Scalping Trade Plan Overview

Oct 12, 2024

Lecture Notes: Price Action Model Number One - Scalping Trade Plan

Introduction

  • Objective: Capture 15 to 20 pips per trade using the ICT price action model.
  • Target Audience: Mentorship students with a comprehensive understanding of price action models.

Understanding the Model

  • Importance of studying the price action models and core content.
  • Encouragement to review lessons and supplemental content on the free YouTube channel.

Trading Plan Overview

  • Five Steps in Trading Plan:
    1. Preparation
    2. Opportunity Discovery
    3. Trade Planning
    4. Trade Execution
    5. Trade Management

Preparation

  • Review the economic calendar for medium and high impact events.
  • Determine IPTA data range for the last 20 trading days (excluding Sundays).
  • Identify highest highs and lowest lows within this range.
  • If necessary, extend lookback to 40 days for tight consolidations.
  • Determine Bias: Expectation of price reaching liquidity or rebalancing arrays.

Trade Planning

  • Look for manipulation opposite to trade bias during volatile times suggested by economic calendar.
  • Frame entries based on movement into premium or discount PD arrays.
  • Use a structured approach for execution and management.

Trade Execution

  • Use a five-minute chart for optimal trade entry during New York session (7am – 10am EST).
  • Specific guidelines for long and short trade management.

Trade Management

  • Short Trades:

    • Sell limit orders using specific entry points.
    • Manage trades to capture 15-20 pips, with options for further objectives.

  • Long Trades:

    • Buy limit orders using specific entry points.
    • Similar management approach as short trades.

  • Stop-Loss Management:

    • Adjust based on trade progress (25%, 50%, 75% increments).

Money Management

  • Position size calculated by account equity, risk percentage, and stop-loss in pips.
  • Adjust risk percentage after losses or series of wins to manage equity curve.

Algorithmic Theory

  • Definition: Algorithm – set of instructions for tasks/problem solving.
  • Can relate to everyday tasks or complex systems like trading.

Bullish Algorithmic Theory

  • Steps to determine trades if conditions (e.g., institutional order flow and price premiums) are met.
  • Specific instructions for entries and exits based on optimal trade entries and time of day.
  • Emphasize no trading on Fridays and ideal conditions on Monday to Wednesday.

Bearish Algorithmic Theory

  • Mirrors the bullish theory but for bearish conditions.
  • Focus on entering trades when prices are not in discounts and targeting previous lows.

Conclusion

  • Emphasis on practice, consistency, and understanding of the core content for successful trading.
  • Encouragement to backtest and validate the model through personal study and application.