ICT PD Array Matrix PDF Guide: Key to Trade Execution

If you’re venturing into the world of trading or looking to refine your strategies, you’ve likely come across various tools and concepts that promise to enhance your trading performance. One such powerful concept is the ICT PD Array Matrix, which stands for “Premium and Discount Arrangement.” This matrix serves as a checklist to help traders pinpoint optimal entry points in the market. In this article, we’ll delve into what the ICT PD Array Matrix is, how to identify it, and how you can leverage it to improve your trading decisions.

What Is the ICT PD Array Matrix?

The ICT PD Array Matrix is a method used by traders to find the best prices at which to buy or sell assets. Essentially, it helps you identify when an asset is trading at a “premium” (higher price) or at a “discount” (lower price) relative to its recent price range. As traders, our goal is straightforward: buy low and sell high. The PD Array Matrix guides us in achieving this by highlighting the zones where prices are most favorable for entering trades.

How to Identify the ICT PD Arrays

To locate the premium and discount zones, we use a tool called the Fibonacci retracement. Here’s a simple way to set it up:

1. Select an Old High and Old Low: On your price chart, identify a previous significant high point and a previous significant low point.
2. Draw the Fibonacci Retracement: Use the Fibonacci tool to draw from the old high down to the old low.
3. Identify the 50% Level: The level at 50% is known as the equilibrium. It’s the midpoint between the high and low you’ve selected.
4. Determine the Zones:
   • Premium Zone: This is any price area above the 50% level. It’s considered a good area to look for selling opportunities because prices are higher.
   • Discount Zone: This is any price area below the 50% level. It’s considered a good area to look for buying opportunities because prices are lower.

By identifying these zones, you can better understand where to anticipate market movements and plan your trades accordingly.

Elements of the ICT PD Arrays

Within these premium and discount zones, traders look for specific signals or “arrays” that indicate potential trading opportunities. These include:

• Fair Value Gaps: Areas where the price has moved quickly, leaving a gap that might be filled later.
• Order Blocks: Price levels where significant buying or selling has occurred.
• Breaker Blocks: Zones that, once broken, indicate a strong move in the opposite direction.
• Mitigation Blocks: Areas where the price returns to a previous level before continuing its trend.
• Inversion Fair Value Gaps: Similar to fair value gaps but in the opposite direction.
• Special Patterns: Such as the ICT Unicorn, NWOG (New Week Opening Gap), and NDOG (New Day Opening Gap).

These elements serve as clues, helping you decide whether to enter a trade and in which direction.

Types of ICT PD Arrays

There are two main types of PD Arrays: Bullish and Bearish.

Bullish ICT PD Arrays

Bullish PD Arrays are found in the discount zone and signal potential buying opportunities. If you believe the market is going to rise, you’ll look for these arrays to find the best places to enter a buy trade. These might include bullish fair value gaps, bullish order blocks, and other bullish patterns.

Bearish ICT PD Arrays

Bearish PD Arrays are located in the premium zone and indicate potential selling opportunities. If you expect the market to fall, you’ll search for these arrays to identify optimal points to enter a sell trade. These could be bearish fair value gaps, bearish order blocks, and other bearish indicators.

How to Use ICT PD Arrays in Your Trading

Here’s a step-by-step guide on how to incorporate PD Arrays into your trading strategy:

1. Determine Your Market Bias: Decide whether you’re bullish or bearish based on your analysis.
2. Identify Premium and Discount Zones: Use the Fibonacci retracement tool to find the 50% equilibrium level and mark your premium and discount zones.
3. Look for PD Arrays: In the relevant zone (premium for selling, discount for buying), search for the PD Array elements like fair value gaps and order blocks.
4. Wait for Confirmation: Before entering a trade, wait for the price to react to these levels. Look for signs like price rejection or confirmation candles.
5. Execute the Trade: Once you’ve identified a solid opportunity and have confirmation, enter the trade with proper risk management in place.

Best Time Frames for ICT PD Arrays

• Daily Time Frame: Ideal for identifying overall market bias and marking premium and discount zones.
• Lower Time Frames (15-Minute, 5-Minute): Useful for pinpointing exact entry and exit points after you’ve established your market bias.

Best Trading Pairs for ICT PD Arrays

While the ICT PD Array Matrix was initially applied to indices like the NASDAQ and S&P 500, it’s equally effective in the Forex market and commodities like gold. Popular pairs include:

• Forex Pairs: GBP/USD, EUR/USD
• Commodities: XAU/USD (Gold)

Final Thoughts

The ICT PD Array Matrix is a valuable tool that can enhance your trading by helping you identify optimal entry and exit points. However, it’s crucial to remember that no strategy guarantees success. Always use proper risk management, including stop-loss orders, to protect your capital. Combining the PD Array Matrix with other strategies like the ICT 2022 Model or the Silver Bullet can further improve your trading results.

FAQs About the ICT PD Array Matrix