Inner Circle Trader Ict Forex Ict Notes
Inner Circle Trader Ict Forex Ict Notes
FOREX
ICT & MMM
notes
JANUARY 2020
Table of Contents
RISK DICLAIMER ................................................................................................................ 6
PRICE FOUNDATION – SWING POINTS (FRACTALS) ............................................................ 7
SWING HIGH .............................................................................................................................. 7
SWING LOW ............................................................................................................................... 7
MARKET STRUCTURE CONCEPT ......................................................................................... 8
TRADING WITH MARKET STRUCTURE ......................................................................................... 9
MARKET FLOW ................................................................................................................ 11
TRADING WITH SUPPORT AND RESISTANCE .................................................................... 12
TYPES OF SUPPORT AND RESISTANCE ....................................................................................... 12
NATURAL SUPPORT AND RESISTANCE ......................................................................................... 12
IMPLIED SUPPORT AND RESISTANCE ........................................................................................... 13
OTHER SUPPORT AND RESISTANCE LEVELS ................................................................................. 15
THE COMMITMENT OF TRADERS DATA AND COT CHARTS ............................................... 18
HOW COMMERCIALS TRADE .................................................................................................... 20
THE COT INSIDER TACTICS ........................................................................................................ 21
STOP LISTENING TO THE HERD .................................................................................................... 21
SEASONAL TENDENCIES ............................................................................................................... 22
SMART MONEY CORRELATION ........................................................................................ 23
USDX SMT DIVERGENCE ........................................................................................................... 23
CORRELATED PAIR SMT DIVERGENCE ....................................................................................... 24
BULLISH SMT DIVERGENCE .......................................................................................................... 24
BEARISH SMT DIVERGENCE ......................................................................................................... 25
THE CRB COMMODITY INDEX SMT DIVERGENCE .............................................................. 27
STOCK INDEX SMT DIVERGENCE ...................................................................................... 27
UNDERSTANDING MAJOR MARKET SWINGS .................................................................... 27
REACTION LEVELS ............................................................................................................ 28
ORDER BLOCKS ......................................................................................................................... 28
BULLISH ORDER BLOCK ................................................................................................................ 28
BEARISH ORDER BLOCK ............................................................................................................... 29
ORDER BLOCK SELECTION ............................................................................................................ 29
LIQUIDITY POOL ....................................................................................................................... 31
LIQUIDITY VOID ........................................................................................................................ 32
FAIR VALUE GAP ....................................................................................................................... 34
LIQUIDITY INJECTION ............................................................................................................... 35
NEUTRALIZING OPEN FLOAT ..................................................................................................... 36
NEUTRALIZING PENDING STOPS ............................................................................................... 37
ENGINEERING LIQUIDITY .......................................................................................................... 38
CROUCHING OUTSIDE ORDER BLOCK ........................................................................................ 38
INSTITUTIONAL PRICING ........................................................................................................... 39
MIDIGATION BLOCKS ............................................................................................................... 40
THE BREAKER ........................................................................................................................... 41
BULLISH BREAKER BLOCK ............................................................................................................ 41
BEARISH BREAKER BLOCK ............................................................................................................ 41
THE POWER OF THREE ..................................................................................................... 42
RISK DICLAIMER
Futures, Options, and Currency trading all have large
potential rewards, but they also have large potential risk. You
must be aware of the risks and be willing to accept them in
order to invest in these markets. Don’t trade with money you
can’t afford to lose.
It should not be assumed that the methods, techniques, or
indicators presented in this PDF will be profitable or that they
will not result in losses.
This PDF is for informational and educational purposes only
and should not be construed as investment advice. Such set-
ups are not solicitations of any order to buy or sell.
Accordingly, you should not rely solely on the Information in
making any investment. Rather, you should use the
Information only as a starting point for doing additional
independent research in order to allow you to form your own
opinion regarding investments. You should always check with
your licensed financial advisor and tax advisor to determine
the suitability of any investment.
SWING HIGH
Ø Ideal Setup is having two lower candles on the left and right with a higher candle in
the Middle
SWING LOW
Ø Ideal setup is having two higher candles on the left and right with a lower candle in
the middle
• If the market structure is bearish, price will be breaking previous swing lows but maintaining
swing highs
• Hunt Intermediate swings, limit your consideration to only trading the Intermediate term
highs for short trades and Intermediate term lows for long trades
• Taking short term scalps and or day trades in that same direction is advised. Your trading
plan is not to capture every move in the market just like easy low hanging fruit.
• Using Daily, H4 and H1 market structure and nesting fractals can be a wildly profitable price
action concept
• When the bearish market structure is broken, the market structure will shift to bullish and
when the bullish market structure is broken, the market structure will shift to bearish.
• Expect market structure to be broken at support/resistance level.
• When the most recent swing low is broken after the move to resistance market structure
will shift to bearish.
• When most recent swing high is broken after the move to the support market structure will
shift to bullish.
• Monitor Market structure on Higher time frame like weekly, daily and monthly charts.
• You can have a bullish market flow in a bearish market structure, for example you can have a
buy trade in Lower time frame within higher time frame bearish market structure.
• Wait for Higher timeframe market structure to be in sync with low time frame market flow.
• Market structure will be considered a move from a major high to major low and vice versa
• In Bullish market structure pay attention to swing lows and not swing highs (buy low)
• In bearish market structure pay attention to swing highs and not the lows (sell high)
• There is high probability of seeing big market shifts after every three months (quarterly).
Monitor market during this period of time and include COT and Dollar index analysis for
confluence.
Ø Measure swing low to swing low, count the days. Multiple that number by 1.28
(round down) and add that number of bars to the swing high in the middle of the
two swing lows. This should bring you to the next swing high.
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MARKET FLOW
• Only previous most recent swing high/low are used to determine the “market flow” with old
swings disregarded.
• There is strong agreement of Market Flow if Daily, 4 Hour, and
1 Hour timeframes are in
line. Focus on 4 Hour Market Flow for consistency. (use H4 chart to see market flow)
• If market structure and market flow are not inline or clear to you, don’t trade
• If recent swing high (fractal) is broken, the market flow is bullish until the most recent swing
low is broken.
• If recent swing low (fractal) is broken, the market flow is bearish until the most recent swing
high is broken.
• Market flow can change at any time.
