
For Any Market
Link To ICT Video

Let’s take a closer look at what Swing Trading is:

When we exit a consolidation area, there's a higher likelihood of entering a
trending environment.

Trending markets typically have significant institutional support.

It's advisable to avoid trading in consolidating markets since they often lack
clear buying and selling opportunities.

Don't let your intuition push you to go against the trend; stick with it.

If you're experiencing losses, it might be a sign of a market shift or changing

conditions.

Keep in mind that even if the monthly chart is moving higher, it doesn't
necessarily indicate a trading setup. You should consider other factors as
well.
Consolidation Profile:
Consolidation profiles can be traded, but they are not ideal for swing
trading. Swing trading is best suited for trending markets.

Trending Profile:
If it shows a willingness to leave a consolidation, thats very strong for swing
trading:

Let’s look at the example below (Weekly, Daily):

- Each Line is a new month
- You hold swing trades for about 2 weeks or longer, this gives you an
idea of where you want to get involved
- We look for strong trending plays, you can combine this with month
5 the long term position trading month and build long term positions
and swing trade positions
Chapter 6.2: Elements To Successful
Swing Trading
Link To ICT Video

Let’s take a closer look at what elements are required for successful Swing
Trading:

SMT divergences to back up institutional sponsorship

When we talk about accumulation, we pay close attention to downcandles
because they usually indicate it's a good time to buy.

The more clear and obvious a PD (Premium/Discount) array appears, the

better the trade opportunity it represents.

If the price breaks out of a consolidation phase, we can expect it to move

toward a premium buyside imbalance or a discount sellside imbalance.

The trades that are the easiest to spot and make sense without much
convincing tend to have the highest chance of success. These
straightforward setups are typically the best ones.

Institutional levels often align with significant rounded levels in the market.
If you see a better setup somewhere then you have to cut the trade youre
currently in, or take something off. But dont stay in the trade fully.
Have a clear understanding of what you're searching for, and then assess
whether it qualifies as a valid swing trade.

Thoroughly research and

analyze your trade setups;
this preparation is crucial
and will benefit you.

Additionally, identify the

factors that could
invalidate the trade.
Establish clear rules for
your trading to avoid
emotional decision-
making.
Chapter 6.3: Classic Swing Trading
Approach
Link To ICT Video

Apply the same approach to analyzing the monthly, weekly, daily, and 4-
hour timeframes as explained by ICT.

Identify which side of the market has experienced recent displacement and
whether smart money has made significant moves. Trading in the direction
of these developments is likely to yield high-probability setups.
A sell program refers to a trading strategy that starts by analyzing the
monthly chart to identify when price is moving away from a resistance level,
indicating a potential downtrend. This approach is used to find
opportunities for selling in various timeframes, including monthly, weekly,
daily, and even the 4-hour chart for swing trading.

In essence, the idea is to look for alignment in these four timeframes, with
price moving away from premium Price Displacement (PD) arrays, to
identify high-probability shorting opportunities. Conversely, when seeking
buying opportunities, the same principle applies, but in the opposite
direction, with all four timeframes indicating a potential uptrend.

The goal is to trade in the direction supported by all four timeframes for the
highest probability and ease of execution in swing trading.

You don't necessarily need all factors to align perfectly; having a few key
elements in your favor can be sufficient. It's particularly important to have
interest rates on your side, especially when there's an interest rate
differential in play.
Here's a breakdown of the process:

1. Identify a Likely Bullish Market: Look for signs of a market that's likely to
move in a bullish direction. This could be supported by macroeconomic
factors.

2. Market Rallies with Displacement: Once you've identified a potential

bullish market, observe how it rallies higher, ideally with a displacement (a
significant upward move).

3. Wait for the Retracement: After the initial rally, expect a retracement or
pullback in prices.

4. Hunt for Retracement Opportunities: During the retracement phase,

look for conditions in the market that signal potential resistance, such as
premium arrays (important price levels).

5. Counter Trend Ideas: While this approach primarily focuses on trend-

following strategies, there may be opportunities for counter-trend trading.
These counter-trend ideas will be discussed in more detail in future
materials.

6. Discount Matrix: Within the green area (the range between the impulse
low and the impulse high), focus on identifying the discount range. This is
the range where you'll be seeking discount matrix opportunities to align
with bullish prices on the Higher Time Frame (HTF).
The goal is to enter the market during the retracement phase and find
opportunities that align with the overall bullish trend on the HTF.

When checking the market profile, especially during consolidation, focus

on how price behaves as it comes out of that consolidation. Look for signs
of strong and decisive movement in the price action as it breaks away from
the consolidation. This kind of forceful movement can signal potential
trading opportunities.

Price should flow smoothly through premium arrays, which include moving
through bullish setups, breaking bearish barriers, and surpassing previous
highs. If the price moves in this manner without significant retracements, it
indicates a high-probability trend continuation and presents a favorable
trading opportunity.
The price swings in the market occur at different timeframes, which are all
interconnected. For instance, within a weekly impulse and expansion
swing, there may be smaller daily swings that are not as visible on the
weekly chart. This pattern continues, where daily swings can have 4-hour
swings within them, and so on. This fractal nature applies from monthly
down to 4-hour timeframes.

In each of these price swings, you can find discount arrays. If you enter a
trade at one of these levels and it doesn't go as expected, you can drop
down to the next higher timeframe (HTF) discount array. There, you can
look for opportunities to enter trades that align with the larger monthly
and/or weekly macro uptrend. This approach allows you to adjust your
trading strategy based on the prevailing market conditions and higher
timeframe trends.

Bearish scenario is vice versa:

Chapter 6.4: High Probability Swing
Trade Setups In Bull Markets
Link To ICT Video
We search for price displacement that rebounds from a discount array. This
means we're keeping an eye on price movements that show a shift away
from a discount level, which can provide potential trading opportunities.

We buy all the discount arrays on the daily and 4-hour charts. This means
we consider buying opportunities at various discount levels within these
timeframes.
ICT rounds the levels to institutional levels.

Every time the daily chart retraces back into a downcandle, we can consider
becoming a buyer. This happens because we now have alignment between
the monthly and weekly charts. We waited for the monthly reference point
to be reached first, as the weekly and daily charts initially showed a bearish
bias.

In this approach, we focus on specific levels rather than broad zones. These
levels are determined using the open and high prices.

Next, we transition to the 4-hour executable timeframe, incorporating all

the daily downcandles as well as the 4-hour downcandles.

It's worth noting that when ICT performs his analysis, he accumulates
numerous lines on his chart. However, he typically removes older lines to
keep only the most recent ones. This is one of the reasons why he doesn't
share his analysis chart.
In addition to buying during downcandles, we also consider buying below
old short-term lows. ICT expects lows to sometimes be tested or breached
before an upward move occurs, especially when there is no order block to
reference or the order block has already been breached. (Minute 27 of the
video)

These levels are where you would anticipate a liquidity void to be filled,
and they serve as potential targets for your trades.
ICT prefers to avoid taking long positions in premium and short positions in
discount. He typically looks for opportunities when the market is at a
significant discount, ideally greater than 20, before considering long
positions.

By focusing on higher discount levels and avoiding premium levels, ICT

effectively filters out potentially less reliable order blocks and trade setups.
This approach helps him identify higher-probability opportunities and avoid
those that may have less favorable conditions or greater risks.
Drawing out the various levels, order blocks, and price structures can be a
helpful visual aid when learning and analyzing the market. It can make it
easier to identify potential trade setups and understand the market's
dynamics. Over time, as traders gain experience and confidence, they may
rely less on manual drawings and develop a more intuitive sense of the
market's movements. However, drawing and annotating charts can remain
a valuable tool for both novice and experienced traders.

Swing trading often involves following a set of predefined rules and

guidelines to identify high-probability trade setups. These rules help traders
make informed decisions and reduce ambiguity in their trading strategies.
On the other hand, day trading can be more dynamic and requires quick
decision-making based on intraday price movements.

In swing trading, traders typically look for well-defined structures such as

bearish order blocks in premium areas that may serve as potential entry or
exit points. Breaking these structures in discount areas can indicate a shift
in market sentiment, providing opportunities for swing trades.
It's important to remember that while rules and guidelines are essential for
trading, they should be flexible enough to adapt to changing market
conditions. Traders should continuously analyze the market and refine their
strategies as needed to stay profitable.
Chapter 6.5: High Probability Swing
Trade Setups In Bear Markets
Link To ICT Video

Author note: this chapter is the same as Chapter 6.4, but now its vice versa.
Let’s take a look at an example:

1. Look at the big candlesticks on your charts, especially on monthly and

weekly timeframes. They're more important for finding key levels.

2. When you see multiple levels close together, pay extra attention. These
areas are likely to be strong support or resistance zones.

3. Levels from monthly and weekly charts are super important. They can be
used for trading multiple times because they're based on longer-term data.

In a nutshell, focus on big candlesticks, watch for overlapping levels, and

give extra weight to monthly and weekly chart levels when making your
trading decisions.
Chapter 6.6: Reducing Risk &
Maximizing Potential Reward In Swing
Setups
Link To ICT Video

Structure your trades using the monthly and weekly timeframes, both for
entry and objective setting.

Orderblocks are shown because displaying every PD array would make the
videos excessively lengthy.

When selling, target entry from a monthly premium array into the initial
monthly discount array as per the PD array matrix.

Maintain a conservative approach to risk management.

If you have a busy schedule, consider the 4-hour (4h) timeframe.

Use stop orders and limit orders for swing trading, specifically on the 4-hour
chart rather than the daily chart.
You don't require high leverage, such as 1:50, to build wealth.

If you believe that trading frequently is the key to success in this industry,
you are mistaken.

You have plenty of time to plan and execute your trades, even if you have
another business to manage on the side.

When your funds reach the $2 million mark, it's advisable to explore prime
brokers. Prime brokers typically restrict leverage.

Finding a 1:10 risk-to-reward ratio is quite feasible in swing trading.

Chapter 6.7: Keys To Selecting Markets
That Will Move Explosively
Link To ICT Video

1. We assess the four major asset classes - interest rates, stocks,

commodities, and currencies. We look for trends that are not conflicting
with each other and not stuck in consolidation. Ideally, we want to see at
least two of these asset classes trending.

2. This approach involves using other asset classes to validate our trade
ideas. For instance, if we anticipate a bullish dollar, we would expect
commodities to struggle to reach higher highs and to easily break through
lows. Conversely, if we are anticipating a bearish dollar, the opposite
behavior would be observed in commodities.

3. We analyze the net positions of commercial trades over the last 12

months. By looking at the lowest low and highest high within that
timeframe, we establish a range and then divide it in half to determine
whether we should be bullish or bearish.

4. Open interest is another factor we consider.

5. We also take seasonal tendencies into account.

6. This method helps us gauge when the market becomes quiet before a
significant explosive move.

7. Major news headlines can influence our decisions. If we notice that two
out of the four major asset classes are trending, and we have a bullish bias,
but a news event suggests weakness, we may take the opposite stance and
continue buying, ignoring the news.

8. We pay attention to market sentiment as well.

We assess the major four asset classes, and we look for signs of whether
they are currently trending or in a state of consolidation. Our goal is to
identify at least two of these asset classes that are exhibiting clear trends.

Specifically, if stocks are in a consolidation phase, we would expect to see

commodities trending, and vice versa. Additionally, within the pair of
interest rates and currencies, at least one of them should be showing a clear
trend.

In summary, we group the asset classes as follows:

1. Stocks and commodities - At least one of them must be trending.
2. Interest rates and currencies - At least one of them must be trending.

Intermarket analysis is about checking if one asset class supports the trading
idea of another. For instance:

- If you're bullish on the US dollar, see if commodities are confirming it.

They should generally be falling, and watch for strong resistance levels.
- When the US dollar is weak, commodities often break previous lows. Look
for easy breaks lower and resistance after moving up.

In both cases, observe how commodities behave. Are they consistently

moving in one direction, or do they meet strong resistance after changing
direction? This analysis helps validate your trading ideas and gives you a
more complete view of the markets.
We examine the Commitment of Traders (COT) report, focusing on data
from the past 12 months. This is a common approach because the last 12
months' data is typically used for hedging purposes. You can access the
COT report on http://barchart.com.

ICT uses a simple method with the Commitment of Traders (COT) report:

1. Look at the highest high and lowest low in the last 12 months.
2. Divide this range in half to create a new zero (0) line.
3. This new range represents the net long or net short position.

For instance, if most positions are slightly below the new zero line in January
2016, it suggests a neutral or slightly bearish sentiment. Conversely, when
positions hit their lowest point in July, forming a new range and dividing it
in half helps determine the new zero level, indicating a bullish or bearish
stance.
If this data aligns with the broader market trend and intermarket analysis,
ICT proceeds to the next step: examining open interest.

If we're dealing with a bearish market and observe the Commitment of

Traders (COT) data showing positions above the newly established zero
line, it's not conducive to a robust sell. In such cases, it's advisable to wait
until the line returns below the new zero line before considering a strong
sell position. This approach helps confirm a more bearish sentiment in
alignment with the COT report.

When open interest decreases by 15% or more, it's often a sign of banks
engaging in short covering. This suggests they anticipate a potential price
increase; otherwise, they would maintain their short positions. This signal is
further confirmed when you observe the Commitment of Traders (COT)
report trending higher toward the zero line. In this situation, the red line in
the COT report should either remain flat or move lower.

Conversely, if open interest experiences an increase of over 15% and the

COT data shows a decline, it can be considered bearish confirmation. This
means that despite the rise in open interest, the COT report is not aligning
with bullish sentiment, signaling a potentially bearish market outlook.
We aim to enter trades when seasonal tendencies support our trading
direction.
We use a volatility filter, which can be applied to any timeframe. This filter
helps us identify when price transitions from large price ranges to smaller
ones. We focus on the candle's body, not the wicks, to gauge this volatility.

The volatility filter helps us identify inside bars, which are candles with
smaller price ranges. When we spot an inside bar, there's a high probability
that the next candle or the one after that will have a larger price range.

This is especially significant if other conditions indicate a potential upward

or downward movement.
For instance, if we're near a support level and other factors suggest bullish
prices, the next few candles should show strong bullish momentum. This
filter doesn't precisely predict timing but indicates that a significant price
move is likely imminent.

We can also interpret this as the smallest price range in the past 7 or 3 days,
and ICT uses any inside bar as an opportunity, comparing it to a spring ready
to release its energy.

ICT suggests that if we have a bullish bias, supported by various factors, it's
advantageous to look for headlines or news suggesting a bearish sentiment.
Conversely, when we're bearish and approaching resistance levels, it's ideal
to observe bullish news.

As a specific approach, ICT recommends using sources like Futures

Magazine and doing the opposite of what they suggest. Similarly, with
platforms like MarketWatch or CNBC, consider taking a contrary position
to their recommendations. This strategy is based on the idea that mainstream
news sources may not always reflect the true market sentiment, and going
against the grain can be a strategic move.
ICT utilizes an indicator called "William %R" to gauge overbought and
oversold conditions. This indicator is most accurate when plotted with a 15-
period setting. It helps traders identify potential reversal points in the market
when an asset becomes overbought (typically above -20) or oversold
(typically below -80) on the William %R scale.

In the context of the William %R indicator, a reading below -50 is

considered oversold, which can be interpreted as a potential buying area.
Traders may look for opportunities to enter long positions or consider that
the selling pressure might be exhausted, and a reversal to the upside could
occur.
When using the William %R indicator:

1. Readings below -50 are considered oversold, suggesting a potential

buying area.

2. Readings above -50 are seen as overbought, indicating a potential selling

area.

3. If the indicator is around the 50 level after leaving the oversold area, it
may favor a potential buy.

4. If the indicator is around the 50 level after leaving the overbought area,
it may favor a potential sell.

In essence, traders often consider the recent direction and level of the
William %R indicator to help determine their bias, whether it's toward
buying or selling opportunities.
Chapter 6.8: The Million Dollar Swing
Setup
Link To ICT Video

Step 1:

If there is no seasonal tendency in a market, it can make swing trading more

challenging because you may not have historical patterns to rely on for
making trading decisions. Seasonal tendencies are based on historical price
behavior during specific times of the year, and traders often use them to
anticipate future price movements.
Without a clear seasonal pattern, swing traders may need to rely more on
other technical and fundamental analysis techniques to identify potential
trading opportunities. This could include analyzing price trends, support
and resistance levels, technical indicators, and market sentiment.

In summary, while seasonal tendencies can be a helpful tool for swing

trading, traders should have a well-rounded approach to trading that
includes multiple strategies and analysis methods to adapt to different
market conditions.

Both of these have to be in agreement. We only need 1 of each group to be

trending
Bullish Trading Idea:

Bearish Trading Idea:

Step by Step plan:
Trading is based on clear rules. ICT, in particular, prefers to focus on
seasonal tendencies when engaging in swing trading. It's important to note
that ICT primarily engages in short-term and day trading.

For swing trading, the setups typically unfold over a period of about 4-6
weeks. If you find that a setup doesn't have all the necessary components,
it's best not to force the trade. Instead, exercise patience and wait for the
right conditions to develop before taking action.
Chapter 7.1: Short Term Trading Using
Monthly & Weekly Ranges
Link To ICT Video

ICT's preferred trading style is swing trading, which he considers his

favorite. However, if he can't find a high-probability swing trade, he resorts
to day trading for the week.

It's important to note that these swing trade setups materialize on a weekly
basis, so there's no need to succumb to the fear of missing out (FOMO).

It's crucial to revisit the notes from Chapter 5 & 6 because they provide
valuable insights that complement the current month's teachings. ICT won't
repeatedly cover those concepts, so reviewing the earlier notes is essential.

Keep in mind that any missing pieces from the swing trading model will be
addressed in the lower timeframe models. It's all interconnected, and
understanding how these concepts relate to each other is key to your trading
education.
You aim to hold your position for the entire potential range, taking partial
profits along the way.

In this approach, you focus on identifying a monthly PD array based on your

directional bias and then look for an opposing weekly PD array as your
target and trading range. This is how ICT analyzes the market. When he's
not confident, it's usually because he doesn't know which PD array will be
in play next, so he waits for more information or until the PD arrays have
already been traded to make a decision.

When examining the market, be sure to consider all the PD arrays on the
monthly, weekly, daily, and 4-hour timeframes. For instance, if you have
outlined your premium and discount arrays and have a bearish bias, you
want to see the discount arrays break successively until you reach the
weekly discount array. This approach helps you navigate the market
effectively.

The 1-hour chart serves as our executable chart, regardless of the timeframe
of the PD array.

