Overview
In this podcast episode, a verified 8-figure trader explains his framework for trading forex and cryptocurrency using simplified ICT (Inner Circle Trader) and smart money concepts. The discussion focuses on core price action principles, systematic entry/exit approaches, and practical examples applicable across asset classes.
Key Trading Concepts Explained
- The strategy is based on market structure, trend identification, and high-probability trading zones.
- Three basic price directions: uptrend (higher highs/lows), downtrend (lower highs/lows), and sideways (consolidation).
- Use two time frames: a higher time frame for analysis (e.g., daily/weekly) and a lower one for trade execution (e.g., H1/M15).
- Market structure is determined with a three-candle swing high/low method.
- Points of Interest (POIs) include order blocks (OBs), breaker blocks, and fair value gaps.
- Liquidity concepts: external (outside range) and internal (within range); market moves from liquidity point to point.
- 'Draw on liquidity' refers to price moving toward the next likely liquidity pool.
Practical Application of the Framework
- Identify market structure break to define trading range from swing low to high.
- Locate the order block responsible for the new high/low—the preferred trading zone.
- Optimal entries are near higher lows (uptrend) or lower highs (downtrend) within the order block for best risk/reward.
- Zoom into the lower time frame inside the high time frame OB to refine entries and stops using patterns like breakers.
- Valid trades require at least a 2:1 risk/reward ratio; multiple attempts may be necessary due to false signals.
Tips and Additional Insights
- Use confluences (multiple supporting factors like higher time frame alignment or cross-market analysis) for higher probability trades.
- Dynamic position sizing is encouraged when high confidence setups occur or volatility shifts.
- System is mechanical but requires discretion and adaptation for different assets and market conditions.
- Regular practice and pattern recognition (chart time) essential for effectiveness.
- Framework works across all asset classes and time frames, not limited to crypto.
Pros and Cons of the System
- Pros: Simple, clean charts, combines key price action concepts, mechanical and consistent, universal application.
- Cons: Requires live pattern recognition, some discretion always needed, not foolproof (losses expected), may underperform in some market conditions.
Example Trades Discussed
- Shorting Bitcoin using a bearish order block and structure break on the two-day chart.
- Long trades on Solana and Bitcoin using the same range/order block method, refined with low time frame entries.
- Emphasis on aligning trades with high time frame market direction and using fair value gaps to confirm institutional momentum.
Recommendations / Advice
- Focus on mastering the framework before adding complexity or extra confluences.
- Backtest and forward test trades for skill improvement.
- Maintain at least 2:1 risk/reward on all setups; tolerate some losses as part of the process.
- Start with the most immediate swing low/high when defining trading ranges for clarity and simplicity.
Questions / Follow-Ups
- Consider refining range definitions and entry tactics as experience grows.
- Explore the impact of confluence stacking and position sizing adjustments for advanced application.