Basic ICT Order Flow | ICT Order Flow 101

Summary

In this video, the speaker explains the basics of ICT order flow from a candlestick chart perspective. They highlight that when order flow is bullish, black candles should support price, and when bearish, green candles should resist price. The speaker discusses how observing the color and position of candlestick closes—rather than wicks—helps identify order flow patterns and market trends. They also mention the importance of identifying key order blocks like propulsion, mitigation, and breaker blocks as price moves, offering insights for traders on how to interpret price movements and determine buy or sell programs.

Takeaways

• 😀 ICT order flow basics: If the order flow is bullish, black candles should support price. If bearish, green candles should resist price.
• 😀 When watching for price action, focus on the body of the candles, not the wicks, to determine if order flow remains bullish or bearish.
• 😀 Price will often retrace to previous black candles in a bullish order flow, and black candles will act as support.
• 😀 Similarly, in a bearish market, price will retrace to previous green candles, and green candles will act as resistance.
• 😀 ICT order flow is a repetitive pattern: black candles support price in bullish markets, while green candles resist in bearish markets.
• 😀 Focus on identifying when price trades back into black candles during bullish order flow, and green candles during bearish flow.
• 😀 Pay attention to candle closes rather than wicks to assess order flow correctly.
• 😀 Use the concept of propulsion blocks and order blocks in conjunction with ICT order flow to find key market turning points.
• 😀 When the market retraces and the black candles no longer support price, or green candles stop resisting price, it signals a shift in order flow.
• 😀 The ICT order flow method helps identify buy and sell programs in the market, which gives traders a clearer understanding of trends.
• 😀 Basic ICT order flow concepts, while simple, are powerful tools for recognizing key market movements and avoiding fear during price retracements.

Q & A

What is the basic principle of ICT order flow?

The basic principle of ICT order flow is that if the overall order flow is bullish, the black candles should support the price, and if the price is bearish, the green candles should resist the price.

How can you identify whether the market is in a bullish or bearish order flow using candlestick charts?

To identify the order flow, observe the candlesticks. If the market is bullish, the black candles should support the price. If the market is bearish, the green candles should resist the price. Focus on the bodies of the candles, not the wicks.

What role do the black candles play in a bullish market?

In a bullish market, the black candles act as support for the price. As price moves higher, you would typically see price bouncing off the bodies of black candles.

What happens when price retraces to a black candle in a bullish market?

When price retraces to a black candle in a bullish market, it is expected to find support at the close of the black candle. This suggests that the bullish order flow remains intact.

What does it indicate when green candles resist price in a bearish market?

When green candles resist the price in a bearish market, it suggests that the bearish order flow is prevailing. The market is likely continuing its downward trend.

What should you look for in candlesticks when assessing a potential change in order flow?

To assess a potential change in order flow, observe the closes of the candles. If the black candles no longer support price in a bullish market or if the green candles no longer resist price in a bearish market, it indicates a possible shift in order flow.

What is the importance of reading the bodies of candles and not the wicks?

The bodies of the candles are more significant because they represent the actual price action that occurred within a given period, while the wicks show the extreme highs or lows but not the key points of price movement. Focusing on the bodies provides clearer insights into market sentiment.

How can understanding ICT order flow help with trading decisions?

Understanding ICT order flow helps traders anticipate price movements. For example, if black candles are supporting price in a bullish market, it gives traders confidence that the price may continue to rise, and vice versa in a bearish market with green candles resisting price.

What are 'propulsion blocks' in ICT order flow?

Propulsion blocks are areas where black candles (in a bullish market) or green candles (in a bearish market) act as key support or resistance levels. These blocks often precede significant price moves and are useful for identifying areas of interest for traders.

What are some common types of blocks mentioned in the video, and how do they relate to order flow?

The video mentions various types of blocks, including order blocks, propulsion blocks, mitigation blocks, and breaker blocks. These are key levels where price reacts, either supporting or resisting the price based on whether the market is bullish or bearish.