Transcript for:
ICT Trading Concepts Overview

In the next 9 minutes, I'm going to teach you every ICT concept that you need in order to become a profitable trader. I wasted years trying so hard to make ICT work. But everything changed whenever I put together a simple and effective list of all ICT concepts. And this is why I'm able to get consistent profits like this, this, and this. So, if you're the kind of person who doesn't just want information, but you want implementation, well, then you're in the right place. Now, let's dive into the first concept. I want you guys to make a promise to me. If I simplify ICT so it finally clicks. Can you commit to staying consistent and keeping things simple? If the answer is yes, then you're in the right place. So today I'm going to teach you everything from liquidity, market structure, market maker models, the power of three, how to put it all together into a profitable strategy, and which time frames to use. First on our list is liquidity, which is the foundation of all ICT concepts. You need to understand that price is always moving towards liquidity because this is where the most stop- losses are and the larger market participants are going to manipulate retail traders. That way they can take their stop losses and enter positions. There are two key types of liquidity. We have external which is at swing highs and we have internal which is at fair value gaps. If you don't know what a fair value gap is, it's just when we have a big candle which creates a gap between the candle after its wick right here and the candle before its wick. This area is a fair value gap. Always remember that price moves like a magnet from one liquidity pool to the next. So it goes from IRL to ERL. Once price has moved from a fair value gap to a swing point. If we create a new fair value gap, you expect the market to trade back into it. And once it does, we expect it to trade back to the next swing point. This is because markets are always moving from one point of liquidity to the next. As you can see, the market moves up to this high and this pattern will continue because this is how the markets work. Liquidity is powerful, but understanding it is just the first step. In order to trade and execute using it, you need market structure. If you could spot a signal that tells you when the trend is over or when it's likely to continue, would that change the way that you trade? Simply put, market structure is just a series of highs and lows. But not all highs and lows are created equal. So, we have to use a tool called manipulation and displacement to tell which we want to pay attention to. Now, first, I want you to take note of what classifies as a high or a low. In this example, I want you to pay attention. Anything that has a higher low on either side of it, meaning we have a three candle formation. This candle is the lowest low, we have higher lows on either side, that is considered a low. And then anything that has a lower high on either side of it, well, that candle is considered a high. Now, what happens at highs and lows tells you everything that you need to know. So, pay attention right here. What is happening to this low and this low? Notice we're not closing below it. Now, some people would say this is a break in structure, but they'd be wrong because when the market doesn't displace or push energetically through a point of structure, it's likely to reverse. Now, this becomes even higher probability with a market structure shift. All a market structure shift is is if we go from making lower highs and lower lows to making a true new higher high. Now, what makes it a true and valid higher high? Well, we created a fair value gap and closed beyond this point of structure. You can use this with liquidity or key level taps, which we'll get to later in the video. Now, another trick that you can use with this is anytime that a low gets manipulated, meaning we don't push through it energetically and you get a reversal pattern, then you can target the high that failed to do its job. Because this high, well, its job was to push us down lower and it failed to make a lower low. So, this gives us a nice target for trades. Now that you've learned liquidity and market structure, let's combine them into how you're going to make money using these concepts, which is market maker models. Now, if you've ever caught a trade that looked perfect and then you get stopped out and it just runs without you, then this is going to explain why and solve that mistake for good. Now, I can't stress the importance of this enough. I mean, just imagine for a second what it would feel like to finally anticipate these stop hunts instead of getting caught in them. So, we know that price goes from fair value gaps to swing points. But how do you actually make money on this move? On the higher time frame, we see price trade into a fair value gap and go straight to liquidity. But the lower time frame tells a different story. What you want to look for for a market maker model is just two or more consolidations on the way down to your fair value gap. Now, a consolidation is just when price moves sideways. A lot of traders are going to be early here, meaning they're going to get stopped out when the market goes under these consolidations. What you want to see once the market comes into your higher time frame fair value gap is you want to see a manipulation and then a displacement creating a new lower time frame fair value gap right here. And this is where you can enter the trade and then take profits at that higher time frame swing point. So this helps you catch the move from this internal liquidity to external. Now another trick is once this is activated anytime you come under a low if you're bullish then you look at this like a likely manipulation. And if you see that there you can also catch trades later in the setup or trail up your stops to