i backtested my Enhanced ICT 2022 Model for a week! Insane Results

Summary

In this video, the creator walks viewers through a backtesting session, using a trading plan based on a model shared in previous videos. Focusing on Euro USD, the strategy is simple and follows a specific plan involving the London Kill Zone, price liquidity, market structure shifts, and entry on fair value gaps or breakers. The creator emphasizes risk management, psychology, and the importance of staying disciplined. Viewers are encouraged to check out the detailed explanation in previous videos for deeper insights, with a clear demonstration of the strategy's effectiveness in real-time trading.

Takeaways

• 😀 The video focuses on a forex backtesting session using the Euro USD currency pair.
• 😀 The strategy discussed is based on a simplified model derived from ICT's 2022 trading methods.
• 😀 The trading plan is designed to be easy to follow with minimal moving parts for beginners.
• 😀 The strategy targets trading during the London Kill Zone (2 AM to 5 AM), focusing on price action after the Asian session.
• 😀 The key entry signal is based on a market structure shift on lower timeframes after a liquidity run post-2 AM.
• 😀 Trades are entered using fair value gaps or breakers, aiming for a 3R profit target for optimal risk-to-reward.
• 😀 A core principle is not to take trades before 2 AM, even if they appear to be winners, as the time frame is critical to the strategy.
• 😀 The strategy emphasizes the importance of following the daily bias and higher time frame analysis, although it doesn’t require one for each trade.
• 😀 Liquidity runs, especially around the Asian session low, can offer opportunities but must be carefully analyzed before entry.
• 😀 The backtesting session shows that taking trades based on the outlined strategy can lead to consistent profits if rules are followed strictly.
• 😀 The trader recommends using tools like Notion to journal trades for better performance tracking, though the focus is on the strategy itself in the video.

Q & A

What is the main focus of this video?

The main focus of the video is a backtesting session where the presenter demonstrates how to apply a Forex trading strategy using the ICT model. It covers how to analyze specific time frames, liquidity, and price action to make trading decisions.

Which Forex pair is being used in the backtesting session?

The Forex pair being used in the backtesting session is Euro/USD (EUR/USD).

What time period does the presenter recommend for executing this strategy?

The presenter recommends executing the strategy between 2 AM and 5 AM, which is known as the London Kill Zone. This period aligns with the Asian session and liquidity runs after 2 AM.

What is the 'London Kill Zone'?

The 'London Kill Zone' refers to the specific period between 2 AM and 5 AM, which is often considered a highly active and volatile period for Forex trading, especially with liquidity runs after 2 AM.

What does the presenter mean by 'liquidity run'?

A 'liquidity run' refers to the movement of price that triggers stop-loss orders and creates liquidity, often after certain levels of price are breached. The presenter looks for these movements as part of the strategy.

Why does the presenter emphasize the importance of time when taking trades?

The presenter emphasizes time because they believe certain trades that occur outside of the designated time window (after 2 AM) are less reliable. For instance, a liquidity run before 2 AM is considered invalid, even if it results in a winning trade.

What is a 'fair value gap' and why is it important in this strategy?

A 'fair value gap' refers to an area where price has moved too quickly, leaving a gap in price action. This gap is important because it can act as a level where price might return to in order to complete the market structure, providing an entry point for trades.

What is the role of market structure shift in this strategy?

A market structure shift refers to a change in the direction of price movement, indicating a potential reversal or continuation. The strategy relies on observing these shifts, especially on lower time frames, to enter trades at optimal points.

What is the suggested risk-to-reward ratio for the trades in this strategy?

The presenter suggests aiming for a 3:1 risk-to-reward ratio, meaning that for every unit of risk, the target profit should be three times that amount. This is considered an achievable and optimal target.

Why does the presenter recommend using a tool like Notion for journaling trades?

The presenter recommends using Notion for journaling trades because it is a convenient and organized tool to track trades, helping traders to review and learn from their past performance.