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ICT Charter Price Action Model 1 \ Trade Plan & Algorithmic Theory
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ICT Charter Price Action Model 1 \ Trade Plan & Algorithmic Theory

Introduction to Scalping Trade Plan

Overview of the Scalping Trade Plan

  • The scalping trade plan aims to capture 15 to 20 pips per trade.
  • The speaker anticipates complaints regarding the delivery of trade plans, emphasizing that understanding requires prior study and mentorship participation.

Importance of Prior Knowledge

  • The effectiveness of these trade plans is significantly enhanced for those who have engaged with the price action models and mentorship content over time.
  • New members will not experience the same lengthy wait for content as earlier groups, indicating a structured rollout process.

Preparation for Learning

Encouragement to Review Previous Content

  • Viewers are encouraged to revisit previous lessons and free YouTube content related to price action model one, which can help fill knowledge gaps.
  • Acknowledgment that impatience or lack of thorough note-taking may hinder understanding; viewers should actively engage with their charts rather than passively watching videos.

Building a Personal Trading Plan

  • The trading plan serves as an overview, reminding users of key points necessary for constructing a personalized price action model.
  • Emphasis on understanding institutional order flow and how prices move between imbalances and rebalances is crucial for effective trading strategies.

Foundational Elements of Trading Plans

Structure and Flexibility in Trading Plans

  • The speaker provides foundational trading plans without overwhelming details, allowing room for personal adaptation based on individual learning experiences from mentorship sessions.
  • Participants are encouraged to develop their unique trading plans using the provided skeleton framework while integrating additional insights gained through mentorship.

Realistic Expectations in Trading

  • There is no guarantee of profitability; traders must take responsibility for their actions when engaging with live accounts, acknowledging that interpretations may vary among individuals.

Understanding the Importance of Mindset in Trading

The Role of Mindset in Mentorship

  • Emphasizes that many individuals rush through processes, seeking shortcuts instead of allowing adequate time for learning and development.
  • Stresses the necessity of aligning mindset with goals; rushing through mentorship can hinder achieving desired results.
  • Highlights that those who take mentorship seriously and invest time will find success, while those who do not may struggle to connect concepts.

Developing Discipline and Confidence

  • Notes that simplicity is key; understanding the process makes trading less daunting when approached correctly.
  • Encourages using a demo account to build discipline and confidence before transitioning to live trading.

ICT Price Action Model: Scalping Trade Plan

Overview of the Scalping Model

  • Introduces ICT price action model number one, focusing on capturing 15 to 20 pips per trade.
  • Outlines five essential steps in every trading plan: preparation, opportunity discovery, planning, execution, and post-trade analysis.

Detailed Steps in Trading Plan

  • Preparation involves waiting patiently and utilizing time effectively before entering trades.
  • Opportunity discovery occurs when traders recognize potential trades based on their experience with price delivery.

Executing Your Trade Plan Effectively

Importance of Personal Responsibility

  • After entering a trade, traders must know how to manage it independently without relying on external guidance for decisions like stop placement or profit-taking.

Customizing Your Trading Approach

  • Encourages developing a unique personal trade plan using the outlined five-step process tailored to individual preferences and experiences.
  • Suggestion to keep plans simple initially; complexity can be added as experience grows over time.

Preparation Stage: Economic Calendar Insights

Utilizing Economic Calendars

  • Advises referring to economic calendars for upcoming medium and high-impact events relevant to chosen markets (Forex, Futures, etc.).

Analyzing Historical Data Ranges

  • Discusses determining the dealing range by analyzing data from the last 20 trading days (excluding Sundays).

Identifying Key Price Levels

Understanding Market Dynamics and Bias

The Importance of Timeframes in Analysis

  • The analysis begins with a discussion on the significance of timeframes, emphasizing that while a 20-day lookback is standard, considering a 40-day perspective can provide additional insights into market consolidation.

Identifying Liquidity and Price Movement

  • Within the current trading range, traders should focus on identifying where price is likely to move next—whether it’s targeting liquidity pools or rebalancing at specific price delivery (PD) arrays.

Overcoming Fear in Trading Practice

  • Acknowledgment of common fears among traders regarding making incorrect bias decisions; many feel overwhelmed due to lack of practice despite having been trained on how to establish bias.
  • Emphasizes that fear stems from inexperience and not practicing the established processes for determining price movements.