• Pay attention to intermediate term swings not short term swings
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o Asian Session sets the parameters for the following London session
o London Session sets the parameters for the following New York session
o New York Session sets the parameters for the following
new trading
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session’s trading
§ Begin: 8am EST or 1pm GMT
§ End: 5pm EST or 10pm GMT
§ Allow up to 1 hour before and after these times
Ø Intraday Fractals (short term Support and Resistance intraday)
o Swings that form and retrace back into previous session High or Low
o You can use these levels for low risk entries and take profit
o Use 15 minutes’ chart for monitoring intraday Fractals
Ø Trend line analysis (Channel, Supply and Demand lines)
Once support is broken it will act as support, and once the support is broken it will act as resistance
IMPLIED SUPPORT AND RESISTANCE
Ø Fibonacci Levels
o Retracements
o Extensions
FIBONACCI
• Traders use the Fibonacci Retracement levels as potential support and resistance areas.
Since so many traders watch these same levels and place buy and sell orders on them to
enter trades or place stops, the support and resistance levels tend to become a self-fulfilling
prophecy.
• Traders use the Fibonacci Extension levels as profit taking levels. Again, since so many
traders are watching these levels to place buy and sell orders to take profits, this tool tends
• The Fibonacci tool works best when the market is trending. The idea is to go long (or buy) on
a retracement at a Fibonacci support level when the market is trending up, and to go short
(or sell) on a retracement at a Fibonacci resistance level when the market is trending down.
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In order to find these retracement levels, you have to find the recent significant Swing Highs
and Swings Lows. Then, for downtrends, click on the Swing High and drag the cursor to the
most recent Swing Low. For uptrends, do the opposite. Click on the Swing Low and drag the
• Previous Three Days - Reference the previous three days when trying to determine points to
• Session Highs Lows - You can use a Session High/Low when drawing Fibs. Not just only daily
highs/lows.
TARGETING USING FIB RETRACEMENT
• Upside Objective: Pull Fib from recent swing high to the swing low. First take profit would
• Downside Objective: Pull Fib from recent swing low to the swing high. First take profit
would be around the 100 level and then the 200 level.
• Always look to the left of price to identify other key price levels which may coincide with
• Upside Objective: Pull from the buy point on the swing low towards the previous swing
• Downside Objective: Pull from the sell point on the swing high towards the previous swing
• Prolonged Targeting - Use Fib Retracement and instead of pulling from high to low and the
high sits on the 100 level, raise the Fib tool so that the high sits on the 50 level. You'll see the
extension levels move higher for a longer range price objective in a trending higher market
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FIBONACCI RETRACEMNET LEVELS
LEVEL DESCRIPTION
0 First TP - Scaling
0.62 62%
0.705 Sweet Spot OTE :: %$ ::
0.79 79%
0.5 Equilibrium
1 100
-0.27 TP 1
-0.62 TP 2
-1 Symmetric Swing
2 200
PIVOT POINTS
o Monthly Pivots
o Weekly Pivots
o Daily Pivots
• Typically, when price is trading above central pivot, it's time to sell. When trading below,
it's time to buy. If price has not gone below central pivot for the day, it may act as support. It
may act as resistance if price has not gone above central pivot for the day.
• Use pivots as a tool to find anticipated levels to trade on in the future. Drawn by hand or
indicator from 05:00 GMT. Central pivot acts as an anchor for PA. PA acts like a rubber band;
it moves away from central pivot and then pulls back towards it. However, like a rubber
band, once trend takes off it will snap and fly. Used best in range trading periods.
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• Upper boundary price levels would signify an overbought area and we should look for
opportunities to sell.
• Lower boundary price levels would signify an oversold area and we should look for
opportunities to buy.
• Price will typically come back to the fair value zones in the centre area of the Traders Trinity.
Try not to trade in the Fair Value Zone or doted small lines below oversold area or
overbought area unless there is another indicator or patter like optimal trade entry
supporting it
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• Use D1 time frame for Monthly trinity, H4 time frame for Weekly trinity and M15 or H1 for
Daily trinity
• KEY POINT
o The more times a support and resistance area is “hit”, the more significant it is.
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STOP LISTENING TO THE HERD
• Trade in line with the direction of the most recent 12-month commercial net position
• Wait for price to form intermediate term swings
• Use optimal trade entry pattern to enter and trade with large traders
• Filter Longs when COT reaches 12 months and 4 year extremes on commercial net short
positions
• Filter shorts when COT reaches 12 months and 4 year extremes on commercial net long
positions
• Trade with COT trend engineered by commercials
• Look for seasonal tendencies to line up with net readings for remarkable trade setups.
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SEASONAL TENDENCIES
USD
o Typically tops out in the middle of February and declines into mid-March.
o Last half of March is usually strong and then sells off in April (and last bit of March).
o Middle of June usually marks a short-term high and the USD declines into the end of
August.
o After this the lines become divergent meaning signals are less clear and no strong
EUR
o The Euro typically forms a bottom in mid-February and then moves higher into mid-
march. A pull back then occurs then we see another climb into the end of April.
o Early to late September begins a bullish trend for Euro through year end with a
pullback in October.
GBP
o The Pound typically forms a bottom in early March and then moves higher into
o A bottom typically forms again in mid-May we see a move higher into early
August.
o Price peaks in early November and the price slides into mid-to-late November.
o Prices bottom in late November and rally into the end of the year.
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• Trading correlation is a smart money fingerprint they leave in charts as they switch the tide
• Intermediate term swing points are where the real potential resides, not minor swings
• When the correlation materializes at predetermined support & resistance levels we can be
• When trading currencies, the USD index is used to determine the current market tone.
o RISK ON
Ø Dollar Falls
o RISK OFF
Ø Dollar Rise
• If Dollar goes up, Commodities, Equities and Foreign currencies will be going down.
• If Dollar goes down, Commodities, Equities and Foreign Currencies will be going up.
• Given inverse correlation of pairs, when price on one has lower lows, it is expected that the
other should reach higher highs. When this does not occur, we have SMT Divergence. This is
direction.
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• Compare lows in correlated pairs like EURO and POND at key support level. If one fails to
make a lower low that is indicating a short term shift in the market to bounce higher
• Compare highs in correlated pairs at key resistance level. If one fails to make a higher high is
• If one pair fails to make a lower low while the other succeeds, then expect both pairs to
• When looking at Support plays or "buys" - consider the pair that fails to make the lower low
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respectively. Premise behind this: The pair that fails to drop lower, it is being bought and
hence, not willing to go lower... this is essentially "Demand in Operation"... anticipate Higher
prices.
