Make $10,000/Month with This Simple ICT Inversion Strategy

Summary

In this video, the speaker explains a simple yet effective trading model for the NASDAQ using three key steps: inversion fair value gaps, liquidity sweeps, and the 9:30 opening. The model focuses on identifying high-probability inversion fair value gaps with good volumes, then waiting for liquidity to be swept and using the 9:30 opening for the most reliable trades. The speaker highlights the importance of consistency and provides examples of successful trades, emphasizing the necessity of these three confirmations for profitable trading and avoiding mistakes like FOMO or low-volume entries.

Takeaways

• 😀 Identify high-probability inversion fair value gaps by spotting a single leg with one fair value gap and a V-shape reversal with volume.
• 😀 Liquidity sweeps are crucial: Look for areas where the market sweeps highs or lows to capture liquidity before moving in your direction.
• 😀 The 9:30 opening is important for high-volume market movement, making it a critical time window for trade entries.
• 😀 Consistency in your trading model is key to long-term profitability; aim for a steady monthly income by following this strategy.
• 😀 Don't enter based on low volume reversals. Ensure there's significant volume to confirm the market's direction.
• 😀 Use a 1:1 or 1:2 risk-to-reward ratio to avoid excessive risk, aiming for realistic and achievable targets.
• 😀 The 9:30 opening provides fast market movement with strong volume, increasing the chances of successful trades.
• 😀 When entering trades, ensure all three confirmations (inversion fair value gap, liquidity sweep, and 9:30 opening) are present.
• 😀 Don't be greedy – target realistic profit levels, and avoid aiming for excessively high risk-to-reward ratios like 1:5 or higher unless supported by the setup.
• 😀 Practice patience and wait for clear setups, like a clean fair value gap reversal with volume, before entering a trade.

Q & A

What is the core strategy discussed in the video?

The core strategy involves trading using inversion fair value gaps, liquidity sweeps, and the 9:30 AM market opening. These three components are used to identify high-probability trade setups.

What is meant by an inversion fair value gap?

An inversion fair value gap refers to a situation where the price reverses after creating a single leg of a fair value gap. The price should reverse with significant volume, which confirms the potential for a profitable trade.

Why is the 9:30 AM opening important in this strategy?

The 9:30 AM opening is crucial because it is a time when the market experiences high volumes. These higher volumes reduce the chances of price manipulation and increase the likelihood of a price movement in the intended direction.

How does liquidity sweep play a role in the strategy?

Liquidity sweep refers to the market pushing above or below significant highs or lows to capture remaining liquidity. This is used as an indicator that the price is likely to reverse and move in the desired direction after clearing out liquidity.

What timeframe should traders use to identify liquidity levels?

Traders should use the 15-minute timeframe to mark significant liquidity levels, such as notable highs or lows, which can then be confirmed in lower timeframes for better precision in entry points.

What does a V-shaped reversal in the market indicate?

A V-shaped reversal occurs when the price takes multiple candles (typically three or four) to fully reverse a fair value gap. This indicates a strong market move with sufficient volume, confirming a high-probability trade.

What is the significance of volume in identifying inversions?

Volume is crucial because it confirms the strength of the reversal. A price reversal with high volume is considered a stronger signal, while low volume reversals are more easily manipulated and less reliable.

How does a trader confirm an entry after a liquidity sweep?

After identifying a liquidity sweep, the trader should look for the creation of a fair value gap (IGG) and wait for the price to reverse back into that gap. Once the price inverses, a market entry can be placed with a stop loss just below the reversal point.

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

The recommended risk-reward ratio is between 1:1 and 1:2. It is important to avoid being too greedy and to aim for realistic targets based on market conditions.

What should a trader do if they don't see all three confirmations?

If any of the three key confirmations (inversion fair value gap, liquidity sweep, and 9:30 opening) are missing, it is advised not to enter the trade. Consistency in following the setup rules is crucial for long-term profitability.