Here's the approach to follow: If you observe that price is already moving
away from the monthly premium array, then drop down to the weekly
timeframe and analyze the weekly array, or check the daily or 4-hour arrays
accordingly.
When the setup originates from a higher timeframe (HTF) array, you might
notice multiple short-term trade opportunities forming. Conversely, if it
originates from a 4-hour array, you are less likely to see as many setups, but
the ones you do identify are still high probability trades.

The swing trade progression

Within this fractal, there are potentially 16 buying opportunities to consider.

This count does not include any short-term trades during retracements, as
those can also provide viable trading opportunities.
The retracement can occur between Monday and Wednesday. The PD array
is applicable during this entire time frame, not just on Wednesday.

For Asian pairs, the sweet spot for trading is typically between 6 pm and 9
pm. However, trading beyond 9 pm, especially approaching 10 pm, tends
to be less favorable as it corresponds to lunchtime.

The 1-hour PD array can also be executed during the inside killzone.

It's not necessary to have the seasonal tendency in our favor for these trades.
If the high of the range formed between Monday and Wednesday is broken
on Thursday or Friday, it's generally an indication that the market may move
aggressively higher, targeting the premium array. Conversely, if you're in a
bearish scenario, breaking the low of that range during the same period can
signal a sell program.
Chapter 7.2: Short Term Trading
Defining Weekly Range Profiles
Link To ICT Video

In the trading week, New York can still push lower or higher on Tuesday to
establish the low or high of the week and potentially surpass London's high.
This means that price movements during Tuesday's trading session can
influence the weekly low or high, even after London's trading hours.
In the trading week, New York can still push lower or higher on Wednesday
to establish the low or high of the week and potentially surpass London's
high. This means that price movements during Wednesday's trading session
can influence the weekly low or high, even after London's trading hours.
This Thursday reversal happens a lot during FOMC Wednesdays…
Go trough price action on the 1h Timeframe and define the moves and the
characteristics of each weekly profile.
Chapter 7.3: Short Term Trading
Market Maker Manipulation Templates
Link To ICT Video

Author note: All below examples are 1H TF. This chapter goes deeper into
the subjects discussed in Chapter 7.2

Old Low example (Sellside liquidity):

To simplify, you should look for a Potential Demand (PD) array that is of a
lower timeframe than the one you initially entered. Here's how it works:

1. If you bought based on a monthly PD array, your next target would be a

PD array on a weekly or daily timeframe.

2. If you bought based on a weekly PD array, your next target would be a

PD array on a daily or 4-hour timeframe.

3. Keep this pattern going, moving down to lower timeframes, as you

continue to trade and aim for smaller PD arrays to capture shorter-term price
movements.
This strategy allows you to adapt to changing market conditions and capture
profits at different levels of price action.

Bullish OB example:

In the context of trading, let's consider a bullish orderblock example. When

dealing with the 3rd swing grade, it's not typical to encounter stop runs, but
you can often find bullish orderblocks in this grade. To explain our
approach to price swings and trade targets, we categorize them into four
stages:

1st Stage: The initial stage of the price movement.

2nd Stage: This stage leads us toward equilibrium.

3rd Stage or 3rd Swing Grade: In this phase, the focus is on identifying
bullish orderblocks.

4th Stage (Terminus): This marks the maximum expected extent of the
market's movement.

Old High example:

When searching for your next PD array, look for one on a lower timeframe,
and ideally, it should overlap with a Fibonacci retracement level.
Specifically, try to find a PD array that aligns with a perfectly symmetrical
price swing of 100%. This alignment can enhance the accuracy of your
trading decisions and improve your chances of successful trades.
Buyside Liquidity example:

When trading from a daily high that has been breached, one potential target
could be a 4-hour (4h) discount array. This approach allows you to define
your trading range for the week, using the 4-hour timeframe. It's essential to
consider the monthly, weekly, and daily timeframes in your analysis, as they
provide high-probability setups and a broader perspective on market
conditions.

Old low + Bearish OB Example:

In the case of a bearish order block, it can occur in various situations, such
as during the 1st swing grade, around the equilibrium (EQ) level, or as part
of a 3rd swing grade entry. These are different scenarios where you might
encounter a bearish order block, and each situation may require a specific
trading strategy or approach.

The fib has to overlap with the lesser timeframe PD array.

Wednesday low of the week
SSL example:

Bullish OB example:

The fair value/void note on the example is what you use your fib on, that
leg.
Let's consider a bullish order block example in the context of different price
swing stages. We categorize these stages into four:

1. 1st Stage: This is the initial phase of a price swing, often characterized by
the start of a new trend or a strong move in one direction.

2. 2nd Stage: In this stage, price action tends to move toward the equilibrium
(EQ) level, which is a point of balance or consolidation.

3. 3rd Stage (3rd Swing Grade): The 3rd stage is marked by significant price
movement, possibly indicating a robust trend. It may involve key levels or
order blocks.

4. 4th Stage (Terminus): The 4th stage represents the endpoint of a price
swing, where the market is expected to reach its maximum potential in that
particular direction.

A bullish order block can occur at any of these stages, and traders may use
different strategies depending on which stage they are trading in. These
stages help provide a structured framework for analyzing and trading price
swings.

Wednesday high of the week

BSL example:
Old Low/Bearish OB example:

Consolidation thursday reversal bullish

We look for sell stops to get taken in a bullish market, turtle soup long
Generally happens with news on Thursday.

In the one-shot-one-kill setup, you would typically look for buying

opportunities below the low on Thursday. However, it's important to use a
small position size when trading around the time of the Federal Open
Market Committee (FOMC) announcement. FOMC announcements can
introduce significant volatility and price fluctuations in the market, and
using a small position size helps manage risk during such events.

Consolidation thursday reversal bearish

Turtle soup short

Consolidation midweek rally bullish

High or medium impact news on wednesday, either during london or new

york

The short term high can also be on monday, and then trade down on tuesday
and maybe even wednesday
The swing projection fulcrum is the highest high from which the market
begins to retrace. This is the point at which you can use your swing
projection. When identifying potential trade setups, it's not just about
finding Fibonacci levels, but also ensuring that they overlap with a lesser
timeframe PD (Price Discovery) array, which can increase the reliability of
your trading decisions.

The Fibonacci overlap levels are determined by the timeframe you are
trading on. To find a high confluence target, you should look for a lower
timeframe that aligns with a premium array, and when the Fibonacci
retracement levels overlap with this setup, it can indicate a strong target
where the algorithm is likely to trade towards. This confluence of factors
can enhance the reliability of your trading decisions.
Consolidation midweek decline bearish
Seek and destroy bullish Friday

Low probability profile, you want to demo this or be on the sidelines for
experience.

We are searching for a rapid price movement.

This market profile can also occur in a bearish market environment. If the
market drops below a low but doesn't continue lower, it could be followed
by a high-impact news event that drives prices higher.

This particular market profile is the most challenging to trade. If you observe
the market consolidating or triggering buy and sell stop orders throughout
the week, it's often wiser to refrain from trading. These conditions can lead
to significant price swings that may trigger your stop loss orders.
Once we reach the weekly or daily PD array, we start monitoring for a
potential reversal, and that's when we consider entering the market.

Seek and destroy bearish friday

Wednesday weekly reversal bullish

Its not the same as wednesday low of the week, its slightly different
Its generally that we see this on HTF basis, so we’ll see a weekly or monthly
support level get taken out with high or medium impact news. It usually
comes into a MWD (monthly week daily) PD array below the low that got
ran.
This is the playbook for the one-shot-one-kill setups:

Weekly ranges will fall into one of these templates. You should already have
a sense of whether we are going to be bullish or bearish based on the
information from the January studies. If we know we are going to be bullish,
we focus on all the bullish profiles and examine how smart money
manipulates the market.

We don't require a perfect entry on Tuesday's high or low. If we know the

weekly range, we can still have a one-shot-one-kill setup on Thursday or
even Friday. Look for characteristics that align with these market profiles.
It's essential to do your homework and study one pair to understand how
manipulation takes place.
Chapter 7.4: Short Term Trading
Blending IPDA Data Ranges & PD
Arrays
Link To ICT Video

Blending time and price with IPDA data ranges and PD arrays involves the
following steps:

1. Each new day, you shift the IPDA data range forward.

2. To determine which PD array to use on the IPDA data range, you look at
the PD array matrix.

3. Look back 20 days in price action and examine what premium arrays
exist above the market price and what discount arrays exist below the
market price.
4. Some PD arrays may have already been used, meaning that price has
traded into and responded to them. In such cases, these PD arrays are
considered exhausted, and you need to look for other PD arrays.

5. Combine time and price factors, similar to how the algorithm does it.

6. In a bearish market, you work from premium to discount. Premium arrays

serve as resistance points where sell-offs occur or new sell setups can form.
The price objective is to reach into the discount array that exists in price
action.

7. Don't force the existence of PD arrays. If there's an absence of one, it

doesn't invalidate the setup; it just means you have fewer options for targets
or setups.
This is the 60 day trading range, with the premium and discount

Last 40 day range:

1. The 4-hour (4h) chart provides more intricate insights, allowing you to
observe how price transitions between PD arrays.

2. On Tuesday, an attempt to reach a higher high ended in a breakdown.

3. Remember, it's not always essential to precisely predict where price will
go. When your analysis doesn't pan out, view it as an immediate signal to
consider trading in the opposite direction.

4. If we decide to initiate a short trade based on a daily PD array, we'll seek

out a smaller timeframe PD array to focus on, like the 4-hour or 1-hour
chart.

5. Take note of how we address the gap within the discount range when
transitioning from a premium range.
ICT took advantage of the premium array linked to the daily high, which
was cleared on Tuesday. He then sought out a smaller timeframe discount
array on the 4-hour or 1-hour chart, often found in the form of a liquidity
void.

By combining time and price analysis in this manner and considering the
weekly profiles, he achieved a sense of balance in the market that many
might overlook.
Chapter 7.5: Short Term Trading Low
Resistance Liquidity Runs Part 1
Link To ICT Video

Let’s blend Time & Price

Consolidation for last 60 days:
Look at the highest high and lowest low bodies of the candles in the last 60
days, that is our range.
When price is above the 50% level, we focus on sell scenarios, which can
involve looking for sell setups or closing out long positions.

Conversely, when price is below this level, we concentrate on long

opportunities or consider taking profits from sell positions.
We measure the premium part as well with the fibs and note the 50% level.
Do the same for the lower range:

Premium

Discount
Next, we identify all PD arrays in the range:

Everything above the grey premium is a good sell, coupled with premium
array.

We look for a premium array and look for it to trade to a discount array, like
the FVG+OB to the weekly bullish orderblock.

Everything that forms in the lowest discount in the form of buys is high
probability, and we would take profits in the premium of that same range.
View each range as Unique Premium & Discount Trading Ranges, this is an
algorithmic way to look at price:
Now were above the 50% of the total consolidation, we can still take longs
but it has to be in discount of this smaller range.

We have quadrants and we divide the quadrants in half as well as were

doing here

Even when the price is above the 50% level of the total consolidation, you
can still consider long trades, but they should be taken from the discount
area of this smaller range. We divide the quadrants in half to further refine
our analysis and trade decisions.

We anticipate the oscillation effect within the consolidation. By combining

this knowledge with PD arrays, we can understand how price can continue
to move upward even when we are in the premium section of the overall
consolidation.
For instance, in the example above, if there's a discount array within the
discount area, we can enter trades there and exit at a lesser timeframe
premium array within the premium area.

Now, the premium arrays hold more influence, particularly the final part of
the premium section, which tends to have a more significant impact on
price.

Our goal is to identify low-resistance liquidity runs from one PD array to

another. We use this approach alongside a 60-day lookback because short-
term trades are more favorable within this timeframe.

By examining the 20, 40, and 60-day lookback periods, we can identify PD
arrays where we can exit trades and set up new positions, whether in the
premium or discount sections.
Best buys are going to be there in discount and highest probability targets
for sells.
The highest probability sell opportunities are found in the premium section,
while high probability targets for long trades can be identified.

It's important to note that one-shot-one-kill trades are not necessarily

defined by entering on Monday and exiting on Friday. These are short-term
trades that may last as little as one day or extend up to a week.

Trading in the middle of a consolidation range can be challenging and result

in frequent losses. It's essential to be aware that a bullish order block that
has already been traded to is less likely to provide a profitable opportunity
because the algorithm knows it has already been visited.

To increase your chances of success, it's important to identify new order

blocks that haven't been traded to yet, whether in a discount or premium
market. Additionally, having a clear bias, either bullish or bearish, can help
you avoid getting caught in the middle of a consolidation range.

Generally, it's better to look for selling opportunities when closer to the top
of the range and buying opportunities when closer to the bottom, as trades
in these areas tend to have better outcomes.
Chapter 7.6: Short Term Trading Low
Resistance Liquidity Runs Part 2
Link To ICT Video

Important note: What can be a consolidation on 1 timeframe can be a

trending one in another.
When employing the "one shot one kill" trading approach, our primary focus
will be on the 4-hour (4h) chart. This particular timeframe is considered the
most suitable and straightforward for implementing the "one shot one kill"
strategy, as it provides a comprehensive view of market dynamics.

In practical terms, if we intend to initiate a long (buy) trade, and this setup
occurs at a quadrant level (a specific zone within a trading range or
consolidation), it often indicates a significant likelihood of price movement
toward the opposite boundary of that consolidation.

In essence, it implies that when price breaks out of the consolidation and
aligns with our bullish bias, there is a strong potential for substantial price
movement in the direction of the opposite level within the consolidation.
In the "one shot one kill" trading strategy, we will primarily utilize the 4-
hour (4h) chart as it provides the most straightforward and insightful
perspective for our approach.

When we identify an opportunity to enter a long (buy) trade, especially if it

aligns with a quadrant level (a specific zone within a trading range or
consolidation), it often indicates a strong probability of price movement
toward the opposite level within that consolidation.

In simpler terms, when the price breaks out of the consolidation pattern in
the direction that supports our bullish bias, there is a high likelihood that it
will move significantly toward the opposite boundary of the consolidation.

• The weekly range shaded in yellow

• Think about the power of 3 (AMD)
Pay attention to how the price behaves when it reaches a quadrant. These
quadrants are like magnets for the price.

When the price moves through a quadrant, it tends to gravitate towards the
levels either above or below it. The direction depends on whether it's
moving up or down.
Every week, try to predict where the price will likely go in a premium market
and where it will head in a discount market. Think about which PD arrays
it might target.

By examining the PD arrays on a 4-hour chart, you can get a sense of what
the weekly price range will look like once the week is over. This exercise
will help you develop your ability to anticipate market movements.

Remember, when the price falls, it's not just seeking support; it's also
searching for old institutional orderflow levels, typically in the form of a PD
array.
Focusing on anything less than a 1-hour chart can reduce effectiveness
because the goal is to identify the complete weekly price swing. So,
concentrate on the 4-hour chart for the levels you want to base your trades
on, and use the 1-hour chart for day-to-day analysis.

In a bullish scenario, pay attention to the low of the week, which is likely
to occur on Monday, Tuesday, or Wednesday. Also, observe how these lows
often align with logical discount arrays.
By the time London closes on Wednesday, if we haven't entered a long
position for a bullish week on Monday, Tuesday, or Wednesday, we
shouldn't anticipate a significant move on Thursday or Friday.
Chapter 7.7: Intraweek Market
Reversals & Overlapping Models
Link To ICT Video

Author note: Make sure you look at the Titles of the images in this chapter,
to not miss valuable information

When we observe a fast-moving market, it's an indication that it is likely

targeting a level of institutional order flow that is highly efficient. This can
involve global trade or adjustments made by central banks.

Effectively combining multiple timeframes in your analysis requires

experience.

Having a comprehensive approach that considers various timeframes will

generally provide better insights compared to someone who only focuses
on a single timeframe.
When Monday and Tuesday exhibit strong and rapid trading activity, it's
often an indication that the market is either in a hurry to complete its weekly
range or it's targeting a significant institutional order flow reference point.
This can potentially lead to a reversal and a change in direction later in the
week.
When the market exhibits rapid movement early in the week, it's crucial to
consider high-timeframe (HTF) PD arrays as potential reversal points.
Speedy price action typically suggests that the market is quickly reaching a
valuation point.

This could be due to central bank interventions, interest rate

announcements, or simply speculation. In a premium market, where prices
are high, if we enter a short-term discount phase within a quadrant, it
indicates the market's reluctance to exit the premium state.
This could end up becoming a market maker Buy Model (MMBM). This can
be the end of the move, but it can be likely that we exceed that price range
and take those highs
When Monday and Tuesday show significant and rapid price movements,
especially if these movements exceed the average range of the last five days,
it's a signal to be cautious and consider the possibility of an intraweek
reversal. This is a general concept in ICT, and at the start of each week,
traders often anticipate where the high or low of the week might form.
If you limit yourself to one specific trading style, you may miss opportunities
to identify potential reversals in the market.

To summarize:

1. Pay attention to the speed and magnitude of price movement on Monday

and Tuesday, as it can provide hints of potential intraweek reversals.
2. Focus on overlapping models, with the higher timeframe (HTF) model
being more influential. Monthly, weekly, and daily PD arrays are crucial for
swing trading, and anything lower than the 4-hour (4h) chart is typically for
day trading. Ensure that your day trading setups align with the HTF PD arrays
for higher probability trades.

By blending these models and considering the factors mentioned, you can
gain a better understanding of price action and make more informed trading
decisions.

If there's a conflict between swing trading and one-shot-one-kill setups,

prioritize the swing model as it tends to have a higher success rate.
Chapter 7.8: One Shot One Kill Model
Link To ICT Video

Intraday concepts are useful for gaining precision in your trading, especially
when dealing with shorter timeframes. However, they may not be essential
for executing one-shot-one-kill setups, which are typically focused on swing
trading and capturing larger price movements.

While intraday concepts can provide additional tools and strategies for more
precise trading, you can still successfully implement one-shot-one-kill
setups without delving deeply into intraday trading techniques.

Analysis paralysis can occur when traders have access to a wealth of

information but struggle to develop a clear and systematic approach for
using that information effectively.

In swing analysis, traders focus on identifying price swings within larger

market movements.

It's important to enter the market when it's relatively quiet because this can
precede periods of higher volatility and larger price ranges.
To avoid analysis paralysis and make more informed trading decisions, it's
helpful to develop a structured trading plan that outlines your strategy, risk
management, and specific entry and exit criteria.

Additionally, focusing on a subset of key indicators and information that

align with your trading style can help you avoid becoming overwhelmed by
data and improve your decision-making process.
1. Seasonal tendency
2. COT hedging program

Only look at the net position.

Net position = all the longs and shorts and you can see if there are more
shorts or more long.