Addressing Gaps in Practice

  • Traders are reminded that feeling uncertain about their knowledge indicates a need for more practice; this is not an emergency but an opportunity to revisit foundational exercises.
  • Suggestion that even a couple of months focused on institutional order flow and daily chart analysis can significantly improve understanding and execution.

Anticipating Economic Events Impacting Price

  • Traders should anticipate price movements towards PD arrays aligned with economic events scheduled for the upcoming week, framing scenarios based on these expectations.
  • It’s crucial to develop specific scenarios rather than binary plans (up or down), focusing instead on how biases may unfold alongside economic volatility injections.

Understanding Market Behavior During Volatility

  • Discussion around whether market movement will be driven by rebalancing or running liquidity; both scenarios justify bullish bias if they align with identified price points.

Framework for Analyzing Bullish vs. Bearish Biases

  • When establishing bearish biases, identify liquidity pools below old daily lows within the last 20 days; conversely, identify above old highs when bullish.

Trade Planning Based on Market Conditions

Market Manipulation and Trading Strategies

Understanding Market Volatility

  • The speaker emphasizes the importance of waiting for specific economic calendar events that suggest volatility in the market, indicating a potential manipulation and rally.
  • Retail traders often chase prices during these movements, providing liquidity for those trading in the opposite direction.

Framework for Bearish Trading

  • A bearish framework involves identifying when price moves into a daily premium PD array before trading lower.
  • Traders can wait for a swing high to form or trade immediately after price fills a fair value gap, depending on their strategy.

Aggressive Trading Techniques

  • The speaker suggests that traders do not need excessive confirmation; understanding institutional order flow allows them to trade aggressively.
  • If the market has reached an old high or premium array, it is likely to reprice lower without waiting for full confirmation.

Bullish Trading Strategy

  • In bullish scenarios, traders frame long entries when price drops into a discount PD array and then trades higher.
  • This approach is essentially the reverse of bearish strategies discussed earlier.

Targeting Liquidity Levels

  • When bearish, traders target sell-side liquidity below old daily lows within a 20-day range, aiming for at least 15 to 20 pips.
  • Conversely, bullish targets are set above old daily highs within the same range with similar pip objectives.

Optimal Trade Execution Timing

New York Session Kill Zone

  • The optimal time frame for executing trades is between 7:00 AM and 10:00 AM EST during the New York session.
  • Occasionally this window may extend to 11:00 AM due to significant economic releases affecting market behavior.

Chart Analysis and Entry Points

  • Traders should focus on forming optimal trade entries on a 5-minute chart during retracements within specified time frames.

Trade Management Techniques

Short Trade Management

  • For short positions, limit orders are placed at the 62% Fibonacci level adjusted down by five pips as entry points.

Objective Setting

  • Traders should set multiple limit orders with different profit objectives (e.g., one at 15 pips and another at 20 pips).

Risk Management Considerations

Trading Strategies and Risk Management

Trade Exposure Limits

  • Each trade should have a maximum exposure limit of $300 to manage risk effectively.
  • When entering a short position, the highest high at 7:00 AM is noted, with a stop loss placed above this high plus 5 pips.

Trade Execution Guidelines

  • Emphasizes the importance of not engaging in revenge trading; once a trade stops out, no re-entry should be attempted.
  • For long positions, a buy limit order is set at the 62% Fibonacci retracement level plus an additional 5 pips.

Profit Objectives and Position Management

  • The first profit target for long trades is set at 15 pips, with a second target at 20 pips. Multiple orders can be used to manage these objectives.
  • In long trades, the lowest low from the New York session is noted for setting stop losses below it by 5 pips.

Stop Loss Adjustments

  • Stop loss adjustments are based on profit milestones: reduce by 25% when profits reach 25%, and by 50% when they hit 50%.
  • At 75% of expected profit objective, the stop loss must be moved to break even to protect gains against transaction costs.

Position Size Calculation Formula

  • The formula for calculating position size is outlined as: Position Size = Account Equity × r% ÷ Stop Loss in Pips.
  • Key variables include account equity (total balance), r% (risk percentage per trade), and pip difference between entry price and stop loss.

Practical Examples of Position Sizing

  • An example illustrates that with a $20,000 account balance and risking 1.5%, one can afford $300 total risk with specific pip values calculated accordingly.
  • Using micro lots ($1 per pip), if risking $300 with a required stop loss of 20 pips results in being able to trade up to 15 mini lots while staying within risk limits.

