Trading Strategy and Confirmations (4th June Class Recording)

Introduction

• Objective: Reviewing trading strategy and confirmations
• Trading Style: ICT (Inner Circle Trader) and retail concepts
• Three Main Models: Market Structure Shift (MSS), Trend Model (TR), and Inversion Model

Models Overview

MSS Model (Market Structure Shift)

• Core components:
  • Liquidity Grab
  • Major High or Low
  • Directional Change in Speed of Price
  • Sell to Buy / Buy to Sell Retrace
  • Fair Value Gap (FVG) or Order Block Confirmation
  • Respective Imbalance
  • Entry: Strong Candle Displacement off the Imbalance
• Examples: Buy models due to current all-time highs
• Liquidity: Predicting where price might go to fill voids
• Directional Change:
  • Price shifts off the low/high
  • Buyers replace sellers at a second leg confirmation
  • Retracement to FVG confirms move
• Confirmation: A strong candle close over FVG indicating direction
  • MSS Example: 30-minute FVG retracement with 5-minute confirmation
  • Avoid invalid MSS setups with sloppy delivery or weak confirmation

TR Model (Trend Reversal)

• After MSS is delivered
• Core components:
  • Strong Directional Move
  • Retrace into FVG or Order Block
  • Strong Displacement in Favor of Trend
• Confirmation: Strong candle close in the direction of the trend
• Examples:
  • NFP/CPI-related 5-minute FVG setups with immediate in-the-money moves
  • Invalid TR setups lack proper displacement or confirmation

Inversion Model

• Core components:
  • Liquidity Grab
  • Major High or Low
  • Directional Change in Speed
  • Opposite FVG / SL Order Block
  • Entry: Candle Close Over/Under
• Confirmation: Candle close through opposite FVG indicating market direction
• Examples: successful inversions validated by strong moves and sharp displacements
• Invalid Setups: Example of invalid inversion setups highlighting lack of speed and structure

General Confirmation Strategy

• Confirmation Indicators: Candle Close
  • 1-minute or 5-minute closes for short-term trades
  • Higher time-frame candle closes possible but challenging due to high leverage
• Importance of strong, deliberate candle closes
• Alerts and Trade Signals: Focus on short-term validation and constant market checks

Key Points

• Always watch for deliberate moves and candle closes
• Consistent themes: Speed in price, deliberate displacements, and structured confirmations
• Continuous practice for mastering trade confirmation and entry models

Final Notes

• Look for strong candle closes in the desired trade direction
• Confirmation strategies revolve around verifying price respects identified FVGs or order blocks, providing confidence in the trade execution.