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Trading NZDUSD | Judas Swing Strategy 28/10/2024 Last week highlighted the importance of a risk management plan for all traders using the Judas swing strategy as a case study. The strategy produced two trades on FX:GBPUSD and one on $EURUSD. Despite facing two losses and securing only one win, proper risk management ensured that the single win offset the losses, allowing us to end the week at breakeven. With these results in hand, we were excited to see what the upcoming week would bring. We got to our trading desk at 8:25EST and started our day by demarcating our trading zones. Once we have demarcated our zones, we wait for the high or low of this zone to be swept, as this will assist us in determining our bias for the trading session. After 35 minutes, the high of the zone was swept, indicating that we should look for potential selling opportunities during this trading session. Next on our checklist is to wait for a Break of Structure (BOS) on the sell side. After an hour, we observed a BOS on the sell side, which resulted in a Fair Value Gap (FVG) being formed in the process We must wait for the price to retrace back into the Fair Value Gap (FVG). A trade can only be initiated once price has entered the FVG, and it is crucial to be patient and wait for the price to close before executing any trades. This waiting period acts as a filter to avoid scenarios where the candle entering the FVG proceeds to hit our stop-loss. The next five-minute candle entered the Fair Value Gap and closed, indicating that we can proceed with executing the trade The position experienced a drawdown shortly after the trade was executed, but this did not concern us as we had only risked 1% of our trading account, targeting a 2% gain. Additionally, we implemented a minimum 10 pip stop loss to allow the trade sufficient space to fluctuate without prematurely stopping us out and then proceeding in our anticipated direction. Upon checking the position later, we found it had shifted in our favor. However, we needed to remain composed since it had not yet reached our ultimate target. Our task was simply to be patient and wait for our targets to be achieved Upon reevaluating the position, we noticed that price had returned to the entry point. At such moments, individuals who have risked more than they can afford may start to panic. That's why we continually stress the importance of only risking what you can afford to lose, as it greatly diminishes the emotional investment in trades. We have encountered situations like this before and will likely face them again. However, what remains within our control is the decision to risk only an amount we are comfortable with losing, which in turn lessens the emotional attachment to the trades. According to our data, we can anticipate being in a position for an average of 11 hours, so the duration of this trade meeting our objective is not a concern we simply need to remain patient for it to occur. After 13 hours and 25 minutes, our patience was rewarded when our Take Profit (TP) was reached, resulting in a 2% gain on the OANDA:NZDUSD trade
Education
by CleoFinance
Trading GBPUSD | Judas Swing Strategy 15/10/2024Last week proved challenging for the Judas Swing strategy, with three consecutive losses and no wins, which heightened our anticipation for this week. Will we be able to break this losing streak? We'll soon find out. We typically arrive at our trading desks five minutes before the session starts to delineate our zones and settle into the trading rhythm. After delineating our zones, the next step is to wait for a sweep of a high or low of the trading zone, which will assist us in establishing our bias for the trading session. Forty-five minutes later, price swept the liquidity at the high, indicating that we should look for selling opportunities during this trading session. A few minutes after the high was swept, we observed a Break of Structure (BOS) on the sell side, which was encouraging as we avoid entering trades without analysis, even with a sell bias established for the session. Upon identifying the BOS, the next step is to find a Fair Value Gap (FVG) within the price leg that broke structure. The final step in the entry checklist is to wait for price to pull back into the Fair Value Gap (FVG) and to execute the trade only after the candle that enters the FVG has closed. Shortly after, a candle entered the FVG, indicating that we could execute our trade following the close of the candle. It's crucial to understand that by risking only 1% of our trading account for a potential 2% return, we minimize emotional attachment to the trades since we're only risking what we can afford to lose, and we stand to gain more than we risk. After executing the trade, we experienced a significant drawdown, which is a critical point for those who risk more than they can afford to lose. After a patient wait, the trade has turned around and begun to move in our favor, which is thrilling. However, we must still keep our composure as the objective has not yet been achieved According to our data, we can anticipate being in a position for an average of 11 hours, so the duration of this trade meeting our objective is not a concern; we simply need to remain patient for it to occur. After 15 hours and 20 minutes, our patience was rewarded when our take profit (TP) target was reached, resulting in a 2% gain on a trade where we risked 1%.
