ICT Standard Deviation Full Strategy With MMXM

Summary

In this video, the creator dives into a powerful Standard Deviation Trading Strategy, emphasizing its application in identifying price reversals and take-profit points. By using Fibonacci and standard deviation tools on TradingView, traders can measure price swings, recognize consolidation zones, and set entry and exit points. Key levels like -2, -3.5, and -4.5 are highlighted for optimal trade management. The strategy also incorporates liquidity pools and higher timeframe price data to improve trade accuracy. Through real-world examples with GBP/JPY, viewers learn how to implement this strategy for day trading, maximizing potential profits while minimizing risk.

Takeaways

• 😀 Understand standard deviation: It is a projection tool used to measure how far price manipulation will occur and can be applied to price swings for targeting price levels.
• 😀 Take profits at specific levels: The key take profit areas are between -2 and -2.5 for minor targets and -4 to -4.5 for reversals.
• 😀 Use original consolidation for analysis: Measure from consolidation high to consolidation low to understand reversal areas and predict price movement.
• 😀 Combine multiple factors for higher probability: Use standard deviation projections, liquidity pool analysis, and high-timeframe price data to confirm trade setups.
• 😀 Standard deviation strategy works for both bullish and bearish markets: Apply the same consolidation measurement process whether you're looking for buy or sell opportunities.
• 😀 Be mindful of liquidity pools: Liquidity pools, such as buy-side or sell-side liquidity, help confirm the validity of a reversal and can enhance your trade's probability.
• 😀 Utilize the Fibonacci tool settings: Use the Fibonacci tool with standard deviation settings in TradingView for accurate projections and trade execution.
• 😀 Min-2 to -2.5 is an ideal take-profit zone: This range is where traders can confidently take partial profits, especially in a trending market.
• 😀 Focus on liquidity and PD arrays: For a higher probability of success, ensure that price action aligns with high-timeframe price data (PD arrays) and liquidity pools.
• 😀 Watch for price behavior near equilibrium: Consolidation occurs when price stays near the 50% equilibrium, and moves away from this point can indicate significant trading opportunities.

Q & A

What is the main concept behind using standard deviation in trading?

The main concept is to use standard deviation as a projection tool to measure price swings and identify potential areas where manipulation may occur, such as price reversals or continuations. It helps traders set logical take-profit levels and anticipate price movements.

What are the key levels for taking profit when using the standard deviation strategy?

Key levels for taking profit include -2 to -2.5. These levels are ideal for taking profit, while -4 to -4.5 are typically used to anticipate potential reversals or retracements.

How does the strategy identify a reversal in the market?

Reversals are identified by measuring the price movement from the original consolidation (high to low). When price reaches levels like -3 to -3.5, or -4 to -4.5, these are areas where reversals are more likely, especially if liquidity is taken into account.

What role does liquidity play in the standard deviation strategy?

Liquidity plays a critical role in confirming the validity of a trade. For a reversal to be likely, liquidity must be taken into account. This means that if price moves into a zone where there is significant buy or sell-side liquidity, it supports the idea that a reversal could occur.

What are breakers in this strategy, and how are they used?

Breakers are price swings that represent a shift in market structure, either from bullish to bearish or vice versa. They are used to measure where price may reverse, helping to set logical take-profit levels. Traders can use the low-to-high or high-to-low measurements to identify these zones.

How can fair value gaps be used in this strategy?

Fair value gaps are inefficiencies in price action where no sell-side orders were offered, creating an imbalance. These gaps can be identified and used as potential zones for reversals or continuations. Traders look for price to return to these gaps before taking a position.

What is the significance of the original consolidation in the strategy?

The original consolidation is important because it serves as the foundation for measuring price movement. Traders look for areas where price has not broken above the consolidation high or below the consolidation low, using this range to project potential price reversals.

How do round numbers (like 00 or 50) impact price movements in this strategy?

Round numbers like 00 or 50 are significant because large institutions often place orders at these levels. This creates areas where price may reverse or consolidate as it approaches these key figures. Traders can use these levels as targets for price action.

How does the strategy apply to both bullish and bearish market conditions?

The strategy applies similarly in both market conditions. In a bullish market, traders measure from the consolidation high to the low and target reversals at negative standard deviation levels. In a bearish market, the process is reversed, with measurements from the consolidation low to the high, targeting profit at similar negative levels.

What additional tools can enhance the probability of successful trades with this strategy?

The strategy's success can be enhanced by combining standard deviation projections with other tools, such as liquidity zone analysis, higher-timeframe PD arrays (potential reversal areas), and fair value gaps. These tools help refine the trade setup and increase the likelihood of a successful reversal.