Are you struggling with finding projections and targets with your trades when you're trading ICT concepts? Well, today we're going to be going over a highly requested video that I've been getting from my community, and that is standard deviation. Now, standard deviation is an ICT concept that I use pretty frequently, and the main reason I use it is to give me an idea of where to set my targets for a trade. So let's jump right into it. What is standard deviation, how to use it, and the best ways to...
use trades and add confluence to your trades. So let's jump into the charts here. So just basically understanding what standard deviation is.
Now, standard deviation is a Fib technique using a Fibonacci retracement. And it looks like this. Now you're like probably wondering, Justin, what the hell is this thing? How, how is this going to give me a better understanding of, you know, where I should put my targets? Well, this is basically how we use standard deviation.
When looking at some sort of chart like this. We want to use this using our higher timeframe PDA raise, right? So using an already existing model of what we trade right now, this one thing I want to make clear is standard deviation is not meant to take trades off of.
It is meant to add confluence onto your trades and to give you an idea of where your targets should be for trades. You should not take trades just based off of standard deviation. You need an already existing model.
Okay. So using a higher time frame PDR, this could be, you know, a buy side liquidity level or a bigger time frame, you know, maybe a one hour fair value gap, whatever it is, right? When we want to, let's say, take a short position and we have the market coming up, market coming up, and we end up coming to this higher time frame PDR, right? Let's say it's buy side.
What are we looking for? Internal liquidity to be swept and then displacement to the downside, right? And then we look to take, you know, some sort of short position, right? So the way that we draw in standard deviation is we look at whatever the manipulation move is.
Now the manipulation move is whatever the last move to take out internal sell or internal buy side or internal sell side before the market structure shift. So you can see here is when we broke structure to the downside right here, and this was the last high we take. So this whole move right here.
is our manipulation move. So this is where we're looking to draw in our standard deviation to get projections for the downside, right? Because again, buy side swept, we get internal swept, we get market structure shift.
Where am I expecting markets to go? I'm expecting to see a sell-off. That's normally, you know, my main setup.
Now, standard deviation is going to give us an idea and a projection of that. So the way that we would draw this in is we go from the high to the low of this move, and this is going to give us projections for where we think the market is going to go. Now, mainly my main target is going to be this two to 2.5 area on standard deviation.
And a lot of the times I want to see this area align with some sort of PD array, whether that be, um, existing sell side liquidity, right? Let's say we have, you know, equal lows here, whatever it is, or a bigger timeframe, a fair value gap or whatever it is, right? I like to see it align with whatever.
you know, external PD array is, you know, telling me. So two to two, my five is my main target. And then I let my runners go to four is what I normally like to see. So this is the main model.
This is what standard deviation is. I'm going to give you guys what the settings look like. So here is the settings for it or my specific settings. Now the, you don't really need the 0.62 or the 0.79. This is just optimal trade entry that I keep on, but this is basically my settings for this.
So you can take a look and, uh, add it to your fib all right so now that we've gotten the main understanding of what standard deviation is let's jump into some real examples so here is our first example looking at nq here you can see we have our buy side level resting here markets have come down and now starting to form that buy side of the curve we have sell side of the curve buy side of the curve coming in i'm now looking to see the target be this buy side level and then i'm looking to take shorts so again i'm waiting for price action to tell me the story We're coming up. We're coming up. I'm waiting.
I'm waiting for that buy side level to be taken. All right. Now that buy side's taken, what am I looking for? I'm looking for internal liquidity to be swept.
There we go. Internal liquidity swept at the highs. And now I'm looking for a breakup structure. Boom, right here.
So now this is now my manipulation move right here. Once we get this breakup structure to the downside, you can see internal has now been swept. We've now gotten displacement to the downside.
So this is now my manipulation move. This is where I will draw in my... standard deviation.
