I want to thank ICT (Inner Circle Trader) Michael Huddleston for sharing his mentorship with everyone for free.
This is my concise breakdown of his teachings from Episode 1 & 2 which totals roughly 1.5 hours of instructions.
Here is my concise ( cut to the chase ) translation of it.
If you are new to trading then you need to do everything on a demo account. If you are unfamiliar with what a demo account is at this point – it is trading account using play money.
You can open one with any broker using MT4/MT5 (I use this one; www.octafx.com/signup/) or you can sign up with an account using the platform called Trading View (and choose a broker from their availability.
The point is do not use real money when learning to trade.
All of the teachings will be completed in trading view using futures and in an intraday timeframe but can be scaled to any timeframe along with usage for forex and/or CFDs.
I am located in Japan and I use two brokers Oanda Japan (Trading View) and MT4/MT5 with OctaFx which has higher leverage.
Looking for set-ups:
Weekly (top down approach)
Try to predict the next candle in the weekly chart. Using the example of a nasdaq e-mini 100 future. Use a collection of biases: seasonal tendecies and fed plans to raise interest rates.
Price will magnetize to certain price levels.
Daily (where most of your set-ups will be found)
Price will be drawn to Liquidity Pools such as stop-losses. Such as traders who are putting stop losses on intraday short term lows or highs. Above old highs and lows.
Price are moved by Imbalances. Large Candles moving in one direction without any checks and balances on those prices. Essentially presented the least contention between buyers and sellers.
If we anticipate a move lower after our study of the weekly and daily analysis and we notice a consolidation of price from the high and low formed from the consolidaton; expect the hunting of sell stops and buys tops before the initial move lower. The same is true for the opposite direction.
Using the analysis of the hourly chart and adding lines for the intra day highs and lows draw a line.
Side Note to Readers: I actually have a lot of experience drawing and viewing these intra day lines for the highs and lows when I learned this method called the New York Breakout Strategy. (which doesn’t work that well but it was interesting to observe how price moved. At that point a became a believer that price is manipulated to take out stops.)
Essentially you could say the ICT method would be an anti-breakout trader who is anticipating the stop hunts.
Using all of the above higher timeframe bias we are now looking for an entry. Just because the there was a run on stops ( a stop hunt ) we are still waiting for a specific market signal before entry which will repeat on any type of trading instrument.
This breakdown after the stop hunt as price heads down we look to the next 2min. candles to find an entry to go short inside what is coined as the Fair Market Value location which essentially is the next set of 2min. candles just below the breakdown of the high that was stop hunted.
The stop loss will be added above the previous 2min candles high.
To maximize your short entry price you want to make sure that you are entering the trade on the 2min. candles that are heading up into that Fair Market Value location.
Where to Close your trade (get out at)
The stop hunt highs and lows are now the new markers for creating your exit point. You will mark those highs and lows and use the half way point (50%) level as a marker for exiting and locate the next closest level to exit based on a previous recent low.
Back Test the ICT Method in MT4 using Soft4Fx
Replicate the Order Blocks, Fair Value Gaps and Liquidity Pools.