ICT Mentorship
Month 1 Core Content:
Elements of a Trade Setup
Braveheart Trading Study Notes
Disclaimer:
None of the contents within this PDF should be considered professional advice.
It is merely for entertainment purposes only.
If you have been following me on YouTube lately, you know that I help Traders reach their full
trading potential.
The aim is to be the bridge between who Traders currently are and who they want to become.
With that being said, the concepts mentioned in belong to "The Inner Circle Trader".
https://www.youtube.com/c/InnerCircleTrader
All the information within this PDF can be found on The Inner Circle Trader's YouTube Channel.
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2 Things Make Up a Trade Setup:
1. Context/Framework behind the IDEA (Reasons that build the trade)
The 4 principles that build Context/Framework behind a trade is Expansion, Retracement, Reversal and
Consolidation (Accumulation).
→ One of these will give you that Context and Framework to build a setup around based on the current
market conditions.
2. We then pair the given Context/Framework of the current market, with its
own Reference Point in Institutional Order Flow.
→ Expansion is paired Order Blocks
→ Retracements are paired with FVG's and Imbalances
→ Reversals are paired with Liquidity Pools & Stop Runs
→ Consolidation is paired with Equilibrium.
Therefore, the 2 Key Factors behind a Trade Setup is:
1) Context and Framework derived from current market conditions
2) Pairing that with an Reference Point in Institutional Order Flow
Both of these factors build the Market Efficiency Paradigm!
Based on what the current market conditions is giving you now, you will be able to select the context & framework and then
know which tool to pair it with.
It’s important to ask yourself: “What characteristics in Price Action are we trading in?”
→ From there you pair 1 of the 4 Elements with its respected Reference Point in Institutional Order Flow.
If the current characteristics in Price Action is indiscernible or inside of a consolidation…
→ It's best to wait on the sidelines for better technicals.
Expansion, Retracement and Reversal will offer the Highest Probability of Trading.
→ Take action on these characteristics by coupling it with it’s respected Reference point in Institutional Order
Flow.
→ i.e - Pairing retracements (Context & Framework) with Imbalances (Ref. Point).
Since the market is solely manipulated by
IPDA, the Fingerprints are easy to spot.
The clues/ ngerprints will be written within Price Action!
To recognize them is the development of the
Anticipatory Skill Set.
The Fingerprints left are based on the 4 Elements:
• Expansion
• Retracement
• Reversal
• Consolidation (Accumulation)
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ICT Mentorship Core Content - Month 1 - Elements of A Trade Setup
Think of a Consolidation as a Holding Pattern
After consolidations, we can always expect an Expansion afterwards.
All markets start off with a Consolidation
Then move into an Expansion with an Impulsive Price Swing.
That Impulsive Price Swing then leads towards:
a) Consolidation after the Impulsive Price Swing
b) Retracement after the Impulsive Price Swing
If a Retracement occurs, we can “anticipate” another Expansion.
After this Expansion however, a Reversal is Possible.
After a Reversal Price will:
A) Retrace after the Reversal
B) Consolidate after the Reversal
Every Market will interchange between these 4 states…
but only 1 will be present at the time.
Ask yourself the 3 Big W’s:
1. Where is price right now?
2.Where is price likely to go?
3.Where did price come from?
The 3 Big W’s will help you with Directional Bias.
Framework/Context: Expansion
Reference Point in Institutional Order Flow: Order Block
Expansion is when price moves quickly from a level of Equilibrium.
This shows a willingness from the Market Makers too reprice to the next objective.
If markets start from a Consolidation, a Displacement will be used to break out of the Consolidation.
Price will then print an Order Block whilst breaking out of the Consolidation.
The Order Block will be found near or at the Equilibrium of the Consolidation.
Framework/Context: Retracement
Reference Point in Institutional Order Flow: FVG/Imbalance
Retracement is when price retraces back within the price range formed by the Displacement.
Retracements inside of a price range seek areas that were not e ciently traded.
Fair Value Gaps and Imbalances show us areas that were not e ciently traded.
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When thinking of retracements, you should instantly think of Fair Value Gaps/Imbalances
Framework/Context: Reversal
Reference Point in Institutional Order Flow: Liquidity Pool
Reversal is when Price completely reverses its current trend established.
Reversals occur at Liquidity Pools
Bearish Trend
Bullish Trend
Bullish Liquidity Pools are found under old lows.
Bearish Liquidity Pools are found above old highs.
Liquidity Pool
I.e - Asian Low
Reversal
Framework/Context: Consolidation
Reference Point in Institutional Order Flow: Equilibrium
Consolidations occur when the price is constricted by a trading range and has no willingness to break out yet.
Consolidations show us that the Market Makers are building liquidity above and below the market.
We can anticipate Expansions to occur after Consolidation.
Be patient and look for a Displacement away from the Equilibrium price point of the Consolidation.
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Dedicated to Freedom and for Reaching Your Full Trading Potential.
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