Education
by CleoFinance
Quarter Theory: Intraday Trading Mastery - Part 2 ExamplesGreetings Traders! In today's video, we'll continue our deep dive into Quarter Theory Intraday Trading Mastery—a model rooted in the algorithmic nature of price delivery within the markets. We’ll explore the concept of draw on liquidity through premium and discount price delivery, equipping you to identify optimal trading sessions and execute high-probability trades, all while aligning with market bias. This video is part of our ongoing High Probability Trading Zones playlist on YouTube. If you haven't watched the previous videos, I highly recommend doing so. They provide essential insights into identifying and acting on market bias, which Quarter Theory enhances further. I highly recommend you watch ICT2022 Mentorship model on YouTube, it will really help you in your trading journey, the link to the mentorship is provided below. I’ll attach the links to those videos in the description below. Quarter Theory: Intraday Trading Mastery - Part 1 Intro: Premium Discount Price Delivery in Institutional Trading: ICT 2022 Mentorship: www.youtube.com High Probability Trading Zones: www.youtube.com Best Regards, The_Architect
OANDA:NAS100USDEducation
by The_Archi-tect
How I Use Multi Timeframe Analysis to Capture LARGE Price SwingsDISCLAIMER: This is not trade advice. Trading involves real risk. Do your own due diligence. TUTORIAL: Today, I demonstrate the thought process and mechanical steps I take when trading my Multi-Timeframe strategy. We take a look at US Treasuries, which have offers a classic lesson in how to apply this approach. As you will see, throughout the year, this approach took some losses prior to getting involved in the "real" move which we anticipated. No strategy is perfect, and I do not purport this to be perfect. It is a rules based and effective way to read price. This strategy is great for people who don't have a lot of time to spend at the charts. I would classify this more as an "investing" strategy when utilizing the 12M-2W-12H timeframe. If you have questions about anything in this video, feel free to shoot me a message. I hope you have all had a great week so far. Good Luck & Good Trading.
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CBOT:ZF1!Education
by Tradius_Trades
3
Two Roads to Profit. A Comparison of ICT/SMC and Advanced VSAHello traders and investors! When we start engaging in trading and investing, we get acquainted with various methods of forecasting price movements. Gradually, if we have enough persistence, strength, and patience, we choose our own path to profitable trades. Among the most popular approaches, we can highlight the use of various oscillators and channels, Dow Theory, Elliott Waves, Fibonacci levels, supply and demand, Volume Spread Analysis (VSA), market auction theory, and the Inner Circle Trader/Smart Money Concept (ICT/SMC). Many traders combine elements from different approaches into their trading system. I personally prefer a concept I call Advanced VSA. It’s a comprehensive set of tools that combines ideas from VSA, Dow Theory, and Supply and Demand analysis. The name "Advanced VSA" perfectly captures the essence of the method, as it is fundamentally based on analyzing volume and price spread. Recently, the ICT/SMC concept has been gaining more and more popularity. Today, I want to explore the similarities and differences between ICT/SMC and Advanced VSA. If there are any inaccuracies in my explanation of ICT/SMC basics, feel free to correct me in the comments. Perhaps after reading this article, you’ll be able to decide which approach resonates more with you and which one you believe will help you in your trading. I hope this will be helpful. Let’s dive in! Basic Differences Before diving into the technical details, let's first clarify the key differences between these concepts. Who Controls Price Movements The ICT/SMC concept assumes that price movements are controlled by large players, such as market makers, who direct prices in the desired direction. This is similar to a model where one "center of power" determines the market's direction. In contrast, Advanced VSA is based on the idea that two forces influence price — the Buyer and the Seller. All analysis revolves around the interaction between these two sides, creating a more balanced model where both forces are equally important. Traded Volume The ICT/SMC concept does not use traded volume as a part of its analysis. In Advanced VSA, volume is an important factor. It is considered an integral part of the data that helps to understand market processes and the actions of participants. Now let’s move on to a detailed comparison of the elements of these concepts. What They Have in Common Both concepts teach traders to identify price ranges on the chart where a large player (Market Maker in ICT/SMC) or a Buyer (in Advanced VSA) shows interest in buying, and ranges where the Market Maker or Seller is interested in selling. When the price returns to these ranges, traders can execute buys or sells. We can call these price ranges contextual areas for buying and selling. Neither concept relies on technical indicators. Instead, they focus on the following key terms for identifying the trade direction and the trade entry point: Trend Trend break/half-trend Trend confirmation Accumulation/Distribution/Sideways movement/Flat Contextual areas for buying and selling The first four terms help determine the direction of the trade, while the fifth helps identify the entry point and the likely target of the trade. Both methods suggest using higher timeframes to find contextual areas and lower timeframes to find entry points within those areas. What