Welcome to Trading PDF! If you’re eager to learn a reliable trading strategy that you can use repeatedly, you’re in the right place. In this guide, we’ll break down the ICT One Trade Setup for Life in simple terms. Whether you’re new to trading or have some experience, this strategy can help you trade like a pro.
What Is the ICT One Trade Setup for Life?
The ICT One Trade Setup for Life is a complete trading model designed by the Inner Circle Trader (ICT). It’s a strategy that combines several trading concepts to help you find consistent opportunities in the market. This setup repeats over and over again, making it useful for both scalping and day trading. If you master this setup, you might not need any other trading strategy.
Understanding the Key Concepts
Before we dive into how to use this setup, let’s understand some important ideas that form its foundation.
- Daily Bias: This is your overall expectation of whether the market will move up or down for the day.
- Draw on Liquidity: This refers to the market’s tendency to move towards areas where traders have placed their stop-loss orders or pending orders.
- PM Session Liquidity Raid: This involves looking at the afternoon session of the previous day to identify potential liquidity areas.
- London Session Liquidity Raid: This focuses on the early morning trading session in London to find liquidity targets.
- Opening Range Gaps: These are gaps that can occur when the market opens, which can provide trading opportunities.
- New York Lunch Raid: This looks at the midday trading session in New York to identify liquidity raids.
- AM Session Liquidity Raid: This involves targeting the morning session’s highs or lows from the previous day.
What Is a Draw on Liquidity?
Liquidity, in trading, means how easily you can buy or sell without affecting the price. But when we talk about a draw on liquidity, we’re referring to the market’s action of moving towards areas where many traders have placed orders. These areas are attractive because triggering these orders (like stop losses) can fuel further price movement. The market often “hunts” for this liquidity before making a significant move.
How to Trade Using the ICT One Trade Setup for Life
Now, let’s walk through how you can apply this setup step by step. Set your chart to New York local time to follow along.
1. PM Session Ranges
- Timeframe: Look at the previous day’s afternoon session from 1:30 PM to 4:00 PM.
- Identify Highs and Lows: Mark the highest high and the lowest low during this time.
- Liquidity Zones: Above the highest high is where buy orders (buy-side liquidity) might be, and below the lowest low is where sell orders (sell-side liquidity) could be.
- Applying Your Bias:
- If you’re bullish (expecting the market to go up), you might anticipate the price to dip below the PM session low to trigger sell orders before moving up.
- If you’re bearish (expecting the market to go down), you might expect the price to rise above the PM session high to trigger buy orders before moving down.
- Market Structure Shift: After the liquidity raid (price dipping below or rising above the marked levels), look for signs that the market is changing direction in line with your bias. This could be a break in the recent price pattern.
- Trade Entry: Once you see this shift, you can consider entering a trade in the direction of your daily bias.
2. London Session Raid
If the PM session isn’t providing clear signals, turn to the London session.
- Timeframe: Look at the session from 2:00 AM to 5:00 AM.
- Identify Highs and Lows: Mark the highest high and lowest low.
- Applying Your Bias:
- If you’re bullish, watch for the price to dip below the London session low.
- If you’re bearish, watch for the price to rise above the London session high.
- Market Structure Shift and Trade Entry: As before, after the liquidity raid, look for a shift in market structure and consider entering a trade in the direction of your bias.
3. Opening Range Gaps
- Understanding Gaps: Sometimes, the market opens at a different price than where it closed, creating a gap.
- Timeframe: This usually happens at 8:30 AM for forex and 9:30 AM for indices like the Nasdaq and S&P 500.
- Applying Your Bias:
- If you’re bearish and see a gap at the open, it might be best to wait until after the New York lunch hour.
- Trade Setup:
- The market may create liquidity during the morning.
- After 1:30 PM, watch for the price to approach the opening gap before moving in your biased direction.
4. New York Lunch Raid
If previous sessions haven’t given you a clear setup, focus on the New York lunch period.
- Timeframe: Look at the period from 12:00 PM to 1:30 PM.
- Identify Highs and Lows: Mark the highest high and lowest low during this time.
- Applying Your Bias:
- If you’re bearish, look for the price to rise above the lunch period high.
- If you’re bullish, look for the price to dip below the lunch period low.
- Market Structure Shift and Trade Entry: After the liquidity raid, wait for a shift in market structure before entering a trade.
5. AM Session Liquidity Raid
Finally, consider targeting the previous day’s morning session.
- Timeframe: The session from 9:30 AM to 12:00 PM.
- Setting Targets:
- If you’re bullish, the high of this session could be your profit target.
- If you’re bearish, the low could be your target.
Putting It All Together
By following these steps, you’re looking for moments when the market “hunts” for liquidity and then shifts direction. Waiting for these liquidity raids and market structure shifts helps you align your trades with the likely movement of the market.
Frequently Asked Questions (FAQs)
Daily bias refers to your expectation of whether the market will go up or down during the day. You determine this by analyzing higher time frames, key support and resistance levels, and overall market trends. Having a daily bias helps you focus on trades that align with the expected market direction, increasing the likelihood of success.
A market structure shift happens when the market changes direction after reaching a certain level. For example, if the price was making lower lows and lower highs (a downtrend), but then starts making higher lows and higher highs, that’s a shift to an uptrend. In the context of this setup, after a liquidity raid, you look for signs like breaking of previous swing highs or lows to indicate this shift.
Liquidity is crucial because the market often moves to areas where there’s a cluster of orders, like stop-loss orders. These areas act like magnets, drawing the price towards them. By understanding where these liquidity pools are, you can anticipate where the price might go next and position yourself accordingly.
Yes, you can use this setup for scalping. Scalping involves taking quick trades to capture small price movements. Since the ICT One Trade Setup focuses on repeated patterns and liquidity raids that occur frequently, it’s suitable for traders looking to scalp as well as those interested in day trading.
If you miss the initial liquidity raid, it’s important not to chase the market. Wait for the next opportunity. The market often provides multiple chances throughout the trading day. Patience is key. Stick to the setup rules and wait for the next session or liquidity raid to align with your daily bias.
