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Trader Theory

@Trader_Theory

20 Tweets • 2022-09-22 •  See on Twitter


rattibha.com 

ICT’s 2022 Mentorship Summarized:


Basics:

The prices of markets are controlled by AI-driven


algorithms based on the elements of time and price.

Price does not move around due to buying or selling


“pressure”.

Price always moves to take liquidity and to rebalance


inefficiently delivered price.
Time (Time of Day, Day of Week, Week of Month,
Month of Year, Seasonality, News Events, 8:30 & 9:30
New York Open)

Price (Premium Discount Arrays)

Optimal Setups (Old High/Low Sweeps + MSS +


Displacement + FVG)

Before the session opens, mark the previous swing


high and swing low for the potential price sweeps.

NY AM session for indices: 8:30 - 12:00

NY PM session: 13:00 - 16:30.

No trades during NY lunch.


Concepts:

ICT Power of 3 (PO3) pattern: Consolidation, then


manipulation (the false move), and then an expansion
in the opposite direction (the real move).

Also known as AMD, or Accumulation, Manipulation,


Distribution.

3 Drives Pattern: 3 continuous higher highs or lower


lows to take out liquidity and then a large reversal
expansion in the opposite direction.

Judas Swing: A false move against the bias (the


manipulation part of PO3) to trap traders and to stop
out already existing positions.

Optimal Trade Entry (OTE): A optimal entry for a


trade. Put a fib over a price swing and the OTE is
between 0.62 - 0.79 fib levels (showing the Discount
or Premium).
Rules:

Do not attempt to trade both sides of the market.

Decide your bias and trade based on it.

Look at the Weekly and Daily candles

Which direction are they most likely to expand in?

This is how you decide your daily bias.

If there are a few FVGs when trading your model use


the one that gives the worst risk/reward because the
price may not trade to the best FVG.

If the FVG is big then place SL above/below the


high/low of the candle the FVG is formed in.
If the FVG is small then place SL above/below the
swing high/low.

Do not trade Wednesday - Friday during NFP weeks.

Do not trade big event days (FOMC-related or High-


Impact Speeches).

If a trade is lost, half your risk you used on the next


trade.

If you lose again, half the risk again.

Example: From 1% risk go to 0.5%, then go to 0.25%.

If you make back half of the previous risk then you are
permitted to go back to your original % risk.
When prices reach 50% of your target, raise/lower
your SL by 25% of the entry price.

When the price reaches 75% of your target, move SL


to entry.

If your TP isn’t hit during the session you take the


trade, then collapse the trade.

Extras:

Focus on one market only and master it.

Liquidity sweeps are not 100% guaranteed reversal.

On consolidation days, there usually will be a


manipulation between 3-4 pm and then move towards
the equilibrium of the daily range.
Indices price action is worse in the Summer months.

The news cannot be used as a directional tool, all we


know is that volatility will be introduced into the
markets.

Use ForexFactory for the news.

It’s okay to not have a bias or not know about where


the market is going to move.

If you don’t know what is going to happen, leave the


charts and come back later after some PA develops.

Photo credit: @daytradingrauf

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