In this scenario, the key factors influencing the market are the commercial
traders' aggressive selling into a rally and the seasonal tendencies indicating
a downward price movement.

Open interest, which refers to the total number of open futures contracts,
may not be as significant because there are already two strong factors
(commercial selling and seasonality) at play, providing a clear direction for
smart money traders.
These ideas MUST align with something technical. Let’s take a look at an
example:

DXY Daily

You could round it down to 98.90 but generally the rule is that we round
up to the nearest 5 or 0 level, so 98.95.

DXY 4H
DXY 1H

In this context, when the market is in the discount phase, it's expected to
pull back to the equilibrium (EQ) level.
However, the next move, whether it continues towards the premium or
reverses back into the discount, is uncertain.

To make more informed trading decisions, traders can utilize IPDA

(Institutional Profit Drive Analysis) data ranges and the PD
(Premium/Discount) array matrix.

This involves blending both time and price factors to gain a better
understanding of potential price movements and reversals.

Now, let’s take a look at Intermarket analysis, EURGBP:

4H

If we want to see weak EURUSD then EURGBP should be weak as well

EURUSD 1H

The extent to which we anticipate the weekly order block to trade into will
be covered in the final part of this lesson.

However, we typically expect Monday through Wednesday (MTW) to

represent the high of the trading week.

This expectation is based on the observation that the market often starts the
week with a move up into the weekly order block on Monday.

Therefore, traders can assume that Monday will likely mark the high point
of the trading week. This information helps in forming trading strategies and
making informed decisions throughout the week.
On Monday, we typically look for price to trade up, followed by a
retracement during the London session.

This retracement is then followed by an expansion in price during the New

York session.

In one of ICT's examples, he measured the price swing from the high formed
during the London session down to the retracement low that occurred
before the New York session rally.

By measuring this intraday swing, he identified a specific level, such as

1.0909. This level can be used to project the potential high for the trading
week.

These concepts involve intraday trading strategies, and ICT delves into more
details about them in his intraday teachings.
We target the liquidity void on a smaller timeframe because we previously
came from the weekly order block.

This helps us establish an expected price range for our trading.

By blending all these elements together, you can achieve a high level of
accuracy in your trading. This comprehensive approach allows you to make
precise predictions and potentially achieve trading success down to the very
pip. To solidify your understanding,

it's essential to revisit and review the mentorship material periodically, even
after completing the program.

This continuous learning and practice will help you refine your skills and
become a more proficient trader.

In Chapter 12, you will receive a procedure that covers a top-down

approach, applicable to any trading style you wish to pursue.
Chapter 8.1: Essentials To ICT
Daytrading
Link To ICT Video

Trading within the daily range can be challenging, but it's important to aim
for capturing around 65-75% of that range to maximize your trading
opportunities and potential profits. This approach requires careful analysis
and precise execution to make the most of each trading day.

In day trading, the focus is primarily on the daily PD arrays, and the goal is
to capture opportunities within the next weekly price expansion, whether
it's in an upward or downward direction.

While traders emphasize specific price levels, they remain flexible with
regard to timing, aiming for precision in price action rather than adhering to
rigid time constraints.
Understanding the timing of different trading sessions is crucial:

- London Session Open (2 am to 4 am, or 1 am to 5 am with daylight

savings): London can be challenging but offers opportunities.

- New York Session Open: Generally the easiest to work with. Avoid trading
during New York if London has already covered 80% of the daily range.

- London Close: Often a good time to take profits or look for reversals,
providing entry opportunities for various trades.

- New York Close (2 pm to 3 pm, coinciding with the bond market close):
Important for closing out daily positions.

- Asian Session Open: Particularly relevant for AUD, JPY, and NZD pairs,
as it can set daily high or low points for these currencies.

- London Lunch (5 am to 7 am): Typically a quiet period that can lead to

consolidation, continuation, or retracement. Consider taking profits before
5 am, as reversals or deeper retracements may occur.
Understanding the dynamics of each trading day in a week is important:

- Sunday: Some platforms use daily candles, while others use Monday
candles. Adjust accordingly.

- Monday: A large range on Monday, relative to the daily range, can often
mark the high or low of the week.

- Tuesday: London typically contributes to creating the week's low,

accounting for about 70% of this move.

- Wednesday: More data is available from the beginning of the week to

analyze.

- Thursday: New York's Thursday session often caps the weekly range and
could lead to reversals.
- Friday: If the objectives set by Thursday, especially regarding PD arrays,
haven't been met, Friday may see a surprise expansion. However, if
Thursday already met the daily PD array for the weekly range, Friday could
be a quieter trading day.

If your broker doesn't provide Sunday's data, simply use the opening price
on Monday.

Pay special attention to Thursday because it can often be the day when you
witness a reversal for the week. If, during Thursday, the price surpasses
Sunday's opening price, it's a strong indication of a major intraweek
reversal. Such a reversal often hints at the potential for a longer-term one
shot one kill bullish setup for the following week or for Friday trading.
If the price remains below the Sunday opening, we take a short position in
each session. This means we short the high during the London session and
seek a continuation sell during the New York session.

We continue with this approach until we reach an opposing PD (Premium

to Discount) array, at which point we can anticipate a reversal.

When we anticipate a bullish scenario on the daily chart, our approach is

as follows:

As long as the price remains above the Sunday opening level, we adopt a
buying strategy. This means we aim to buy at the low during the London
session and look for opportunities for a continuation buy during the New
York session.

When we reach the opposite HTF PD array thats when we can expect a
possible reversal.
Range expansion on the weekly is a goldmine.

We pay close attention to the small wicks in the price action, and the range
within those wicks is where we focus our trading.

We typically have around 9 solid trading setups. While we don't usually

rush into a London setup on Monday, there can be exceptions, especially
when there's a significant price range starting right from the Sunday opening
and continuing into the Frankfurt session.

The period from Sunday's opening until Monday's Frankfurt session is

crucial. If there's a substantial range during this time, we look for the high
or low of the week to potentially form on Monday because it often indicates
a strong market move, which may align with a PD array on the daily chart.

Shorting on Tuesday simply because we are below Sunday's opening is not

a straightforward strategy. We need to consider other factors and combine
this information with PD arrays to make a more informed trading decision.
Daily

1H
Daily

1H
The above is a perfect example of when not to sell below the sundays
opening, we traded down into a daily FVG and a daily bullish orderblock.
We reached the opposite PD array matrix already. So we anticipate a
reversal forming. > Wednesday low of the week profile

You have to blend things, where are the barriers or speedbums for price.
Because we understand the IPDA data range and PD array matrix.

Daily:
1H

To summarize, here's the daily trading approach:

1. London Session:
- Open → Expect a decline and look for the low of the day → Consider
buying.

2. New York Session:

- Look for a retracement into the range created from London's low to the
high formed prior to 8:20-8:30 am (CME opening) → Generally, this sets up
for a continuation trade.

It's important to use Sunday's opening price and combine it with PD arrays
on the daily chart to frame the potential weekly range.

This approach helps determine whether you should be a buyer or seller each
day for day trading. If the expected conditions, such as an open and decline
in London, aren't met, you may choose not to take any action or adapt your
strategy based on the market's behavior later in the day, especially in New
York.

This is a strong foundation. It's crucial not to rely solely on the Sunday
opening price as a strict rule for trading decisions.

Instead, you should blend this information with PD arrays and understand
how IPDA moves from one PD array to another, transitioning from discount
to premium and vice versa.

By considering the daily chart and the PD arrays, you can better frame the
potential weekly range and anticipate how it will unfold.
Chapter 8.2: Defining The Daily Range
Link To ICT Video

Author note: all the value for this chapter is in the images.
Chapter 8.3: Central Bank Dealers
Range
Link To ICT Video

A standard deviation is the exact same range as the CBDR, its a symmetrical
swing.
When you see price move by four standard deviations, it typically occurs
during high-impact news events or during a significant market reversal in
the New York session.

This level of movement is considered quite extreme and is often associated

with major market shifts.
ICT prefers to use the candlestick bodies rather than just the wicks when
analyzing price action.

However, he still considers both aspects, bodies and wicks, in his analysis.

Additionally, he doesn't trade every day and focuses on higher probability

trading days.

He also uses CBDR (Central Bank Daily Range) projections to help

determine where the low of the day on a bullish day or the high of the day
on a bearish day might be.

Despite this preference for candlestick bodies, he emphasizes the

importance of considering wick ranges as well in his analysis.
When it comes to day trading, the CBDR (Central Bank Daily Range) criteria
may not always be applicable. In such cases, traders can consider scalping
strategies. It's important to note that the daily candle typically has a range
of around 100 pips.

To make high-probability day trading decisions, traders should have a clear

bias. They should consider factors like what the next three days are likely to
do, the expected price movement for the week, the current seasonal trends,
quarterly shifts, and whether there are unmet IPDA (Intraday Price
Discovery Analysis) PD arrays.

For example, if the daily chart shows a premium array and there's an
expectation of bearish price movement, traders can look at the London open
for potential short opportunities, targeting 1-2 or maybe even 3 standard
deviations higher to establish the high of the day. Seasonal tendencies
should also be factored into the analysis. By combining all these elements,
traders can increase the probability of their trades.
Chapter 8.4: Projecting Daily Highs &
Lows
Link To ICT Video
Zooming in on this:

Standard deviations can be aligned with PD arrays, and this combination

provides a measurement for the opposite low or high of the day at London
close.

Traders can draw these measurements until they reach the London close.

If there's still an unmet daily PD array, as seen in the example, then London
close may not lead to significant price movements, and traders can consider
holding onto some profits through this period.

This approach helps traders determine potential price levels for the day's
high and low based on standard deviations and PD arrays.

Make sure the standard deviations line up with a PD array

ICT employs a method of using 2 standard deviations to project potential
price levels on a 1-hour chart.

These standard deviations can be used in conjunction with PD arrays to

provide insights into potential price movements.

It's essential to have a directional bias when using this approach, and the
projection should be less than 40 pips.

Additionally, traders can filter out the days they want to trade based on the
CBDR (Central Bank Daily Range) and other factors, which can help identify
higher probability trading opportunities.

The PD arrays play a significant role in guiding these trading decisions.

Chapter 8.5: Intraday Profiles
Link To ICT Video

A classic sell day is characterized by specific criteria and can serve as a filter
or checklist for traders. Here are some key points to consider for such a day:

1. Variations: While classic sell days may not be exactly the same every day,
they share similarities and can be identified based on specific criteria.
2. CBDR Influence: If the CBDR (Central Bank Daily Range) is significant
and could disrupt market dynamics, it may be best to avoid trading during
the London session. However, if the Asian session shows a small
consolidation (around 20-30 pips), you might still consider trading.

3. Entry Timing: The entry for a classic sell day can occur as early as 1 am
or 1:30 am.

4. Price Movement: Between 12 am and 1:30 am, you should see a price
move that creates a higher high compared to the Asian range or CBDR. This
is considered the protractionary stage, and it's ideal for price to trade up
from 12 am to 2 am.

5. Early Seller Trap: The price movement during this period is designed to
trap early sellers.

These criteria act as filters to help traders identify and potentially capitalize
on classic sell days in the market.
CBDR, or Central Bank Daily Range, isn't a significant factor in this context.

Instead, we're focusing on a scenario where price movement between 12

am and 2 am doesn't exhibit a rally but rather moves lower.

The critical element here is the presence of a rally at 2 am, specifically into
a 15-minute PD (Previous Day) array.

This rally serves as a key indicator for potential trading opportunities.

The most crucial aspect here is observing the decline in price, which helps
determine the appropriate trading profile to apply.

This decline typically occurs until at least 1 am or 1:30 am, providing

valuable insights for trading decisions.
The size of the Asian trading range can also play a role in defining this
trading profile. A smaller Asian range is generally more favorable, but it's
not a strict requirement.

The key factor is still the price movement at 12 am, whether it experiences
a decline or a rally.

However, if the CBDR (Central Bank Daily Range) is not under 40 pips,
traders may move to this profile regardless of the Asian range size.

If the classic trading profile is not evident, traders should then seek
justification for a delayed protraction. This protraction phase can occur
either at 12 am or 2 am.

The decision to be a buyer or seller should still align with the Higher Time
Frame (HTF) premise.

It's important to note that sometimes this profile won't offer a specific entry
point; instead, the price may simply start moving decisively. In such cases,
it's essential to prioritize high-probability trades.
Chapter 8.6: When To Avoid The
London Session
Link To ICT Video

A typical scenario is a consolidation or a choppy day following a day with

a significant price range. I

t's advisable to avoid long positions, especially in the London session, after
three consecutive up days, as there's likely to be a pause or retracement
lower.

Days with extreme whipsaw movements up and down can disrupt trading
in London.
In trading, it's crucial to think in terms of probabilities and seek out the
highest-probability setups.

Not every day offers high-probability opportunities. Ideally, you'd want one
high-impact or medium-impact news event per day, one stage of
manipulation, and then an expansion of price action leading into the New
York session.

A "wildcard" day means that it could go either way. It might unfold

smoothly, but there's also the possibility of an unexpected event, often
referred to as a black swan event, which can introduce unpredictability into
the markets.

A sustained rally or decline that occurs from 8 pm New York time often sets
up for a potentially poor London session, with the possibility of a
retracement at the start of New York or, in some cases, no retracement at
all.
To assess the market conditions, use the 15-minute timeframe to check if
the CBDR (Central Bank Daily Range) and the Asian session are
consolidating or not.

When banks hold price within a small consolidation during the Asian
session, it suggests that they are allowing orders to accumulate above and
below the high and low formed within the Asian range.

This is a desirable condition, as it indicates the building of orders and a

potentially high-probability setup, typically characterized by a clear
manipulation cycle.

If the Asian session is trending strongly, it's generally not a high-probability

setup for the London session. T

herefore, it's essential to focus on high-probability trading opportunities,

which means not trading every day.

Intraday trading is where banks can manipulate the market and trigger stop-
loss orders. By understanding the daily and 4-hour PD arrays and IPDA data
ranges, you can anticipate where price is likely to move.

Knowing this, you can recognize when the market is likely to be

manipulated in the opposite direction and when banks might distribute their
orders at a specific PD array during the London close.

Having clear filters and rules is crucial. Without them, you may overtrade
and, while you might catch some profitable moves, you'll likely harm your
overall trading performance and capital.

It's essential to adhere to your rules and maintain discipline in your trading
approach. Ignoring these lessons can lead to imprecise trading and
unfavorable outcomes.
When analyzing the daily chart, it's crucial to observe whether it's
respecting PD arrays. This helps determine your daily bias, whether the
market is likely to move higher or lower.

You should have a discernable direction on the daily chart, and it should
align with the PD array matrix. This clarity in your daily bias is essential.

If the market is poised to trade higher toward a premium PD array, you'll be

looking for London longs. When the higher timeframe (HTF) chart respects
the PD array matrix, the most probable outcome is reaching a premium PD
array.

The current range from the market price to the next premium PD array
indicates the potential for the next upward move.

This move might not happen in a single day; it could take several days. If
the range persists, you can trade it in subsequent days as well.
Conversely, if you recently moved from a premium array and have a
discount array to target, London shorts are ideal, but all the previously
mentioned conditions still apply.

Maintain a log of daily ranges to calculate the 5-day Average Daily Range
(ADR). If a day hasn't exceeded the 5-day ADR, you can expect an
expansion day the following day.

Don't seek validation by trading every day. Stick to your rules and look for
the highest-probability and easiest trading days. ICT doesn't trade every day,
and this approach helps in building a winning mindset.

This checklist applies to various trading styles, whether it's position trading,
swing trading, day trading, short-term trading, or scalping. If the market
conditions don't align with the criteria, it's best to wait for a better
environment to enter with more confidence. Being in the market when
conditions favor your strategy is crucial.

In summary, creating your own checklist based on these guidelines is a

valuable homework assignment. It will help you develop discipline and
make informed trading decisions. Remember that trading should be based
on analysis and probabilities, not gambling.
Chapter 8.7: High Probability
Daytrade Setups
Link To ICT Video

When we search for good trades, we need to figure out if the price will go
up or down and from which level it will likely move. We also need to know
where we plan to take our profits.

Additionally, we should look at the highest and lowest points of the London
trading session from the previous day, as well as the high and low points of
the London session right before the New York session starts. These reference
points can help us make better trading decisions.
On the lower timeframes (LTF), we apply similar principles as we do on the
higher timeframes (HTF) when considering our trading decisions. These
criteria aren't exhaustive but represent what ICT looks for daily under the
right conditions.

After conducting a thorough analysis on the HTF and determining the most
likely direction, we rely on previous models and data from prior months to
establish our bias. The IPDA data ranges and PD array matrix play a key role
in this.

It's important to measure the London session range up to just before the
New York session opens, specifically the extreme high and low. This data
helps us prepare for the retracement that typically occurs during the
protractionary state, usually from 2am to 7am. If we're bearish, this range
can provide insight into the retracement upward.

Similarly, we measure the high and low of the New York session range,
which often sets the framework for the following day's high or low,
including a potential retracement within that range.

Examining the previous day's high and low is valuable for spotting stop
raids, typically occurring at the end of recent trends. For instance, after a
series of upward days, prices may temporarily move above an old high
before reversing lower.

Conversely, in a downtrending market approaching a discount array, we

might look for prices to briefly dip below the previous day's low before
rebounding.

When analyzing daily and 4-hour charts, we search for signs of bullishness,
such as price bouncing off bullish order blocks, rejecting old lows, or filling
in gaps and then rallying.
These observations form the foundation of our trading decisions.
Additionally, we monitor whether short-term premium arrays are being
breached, which is indicative of bullish institutional order flow. Conversely,
bearish scenarios follow a similar logic but in the opposite direction.

Identifying potential price targets above your current position should be

straightforward and easily visible. If it's not readily apparent, it's likely not
a high-probability trading setup.
FVG below a short term low from previous days NY session obviously has
to line up with other things as well, like the CBDR, asian range etc. And
time of day, during London open.

In these scenarios for London open trades, we need to consider various

factors like the CBDR (Central Bank Daily Range), Asian range, and the time
of day during the London open.

1. If the market rallied immediately after MNO (Midnight New York Open)
without retracement, and it's 2 pm London time, we look to buy the first
bullish order block during the retracement on a 15-minute or 5-minute
timeframe.

2. When the market hasn't shown a protractionary move on the upside or a

Judas swing upward, and it goes down for a low and then breaks that low
one more time, we buy this as a "turtle soup." This concept might require
further clarification.

These scenarios provide opportunities for London open trades, and they
tend to occur several times a week. Depending on market conditions and
the willingness to respect the daily discount array, one of these criteria is
likely to be met.