Are the Differences The differences between the concepts lie in the interpretation of key terms. For the first four terms (trend, trend break, trend confirmation, accumulation/distribution/Sideways movement), the distinctions are minor and relate mostly to specific interpretations. However, the main differences arise in the rules for identifying contextual areas of interest (buyer, seller, or market maker). Let's look at these differences in more detail. Difference 1: Use of Volume In ICT/SMC, contextual areas of interest are determined solely based on price action and candlestick patterns, without taking traded volume into account. In contrast, Advanced VSA sees volume as an integral part of the analysis. contextual areas of interest are identified by both traded volume and price behavior (candlestick patterns). If there was interest from a buyer, seller in a specific price range, leading to a price change, it's logical to assume that the volume traded in that range should be higher than in previous periods over a similar timeframe. To illustrate the importance of using all available data for analysis, consider an analogy with choosing the best time for a seaside vacation. If the decision is based only on water and air temperature, while ignoring factors like wind or rainfall, the choice may be misguided. For example, choosing April for its comfortable temperature might result in encountering constant rain and high waves. Thus, in Advanced VSA, volume plays a crucial role, whereas it is absent in ICT/SMC. Difference 2: Types of Contextual Areas of Interest In ICT/SMC, the following types of contextual areas of interest are used: order block, breaker, mitigation block, and rejection block. All of these areas are formed by a specific arrangement of candles on the chart. In contrast, Advanced VSA operates with a different set of contextual areas of interest: effort, zone, and range (sideways movement). Effort refers to a single candle or bar that indicates significant market activity. Zone is formed by a sequence of candles or bars, taking into account their traded volumes. Range (sideways movement) is defined by a series of consecutive candles/bars where price fluctuates within a limited range, interacting alternately with the upper and lower boundaries of the range. It's only possible to identify which party (buyer, seller, or market maker) controls the range after the price breaks out and confirms the move. If the volumes align with Advanced VSA's criteria, order blocks and mitigation blocks in ICT/SMC can be considered as zones in Advanced VSA. So, not all order blocks and mitigation blocks will be considered zones in Advanced VSA. The breaker will be discussed separately, and there is no equivalent to the rejection block in Advanced VSA. Difference 3. Price Attraction Points In ICT/SMC, concepts such as fair value gap, liquidity void, and liquidity are used to describe price attraction points. In Advanced VSA, the terms fair value gap and liquidity void are not utilized. Most of the time, these ICT/SMC elements correspond to price interest points in Advanced VSA, such as effort. The term liquidity has the same meaning. Difference 4. Importance of Levels In Advanced VSA, levels play an important role in identifying trade opportunities. To understand the significance of levels, let’s first recall the concepts of trend and range (sideways movement). In both ICT/SMC and Advanced VSA, a trend is broken down into components, often referred to as impulses or expansion moves. A range, on the other hand, is characterized by its boundaries and the vectors of price movement between those boundaries. In Advanced VSA, important trading signals include the defense of a broken level or a price retracement to a level followed by its defense. In Advanced VSA, the defense of a broken level or the cancellation of a breakout (where the price returns back behind the broken level) followed by a defense of that level is considered a signal for identifying trades. This method helps traders spot potential entry points where either buyers or sellers to protect a key price level, giving more confidence in the direction of the market. The most important levels include the base of the last impulse, the boundaries of a range, and the test level of a zone. In ICT/SMC, there are no direct equivalents of these elements when it comes to searching for trades. However, breakers and sometimes mitigation blocks serve similar purposes to the levels in Advanced VSA, but the approaches differ. In ICT/SMC, trades are typically executed within the breaker or mitigation block, whereas in Advanced VSA, trades are found when a level is defended: buy trades above the level (supported by buyers), and sell trades below the level (supported by sellers). Additionally, Advanced VSA allows for trading within ranges, moving from one boundary to the other, as long as the boundaries are defended. Summary Despite the shared terms and similar approaches, there are significant differences between the two concepts: Number of forces influencing price movement: In ICT/SMC, it is believed that price is controlled by a single force, the Market Maker (MM). In contrast, Advanced VSA considers the interaction of two forces—buyers and sellers—as driving price movements. Use of volume in analysis: ICT/SMC does not take traded volume into account during analysis, while in Advanced VSA, volume is a crucial element for identifying market forces and areas of interest. Use of levels for trade entries: In ICT/SMC, levels do not play an important role, whereas in Advanced VSA, levels one of the possible places for identifying potential trade setups. Good luck with your trading and investing!
