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ICT 2022 Strategy

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681 views2 pages

ICT 2022 Strategy

Uploaded by

xkhouani
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
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ICT 2022 Strategy

The ICT (Inner Circle Trader) Strategy, developed by Michael J. Huddleston, also
known as "ICT," is a trading methodology focused primarily on Forex markets. The
strategy is known for its precision in identifying high-probability trade setups,
with an emphasis on understanding market structure, institutional order flow, and
liquidity concepts.

### Key Components of the ICT Strategy 2022

1. **Market Structure**:
- **Market Phases**: ICT focuses on understanding different phases of the
market, such as accumulation, manipulation, and distribution. Identifying these
phases helps traders recognize potential entry and exit points.
- **Price Action**: ICT places a strong emphasis on reading price action to
identify the underlying trend, support and resistance levels, and potential
reversals.

2. **Liquidity Concepts**:
- **Liquidity Pools**: The ICT strategy looks for areas where liquidity might be
resting, such as above or below swing highs and lows. These areas are often targets
for institutional traders (banks, hedge funds) to execute large orders.
- **Stop Hunts**: ICT traders often anticipate "stop hunts," where the price
briefly moves against the trend to trigger stop losses before resuming the original
direction. This creates an opportunity to enter the market at a better price.

3. **Fair Value Gaps (FVG)**:


- **Imbalance**: ICT traders look for price imbalances or gaps between the bid
and ask during strong price movements. These gaps, called Fair Value Gaps, often
act as magnets for price, and traders anticipate a return to these levels for
potential entries.
- **Entry and Exit Points**: These gaps can provide precise entry and exit
points based on the expectation that price will return to fill the gap.

4. **Optimal Trade Entry (OTE)**:


- **Fibonacci Retracement**: The OTE concept is based on Fibonacci retracement
levels, typically focusing on the 61.8% to 79% retracement levels for entering
trades in the direction of the trend.
- **Confluence**: ICT strategy often looks for confluence with other factors
like market structure, liquidity pools, and Fair Value Gaps to validate the OTE
entry.

5. **Time of Day**:
- **Session Timing**: ICT places great emphasis on specific times of the day for
executing trades, particularly during the London Open, New York Open, and the
overlap between the two sessions.
- **Kill Zones**: The strategy defines specific “Kill Zones” or time windows
where the highest probability setups occur. These include:
- London Kill Zone (2 AM - 5 AM EST)
- New York Kill Zone (7 AM - 10 AM EST)
- London Close (10 AM - 12 PM EST)

6. **Judas Swing**:
- **Manipulation Move**: The Judas Swing refers to a false breakout or a
manipulation move that occurs during the London or New York session, often in the
opposite direction of the true trend. ICT traders look to capitalize on this by
waiting for the market to reverse and then entering in the direction of the main
trend.
7. **Institutional Order Flow**:
- **Following the Smart Money**: The strategy is built around the idea of
understanding and following the actions of institutional players. This involves
recognizing where large orders might be executed and how they impact market
movement.

### Practical Application of the ICT Strategy

1. **Identify Market Structure**: Determine if the market is in a trending or


consolidating phase. Look for key levels of support and resistance.

2. **Watch for Liquidity**: Identify potential liquidity pools above highs or below
lows where institutional players might target. Anticipate stop hunts around these
areas.

3. **Look for Fair Value Gaps**: During strong price moves, identify any imbalances
that could act as areas of interest for price to revisit.

4. **Use the OTE for Entries**: When the market retraces to key Fibonacci levels
(61.8% to 79%), look for confluence with other ICT concepts like Fair Value Gaps or
liquidity pools.

5. **Time Your Trades**: Execute trades during high-probability times, such as the
London or New York Kill Zones, to increase the likelihood of catching significant
market moves.

6. **Be Mindful of the Judas Swing**: Be cautious of potential false breakouts or


manipulation moves and wait for the true direction to establish itself.

### Summary
The ICT Strategy 2022 is a comprehensive trading approach that combines an
understanding of market structure, liquidity, and institutional order flow. It's a
strategy that requires patience, precision, and a deep understanding of how the
market operates. While it is primarily used in Forex trading, the principles can be
applied to other markets as well.

This strategy is best suited for traders who are willing to invest time in learning
its intricacies and who can execute trades with discipline and a well-defined plan.

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