What is the strategy for trading ICT?
Th is method, which is based on the structure of the market, can be used to explain the presence of institutional traders in the market. Investors can avoid falling into the retail trading trap of
losing money as a result.
Bigger players in the financial market must place orders before changing the price in any way. During the order-building phase, the price broke through near-term supports and resistances,
remaining within a correction. In contrast, when the price is ready to move, it will indicate which candle the order flow began. In addition, the financial market follows a sentiment that begins
with the Asian range during 24-hour trading. Traders can determine the intraday price sentiment and profit by placing trades at the optimal level based on this behavior. The New Work Move and
the London manipulation complete the circle later.
How to trade ICT trading strategy Concept ?
The ICT concept is the foundation of several trading strategies; However, swing trading with an emphasis on longer time frames and intraday trading is more profitable than other types.
In swing trading, we will use the daily or H4 order block to choose the best trading position and use the order flow on the weekly chart to open buy or sell [Link] intraday strategy, on the
other hand, determines the best trading entry after the London manipulation is finished.
A short-term trading strategy
Following the London manipulation, the short-term strategy seeks to identify the optimal trading entry's buying and selling positions.
Bullish trade scenario:
Once the daily trend is bullish and the current price remains within the
weekly order flow, the bullish trading entry is valid.
Entry
Once these conditions are met, the intraday buy trade is valid:
[Link] the higher time frame chart, the price is trading within the order flow.
[Link] the daily chart, the closing price of the previous day appeared to be
above any significant support level.
The price reached the optimal level the following day, following a London
3.
manipulation known as the Asian range.
At the optimal areas order block, where the bullish entry is valid, the price
4.
formed a bullish reversal candle.
STOP LOSS Please set a stop loss that is lower than the reserve swing low of
the best trading area with some buffer.
Take profit:
The primary take profit will be the swing high in the near future, but
investors should look for bullishness in the higher time frame order floor.
Profit can be extended if the section-specific longer time frames permit the
second take
HOW TO TRADE USING
ORDERBLOCKS
First stage is identifying your higher time frame directional bias. Whether
you are looking for intraday or Swing entries you still need to understand
which way the market is moving for the pair that you are focusing on.
Essentially you want to identify Order blocks from weekly down to the
hourly and work off there. However, the more experience you gain, you may
find that you can trade intraday moves by having a short term directional bias
from lower time frames and finding entries on an even lower time frames.
Either way, the concept is exactly the same.
From above we can see a clear break of structure, this is the first thing we
look for before looking for OBs. Reason for this, we want to find the candle
that created this move, this candle is our OB. The OB is generally the last
opposing candle before the move. So if its a bearish break, the OB is a
Bullish candle. However, we need to understand what kind of BOS we look
for and how to refine our OBs.
HOW TO REFINE ORDER
BLOCKS
There are a few ways to refine the OB. The easiest would be moving left
from the OB until you find the candle before the impulse which is still within
the OB candles range. Example:
As we can see above, the black candle following the OB hasn't overly moved
or broken the range of the OB. This is now our refined OB. You can do this
on all time frames.
Alternatively, you can locate your OB, and you can refine down the time
frames and find a clear open OB within the OB.
So here on the left, that big blue candle is our OB, however within that candle
on a lower time frame, there is a clear OB and this is now our refined OB.
You can go down by as many time frames as you like.
TIP: If you are happy with the RR from a particular time frame OB, then
Simply use that one. Don't get greedy and don't use lower time frames if it
makes you anxious.
UNDERSTANDING BREAK OF
STRUCTURE (BOS)
There are two types of BOS, we prefer a full body break. This is very simple
to understand as shown below:
HOW TO TRADE USING
ORDERBLOCKS
Saferentry
Identify your Point of interest on the higher time frame. In this example it
was the hourly, however as mentioned, this concept can be applied to any
time frame. The higher time frames such as 4 hourly or daily are more more
swing entries with hourly and lower being intraday.
So here we can see our higher POI.
Now from here, you can look deeper into that OB so you have an idea as to
where price could potentially go before reversing. Once you find your OB,
you can set an alert at the Open of your OB. This frees up your time, meaning
you dont need to sit and stare at the screen.
The reason we trade is to for our free time, so why waste time staring and
waiting.
Once price taps your higher time
frame OB, go to a lower time frame.
