Your Guide to ICT Trading Strategy: Big Players Game
ICT stands for Inner Circle Trader and nowadays this trading strategy is gaining a lot of importance among traders. In this article, we will discuss the powerful methods to trade the financial markets for consistent profits. This information will equally help the new and experienced traders and it can give a boost to your trading knowledge.
Major Outline
- What is the ICT Trading Strategy?
- Why is ICT Trading Strategy important for a trader?
- What is the key backbone of ICT Trading?
- What things do you need for ICT Trading?
- Understanding how the market structure works in ICT Trading?
- How to find the valid order blocks in ICT?
- What is the importance of fair value gaps in ICT Trading?
- How to trade with ICT concepts in forex?
- What mistakes do you need to avoid while ICT Trading?
- How to start a profitable ICT Trading plan?
What is the ICT Trading Strategy?
The ICT Trading Strategy was developed by someone named Michael J. Huddleston. This method is called Inner Circle Trader and it is used for Price Action Trading and understanding the behavior of the market. Moreover, the ICT Trading Method focuses on the moves that are created by smart money and liquidity.
Why is ICT Trading Strategy important for a trader?
The ICT Trading Method is very important for a trader because it provides you with an in-depth analysis of financial markets. Moreover, the dark side of trading is that traders rely on technical analysis and indicators only. On the other hand, ICT Trading gives us an idea of bank behaviors and market structure. This method helps us to make more effective trading decisions.
What is the key backbone of ICT Trading?
ICT Trading revolves around the following key methods.
- Understanding Market Structure: In ICT Trading we mainly focus on highs and lows and we try to find the trends in this way.
- Role of Liquidity Pools: This method helps us to understand the liquidity levels in the market and it has a great impact on the trading market.
- Role of Smart Money: ICT Trading helps us to understand the methods and techniques used by smart money (Big Players).
What things do you need for ICT Trading?
We need to follow these steps to get started with ICT Trading.
- Key Education: First of all, you need to learn ICT Trading through different available resources like YouTube tutorials on ICT, reading content about ICT Trading, or learn it through the FX Mentor US one-hour coaching program.
- Platform: If you want to be a successful ICT Trader then you need a better platform for chart analysis such as trading view.
- Practice is the key: When you start trading first time with ICT Concepts then you need to trade on a demo account without risking your real money.
Understanding how the market structure works in ICT Trading?
Market structure plays a leading role in ICT Trading, we need to understand these elements.
- Trend Identification: We need to understand three types of momentums in the market such as consolidation, downward, and upward trends.
- Role of Swing Highs and Lows: We need to find out the potential reversal points in the market in the form of swing highs and lows.
- Importance of break of structure: When the price action breaks any highs and lows it is called a break of structure.
How to find the valid order blocks in ICT?
Order blocks are the key areas while making trading decisions:
- Bullish Order Block: This type of order block normally appears in the upward trend where big banks show more interest in buying activity.
- Bearish Order Block: The Bearish Order block appears in the downward trend and shows the key levels where institutions are more interested in selling the asset.
- Final Confirmation: When we decide to trade the order block levels then it’s always important to look for valid confirmation before taking a trade.
What is the importance of fair value gaps in ICT Trading?
Fair value gaps represent the imbalance in the trading market.
- Key Imbalance Zones: Imbalance zones show us the key areas where the difference occurs between the buying and selling pressure.
- Trading Opportunity: The fair value gaps are the key levels where the price action can come for a retest.
- Effective Risk Management: You can trade with the help of these fair value gaps with proper stop loss and can gain a good risk-to-reward ratio.
How to trade with ICT concepts in forex?
Next, we need to follow these ICT rules while trading forex:
- Choosing the Right Pair: A trader should choose those currency pairs where there is a big role of institutions such as EUR/USD, and GBP/JPY.
- High Volatile Sessions: While Trading the ICT Method a trader should choose to trade high volatile sessions like New York and London.
- Impact of News: A trader should always keep an eye on the major news and announcements.
What mistakes do you need to avoid while ICT Trading?
A trader can improve its success rate by avoiding these mistakes:
- Do Not OverTrade: It is always advised for ICT Trader to rely on highly accurate setups and he should avoid taking too many trades in one day.
- Do Not Ignore the Stop Loss factor: Atrader is advised to plan his all trades by setting up a proper stop loss. Ignoring the factors of Risk Management can lead to loss.
- Proper Confirmation: It is always important to wait for a valid confirmation before executing your trade.
How to start a profitable ICT Trading plan?
Finally, for a Profitable ICT Trading Plan, we need to take care of the following points.
- Trust your Strategy: After you practice an ICT Trading Strategy on a demo account then you need to focus on it with proper entry and exact rules.
- Apply Risk Management: If you have plans to stay in the financial markets for a longer period of time then you always need to work with proper risk management. The other way is to review your trading plan based on the number of winning and losing trades.
Conclusion
The ICT Trading Strategy is the new and best way to trade the financial markets. When we focus on smart money moves market structure and liquidity pools then we can have very successful trades. Always be patient and review your strategy and adapt further changes according to it.
Best Of Luck!
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