• EUR/USD is making higher lows while GBP/USD is making lower lows > Buy EUR/USD
• If one pair fails to make a higher high while the other succeeds, then expect both pairs to go
• When looking at Resistance plays or "sells" - consider the pair that fails to make the higher
highs respectively. Premise behind this: The pair that fails to rally higher, it is being sold
and hence, not willing to go higher... this is essentially "Supply in Operation"... anticipate
Lower prices.
• EUR/USD is making higher highs while GBP/USD is making lower highs > Sell GBP/USD
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Real Example of Correlated Pair SMT Divergence (GBP/USD
vs. EUR/USD): GBP made a higher high
while EUR failed to make higher highs. This signal a reversal for both pairs.
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• The CRB index tends to be a bit early to change direction and can warn of possible long term
shifts in trend
at support
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REACTION LEVELS
• Use Highest time frame (Monthly, Weekly and Daily time frame.
• In our class we will be looking at D1 and H4 after having Monthly and weekly bias.
• Institutions are watching at higher time frame reaction levels
o Mark/Draw horizontal lines at swing points on Daily time frame (Every turning point
or fractal)
o Major price reaction levels occur around annually highs and lows, Quarterly high
and lows (January to March, April to June, July to September and October to
December) mark the highest high and lowest low of each quarter, also Monthly
highs and Lows, Weekly and Daily high and Lows.
• Whenever you see a swing point mark or draw horizontal lines to open, close, high and low
of each of three candles that forms a swing/fractal and look for price reaction around those
levels
• As you move from higher to lower time frame i.e. D1 to H4, you can add dynamic support
and resistance from the lower time frame because they won’t be visible on D1 time frame
• You don’t look for a trade pattern on intraday chart unless it is trading on higher time frame
reaction level
• You can plot Support and resistance on 15M chart too but they are not as important as
those on D1 and H4 because those are the levels where institutions are looking for value.
• Focus on tracking trades only at higher time frame support and resistance levels, don’t focus
in the middle (between support and resistance)
ORDER BLOCKS
• Order blocks are specific candles or bars that when properly viewed in institutional context
can highlight smart money buying and selling.
• Apart from using commonly used “supply and demand zone” Order block are very specific
levels that can be refined to lower time frames to exact price levels… not a bread range or
zone.
• The higher time frame institutional order flow is critical to selecting high probability Order
blocks to trade on. Understanding the current trading range is equally important in
relationship to detecting the actions of the smart money traders or Institutions and Banks
(MN, WK, D1 and H4) are higher time frames.)
BULLISH ORDER BLOCK
• Definition – The Lowest Candle or Price Bar with a Down Close that has the most range
between Open to Close and is near a “Support” level.
• Validation: When the High of the Lowest Down Close Candle or Price Bar is traded through
by a later formed Candle or Price Bar.
• Entry Techniques: When Price Trades Higher away from the Bullish Order block and then
Returns to the Bullish Order Block Candle or Price Bar High – This is Bullish.
• Defining Risk: The Low of the Bullish Order block is the location of a relatively safe Stop Loss
placement. Just below the 50% of the Order block total range is also considered to be a good
location to raise the Stop Loss after Price runs away from the Bullish Order block to reduce
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BEARISH ORDER BLOCK
• Definition – The Highest Candle or Price Bar with a Up Close that has the most range
between Open to Close and is near a “Resistance” level.
• Validation: When the Low of the Highest Up Close Candle or Price Bar is traded through by a
later formed Candle or Price Bar.
• Entry Techniques: When Price Trades Lower away from the Bearish Order block and then
Returns to the Bearish Order Block Candle or Price Bar Low – This is bearish.
• Defining Risk: The High of the Bearish Order block is the location of a relatively safe Stop
Loss placement. Just above the 50% of the Order block total range is also considered to be a
good location to raise the Stop Loss after Price runs away from the Bearish Order block to
reduce Risk when applicable.
• To put it in a simple way, the bullish order block is the last bearish candle before the move
up to break previous swing high and bearish order block is the last bullish candle before the
move down to break the previous swing low.
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LIQUIDITY POOL
• Liquidity pools reside just above previous high and below previous low.
• Smart Money will fake breakout to these levels to take stops and pretending orders but they
won’t maintain the overall direction.
• When you open your charts, the first question you should ask yourself is “where is the
money”? for a buy trade see swing lows that are potential for stops to be placed there, there
is where the money is and for sell trade see swing highs that are potential for stops to be
placed.
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LIQUIDITY VOID
• Liquidity Void is a range in Price Delivery where one side of the Market Liquidity is shown in
wide or “long” one sided ranges or candles. Price typically will want to revisit this “porous
range” or void of contrarian liquidity.
• The market will slip to the only available trade levels as a result of thin liquidity and these
voids in liquidity will be revisited at a later time.
• The market will seek to “fill in” any gaps or missed levels on trade. Impulse price swings are
typically seen with these voids in liquidity.
• Liquidity void is when you see a burst move or a very move long without a pause after
consolidation, if you missed the opportunity don’t worry because price will fill the burst
range and retest the Order block before the burst move.
• Identify consolidation before the burst move and the order block to find opportunity, you
can trade the move back to the Order block although it is not advisable because the move
will be fast.
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LIQUIDITY INJECTION
• Is the Judas swing or stop hunt move that will take the stops sitting above previous swing
high or below previous swing low.
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ENGINEERING LIQUIDITY
• This is the false move after Asian Range consolidation that will validate trades to the
direction of the Overall trend and stop them in London or New York before going to the
intended direction.
• In order to avoid fake breakouts coming out of Asian Range make sure you understand high
timeframe direction and order block.
• When you see double bottom/top just know stops are sitting below/above them and Market
Makers will take those stops before continuing to the intended direction
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INSTITUTIONAL PRICING
• These are specific levels where when we see price is trading there and they are in line with
higher time frame Support/Resistance or Order block and fib retracement will give us
confirmation that trade to the direction of the market will be going underway
• The institutional numbers are 11,20,50,50 and 10,30,60 ,90
• Pay attention to the body of the candle at these numbers and not the wicks
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MIDIGATION BLOCKS
• You will see these orders most often at Support/Resistance in Intermediate term or long
term high or low when market structure is broken.
