ICT Turtle Soup - Everything You Need To Know
Understanding Turtle Soups: Types and Mechanisms
Overview of Turtle Soups
- There are two main types of turtle soups: reversal turtle soups, which change the direction of price trends, and entry turtle soups, which are part of an existing buy or sell program.
Bullish Scenario Explained
- In a bullish scenario, a turtle soup occurs when the price dips below an old low to buy external range liquidity, anticipating a rebound in price.
- This buying action targets external range sell-side liquidity, expecting the price to expand towards the opposite side of the range.
Bearish Scenario Explained
- Conversely, in a bearish scenario, prices rise above an old high to buy external range buy-side liquidity with expectations for a downward reversal.
Tools for Price Movement Analysis
- Three tools can help determine how far prices may move past old highs or lows: opening range gap, new day opening gap, and new week opening gap. These serve as key levels for potential reversals.
Differentiating Reversal and Entry Turtle Soups
Characteristics of Reversal Turtle Soups
- A reversal turtle soup signifies a complete change in trend direction that could last from one session to several days.
Characteristics of Entry Turtle Soups
- An entry turtle soup occurs within an established trend after a reversal has taken place; it involves trading into fair value gaps created by previous movements.
Mechanisms Behind Entry Turtle Soups
Fair Value Gaps and Their Role
- When prices drop into fair value gaps during an existing bullish trend, this indicates an entry mechanism where stops are taken out before reversing back up.
Example Scenarios
- Observing lower time frame movements can reveal entry mechanisms as prices tap into fair value gaps while maintaining upward momentum.
Ideal Conditions for Trading Turtle Soups
Daily Bias Considerations
- Traders should identify daily bias and look for stop hunts against that bias during specific kill zones (e.g., 2:00 - 5:00 AM).
High Probability Setups
- A high probability setup is characterized by taking out previous day lows while maintaining bullish order flow; this creates opportunities for expansion toward higher targets.
Timing and Volatility in Trading Strategies
Importance of Volatility
- Successful trades require volatility; without it, price movements may lead to consolidation rather than significant reversals.
Kill Zones as Trading Opportunities
- Identifying active trading times (kill zones), such as London or New York sessions, enhances the likelihood of capturing profitable trades based on daily biases.
Conclusion on Trading Strategies
Summary Insights
- The discussion emphasizes understanding market structure changes through reversal and entry mechanism turtle soups while focusing on timing and volatility for effective trading strategies.