OANDA:XAUUSDEducation
by AlexeyWolf
2
Mastering High Probability Trading Across All AssetsGreetings Traders! Welcome back to today’s video! In this session, we're revisiting the critical concept of draw on liquidity. I'll guide you on how to take advantage of it with extreme market precision, focusing on when to trade, when to avoid the market, and how to increase your chances of high-probability trade outcomes. If you're looking to enhance your trading strategy and make smarter decisions, this video is for you. Let's dive in and start mastering these concepts! Refer to these videos as well: Premium Discount Price Delivery in Institutional Trading: Mastering Institutional Order-Flow Price Delivery Quarter Theory Mastering Algorithmic Price Movements: Best Regards, The_Architect
OANDA:NAS100USDEducation
by The_Archi-tect
4
BTC Short using ICT Market Maker Sell Model (Explained)ICT Market Maker Sell Model (MMSM) for Bitcoin (BTC/USD) Key Components: 1. Original Consolidation: - This is the initial phase where the price consolidates within a range, indicating accumulation by smart money. 2. Smart Money Reversal: - This area marks the point where smart money starts to take profit or reverse their positions, leading to a reversal in the market trend. 3. Market Structure Shift: - This indicates a significant change in market direction with a displacement 4. Fair Value Gaps (FVG): - They are marked as potential areas of interest where price might return to fill these gaps. 5. Sellside Liquidity: - This is the area where liquidity is collected, often below the market structure where stop-losses and other sell orders are triggered. 6. Re-Distribution: - After the initial move down, the market redistributes, often retesting previous support areas or fair value gaps before continuing the trend. Chart Analysis: 1. Consolidation Phase: - The price starts with an original consolidation phase where accumulation occurs. 2. Upward Move: - After consolidation, there's an upward move indicating bullish market conditions. 3. Smart Money Reversal and Low Risk Sell: - The price reaches a peak where smart money starts to reverse their positions. The chart highlights a 'Low Risk Sell Inside FVG' which is an optimal selling point within a fair value gap, suggesting a high probability sell zone. 4. Market Structure Shift: - After the peak, the market experiences a shift in structure, breaking previous support levels and signaling a bearish trend. 5. Downtrend and Redistribution: - The price moves down sharply, redistributing within fair value gaps. The chart highlights these gaps (fvg) where price might retrace to fill before continuing downward. 6. Sellsides Liquidity Targeted: - The market targets sellside liquidity, triggering sell orders and stop-losses, leading to further downward pressure. Practical Use: - Identifying Entry and Exit Points: - Traders use this model to identify optimal entry (sell) points within fair value gaps and exit points where liquidity might be targeted. - Understanding Market Phases: - Recognizing different market phases (accumulation, distribution, and redistribution) helps in anticipating market moves. By understanding these components and their interplay, traders can better anticipate market movements and make informed trading decisions. 🙏 Support Me! If you enjoy my analyses and content, please consider following me and leaving a like/boost and a follow . Your support motivates me to keep creating high-quality content and sharing it with the community. Thank you for your support! 🚀
INDEX:BTCUSDEducation
by SerenityEquity
Trading EURUSD | Judas Swing Strategy 30/07/2024Risk management ought to be a trader's closest ally, as the previous week demonstrated the practical significance of incorporating risk management into every trader's toolkit. Last week, we executed four trades; despite having only one win and three losses, we concluded the week with a mere 1% loss on our trading account. This has heightened our excitement for the opportunities that this week may present. As is customary, at 8:25 AM EST, we commenced the day by reviewing the essential items on our Judas Swing strategy checklist, which comprises: - Setting the timezone to New York time - Confirming we're on the 5-minute timeframe - Marking the trading period from 00:00 - 08:30 - Identifying the high and low of the zone The next 5 minute candle swept liquidity resting at the low of the zone, which meant our focus would be on identifying potential buying opportunities for the trading session. To increase the likelihood of success of our trades, we wait for a break of structure (BOS) towards the buy side. Once the BOS occurs, we anticipate price to retrace to the initial Fair Value Gap (FVG) created during the formation of the leg that broke the structure. We patiently waited for price to retrace into the created Fair Value Gap (FVG), and executed our trade upon the closing of the first candle that entered the FVG, as all the conditions on our checklist for trade execution were satisfied. Please note that our stop loss is set at the low of the price leg that broke structure, and we implement a minimum stop loss of 10 pips. The minimum stop loss value was not chosen randomly; it was determined through extensive backtesting. This allows trades sufficient space to fluctuate, avoiding premature stop-outs and trades later moving in our anticipated direction. After 15 minutes, a large bearish marubozu candle formed, which could have exited us from the trade if we had set our stop loss solely based on the low of the price leg that broke structure, without including a minimal stop loss in our checklist. By using that price leg, our stop loss would have been around 6 pips, whereas a 10 pip stop loss provides the trade with sufficient breathing room. We are aware that our strategy does not guarantee a 100% win rate but rather hovers around 50% on EURUSD, indicating that some losses were inevitable. To avoid becoming emotional over the position, we used only 1% of our trading account with the goal of achieving a 2% gain. Upon checking our position later, we observed that the position was a few pips away from hitting SL. We remained calm despite the drawdown we were experiencing and were prepared for any outcome of the trade. All that was left was to wait for either our stop loss or take profit to be triggered to determine the result of our trade. A few hours later, the trade began to move in our favor. After 13 hours, our Take Profit was triggered, and our patience paid off as we hit our target on EURUSD, resulting in a 2% gain from a 1% risk on the trade.