• For a sell trade you will use the last bearish candle (bearish order block) before the move up
that took the stops high and break the market structure low.
• After the market structure is broken, wait for price to trade away from the point where it
was broken and pay attention to the bearish order block as per explanation above which
most of the time it will be a short term low fractal and there is high probability of price to
trade back to the low of the bearish order block.
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THE BREAKER
• The breaker is more like midigation blocks.
• This is the order block prior to Judas swing going or in London session that will break the
Asian range to the opposite direction of the market trend.
• After the false move price will go to the intended direction and it will break the Asian Range
to the true direction of the market and the order block prior to the false move.
• Allow price to move after the break of the Order block and wait for retracement to the order
block as it is illustrated in midigation blocks.
• The Breaker Block will take the previous swing high before it takes the support and it will
take the previous swing low before it takes the resistance
BULLISH BREAKER BLOCK
• Bullish Breaker Block is a bullish range or Up Close Candle in the most recent Swing High
prior to an Old Low being violated. The Sellers that sold this Low and later see this same
Swing High violated – will look to mitigate the loss. When Price returns back to the Swing
High – this is a Bullish Trade Setup worth considering.
BEARISH BREAKER BLOCK
• Bearish Breaker Block is a bearish range or Down Close Candle in the most recent Swing Low
prior to an Old High being violated. The Buyers that buy this Low and later see this same
Swing Low violated – will look to mitigate the loss. When Price returns back to the Swing
Low – this is a Bearish Trade Setup worth considering.
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Accumulation phase)
DISTRIBUTION PHASE
THE OPEN
• Smart money distributes above the open and accumulates below the open
o For the up days, the move below the opening price is the Judas Swing or stop hunt
move, if you see a fast move below the opening price that is the confirmation that
o The open will be near the low of the day, typically 20% of the total range, there will
be a long body in the middle, then the close will be near the high of the day,
o For the down days, the move above the opening price is the Judas swing or stop
hunt move, if you see a fast move above the opening price that is the confirmation
o The open will be near the high of the day, typically 20% of the total range, there will
be a long body in the middle, then the close will be near the low of the day, typically
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o If we are looking for a buy trade, we will be waiting to see a move below the
o If we are looking for a short trade, we will be waiting to see a move above the
o Smart Money buys in down move and sell in up move, so should you.
• You need to make sure you have higher time frame premise in mind
• Wait for price to get to specific levels, don’t enter before they go to support/resistance of
• In summary you will be looking for open price, Judas Swing or false move and range
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• Time and price theory is when price meets support/resistance at specific time of the day
that we anticipated high/low to be formed (Kill zones). When this unfold it will give us a
• For example, Monday, Tuesday and Wednesday are high probability days for high of the
week or low of the week to be formed but look closely for Tuesday and Wednesday London
open
KILL ZONES
• We need to understand that there are specific hours of the day that high/low of the day is
likely to form, understanding this will help you to know when you want to look for a setup
• Below are specific hours or Kill zone that will be used to hunt for trades
o Allow up to 1 hour before and after the kill zones timings because sometimes setup
will come 1 hour early or 1 hour before and because of Daylight Saving Time.
• Monitor 4 hours after 05:00 or New York midnight, there is high probability of high/low of
• You will see high/low of the day forming most of the time around 09:00 – 09:30 GMT
• 10:00 GMT most of the time expect to see a Judas Swing or and Divergence above/below
the 07:00 – 09:00 GMT price that will form a swing high/low to the direction of the market,
for example if you are in a sell trade you will see a move back to the higher of the day that
will form a swing high and continue down. Mark the opening price of 10:00 GMT and most
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of the time this price will setup New York Optimal Trade Entry in sync with High/Low that
was formed in London. In New York most of the time price will trade back to 07:00 Price and
give you optimal trade entry. When you don’t see a Judas swing in London expect the Judas
• For a sell trade, most of the time high of the day will form in first 4 hours after 05:00 GMT
(London open kill zone) but ideal time window for a high to form is 07:00 – 10:00 GMT and
low of the day will form around 15:00 – 16:00 GMT and vice versa for a buy trade (if you
were selling from London open kill zones you need to close trades around 15:00 – 16:00
GMT
• Typically, the daily high or low is formed on a sharp counter trend direction on that day.
• 05:00 GMT is the beginning of the true trading day and end of Asian range
• 10:00 – 11:00 most of the time you will see a pause in price after London move or a Judas
swing that will make a fractal to the direction of the market in lower time frame
• 12:20 GMT (20 minutes after the beginning of New York kill zone) is when futures contracts
begin trading
• Start looking for New York trade setups from 12:20, for a buy trade you need to buy 10pips
below the 12:20 price and for a sell trade you need to sell 10 pips above the 12:20 price for
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MARKET PROFILES
• Traders all too many times rush into the action of entering trades with no real
• Market profiling is a concept that classifies what type of trading environment the current
• This swings the odds of success when you apply the proper technical analysis to the present
profile
o Understand where you are in the move that may already exist.
o If in bearish market environment, during a consolidation range you can identify false
opportunity to establish your position in anticipation of where the trend will go.
o Consolidation is equilibrium, when price breaks the consolidation it will retest the
TRENDING PROFILE
o Don’t enter in a move that has already started, wait for another
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REVERSAL PROFILE
o The profile will form a sell day during a bullish Asian, London and possibly
NY session but fail to hold its rally and reverse lower. It will form a buy day
during a bearish Asian, London and possibly NY session but will fail to hold
its lower price slide and reverse higher. Typically, New York Open, London
ICT BUY AND SELL MODEL
BUY MODEL
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• This pattern is in all the time frames and all the tradeable instruments.
Consolidation
o If you want to sell you can start looking for patterns here
o Price will break the low of the consolidation and retest the consolidation
then run into key Support level or Order block, sometimes there won’t be a
retest to the consolidation and price will fall directly to key support.
o Having reached at the key support level price will reverse to the upside, look
o After rejection at the support price will run higher and accumulate low risk
buy trades
Re-accumulation
o This is the area that you need to pay attention, for example if the higher
o But if the market structure is bullish, price will trade above previous
accumulation and stop those who went short on the move to support
Distribution
o After taking stops above the previous accumulation price will distribute to
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SELL MODEL
• This pattern is in all the time frames and all the tradeable instruments.
