How to Trade the ICT Market Maker Model (LIVE)

Summary

In this video, the trader explains the Market Maker Buy or Sell model in a live trade scenario. They walk through their strategy, emphasizing a bullish bias based on higher time frame analysis. The trader details the use of fair value gaps, order blocks, and liquidity zones to identify entry points and manage risk. They also share insights into the importance of not thinking in absolutes, but rather probabilities, when trading. The trader highlights how they incorporate smart money reversal techniques and market structure shifts to guide their decisions, aiming for higher liquidity levels and positive trade outcomes.

Takeaways

• 😀 Understand the Market Maker Buy Model: The script focuses on the Market Maker Buy model, which involves analyzing price action based on key levels such as buy-side liquidity and fair value gaps.
• 😀 Identify Entry Points: The trader entered the market after a market structure shift, noticing a bullish fair value gap and a bullish bias on the higher time frame.
• 😀 Rebalance and Retrace: The trader highlights how price retraced into a key order block and expanded from there, showing how specific price actions align with the model.
• 😀 Price is on the Buy Side of the Curve: The trader consistently refers to the price being on the buy side of the curve, suggesting a higher probability of bullish movement.
• 😀 Probabilistic Mindset: The script emphasizes the importance of thinking probabilistically in trading, where outcomes are uncertain but can be guided by high-probability setups.
• 😀 Market Structure Shift: The trader mentions that a shift in market structure, such as price breaking old highs, signals a potential continuation of the trend.
• 😀 Respecting PD Arrays: The trader stresses the significance of respecting bullish price displacement arrays (PD arrays) and using them as support in the Market Maker Buy Model.
• 😀 Managing Risk: The trader manages risk by setting specific stop levels and using a trailing stop to lock in profits, but avoids rigid expectations of price movements.
• 😀 Smart Money Reversal: The key entry was based on a smart money reversal at sell-side liquidity, where price was anticipated to rise after clearing sell stops.
• 😀 Standard Deviation for Targets: The trader used standard deviation projections to determine realistic target levels, aligning with the buy-side liquidity to confirm the expected market move.

Q & A

What is the core strategy the speaker is using for this trade?

The speaker is using the 'market maker buy or sell model,' which involves identifying buy and sell sides of the market, determining levels of liquidity, and entering trades based on price action and smart money reversals. The focus is on probability, not certainty.

How does the speaker decide where to enter the trade?

The speaker enters the trade after identifying key price levels like the 2022 model at sell-side liquidity and the presence of a bullish fair value gap (FVG). This suggests a higher probability of price moving toward the buy-side liquidity.

What role does the higher time frame analysis play in the strategy?

The higher time frame analysis helps establish the broader trend (bullish or bearish), which guides the decision to look for bullish or bearish smart money reversals on lower time frames. It ensures alignment with the overall market bias.

What is the significance of the 'Judah swing' mentioned in the script?

The 'Judah swing' refers to a price movement that temporarily takes out sell-side liquidity before reversing direction. In this case, the speaker was anticipating a Judah swing to take out sell stops, setting up the conditions for a bullish market reversal.

What are PD arrays and how are they used in the strategy?

PD arrays (Price Delivery Arrays) refer to key price levels where price action either respects or disrespects certain patterns. In the context of this strategy, bullish PD arrays (like order blocks and fair value gaps) are considered support levels, while bearish PD arrays are seen as resistance levels.

What is the purpose of marking the 'order block' in this trading model?

The order block is marked to identify areas of potential support or resistance. It is a region where price has previously reversed, and the speaker expects price to respect the order block and expand higher.

What does the speaker mean by 'low-risk buy'?

A 'low-risk buy' refers to entering a trade where the risk is minimized by buying after a clear accumulation phase, such as when price retraces into a key support level (like an order block) and begins to move higher.

Why does the speaker mention 'fair value gaps' (FVGs) in the trade strategy?

Fair value gaps (FVGs) represent price levels where there is an imbalance between supply and demand. The speaker uses FVGs to identify potential entry points for buying or selling. A bullish FVG is a sign that price may move higher, while a bearish FVG could indicate a potential reversal.

What is the role of the 'rebalanced price range' in the strategy?

The 'rebalanced price range' refers to a price level that has already been tested and is no longer expected to be revisited. Once price has retraced into and then expanded away from a fair value gap, the speaker believes that it will not return to that level, indicating the market is likely to continue its upward trend.

What is the importance of using a probabilistic mindset in trading, according to the speaker?

The speaker emphasizes the importance of maintaining a probabilistic mindset to manage uncertainty. While certain price actions may have a higher likelihood of occurring based on the analysis, the outcome is never certain. This approach helps mitigate the emotional impact of potential losses and keeps the trader focused on long-term strategy.