Education
by CleoFinance
Trading AUDUSD | Judas Swing Strategy 17/06/2024 Following a successful trading week, we approached our trading desks in high spirits, eagerly anticipating the start of the trading session. While our week included trading FX:EURUSD , FX:GBPUSD , OANDA:NZDUSD we’re showing this classic example using $AUDUSD. At 8:25 AM EST, we began the day by running through the essentials on our Judas Swing strategy checklist, which includes: - Setting the timezone to New York time - Confirming we're on the 5-minute timeframe - Marking the trading period from 00:00 - 08:30 - Identifying the high and low of the zone Now that our zones are demarcated, we anticipate a liquidity sweep on either side of the trading zone, as this will assist in establishing a bias for the trading session. Liquidity was taken at the lows after 5 minutes, signaling our focus would be on identifying potential buying opportunities. To increase the likelihood of success of our trades, we wait for a break of structure (BOS) towards the buy side. Once the BOS occurs, we anticipate price to retrace to the initial Fair Value Gap (FVG) created during the formation of the leg that broke the structure. We patiently waited for price to retrace into the created Fair Value Gap (FVG), and executed our trade upon the closing of the first candle that entered the FVG, as all the conditions on our checklist for trade execution were satisfied. Ideally, our stop loss should be set at the low of 0.65854, but that would place our stop loss at approximately 6 pips, which is too tight for our strategy. Extensive backtesting has shown that tight stop losses are often triggered before price reverses and moves in our intended direction. Consequently, we have implemented a minimum stop loss of 10 pips for all our trades. After executing the trade, we experienced a minor drawdown for approximately 25 minutes before price shifted in our favor. During the drawdown, we remained calm as we had only risked 1% of our trading account with the goal of achieving a 2% return. Price was progressing well in our direction, and all that was required of us was patience for the Take Profit (TP) to be reached. We expected to be in this trade for roughly 8 hours and 6 minutes, so we stayed composed and had faith in our strategy. After 3 hours and 50 minutes, our Take Profit was triggered, and our patience paid off as we hit our target on AUDUSD, resulting in a 2% gain from a 1% risk on the trade.
Education
by CleoFinance
MARKET STRUCTURE USING SMART MONEY CONCEPT (ICT)The market structure, when viewed through the lens of the smart money concept, refers to the way financial markets operate and how price movements are influenced by institutional investors, or "smart money." These entities, such as banks, hedge funds, and large financial institutions, have significant capital and access to superior information, allowing them to impact market prices and trends. The smart money concept suggests that these institutions leave discernible footprints on price charts, which can be identified through patterns like accumulation and distribution, liquidity hunts, and manipulation of key support and resistance levels. Traders who understand and recognize these patterns can potentially align their strategies with the smart money, improving their chances of making profitable trades by following the sophisticated moves of these influential market participants.