Consolidation
o If you want to sell you can start looking for patterns here
o Price will break the high of the consolidation and retest the
o Having reached at the key resistance level price will reverse to the
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o After rejection at the resistance price will decline lower and accumulate
Re-accumulation
o This is the area that you need to pay attention, for example if the higher
o But if the market structure is bearish, price will trade below previous
Distribution
o After taking stops below the previous accumulation price will distribute
(consolidation) areas
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weekly, then daily charts before moving to lower time frames like H4, H1, M15 and M5
charts
• Understand where price is trading from and where is reaching for, where is the next level of
institutional interest
• When looking at Monthly chart, Key support and resistance levels, look for old highs and
lows with significant reactions and the monthly order blocks, you can cut through the
candles and use reactions levels on the left like the order blocks (order blocks are
• After moving from Monthly to weekly time frame, start looking for new Key Support
• Look for weekly order blocks, consider the old order block on the left
• Look for areas of liquidity above old highs and below old lows
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• Look for new key Support and Resistance levels of daily time frame – use 2-3 years data and
don’t discount the levels acquired of the study of monthly and weekly charts
• Consider seasonal tendencies – They are not guarantee but more like a map
• Highlight key swing highs and lows – open, close, high and low of 3 bar patterns
• Identify major reaction levels where price obviously and strongly move away from a level
• Highlight potential order blocks where price will possibly react in similar fashion, consider
• Look for areas of liquidity above old highs and below old lows
• All levels and blocks are carried over to the lower H4 and H1 or lesser charts
• The D1 analysis is kept in focus. We hold to this bias as our foundational basis for trade idea
stalk setups on
o While D1 analysis is in buy model, we look for key support levels to stalk
setups on
• Look for new key Support and Resistance levels of H4 time frame
• Order blocks can be fine-tuned on this period and more precise levels at or near institutional
levels
• Define the H4 market flow and couple this with market structure
• Fibonacci levels
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• Look for price patterns (Head and shoulders, M or W and other patterns)
• D1 analysis can be mixed. Consult the H4 perspective, ideally D1 and H4 will agree
• The order blocks on both D1 and H4 will produce highest probability setups. Focus there
• Look for new key Support and Resistance levels of H1 time frame
• The reaction levels seen on the H1 chart will permit fine turning order block
• Viewing the weekly perspective on a H1 chart will provide a good vintage points for swings
• Look for logical levels where retail traders and funds would possibly have stops resting near
• The day of the week theory is rough idea where the weekly high or low is likely to form
• Fibonacci levels
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• Have the day separated with vertical lines to have or highlight possible day of the week
theory
• Look for key support and resistance levels of higher than H1 time frame
• Look for sessions highs and lows, weekly and daily open and close price
• Fibonacci levels
• Look for Asian range (00:00 – 05-00 GMT = initial high and low of the day)
• Look for price patterns – Do not rush the pattern. Wait for the setups and the time of the
• Look for key support and resistance levels of higher than H1 time frame
• Look for sessions highs and lows, weekly and daily open and close price
• Fibonacci levels
• Look for Asian range (00:00 – 05-00 GMT = initial high and low of the day)
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PRIMARY OBJECTIVE
o Know your timeframe for trading
PROFFESIONAL PERSPECTIVE
o Frame trades on at least three time frames
§ Position Trades (Month or More) - Monthly Time Frame, Weekly
Time Frame and Daily Time Frame
§ Swing Trades (Week or More) - Daily Time Frame, 4 Hour Time
Frame and 1 Hour Time Frame
§ Short Term Trades (One Day or More) - 4 Hour Time Frame, 1
Hour time Frame and 15 Minutes Time Frame
§ Day Trades and Scalps - 1 Hour Time Frame, 15 Minutes Time
Frame and 5 minutes Time Frame.
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• Monitor if you see a strength or weakness in the stocks, commodity, dollar index, and COT,
• Are there any market reports? Due to that might change the current market tone?
• The more the other asset classes confirm or negate your trading idea, the better.
• This stage of analysis is where you will spend the majority of your time, it is on the weekly
and daily time frames. Since the trades are based on these higher time frames, there might
• You want to track the COT, CRB, USDX, Seasonal tendencies, Key support and resistance
• This is the stage of analysis where you hunt setups based on the insight and conclusions you
• If Risk On – Look for setups to buy currencies and confirm these setups with higher moving
or poised to rally stock indices, CRB, Oil, Gold and SMT concept and vice versa if Risk Off
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• This is the stage of analysis that requires your concepts for trade management on open
positions. The management of profit objectives, stop loss, limit orders, Initial take profit and
• Your trading plan must have clear concepts and techniques for the process you will adhere
to when managing open positions. This stage of analysis is crucial for consistency and
longevity.
• You can find wonderful setups, enter at optimal trade entry points and still mismanage the
trade is this stage you will find your results bring with it loss and regrets.
• This stage of analysis is seen when your trades are open and you suspect or clearly see
reasons to collapse the trade and cut your losses or take what profits you have open
• There must be a clear parameter in your trading plan that would invoke an immediate trade
• This might be a result of a report or news event and or you realize you were human and
essentially wrong.
• This stage of analysis is where you record your Journal what your trade idea was based on.
What tools you used and why? Screenshot before taking a trade and after results. Record
how you felt going into the trade, while the position was open what made you nervous
• The results of the trade should be documented and reflection on the trading plan and was it
adhered to from beginning to end. Document any lessons learned from the trade and what
you would have liked to have done differently. Determine what leverage and or lot size your
• Keep these records and refer to them when you experience a period of drawdown and or a
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string of losses. It will remind you that temporary losing streaks come and go
• Daily buy or sell in effect swing point at key Support / Resistance levels
• Transport the key levels from Monthly, Weekly and Daily charts to lower time frames charts
• Optimal Trade entry – Basis lower time frame at key support / resistance, use any pattern
you like in this area like turtle soup, reflection pattern, Optima trade entry, TDI signal, M or
W etc.)