Final Considerations on Lot Sizes

Trading Risk Management Strategies

Understanding Losses and Adjusting Risk

  • When a demo account incurs a loss, it's crucial to manage risk by reducing the percentage of risk taken on the next trade.
  • If the subsequent trade also results in a loss, continue to decrease the risk percentage until previous losses are recovered by 50%.
  • After achieving five consecutive winning trades, consider dropping your risk percentage by 50% to maintain equity stability.

The Importance of Equity Curve Management

  • A smooth equity curve is essential; avoid aggressive increases or deep declines that can psychologically impact trading performance.
  • Trading should be approached as wealth-building rather than seeking quick wins; protocols must be established to prevent self-harm in trading.

Setting Realistic Expectations

  • Expecting multiple winning trades without any losses is unrealistic; even experienced traders anticipate occasional losses.
  • Building allowances for human error in trading decisions is vital for maintaining psychological resilience.

Developing a Trading Plan

  • A comprehensive trading plan includes specific protocols and procedures that help mitigate detrimental drawdowns.
  • The essence of a trading plan can be summarized concisely but requires extensive understanding and practice to implement effectively.

Backtesting and Continuous Learning

  • Engage in backtesting with sample sets over one or two months to solidify understanding of the price action model.
  • Utilize resources like Forex Factory for historical data analysis, ensuring all elements of the model are within research scope.

Applying Knowledge Consistently

  • Mastery of core concepts allows traders to replicate successful strategies consistently across different time frames.

Understanding Algorithmic Theory in Trading

The Importance of Tool Selection

  • The speaker compares trading tools to an artist's brushes, emphasizing the need for specific tools for different tasks rather than using all available options indiscriminately.
  • Just as artists have various brushes for fine detailing or broader strokes, traders must know when to use particular strategies or techniques effectively.
  • Mentorship is highlighted as a means to learn which tools (strategies) to employ at the right time, stressing that practical engagement is essential beyond just consuming content.

Breaking Down Information

  • The speaker encourages breaking down information into manageable parts, suggesting that this approach will help learners catch up with more experienced traders.
  • Access to resources like the price action model allows for repeated study and deeper understanding of core concepts.

Defining Algorithmic Theory

  • An algorithm is defined as a set of instructions designed to perform specific tasks or solve problems, likened to everyday activities such as cooking or teaching children routines.
  • The concept of algorithmic theory involves a step-by-step approach applicable in various contexts, including trading.

Practical Example: Troubleshooting a Lamp

  • A flowchart example illustrates how algorithms work; troubleshooting an old lamp serves as a metaphor for problem-solving in trading.
  • Steps include checking if the lamp is plugged in and whether the bulb is burnt—each decision leads to further actions until reaching an outcome.

Applying Algorithmic Theory in Trading

  • Trading requires having a "recipe" with key ingredients (specific PD arrays), similar to following steps in troubleshooting.
  • While complex models can be created from mentorship teachings, simplicity remains crucial; profitable trading does not necessitate intricate systems.

Price Action Model Number One: Bullish Algorithmic Theory

  • The speaker emphasizes that effective trade plans should be simple enough to fit on a business card while still being rule-based and systematic.

Scalping Trade Plan Overview

Introduction to Price Action Models

  • The speaker anticipates potential complaints regarding the delivery of trade plans, emphasizing that they are most beneficial for those who have studied the price action models and participated in mentorship.
  • Mentorship is highlighted as a prerequisite for fully understanding the content, with an emphasis on the importance of prior knowledge and experience.
  • New students will not face long wait times for content delivery compared to earlier groups, indicating a structured approach to information dissemination.

Price Action Model Number One: Bullish Algorithmic Theory

  • If today is Friday, no trades should be executed; this sets a clear guideline based on day-specific trading rules.
  • A bullish optimal trade entry can be made if formed between 7:00 AM and 10:00 AM; traders should buy long at the 62% Fibonacci level plus five pips.
  • For long trades, use the five-minute Fibonacci optimal trade entry anchor low minus five pips for initial stop-loss placement. This emphasizes risk management strategies.
  • If stopped out, there should be no re-entry into the trade; this reinforces discipline in trading practices.
  • Upon reaching the optimal trade entry anchor high, take first partial profits at that price level before adjusting stop-losses to secure gains.