Education
by FrankFx14
ORDER BLOCK AND FAIR VALUE GAP SMART MONEY CONCEPT**Order Block**: An order block is a specific price area on a financial chart where institutional traders have placed large buy or sell orders. These areas often lead to significant price movements and are used by traders to identify potential zones of support or resistance. Order blocks represent clusters of orders from big players like banks or hedge funds, signaling where major buying or selling interest lies. When price revisits these zones, it often reacts strongly, making them valuable for predicting price reversals or continuations. **Fair Value Gap**: A fair value gap (FVG) is a price range on a chart where there is an imbalance between buyers and sellers, often created during periods of high volatility or news events. This gap typically occurs when the market moves so quickly that trades do not fully fill, leaving a visible gap on the chart. Traders use fair value gaps to anticipate potential price retracements to these levels, as the market tends to revisit and fill these gaps over time, aligning price with its perceived fair value. Both concepts are crucial in technical analysis for identifying key price levels where significant market activity is likely to occur.
Education
by FrankFx14
2
MARKET STRUCT USING ICT CONCEPTThe Inner Circle Trader (ICT) concept in trading, developed by Michael J. Huddleston, offers a comprehensive approach to understanding and navigating market structure. ICT emphasizes the importance of market structure, which refers to the organization and arrangement of various market components, such as support and resistance levels, trends, and price patterns. This approach involves identifying key levels where institutional investors might be placing orders, understanding liquidity pools, and recognizing the behavior of smart money. By focusing on these elements, traders can better predict market movements, identify high-probability trade setups, and manage risks effectively. The ICT methodology combines technical analysis with a deep understanding of market dynamics to provide traders with a robust framework for making informed trading decisions.
Education
by FrankFx14
SIMPLE ICT CONCEPTS FOR TRAADING SYNTHETIC INDICES The Inner Circle Trader (ICT) concept for trading Deriv synthetic indices involves using sophisticated market analysis techniques and proprietary trading strategies. It focuses on understanding market mechanics, price action, and order flow to make informed trading decisions. ICT strategies leverage advanced tools and ICT knowledge to predict synthetic market movements, optimizing entry and exit points for higher profitability and risk management.
Education
by FrankFx14
FAIR VALUE GAP OR ORDER BLOCK ENTRYA fair value gap (FVG) and an order block entry are concepts used in technical analysis within financial markets to identify potential trading opportunities. ### Fair Value Gap (FVG) A fair value gap refers to a price range on a chart where there is an imbalance between buyers and sellers, often resulting in a quick movement through this area without much trading activity. This gap can create a zone of interest where price may return to fill the gap, presenting a potential trading opportunity. Traders look for these gaps to predict price movements, expecting that the market will revisit these areas to achieve a fair value. ### Order Block Entry An order block is a consolidation area where significant buying or selling has taken place, often by institutional traders. These blocks are typically identified by a cluster of orders that create a strong support or resistance level. When price returns to this level, it often reacts due to the presence of unfilled orders, providing a strategic entry point for traders. Order blocks are used to predict where the price might reverse or continue its trend, offering a high-probability entry signal based on historical price action. Both concepts are used by traders to make informed decisions based on the past behavior of price and volume, aiming to identify areas where significant trading activity is likely to influence future price movements.
Education
by FrankFx14
ORDER BLOCK CONFIRMATION ENTRY PART 2Sure! Here's another description of order block confirmation with a focus on practical application and detailed examples: ### Understanding Order Block Confirmation: Order block confirmation is a technique used by traders to identify and validate significant price levels where large orders from institutional traders have been placed. These levels often act as strong support or resistance zones. Confirming an order block helps traders make informed decisions about entry and exit points in the market. ### Detailed Steps for Order Block Confirmation: 1. **Identify Potential Order Blocks:** - **Bullish Order Block:** Look for a downtrend that ends with a strong bullish reversal, marked by one or more large bullish candlesticks. - **Bearish Order Block:** Look for an uptrend that ends with a strong bearish reversal, identified by one or more large bearish candlesticks. 2. **Analyze Market Structure:** - **Trend Context:** Determine whether the market is in an uptrend, downtrend, or sideways movement. This context helps in predicting the likelihood of the order block holding. - **Key Levels:** Note the order block's alignment with significant support or resistance levels. 3. **Volume Analysis:** - High volume during the formation of the order block is a strong indicator of institutional activity. Look for volume spikes that coincide with the large candlesticks forming the order block. 4. **Price Action Confirmation:** - **Engulfing Patterns:** A bullish engulfing pattern at a potential bullish order block or a bearish engulfing pattern at a potential bearish order block can confirm the level. - **Pin Bars and Rejection Candlesticks:** Candlesticks with long wicks (e.g., pin bars, hammers, shooting stars) at the order block level indicate strong rejection and confirm the presence of significant buying or selling interest. - **Break and Retest:** Confirmation is stronger if the price breaks through the order block level and then retests it as support (for bullish order blocks) or resistance (for bearish order blocks). 