• Limits orders used at 62% - 70.5% (sweet spot) fib levels (pending orders)
• First take profit is taken at 50% of position at 20-30 pip profit and move the balance position
• Targets on balance are scaled at fib extensions 127% and 162% or 200%
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• When 18 EMA is above 40 EMA and if it’s opening up/widening (don’t pay attention to
crossover) you want to be looking for a buy signals and if 18 EMA is below 40 EMA and if it’s
• Many times 18 EMA acts as dynamic support/resistance on a D1 time frame, most of the
time when price is trading to 18 EMA you will see hidden divergence or OTE pattern
• After a move up if you see 18 EMA starts to go down prepare for consolidation and vice
• You won’t get in at absolute highs and lows and you won’t get out at absolute highs and
lows because there is no need of catching every pip (significant highs will form above
• It doesn’t mean if 18 is above 40 EMA you won’t have sell programs; it simply means you will
be focusing more on buy programs (focus on fractals low/swing low) and after the fractal
• It doesn’t mean if 18 is below 40 EMA you won’t have buy programs; it simply means you
will be focusing more on sell programs (focus on fractals highs/swing highs) and after the
• Always be patient and wait for the new fractal to form to be in sync with the market flow
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Buy Signal
• Optimal trade entry for entry price and fib extension for take profit
Sell Signal
• Optimal trade entry for entry price and fib extension for take profit
o Trade what you see, if you see a sell on a buy model, that is what you
should go for
TRADING INTRADAY
Day Range is going to be primary decision whether you are going to be a buyer or seller on a
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Buy Signal
• Optimal trade entry for entry price and fib extension for take profit
Sell Signal
• Optimal trade entry for entry price and fib extension for take profit
• On a buy trade, wait for initial low to be breached below the opening price and make sure
the price has traded to higher time frame support level within a kill zone
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• On a sell trade, wait for initial high to be breached above the opening price and make sure
the price has traded to higher time frame resistance level within a kill zone
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• Anticipate a Judas Swing Lower (you can trade this move knowing trading to support)
• Risk 20 pips
o Assuming total risk on trade is 2% of Equity, Take 50% of position off @ ~20-30 pips
for 1% gain (Scalp). Remaining 1% portion will be held for the daily range. Look for
time of day objective and keep protective stop outside the daily range.
o Protective stop at Breakeven after taking profit on first half of trade.
• Look for Time of Day Objective around NYO, LOC, and 18:00 GMT.
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• Anticipate a Judas Swing Higher (you can trade this move knowing trading to resistance)
• Risk 20 pips
o Assuming total risk on trade is 2% of Equity, Take 50% of position off @ ~20-30 pips
for 1% gain (Scalp). Remaining 1% portion will be held for the daily range. Look for
time of day objective and keep protective stop outside the daily range.
o Protective stop at Breakeven after taking profit on first half of trade.
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• Look for Time of Day Objective around NYO, LOC, and 18:00 GMT.
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SESSION TRADING
ASIAN SESSION
• The Asian Range determines the directional bias or likely direction for the majority of the
London & NY sessions. Where the money is positioned in Asian dictates the profit release on
the trading day. Typically, Asian session trades counter the NY session direction in a
corrective bounce.
• Although the volatility is the lowest in this session, this can provide ideal “learning
environment” for new traders. Not to mention long term position trading can and typically
find entry signals in the Asian session… thus lending well to Day job traders.
and New York sessions with Yen Pairs consuming most of the volume.
• News releases of Australia, Japan and China can impact this session.
• Ideal range for Asian session is 50 pip, if the range is more than 50 pip, look for Optimal
trade entry inside the Asian range, in this scenario you won’t see a Judas Swing outside the
Asian Range
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• Typically, the Asian session will trade counter New York session direction. Even in bear
trending market environments the Asian session will engineer a rally that many times
• Note key support/resistance levels on higher time frame (Weekly, Daily, H4 and note less
than H1)
• Anticipate optimal trade entry buys to form in Asian session when price trades down to
support (waif for it to bounce of at least 20 pips from support and start looking for OTE)
• Take profit at OTE from New York Swing and Leave a portion for continuation into London
Open (Initial swing that was made after a pullback from support)
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• Typically, the Asian session will trade counter New York session direction. Even in bull
trending market environments the Asian session will engineer a decline that many times
• Note key support/resistance levels on higher time frame (Weekly, Daily, H4 and note less
than H1)
• Anticipate optimal trade entry sells to form in Asian session when price trades up to
resistance (waif for it to bounce of at least 20 pips from resistance and start looking for OTE)
• Take profit at OTE from New York Swing (Initial swing that was made after a pullback from
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• London Open Kill zone: 06:00 – 10:00 GMT (Ideal time is 07:00 – 09:00 GMT)
• When Considering the 24-hour trading day in forex, the largest range of pips is without a
• The Lion’s portion of the Daily Range is put in during the London and New York sessions
• It is possible to establish an intraday position and catch “The London Express” (London
express is Swing or true move that is 4-8 hours in duration). This is essentially the daily
• After stops are taken out, price moves lower testing key support levels & OTE.
• From London Open to Close or 18:00 GMT, the Daily Range is put in and you should not use
• Buy below 05:00 – 05:30 price, below opening price and below Asian Session Swing Low
• In Bullish conditions you may leave a portion of the trade on beyond 18:00 GMT for short
term overnight trades that can pay well with only 10-20% of original position.
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• After stops are taken out, price moves higher testing key resistance levels & OTE.
• From London Open to Close or 18:00 GMT, the Daily Range is put in and you should not use
• Sell above 05:00 – 05:30 price, above opening price and above Asian Session Swing High
• In Bearish conditions you may leave a portion of the trade on beyond 18:00 GMT for short
term overnight trades that can pay well with only 10-20% of original position.
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o Turtle soup is initial fake out outside Asian range before the real Judas swing
o After turtle soup the Judas swing will begin and break Asian Session Hi/Lo to
anticipate price to retest the broken Asian range but sometimes there might
be a minor to no pullback to the Asian range (refer to the ICT buy and sell
Model)
Higher Time Frame Order Block, Previous day Hi/Lo, Previous Week Hi/Lo,
• Additional trade entries can be made in the direction of the “London Express” in New York
Open
• Most of the time during 12:00 you will see a small retracement that might scare you, don’t
panic
• Take profit objectives should be based on time and price theory at key levels (ideal time for
• Also take profit when price trades back to Asian range or before New York open (most of the
time price will retest the high/low that was formed in the London session before
continuation – Judas)
• When price has reached key support/resistance level start looking for SMT divergence and
other patterns and indicators for signal, (you can use 5 minutes’ chart for entry at key
support/resistance level)
• Entries should be within the London Kill zone (06:00 – 10:00 GMT but the ideal London open
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• Key Speeches
• Holiday trading
Occasionally
• If the Asian session range is over 50 pips, wait for New York trade to be safe
• Generally, the market will look to encounter profit taking around 16HRS GMT as London
traders close their trading day and NY traders are taking lunch.