Managing Trades and Profit Taking

  • After taking first partial profits, raise protective stop-loss to lock in 5 to 10 pips profit; this step ensures that some profit is secured while allowing room for further gains.
  • If prices rally to previous highs or Fibonacci extension number two, take second partial profits at that level. This strategy focuses on maximizing returns during favorable market conditions.
  • Close all remaining positions if prices reach symmetrical swing extensions; it’s advised to exit entirely rather than risking further fluctuations.

Time Constraints and Trading Conditions

  • No trades should occur after 10:00 AM; this rule helps avoid late-day volatility which can affect outcomes negatively.
  • The model is presented as a step-by-step process akin to a recipe—this algorithmic theory simplifies complex trading strategies into actionable steps.

Price Action Model Number One: Bearish Algorithmic Theory

Identifying Market Conditions

  • The bearish model mirrors its bullish counterpart but focuses on identifying previous lows over the past 20 trading days without counting Sundays.
  • Institutional order flow must be bearish with price breaking below swing lows on daily charts before considering trades.

Trade Entry Criteria

  • If price is in discount territory, no trades are allowed. This highlights critical market conditions necessary for executing bearish strategies.
  • Ideal conditions exist if it's Monday through Wednesday or Thursday without having traded down to previous lows—these days are more favorable for entering bearish positions.

Execution of Bearish Trades

  • Similar rules apply as with bullish entries: if a bearish optimal trade entry forms between 7:00 AM and 10:00 AM, traders should sell short at levels minus five pips from identified points.
  • Use five-minute Fibonacci optimal trade entry anchor high plus five pips for initial stop-loss placement when entering short trades.

Understanding the Importance of Note-Taking and Trading Plans

The Role of Preparation in Trading

  • The speaker emphasizes that impatience and laziness can hinder effective learning, urging viewers to take good notes and study thoroughly instead of rushing through content.
  • Viewers are encouraged to revisit their charts using a trading plan as an overview, highlighting the importance of personal engagement with the material.
  • A reminder is given about building a price action model based on collective experiences from previous videos, focusing on understanding market movements.

Key Components of a Trading Plan

  • The discussion includes how prices move between imbalances and rebalances, emphasizing the significance of recognizing these patterns for successful trading.
  • It is noted that while additional tools like commitment of traders data can enhance models, they are not essential for creating an efficient trading plan.
  • The speaker provides foundational trading plans rather than complex strategies, allowing room for individual growth and personalization in approach.

Building Your Unique Trading Strategy

  • Participants are encouraged to develop their own unique trading plans over time rather than rushing to implement them immediately after learning.
  • The framework provided serves as a skeleton for each trader to build upon according to their personal insights and experiences gained through mentorship.

Responsibility in Trading Decisions

  • A cautionary note is issued regarding expectations; there’s no guarantee of profitability or high strike rates when engaging in live trades.
  • Each trader must take responsibility for their actions; interpretations of price action will vary among individuals, which can lead to impulsive decisions.

Emphasizing Process Over Speed

  • Human nature often leads individuals to seek shortcuts; however, taking time during the mentorship process is crucial for developing proper skills.
  • Rushing through content without fully absorbing it may result in poor outcomes; patience is key to mastering trading techniques effectively.

Introduction to ICT Price Action Model Number One

Overview of Scalping Model Trade Plan

  • The first model discussed focuses on scalping with an aim to capture 15–20 pips per trade, outlining five essential steps involved in every trading plan.

Understanding the Five Stages of Trading

Overview of the Trading Process

  • The trading process consists of five stages: preparation, opportunity discovery, trade planning, execution, and post-trade analysis.
  • After identifying an opportunity based on market developments, traders must prepare a structured plan before executing trades.
  • Traders often seek guidance on managing trades (e.g., stop placement and profit-taking), but it's emphasized that each trader is responsible for their own decisions.

Developing Your Unique Trade Plan

  • Each trader should create a personalized trading plan using the five-step framework; this can be adapted to individual styles and preferences.
  • While detailed models can incorporate complex algorithms, simplicity is key for efficiency in trading strategies.

Importance of Preparation

  • The first stage involves thorough preparation by reviewing the economic calendar for upcoming medium and high-impact events relevant to chosen markets.
  • This preparation isn't limited to Forex; it applies across various asset classes like futures, bonds, metals, etc.

