A+ ICT Trading Checklist - ICT Concepts

Summary

In this video, Wavy shares his A+ day trading checklist based on ICT concepts. He emphasizes the importance of having a structured approach, focusing on key elements like selecting the right trading session, understanding discount and premium zones, identifying major liquidity levels, and defining clear entry and exit strategies. Wavy also explains how he uses these principles to execute high-probability trades, sharing detailed examples of both successful trades and how he manages risk. Additionally, he promotes his free Discord server as a resource for traders to learn and engage with his methods and analysis.

Takeaways

• 😀 Having a trading checklist is crucial for maintaining discipline and avoiding random, emotional trades that can lead to account blowups.
• 😀 The checklist helps traders focus on high probability setups and stay consistent in their approach to day trading.
• 😀 Step 1: Choose a trading session and focus on a specific 'Kill Zone' that fits your schedule and personality for optimal performance.
• 😀 Step 2: Understand the concept of 'Discount' vs. 'Premium' ranges to identify high-probability setups for long or short trades.
• 😀 Step 3: Recognize and use major liquidity levels (such as previous session highs and lows) as important factors for targeting or taking trades.
• 😀 Step 4: Set clear profit-taking targets and break-even levels to protect winnings and manage risk effectively.
• 😀 Step 5: Use proven entry models, such as inverse fair value gaps (IFG), to guide trade entries and ensure consistency.
• 😀 The speaker’s main trading focus is on the 9:30 AM to 11:00 AM EST Kill Zone, which offers the best volatility for trade setups.
• 😀 The speaker also trades pre-market if clean setups appear, especially when significant data candles with clear wicks occur before market open.
• 😀 An example of an A+ trade setup includes entering a position at a discount, with a clear reaction from a liquidity sweep, followed by a precise entry model.
• 😀 The importance of using a clear and concise entry model is emphasized, as well as sticking to one or two core strategies for better results in trading.

Q & A

Why is it important to have a trading checklist before entering a trade?

Having a trading checklist is crucial because it allows you to follow a structured approach, ensuring that you take only high-probability setups. It helps maintain discipline, avoids random trades, and minimizes the risks of revenge trading or blowing up your account.

What is the significance of choosing the right session for day trading?

Choosing the right session is important because it aligns with your personal schedule and trading style. For example, the 9:30 to 11:00 a.m. EST 'kill zone' is favored for its volatility and optimal setup opportunities, making it a great time for high-probability trades.

How do discount and premium ranges affect trading decisions?

The discount and premium ranges, derived from the daily price range, guide whether to focus on long or short trades. In the discount range (below equilibrium), long setups are more probable, while in the premium range (above equilibrium), short setups have a higher probability.

What are some exceptions when trading outside the general rule of discount and premium?

Sometimes, when there’s a clear liquidity target or a strong liquidity level in the premium range, a trader might still take long setups. The key is ensuring that the setup makes sense with proper confluence and entry models.

Why is understanding liquidity important for day trading?

Liquidity is vital because it acts as a key level for both targets and potential setups. Major liquidity levels, such as previous session highs and lows or hourly/4-hour highs, provide entry points or targets for trades, as price tends to be drawn toward these levels.

How do you set clear profit targets in day trading?

Clear profit targets are set by identifying levels where price is likely to reverse or balance out, such as unmitigated imbalances, fair value gaps, equilibrium levels, and major liquidity points like previous highs or lows.

What is the importance of a clear entry model in day trading?

A clear entry model is essential to ensure consistency and discipline. It outlines the exact conditions for entering a trade, setting stop losses, and taking profits. Following one or two well-defined entry models reduces decision-making uncertainty and improves trade execution.

Can you explain the inverse fair value gap (IFG) entry model?

The inverse fair value gap (IFG) is one of the main entry models used. It involves identifying a gap in price where price has moved sharply in one direction, then pulled back into the gap area. A trade is initiated when the price reacts within the gap area, signaling a potential continuation.

What was the example of a trade setup shared in the video, and what made it an A+ setup?

An example of an A+ trade setup involved a sweep of the London low (a major liquidity level) during the 9:30-11:00 a.m. kill zone, with price in the discount range. After the liquidity sweep, an inverse fair value gap appeared, providing a clear entry, and the target was the equilibrium level, where the trader took profits.

What should a trader do if the setup doesn't match their kill zone or preferred session?

If the setup doesn’t align with the kill zone, the trader can still consider pre-market trades if clean data candles or liquidity levels are present. However, it’s crucial to follow the entry model and risk management strategies to ensure consistent outcomes.