• Quick 15-20 pips scalp using 5 minutes’ chart to the opposite direction of the daily trend if the
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• Reference the US Dollar Index and determine if it has met its 5-day Average Daily Range
• Prior to the London Close Kill Zone window determine higher timeframe Weekly, Daily, 4-
• Note the previous 3-day highs and lows, Session Highs/Lows, and Pivot Points
• As price drops down into the ADR level and Kill Zone, look at the 5-min lows for a bounce off
• After the bounce, pull a Fib over the short term upswing and consider buying the pair at OTE
• Risk 10 pips under the low used for the Fib and take profits on 15-20 pips and hold for the
• Ideally, better trades form on swings measuring at least 15%-20% of the daily range of the
trading day.
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• Reference the US Dollar Index and determine if it has met its 5-day Average Daily Range
• Prior to the London Close Kill Zone window determine higher timeframe Weekly, Daily, 4-hour, 1-
• Note the previous 3-day highs and lows, Session Highs/Lows, and Pivot Points
• As price rises up into the ADR level and Kill Zone, look at the 5-min lows for a bounce off of one of
the levels.
• After the bounce, pull a Fib over the short term downswing and consider selling the pair at OTE on
• Risk 10 pips above the high used for the Fib and take profits on 15-20 pips and hold for the low of
• Ideally, better trades form on swings measuring at least 15%-20% of the daily range of the trading
day.
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• Trend trade entry to get in sync with the daily trend or long term price swing. This will happen
• This trade will form the high or low of the day and above/below London open high/low
• Look for Higher time frame support and resistance level, this will happen if price didn’t trade to
• For the London close trend trade sell, the day will start as classic buy day and reverse in
London Close/Late New York and price will trade below London low
• For the London close trend trade buy, the day will start as classic sell day and reverse in
London Close/Late New York and price will trade above London high
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• High or Low of the day can be formed in New York open too
• New York session is the easiest one to trade as London session high/low already in place
• Majority of time this session will trade in sync with higher time frame direction
• Consider London and Asian session highs and lows (price might bounce off these levels)
• Most of the time price will trade to the direction of the move that was established in London
session
• Consider 5:00 – 5:30 GMT price level as most of the time price will retrace to these levels
• Expect a pullback to the high or low that was formed is London, most of the time price will
• Avoid New York Open setups If D1 swings are maturing into key support/resistance level
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• Always buy when the market drops at the right time of the day at key support level (buy
• On a buy day, if price starts by trading above the opening price, do not fall for that and wait
• The faster the move to the support the good the trade, (it will look stupid and scary but buy
• The distance from the open price to support will be 15 – 30 pips on average. If the move
from open price to support in London session is more than 30 pips, wait for New York trade
• If you can’t trade London session you can trade New York session to get in sync with London
trade
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• This will unfold in the middle of a Larger swing (strong move has minor to no retracement,
most of the time price will consolidate after a strong or very big move and this template will
unfold)
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• The reversal market profile is one that typically forms as a ‘Key Reversal Day”.
• It will form a sell day during a bullish Asian, London and Possibly into New York session but
o The Swing up will likely be the Right Shoulder of an inverted head and shoulders top
o This move will many times look just like classic London open buy day
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o Instead of seeing the typical London Close counter trend, reversal then
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o The Reversal Decline will blow through the New York lows, London lows and Asian
low
o Many times at 18:00 GMT or even later the market will eventually consolidate into
• The reversal market profile will form a buy day during bearish Asian, London and possibly
into New York session but fails to hold its lower price slide and reverse higher
o The Swing down will likely be the Right Shoulder of an inverted head and shoulders
bottom on higher time frame or Swing down to the higher time frame OTE
o This move will many times look just like classic London open sell day
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o Instead of seeing the typical London Close counter trend, reversal then
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o The Reversal Rally will blow through the New York highs, London highs and Asian
high
o Many times at 18:00 GMT or even later the market will eventually consolidate into
• Typically, New York open, London close and late New York Session posts the Reversal
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• This pattern will unfold most often during the NFP, FOMC and Interest Rates
Announcements
• Before the News price will break London Lows and rally after News Release
• Always remember to see cross pairs of the major pair you are trading when this template
unfolds
o If Dollar dropping, GBP is buying and EUR is consolidating, wait for GBP to hit
resistance level and EUR will give nice range to NYO/LC rally setup
o If majors are consolidating but crosses are moving, wait for the crosses to hit key
Support/Resistance levels and come back to majors and trade to the direction of the
crosses
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• This pattern will unfold most often during the NFP, FOMC and Interest Rates
Announcements
o During the News releases price will drop to induce traders and take stops (this move
might not be that big below the consolidation but it has to break the consolidation)
o After clearing the stops and inducing, price will move into true direction
• You have to identify Key support level or order block below the consolidation
• See if price will reject at support/resistance within 5 minutes after News release, if it won’t
reject then leave the trade because you might be wrong in your analysis
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• This template will unfold most often after a big move/swing or at the end of the price move
(support/resistance)
• It is better to trade when a pair is in the middle of the range knowing it is going to support or
resistance rather than trading a pair that is already in support/resistance because we don’t
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o One of the most difficult ways to trade is to try to trade the News Releases
o The Internet is littered with so-called robots or programs designed to quickly give
you trading profits on the kneejerk reaction to the News (this is pure gambling)
o We can never know for sure what the numbers will be in the reports, we don’t guess
o However, we can wait for the release and watch the reaction and many times a
signal will form shortly after the release (within 5 minutes after release)
o Many times price will trade counter direction to the intended news hawks
o Use News for injections an volatility and to fuel trade ideas based on price action
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UK – THE POUND
• Retail Sales
• Consumer Prices
• Claimant Count
• Industrial Production
US – THE DOLLAR
• Retail Sales
• Trade Balance
• Germany Unemployment
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MONTHLY RANGE
• Determine the current market structure
• Understand where the market is trading from and where is reaching to (support and
resistance)
• Focus on swings and turning points
o Use mt4 fractal indicator to see the swings
o Swing points on monthly time frame has a huge impact on where the price is going
to go.