So looking at where we are right now, Notice also where the 2.25 and the four likes to line up. Notice two to 2.5, we align right here with the sell side level. So this right here would be my main target for this trade. Noticing as well, we do have equal lows here.
So this would be my main target for this trade. When we sell off, I'm looking to see this area and then I'm looking to see this four area get met as well. So these are the two areas that I want to see price come to.
And let's see how this ended up playing out. That would be your entry right here. Again, displacement back. Wait for the pullback to the fair value gap. Enter short.
We'll see if our projections get met. And there we go. 2 to 2.5 on NQ.
And we'll see if... the fourth projection gets met and there we go big sell-off to that level so this is a first example again buy side met use the manipulation moves gives you an idea of where price wants to go let's look at another example all right here's another example looking at euro usd again clear buy side level wait for that to get taken we put in a high i'm waiting for internal to not be taken Internal now gets taken. So now we have a significant low.
I want to see this low now broken through with big displacement to the downside to validate that we have now had our manipulation move. There we go. Big move to the downside. We end up retracing back into this big fair value gap. This is where I'm expecting to now hold price.
So now where do we expect to go? Well, let's draw in our standard deviation going from the high to the low of that manipulation move. And where is the first price target I'm looking to see? This 2 to 2.5 area. This is my main target to see.
And then notice as well, our external sell side level aligns pretty closely to this 4. So this is my two targets here, this 2.5 and this external sell side level. Let's see if this ends up playing out. First target gets hit.
And there we go, all the way back to sell side. And there we go. That 0.4 is now hit. And notice exactly where we end up stopping as well here.
Right when we hit that 0.4, we automatically bounce to the upside. And notice where we go here. All right, here's another example, but using sell side liquidity. So again, this is on AUD coming down, waiting for sell side to be taken. We've now swept it.
So now again, I'm waiting for structure to form, looking like we swept internal. So again, what am I waiting for? I'm looking to see a break of a high. There we go right there.
So again, looking at where we are, this is exactly what I want to see. Sell side has now been swept. We formed some structure.
We have now swept that internal low and we have now displaced above this high here. So this is now my manipulation move right here. So this is where I'm going to draw in my standard deviation from the low to the high now. And this is now giving me my projections.
Now notice. Notice exactly where that four lines up. It lines up perfectly with buy side. This is where I'm possibly expecting the market to go again. Now that sell side has been taken.
I want to see us now go back to buy side. Now my main target here is going to be this two to 2.5 because that's the most likely. It's the highest probability that we're going to go here.
Then it will be here, but we'll see how this ends up playing out. Do we go to our targets here? Continues to get bought back up.
First target is now met. Notice we start to sell off after this, right? We come up to this 2.5 and it acts as an area of resistance.
One thing that you'll notice about standard deviation is it acts as support and resistance sometimes. If the draw is not super strong, a lot of the times we will come up to these areas, this 2 to 2.5 area, and we will look to reject this area and possibly then go back to discount of this entire range here to then go back higher. So keep that in mind. Watch this. Notice we have now came back to discount.
After going to this two to 2.5, we reject it, retrace back to discount of this entire range. And now I'm expecting us to go back to these highs here. Notice we also come down to sweep this internal low here. All right, let's see if we continue to get bought back up to the four and boom, there you go. End up retracing back to discount after the two to 2.5 and then gets bought right back to that 0.4 area.
on AUD. Let's check out some other examples and some more complex ideas that I want to start going over with you. So standard deviation is a way that you can project targets, but not only can you use it for that, but also use it for confluence on when to possibly inverse your bias.
Now in this specific example here, this is notice when we come up to this 2.5, we actually reject this area and sell back off the discount. This happens a lot. And I want to Make sure you guys know how to use it to your advantage. So let's check some other examples as well.
So here is another example on NQ. And this is where we're going to start diving into more complex ideas using standard deviation. Now, I'm going to show you these trades that I actually did take. At the end, I'll show you guys the executions that I did. This was on September 19th.