The specific scenario that unfolds depends on what the market is presenting
at 12 am during MNO, and traders should be prepared for each of these
possibilities.
Here are some important considerations for managing your trades during
the London session:

1. Avoid rushing to move your Stop Loss (SL). It's common for London to
make a double pass, potentially knocking you out at breakeven (BE), causing
you to miss out on the move. Instead, wait until you've captured at least 40-
50% of the daily range before adjusting your SL to breakeven.

2. When trading the "second return for sell stops," this occurs when the
market moves lower, and then it makes one more move downward, taking
out the sell stops. In this case, your stop should be placed 30 pips below the
low of the initial move if you're buying as a "turtle soup" setup.

3. Suppose the average daily range (ADR) over the last five days is 100 pips.
In that case, you can calculate your stop loss by subtracting 50 pips from
the Asian range low. The resulting price should be your stop loss level.

These guidelines help ensure you have appropriate stop loss levels and
account for potential market behavior during the London session.
Consider these points when trading during the New York session:

1. Pay attention to the short-term high formed before 7 am. If there's a short-
term high before this time, consider taking partial profits because New
York's session, starting from 7 am, can sometimes lead to reversals.

2. Keep in mind that not all these conditions will always be present
simultaneously. However, it's essential to review the list and identify which
conditions are applicable before taking a trade. Evaluate the candidates
based on the criteria provided to make more informed trading decisions.

If right after 12am it goes into a PD array thats enough to go short.

When trading for second return buystops, meaning you expect a price rally
after the Midnight York Open (MNO) and haven't witnessed an immediate
price drop following MNO, it's crucial to set your stop loss at a level that
provides sufficient protection.

In this case, your stop should be positioned 30 pips above the highest high
of the trading day. This approach helps mitigate potential losses and manage
risk effectively in this specific trading scenario.

Beware of significant lows in the market, as they can either reject price
movements or trigger reversals, creating what's known as a "turtle soup."
During the New York Open (NYO), keep an eye out for potential reversals
or retracements, especially around the time of the CME opening. It's
essential to observe whether there is profit-taking activity before 7 am.

These conditions should ideally align with a discount array on the price
chart.

Remember that we have discussed additional techniques and concepts in

previous lessons, such as Fibonacci levels, symmetrical price swings, and
ratios like 1.27 or 1.68. These concepts can complement the criteria we've
discussed.

Keep in mind that not all of these conditions will apply to every trade. It's
like having a checklist of options to consider based on the specific scenario.

For instance, if you've already taken profits at 20-30 pips and the price
hasn't moved significantly by 5 am, you might not apply certain criteria.

Ultimately, there are specific rules and conditions for various trading
scenarios.
Chapter 8.8: Integrating Daytrades
With HTF Trade Entries
Link To ICT Video

Usually, on a bullish trading day, the price tends to close near the high of
the day, and conversely, on a bearish day, it often closes near the low of the
day.

This pattern follows an "open, decline, down, close" sequence for bearish
days or an "open, rally, up, close" sequence for bullish days.

The closing price frequently aligns with the extremes of the day's price
range.

These guidelines can be particularly useful when you cannot trade during
the London killzone.
The refined London open entries are not necessary when you have a solid
understanding of IPDA (Interbank Price Delivery Algorithm), the daily range,
and the context of the PD array matrix.

It's crucial to determine whether the market is transitioning from a discount

to a premium or vice versa. This directional bias helps you decide whether
you should be a buyer or seller, making the refined London open entries
less critical.
The daily candle at 0 GMT serves as the beginning reference point for IPDA,
representing the true day opening.

Regarding price movements from the opening (MNO):

1. Upclose (Bullish Day): On a bullish day, the price may decline lower
from the opening before reversing and closing higher. The extent to which
it goes lower before the upclose can vary depending on market conditions
but typically signifies bearish pressure before the bullish reversal.

2. Downclose (Bearish Day): Conversely, on a bearish day, the price may

rally higher from the opening before reversing and closing lower. Again, the
specific distance it goes higher before the downclose can vary and often
reflects temporary bullish sentiment in a bearish context.

The exact price levels at which these reversals occur will depend on various
factors, including market sentiment, liquidity, and order flow.
The key to successful trading is understanding your position on the Higher
Time Frame (HTF) PD (Previous Day) array matrix. When price is respecting
a discount array on the HTF, it means that it has been unable to move lower
and is showing signs of repelling from that level.

In such a scenario, you can anticipate that the next trading day may have
limited downside movement.

This understanding is crucial for making informed trading decisions.

By recognizing where price is within the PD array matrix and how it is

behaving in relation to key support and resistance levels, traders can
develop a directional bias and adjust their strategies accordingly.
To make informed trading decisions, it's essential to determine whether the
market is more likely to move higher or lower. One way to do this is by
observing how price has already respected a daily discount PD array.

Once you have this information, you can then look at the market's opening
price at 0 GMT.

The opening price at 0 GMT provides you with valuable information about
the potential market direction for the day.

If price has respected a discount PD array and you see a favorable setup at
the 0 GMT opening, you may consider entering a buy trade.
While the initial stop-loss for this type of trade could be relatively large,
such as 90 or 100 pips, it's important to keep in mind that the objective here
is to use daytrading concepts to enter a high timeframe (HTF) trade idea.

The goal is to capture several hundred pips of profit by holding the trade
until price moves into a premium array.

This approach allows traders to potentially benefit from significant price

movements over time, even if the initial risk is higher.

The exact magnitude of the protraction (price movement away from the
premium array) is uncertain, but what's crucial is that we've already
observed price moving away from a premium array on the daily chart in the
preceding trading session.

This knowledge provides us with a directional bias and informs our decision
to initiate the trade at the 0 GMT opening.
In this scenario, where we anticipate a minor protractionary move, you can
employ a sell limit order.

To avoid missing the potential move, you have the option to split your risk.
Execute half of your position immediately at 0 GMT and the other half with
a 20 pip limit order.

This strategy allows you to capture the trade while managing your risk
effectively.
Chapter 9.1: The Sentiment Effect
Link To ICT Video
This is referred to as the "Judas swing." Smart money tends to sell above the
Asian range high on bearish days. While the opening price can occur at 0
GMT early, we'll primarily focus on the Midnight Open (MNO) in this
lesson.

When price has recently respected or traded into a daily or 4-hour PD array
and it's showing a willingness to support that price with some kind of
reaction, coupled with bullish institutional order flow, then the odds are
very high for buy day trades.

Ideally, you want to see a range of 50-60 pips or more to profit from as a
buyer.

It's important to note that short-term sentiment might appear bearish at the
time you enter long trades. This means you should think opposite to the
mass sentiment. Practice is crucial in this regard.

To gauge sentiment, use a 10-period W%r (Williams %R) on the 15-minute

timeframe.

Pay attention to price primarily, and if you get a sentiment confluence, as

seen in the example provided, it suggests you're likely on the right side of
the market.
Let’s look at an example:

So we had a draw on a discount array and then move to premium array.

They hit the intraday stops on new york open 08:30 but they did it before
the news released and thats not good and theyr are e probably pricing in the
low of the week, and that happened here.

From Premium array to a Discount array.

It's important to understand that the criteria discussed here won't provide a
trading setup every day.

Day trading doesn't mean you have to trade every single day. In fact, trading
too frequently isn't healthy for long-term success because it increases the
risk of making hasty decisions and suffering losses.

By incorporating sentiment analysis and following a rule-based approach,

especially when considering the Asian trading range, we can filter out and
focus on the best trading opportunities.

While these conditions won't be present every day, when they do occur,
they offer the highest probability for successful day trading. So, it's about
being selective and patient for the most favorable trading days.
Chapter 9.2: Filling The Numbers
Link To ICT Video
As a day trader, it's important to pay attention to key price levels on the
chart, such as the previous day's high and low, as well as the high and low
of the last three days. These levels often act as significant swing points on
the daily chart.

Institutional funds and retail traders often use pivot points, specifically the
central pivot point, which is calculated based on the previous day's price
action and serves as a reference point for the day's trading.

These pivot points, including the central pivot point and other support and
resistance levels (e.g., S1, S2, R1, R2), are typically calculated at 0 GMT and
are considered important reference points for traders.

Institutional orders are often staged around these pivot points because they
are widely watched by market participants.
This means that there can be significant buying and selling interest at these
levels.

As a result, what might seem like a good buying opportunity at a support

level (e.g., S1 or S2) could turn into a good selling opportunity for day
traders if the market is showing signs of expanding lower for the day.

These pivot points can act as areas of potential reversals or breakouts, and
day traders often monitor them closely for trading opportunities.

When considering a short trade and entering near the R2 level (a resistance
pivot point), day traders can plan their profit-taking strategy.

If the market is showing signs of a potential reversal or resistance near the

R2 level, traders might consider taking 75% of their position off the table.
This means closing a significant portion of the short position to secure
profits.

After taking profits, traders can then monitor other pivot levels such as M4
(a potential target for the remaining portion of the trade), R1, M3, and the
central pivot point.
These levels can serve as reference points to gauge potential price
movements and plan the exit strategy for the remaining portion of the trade.

By taking partial profits near the R2 level, traders can secure gains and
reduce risk, while still having exposure to the market in case it continues to
move in the desired direction.

IPDA is looking to fill 4 pivot points intraday and 4 CBDR points, both can
be used.
Sell short above the EQ of the Flout.

4 is just a general rule of thumb, it can go lower or higher.

On its own, these price projections don't hold much significance or provide
clear trading signals.

However, if we observe that the price is adhering to a daily or 4-hour

premium array (indicating a bullish bias), we can expect the price to make
an upward move around the Midnight Open (MNO) or shortly thereafter.

This upward move is often referred to as the "Judas swing."

To gauge how far this swing might extend, we use the price projection.
Additionally, we combine this projection with the presence of an opposite
PD array, such as a daily or 4-hour discount array. Then, we consider how
these factors align with the time of day and standard deviations.

As the trading day progresses, we can refine our expectations and get a
better sense of where the price is likely to go.

It's worth noting that sometimes the price may exceed our initial
projections, which is why it's prudent to leave a small portion of the trade
open to capture any unexpected extended moves.

We carefully study several things like the central pivot, CBDR, Asian range,
and the flout.

It's important to pay attention to both the candle bodies and the wicks when
we look at these factors.

We also consider the standard deviations of both the bodies and wicks.

Our aim is to find price projections that match specific times of the day and
are in line with a premium array on the chart.
This match-up helps us figure out potential high and low points for the day.
And when the Average Daily Range (ADR) lines up with these factors, we
have a very good chance of a successful trade.

We'll explore ADR in more detail later on, which will make our entry and
exit strategies even more accurate.

On a particular Thursday, ICT had an expectation that the week's low would
likely form. This expectation was based on the market's behavior, which
involved sweeping sell stops on both the daily and intraday charts.

The market took out these sell stops before a major news event at 8:30 AM,
indicating that the low of the week might have been established. This
formation created a bullish order block on the chart.

ICT also mentioned that he anticipated the high of the day to be around
1.0930 because there was a Fair Value Gap (FVG) at that price level. What
he didn't explicitly show in his example were all the projections he had on
his chart.
In terms of trading, the goal is to exit positions just before reaching specific
price levels, such as round numbers, that are near our target. For instance,
if the target is 1.0933, traders aim to exit at 1.0930.

ICT doesn't rely on pivot points for entry signals. Instead, he focuses on four
key factors: pivot points, CBDR, Asian range, and flout. These elements
require some effort to analyze, but the results can be quite impressive.
Chapter 9.3: 20 Pips Per Day
Link To ICT Video
Some more examples:
Turtle soup setups involve anticipating price movements within the high and
low range of the Asian trading session.

Typically, these setups involve trading in the direction of the Asian range,
which means going short (selling) when the price is about 5 pips above the
Asian range's high.

These setups can work particularly well on days when there is a bullish
continuation, as you are essentially trading a move that starts by going down
(the Judas swing) before turning upwards during the London session. This is
because there is an anticipation of the Asian range trading lower before a
bullish day begins.

These trades are often executed in the time window between 8 PM and the
Midnight Open (MNO) time, which marks the start of a new trading day.
Some examples:
In these setups, London typically establishes the High of the Day (HOD),
and New York may experience a slight retracement higher, often trading
above a short-term 5-minute high.

Additionally, these setups may involve trading into a Fresh Vacuum Gap
(FVG) and an order block, as seen in the first example.

It's possible to encounter multiple setups in a single trading session, but it's
crucial to have a strong conviction about what London has already
accomplished in terms of price movement.

These patterns can also be applied effectively to other instruments like the
S&P 500 and various indices, as well as futures such as ES (E-Mini S&P 500
futures). However, day trading individual stocks is not recommended due
to their typically lower volatility.
Chapter 9.4: Trading In Consolidations
Link To ICT Video

The duration of consolidation periods allows financial institutions to

accumulate more trading orders.

The direction of the daily or 4-hour chart often determines the direction of
the breakout from the consolidation.

For example, if the daily or 4-hour chart indicates a bearish trend, a breakout
above the consolidation with a bearish sentiment is usually the most
favorable scenario for trading outside the consolidation.

Expect price to reprice to the EQ of the consolidation once we wick out of

it.
Short term high above EQ.

To determine the directional bias, it's crucial to focus on the daily and/or 4-
hour order flow, assessing whether the market is likely to move higher or
lower over those timeframes.

Ideally, you want to see alignment between the 4-hour and daily charts in
terms of the directional bias.

When identifying consolidations, it's best to examine the 1-hour timeframe

or even the 15-minute chart.

These shorter timeframes provide a clearer view of the consolidation

patterns you're looking for.
The "open float" refers to the accumulation of orders both above and below
the current market price.

The longer a consolidation phase lasts, the more orders are typically being
accumulated.

The direction of the daily and 4-hour charts often determines the eventual
breakout direction from the consolidation. For instance, if the daily and 4-
hour charts indicate a bearish trend, breaking out of a consolidation to the
upside can be an excellent selling opportunity within that consolidation.

When we move away from the equilibrium (EQ) point and break a short-
term high, it signals a potential selling scenario.

We don't always aim to reach the opposite end of the consolidation when
trading within it. Instead, we typically target the equilibrium (EQ) point
unless we are specifically trading the breakout, in which case we aim for
the opposite end of the consolidation.

We wait for price to decisively break above or below the high/low of the
consolidation before entering trades, while retail traders often expect these
levels to hold, which can lead to false expectations.

When determining directional bias, we consider whether price is respecting

a daily PD array and whether it's moving towards an opposite PD array.

This helps us assess whether the market is likely to continue in its current
direction or if a reversal is more probable. In essence, it helps us gauge
whether the trend is likely to persist or change.

That short term low could be in many cases the asian low, or the previous
days low.

Focus primarily on the 4h and daily for daytrades.

Chapter 9.5: Trading Market Reversals
Link To ICT Video

The duration of consolidation periods allows financial institutions to

accumulate more trading

1. Previous Day's High - Raid Buy Stops & Reverse: Look for conditions
that lead to a raid on buy stops at the Previous Day's High (PDH). Not
every PDH will have the same effect.

2. Previous Day's Low - Raid Sell Stops & Reverse: Similar to PDH,
identify specific criteria before selling above old lows and buying
below old highs.

3. Intra-Week High - Raid Buy Stops & Reverse: Consider the weekly
market profiles, especially on Tuesdays when false highs or declines
can occur. If the market has been trending up without reaching a
premium array, watch for price to take out an intra-week high into a
premium array.

4. Intra-Week Low - Raid Sell Stops & Reverse: When the lowest low of
the week is swept and reversed, it presents high-probability day
trading and scalping opportunities. Even if it doesn't continue higher,
a tradable bounce can be expected.

5. Intermediate Term High - Raid Buy Stops & Reverse: This refers to
highs from the previous week or a couple of weeks ago. Consider the
context behind these highs, whether they signal profit-taking or a
potential reversal. Not every old high is suitable for going short.

6. Intermediate Term Low - Raid Sell Stops & Reverse: Similar to

intermediate term highs, look for the context behind lows from the
previous week or a couple of weeks ago. Assess whether these lows
indicate profit-taking or the start of a longer rally.
 7. New York Session Reversals: Typically, these reversals continue what
was established in London. However, there are instances when New
York reverses and takes out London's low of the day, especially when
New York trades into a Higher Timeframe (HTF) premium array.

8. London Close Reversals: Similar to New York reversals, London close

reversals follow London's lead. On large range days, particularly
when the Average Daily Range (ADR) has been exceeded by 1.25 or
1.3%, intraday scalp opportunities may arise during London close.

Remember, the key to mastering these reversals is to study charts and

understand the underlying concepts rather than seeking numerous
examples.
Chapter 9.6: Bread & Butter Buy
Setups
Link To ICT Video

Price will either trade to old Highs/Lows or Imbalances

Trade duration is many times a lot less then 2 hours but 2 hours is the
maximum.

Turtle Soup:
FVG + OTE:

When analyzing the market, we examine both the 0 GMT and MNO
(Midnight New York Open) openings. Institutional order flow on higher
timeframes (HTF) consists of monthly, weekly, daily, and 4-hour data.
We also consider the IPDA data range, focusing on whether there has been
a recent shift in the quarterly perspective, indicating a move higher or lower.
Additionally, we assess whether price has been trading based on daily
bullish discount arrays, whether bullish order blocks are respected, and if
bearish order blocks are failing. Looking at these factors helps us gauge
institutional order flow.

To understand institutional order flow, it's essential to observe how price

behaves. Are up-closed candles broken, or do they find support whenever
price retraces to them? Similarly, are down-closed candles respected, or
does price quickly break below them and then rally? These price patterns
provide insights into institutional order flow. We analyze these aspects on
the HTF, MWD (Monthly Weekly Daily), and 4-hour charts.

Once we identify evidence of institutional order flow, we look at the PD

array matrix to determine which PD array is the most likely entry point for
a long trade.

This becomes the next target for price movement. As we enter the trade, we
seek a premium counterparty, which helps frame our trade. In essence, we
rely on institutional order flow to assess whether the market is bullish or
bearish.
We observe whether old highs are breaking while old lows hold, or if the
lows are breaking quickly, followed by rapid upward price movements.
These characteristics help us identify accumulation patterns and further
confirm the bullish sentiment.
London open swing usually does around 40-60% of the daily range before
we get to 5am.

London lunch is usually a retracement or consolidation.

At 10 am New York time, the market typically starts to consolidate, establish
the high of the day, and possibly retrace slightly.

While there could be a market reversal at this time, our current focus is
primarily on understanding the consolidation and trading dynamics during
this period.

