ICT Mentorship: Month 2 Overview

Topic: Growing Small Accounts Without High Risk

Key Points to Avoid:

• Avoid Rushing for Massive Gains: Don't chase massive gains in pips or percentage returns. It's not about how many pips you have; it's about consistent wealth building.
• Avoid Large Risks for Large Returns: Large risks aren't necessary to make money. This is a common misconception for new traders.
• Small Risk Trades Can Grow Accounts: Small, defined risk trades can grow your account over time through compound interest.
• Risk Management: Avoid sacrificing trading equity due to poor planning. Aim for consistent, low-risk models.

Important Risk Parameters:

• Low Risk Per Trade: Aim for setups with well-defined risks, ideally 2% or less.
• Reward to Risk Ratio: Seek trades with a 3:1 reward to risk ratio or higher for profitability.
• Respect the Risk: Focus more on potential losses than potential gains to avoid greed-driven mistakes.

Strategic Approach to Trading:

• Compound Interest: Understand that time is the key to growing small accounts using compound interest.
• Realistic Performance Expectations: You don't need high accuracy to be profitable; focus on high reward to risk ratios.
• Performance Example: A 50% increase in one month is possible but not a standard expectation.
  • Use selective setups for big reward to risk ratios.

Practical Application:

• Focus on 6% Monthly Growth: Achieve 6% growth per month to double your account annually.
  • Requires only 20 pips per week with 1.5% risk and a 1:1 ratio.
  • Example Strategy: Use daily order blocks and fair value gaps to identify opportunities.

Example Trade Setup:

• Order Block Strategy:
  • Identify daily chart order blocks and wait for price to return to these levels.
  • Look for confirmations on lower timeframes before entering trades.
  • Map profit-taking levels before entering trades.

Scaling and Managing Trades:

• Graduated Exits: Scale out of trades at logical levels to secure profits.
  • Example: Take partial profits at various multiples of the original risk.
• Risk Management: Maintain stops at breakeven after securing initial profits.

Long-term Growth Potential:

• Consistency Over Time: Using small, consistent growth can lead to substantial equity increases over years.
  • Example: $1,000 can grow into over $1 million in 10 years with disciplined compounding.

Conclusion:

• Focus on Consistency and Low Risk: Aim for low drawdowns and avoid overtrading.
• Future Lessons: Upcoming teachings will delve deeper into trade ideas and scenarios to further build equity and grow accounts.

These notes summarize the strategies and principles discussed in the second month of the ICT Mentorship program, focusing on trading with small accounts and low risk.