Analyzing Historical Data

  • Traders should analyze price data from the last 20 trading days (excluding Sundays) to establish a current dealing range.
  • Understanding the highest high and lowest low within this range is crucial for effective decision-making in future trades.

Identifying Market Bias

  • Within the established dealing range, traders need to identify where price may move next—whether towards liquidity pools or specific price distribution arrays.

Understanding Market Bias and Price Movement

The Nature of Fear in Trading

  • Acknowledges the common fear traders have about practicing their skills, emphasizing that perfection is unattainable.
  • Highlights uncertainty stemming from a lack of practice, which can lead to confusion about previously learned concepts.

Anticipating Price Movements

  • Discusses the importance of anticipating price movements towards a PD (Price Delivery) array that aligns with market bias during economic events.
  • Stresses the need for framing specific scenarios rather than just having a binary plan (up or down), focusing on how biases can unfold.

Understanding Market Dynamics

  • Emphasizes waiting for market conditions to develop before making trading decisions, acknowledging that certainty is never guaranteed.
  • Explains two potential scenarios: liquidity runs or rebalancing inefficient price delivery, both justifying bullish bias.

Identifying Liquidity Pools

  • Details how to identify liquidity pools based on old daily highs/lows within a 20-day lookback period depending on market bias.
  • Describes identifying discount and premium PD arrays based on whether the bias is bullish or bearish.

Trade Planning and Execution

  • Introduces trade planning when the market shows signs of being primed for movement, regardless of direction.
  • Discusses looking for manipulation in price opposite to trade bias coinciding with volatility injections from economic events.

Framework for Short Entries

  • Outlines how to frame short entries when prices rise into a daily premium PD array before moving lower.
  • Illustrates trading strategies after price reaches previous PD arrays and begins retracing under certain conditions.

Confirmation Approaches in Trading

  • Mentions an alternative approach where traders can act immediately after observing significant price movements without waiting for confirmation swings.

Trading Strategies and Execution

Shorting in the New York Session

  • The strategy involves shorting during the next New York session based on trade entry signals.

Bullish Market Patterns

  • In a bullish scenario, traders look for long entries when prices drop into a discount zone on the daily chart, followed by upward movement.
  • The approach is essentially a reversal of bearish strategies; understanding this is crucial for effective trading.

Bearish Market Targets

  • When bearish, traders target sell-side liquidity below old daily lows within the last 20 days, focusing on logical price points for potential trades.
  • For bullish scenarios, buy-side liquidity above old daily highs is targeted with similar logic applied to identify optimal entry points.

Trade Execution Timing

  • Key execution times are noted as 7:00 AM to 10:00 AM EST during the New York session, with some flexibility extending to 11:00 AM due to economic releases.

Chart Analysis and Entry Points

  • A 5-minute chart is preferred for identifying optimal trade entries during retracements in both bullish and bearish conditions.

Trade Management Techniques

Short Trade Management

  • For short positions, a sell limit order is placed at the 62% Fibonacci level minus five pips. Multiple orders can be used with consistent entry pricing.
  • Profit objectives include taking 15 pips from one position and 20 pips from another. Additional positions may capture longer-term gains if desired.

Risk Management Strategy

  • It's essential to manage risk effectively across multiple orders by dividing total risk exposure among them (e.g., $900 total risk divided by three positions).

Stop Loss Protocol

  • When entering shorts, stop losses are set above the highest high plus five pips. No re-entry is allowed after a stop-out; trades are considered "one and done."

Long Trade Execution Guidelines

Long Position Setup

  • For long entries, buy limit orders are placed at the 62% retracement level plus five pips. Consistency in entry pricing applies here as well.

Profit Objectives for Long Trades

  • Similar profit-taking strategies apply: aim for 15 pips from one position and potentially more from additional positions if market conditions allow.

Stop Loss Considerations

  • In long trades, stop losses should be positioned below the lowest low of the session minus five pips. Re-entry rules remain consistent with short trades—no re-entry after being stopped out.

Profit Protection Measures

Adjusting Stop Losses Based on Profit Levels

Understanding Position Sizing and Risk Management in Trading

Key Concepts of Position Sizing

  • To effectively manage risk, traders should determine 25% and 50% of their expected profit objectives before adjusting stop-loss levels. At 75% of the target, the stop-loss must be moved to break-even.
  • When calculating break-even points, it's crucial to factor in all transaction costs associated with a commission-based broker, including spreads.