To get a precise understanding of price movements, you should consider

various factors. First, you should aim to see price reach the 5-day Average
Daily Range (ADR) high, which can help provide a reference point for
potential price targets.

Additionally, combining this information with projections and PD arrays

can help refine your analysis and provide even more precise insights into
potential price movements.

Furthermore, during highly explosive market moves, it's essential to be

prepared for significant price increases, as these situations can lead to
substantial price spikes. So, it's crucial to remain vigilant and adapt your
trading strategies accordingly during such times.
Trading during lunchtime can present opportunities for early entries,
particularly when the market has been busy and there's potential for a
retracement.
This is often observed when London experiences significant volatility or if it
starts quietly and then becomes active around 4:30 am, possibly continuing
into London's lunchtime.

During such scenarios, you may notice a brief consolidation period lasting
around 15 to 20 minutes, followed by a retracement before the market heads
into the New York session. While there can be good entry points during
lunchtime, it's often better to avoid trading during this period or not focus
on it too much.

Additionally, ICT typically uses a 5-minute chart for his trading analysis and
decision-making.
In trading, every session has specific market stages that traders pay attention
to. These stages include:

1. Protractionary Stage: This is the initial phase of the session, and it sets
the tone for the market's direction. Traders analyze price movements
during this stage to gauge whether the market is likely to be bullish or
bearish.
2. Judas Swing: The Judas swing is a reversal or retracement move that
often occurs after the initial market direction is established. Traders
look for this swing to identify potential opportunities.
Here are some examples of when these stages occur:
• For the London session, the Protractionary Stage typically occurs at
the Midnight Open (MNO). Traders expect a rally if the market is
bullish.
• In the Asian session, the Protractionary Stage starts at 0 GMT.
• At the London close, which is around 10 am, traders anticipate a rally
followed by a down move to close the day on bullish days.
In trading the SP500 and other indices, similar principles can apply to
identifying trends and trading opportunities. Just like in the forex market,
traders in the SP500 also have two distinct trends: the AM (morning) session
and the PM (afternoon) session.

The characteristics observed during London close in the forex market can
be translated to trading the SP500 and other indices.

Here are some key points to consider:

1. Timing: Between 10:30 am and 1:00 pm is the time frame when
traders look for specific setups in the SP500. This corresponds to the
London close time in the forex market.

2. Profit Targets: In SP500 trading, the aim is to target a maximum of

15-20 pips (points). This is similar to the objectives set in forex trading.

3. Fibonacci Levels: Fibonacci retracement levels, such as the 30% and

20% levels, are used as reference points for profit targets. Traders
draw Fibonacci retracement lines from the London low to the 5-day
Average Daily Range (ADR) high, with the 20% level often indicating
where the market might close.

These principles show that trading strategies and concepts can be adapted
and applied across different markets, including forex and indices like the
SP500, to identify high-probability trading setups and profit targets.
The Asian open and London close are considered by ICT as two very narrow
windows of opportunity in trading. ICT's perspective is that these windows
don't offer sufficient potential rewards relative to the associated risks.

There is a bit of a paradox here. On one hand, traders often anticipate and
hope for a small Asian range before the London session, but on the other
hand, trying to trade this small range can lead to conflicting rules and is, in
ICT's view, not worth the effort.

ICT acknowledges that he shares this information because he frequently

receives questions about it. However, he personally avoids trading such
setups unless it's a day with significant market reversals. In such cases, he
might become more active during the London close.

Similarly, in the Asian session, if he expects the market to move down

towards a higher timeframe (HTF) discount area and it hasn't reached that
level during the New York session, he might look for Asia to fulfill this move
and potentially establish the low of the day.
Chapter 9.7: Bread & Butter Sell
Setups
Link To ICT Video

Author note: This chapter is almost the same as Chapter 9.8 but then in
reverse.
Price often falls just short of the Average Daily Range (ADR) or, conversely,
it can significantly exceed it. As a general guideline, this information helps
traders establish a range within which they can blend Price Data (PD) arrays
on lower timeframes, such as 1-hour or 4-hour charts, and combine them
with pivot points, the Central Bank Daily Range (CBDR), Asian range, and
flout.

When all these factors overlap, it helps formulate a probable objective for
the trading day. Traders can look for scalp opportunities within these ranges
until the objective is met. Ideally, traders aim for one scalp in London, one
in New York, and one during London close, possibly even one during the
Asian open.

If the price range for the day is 60 pips or less, the conditions suggest that
an obvious and significant move higher or lower is likely, possibly resulting
in a larger range, even doubling the ADR.

Capitulation refers to when a price move has been ongoing for a while to
reach a PD array, and on the last day, price rushes to get there. In such
cases, traders can expect the range to potentially double the ADR.

To manage trades effectively, traders may consider scaling their positions

off by about 15 pips before reaching the ADR high or low. This approach
allows traders to secure profits while leaving some room for further potential
gains.
The term "Equities open" refers to the opening of the stock market at 9:30
AM.

While having the ADR on the chart is not essential, it serves as a useful tool
that complements other analysis methods and provides insights into
probable price expansions for the day.

It's important to note that while the Higher Timeframe (HTF) Price Data (PD)
arrays provide insights into price direction, the Intraday Lower Timeframe
(LTF) PD arrays offer timing and specific price levels for entry.

Trading in smaller price ranges doesn't necessarily mean "scalping" in the

sense of quick, short-term trades. Scalping is most profitable when there is
volatility in the market, and larger range days are ideal for this approach.

The various trading models and strategies presented here should

complement each other. Traders can use scalping as a hedge or as an
alternative when they miss out on other trading opportunities like day trades
or "one shot one kill" setups.
It's worth emphasizing that scalping is not an everyday trading strategy.
Overreliance on scalping can divert traders from focusing on the Higher
Timeframe (HTF) charts, which are essential for comprehensive analysis.

It's important to have a solid understanding of the tools and strategies from
various lessons to effectively incorporate scalping into your trading
approach.
Chapter 9.8: ICT Day Trade Routine
Link To ICT Video

Step 1

Step 1 involves carefully reviewing the economic calendar to identify

significant events that could impact the currency market. These events
typically fall into the medium or high-impact categories.

To pinpoint potential trading opportunities, we consider the timing of these

events concerning specific trading "killzones," periods when market
manipulation is more likely to occur.

The manipulation of currency prices often coincides with the release of

important economic news. To apply this strategy effectively, we focus on
currency pairs relevant to either the London or New York trading sessions,
where a medium or high-impact news event is scheduled.

For instance, if there's a significant news release at 3 AM, we anticipate

price movements occurring around that time in the selected currency pair.
However, before diving into specific pairs, we proceed to step 2, where we
assess the Dollar Index for additional insights.
Step 2

Step 2 involves analyzing the Dollar Index as part of our trading strategy. To
begin, we focus on the previous trading day's data and draw a trendline that
extends to the left, covering a span of 60 trading days.

If your broker displays Sunday trading data, you'll need to account for this
and extend the trendline accordingly to ensure an accurate representation
of market trends.

We establish our ranges for Fibonacci retracement levels and for our Price
Distribution (PD) arrays. We primarily concentrate on the most recent 60
trading days, starting with the day before yesterday as day 1.

With each new trading day, we add it to our analysis while removing the
oldest day, so our analysis is always based on the most recent 60 days of
trading data.
Additionally, we keep an eye out for a quarterly shift in market structure that
typically occurs every three months. While we anticipate this shift as a
potential trend reversal, it's essential to understand that it doesn't always
happen, and it's not the sole factor guiding our trading decisions. It's merely
something we acknowledge as a possibility in the market.

When theres a gap and a breaker like that, we go with the breaker first
because of the hierarchy. And we use the wick of the downcandle fo the
breaker.

Notice how we use the highest upcandle and not the downclosed one,
because the upcandle thats where the resistance begins for the FVG.

We shift our focus to the most recent 20 trading days to determine the
position of our Price Distribution (PD) arrays. This is crucial for day trading
because we primarily operate within this 20-day timeframe.

However, if we find that all trading activity has been exhausted within the
last 20 days, meaning there are no more profitable opportunities, we expand
our lookback period to the last 40 trading days.
The key question we ask ourselves is whether we are currently trading
within a premium or a discount range. In the provided example, it's evident
that we are trading at a discount relative to the last 20 days.

However, being in a discount range doesn't automatically mean we should

buy and expect prices to go up. We must also consider historical reference
points.

By examining the price action over the last 60 and 40 trading days, we can
observe that we are in a discount market with many potential premium
arrays to trade to. Additionally, we should keep in mind the bearish tone in
the daily chart of the US dollar.

When it comes to discount arrays, we disregard the mean threshold of the

first order block because it has already been violated. Instead, we focus on
the order block, propulsion block, and rejection block as critical levels
within our discount arrays.

Step 3

In this step, we evaluate the current institutional order flow for the market
we're trading. To do this, we analyze recent price action in the last 60 and
40 days.

If we observe that up candles (bullish candles) are being respected and that
price breaks lows during this period, it indicates that institutional order flow
for the dollar index is bearish.

With this bearish order flow, our preferred trading direction would be to go
short, as this aligns with the overall bearish sentiment.
However, since we are day trading, we also consider countertrend trading
if the market conditions are right. This means that if we have identified that
the market is at an extreme and trading at a discount, we may anticipate a
retracement. I

t's important to note that a retracement is not guaranteed, but it is a

reasonable possibility based on our analysis.

Step 4

You would take the same elements and now apply it to the EURUSD chart.

When we find ourselves in a premium market scenario, it means that the

current market price is trading at a premium compared to recent historical
data. In this situation, it's essential to consider the historical high of the
market as part of our macro perspective.
By examining the IPDA data ranges, we can effectively filter out market
noise and concentrate on what is currently relevant and significant for our
trading decisions. This allows us to make more informed and focused
trading choices based on the prevailing market conditions.

Step 5

In Step 5, we assess the institutional order flow for the EUR/USD (EU)
market.

We observe that down-closed candles are being respected while highs are
breaking, indicating a bullish institutional order flow in this context.
Although there is a significant gap in the price chart, we don't focus on it
for now because it's quite distant from the current market activity.

However, we need to pay attention to specific factors, such as the highest

order block in the example, the opening price of that block, and the mean
threshold. If the mean threshold is not respected, it suggests a potential move
lower, especially given the premium market condition we are in.
In this premium condition, we don't consider the high of the order block as
critical as we would in a discount scenario, as it is less sensitive in this
context.

Step 6

In Step 6, we switch to a 4-hour (4h) chart for the EUR/USD (EU) market.

Here, we are searching for indications that suggest price may retrace
slightly, creating an offset accumulation before potentially moving higher.

Given our understanding of the daily institutional order flow, our initial
focus on the 4h chart is to identify factors that could prompt a temporary
price drop.

This drop would serve the purpose of accumulating new long positions in
the market.

Consequently, we're looking for signs that suggest price is entering a short-
term discount market, as illustrated in the example provided.

Short term range:

Total range:

If we break the orderblock above then were likely going to that old high.

In this step, we consider two scenarios: bullish and bearish.

1. Bearish Scenario: If the market were to turn bearish, we need to look

for signs that justify this shift. If the price falls below the mean
threshold, it would invalidate the bearish bias and suggest a potential
move to the upside.

In this case, we focus on the last two down candles as a potential

bullish order block once the price breaks through the last up candle.

2. Bullish Scenario: To justify the daily institutional order flow being

bullish, we seek arguments and scenarios that support this trend. If we
can't find entries for this trend immediately, we might consider that
the market, although currently in a premium state, could move to a
short-term discount state. However, if specific discount arrays are
 breached, this could indicate a shift in the market toward a more
intermediate-term bearish trend as opposed to a short-term one.

In summary, we are analyzing various scenarios based on the institutional

order flow and technical factors to determine the most likely direction for
the market.

Step 7

In this step, we shift our focus to a 1-hour (1h) chart and repeat the analysis
process. Here's what we do:

1. Look for Confluences: We search for confluences of PD arrays that

overlap with one another on the 1-hour chart. This helps us assess
whether the market is likely to move lower temporarily for institutions
to buy at a lower price, with the intention of eventually continuing in
the direction of the higher time frame (HTF) institutional order flow.
 However, we should not try to predict with certainty whether the
market will continue to rise or fall; instead, we focus on assessing
probabilities.

2. Analyze Consolidation: If the market is currently in a consolidation

phase, this could be a period where institutions are building up the
open float and creating a large liquidity pool.

This buildup may be part of a larger strategy to eventually trigger a

Stop and Reverse (SSL) move, where the price moves in the opposite
direction before continuing in the desired direction. We analyze
where this consolidation is taking place and look for potential entry
points based on the given market conditions.

The goal of this step is to gain insights into the market's intentions and
potential areas of interest for institutional trading activities. We base our
analysis on probabilities rather than trying to predict exact market
movements.
Now that we have identified a convergence of two overlapping discount
arrays below the sell stops and inside the daily order block, here's how we
can use this information:

1. 15-Minute Timeframe Analysis: If the price trades down to this level,

switch to a 15-minute timeframe. Here, we will look for standard
deviations using tools like CBDR (Central Bank Daily Range), the
flout, and Asian range standard deviations. These projections will give
us potential target levels both above and below the current market
price.

2. Opening Price Analysis: Pay attention to the opening prices at 0 GMT

and MNO (Midnight Open). If we are anticipating a bullish move, we
should expect a slight decline on the 15-minute chart at these opening
times.

3. Protractionary Stage Expectation: By having this protractionary stage

at either MNO or 0 GMT, we would anticipate that at or very close to
this level, there could be a buying opportunity for a day trade. This
expectation primarily applies to the London session. If the London
session fulfills this expectation, we can anticipate a continuation
during the New York session.

4. New York Session Reversal: It's important not to assume that only one
outcome is possible. While we have these expectations, it's essential
to remain flexible because various scenarios can unfold. Generally,
we can think in terms of bullish or bearish directions based on factors
like the day of the week, the time of day, and other market conditions.

5. Stop Run and Institutional Order Flow: If the price drops and then
quickly recovers, showing evidence and willingness to move through
premium arrays, it may indicate that the initial drop was a stop run.
In this case, institutional order flow on the daily chart could come
back into play, and we might see more bullish price movements.
The key is to remain adaptable and consider multiple possibilities while
focusing on the overall bullish or bearish bias, depending on the market
conditions and institutional order flow.

If the price fails to initiate a long position at the red level, it's advisable to
reassess the situation and zoom out a bit for a broader perspective. In this
scenario, we might anticipate an intermediate pullback to the old high. The
Equal Low (EQL) levels below the red level would then become potential
targets for a downward expansion. It's essential to note that these levels are
not meant for buying; instead, they are areas to watch for a downward
move, possibly to the old high.

Afterward, we would wait for a rally that typically occurs around 0 GMT
and/or MNO (Midnight Open) and consider selling from a premium array.
This decision would be based on the analysis of a 15-minute or 5-minute
chart. As the price approaches the old high, it could present an opportunity
for the High-Time Frame (HTF) daily institutional order flow to come back
into play, potentially leading to higher price movements.
In summary, if the price doesn't respond as expected at the red level, we
look for a possible intermediate pullback, target EQL levels for a downward
move, and then consider selling from a premium array during a rally. The
old high may serve as a point where the broader institutional order flow
direction could resume, potentially resulting in upward price action.

Formula:

1. Economic Calendar: Begin by reviewing the economic calendar to

identify medium and high-impact events. Consider the time of day
and its influence on currency pairs during the London and New York
sessions.

2. Analysis Baseline on the Dollar: Assess the current state of the US

dollar to understand its strength or weakness in the market.

3. Determine IPDA Data Range: Utilize the IPDA (Interbank Price

Delivery Algorithm) data range to identify key price levels and ranges
for potential trading opportunities.

4. Look at the PD Arrays: Examine the Propulsion (PD) arrays on various

timeframes, such as daily and 4-hour charts, to identify critical support
and resistance zones.

5. Consider the PD Array Matrix: Analyze how different PD arrays align

or diverge across timeframes, forming a matrix that helps in decision-
making.

6. Determine HTF Institutional Orderflow: Understand the High-Time

Frame (HTF) institutional order flow, including monthly, weekly,
daily, and 4-hour trends, to establish the overall market direction.
7. Breakdown of the Pair with News Driver: Focus on the specific
currency pair that has a news driver for the upcoming London or New
York session. Anticipate potential manipulation based on the news
event and consider the weekly templates to predict when price levels
may be reached.

8. Directional Bias from Daily Institutional Orderflow: Always rely on

the daily institutional order flow to determine the primary directional
bias. Aim to trade in the direction indicated by institutional order flow,
but remain flexible for potential retracements or consolidations.
If there's a combination of different levels, like Standard Deviations (STDV),
Average Daily Range (ADR), and Premium Discout (PD) arrays on a 15-
minute, 1-hour, or 4-hour chart, it indicates a strong likelihood that the price
will either rise or fall to those specific levels. This is the method ICT uses
when identifying potential highs and lows, and there's no secret formula
involved. It's all about doing this analysis and considering the weekly and
daily patterns.

When we're in a bullish market, there are only a limited number of bullish
scenarios to consider. We start by looking at the low point of the week on
Monday. If Monday's data doesn't provide enough evidence, we move on
to Tuesday's low. If Tuesday starts trading upward, we anticipate that
Wednesday could be a good day for buying opportunities. This process
continues until Thursday's New York open, which is typically when the
weekly high starts forming. However, this doesn't always happen. If
Thursday keeps going up, we might expect profit-taking on Friday, so it's
best not to buy on Fridays. Instead, you can either wait on the sidelines or
look for currencies that support the idea of a potential reversal.

Once you incorporate these weekly range and institutional order flow
concepts into your analysis, it's crucial to stick with this framework. In
simpler terms, if the daily institutional order flow indicates a bullish trend,
focus on finding reasons to go long. This doesn't mean you'll find a buying
opportunity every day. Sometimes, there will be consolidations or
retracements, and that's perfectly normal.

Remember, day trading doesn't mean trading every single day, and scalping
doesn't involve trading every small price fluctuation throughout the day.

Once we've identified the Standard Deviation (STDV) levels and Average
Daily Range (ADR) in alignment with our expectations from daily and 4-
hour institutional order flow, we incorporate the weekly template to justify
what the weekly range might look like.
This process increases the probability of success. But remember, we can't
predict the exact weekly template before the market opens on Sundays. We
have several potential templates in mind, and it's about recognizing
scenarios where they might unfold.

This approach trains your eyes to identify situations where these templates
could play out. More importantly, it provides the context for framing your
trades. It's the classic "plan your trade and trade your plan" concept, but
when applied to ICT's methods, it means assessing whether we're in a
bullish or bearish trend on the longer term and daily charts.