This is up to you and what you are
comfortable with, some prefer 1 min
some prefer 15 min its up to you.
But what we look for is a BOS and
an OB on the lower time frame.
Once we find our OB we set a limit
order at either THE OPEN of the
OB or 50% of the OB. This again is
up to you.
So here we can see a clear BOS and
a clear OB, so we can now set a limit
order on this OB
Once we set the order and set our target to our higher time frame High in this
example.
The benefit of using a safer entry
over a risk entry:
· More confirmation for the trade · May get a better RR for the trade
Cons:
· More time consuming
· Sometimes it may not form a BOS on the lower time frame and price may
just shoot from the higher time frame OB. So you may miss trades.
This method is very simple. Once you locate your Higher time frame OB,
you simply go down the time frames till you find an OB within the higher
time frame OB which is clear. Once you find your OB, mark it out. Use an
OB which gives you and RR you are comfortable with.
Same as before you can set a limit order at the OPEN or the 50% mark of the
OB with your stop loss below the low of the OB or the overall low and target
the recent high or low depending on if you are buying or selling.
With this style of entry, it is of course riskier. This method is ideal when
there is high momentum in the direction you are aiming for. If its more within
a consolidation period, it is not worth trying a risk entry.
Either way you go about, you get similar results and its all dependent on your
risk appetite and how you are comfortable trading. Trading is personal to
you, you dont
need to follow what everyone else is doing. You need to what you are
comfortable with doing and how you are happy about going about it.
Lets have a look at some examples
EXAMPLE 1
GBPNZDRISK ENTRY
15MIN BOS and OB
15
SECOND REFINEMENT
Swing High And Swing Low
At the point when we discuss the ideas swing high and swing low, with a
particular goal in mind we are referring to a candle pattern likewise called a
3-bar swing, yet all not about seeing a pattern while perhaps not tied in with
understanding the directional predisposition in the organization of these
patterns and that in the end will help us not to open or make activities where
they are not
There is, which is one of the most widely recognized mistakes made by
traders. With this picture you see more
obviously where we distinguish these patterns:
We really want to search for 3 candles that are either swing high or low
regions (swing low). The color of the candles doesn't make any difference,
but the patterns they have
Formed, for example the high/low and the closes of the candles:
To approve these
patterns we really want to see the close of the third candle, which is the one
that
will affirm the pattern and notify us that it very well may be a change of
address
in the price, obviously, depending upon the time span that we are examining,
since that the swing high and swing low are legitimate in any fleetingness.
For instance, if
structures a swing high on a 1 hour chart, it implies that the price could
follow going down on an intraday.
Basically, both the swing high and the swing low are denoting our fractality
of the market or on the other hand assuming that we contrast it and the idea
of Elliott wave hypothesis we
it says that one wave is finishing to shape the next, as per the time frame.
PATTERN VALIDATION
The swing will be substantial the same as the price doesn't break the high/low
of the third candlestick.
We should check the following example:
We consider these patterns as an idea of outside liquidity since they are
structure in significant areas of liquidity making an reversal or potential
waves
remedial, on the grounds that another fractal is expected. For instance, if it is
a bullish trend, each time we find a swing low, the price would show that the
fractality proceeds with bullish and that the restorative movement could be
finished.
Definitely you have heard when the cost has made a "swing", this alludes to
that the price has taken a full impulsive move(up or down), or we can
likewise say that it has made a fractal, see in this bullish example as
the price has let you know when the force starts and when it closes,
additionally when
closes the correction of said drive:
Types of Trend and Forms of
Accumulation
As a forex traders we must know clearly what type of action we are going to
take according to our trading style.
We have three types of trend based on price action: bullish, bearish, and
sideways as we already know:
a) Normal Upward Trend: rises in a stagger pattern with good harmony of
the price.
b) Lateral Trend or Consolidation: It remains in a price range for a good
weather, until the price breakout or imbalance occurs. Here it is where we
traders want to position ourselves in advance.
c) Downtrend: price correction is seen after having remained in a
distribution area.
Types of Trend for Smart Money
We also have the 3 types of trend for Smart Money, which are related with
the graphic temporality:
1. General: macro trends (biases), seen on daily, weekly and monthly charts
2. Intraday: Which involves all hourly charts
3. Momentum: Which Involves all minute charts
It will be very important to know how to identify trends depending on your
style of trading.