Position Size Calculation Formula

  • The position size calculation formula is essential for traders: Position Size = Account Equity × R% ÷ Stop Loss (in Pips). This formula will be reiterated with different figures throughout the discussion.
  • In this context:
  • Account Equity refers to the total amount in your trading account without any open positions.
  • R% represents the percentage of risk you are willing to take per trade.
  • The difference between entry price and stop loss defines the number of pips used for calculations.

Practical Examples of Position Sizing

  • For an account balance of $20,000 with a risk tolerance of 1.5%, if a trade requires a 20 pip stop loss at micro lots (1K each), the cost per pip is calculated as follows:
  • $20,000 × 0.015 = $300 total risk
  • $300 ÷ ($2 per pip from a 20 pip stop loss) = 150 micro lots.
  • Using mini lots (10K each), with similar parameters:
  • A standard lot equates to $1 per pip; thus, for a trade requiring a $200 maximum loss (20 pips at $10/pip), you can only afford to trade one and a half standard lots while rounding down.

Managing Risk After Losses

  • If experiencing losses on demo accounts that meet full R%, reduce your next trade's risk by 50%. Once recovery reaches half of that loss, return to original R%.
  • Maintaining psychological stability is vital; avoid aggressive trading strategies that lead to steep equity declines. Aim for smooth growth rather than erratic fluctuations in your equity curve.

Building Wealth Through Controlled Trading

  • Emphasize controlled wealth-building over seeking quick wins or lottery-like outcomes. Establish protocols and procedures that protect against self-harm during trading activities.

Understanding the Price Action Model and Trading Plan

The Importance of a Trading Plan

  • Acknowledges that regardless of analytical skills, entering a trade alters everything; thus, a solid trading plan is essential to mitigate detrimental drawdowns.

Outlining the Price Action Model

  • The speaker summarizes the entire price action model into a concise trading plan, emphasizing its simplicity despite its complexity when explained in detail.

Clarity and Communication

  • Highlights that while the trading plan can fit on a business card, explaining it requires significant effort and examples for clarity.

Backtesting and Research

  • Encourages backtesting with sample sets over one or two months to understand the process better; suggests rewatching lessons on the price action model for deeper comprehension.

Utilizing Resources Effectively

  • Advises against waiting for provided sample sets; instead, encourages proactive research using tools like Forex Factory to gather historical data relevant to their trading strategy.

Applying Core Concepts in Trading

Chart Analysis Techniques

  • Recommends setting up charts from daily down to 5-minute intervals while applying learned concepts from core content bias within the price action model.

Consistency in Trading Practices

  • Emphasizes that understanding and applying these principles will yield results similar to those shared on social media platforms by experienced traders.

Managing Expectations as a Student

  • Warns students about misaligned expectations regarding learning outcomes; stresses that consistent application of learned strategies leads to success rather than seeking shortcuts.

The Role of Algorithms in Trading

Defining Algorithmic Theory

  • Introduces algorithmic theory as structured instructions designed for specific tasks or problem-solving, likening it to everyday processes such as cooking recipes or teaching children routines.

Step-by-Step Approach

Understanding Algorithmic Trading Through Everyday Examples

Introduction to Algorithms in Trading

  • The speaker introduces the concept of algorithms using a flowchart analogy, emphasizing that while they won't break down models into flowcharts, the aim is to simplify complex ideas.
  • Mentorship focuses on creating price action models that serve as a foundation for traders to build upon or innovate their own strategies.

Problem-Solving with an Example

  • An example involving an old lamp illustrates problem-solving through an algorithm: checking if the lamp is plugged in and whether the bulb is burnt.
  • The process mirrors trading, where having a structured approach (recipe) with key ingredients (specific PD arrays) is essential for success.

Simplifying Trading Models

  • The speaker emphasizes that profitable trading can be taught simply; intricate models are available but not necessary for profitability.
  • Price action model number one will be discussed, highlighting its simplicity and rule-based nature suitable for quick reference.

Conditions for Bullish Algorithmic Theory

  • Traders should identify previous highs from the last 20 trading days while excluding Sundays.
  • If institutional order flow is bullish and price has broken a swing high without being in premium territory, conditions are favorable for trade.