5. **Indicator Confirmation:** - **RSI (Relative Strength Index):** If the RSI shows overbought conditions at a bearish order block or oversold conditions at a bullish order block, it provides additional confirmation. - **Moving Averages:** The interaction of price with moving averages (e.g., 50 EMA, 200 EMA) near the order block level can confirm its validity. A bounce off or crossover can be significant. 6. **Confluence of Factors:** - Multiple confirmations such as Fibonacci retracement levels, pivot points, and trend lines aligning with the order block increase its reliability. ### Practical Examples: 1. **Bullish Order Block Confirmation:** - Suppose the price of a stock is in a downtrend and reaches a level where it forms a large bullish candlestick, followed by increased volume. - The RSI indicates oversold conditions. - The price breaks above the identified order block and later retests this level, forming a bullish pin bar. - This confluence of signals confirms the bullish order block, suggesting a potential entry point for a long position. 2. **Bearish Order Block Confirmation:** - Consider a forex pair in an uptrend that hits a resistance level, forming a large bearish candlestick with a volume spike. - The RSI shows overbought conditions. - The price breaks below the identified order block and retests it, forming a bearish engulfing pattern. - This setup confirms the bearish order block, indicating a potential entry point for a short position. ### Trade Execution and Management: 1. **Entry:** Based on the confirmed order block, place a buy order at the bullish order block or a sell order at the bearish order block. 2. **Stop-Loss:** Set stop-loss orders just below the bullish order block or above the bearish order block to manage risk. 3. **Take Profit:** Identify potential take-profit levels based on historical price action, nearby support/resistance levels, or using risk-reward ratios. By following these detailed steps and examples, traders can effectively use order block confirmation to enhance their trading strategies and improve their chances of successful trades.
Education
by FrankFx14
Order Block ICT (Inner Circle Trader) for Beginners Order block trading is a method championed by the Inner Circle Trader (ICT), a well-known figure in the forex trading community. ICT's approach to order blocks is grounded in understanding market mechanics and the behavior of institutional traders. For beginners, grasping this concept can provide a powerful edge in trading by revealing areas of potential price reversals and continuations. ### What is an Order Block in ICT? An order block, according to ICT, is a price range where significant buy or sell orders from institutional traders have been placed. These blocks represent zones of high interest for major market participants and can serve as indicators of future price movements. Recognizing these zones can help traders anticipate where the market is likely to react. ### Key Characteristics of ICT Order Blocks 1. **Institutional Footprints**: Order blocks indicate the presence of large financial institutions in the market. They reveal where these entities have placed their orders, suggesting potential areas of strong support or resistance. 2. **Price Consolidation and Expansion**: Order blocks are often found in areas where the price has consolidated before a significant move. This consolidation is followed by an expansion, which confirms the presence of large orders. 3. **Market Structure**: Order blocks are integral to understanding market structure. They often align with swing highs and lows, forming critical points in price action analysis. ### Steps to Identify ICT Order Blocks 1. **Identify Swing Points**: Begin by marking significant swing highs and lows on the chart. These are potential areas where order blocks may form. 2. **Spot Consolidation Zones**: Look for areas where the price moves sideways, indicating accumulation of orders by institutional players. 3. **Observe Breakouts**: After consolidation, identify strong bullish or bearish candles that break out of the range, signaling the presence of an order block. 4. **Mark the Order Block**: Draw the order block by marking the high and low of the consolidation area, extending this zone into the future to identify potential trade setups. ### Trading with ICT Order Blocks 1. **Entry Points**: Wait for the price to return to the order block. Look for confirmation signals such as reversal patterns or volume spikes to time your entry. 2. **Stop Loss**: Place your stop loss just outside the order block to minimize risk in case of false breakouts. 3. **Take Profit**: Set your take profit levels based on nearby support or resistance levels, or use a predetermined risk-reward ratio. ### Benefits of ICT Order Block Trading - **Alignment with Institutional Activity**: By focusing on order blocks, traders can align their strategies with the actions of large market participants, potentially increasing the accuracy of their trades. - **Defined Risk Management**: Order blocks provide clear areas for placing stop losses and take profits, enhancing risk management. - **Enhanced Market Insight**: Understanding order blocks helps traders gain deeper insights into market dynamics and price behavior. ### Challenges for Beginners - **Learning Curve**: Identifying and correctly interpreting order blocks requires practice and experience. Beginners may find it challenging to accurately spot and draw these zones. - **Market Variability**: The effectiveness of order blocks can vary with different market conditions. Knowing when and how to apply them is crucial for success. ### Tips for Beginners 1. **Practice on a Demo Account**: Start by practicing on a demo account to build confidence and refine your skills without risking real money. 2. **Use Multiple Timeframes**: Analyze order blocks on higher timeframes for a broader market perspective and on lower timeframes for precise entry and exit points. 3. **Combine with Other Tools**: Enhance your analysis by using order blocks alongside other technical tools like trend lines, moving averages, and indicators to confirm trade setups. Order block trading, as taught by the Inner Circle Trader (ICT), offers a structured approach to understanding and navigating the forex market. By learning to identify and trade order blocks, beginners can improve their ability to anticipate market movements and make more informed trading decisions. With practice and careful analysis, ICT order block trading can become a valuable part of a trader's strategy.
