ICT Charter Price Action Model 6 \ Buyside Trade Plan

Summary

In this video, the Price Action Model #6 focuses on the universal trade plan for market maker models, specifically targeting the buy side. The strategy revolves around analyzing medium to high impact events, identifying key market structures, and defining premium and discount ranges to guide trade decisions. Emphasizing market manipulation, the model teaches how to time entries in discounted fair value gaps, manage risk, and optimize money management using multi-order setups. Backtesting is essential to refine the strategy. This plan outlines precise steps from preparation to execution, offering a clear framework for identifying and capitalizing on market moves.

Takeaways

• 😀 The focus of the video is on the 'Universal Trade Plan' for the buy side of the market maker model in ICT price action trading.
• 😀 The five stages of any trading plan are: Preparation, Opportunity Discovery, Trade Planning, Trade Execution, and Trade Management.
• 😀 In the Preparation stage, traders should review the upcoming week's events, market structure, and the highest highs and lowest lows of the last 20, 40, and 60 days.
• 😀 The 'premium and discount PD array' is crucial in identifying buy opportunities, where buying occurs primarily in the discount range (below the midpoint).
• 😀 The market maker buy model involves an initial drop to a discount, followed by a rise to a premium, where a sell-off can occur.
• 😀 Opportunity Discovery involves forecasting the market's movements, looking for signs of price reaching a premium PD array and then reversing.
• 😀 In trade planning, traders should wait for a 'volatility injection' based on economic events, followed by a discount fair value gap or sell stop to enter long positions.
• 😀 For trade execution, multiple orders should be placed with specific objectives (e.g., 20, 40, and 60 pips), and a position size formula is used to calculate risk and reward.
• 😀 Money management includes adjusting stop losses progressively (e.g., reducing the stop loss by 25% after hitting 25% of the expected profit objective).
• 😀 Risk management involves adjusting the percentage of risk (R%) based on previous trade performance, such as reducing risk after a loss or increasing it after a winning streak.

Q & A

What is the main focus of the ICT Price Action Model, Number 6 Universal Trade Plan?

The main focus is on the buy side of the market maker models, specifically targeting buying opportunities in discount ranges with the objective of capitalizing on market movements towards premium zones.

How should traders approach preparation for a new trading week?

Traders should analyze all medium and high-impact economic events on the calendar, consider the current market structure, and determine the weekly range. This includes studying the last 20, 40, and 60 days of market data to establish the dealing range and identify premium and discount zones.

Why is it important to focus on the 20, 40, and 60-day periods in this model?

These periods allow traders to view market data across different time frames. The 20-day range is useful for short-term setups, while the 40-day and 60-day ranges help to guide longer-term trades. This flexibility enables trading across different time frames, such as weekly, daily, or intraday setups.

What does the term 'premium PD array' refer to in the context of this trading plan?

'Premium PD array' refers to the price distribution levels in the market that represent higher price zones, such as old highs or specific order blocks where price is expected to reverse or face resistance before moving in the opposite direction.

How do you identify a buy opportunity in this model?

A buy opportunity is identified when price enters a discount zone, and the market shows signs of reaccumulation (Stage 1 or Stage 2). This typically occurs after price has moved lower into a favorable discount area and begins to show bullish reversal signals.

What is meant by 'Judah swing' in the context of this trading plan?

A 'Judah swing' refers to a manipulation move in the market where price initially moves in the opposite direction to the trader's bias, often creating a false breakout or shakeout before reversing and moving in the anticipated direction.

What is the significance of economic events in this trading strategy?

Economic events are crucial because they can inject volatility into the market, triggering liquidity runs that align with the trader's bias. These events provide the timing for when market conditions are ripe for specific setups, such as reversals or breakouts.

How do traders manage their trades once they are in profit?

Traders manage their trades by reducing the stop-loss as the trade progresses. When a position hits 25% of the expected profit, the stop-loss is reduced by 25%. At 50%, the stop-loss is reduced by 50%, and at 75%, the stop-loss is moved to break-even to lock in profit and reduce risk.

What is the role of partial profit-taking in this trade plan?

Partial profit-taking helps secure gains at different levels (20 pips, 40 pips, 60 pips) to reduce risk as the trade progresses. This method ensures that the trader banks profits along the way while allowing room for the trade to continue in the direction of the bias.

How is position size calculated in this strategy?

Position size is calculated by using the formula: Account Equity * Risk Percentage / Stop-loss (in pips). The trader determines their risk per trade (e.g., 1% or 2%) and adjusts position size based on their account balance and the stop-loss distance for each trade.