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#1 Liquidity Grab
- Identify previous highs or lows as liquidity levels.
- Look for price to:
- Break below a low and reverse upwards.
- Break above a high and reverse downwards.
- This indicates order collection and market participation by institutions.
#2 Market Structure Shift (MSS)
- After liquidity collection, observe an aggressive move breaking previous highs/lows.
- Confirms the market direction shift (Displacement).
#3 Return to Premium or Discount Zones
- Check price position relative to the 50% equilibrium:
- Discount zone (below midpoint): Potential long entry.
- Premium zone (above midpoint): Potential short entry.
#4 Identifying Price Delivery (PD) Arrays
- Use tools such as:
- Fair Value Gaps (FVG)
- Order Blocks (OB)
- Breaker Blocks (BB)
- Each can be used individually or combined to enhance entry precision.
Types of Trade Entry Setups in ICT
Fair Value Gap (FVG)
- After confirmations, price returning to the FVG indicates an entry opportunity.
- FVGs form when trade volume decreases, causing price imbalances.
Order Block (OB)
- OBs form from large order accumulations before significant market moves.
- Entry occurs on the first touch of the OB after meeting entry conditions.
Breaker Block (BB)
- Formed when price penetrates support/resistance and returns.
- Indicates market structure shifts, used as entry points after other confirmations.
BOX Setup
- Accumulation range where price consolidates, indicating order accumulation.
- Entry occurs when price breaks out and returns to this level.
Optimal Trade Entry (OTE)
- Uses Fibonacci retracement levels (0.62 to 0.79).
- Entry opportunity aligns with the main market trend.
Premium & Discount Analysis
- Prices below equilibrium (50%) offer long entries.
- Prices above equilibrium indicate short entries.
Importance of ICT Trade Entry Steps
Adhering to ICT entry confirmations offers the following benefits:
- Reduced drawdowns: Minimises duration trades remain in loss before profitability.
- Higher success rates: Increases trade outcome consistency.
- Improved risk-reward ratios: Enables precise and optimal entry execution.
Conclusion
The ICT trading method revolves around structured steps including liquidity raids, market structure shifts, and returns to key zones. Using tools such as Fair Value Gaps, Order Blocks, Breaker Blocks, BOX setups, Optimal Trade Entries, and Premium & Discount analysis ensures precise entries and informed decision-making for professional traders.