ICT Trading Course
The Inner Circle Trader (ICT) course is a thorough educational programme for Forex traders. It is created to give participants in-depth knowledge and abilities to support them in making successful trades in the foreign exchange market. The course provides insights into the psychology and behaviours of great traders as well as covers a variety of facets of Forex trading, including technical analysis, fundamental analysis, and risk management. The ICT Trading Course seeks to provide traders with the skills they need to excel in the dynamic and fast-paced world of Forex trading through a combination of lectures, videos, and hands-on experience.
Is ICT a good trading strategy?
The Inner Circle Trader (ICT) strategy is a popular forex trading strategy. While it has its advantages, such as focusing on institutional trading behavior and market structure, its effectiveness and suitability may vary for individual traders. It is important for traders to thoroughly understand and practice the strategy, considering their risk tolerance and experience level.
ICT Trading Strategy
Inner Circle Forex Trading Strategy
Forex trading is a popular investment option for individuals looking to make profits by trading currencies. There are numerous trading strategies available, each with its own approach and principles. One such strategy is the Inner Circle Trader strategy, which focuses on understanding and leveraging the behavior of large institutional traders in the market.
In this article, we will provide you with an overview of the Inner Circle Trader and the opportunities it provides. We will also cover the top 3 reasons why you should join the inner circle style of trading. The ICT trading method is a guide to help traders trade their way to success.
It was designed by Michael J. Huddleston, who has mastered the art of trading. However, over the years, this strategy has been further developed and now guides and helps traders understand the market, identify opportunities better, and make the most out of the markets.
The ict trading strategy is a technical trading method that relies on chart analysis and market trends to make trades. This strategy is based on the idea that market trends can be predicted by analyzing price action, support, and resistance levels, and identifying key areas of liquidity.
The strategy was developed by a trader known as inner circle trader, who has become well-known in the trading community for his successful implementation of the strategy. The ict trading strategy is a comprehensive approach that involves analyzing multiple timeframes, using various technical indicators, and developing a deep understanding of market behavior.
Interest Rate Effects On Currency Trades
Smart Money Accumulation & Distribution
1) Interest Rates are the single most influential driving force behind market moves.
2) Understanding Interest Rate Shifts & changes can assist you in selecting trades.
3) Technical Analysis of key Interest Rates can unlock professional money movement.
4) Interest Triads provide a visual depiction of Smart Money Accumulation & Distribution.
Interest Rate Triads
1) 30 Year Bond – Key Long Term Interest Rate.
2) 10 Year Note – Intermediate Term Interest Rate.
3) 5 Year Note – Short Term Interest Rate.
4) Overlaying or Comparative Analysis on these three Interest Rates unlocks Price Action.
5) Failure Swings at opportunistic times can validate Institutional Order Flow.
Understanding the Inner Circle Trader Strategy
The Inner Circle Trader strategy is based on the belief that large institutional traders, often referred to as “smart money,” manipulate the forex market to their advantage. These institutional traders have substantial resources at their disposal, allowing them to influence market prices and create profitable trading opportunities. The Inner Circle Trader strategy aims to identify and align with these institutional traders’ actions to increase the likelihood of successful trades.
What Smart Money looks like in Price Action
Interest Rate Triad
30 Year T Bond Market
10 Year Note Market
5 Year Note Market
Overlaying these three markets will highlight when Accumulation & Distribution in the Interest Rate Market takes place – from a “Smart Money” perspective. The three Interest Rates should confirm each higher high or lower low – at moments when the USDX is at a significant Price point. Failure swings highlight Smart Money participation in the markets & trading opportunities are validated.
Applying the Inner Circle Trader Strategy
To apply the Inner Circle Trader strategy effectively, traders need to conduct thorough chart analysis and identify potential trading opportunities based on liquidity pool manipulations and stop hunts. Here are the steps involved:
Inner Circle Traders begin by analyzing price charts of currency pairs to identify key market levels and patterns. They look for areas of accumulation or distribution, which often indicate the presence of liquidity pools.
Identifying Liquidity Pools
Once Inner Circle Traders have identified potential liquidity pools, they closely monitor price movements in those areas. They look for signs of manipulation, such as sudden spikes or drops in price, high trading volumes, or significant candlestick patterns. These indications suggest the presence of institutional traders attempting to manipulate the market.
When Inner Circle Traders identify favorable trading opportunities based on liquidity pool manipulations and stop hunts, they enter trades accordingly. They set appropriate entry and exit points, considering the underlying market structure and risk management principles.
