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Consolidation: Picture a seesaw stuck in the middle. That's consolidation. It's a period of sideways price
movement with no clear trend. Buyers and sellers are evenly matched, keeping the price bouncing within a
defined range. Consolidation can be a precursor to either expansion or a breakout in either direction.
Consolidations appear more often in the Tokyo Session.
Expansion: Imagine a basketball bouncing. It goes up (higher highs), hits the ground (Higher low), then
bounces even higher (even higher high). That's an expansion - a strong, trending move where price keeps
pushing higher or lower in a sustained way. According to ICT these expansions are usually part of what he
calls a “ Judas swing ”.
Retracement: Think of taking two steps forward and one step back. That's a retracement. It's a temporary
pullback within a larger trend. In an uptrend, it's a dip that doesn't break the previous low before resuming
the upward climb. In a downtrend, it's a brief rise that doesn't break the previous high before continuing
down. Retracements tend to occur more often during the New york session.
Reversal: This is like changing directions on a one-way street. It's when the prevailing trend completely
changes. An uptrend turns into a downtrend, and vice versa. Reversals can be sharp and dramatic, or they
can take time to form. Reversals tend to appear more in the London Session.
EXPLANATION
Price will typically always move in this order.
Some additional Info
Why price reacts this way: Price is targeting Liquidity voids /
Liquidity pools, Fair Value Gaps / Imbalances, Stop losses, Order
Blocks and the Equilibrium (50% area).
During consolidation, the price moves between two levels: a “support” level,
which is the lowest point the players reach, and a “resistance” level , like the
ceiling which is the highest point the players reach.
The consolidation phase ends when the price “breaks out” of this range,
meaning it either falls below the support level (like a player falling through
the floor) or rises above the resistance level (like a player jumping through
the ceiling).
EXAMPLE
Expansion
When price expands, price will shift quickly either from the middle point
(Equilibrium) or the cheaper zone of the gathered consolidation. This is when
the "Market Makers" usually show their hand & push price where they want it
to go.
You can look for a POI at or near the Equilibrium that was left behind.
When price finally expands it is usually looking for liquidity or it expands for a
certain amount. For forex pairs, 20 pips is the average amount.
EXAMPLE
Look for “ Fair Value Gaps ” & “ liquidity voids ” as a POI or you can
even use the Fibonacci levels to find their “Optimal Trade Entry”
before entering trades.
These entry levels are 0.618 (0.62), 0.705 (OTE) & 0.79
EXAMPLE
Reversal
A Reversal is where a liquidity level is breached and a trend reversal
occurs. Meaning price completely moves to the opposite direction or a
complete shift in trend.
Traders often observe a “gap” on their charts during this event. This is
referred to as a Fair Value Gap by ICT traders.
THANK YOU !
(CSB), 1 Corinthians 12:12-14 :
"For just as the body is one and has many parts, and all
the parts of that body, though many, are one body—so
also is Christ. For we were all baptized by one Spirit into
one body—whether Jews or Greeks, whether slaves or
free—and we were all given one Spirit to drink. Indeed,
the body is not one part but many."