If we're bullish, we focus on how the weekly range might unfold in a bullish
manner. Then, on a daily basis, we assess where we are in the context of
that weekly template. Even if only a portion of the template unfolds on a
particular day and you profit from it, that's sufficient. Don't try to apply it
every single day.

When looking at individual day scenarios, we ask questions like: Will the
London session start with consolidation and New York creates the low of
the day, or will we establish the low right from the beginning at 0 GMT? Or
are we expecting the classic buy day at MNO (Midnight New York Open)?

The key is that we can't be certain about what will happen. If you keep
analyzing every session, starting at 0 GMT, you might incur losses, and this
leads to overtrading.

So, ICT's approach is to leave 0 GMT and focus on MNO. If we're in a

bullish trend, we want to see a drop below MNO to certain STDV levels,
such as CBDR, flout, or Asian range, leading to a discount (PD) array visible
on the 15-minute timeframe. This array may also overlap with a 4-hour or
1-hour discount array. By doing this, we gain confidence in pinpointing the
low of the day.

If this drop occurs in London, it gives us the confidence to buy throughout

the day without fear. We use the general rule of thumb that the price will
drop around 33% from the high and then establish a 100-pip range up-
close. This framework helps us determine precision when targeting STDV
levels, flout, CBDR, and Asian range projections that align with ADR and
an opposing PD array, whether on the 15-minute, 1-hour, 4-hour, or daily
charts.

Conclusion

First of all, amazing that you read through all of these notes. This means you
are well underway to become an amazing trader. You have eye for the
details. That said:

This routine for day trading and scalping follows a systematic and generic
approach. However, there are still choices to be made, and it's a step-by-
step process. There's no one-size-fits-all strategy that works the same way
every day.

This routine is what ICT (Inner Circle Trader) follows every single trading
day. Even when you make mistakes and incur losses, those experiences
provide valuable feedback and insights. Don't view a loss as a failure;
instead, consider it as a premium paid for gaining a deeper understanding
of the market.

The goal is to align yourself with the market participants who have inside
knowledge. If you make a wrong move, you can quickly adjust by waiting
for another setup and exercising patience rather than rushing in.

ICT has performed this routine countless times, so he can execute it swiftly.
With experience, it becomes second nature. Observing price action is
crucial because it helps build your understanding, and experience is the
most valuable teacher.
The best trades often align with institutional order flow. However, becoming
proficient at this approach takes time and practice. You can't expect to be
the best right from the start.

This routine involves blending time and price scenarios with the templates.
For example, if Monday is a U.S. bank holiday, Tuesday tends to behave
like a typical Monday with range-bound trading.
Chapter 10.1: Multi- Asset Class
Analysis
Link To ICT Video

Author note: Chapter 10 will ONLY focus on Index Futures. ICT also talks
about Commodities, Bond and Stock trading in his videos. As we are not
trading this, we will not discuss this in the ICT Bible.

This doesn’t mean you should count them out of your development.

Understanding how different financial markets are interconnected is crucial

for successful trading. These markets include commodities, interest rates,
equities (stocks), and foreign currencies. They often move together in a
harmonious way, but sometimes they can diverge.

Imagine these markets as having two main modes: "risk-on" and "risk-off."
When it's a "risk-on" environment, investors are more willing to take risks,
and stocks and foreign currencies tend to perform well. In contrast, during
"risk-off" times, investors seek safety in bonds, causing bond prices to rise
and interest rates to fall.
The interaction between these markets matters because it affects overall
market dynamics. When they work together efficiently, you can expect clear
trends and trading opportunities. However, when they're not in sync, it
indicates uncertainty in the market, which can make trading more
challenging.

The ideal scenario is when these markets move in harmony. For example,
when the dollar index rises, commodities often fall, stocks go up in a risk-
on situation, and foreign currencies follow suit. This creates predictable
trends and trading opportunities.

Analyzing these interconnections is not easy, as it requires a lot of work and

a broad view of the market. While you can make money by focusing on a
single currency pair like EUR/USD, understanding the broader context helps
you anticipate significant moves and hold onto profitable trades.

It's crucial not to shy away from this work because having a general
understanding of how the entire market operates is essential. When markets
are in chaos or experiencing decoupling (when they don't move together as
expected), it's usually due to factors like geopolitical events or economic
changes.

You don't need to obsessively monitor these markets all day long.
Periodically checking them and ensuring they are moving in concert is
sufficient. An efficient market creates significant, easily predictable moves
that are worth trading.

It's not always straightforward; there are times when things seem clear-cut
and times when they don't. Understanding these dynamics helps you
recognize when to trade and when to step back. Intermarket analysis is a
valuable tool in your trading arsenal.
ICT emphasizes the importance of learning how each asset class behaves,
understanding their seasonal tendencies, and recognizing when they are not
moving in harmony.

Even if you don't trade every asset class, having this broader understanding
enhances your ability to make informed trading decisions.

In summary, comprehending how different financial markets relate to each

other is vital for successful trading. It allows you to anticipate market
movements, make informed decisions, and stay profitable in the long run.
Chapter 10.2: Index Futures - Basics &
Opening Range
Link To ICT Video
When we observe an extended range, which means a significant one-sided
movement in the market, we usually anticipate that the high or low of that
range will be breached later in the day. Here's how it works:

1. Bullish Day Scenario: If we expect it to be a bullish day, we anticipate

that the high of the opening range will be surpassed or at least revisited later
in the trading session.

2. Bearish Day Scenario: Conversely, if we anticipate a bearish day and the

market starts the day with a significant upward movement (a big move up),
we look for the opening range low to be revisited or traded through.

By recognizing the extension of the opening range, we establish a reference

range within which we expect the market to move. This range becomes a
target area for price to return to and potentially trigger stop orders on the
opposite end. In essence, it provides a framework for our trading strategy
based on the anticipated market direction for the day.
In futures trading, it's important to pay attention to volume as it often
provides valuable insights into market dynamics. When analyzing price
movements within a trading range, particularly when looking at wicks (the
upper and lower tails of candlestick patterns), volume can offer critical
information:

1. Volume Precedes Price: In futures markets, there's a principle that

suggests volume tends to lead price movements. This means that if the
market is about to make a new low or retest an old low or high, it
should ideally be accompanied by higher volume. This higher volume
indicates strong participation and conviction among traders in that
direction.

2. Volume and Wick Analysis: When examining the lower wick of a

candlestick pattern (or a price bar), if you observe that the wick
extends significantly below a particular level but lacks the expected
volume to support such a move, it can be a sign of weakness. In this
context, the second wick, which may seem concerning without the
necessary volume, becomes less alarming when you consider the
volume associated with it.
 3. Volume Confirmation: If the volume is substantial when price tests a
key level (like a low or high), it can provide confirmation of the
validity of that test. On the other hand, lower volume during such tests
may suggest that the move lacks strength and conviction.

So, when analyzing futures markets, always consider the interplay between
price and volume to gain a more comprehensive understanding of market
sentiment and the potential strength or weakness of price movements,
especially when testing important levels within a trading range.

We will begin combining different stock market indices to make our trading
predictions more reliable. Additionally, we'll pay special attention to certain
times during the trading day that are especially important for index trading.

Once we've established the opening price range and have a clear direction
based on our bias and high-timeframe institutional orderflow, we can use
this opening range to determine levels of support and resistance.
Specifically, we'll focus on the highest and lowest prices during the first
hour and the first 30 minutes of trading, as these levels hold a significant
relationship to our trading decisions.
Chapter 10.3: Index Futures - AM
Trend
Link To ICT Video

Some examples:
It fills the gap only with wicks, we like to see bodies, the bodies has to cross
for it to be efficient price.
When we observe that one time period (e.g., 5am or 9am) fails to make a
lower low, it confirms a bullish trend for the morning (AM).

However, keep in mind that this pattern doesn't always follow the same
timing, and the low at 7am, for instance, can also exhibit divergence.

Between 5am and 9:30am is the crucial time window we are constantly
monitoring. When high-timeframe (HTF) institutional orderflow suggests a
bullish market direction, and we look at intraday timeframes like 4-hour or
1-hour charts, we anticipate bullish price movements. In such cases, we
watch for price to fail in making a lower low during retracements, and this
failure signifies the presence of smart money in the market, indicated by the
Index SMT (Smart Money Tool). This pattern often indicates significant
trading opportunities.

It's important to note that the lows we're referring to are not strictly at 5am
and 9am; it's more of a general time frame or "killzone."

We pay attention to 5am because that's when London traders typically take
their lunch break, and significant money flows into the market at 9:30am.

When you see a substantial buildup at the lows, as indicated by the Index
SMT, you can have a high degree of confidence that the SSL (Smart Money
Liquidity) run is essentially a stop run.
In such scenarios, we look for an expansion move, and one strategy ICT
uses is to become a buyer when price breaks above the high of a
downclosed candle.

If only one of the two time periods (e.g., 5am or 9am) makes a lower low,
your focus should immediately shift to the one that made the lower low,
and you can anticipate it to be a "turtle soup." In this situation, you have the
option to buy on strength with a stop order or buy on weakness below the
old low with a market order, both of which are valid approaches.

You don't need to strain your eyes searching for these patterns; if it's not
clear, assume it's not present.

This approach helps eliminate the fear of wondering, "How can I be sure it's
a turtle soup, and that price won't just continue running?" When you
encounter this pattern, there's a high probability it's a turtle soup.

The speed at which the market makes the lower low will be quite rapid, but
remember that speed doesn't always correlate with the magnitude of the
move.
In a bullish day where the market rallies throughout the morning (AM)
session, the afternoon (PM) session will typically seek to sell below the lows
of the AM session and reprice to any Buyside Imbalance Sellside
Inefficiency (BISI). Once this happens, you can anticipate a return to
premium levels within the established range.
Chapter 10.4: Index Futures - PM
Trend
Link To ICT Video

The lunch break in trading typically falls between 12:00 PM and 1:00 PM,
but its timing can vary, starting as early as 11:00 AM or extending as late as
2:00 PM, depending on the current market conditions. If the morning
session is highly active and fast-paced, traders often prefer to work through
lunch, resulting in a shorter lunch period characterized by consolidation or
a small retracement.

Conversely, on mornings when the market is slow and lacks energy, the
lunch break might extend for the full hour or even from 11:00 AM to 2:00
PM, although this is less common. However, in general, traders anticipate
some degree of consolidation or retracement during the noon to 1:00 PM
timeframe.
Some examples:
In this case the PM session cause a reversal, perhaps because it traded into
a premium array.
ICT primarily focuses on trading the SP500, so if he observes a certain price
movement pattern, like a crack, he will enter a trade in the SP500. This
pattern might involve a drop in the morning session, possibly into a discount
price range.

In many cases, the opening range of trading sets the high and low points for
the day, and the last hour of trading tends to establish the opposite high or
low of the day.

For example, if there is a low formed during the morning session on a day
that has been consistently bullish and during lunchtime there has been no
retracement (price reversal), and the afternoon session shows signs of
wanting to move higher, traders can reasonably expect that any trade made
in the direction of the morning session will continue into the final hour of
trading, which concludes around 3:00 PM when the bond market closes.

In a bullish market where the price has been rising steadily during the
morning, the afternoon session may seek to find selling opportunities just
below the morning session's lows, looking for any Buy-Side Imbalance Sell-
Side Inefficiency (BISI). Once this inefficiency is identified, traders can
anticipate a return to premium prices within the established range.
Chapter 10.5: Index Futures -
Projected Range & Objectives
Link To ICT Video

The daily price range can sometimes continue without much consolidation
during the lunch hour. This can happen when there is a strong catalyst
driving prices higher, such as a significant economic news release.

It's important to note that not every day will have a consolidation period
during lunchtime.

If prices are rapidly moving higher, there's a chance that market participants
will continue trading through the lunch hour without taking a break.

In an ideal scenario, the afternoon (PM) session would mirror the morning
(AM) session in terms of symmetry, meaning that the price movement and
trading patterns in the afternoon session align with those of the morning
session.
When we observe that both the daily and 4-hour charts are showing bearish
signals, it's crucial to focus on specific scenarios. This situation often arises
when we are in the midst of an intermediate-term or long-term price swing,
as indicated by the higher timeframe (HTF) chart.

In this classic scenario, we need to consider the following factors until we

reach an opposing array or setup on the 4-hour, daily, or even weekly chart.
This means that bearish conditions persist until we see a significant shift in
the higher timeframe or a change in the technical setup that suggests a
different direction.
In the afternoon (PM) trend, it's important to note that it may not always
reach the morning (AM) high before reversing. Instead, it could form a lower
high when it reverses. The outcome depends on the specific circumstances
of the market.

If the rally during the AM session was triggered by a 15-minute or 1-hour

discount array, then it's likely that the PM session will head lower. However,
if the rally was driven by a 4-hour, daily, or weekly discount array, then the
upward momentum might continue.

To filter this, consider whether the array responsible for the move is at least
a 4-hour discount array. If not, anticipate a move through that level and a
subsequent decline.
The direction of the PM (afternoon) trend can be influenced by whether
there's a premium or discount array on the higher time frames (HTF). Here's
how it works:

1. If the AM (morning) session has traded into a HTF premium array (e.g.,
hourly or 4-hour), it's likely that the PM session won't revisit that level. This
is because the premium array represents a strong level of support or
resistance that has already been defended. In such cases, the PM session
may only aim to test the highs or lows reached during the lunch hour and
then reverse.

2. Conversely, if the AM session has not entered a HTF premium array and
there are no strong market drivers or news, the PM session can potentially
run back up to retest the intraday high before reversing.

The key takeaway is that the presence of premium or discount arrays on

higher time frames can help determine the PM session's behavior. If a
premium array has been touched during the AM session, it's less likely to
be revisited, whereas an absence of such premium levels can lead to a retest
of intraday highs or lows.
This situation is quite common in index trading and resembles a tug of war
between buyers and sellers. It can be confusing if you don't understand how
it works.

Here are the main points:

1. Tug of War: Imagine a situation where buyers and sellers are evenly
matched, like a game of tug of war. This often occurs in index trading.
2. Not Seeking and Destroying: Importantly, this isn't the same as a
deliberate move by big players to trigger stop-loss orders (seek and
destroy). Instead, it's just a period of consolidation.
3. NFP Exception: Seek and destroy behavior is more likely during
events like Non-Farm Payrolls (NFP) releases, which can cause
sudden and sharp market moves.
4. Lack of Trend or News: This kind of market scenario usually happens
when there's no clear trend, and there aren't any major news events
influencing trading.

In essence, don't expect big price movements when there's consolidation,

unless there's significant news or a strong market trend to guide the trading
direction.
These templates provide a straightforward way to understand what we
should expect from the market.

The lunch hour typically involves consolidation, except on days when

there's a clear trend based on specific templates like the two-session
upclosed or downclosed. However, this always depends on what caused
the initial price movement.

In the case of indices, their primary focus during intraday trading is to locate
and trigger stop-loss orders. While they can trend on a higher time frame
(HTF), on shorter time frames, it's all about finding liquidity and targeting
areas where stop orders are clustered. It's essentially a market driven by
traders looking for stop orders to exploit.
Chapter 10.6: Index Futures - Index
Trade Setups
Link To ICT Video

In the PM session, it's possible for the market to initially fall short of reaching
the 15-minute (15m) or 1-hour (1h) premium array. However, later on, it
may continue and reach that premium array.

When this occurs, it's a signal to look for long trading opportunities with the
goal of entering positions within the premium array.
In the AM session, it's expected to reach into a premium array and
experience SMT activity between the high in the timespan of 5 am to 9:30
am. The timing of these moves is crucial to maximize the potential range.

To get the most out of the trading day, rely on specific times of day.

For the New York lunch SMT, focus on the highs formed during the lunch
hour and any high that develops after New York lunch.

When it comes to the PM trend, determining which scenario will unfold

depends on various factors. If the market has already reached into a
premium array during the lunch hour, there may be no need for the PM
session to do the same. It's essential to test and assess the situation.

Ideally, you should aim to hold your position until the bond market closes.

However, if the bounce at the end of the PM session doesn't occur at a

logical 15-minute (15m) or 1-hour (1h) discount array, consider holding
your position and waiting for it to make another leg lower.
That's correct; the 15-minute (15m) and 1-hour (1h) timeframes are not
considered high timeframe (HTF). However, when assessing the PM session,
you should be looking for an overlapping premium array nested within a 4-
hour (4h) or daily premium array.

If the AM session has already reached into the premium array and it's being
defended by market participants, you shouldn't anticipate the PM session to
spike above the AM session high, as it's less likely to happen in such a
scenario.
Typically, you shouldn't hold your trades until the end of the trading day in
this context. Usually, a short-term high will form around 2 pm, and the price
will decline into the close, approaching the equilibrium (EQ) price point of
the day.

In terms of the PM session low, it can either reach the lunchtime low or the
AM session low. You can determine this based on whether the AM session
rebounded from a nested 15-minute (15m) or 1-hour (1h) discount array
within a 4-hour (4h) or daily discount array. If the AM session just fell short
of that nested level, you should expect the PM session to aim for the 4-hour
or daily discount array.

Ask yourself what caused the high to form? Is it falling short of a 4h or daily
premium array? Or did it already reach it?
Chapter 11.1: Commodity Mega-
Trades
Link To ICT Video

Supply and demand factors are an absolute reality when it comes to

commodities.
Let's take an example involving a parasite affecting crops during the
summer. This situation can trigger significant buying activity in response to
the potential threat to crops.

In magazines like "Commodities Magazine" and "Futures Magazine," there

are sections that highlight "hot commodities." These are typically
commodities that have been experiencing significant price movements for
some time. As a contrarian trader or investor, you might view such situations
as potential signals for a reversal in price direction.
You want to hold on to these parabolic moves, it can be scary at first but
they tend to move further then you expect.
Step by step:

You can analyze and compare the leaders of different sectors to make more
informed investment decisions. To start, identify the leading companies or
assets in each sector that you're interested in, typically those that have
shown strong performance or growth.
Once you have your list of leaders, assess their relative strength by
examining factors like which one is breaking new highs earlier or displaying
more support during downclosed candles. This analysis helps you identify
which leader has the most strength.

After evaluating the relative strength, refine your selection to the top 3
leaders from the initial list of 8. These are the assets you have the most
confidence in regarding their growth potential.

Allocate a higher percentage of your investment or trading capital to these

top 3 leaders, as they are considered the strongest in your analysis.
However, it's essential not to neglect the other 5 leaders entirely.

Diversify your portfolio by allocating smaller portions of your capital to

these assets to spread risk effectively.

Continuously monitor market developments and the performance of these

assets. Adjust your allocation as needed based on changing market
conditions.

