Trading Lecture: One ICT Strategy for Life

Key Challenges in Early Trading Career

• Lack of a step-by-step process for analyzing & executing trades
• Vicious cycle of constantly learning new systems & entry methods
• Need for a repeatable process led to stripping down unnecessary elements
• Significant performance improvements by developing a systematic routine

Overview of the ICT Strategy Discussed

• Time frame selection
• Market structure
• Liquidity
• Order flow
• Power of three
• Risk management
• Trade management

Time Frame Selection

• Importance: Critical to know execution time frames to understand trade types
• Types of traders: Swing, position, scalping
• Execution: High time frame for trade ideas/bias; middle to low time frames for execution
• Example: A short-term trader forms ideas on daily/4H/1H charts, executes on 15-minute chart
• Consistency: Align trade ideas with higher time frames to reduce noise

Bias Determination

• Market Structure: Determine if market is trending or range-bound
• Clear Market Structure Signs: Higher highs/lows (bullish), lower lows/highs (bearish)
• Intermediate and Short-term Analysis: Understand placement within overall structure
• Dealing Ranges: Use Fibonacci tool to find discounts & premiums within price swings

Order Flow

• Use of Fair Value Gaps: Identify respected and violated gaps to gauge order flow
• Long-term Context: E.g., Dollar-Yen order flow influenced by macro fundamental analysis
• Institutional Order Flow: Focus on price respecting specific PD rays

PD Array Matrix

• Execution: Identify points like old highs/lows, order blocks, fair value gaps, etc.
• Statistical Approach: Each PD ray has its own hit rate; fair value gaps favored
• Homework: Intensive study and journaling of each PD ray

Power of Three

• Concept: Accumulation, manipulation, distribution phases in candles
• Execution: Align entry with high time frame positioning, e.g., bullish entry below open
• Importance: Final step ensuring alignment with overall strategy

Risk Management

• Max Consecutive Losses: Know your historical losing streaks to manage risk
• Drawing Down: Adjust risk based on current drawdown status
• Proper Decision Making: Essential to stay in the game by reducing risk during drawdown

Trade Management

• Stop-Loss Placement: Logical levels based on market structure or PD rays
• TP1 at First Liquidity Point: Scale out a portion of position and adjust stop-loss
• Final TP at External Range Liquidity: Manage exits with higher discretion

Final Notes

• Practice and Journaling: Essential to mastering each segment of the ICT strategy
• Strategy Flow: Each step (time frame selection, bias determination, execution, etc.) must align
• Repeatability: The strategy is structured for daily, hourly, and even lower time frame execution