Risk Management in Inner Circle Trader Strategy
While this strategy offers potential for profitable trades, it is essential to implement effective risk management techniques. Here are some key aspects of risk management in this strategy:
Setting Stop Loss and Take Profit Levels
Inner Circle Traders set stop loss and take profit levels for each trade to limit potential losses and secure profits. These levels are determined based on the analysis of market structure, volatility, and the trader’s risk tolerance.
Managing Position Sizes
To control risk exposure, Inner Circle Traders carefully determine the appropriate position sizes for each trade. They consider factors such as account size, risk-reward ratios, and market conditions to ensure that no single trade poses a significant threat to their overall capital.
Monitoring Market Conditions
Inner Circle Traders continuously monitor market conditions and adapt their trading strategies accordingly. They stay updated with relevant news and events that may impact currency prices and adjust their positions or exit trades if necessary.
ICT Action Plan
Use the points of Focus taught in the first month of the Mentorship.
When Price Action trades to a Focus Point like a:
• Liquidity Pool
• Liquidity Void or Fair Value Gap
Refer to the Interest Rate Triad & USDX to confirm Smart Money is behind your trade idea. If there is no obvious indication they are moving large funds – pass on the trade idea and look for new ones that do.
Liquidity Pool Manipulation
One of the key principles of the Inner Circle Trader strategy is the concept of liquidity pool manipulation. Institutional traders manipulate liquidity pools by creating false market movements to trigger stop loss orders and induce panic selling or buying among retail traders. By understanding and anticipating these manipulations, Inner Circle Traders can position themselves to profit from the subsequent market movements.
Stop hunts refer to intentional price movements designed to trigger stop loss orders placed by retail traders. Institutional traders exploit these stop hunts to accumulate more significant positions or exit existing positions at favorable prices. Inner Circle Traders closely monitor these stop hunts and use them as opportunities to enter or exit trades.
Understanding market structure is crucial for successful implementation of the Inner Circle Trader strategy. Inner Circle Traders analyze price charts to identify support and resistance levels, trend lines, and other market patterns. By aligning their trades with the underlying market structure, they aim to increase the probability of profitable trades.
Reinforcing Liquidity Concepts and Price Delivery
External Range Liquidity
1) The current trading range will have Buy Side Liquidity above the range or High.
2) The current trading range will have Sell Side Liquidity below the range or Low.
3) Runs on Liquidity – seek to pair orders with the pending order liquidity – Liquidity Pools.
4) External Range Liquidity Runs can be Low Resistance or High Resistance in nature.
Internal Range Liquidity
1) When current trading range is likely to remain – Liquidity Voids will fill in – Gap Risk.
2) When current trading range is likely to remain – Fair Value Gaps will fill in – Gap Risk.
3) Orderblocks inside the trading range will be populated with new Buy & Sell orders.
4) Market Maker Buy & Sell Models will form inside trading ranges.
Reinforcing Order Block Theory
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 Orderblock and then Returns to the Bullish Orderblock Candle or Price Bar High – This is Bullish.
Defining Risk: The Low of the Bullish Orderblock is the location of a relatively safe Stop Loss placement. Just below the 50% of the Orderblock total range is also considered to be a good location to raise the Stop Loss after Price runs away from the Bullish Orderblock to reduce Risk when applicable.
The Inner Circle Trader strategy provides a unique approach to forex trading by leveraging the behavior of institutional traders. By understanding liquidity pool manipulations, stop hunts, and market structure, traders can potentially identify profitable trading opportunities. However, it is important to apply effective risk management techniques and acknowledge the limitations of the strategy. With proper analysis and careful execution, the Inner Circle Trader strategy can be a valuable tool for experienced forex traders.
The Inner Circle Trader strategy is a forex trading approach that focuses on understanding and leveraging the behavior of institutional traders to identify profitable trading opportunities.
The Inner Circle Trader strategy is more suitable for experienced traders who have a solid understanding of market dynamics and chart analysis. Beginners may find it challenging to grasp the nuances of this strategy initially.
Liquidity pools can be identified by analyzing price charts and looking for areas of accumulation or distribution. These areas often indicate the presence of liquidity and potential market manipulation.
Risk management techniques in the Inner Circle Trader strategy include setting stop loss and take profit levels, managing position sizes, and monitoring market conditions to adapt trading strategies.
No trading strategy, including the Inner Circle Trader strategy, can guarantee profits. The forex market is inherently unpredictable, and there are risksinvolved in trading. The Inner Circle Trader strategy aims to increase the probability of profitable trades by aligning with institutional traders’ actions, but it is important to manage risks and understand that losses are a possibility.
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Written By: Allen Matshalaga
Allen is a professional forex trader, blogger, and online enthusiast who spends most of his time testing and reviewing legit ways of making money online and is determined to help others succeed.