This approach allows you to focus your resources on sectors and assets with
high potential while maintaining some diversification to manage risk. Keep
in mind that market conditions can change, so staying vigilant and
adaptable is crucial for successful investing.
This behavior can also be observed in currency markets, as well as in bonds
and stocks. Analyzing these patterns across different financial markets will
contribute to a more comprehensive understanding of overall market
dynamics and price movements.
Chapter 11.2: Forex & Currency Mega-
Trades
Link To ICT Video

Megatrades fall between the categories of swing trading and position

trading. To effectively engage in megatrades, it's essential to merge insights
from institutional orderflow analysis with an understanding of quarterly
shifts.

By doing so, traders can not only anticipate these quarterly shifts but also
validate their occurrence, enhancing their trading strategies.
Concentrate your attention on markets that exhibit a strong inclination to
move upward, where the lows are maintaining higher levels, signaling their
resilience.

Look specifically for signs of these markets breaking highs, typically in the
form of premium arrays.

On the other hand, disregard markets that fail to break into premium arrays
as they may lack the desired strength.
When anticipating a weak dollar, focus on identifying higher lows in other
currencies, which can be indicative of potential bullish trends in those
currency pairs.

Pro tip: look at individual currencies and see if they are showing VERY
STRONG signs or VERY WEAK signs.

When you found a Strong and a Weak pair: trade that cross pair.
Now look how big this CAD/JPY cross pair rallies:
Chapter 11.3: Stock Mega-Trades
Link To ICT Video

Author note: as we are not trading stocks, this chapter will be brief.
Chapter 11.4: Bond Mega-Trades
Link To ICT Video

Author note: as we are not trading Bonds, this chapter will be brief.
Chapter 12.1: Long Term Top Down
Analysis
Link To ICT Video

Having multiple factors align to support an idea increases its credibility.

ICT conducts long-term, comprehensive analysis from the highest

timeframes down to the lower ones on the final trading day of each month,
which is done once a month.

It begins with examining the seasonal tendencies of the market.

We analyze both the current month's seasonal tendencies and those of the
upcoming month.

The principles taught in this lesson apply uniformly across all four asset
classes, but as we delve into smaller timeframes, there will be more
specialized information tailored to each asset class.
Quarterly Shifts

We should keep an eye on the market every 3 to 4 months.

It's important to remember that a quarterly shift can occur when the market
has been moving strongly in one direction for an extended period. While it
may continue in the same direction, it's not guaranteed, and we should
analyze the market with the expectation that it could either continue or
potentially reverse in the next 3 to 4 months.

Interest Rates
Our analysis always begins with time as the first reference, followed by
price. Once we have established a time element, we seek reasons to justify
why price should move in a certain direction.

In the case of currencies, we consider interest rate differentials. If we're

analyzing stocks, we turn our attention to the bond market. When bond
prices decline, it indicates that interest rates are rising, which can make it
challenging for stocks to maintain a bullish trend. Conversely, if bond prices
are rising, it suggests that interest rates are falling, typically supporting a bull
market in stocks.

Commodities, on the other hand, react inversely to changes in interest rates.

Interest rates play a fundamental role in driving prices higher, making them
a crucial factor across all asset classes.
Market Profile
We also examine the market profile. This involves evaluating our recent and
current market behavior. Are we currently in a trending phase, a
consolidation phase, or experiencing a reversal? Identifying the current
market state helps us anticipate potential price movements and adjust our
expectations accordingly.

Intermarket Analysis
We also consider other markets that have positive or negative correlations
with the one we're analyzing. These correlated markets can either support
or contradict our analysis. By examining these related markets, we gain a
more comprehensive understanding of the overall market dynamics and
potential influences on the asset we're focused on.
Market Structure
We also assess our position in the context of higher highs and lower lows.
Are we currently establishing short-term, intermediate-term, or long-term
lows? Understanding where we are in this spectrum is crucial for our
analysis. Additionally, we reference SMT studies and correlation ideas to
gain insights into market behavior and potential future trends.
PD Array Matrix
Define the market in terms of a Premium and Discount

Key Price Levels

In relation to the PD array matrix, we fine-tune and establish the significant
price levels. These key price levels are essential for realizing our trade ideas,
whether they pertain to entries or target objectives.
By systematically following these steps, we eventually arrive at a monthly
bias. This means we have outlined our expectations regarding the likely
direction of the monthly chart.

Even if you're not a long-term trader like ICT, it's still beneficial to go
through this process. Ideally, you should perform this analysis once a
month, preferably as soon as the previous month concludes.
What now?
After completing the monthly analysis and establishing our long-term bias,
we then transfer this information to the weekly chart. All the insights and
ideas are applied to the weekly chart, providing us with a more
intermediate-term perspective. This monthly analysis is usually sufficient to
determine a long-term bias.

To further confirm our ideas, we can consider factors such as inflationary

and deflationary conditions, as discussed in January. Monitoring commodity
prices is an effective way to gauge these conditions. If commodity prices are
rising, it indicates inflationary conditions, whereas falling commodity prices
suggest deflationary conditions. These conditions can significantly influence
overall market trends.

The goal is to forecast price action for the next three to four months. Once
we have the monthly bias, we can apply it to the weekly timeframe as well
to guide our trading decisions.

It's essential to be aware of seasonal tendencies before the start of each

month. Pay particular attention to the months that exhibit repetitive patterns.
Analysts like Steve Moore are valuable resources, especially for
commodities and currencies, as they have expertise in identifying these
tendencies. While seasonality isn't a guaranteed predictor of future price
movements, it aids in planning and anticipating potentially significant
market movements during specific times of the year.
To establish a primary range on the monthly chart, go back 18 candles
(months) and analyze the price movements during that period. This
historical data will help determine the primary range for your analysis.

Additionally, if the trend in the past 3 to 4 months has been unclear or

lacking a clear direction, you should anticipate a potential reversal in the
next 3 to 4 months. This approach can assist in identifying possible trend
changes and market reversals.

When forming a forex pair bias, it's beneficial to consider the interest rates
of two countries. Look for a country with high-interest rates and another
with low-interest rates. Pair these currencies together, and this pairing can
help establish a bias for your forex trading.
Ideally, your bias should align with both seasonal tendencies and quarterly
shifts, although this alignment may not always occur. Nonetheless, it's
essential to analyze all three factors to make informed trading decisions.

To make trading decisions, we examine the highs and lows of markets while
considering their positive and negative correlations, particularly focusing on
SMT divergence. If we notice a pattern where prices form a higher high
followed by a lower high and then another lower high, it likely signals an
intermediate or long-term high. This concept is fundamental and is part of
basic market structure education.

When we identify this pattern in market highs, indicating the possibility of

an intermediate or long-term high, we start looking for reasons to take short
positions. We consider various factors, including interest rates, quarterly
shifts, seasonal tendencies, and the current trend in market profiles.

Similarly, when analyzing lows, we might find that there's potential for
further upward movement. In such cases, we seek instances where seasonal
factors support this bullish outlook, along with trends in market profiles and
indications from quarterly shifts. Ideally, we also want to see SMT
confirmation.

It's important to note that if we have strong alignment in factors like market
structure, seasonal tendencies, quarterly shifts, and interest rates all
supporting one direction, we avoid trading against this trend. Even for short-
term trades (scalping), it's best not to counter the prevailing trend. Instead,
we focus on defining and trading within or outside established price ranges,
using them as references for our trading strategies.

The dynamics of markets can change significantly during extraordinary

events like wars or geopolitical crises. In such situations, traditional market
drivers may not apply as they typically would. For example, gold, which is
often considered a safe-haven asset, might not exhibit its usual behavior
during such times.

During war or similar crises, market sentiment can shift dramatically, and
investors may seek safety in assets like gold, which can drive its price higher.
As a result, gold may not align with its typical correlation to other market
factors.

In these exceptional circumstances, traders and investors need to adapt their

strategies and consider the unique dynamics created by the crisis. Safe-
haven assets may become more attractive, while other assets might
experience increased volatility and uncertainty. It's crucial to stay informed
about the geopolitical developments and their potential impact on financial
markets during such times.

The initial step in analyzing the market is to determine whether it's in a

consolidation phase. Consolidation typically marks the starting point for the
next significant price movement. Before a breakout occurs, there are often
signs of an impending expansion. In essence, traders should seek indicators
that support which direction the market is likely to break out, whether it's
upward or downward.

To gauge how far the price might retrace during a potential reversal, traders
can utilize the PD (Previous Day) array matrix. This matrix provides valuable
insights into potential retracement levels, aiding in the decision-making
process.

Typically, when conducting analysis on the monthly chart, traders will

examine data from the past 9 to 18 months. This historical data provides a
substantial timeframe for evaluating market trends and making informed
decisions.

To gain a clearer understanding of potential buying and selling levels,

traders should focus on identifying premium and discount arrays. These
arrays represent areas where significant market activity, such as buying and
selling, is expected to occur. By pinpointing these levels, traders can make
more precise predictions about market movements.

When analyzing the market, it's crucial to consider all relevant elements,
including time, price, and fundamentals. Fundamentals, especially interest
rates, play a significant role in shaping market conditions and should be a
key factor in your analysis. By blending these various elements, traders can
develop a comprehensive understanding of market dynamics and make
more informed trading decisions.
Aim for low hanging fruit.

Market structure involves the process of identifying and trading within

specific price ranges. These ranges can be used to assess both internal and
external liquidity in the market.

While it may sound complex, it becomes more straightforward as you gain

a deeper understanding of the concepts and factors that influence market
behavior.

If you find that certain aspects are unclear, it's essential to revisit and work
on those areas to enhance your understanding and trading proficiency.
Now, let’s apply this to the chart:

Expect higher prices in January, March and June.

In June, there is historically a bullish seasonal tendency, which means that
prices often tend to rise during this month. Additionally, there is the
potential for a quarterly shift, which could influence market dynamics.

Over the last 18 months, the market has generally exhibited a bullish trend
with some periods of consolidation. Importantly, higher lows have been
forming during this time, indicating that buyers are showing strength.

Furthermore, it's worth noting that discount arrays (levels where prices have
previously been discounted or undervalued) have been largely respected,
suggesting that these levels may have significance in the market's future
movements.

When the interest rates in Australia are higher than those in the United
States, it can create a yield attraction for investors. This means that investors
may find Australian assets, such as bonds or other financial instruments,
more attractive because they offer a higher yield or return on investment
compared to U.S. assets.
As a result, this could lead to increased demand for Australian currency (the
Australian Dollar) as investors seek to take advantage of the higher interest
rates and potential returns. This can contribute to the relative strength of the
Australian Dollar compared to the U.S. Dollar in the foreign exchange
market.

Back to the Monthly AUSUSD Chart

The market profile has been in a state of consolidation, which means it's
trading within a relatively narrow range. To determine whether it's likely to
break out upwards or downwards, we employ a method called intermarket
analysis. In this particular case, we focus on the dollar index.

Intermarket analysis involves studying the relationships between different

financial markets to gain insights into potential price movements. By
examining the dollar index, we can assess the overall strength or weakness
of the U.S. Dollar compared to other major currencies. This information
helps us understand how currency markets are reacting to various economic
factors, geopolitical events, and shifts in market sentiment.
If the dollar index shows signs of strength, it may suggest a higher likelihood
of the market profile breaking downwards. Conversely, if the dollar index is
weak, it could indicate a potential upward breakout for the market profile.

In summary, intermarket analysis involving the dollar index assists us in

predicting the direction in which the market profile may move, whether
upwards or downwards, based on the relationships between different
financial markets.

Dollar:

The U.S. Dollar has been experiencing a decline, and we need to determine
whether a quarterly shift will occur, causing it to rise, or if it will continue
to fall. To make this assessment, we also examine the market profile of the
dollar.

Before the most recent high in the dollar's price, there was a period of
consolidation. During this consolidation, the price broke above the
consolidation range and surpassed the equilibrium highs (EQHs). This
breakout could potentially be a stop run, and it's significant even on a
monthly basis. In this scenario, we anticipate that the dollar's price will
continue to move lower. This is because we had a failed break after the
consolidation, meaning that we broke on one side of the consolidation and
now expect the price to return to the consolidation range and possibly even
reach the lower end of that range, or at least the bodies of the candles within
it.

So, how does this information apply to the Australian Dollar (Aussie)?

In the case of the Australian Dollar (Aussie), we observed a higher low,

while in the U.S. Dollar, we witnessed a higher high. This divergence
between the two currencies, known as SMT (Smart Money Trend), is crucial
when considering market structure.

From a market structure perspective, this divergence indicates that there was
accumulation happening in the Aussie, meaning that buyers were becoming
more active and the currency was gaining strength. On the other hand, the
U.S. Dollar showed signs of a "turtle soup," which means that it appeared to
be heading lower but failed to do so, leading to a potential reversal.

In essence, this analysis suggests that the Aussie was strengthening, while
the U.S. Dollar was showing signs of potential weakness and a reversal in
its trend.
At the end of May, just before the start of June trading, we establish our PD
arrays. These arrays are determined based on the most recent high and low
in the market, which gives us a range to work with. Within this range, we
identify specific price levels that are significant for our analysis.

Within this range, we identify several key PD arrays, including a bullish

order block, a rejection block, and a liquidity pool below the low. These
arrays represent potential levels where price action may interact
significantly. It's important to note that not every price range will have all of
these PD arrays; their presence depends on the specific market conditions
and price movements.

Our bias for this scenario has come together rather quickly. Here are the
key factors contributing to our bias:
1. June Seasonal Tendency: Historically, June tends to exhibit a
tendency for prices to move higher.

2. Recent Quarterly Shift: Over the last three months, the market has
been moving lower, suggesting the possibility of a quarterly shift in
the near future.

3. Retracement into Bullish Order Block: During these three months of

downward movement, the market has been in a retracement phase.
Notably, this retracement has been occurring within a bullish order
block, which implies a potential upward price movement.

4. 18-Month Consolidation Profile: Zooming out to an 18-month

timeframe, we can see that the market has been in a consolidation
phase. Typically, above a consolidation range, there tend to be buy
stops, which can trigger significant upward momentum.

5. Rejection Block: Furthermore, there is a rejection block slightly to the

left on the price chart, adding to the confluence of factors supporting
a bullish bias.
Chapter 12.2: Intermediate Term Top
Down Analysis
Link To ICT Video

Starting a new trading week often involves assessing relative strength in the
market. This approach is valuable because, at the beginning of the week,
the monthly analysis might not provide a clear picture.

To prevent frustration or trading blind when the monthly analysis lacks

clarity, evaluating relative strength can serve as a helpful guide.

Let's take the example of the Australian dollar (aussie) as a case in point.
Ideally, the criteria established in the monthly analysis should align with the
findings from the weekly relative strength analysis.

This congruence helps traders make more informed decisions and provides
a sense of confidence when entering the market at the start of a new trading
week.
When transitioning from the monthly to the weekly analysis, it's
important to note that we introduce different elements into the
assessment. At the weekly level, we place more emphasis on considering
the opinions of other traders, moving beyond just technical analysis.
These opinions are weighed against the strengths and weaknesses
identified through relative strength analysis.

Once we've developed our watchlist and explored the Commitment of

Traders (COT) hedging ideas, we delve into market sentiment. This
involves gaining an understanding of the prevailing sentiment among
retail traders. A general principle is to often go against the consensus in
the retail trading world, as their behavior can be influenced by emotions
and herd mentality.

Additionally, we examine the weekly market profile, which helps us

determine whether the market is currently in a state of consolidation,
trending, or retracement. This multifaceted approach enables us to make
more informed trading decisions as we move from the monthly to the
weekly analysis.
As we transition from the weekly to a more detailed analysis, we continue
to consider market structure. However, at this stage, we introduce the
concept of institutional order flow, which becomes a significant factor in
our analysis. We pay close attention to the behavior of down-close candles
and up-close candles, which provide insights into institutional participation.

The principles we've established at the monthly level, including the concept
of Smart Money Techniques (SMT), remain relevant. However, our focus
now shifts to delving deeper into institutional order flow and sponsorship.
This involves a thorough examination of the order flow within the market,
helping us understand the dynamics of institutional traders and their impact
on price movements.
We continue with a similar approach on the PD array matrix at the weekly
chart level, just as we did on the monthly chart.

This involves breaking down the range defined on the weekly chart and
identifying any PD arrays that may not have been visible on the monthly
chart.

By defining the PD array matrix here, we lay the foundation for calibrating
our key price levels.

With the weekly bias established, we can then transpose this information to
the daily chart.

This step allows us to carry over our analysis from the weekly to the daily
timeframe, ensuring that our trading decisions are well-informed and
aligned with our bias at multiple timeframes.
Let’s take a look at the different topics, one by one:

We want to look for the strongest to trade them and the weakest to avoid
them or potentially form a forex pair with.

The Commitment of Traders (COT) report provides valuable insights into

market dynamics. Commercial traders, often referred to as the "smart
money," have the power to influence market highs and lows. By
understanding where these extremes are and what commercial traders are
likely doing, traders can identify a significant range for potential price
expansion, allowing them to capture substantial market moves in between.

The strategy involves using commercial traders to determine the high and
low ends of the range based on their extreme positions. Traders then focus
on trading in alignment with the large funds or institutional traders in the
middle of this range. It's important to note that commercial traders tend to
be accurate at calling the highs and lows of the market, which makes them
profitable. However, they can struggle at these extremes, where they often
face losses. Traders aim to identify when commercial traders are signaling a
potential market high or low and position themselves within the middle
portion of the range.

One key aspect is observing commercial traders buying when it may not be
immediately evident, such as when their positions are below the zero line
on the COT report. Additionally, analyzing the 12-month extremes and
dividing this range in half can provide valuable insights. For example, if
there is a significant number of net long positions in the soybean market
compared to other similar markets, it can indicate the potential for a
significant price move in soybeans. This approach helps traders navigate
market dynamics and make informed trading decisions.

Market sentiment reading involves monitoring emotionally charged

headlines and news stories like "Doom and gloom" or "Best bull market ever
seen." When such language becomes prevalent, it can shape market
sentiment. It's essential to check if market sentiment aligns with technical
analysis.

If technical indicators suggest one direction, but sentiment indicates the

opposite, there may be trading opportunities.
Same as on the Monthly.

First choice is always retracement and not reversal, since we dont pick tops
and bottoms.

Same as Monthly.
Incorporating institutional order flow, we pay close attention to premium
arrays breaking in bullish markets and discount arrays supporting price. This
aligns with SMT ideas, which involve identifying key levels where
institutional players make their moves.

We look for signs of institutional sponsorship and order flow alignment with
the prevailing market bias, helping us make more informed trading
decisions.

