Smart money does not move price randomly—instead, it follows structured rules to accumulate liquidity and balance imbalances, a concept emphasized in professional Forex Education. The IPDA framework identifies these movements across three key time intervals: 20-day, 40-day, and 60-day cycles, each separated by 20-day periods, providing traders with a systematic approach to market analysis.
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How Does the Interbank Price Delivery Algorithm (IPDA) Work?
The IPDA operates based on liquidity collection and imbalance correction. Smart money targets specific price levels to gather liquidity before initiating directional moves.
Key Levels for Liquidity Collection
The algorithm reviews past price action in three stages:
- 20-day range (most recent liquidity zones)
- 40-day range (mid-term liquidity)
- 60-day range (long-term liquidity)
The highs and lows of these ranges act as liquidity pools, where market makers manipulate price to trigger orders before reversing direction.
Price Movement After Liquidity Collection
Once liquidity is absorbed:
- Price moves toward the next liquidity zone (e.g., 40-day low after taking 60-day high).
- An imbalance is formed and later balanced.
- The cycle repeats, targeting the opposite liquidity zone (e.g., 60-day low).
What Are IPDA Seasonal Shifts?
Another critical aspect of IPDA is seasonal shifts, occurring every 3 to 4 months (quarterly). These shifts represent major liquidity redistributions on higher timeframes, realigning market structure.
Identifying Seasonal Shifts
- Occur around quarterly transitions.
- Marked by new liquidity highs/lows beyond standard IPDA ranges.
- Often coincide with institutional repositioning.
Conclusion
The Interbank Price Delivery Algorithm (IPDA) is a foundational ICT concept explaining how smart money controls price through liquidity and imbalance mechanics. By analyzing 20, 40, and 60-day ranges, traders can anticipate key turning points and align with institutional order flow.
Understanding IPDA seasonal shifts further enhances this framework, allowing traders to adapt to longer-term market cycles. Mastering IPDA provides a strategic edge in navigating Forex and other financial markets.
