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ICT CISD PDF Guide: Definition, Spotting, and Trading

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Hello fellow traders! Today, we’re diving into a fundamental concept that can significantly enhance your trading strategy the ICT Change in the State of Delivery (CISD). Whether you’re a novice trader just starting out or an experienced professional looking to refine your skills, grasping this concept is essential for navigating the markets effectively.

What is ICT Change in the State of Delivery (CISD)?

The ICT Change in the State of Delivery refers to a shift in the direction of price movement in the market. Essentially, it signifies a transition where the price delivery switches from favoring the buy-side to the sell-side, or vice versa. This change indicates a potential reversal in market sentiment, providing traders with valuable insights for making informed decisions.

Understanding Price Delivery in Trading

Before delving deeper into CISD, it’s crucial to understand the concept of price delivery. In trading, price delivery represents the way prices are moving either upwards towards the buy-side liquidity or downwards towards the sell-side liquidity. Recognizing the current state of price delivery helps traders anticipate future movements and adjust their strategies accordingly.

How to Spot an ICT CISD on the Chart

Identifying a CISD involves analyzing candlestick patterns on your trading charts. Here’s how you can spot it:

  • Bullish CISD: Occurs when the price closes above the opening price of a previous bearish price delivery. This indicates a potential shift from selling pressure to buying interest.
  • Bearish CISD: Happens when the price closes below the opening price of a previous bullish price delivery. This suggests a possible transition from buying momentum to selling pressure.

Key Tip: Focus solely on the opening and closing prices of the candlesticks. Ignore the wicks, as they represent price extremes that didn’t hold and can be misleading when identifying CISD.

Types of ICT CISD

Let’s explore the two main types of CISD in detail:

1. Bullish ICT CISD

A Bullish CISD signals a potential reversal from a downtrend to an uptrend. It indicates that the selling momentum is waning, and buyers are starting to take control.

How to Identify a Bullish CISD:

  • Observe Bearish Price Delivery: Look for one or several consecutive bearish candles.
  • Identify the Shift: Notice when a bullish candle closes above the opening price of the last bearish candle.
  • Ignore the Wicks: Focus on the bodies of the candles the opening and closing prices.

What It Means for Traders:

  • Potential Reversal: The market may shift upwards, presenting opportunities for long positions.
  • Bullish Order Block Formation: The bearish candles can act as a bullish order block, providing a support zone for future price increases.

Example Scenario:

Imagine the market has been declining with several bearish candles. Suddenly, a bullish candle appears and closes above the opening price of the last bearish candle. This pattern suggests a bullish CISD, indicating that buying pressure is increasing.

Bullish ICT Change in the State of Delivery (CISD)

2. Bearish ICT CISD

A Bearish CISD indicates a possible shift from an uptrend to a downtrend, showing that buying momentum is decreasing while selling pressure is rising.

How to Identify a Bearish CISD:

  • Observe Bullish Price Delivery: Look for one or several consecutive bullish candles.
  • Identify the Shift: Notice when a bearish candle closes below the opening price of the last bullish candle.
  • Ignore the Wicks: Concentrate on the candle bodies.

What It Means for Traders:

  • Potential Reversal: The market may start moving downwards, offering opportunities for short positions.
  • Bearish Order Block Formation: The bullish candles can serve as a bearish order block, acting as a resistance zone against future price increases.

Example Scenario:

Consider a scenario where the market has been rising with several bullish candles. A bearish candle then closes below the opening price of the last bullish candle. This pattern indicates a bearish CISD, signaling increased selling pressure.

Bearish ICT Change in the State of Delivery (CISD)

The Significance of ICT CISD in Trading

Understanding CISD is invaluable for traders because it:

  • Helps Anticipate Market Reversals: Early identification of CISD patterns allows traders to prepare for potential shifts in market direction.
  • Enhances Entry and Exit Strategies: Recognizing when the market sentiment is changing aids in making timely decisions on when to enter or exit positions.
  • Improves Risk Management: By being aware of potential reversals, traders can adjust their risk exposure accordingly.

Conclusion

Mastering the ICT Change in the State of Delivery empowers you to read the markets more effectively and make smarter trading decisions. By focusing on candlestick bodies and understanding the implications of CISD patterns, you enhance your ability to anticipate market movements. Remember, like any trading strategy, it’s essential to combine CISD analysis with other tools and indicators for the best results.

Frequently Asked Questions (FAQs)

What exactly does “ignoring the wicks” mean in CISD analysis?

Ignoring the wicks means focusing solely on the opening and closing prices of the candlesticks, not the highest and lowest points they reach during the trading period. This approach centers on where the price settled, providing a clearer picture of market sentiment shifts essential for identifying CISD patterns.

Can CISD patterns be applied to all time frames and markets?

Yes, CISD patterns are applicable across various time frames and markets, including forex, stocks, and commodities. However, the reliability of the signals may vary depending on the time frame and market conditions. It’s advisable to test CISD patterns on your preferred time frame and market to gauge their effectiveness.

How does a bullish order block function after a Bullish CISD?

After a Bullish CISD, the preceding bearish candles act as a bullish order block. This means they create a support zone where buying interest is likely to re-emerge if the price revisits this area, potentially propelling the price higher and confirming the bullish reversal.

Is CISD a standalone trading strategy or should it be used with other indicators?

While CISD is a powerful concept, it’s best used in conjunction with other trading tools and indicators. Combining CISD with trend analysis, support and resistance levels, and volume indicators can enhance the accuracy of your trading decisions and provide a more comprehensive market view.

What are common mistakes to avoid when identifying CISD patterns?

Including Wicks in Analysis: Remember to focus on the candle bodies only.
Forgetting Market Context: Always consider the broader market trends and conditions.
Ignoring Confirmation: Look for additional signals or patterns to confirm the CISD before acting.
Overlooking Risk Management: Always set appropriate stop-loss levels to protect against unforeseen market movements.

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