• Note the key support and resistance levels
o From support we are trading to resistance and from resistance we are trading to
support
• Use the most recent high and low of the current big range (small ranges within the big
range)
o Apply fib and note the retracement levels (within 62% and 79%) – use horizontal
lines or rectangle to mark these levels. You will see price reacts when it gets to these
levels (new swing will be formed to the direction of the market flow)
o At the turning point the new high and low becomes a new range to apply fib
o Always note the range of every new high and low within the big range
o Don’t forget to use overall range
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You can do the same to weekly and daily ranges
THE AVERAGE DAILY RANGE
• Align your trades to expectations to 5 day ADR
• If the range was contracted for 5 days expect a range expansion
• Once trade entry- stalk ADR objectives
• Anticipate profit objectives near ADR
o If ADR is 100 pips get out at 80-90 pips, you don’t have to capture the actual
high/low
• Expect 15:00 to 16:00 GMT, ADR convergences and other technical to confirm profit taking
objectives
• If ADR has exceeded use fib from ADR low to ADR high for extension objectives
• Load ARD indicator around 10:00 GMT
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• Draw the deviations of (20:00-05:00 GMT range) above the range and below the range and
extend horizontal lines at every deviation
o For a sell trade expect a high at 1 deviation above the flout
o After high is made, market will fall 2 deviations below the flout
o Consider the high to form in London
o For a buy trade is the opposite
• Expect the flout to occur between Monday, Tuesday and Wednesday
• Sometimes price will go a little bit above/below the flout
• To put it simple
o Measure the number of pips from the low to high of 20:00 – 05:00 GMT range
o For a sell trade, the high of the day will form at same number of pips above the
20:00 – 05:00 GMT range (1 deviation). For example, is the flout range is 20 pips,
the high of the day will form at 20 pips above the flout
o Target or low of the day will form at 20 time 2 below the flout (2 deviation), that
will be 40 pips below the 20:00 – 05:00 range
o For a buy trade is the opposite of the above
• The ideal high/low of the day will form at 1 deviation above/below the flout but it can go up
to 2 deviations for Reversal market profile (London Close/New York open reversal)
• The ideal take profit is 2 deviations but it can go up to 3
• Consider higher time frame analysis to know the direction of the trade
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Ø Point 3 will be lower than point 1
Ø Point 4 must go above point 1 and it must be within the range of pint 1 and 2
Ø Point 5 will most often break the trend line extended from point 1 and 3 (false
breakout). When you see point 5 breaks the trend line, you will see point 3 or 5 is
trading at support level
Ø Extend point 1 and 4 by using a trend line and that is where take profit objectives
should be
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Ø Point 3 will be higher than point 1
Ø Point 4 must go below point 1 and it must be within the range of pint 1 and 2
Ø Point 5 will most often break the trend line extended from point 1 and 3 (false
breakout). When you see point 5 breaks the trend line, you will see point 3 or 5 is
trading at resistance level
Ø Extend point 1 and 4 by using a trend line and that is where take profit objectives
should be
• Note a key resistance level where you find consolidation and support/resistance. Plot a
general trend-line from low point to its intersection with the key resistance level. Measure
• Use the widest portion of the triangle and add that pip range to the low point dips along
the trend line. Not each level as it progresses and these levels would be where you'd
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Look for the flag pole which would be a sharp price run up followed by descending range of price
between channel. Price objective would be done by getting the pip range from low to high and
adding that distance to the lowest low of the flag and to the breakout of the flag. There would be a
Look for the flag pole which would be a sharp price run down followed by ascending price
range/channel. Price objective would be done by getting the pip range from high to low and adding
that distance to the highest high of the flag and to the breakout lower of the flag. There would be a
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• Draw trend-line of lower highs and trend-line of higher low to a point where they look to
intersect. As price approaches the intersection, we'd expect price to range higher or lower
from that point. Use higher time frame analysis to get in sync and anticipate which
direction price will due to directional bias. If pattern occurs at key support level, anticipate
• Measure range from the low to the touch point of the upper trend line of lower highs above
it. Add the range to the upper or lower trend line to identify a price objective once price
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PROFESSIONAL ORDER PLACEMENT
• Try keeping entry and exit to limit orders
o Limit orders will provide best price entry/exit
o It gives you control
• Market orders are last ditch protection
o If your limit order was not triggered in London, wait for New York and use market
order to get in sync with the market
• Don’t try to get the best entry price
o Generally, enter between 62% and sweet spot,79% is where deep market might
reach
• Always factor the spread plus 2-3 pips
o The Weekly High or Low forms 80% of the time between Sunday's /Monday’s Open
& Tuesday's London Open. When it fails, it will likely form between Tuesday's
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THE 7 KEYS TO SUCCESSFUL FOREX TRADING
1. Understand the asset class you are trading (i.e. don’t follow 20 pairs at
once)
2. Think independently and use your own analysis (turn off the TV and rumour sites)
3. Develop and adhere to your personal trade profile and compressive trade plan
5. Utilize and exercise impeccable equity management (1-1.5% risk per trade for new traders,
7. Think in terms of probability and not absolutes, there are no absolutes in trading
• Traders who learn to pick and choose their trades like a Forex “sniper” are typically the ones
who succeed. Traders who fail act like machine-guns by shooting at everything they see
LESS IS MORE
• Wait patiently for anticipated target to come into view as a result of your own analysis.
• The higher the timeframe the more reliable the target, information is presented. Looking at
Monthly or Weekly time frames only does not give you enough targets to trade.
• Base most of your analysis off of Daily and 4-Hour charts to identify high value, probability
targets.
• Work with the lower timeframes (1-Hour and 15-Min) to manage the circumstances around
the trade.
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PATIENCE
• Most of new traders lose money in the markets, and most of them are also anything BUT
patient.
• For new traders, fight the tendency to make yourself trade because you have the idea that
trading will give you money. Only smart trading with a plan can make you money.
• Wait for confirmation by multiple factors before jumping into a trade to avoid false moves.
• Combat natural tendencies of fear and greed by documenting and diligently following a
trading plan.
• Make trading about following rules, plans, and risk management. NOT about emotions.
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