And this is a really good understanding and show you guys how strong and how powerful standard deviation is. And it. the different ways to use it in the different ways that I like to use it. So looking at NASDAQ here, again, I have my buy side level marked in. I'm looking to see this get taken right when this gets taken on NQ.
Again, I'm waiting for structure. Notice there's no manipulation move here yet. We still have only put in one high here, so I'm not really looking to take anything yet.
Just quite yet. Again, I'm still waiting right now. I'm looking to see manipulation, right? I'm looking to see one more time for us to come up, take this high out, and then look to see that, that displacement back down. All right.
Coming Again, looking for break of structure to the downside now, right? Internal has now been taken. I'm now looking to see a low. Boom, there we go.
Notice, we end up coming up one more time as well. So this is our manipulation move, right? Notice, this is not our manipulation move because this is the last high that is put in.
So again, we zoom out, noticing buy side has not been swept. Internal has not been swept. So where do I draw standard deviation here?
I draw it from this move right here because this is the internal draw being taken. This is now an internal short model. We have buy side swept.
We have internal now swept. Again, charts are all fractal, right? It's models inside of models inside of models.
So this now becomes my manipulation move here. This last low that puts in between this high here. Now you can either draw it in this way or draw it in this way. These are the two, but I will draw it in this way. And you'll notice that even if you draw it in this way or this way, it'll still give you this exact same reward.
And I'll show why. So let's mark it in here. Again, noticing where are my main targets here?
Now, this is going to be a partial, but it's not going to be my main target this time. Standard deviation is to give you an understanding of what should be your main targets, but also what aligns with the market and what is the market telling you? So on this specific trade here, I waited for us to come into this fair value gap. I took shorts and I was targeting. mainly this level here.
I actually, in fact, I actually, I did take a contract off here, but I took most of my contracts off here. Now, if I was to draw in standard deviation, the other way that we were talking about, which is this way, notice it also aligns perfectly with two to 2.5 area. And this is where I would want to see us come down to. So no matter how, how much you draw here, I would want to see the exact same thing.
I want to see the market come to this area. So I'm in shorts. I'm looking at sell side. Boom, boom, boom, boom, boom, boom, boom, boom. We end up selling off.
Now, notice, we have now hit four retracement on this trade. Notice, as well, if I was to draw it in this way, we've now hit 2 to 2.5. So would I expect to come down here?
It's possible, but what do I want to watch? One thing that I want you guys to notice is look what happens here. So let's draw it in this way here. NQ is now in 2 to 2.5 projection. Is this bearish or bullish?
Remember what I said earlier, we like to act as support and resistance. These two to 2.5 areas, I like to think of these as support zones or resistance zones. Now notice when you start to align this with overall ICT concepts and ICT biases, noticing we have now just swept internal sell side here as well. So am I really looking to let this run any further? Not really.
My target here has now been met. So what is an opportunity that I can now take a trade off of? If we continue to show a model, a buy model, meaning sell side swept, internal sell side swept, displacement, there's an opportunity for me to take a trade back to the upside and I can use standard deviation again inside standard deviation to get a projection.
So looking at this, sell side's now swept. What am I waiting for? I'm looking for internal to be swept. Notice we form equal lows.
Still not yet. Still not ready. Still not ready.
Boom. Cell size now been swept. This is now my manipulation move.
Notice we're still holding this two to 2.5 area. So what am I expecting? This is what I want you guys to know.
When we hold two to 2.5 areas. and we hold four projections, meaning we come down here, hold, fail to go lower, come down here, hold, fail to go lower, fail to go higher, fail to go higher, whatever it is. A lot of the times we will go back to discount of whatever the range is. So notice we have this whole entire range here. I am confident after seeing this manipulation move and seeing displacement to the upside that we now go back to discount of this range here, which is here.
