ICT Trading 2022 Setup

Basic ICT Trading Setup

The main components of the 2022 ICT Trading mentorship setup are:

1. Liquidity Sweep or Price reaching POI (Point of Interest).
2. Price reacts aggressively with a displacement to the other side.
3. The move in “2” causes a Change of Character (CHOCH Trading), AKA Market Structure Shift (MSS).

On one side is a blueprint of the basic model, while on the other is a trade example on ES1!

We will try to learn how to make variants with higher win rates, and more precise entries with more reward to risk ratio.

The ICT Trading Setup Criteria

One criterion is chosen from each category to create the setup that fits you.

1. 1. Liquidity Sweep | POI | Both
   Liquidity: Swing highs/lows | Previous day’s high/low | Previous week’s high/low | Equal highs/lows
   POI: Order Block (OB) | Fair Value Gap (FVG) | Breaker Block Trading (BB)
2. 2. Fair Value Gap (FVG) | Order Block
   For entry, either Fair Value Gap (FVG) or Order Block is used.
3. 3. Types of Entry (Confirmation)
   a. After the Change of Character, you enter on the Fair Value Gap (FVG) / Order Block.
   b. After the Change of Character, you wait for price to trade through the Fair Value Gap (FVG), you switch to a lower time frame, and you look for a Change of Structure / Break of Structure with a LTF Fair Value Gap (FVG) where you entered from.

Additional Confluences

More confluences can be implemented in the ICT Trading setup to improve the setup:

1. 1. Premium/Discount | Daily Bias
   Long trades are allowed on discount, and short trades on premium. A Gann Box can be used to identify premium and discount zones. Daily Bias is considered too.
2. 2. Inducement | Liquidity
   When there is an inducement/liquidity above the Fair Value Gap (FVG), for example, it is a higher probability to go long. On the other hand, it is a higher probability to go short when there is an inducement/Liquidity Sweep below the Fair Value Gap (FVG).
3. 3. Optimal Trade Entry (OTE)
   Only take the trade when the FVG is on the OTE zone, which is 0.618–0.79 using the Fib Retracement tool.

SMT Divergence

SMT Divergence occurs when there is a divergence between the lows/highs of the correlated pairs.

Time Frames

Your time frames used in the setup should be related. You cannot use a 4H sweep or POI and then use the M1 for Change of Structure. It is not logical. When using entry type a, you can use HTF and MTF.

On the other hand, for entry type b, you can use HTF, MTF, and LTF, or MTF, MTF, and LTF. For example, the M15/M5 Liquidity Sweep, the M5 Fair Value Gap (FVG), and the M1 Fair Value Gap (FVG).

My suggestions for the time frames are as follows:

ICT Killzones

ICT Killzone times are the specific time periods when we will look for our setup, as there is more volume in the market.