reduce risk. So let's take a look at this example. We have a consolidation and then we have another consolidation here. At the bottom, we see a manipulation and then the market displaces through a high. So, at this time, you could look to go long using one of the entry models I'm going to teach you later in the video. And anytime the market comes under a low, you expect this to be a fake out and the market's likely to continue up to the upside. Now, remember, it's a higher time frame fair value gap to a lower time frame market maker model. Now, I remember whenever I started trading, I would look over my trades and wonder why some of them exploded and were great trades while others stalled and were very slowmoving. And that is where the power of three comes in. And this is one of the most powerful concepts. This helped me make $41,000 in a single day just using the power of three. Power of three is very simple. It states that the market moves from accumulation to stop runs and reversals. Now, if you look right here, we have this accumulation aka a consolidation. So, if we're bullish, what we expect is a stop run. And if we're bullish, we're going to expect lows to get run. So, on this day, I waited for the lows to get ran. And then once the market gave a good entry pattern back into the range, I knew that I had a great opportunity for a long because the market is likely to have a big move. And that is exactly how I use the power of three to make that 41K. But in order to execute, I had to use an entry model. So let's hop right into those. Now, I want to be brutally honest, guys. Without an entry model, everything else that you've learned today is just theory. All right, guys. So tell me, if I gave you a consistent entry setup right now, would you actually commit to staying consistent with it? I'm going to teach you three entry models. But before we get into that, you have to understand that if there is not a key level tapped, then you have no trade. This makes sure you're only taking high probability trades. So I want you to look at this example over here. Notice how we traded into this liquidity, but the market didn't displace, meaning it didn't create a fair value gap. So that alone gives us the idea that we're likely to trade back up to the high that failed to make a new low. Now, this can be looked at as a key level because it's that external range liquidity. And if we don't have a fair value gap in the middle of this range, that means that the market's likely to go from one area of liquidity to the next. Now, another thing to keep in mind here is not only that, but we are also trading inside of this bullish fair value gap. So, if the market has traded into two key levels, at that time, you could then scale down to the lower time frames to look for a trade. So, the first entry model we're going to talk about is the inverted fair value gap. Once the market has hit into a key level on your higher time frame like we have here, what you want to watch for is fair value gaps going down into the level. Now notice right here we had a fair value gap. What happened to this fair value gap? Well, the market closed a candle through it. That shows that the market is responding in a bullish way because this shouldn't happen if the market were bearish. And if the market is doing bullish things at these key levels, then we know there's a high probability the market is going to move up. So, as soon as this happened, which was technically on this candle's closure, you could put a trade on and put your stop at the lowest low that was made, and you would just target this area up here. Now, you want to make sure that you're getting at least a 2:1 risk-to-reward on any trade setup you have. And when you pair key levels and an entry model, you can have confidence that the trade is going to go in your direction, as we can see that it does right here. However, there were two other types of entry models that occurred. And the first we're going to talk about is a change in the state of delivery. So, let's just say you miss that trade entry. What you want to pay attention to for a change in the state of delivery, which is one of my favorite entry models, is notice how we have this down move right here. We have a down move where all these down close candles are in control. They're engulfing the up close candles. And even right here, the uplo candles do not engulf this down move. But look at what happens next. The market engulfs this down move. That right there is a change in the state of delivery. And at that time, you could enter the trade. Now, something else is happening right at this moment as well. And that is a market structure shift. Because if you notice right here, we took out this high and created a fair value gap through it. So at that time, you could enter the trade just based off that. So anytime you get these patterns or the inverted fair value gap, you would just enter the market right when these patterns confirm, put your stop at the lowest low, and then target the high that you got from the higher time frame. As I said before, time frame alignment is super important. So this list right here is organized from key level to the entry time frame. Meaning, if you use a weekly IRL or a fair value gap or a weekly swing point, you would then use the 4 hour to look for your market maker models or entry models. Now, take a screenshot of this. That way, you have it and can take consistent trades. Now, you've got everything you need to start trading ICT like a pro without having to waste years like I did, and more importantly, without all of the over complicated fluff. Now, if you want to learn my full trading system from front to back, I'll leave a link down in the description. Also, make sure to subscribe to the channel. I post tons of free value here on YouTube. I even have a 2-hour long free course. I'll leave that somewhere on the screen.