So I actually ended up taking a scalp opportunity trade here to target this. So this is when you can go down to even smaller timeframes, like a 30 second and zoom in and see if there's any more opportunity there. So sell size now been swept. This now becomes my manipulation move. Where am I expecting markets to go?
Two to 2.5 area. And I also draw in. the consequent encroachment of this area, which is the exact midpoint. So what's the first target here? First target is 50% of this entire range here, right?
Get displacement up. Again, noticing we run this for value gap. If you were looking to take a trade here, this would be your first entry.
If you wanted to take a more aggressive entry would be wait for this to get ran through and then boom, inverse for value gap. We get tapped in, goes long. That was my trade.
That was my entry. And notice we go right back to discount first. So now another opportunity, again, I'm long biased now. We've now come down, we've swept sell side.
This is now our market structure shift here. Again, using standard deviation, once again, we now have internal swept, break a structure to the upside with displacement. I draw in my fib.
Where am I expecting price to go? Two to 2.5 area. Where can I look to take an entry?
Fair value gap. I'm now looking to take longs here. We come in. I enter long in this fair value gap.
What's my target here? First, buy side to 2.5. Notice where we go here.
And where do we reject? Where do we stop? Gets bought back up, goes straight to buy side.
Do we continue higher? We do. Notice where we stop and sell back off.
We end up coming here to this 2.5 area. Reject, reject, sells back off. Now notice how this acts the entire day.
Comes back up, goes to the exact midpoint, still rejecting. Again, notice we cannot break through this. Reject, now keep watching, keep watching.
Still holding, still holding, still holding, still holding, still holding. And we end up selling back off. The entire day, this 2.5 projection acts as a point of resistance.
The whole day. Notice every time we come back up here. Every single time.
And then we end up selling off. So this is the hidden key. Or hidden sort of idea. That I like to use for standard deviation.
Is I like to see what's getting respected. What's getting disrespected from PDA rates. Like fair value gaps.
But also through standard deviation. Our projection here never gets broken through. It continues to act as resistance the entire day, right?
So this is something I want you guys to note. Again, we got an opportunity here from using the exact same idea. Number one, I still have my first trade, a buy side swept. Beautiful short trade.
Where's my projection, my target? This is my target. Now, how can I use that, right? Sell sides up and swept.
We're holding this 2 to 2.5. Number one, I expect us to go back to discount. But once I get this break, a structure back to the upside, again, I can use standard deviation out.
of standard deviation to then give us another projected target, which is where we go to. And then I use then this information to give me an idea of maybe another possible trade that I can take later. And notice on the 15 minute how much we respect this.
Not a single candle close inside of this area. All of these wicks, how much we respect this area and then sell off in the PM session. So I want you guys to take. this video, and I plan on making another standard deviation video in the future, but this is just the introduction.
And what I want to challenge you guys to do is I want you guys to start using standard deviation when you see fit. And I want you to back test what happens in price when those projections are met. After they're met, once we go to 2.5 and two, once we go to four, what happens afterward?
And I want you to journal that. Now I not, not only want you to journal that, but journal. How many times when you get a good setup and you see a manipulation move that we actually go to those projected targets?
Because I guarantee you, it'll surprise you how much we do. This was the first video on standard deviation, an introduction to it, understanding it, to give you guys an understanding of this specific idea as well. This was that execution that I had on this day. You can see that initial short that I took, ended up selling off, added to this, took it off in the 2.2.5.
Right when we ended up sweeping sell side, I entered back long, took it off when we reached discount of this entire range, and then I added my longs back when we came back to that fair value gap, took some off at the one. And then I took it off at buy side. And then we ended up coming to the 2.5. So I'm hoping you guys enjoyed this video. If you did make sure to leave a like subscribe new content for you guys coming.
Um, the discord is still on sale for the next three days. Take advantage of the birthday sale. We are having a huge sale right now. It will never be this cheap ever, ever, ever, ever again. So take advantage of it.
I will see you guys in the next one. Peace.