1- What New Traders Should Focus On

ICT CONCEPTS USED IN THIS SPECIFIC MODULE:

Theory of liquidity raids or stop hunts

Introduction to liquidity pools

How to locate high probability liquidity pools

Introduction to the ICT Orderblock

High accuracy entry points

Low drawdown entry tactics

High probability Targeting

Benefit of scaling profits

How to make Money when you are wrong

All of these concepts and ideas will be used in practical application throughout the lecture

we are going to focus on price action and OHLC (Open High Low Close) and NOT on indicators or other
retail strategies.

we’re now on EURUSD 15 min chart

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 before starting the price reading we have to understand what moves the market
“price moves to levels where orders reside”

we want to first highlight all the equal highs and equal lows with a horizontal line (doesn’t matter if
they’re not perfectly aligned)

we do the same thing with the major swing points ( swing point highs and swing point lows)

these two price patterns are the ones that

retail traders use to trade from and trust using a religious strategy

institutional traders use in order to find the needed counterpart to their trades using the retail orders to
their advantage (they buy from the wiling sellers in the form of sell stops and sell to the willing buyers in
the form of buy stops)

sum up: institutional traders buy from the retail sell stops and sell to the retail buy stops but in order to put on
large orders they need a big counterpart and they find it on the key levels we’ve highlighted ( equal highs/lows
& swing points)

small reminder: you have to think in terms of orders—> a stop loss is: a buy stop for a sell position or a sell
stop for a buying position. a take profit is a sell stop on a buy position or a buy stop on a sell position
schematized:

BUY order SELL order

STOP LOSS sell stop buy stop

TAKE PROFIT sell stop buy stop

now that we’ve marked equal highs/lows and swing points we want to know that

there are sell stops AT or BELOW equal lows and swing point lows

there are buy stops AT or ABOVE equal highs and swing point lows

we can now mark the original chart form a different perspective : the institutional perspective

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 For at least one month try to train your eye to see how these levels get manipulated on a couple of pairs
You have to look at 10/20 pips beyond the key levels we highlighted (yellow area rectangle in the picture
above)and look at how many times a manipulation of this kind takes place in the market over the levels (
spoiler: almost every single time :)
we now consider the very last part of price action:(always on 15 min TF)

price went above a key level (old swing point high—> buy stops) —> first yellow area

now is targeting sell stops (equal lows) to sweep them ( second yellow area)

institutional traders will see those two levels (a sell stop key level and a buy stop key level) as liquidity

if you are a new trader you can use these 10/20 pip liquidity raids to your advantage and use them as an
institutional trader would do (buy a resistance to manipulate it and sell a support to manipulate it).

doing so you can target as much as 20/30 pips per week, not more.

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 after you reached your goal of that 20/30 pips you stop trading and practice on a demo account

the setup you want to be using for this initial trading plan is using OTE (Optimal Trade Entry) to

enter at premium before selling and get the 10/20 pip move (for a sell opportunity)

enter at discount before buying and get the 10/20 pip move (for a buy opportunity)

OTE is the zone of price between the 0.618 and 0.79 of fibonacci retracements that we use for the best
premium or discount prices to enter from.

OTE will be explored in the following lessons.

example here below:

we are close to a sell stop level (blue level pointed) —> we want to sell in order to join the 10/20 pips
manipulation move that will break the level highlighted in blue

we apply the fib retracement tool to the most recent price range

we enter off the OTE area for selling at the best possible premium prices

we scale profit at the key level (blue level pointed)

we target 10/20 pips below that as we said before

in fact what the price does is

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 collect (buy from) all the sell stops (in the form of stop losses & actual sell stop orders) and makes a huge
rally up right after that

SECOND ENTRY TYPE OVER KEY LEVELS: ORDERBLOCK ENTRY

if me miss the OTE entry we can still grab an orderblock entry:

we’re now zooming in to look at our zone of interest

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 let’s say that we just missed the OTE entry but we can clearly see a ICT bearish order block right before the
OTE reaction.

once the price gives us a reaction lower and breaks the low of the orderblock candle we’ll wait for the
price to come back to the orderblock in order to enter from there and still benefit from the liquidity raid with
a smaller move (8/10 pips approximately)

if the orderblock is actually valid it will keep the price below itself until the target is reached

as we can see in the picture above the price passes the order bloc to the downside—> we wait for it to come
back and test the low of the OB one more time so that we can still enter short

this kind of trade is a pretty good amount of move for a scalp during a session:

20 pips of the classic liquidity raid range

we enter 7 pips above that

so total it’s a 27 pips move —> pretty clean huh?

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 LIVE EXECUTION BY ICT

He entered right away as soon as the price came back to test the bearish Orderblock created 7 pips before
the actual liquidity raid range

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 we take partials 10 pips into the liquidity raid range

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 we then can easily collapse the trade when it reaches 20 pips range

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 the lowest line you see on the chart is for grabbing an eventual accelerated move on the NY am session open
and it’s not a proper take profit (8:30) AM NYT)

ICT instead of closing the complete trade at 20 pips, moves the stop loss right there ( at 20 pips) and let the
price run or stop him out (in the case the SL is hit he would be in profit by 20 pips)

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 CONCLUSION ON LIQUIDITY RAIDS

a liquidity raid like this is made to :

knock out all the traders that have their early buy positions open by hitting their stop losses

induce traders that put sell stops under that level because they use breakouts to enter

we come to the conclusion that the liquidity raid has 2 main objectives:

liquidation of open orders

inducement of orders to the wrong part of the market

we’ll explore deeply this concept later in the teachings don’t worry ;)

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