Forms of Accumulation
Keep in mind that this module will cover a pretty wide range of price
structures. Recognizing trends first will always be a part of the initial steps:
generally speaking, time and directional trends before you open positions.
In any case, a lot of traders sometimes don't know how to tell when
institutional traders are placing orders from retail dealers and the price isn't
moving in a reasonable direction.
In order to comprehend what the market ought to do and where the price
could be controlled to obtain the liquidity it requires and move in the
direction that the institutional needs, we will observe the primary
accumulation structures that the price will form.
There are three main types of accumulation, which means being able to tell
early on what kind of accumulation structure the price is encouraging because
we can make choices ahead of time.
1. Lateral accumulation range. It is clearly one of the ways most common
accumulation that exists and it does so laterally:
2. Channel accumulation range. This collection structure is distinguished
on the grounds that it forms a channel, either rising or falling, and should not
mistook for an impulse, let's see examples:
3.
Accumulation in the form of a diamond.
This sort of collection frames a pattern with a diamond shape, which if found
inside the order flow of an uptrend gives superb outcomes. You can likewise
known a flat example of pattern continuation from the hypothesis of Elliott.
These equivalent patterns will present themselves similarly in a bearish trend,
that is to say, types of distribution and we need to distinguish them as it were
convenient.
Understanding Fractality And The
Valid Fractal
Fractals are one of my #1 ideas, I have read up them for quite a while and I
think
that concentrating on them is a way for understanding what the market is
doing truly as indicated by the structure of the trend.
Maybe you as of now have insight with fractals, or maybe you have never
utilized them, however it is
vital to work in light of them, so I make sense of exhaustively what it
comprises of, how to use and figure out them. One might say that the fractal
is the fundamental construction of the market and the way of behaving of
market members.
What is a fractal?
The term fractal comes from the Latin "fractus" and implies divided or
broken. A fractal is an item whose construction is rehashed at various scales,
or at least, for much that we approach or create some distance from the
article, we will continuously notice something similar
structure or we can likewise say that a fractal has duplicates of itself inside
itself. This might appear to be a piece confounding, however you can watch
this video where it just makes sense of how we track down fractality in
nature. the maker of the fractal math was Benoit Mandelbrot and you can
concentrate on a piece of his life story here.
Albeit this theme is fairly mind boggling and has a wide field of study, here I
in particular center with regards to exchanging. In this way, fractals exist in
nature and obviously likewise in the business sectors.
monetary. Many can't help thinking about why, however the monetary
business sectors are dependent upon these equivalent laws of nature because
of their turbulent properties, it is that is, they display erratic or clearly
arbitrary way of behaving.
Markets are a fierce framework delivered by the connection of individuals or
of the majority, consequently, it turns into the ideal spot to look for fractals
and our
work as experienced merchants is to comprehend the fractal structure that
produces the way of behaving or development of the price, for what? To see
the example, request it and have the option to project where the price can go
with better lucidity, where some as it were
they would see disarray.
Thus, there are two methods for perceiving fractals on the lookout:
1) The fractals will be those arrangements that are rehashed in the market in
the various transiences, or at least, a similar example development ought to
exist in
different time periods, or in a similar time span, however time then, for
instance, you can see this examination between the Ethereum fractal of the
last quarter of 2017 and a similar time span of 2021, are practically the same.
You can see the outline here.
Another model, where the gold development of the year 1970 was contrasted
and Bitcoin in
2021, a fundamentally the same as fractal can be noticed.
2) A fractal is likewise a grouping of maxima and minima that structure a
pattern. We'll see this in more detail, yet essentially every time the price
surpasses its past greatest (bullish) or its past least (bearish), it is finished
a fractal.
The main researcher and maker of the fractal marker was Bill Williams and
furthermore engineer of different pointers, for example, Croc, MFI or Market
Help Record,
Amazing Oscillator, which by the way is one of my number one oscillators,
among others
pointers. Bill had the option to nail down the hidden construction (fractal) of
the rush of
Elliott:
As you
can see Elliott waves have more modest fractals inside their fractals and this
will be noticed in the event that you change from bigger realistic transiences
to
the minors. Along these lines, to perceive market structures, we should learn
to distinguish the fractals and what data they leave us.