Break down the selected price range into Premium and Discount.
To summarize:

Now, let’s continue with the example from Chapter 12.1:

All the monthly PD arrays transposed to the weekly, that range is no longer
valid but we do use the old high as discount array
From a relative strength standpoint, without considering Smart Money
Tactics (SMT) or other factors, we observe weakness in the dollar and
strength in the Aussie. This straightforward analysis indicates a potential
trading opportunity based on the relative strength of these currencies.

All PD Arrays are now marked.

You can observe that in June, commercial traders were positioned above
our modified zero line, which represents the 12-month range of their
hedging program. This suggests they were buying in that region, and it
coincides with a 12-month extreme, occurring as the weekly Fast Vertical
Grid (FVG) closes in.

It's worth noting that open interest, the total number of open futures
contracts, significantly decreased during this period. ICT believes that this
data may have been manipulated to confuse retail traders.
Nevertheless, it's essential to understand that the law, specifically the
Commodity Futures Trading Commission (CFTC), requires reporting of this
information.

When commercial traders' positions are near the high or low extremes of
the range, it often indicates smart money's accumulation or distribution of
assets.

Perfect example of a headline we could use for sentiment

When these story lines starts building then we want to do the opposite.
Uninformed crowds follow these headlines like sheep, like slaves. All the
news events are there to build in sentiment, its conditional programming.
Market profile analysis reveals that we're currently within a more extended
consolidation phase. However, there are indications that suggest price is
poised for an upward breakout.

If this holds true, we should be expecting the profiling of a retracement. This

sequence involves an initial impulse swing, followed by a retracement, and
then an expansion swing.

Typically, the expansion swing extends beyond the range of the initial
impulse swing. In essence, market profile analysis helps us understand the
transition from retracement to expansion.

Next Chapter we transpose all the weekly stuff onto the Daily chart.

Notice how it is easy, its a process, we don’t do everything on one

timeframe.
Chapter 12.3: Short Term Top Down
Analysis – Daily to 4 Hour
Link To ICT Video

ICT follows a consistent trading plan without any secret tricks. His accuracy
comes from using the same setup repeatedly. However, he emphasizes the
importance of not forcing oneself to trade every day.

Instead, it's crucial to wait for specific conditions that align with the trading
plan. This patient approach contributes to his accuracy in trading.
On the daily timeframe, the first step is to look at the Commitment of Traders
(COT) data. By creating their own 0 line, which is derived from the highest
high and lowest low of the 12-month range, traders can determine the
bullish and bearish zones. Anything above this 0 line is considered bullish,
while anything below is seen as bearish.

Importantly, the daily analysis should ideally align with the bias established
from the monthly and weekly analyses. This alignment ensures a more
robust trading strategy that takes multiple timeframes into account.

For currencies, it's essential to refer to the futures contract for open interest
data. In the daily timeframe analysis, one crucial aspect is institutional
orderflow.

Traders should assess whether there is clear institutional sponsorship in the

market. Additionally, it's important to anticipate the likely weekly profile
based on the economic calendar.

If the initial analysis doesn't yield a clear picture, traders can make their best
assumptions and later correct them with reference to the economic
calendar.

Correlated assets and pairs should also be considered, along with the
identification of SMT divergences and other relevant factors. Traders should
start incorporating the use of breakers and mitigation blocks more heavily.

The focus should be on identifying overall bullish and bearish market

structures while maintaining awareness of institutional orderflow.

Once the daily bias is established, traders will know whether they should
be looking to buy or sell in the next significant market expansion. I
t's important to remember that banks often rely on the daily chart, making
it a crucial timeframe.

Finally, all the information and analysis should be transposed to the 4-hour
(4h) chart for more detailed planning and execution.

Now, let’s zoom in:

Commitment of Traders (COT) data is typically analyzed within the context

of a 12-month range. This means that traders look at data from the most
recent 12 months, going back in time to gain insights into market sentiment
and positioning.

Regarding ICT's statement, when he mentions being "below halfway," it

likely means that if the COT data shows that commercial traders' positioning
is below the midpoint of the 12-month range, he would be more inclined to
focus on scenarios where the market might move to the upside, aiming for
premium price levels.

This interpretation aligns with the idea that when commercial traders'
positions are relatively lower in the range, it may indicate that they have
been selling, and the market could be due for a move higher to reach
premium price levels.
Essentially, it's about understanding where commercial traders are
positioned within the 12-month range and using that information to
anticipate potential price movements, taking into account the market's
historical behavior based on their positioning.

In the weekly trading profile, a typical scenario often involves a focus on

Tuesday through Thursday as the most significant part of the trading week.
When the market sentiment is bullish, traders may anticipate that Tuesday
will likely be the low point of the week, and Thursday will be the high point
of the week. Mondays and Fridays are often seen as consolidation days.

Conversely, in a bearish week, the expectations may be reversed, with

Monday being the high point and Thursday as the low point. While this
pattern doesn't occur every single week, it provides a framework for
adopting bullish and bearish scenarios.

As a result of this, ICT tends to be cautious on Mondays and prefers to

concentrate on the Tuesday-through-Thursday portion of the week, where
the bulk of the potential price movements often occur.

To prepare for the trading week, ICT suggests starting during the weekend
by examining the economic calendar and assessing which economic events
and sessions are likely to drive liquidity and market manipulation. This
analysis helps in aligning with potential market profiles for the week.
Additionally, traders look at the Sunday opening price and compare it with
Monday's Midnight opening. This allows traders to establish two opening
prices for the weekly range.

When the market sentiment is bullish, traders ideally want to see the price
trading below the opening prices and possibly into a discount array during
the early part of the week. This is done to align with the overall bullish bias
and anticipate potential price movements accordingly.

SMT divergence from daily going to 4h because thats where its most
effective.
On the daily timeframe, traders focus more on identifying breakers and
mitigation blocks than on other timeframes. Recognizing the presence and
location of these breakers and mitigation blocks can provide valuable
insights into where the next intermediate price swing may occur.

As traders analyze historical price action, they often observe a transition

from bullish breakers to bearish breakers and vice versa. The critical area of
interest is the price movement that takes place between these breakers. This
"meat in the middle" of the transition is where traders aim to participate
actively.

Knowing the locations of these breakers allows traders to make more

informed decisions about their trading strategies and anticipate potential
price movements with greater confidence. It's a valuable tool for traders to
navigate the markets effectively.

Being bullish on a market doesn't necessarily mean that traders should buy
every single day. Instead, it involves identifying specific times and price
levels when the market reaches a discount array. This should ideally
coincide with a manipulation driver event on the economic calendar.

It's crucial for traders to thoroughly study all the available content and
educational materials to gain a complete understanding of this approach.
Comprehension comes through self-study and exploration, as there is no
substitute for learning the intricacies of trading without hand-holding.
Chapter 12.4: Intraday Top Down
Analysis – 4H to 5M
Link To ICT Video

ICT follows a consistent trading plan without any secret tricks. His accuracy
comes from using the same setup
The choice of which timeframe to use after the 4-hour (4h) chart should be
a personalized approach for each trader. While the 1-hour (1h) chart is a
good option, it may require further refinement.

In ICT's approach, he typically transitions from the 4h chart to a 30-minute

(30m) or 15-minute (15m) chart, and ideally down to the 5-minute (5m)
chart if possible. He often looks for setups and executes trades on the 15-
minute chart as a minimum, with the 5-minute chart being the best for fine-
tuning entries.

The key consideration is to find a timeframe below the 4h chart that exhibits
clear First-Visit Goals (FVGs). While the 1h chart may sometimes be unclear
or "muddy," the 15m chart may offer clearer FVGs. This allows traders to
select their Price Distribution (PD) arrays on the 15m chart for more precise
analysis and decision-making.
An essential aspect of effective trading is ensuring that the Standard
Deviation (STD) overlaps with a Price Distribution (PD) array. This blending
of STD and PD arrays is crucial for making informed trading decisions.

The PD array matrix is a fundamental tool in this process, and understanding

and using it consistently is key to achieving trading success.
When adopting a bullish stance, the ideal scenario for going long is to enter
below the Asian range low. However, as long as the price remains below
the Asian range high, high probability long trades can still be considered.

On the other hand, if you have a bearish bias, the preference is to go short
above the Asian range high. Nevertheless, as long as the price stays above
the Asian range low, it is still seen as a high probability short opportunity.

In some cases, the price may retrace to the Asian range high during the New
York open and then proceed to trade higher.

For a highly accurate prediction of the high or low of the day, it's beneficial
when both Asian range projections and Central Bank Daily Range (CBDR)
align with a Price Distribution (PD) array.

The "flout" refers to a concept that combines the Central Bank Daily Range
(CBDR) and the Asian range, including their highest high and lowest low
levels, and then divides this entire time window in half. It considers both
the wicks and the bodies of candles to define this range.

Unlike the CBDR or Asian range, there are no strict rules for determining
the specific range of the flout. It can encompass various Standard Deviation
(STD) levels and may not follow a fixed pattern like the other range
concepts. If you're unsure about the concept of flout, it's recommended to
revisit the lesson that chapter it for a clearer understanding.
This approach allows us to predict whether there will be reversals or
continuations during the New York session.

As long as the New York Open (NYO) doesn't trade into a 4-hour PD array,
we anticipate that both the London and New York sessions will align with
each other and that New York will follow the High Time Frame (HTF) bias
and momentum. This helps in making trading decisions during the New
York session.

Once we've identified the specific market structure range we want to focus
on for our trade ideas, whether it's for internal range liquidity or external
range liquidity, the next step is to calibrate the key price levels within that
range for the PD array matrix.
The 1.27 and 1.62 levels alone don't carry much significance, but when we
see them overlapping with a PD array, along with the CBDR, STD, Asian
range STD, and flout, we can achieve a high level of accuracy.

This comprehensive approach allows us to anticipate price movements and

aim to get within 10 pips of the high or low. Keep in mind that projections
are not absolute guarantees, but rather helpful tools when used in
conjunction with other factors.

If the ADR is broken, indicating a larger range day, we can determine the
extent of that range by referring to the STDs and looking for their alignment
with a 15-minute or 1-hour timeframe PD array.

It's advisable to exit trades about 10 pips before the projection point.
In trading, it's essential to have a clear understanding of the following stages:
HTF (Higher Time Frame) directional bias, setup identification, and
execution.

While execution has been covered in previous mentorship sessions, the

focus here is on setup identification, specifically the two setups that ICT
trades.

These setups are the core of his trading strategy, and he emphasizes the
importance of finding one pattern that suits your trading style and sticking
with it.

ICT primarily relies on two setups, which are ICT stingers, reflection
patterns, and Oro patterns. These patterns have been discussed in his free
tutorials and on YouTube, but ICT cautions that you don't necessarily have
to use these specific patterns to be successful.

There are other patterns that can work as well. The key is to find a pattern
that resonates with you and practice it consistently to build confidence and
measure your trading consistency.

It's not about constantly changing strategies but rather mastering one pattern
and sticking to it.
Let’s look at some entry patterns:

ICT Bullish Pattern #1, also known as the fair value play or OTE (Optimal
Trade entry), is a setup that ICT employs in his trading strategy. This setup
is characterized by several key elements:

1. OTE Condition: The setup occurs when the price reaches an area referred
to as the " Optimal Trade entry" or OTE. This typically represents a
retracement from a recent impulse move.

2. FVG Overlap: One of the essential criteria for this setup is that the OTE
level should overlap with an FVG (Fair Value Gap). This confluence adds
strength to the setup.

3. Short-Term Low: There should be evidence of a short-term low forming

within the OTE area. This low indicates a potential turning point in the price.

4. Bullish Orderblock: The setup is further validated if the price starts to

move back into a bullish orderblock.

When these four conditions align, along with a bullish bias on the higher
time frame (HTF), it suggests a high-probability bullish trade. This setup falls
into the category of internal range liquidity range expansion trades.
In simpler terms, it involves entering a long position within a price range
(internal range liquidity) with the expectation that the price will eventually
break out of this range and target external range liquidity.

ICT Bullish Pattern #2 is referred to as a "Turtle Soup" or external range

liquidity setup. Unlike the fair value setup (ICT Bullish Pattern #1), this setup
is designed to identify opportunities in the market where a bullish move is
anticipated through a specific pattern. Here are the key characteristics of
this setup:

1. Fake Low: The setup occurs when the price creates a fake low. In other
words, it tricks traders into thinking that the market is heading lower when,
in fact, it's poised for an upward move.

2. Price Above Discount Array: The price should be trading above the
discount array. This implies that there's a level of support or demand just
below the current price, which can act as a catalyst for a bullish reversal.

3. Killing Early Bulls: The setup aims to catch traders who have entered short
positions prematurely, thinking that the market will continue to decline. By
reversing these early bearish positions, the setup generates buying pressure
that can lead to a bullish rally.
4. Patience: This setup requires traders to exercise patience. Rather than
rushing into a trade, it's important to wait for the specific conditions outlined
above to materialize.

Turtle Soup setups are characterized by their ability to exploit false market
signals and trap traders who are on the wrong side of the market. The name
"Turtle Soup" reflects the idea that the market is preparing to "eat up" those
who have taken bearish positions too early. This setup is one of the strategies
ICT uses to identify potential bullish reversals in the market.

ICT Bullish Pattern #3 is a setup that traders can use when they miss the
Turtle Soup entry or are looking for an alternative entry strategy. This setup
involves waiting for specific conditions to be met before entering a bullish
trade. Here are the key components of this setup:

1. Rally Above Short-Term High: The setup begins with a rally in price that
takes it above a short-term high. This short-term high now becomes a
significant reference point for traders.

2. Bullish Breaker: The short-term high acts as a bullish breaker. In other

words, it represents a level where traders are looking for bullish
opportunities. When the price retraces and reaches this breaker level, it
becomes a potential entry point.
3. No Return to Lower Low: A crucial aspect of this setup is that the price
should not return to the lower low formed before the breakout. This
condition ensures that the bullish momentum remains intact.

4. Absence of Retracement into Orderblock: Typically, there should be no

retracement down into an orderblock located below the breaker. This
indicates that the price is holding above key support levels.

This setup is designed to capture bullish momentum following a breakout

above a short-term high. Traders can wait for the price to retest this level as
support, providing them with a potential entry point for a long trade. It's an
alternative approach for traders who missed the Turtle Soup entry or prefer
a different way to enter bullish positions.

Imagine you're looking at a 4-hour chart. Within a specific range on that

chart, you can identify lower timeframe patterns related to internal range
liquidity or OTE (Order to Execute). These patterns aren't as clear on higher
timeframes, but on lower timeframes, they manifest as OTE setups. In such
cases, traders aim to enter positions within a lower timeframe bullish
orderblock or discount array, aligning them with a bullish breaker from the
higher timeframe. This means there will be nested lower timeframe
orderblocks or discount arrays within the higher timeframe bullish breaker.

These patterns are universal, applicable across all timeframes. When

observed on a higher timeframe, traders start breaking them down into
lower timeframes to identify fractal patterns.

Once these patterns have executed and triggered stop runs, they usually
don't revisit discount arrays below the breaker level. In essence, two
primary patterns are discussed: external range liquidity (Turtle Soup) and
internal range liquidity (OTE).

Traders maintain contingency plans for both patterns. They either engage in
internal range liquidity OTE setups, known as fair value plays, or external
range liquidity runs, similar to Turtle Soup. If they miss the Turtle Soup entry,
they wait for price to reach the bullish breaker level, providing a clear
structure for entry. These two patterns primarily cover the buy-side setups.

A crucial point is that traders must witness these specific patterns in the price
action. If the patterns aren't evident, it's best to avoid trading. Target levels
are determined using Average Daily Range (ADR) projections.

Flexibility is key, as no single method fits all situations. Automation of these

strategies is limited due to the complexity and need for contextual
understanding. The human element, providing narrative and context behind
each trade, plays a vital role.

To sum it up, traders focus on three key criteria and two primary patterns.
They have plans for buying, selling, and dealing with situations when they
miss an opportunity. These concepts are mainly designed for the buy side,
with the sell-side strategies yet to be covered.
ICT's preferred bearish pattern is characterized by price exceeding a short-
term high and then moving into a Fair Value Gap (FVG) and a bearish
orderblock. This setup represents a potential opportunity for a bearish trade.

The second bearish pattern identified by ICT is related to what he calls a

"Turtle Soup" sell setup. In this scenario, many traders may be chasing the
price upward, but traders following this approach wait for specific
conditions to be met before considering a bearish trade.

The key to identifying this setup is a solid understanding of the PD array

matrix for the timeframe being analyzed.

This setup typically occurs during a "killzone," which refers to a specific

time period when price movements are anticipated. For example, if the
London session shows consolidation, and a significant news event occurs
during the New York session, this could contribute to the formation of a
Turtle Soup scenario.

The key takeaway is that this pattern involves blending various factors,
including the PD array matrix and the timing of trading sessions, to identify
potential bearish trading opportunities.

The third bearish pattern presented by ICT comes into play when traders
miss the Turtle Soup setup. In this situation, traders focus on the breaker
level, which has already served its purpose in the market.

The expectation here is that the breaker level should hold as a significant
level of resistance.

It's important to note that in this scenario, traders should not anticipate a
return to the Order to Execute (OTE) level all the way back to the highest
sell level.

Price movements are typically limited by the breaker level, preventing it

from reaching the deepest sell level.

This strategy involves being attentive to the breaker's role and its impact on
price behavior.
The core of this trading approach revolves around two primary patterns:
internal range liquidity (including fair value and OTE) and external range
liquidity (which encompasses turtle soup and running out stops). While
these patterns may go by different names, they essentially represent the
same concepts.

Understanding and successfully applying these patterns requires a

comprehensive grasp of the PD array matrix, starting from the higher
timeframes (HTF) and drilling down to the lower timeframes (LTF). It also
necessitates a deep comprehension of institutional order flow. Relying
solely on rule-based ideas is insufficient, as this approach emphasizes a
more holistic understanding of market dynamics.

When approaching the charts, ICT's initial question is often, "Where are the
breakers?" Losses, while inevitable, can provide valuable insights into
market behavior and direction. It's essential not to resist these losses but to
learn from them and adapt your trading strategy accordingly.

Conclusion
The material covered in these four chapters may seem extensive at first, but
in reality, it's not as complex as it appears. With just a few minutes of study,
you can start forming a clear understanding.

You now possess all the essential components to create your own trading
plan, with ICT having shared his own trading plan. There are no hidden
teachings or secret knowledge waiting in the future. This is the entirety of
what ICT knows and practices. While there may be additional specialized
topics that ICT wishes to explore, this foundation provides a limitless
framework for your trading endeavors.