Execution Steps in Trading Strategy

  • Look for optimal trade entries between 7:00 AM and 10:00 AM local New York time on a five-minute chart; no trades are allowed on Fridays.
  • If stopped out of a long trade, there should be no re-entry on that day; first partial profits should be taken at specific levels based on Fibonacci extensions.

Bearish Algorithmic Trading Model

Overview of the Trading Model

  • The trading model is presented in a concise and detailed manner, focusing on its structure and application.

Price Action Model Number One

  • This model outlines a bearish algorithmic theory, which involves determining previous lows over the past 20 trading days, excluding Sundays.

Conditions for Trade Entry

  • A bearish trade is considered if institutional order flow is bearish and price has broken a swing low on the daily chart.
  • If the price is in a discount zone, no trades are executed; trades are only considered when conditions align with specific weekdays.

Ideal Trading Days

  • Ideal trading days for this model are Monday through Wednesday; Thursday can be considered if price hasn't reached a previous high or low.
  • On Fridays, no trades should be taken to maintain consistency within the model's framework.

Trade Execution Guidelines

  • For short trades entered between 7:00 AM and 10:00 AM, an initial stop-loss order should be placed at anchor high plus five pips.
  • If stopped out, there should be no re-entry into the trade on that day.

Managing Trades and Profit Taking

  • Upon reaching optimal trade entry levels, take partial profits while adjusting protective stop losses to secure gains of 5 to 10 pips.
  • Further profit-taking occurs if prices decline to previous lows or symmetrical swing extensions.

Summary of Model Effectiveness

  • The complete treatment of this trading idea emphasizes understanding market conditions and timing for executing trades effectively.
  • The model provides clarity on when to engage with price action based on specific criteria related to time and market behavior.

Consistency in Trading Practices

  • Familiarity with core content allows traders to find consistent setups using this model; it primarily focuses on early-week opportunities.

Conclusion of Learning Process

Playlists: ICT Charter Content
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Government Required Risk Disclaimer and Disclosure Statement CFTC RULE 4.41 – HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN Trading performance displayed herein is hypothetical. Hypothetical performance results have many inherent limitations, some of which are described below. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown. In fact, there are frequently sharp differences between hypothetical performance results and the actual results subsequently achieved by any particular trading program. One of the limitations of hypothetical performance trading results is that they are generally prepared with the benefit of hindsight. In addition, hypothetical trading does not involve financial risk, and no hypothetical trading record can completely account for the impact of financial risk in actual trading. For example, the ability to withstand losses or to adhere to a particular trading program in spite of trading losses are material points which can also adversely affect actual trading results. There are numerous other factors related to the markets in general or to the implementation of any specific trading program which cannot be fully accounted for in the preparation of hypothetical performance results and all of which can adversely affect actual trading results. U.S. Government Required Disclaimer – Commodity Futures Trading Commission Futures and Options trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the futures and options markets. Don’t trade with money you can’t afford to lose. This is neither a solicitation nor an offer to Buy/Sell futures or options. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this web site. The past performance of any trading system or methodology is not necessarily indicative of future results. Trade at your own risk. The information provided here is of the nature of a general comment only and neither purports nor intends to be, specific trading advice. It has been prepared without regard to any particular person’s investment objectives, financial situation and particular needs. Information should not be considered as an offer or enticement to buy, sell or trade. You should seek appropriate advice from your broker, or licensed investment advisor, before taking any action. Past performance does not guarantee future results. Simulated performance results contain inherent limitations. Unlike actual performance records the results may under or over compensate for such factors such as lack of liquidity. No representation is being made that any account will or is likely to achieve profits or losses to those shown. The risk of loss in trading can be substantial. You should therefore carefully consider whether such trading is suitable for you in light of your financial condition. If you purchase or sell Equities, Futures, Currencies or Options you may sustain a total loss of the initial margin funds and any additional funds that you deposit with your broker to establish or maintain your position. If the market moves against your position, you may be called upon by your broker to deposit a substantial amount of additional margin funds, on short notice in order to maintain your position. If you do not provide the required funds within the prescribed time, your position may be liquidated at a loss, and you may be liable for any resulting deficit in your account. Under certain market conditions, you may find it difficult or impossible to liquidate a position. This can occur, for example, when the market makes a “limit move.” The placement of contingent orders by you, such as a “stop-loss” or “stop-limit” order, will not necessarily limit your losses to the intended amounts, since market conditions may make it impossible to execute such orders.