In this THREAD I will explain ICT BASIC CONCEPTS:
1. Liquidity
2. Displacement
3. Market Structure Shift
4. Inducement
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1. Liquidity
2. Displacement
3. Market Structure Shift
4. Inducement
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1. Liquidity:
Two types of liquidity;
Buy-side liquidity: Level on the chart where short sellers will have their SL positioned
Sell-side liquidity: Level on the chart where long buyers have their SL positioned
These levels are often classified as tops and bottoms of ranges.
Two types of liquidity;
Buy-side liquidity: Level on the chart where short sellers will have their SL positioned
Sell-side liquidity: Level on the chart where long buyers have their SL positioned
These levels are often classified as tops and bottoms of ranges.
2. Displacement:
Displacement will appear as a single or a group of candles that are positioned in the same trend.
These candles normally have large bodies and very short wicks, suggesting a clear TREND between BUYERS and SELLERS.
Formed by a strong buying/selling pressure.
Displacement will appear as a single or a group of candles that are positioned in the same trend.
These candles normally have large bodies and very short wicks, suggesting a clear TREND between BUYERS and SELLERS.
Formed by a strong buying/selling pressure.
3. MS Shift:
A Market Structure shift occurs when the previous trend is broken.
If the price is in an uptrend, the shift level is where a LL is made.
If the price is in a downtrend, the shift level is where a HH is made.
MS shifts tend to occur after a displacement.
A Market Structure shift occurs when the previous trend is broken.
If the price is in an uptrend, the shift level is where a LL is made.
If the price is in a downtrend, the shift level is where a HH is made.
MS shifts tend to occur after a displacement.
4. Inducement:
It's a manipulation in the price, that makes traders jump into the market too early.
When this happens, traders stop loss get hit, and the price moves the way it was supposed to.
These counter-trend moves are the results of lower time frame liquidity hunting.
It's a manipulation in the price, that makes traders jump into the market too early.
When this happens, traders stop loss get hit, and the price moves the way it was supposed to.
These counter-trend moves are the results of lower time frame liquidity hunting.
5. Example of all the concepts together:
1. Price makes a double bottom, and traps traders through Inducement
2. Price breaks Previous Day High, and hunts liquidity above it
3. MS Shift takes place, and trend changes from Bullish to Bearish
4. Displacement = change of trend
1. Price makes a double bottom, and traps traders through Inducement
2. Price breaks Previous Day High, and hunts liquidity above it
3. MS Shift takes place, and trend changes from Bullish to Bearish
4. Displacement = change of trend
I hope this THREAD has helped you to understand the BASIC concepts of ICT strategy.
It's a must knowledge you should have, to find good RR trades, and therefore, to understand PA and Market Structure.
RT and FAV to spread this THREAD is appreciated.
It's a must knowledge you should have, to find good RR trades, and therefore, to understand PA and Market Structure.
RT and FAV to spread this THREAD is appreciated.
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