ICT Unicorn Model - Explained In-depth!

Summary

In this video, the ICT Unicorn Model is explored, a high-probability trading strategy combining breaker blocks and fair value gaps. The model is explained in detail, showing how a bullish or bearish breaker block works and how a fair value gap overlaps to form the Unicorn setup. The video also covers how to identify these setups in real-time with chart examples, live trades, and a discussion on how to avoid common pitfalls. Viewers are provided with a thorough understanding of how to use the Unicorn Model for successful trades and real-world market analysis.

Takeaways

• 😀 The ICT Unicorn Model is a high-probability entry strategy that incorporates breaker blocks and fair value gaps to predict price movements.
• 😀 A breaker block is formed when price creates a low, high, lower low, and a higher high, and price must close above or below certain levels for validation.
• 😀 Bullish breaker blocks occur when price creates a lower low, then a higher high, and closes above the previous high, indicating strong support for a buy program.
• 😀 Bearish breaker blocks form when price creates a higher high, followed by a lower low, and closes beneath the previous low, signaling strong resistance for a sell program.
• 😀 A fair value gap is a three-candle pattern where the high of the first candle and the low of the third candle do not overlap, creating an imbalance in the market.
• 😀 Bullish fair value gaps signify buy-side imbalance, while bearish fair value gaps indicate sell-side inefficiency.
• 😀 The Unicorn Model combines a breaker block with an overlapping fair value gap, forming a high-probability entry point for either buying or selling depending on market direction.
• 😀 A bullish unicorn model occurs when a bullish breaker block overlaps with a fair value gap, acting as strong support for price to move higher.
• 😀 A bearish unicorn model happens when a bearish breaker block aligns with a fair value gap, serving as resistance for price to move lower.
• 😀 It is crucial to have a narrative and bias in trading the Unicorn Model to avoid failures, as a bearish unicorn model may not work if the market is in a buy program.
• 😀 Real chart examples demonstrate the effectiveness of the Unicorn Model, where price respects the breaker block and fair value gap, targeting liquidity zones, and standard deviations.

Q & A

What is a breaker block in the ICT Unicorn Model?

A breaker block is a price structure that occurs when price creates a low, a high, a lower low, and a higher high. For a bullish breaker block, price breaks beneath the low and then closes above the previous high. For a bearish breaker block, price breaks above the high and then closes beneath the previous low.

How does a bullish breaker block work in the ICT Unicorn Model?

In a bullish breaker block, price forms a low, a high, a lower low, and a higher high. Price needs to break beneath the low of the previous swing and then close above the previous high. This setup is validated when price retests this level as support and continues to move upwards.

What role does the last up-close candle play in a bullish breaker block?

The last up-close candle before the lower low and higher high plays a crucial role as it acts as support once price retraces into it. The candle's close is the reference point for validating the breaker block as a bullish setup.

What is a fair value gap in the ICT Unicorn Model?

A fair value gap is a three-candle pattern where the high of the first candle and the low of the third candle do not overlap. This creates an imbalance in the market, signaling a buying or selling opportunity, depending on whether it's bullish or bearish.

How does a fair value gap overlap with a breaker block in the Unicorn Model?

In the Unicorn Model, a fair value gap overlaps with a breaker block, creating a high-probability trade setup. When price returns to the breaker block and a fair value gap exists in the same area, this area acts as strong support or resistance, depending on the market direction.

What is a bullish unicorn model, and how is it identified?

A bullish unicorn model occurs when a bullish breaker block overlaps with a bullish fair value gap. Price respects this area as support, and with the market bias being bullish, the price typically continues to move higher, targeting buy-side liquidity.

What is a bearish unicorn model, and how is it identified?

A bearish unicorn model occurs when a bearish breaker block overlaps with a bearish fair value gap. Price respects the area as resistance, and the price typically continues to move lower, targeting sell-side liquidity.

What could cause the bearish unicorn model to fail?

The bearish unicorn model may fail if the broader market is in a buy program. In such cases, price may not respect the bearish setup because smart money is targeting higher prices, leading to the failure of the model.

How should stop-losses be placed when trading the unicorn model?

Stop-losses can be placed in several ways when trading the unicorn model. They can be set above the high of the swing high of the breaker block, above candle number two or three of the fair value gap, or just above the breaker block itself, depending on the trader's risk tolerance.

What is the significance of using standard deviation levels in the Unicorn Model?

Standard deviation levels help in setting price targets once a unicorn model is identified. Drawing standard deviation from the low to the high of the breaker helps predict where price might target next, often within the -2 to -2.5 range, signaling potential areas for price to reverse or continue.