The mystery is first to dominate when the market is moving, when it is a
fractal in line and when it is a fractal shaped. For this we initially need to
have completely dominated the acknowledgment of the structure s and
patterns of the market.
As it were, some information on Elliott waves can be extremely useful.
utility, as an enhancement to assist you with perceiving structure s and
patterns of the
market. In my extremely private case, I committed a ton of study to this
hypothesis, notwithstanding,
with the plenty of calculations working the business sectors made by
physicists,
mathematicians, lenders and software engineers, do a specialized
investigation based simply in Elliott waves, I think it is all the way not
feasible to keep counts of all
the waves, when absolutely the market will move by liquidity and as
indicated by the necessities of liquidity suppliers. Where the liquidity is, there
will go the price. That is the reason I feel that Elliott waves can assist us with
somewhat more than conviction to distinguish waves in huge transient cycles
or large scale transiences, for example, we saw before, in our general
predisposition.
Sorts of Fractals available
Involving fractals for price examination, we have two sorts: the bullish fractal
and the bearish fractal:
BULLISH BEARISH
The bullish fractal is a grouping of record setting paces all around and the
bearish fractal is not set in stone by endlessly worse high points and lows.
Inside a fractal generally there will be a miniature fractal, which should be
visible in little transiences.
To decide the heading of the fractal, for instance, a bullish one, we need to
hang tight for the principal swing or first bullish drive with its separate
difficulty that can be half to 88% of past bullish force, at generally close to
100%
When affirmed that the swing is bullish, on the grounds that it broke the past
high,
we need to consider just buys, clearly after difficulties, never we ought to
ponder taking part in breakouts.
On the off chance that it remembers over 100 percent of the past energy, it
wouldn't be a fractal
bullish, on the off chance that not a bearish one, which will likewise must be
affirmed.
We should take a gander at certain instances of bullish and bearish fractals on
genuine outlines with the goal that you would be able
be much more clear.
In the accompanying picture, we can see the price came from a bearish
fractality,
since he was making endlessly worse high points and lows, until the price
has force that figures out how to break out of the bearish fractality by making
a higher high
than the past ones, then we have that there is a fractal in line.
This is a
fractal in line since we don't have the foggiest idea yet assuming the price
will keep on falling or on the other hand if needs to roll out an improvement
of fractality. At the point when the price makes a retracement it doesn't go
past 100 percent of the past energy and keeps on rising, breaking the last
greatest, we can say that the fractal has been affirmed and is bullish:
The fractal will be affirmed when the price breaks over the past high and
afterward
we might be confronting an adjustment of the fractality of the construction
and as a result,
the following retracement ought not be not exactly the last low:
After recognizing that a bullish fractal transforms into a shaping fractal, we
will recognize that the subsequent developments will follow a vertical
pattern. Regardless of what you do immediately, you will experience
increasingly elevated ups and downs. Therefore, our primary objective is to
distinguish fractals in order to identify pullbacks and trade with minimal risk
and significant rewards.
Simply put, the same holds true for a bullish-bearish pattern. standards, so we
should figure out how to always tell the Valid fractals apart and follow the
market's direction, but most importantly, don't enter before it's time to
advertise. Checking a pattern out fully (in general predisposition) on a dayto-
day and week-to-week basis is one way to learn how to dominate fractals. We
should trade with less transience in misfortunes when the weekly trend is
bullish. As shown in the Elliott wave plot, the fractals will rehash much more
quickly, creating miniature fractals.
You can practice by looking at various digital money matches or any other
financial resource like a schematic, which will help you understand the
market's fractality. We will later figure out how to adjust transiences, which
will support the implications of miniature fractality for full scale fractality as
value shifts. In this model with Bitcoin, you can see the large scale fractality
and the miniature fractality,
They let us know when a pattern or market structure begins to change:
Valid
Fractal
In the event that we don't dominate fractality we will basically be lost on the
lookout, so
that when I allude to a substantial fractal we are discussing two sorts of
schematic or examples that we should recognize in the value development of
a
straightforward way and initially
1. Valid bullish fractal: it will leave us with a plan like the accompanying,
where the price
after the retracement we will make another greatest:
2. Substantial bearish fractal: it will leave
us with a plan like the example below, where the price
after the retracement we will make an extraordinary failure: We will affirm
the two kinds of fractals with the subject that we will see straightaway.