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Applying Standard Deviation in ICT Trading

Feb 5, 2025

Lecture: Using Standard Deviation in ICT Trading Concepts

Introduction

  • Importance of finding projections and targets in trading ICT concepts.
  • Focus on standard deviation as a tool to set trade targets.

What is Standard Deviation?

  • A Fibonacci technique using Fibonacci retracement.
  • Adds confluence to existing trade models; not for taking trades alone.
  • Utilizes higher timeframe PD arrays such as buy side liquidity levels or fair value gaps.

Key Concepts

  • Manipulation Move: The last movement to internal sell/buy side before market structure shift.
  • Market Structure Shift: Observed when internal liquidity is swept with displacement.

Using Standard Deviation

  • Draw from high to low of the manipulation move to project targets.
  • Main targets: 2 to 2.5 on standard deviation.
  • Align targets with PD arrays for higher confluence.
  • The 4 level is used for letting runners go.

Example Application

  • Example on NQ and EUR/USD using buy side level.
  • Wait for buy side to be taken, then look for internal liquidity sweep and break of structure.
  • Draw standard deviation from high to low of manipulation move to project downside targets.

Real-World Examples

  • NQ and EUR/USD examples:
    • NQ: Wait for buy side, mark manipulation move, project using standard deviation.
    • EUR/USD: Similar process with sell side being manipulated.

Complex Ideas and Advanced Usage

  • Using standard deviation to project possible reversal points.
  • Example: NASDAQ trade using standard deviation both to project targets and inverse biases.
  • Inverse Bias: When projections act as support/resistance, indicating potential reversals.

Trading Strategy Implementation

  • Use of standard deviation in conjunction with ICT concepts.
  • Examples demonstrate respecting standard deviation projections for trade decisions.
  • Backtesting and journaling recommended to observe price behavior upon hitting standard deviation projections.

Conclusion

  • Emphasizes practical application and encourages backtesting.
  • Importance of integrating standard deviation with ICT frameworks for effective trading.

Additional Resources

  • Mention of further content and Discord community offer.

Note: This is only an introduction to using standard deviation in trading. More advanced strategies and examples can be explored with further study and practice.

Full transcript