If you’re looking to improve your trading skills, the ICT Weekly Range Expansion Model is a strategy worth exploring. This short-term trading method helps you identify and trade weeks where the market is expanding, whether it’s moving up (bullish) or down (bearish). In this guide, I’ll break down this model into simple terms so both new and seasoned traders can easily understand and apply it.
What Is the ICT Weekly Range Expansion Model?
The ICT Weekly Range Expansion Model is all about predicting the market’s direction for the week and trading accordingly. It focuses on three key areas, known as PD Arrays:
- Fair Value Gap: A price gap where the market moves quickly, leaving unfilled orders behind.
- Old Highs and Lows: Previous significant price points where the market changed direction.
- Liquidity Pools: Zones where many stop-loss orders are clustered, which the market may target.
By paying attention to these areas, you can anticipate where the price is likely to go during the week.
Steps to Use the Model
The model involves three main steps:
- Determine the Weekly Direction (Stage): Figure out if the market is likely to go up or down for the week. This is your trading bias.
- Set Up for Range Expansion (Setup): Look for signs that the market is about to make a big move in your anticipated direction.
- Execute the Trade (Pattern): Enter the trade using specific signals or patterns, focusing on the PD Arrays mentioned above.
Let’s dive deeper into how to apply these steps for both bullish and bearish weeks.
Trading a Bullish Week
Determining a Bullish Bias
- Weekly Chart Analysis: Check if the price has recently dipped into a discount area or taken out previous lows (sell-side liquidity). This could mean buyers are ready to push the price higher.
- Daily Chart Confirmation: Look for a Market Structure Shift upward, where the market starts making higher highs and higher lows.
Setting Up the Trade
- Wait for the New Week: While you can watch Sunday or Monday’s opening prices, we’ll focus on entering trades from Tuesday onwards. Often, Monday sets the low of the week in a bullish scenario.
Executing the Trade
- Entry Point: On Tuesday at around 4:00 AM New York time, observe the charts. If the price is at or below Tuesday’s opening price, consider entering a buy trade.
- Stop Loss: Set your stop loss 50 pips below your entry price to manage risk.
- Holding the Trade: Aim to hold the trade until at least Thursday’s New York opening. Between Tuesday and Thursday, the market often expands upward in a bullish week.
Trading a Bearish Week
Determining a Bearish Bias
- Weekly Chart Analysis: See if the price has recently moved into a premium area or taken out previous highs (buy-side liquidity). This might indicate that sellers will push the price lower.
- Daily Chart Confirmation: Look for a Market Structure Shift downward, with lower highs and lower lows forming.
Setting Up the Trade
- Wait for the New Week: As before, focus on entering trades from Tuesday. In bearish weeks, Monday often sets the high of the week.
Executing the Trade
- Entry Point: On Tuesday at around 4:00 AM New York time, if the price is at or above Tuesday’s opening price, consider entering a sell trade.
- Stop Loss: Place your stop loss 50 pips above your entry price.
- Holding the Trade: Plan to hold the trade until at least Thursday’s New York opening to capture the expected downward expansion.
Final Thoughts
The ICT Weekly Range Expansion Model offers a structured way to trade weekly market movements. However, always prioritize protecting your capital. Use stop losses, manage your positions carefully, and never risk more than you can afford to lose. This strategy requires patience and discipline, so take the time to analyze the market thoroughly before making a move.
Frequently Asked Questions (FAQs)
A Fair Value Gap is a price area on the chart where the market moved rapidly, leaving little trading activity. This gap can act as a magnet for future price movements as the market seeks to “fill” it, providing potential trading opportunities.
Around 4:00 AM New York time, the London trading session is active, leading to increased market liquidity and volatility. This makes it an ideal time to enter trades as significant price movements often occur.
A Market Structure Shift happens when the market changes its trend direction. For an upward shift, look for higher highs and higher lows. For a downward shift, look for lower highs and lower lows. Analyzing daily charts can help you spot these shifts.
Liquidity Pools are areas on the chart where many stop-loss orders are placed, usually around old highs and lows. The market often moves towards these areas to trigger these stops, providing opportunities for traders to enter positions in the direction of the move.
Yes, the ICT Weekly Range Expansion Model can be applied to various markets, including forex, stocks, commodities, and indices. Just make sure to adjust your analysis according to the specific characteristics of each market.