Education
by FrankFx14
High Probability Trading Environments Part 2: Liquidity RunsIn this educational video, we'll explore the distinction between High Resistance Liquidity Runs and Low Resistance Liquidity Runs, crucial for identifying High Probability Trading Environments. Our analysis will focus on NAS100USD, providing insights into potential trading opportunities for the week ahead. By understanding these concepts, you'll gain valuable insights into positioning yourself effectively in the market. Be sure to watch to gain a comprehensive understanding of the key confluences that contribute to successful trading strategies. Understanding Trend Analysis, SMT and ICT Concepts Mastering High Probability Trading Environments Part 1 Kind Regards, The_Architect
OANDA:NAS100USDEducation
by The_Archi-tect
This Completing Transformed My Trading (RESPECT & DISRESPECT)The idea of RESPECT and DISRESPECT completely transformed my ability to effectively read price action and trade profitably. ICT teaches about Premium/Discount (PD) Arrays. There is a lot of bickering and debate as to which of these PD Arrays are better. I'm here to build a case for the idea that they are all equally effective, and are just reference points on a chart to build a trade idea around. To me, it boils down to: Which levels are being RESPECTED or DISRESPECTED? That's it for me, that's what made it all click. That is what helped me stop worrying about every little level on the chart. Once you have a high time frame (HTF) narrative and draw on liquidity (DOL), you know which PD arrays you want to see respected and disrespected. Coming up with your HTF Narrative is also based around what levels are being RESPECTED or DISRESPECTED. I hope this video can give you an a-ha moment like it did for me.
Education
by Tradius_Trades
Mastering High Probability Trading EnvironmentsIn this educational video, we'll delve into High Probability Trading Environments and introduce a simple yet effective concept to confirm their presence . Understanding these environments will empower you to confidently navigate the market with consistency and success. For a comprehensive understanding, I recommend watching my previous video on Understanding Trend Analysis, SMT, and ICT Concepts below. If you have any questions, feel free to leave them in the comments section. Happy trading! The_Architect
Education
by The_Archi-tect
Understanding Trend Analysis, SMT and ICT ConceptsIn this video, I'll delve into the concept of Institutional Market Structure, a vital tool for trend analysis. Specifically, we'll explore the Smart Money Tool/Technique (SMT), which provides insights into whether a market will continue its trend or potentially reverse. Understanding these concepts is crucial for effective trading strategies. Sit back, relax, and enjoy the video! Please do leave any questions in the comment section if you have any. Kind Regards, The_Architect
Education
by The_Archi-tect
4
ICT Unicorn Model - The powerful ModelThe Unicorn entry model in the ICT method combines the concepts of the Breaker Block and the Fair Value Gap, providing a unique approach to identifying trade opportunities. This combination highlights a future area of support/resistance. A Bullish Unicorn Pattern consists out of: A Lower Low (LL), followed by a Higher High (HH) A Fair Value Gap (FVG), overlapping the established Breaker Block A successful re-test of the FVG which confirms the pattern. A Bearish Unicorn Pattern consists of: A Higher High (HH), followed by a Lower Low (LL) A Fair Value Gap (FVG), overlapping the established Breaker Block A successful re-test of the FVG which confirms the pattern In this trading idea, I would combine the movement of DXY and GU/EU to explain the correlation and divergence (ICT SMT). Futhermore, I want to share how powerful the ICT Unicorn Entry Model is.
TVC:DXYEducation
by MrTuanDoan