Short Term Trading - ICT Style!

Trading Systems
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After starting my 1st Thread a week ago to detail a method i learnt from my mentor Michael Huddleston,
which can be found here… 301 Moved Permanently
That thread was for my day trading strategy and for trades that are held for 1day up to a week mainly.

I have decided to start this new thread to run along side that thread for my second method of trading, which will usually last a little longer, usually 2days to 2weeks. However, these trades should net some big pip hauls, hopefully in region of 200-600pips for a trade!
I know its not fun waiting 2 weeks or a month to place a trade, and I know many including myself when starting out fall into the trap of over trading and thinking that the more trades we take the more money we can make. My mentor has taught me patience!! I hope this thread will be an example that [B]Patience Pays![/B].

Before I start detailing the method, of course learnt from Michael, I wanted to show respect and thanks to him. Thank you Michael!!! We love you more than you will ever know… May the pips rain on us while we ‘ride the lightning’ lol

A quick nod to the fellow Musketeers…All 4 1, 1 4 All :wink: love you too guys lol

P.S…watch this video for a more in depth explanation of the strategy.
Short Term Trading - Inner Circle Trader - YouTube

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[B]Detailing The Strategy[/B]

I’ll mainly be trading the Cable (GBP/USD) and the Fiber (Eur/USD)

Pretty simple really!!
Step by Step…(This is on MT4 platform)

  1. Bring up a daily chart
  2. Plot the 18 movng average, (expectational) and (on the close). In Blue.
  3. Plot the 40 moving average, (expectational) and (on the close). In Red.
  4. Pull up the fractal indicator.

Ok now you are all set up, lets talk strategy, when the 18 is above the 40 (and the averages are getting wider apart) we are looking for buys! When the 18 is below the 40 (and the averages are getting wider apart) we are looking for sells. Market structure must be broken, in other words we are looking for a recent high or low to be taken out on the daily chart. We then wait for a fractal to form. In simple terms a daily fractal will form when there is a candle with a lower candle on either side, signalling you may look for a trade the following day. Now on MT4 there has to be a candle with two lower candles on either side for it to display the arrow but you can trade with either. Best to go with the latter if you are new.
Now these conditions are in place at London open you will be looking for a entry. For buys anything below the asian range high, for sells anything above the asian range low. I will use OTE’s and divergence between the cable and fiber, or between the USDX and the pair i’m trading at the time for the entry. (I know this divergence as SMT, as will fellow students of Michael). My stop loss will be 25-30pips. If I have a loss, I will wait for the following day and trade the same in London Open. I will only be risking 2% per trade and I will half this position every time I lose till I recover half of the original amount lost. Then back to 2%.

If you don’t know what an OTE (optimum trade entry) is, then you need to watch this…
Optimal Trade Entry - Inner Circle Trader - YouTube

If you don’t know what a Judas swing is, then you need to watch this…
The Judas Swing - Inner Circle Trader - YouTube

As for targets I will be reaching for the 162 exention of the previous swing that has been broken.
(please watch the video if that didn’t make sense)…
Short Term Trading - Inner Circle Trader - YouTube

I should mention, i’m not really here to teach this strategy, I believe you should go to the source for this, and learn everything so you can be a more rounded trader and find a strategy that fits with your personality.
Source… 301 Moved Permanently

I’ve chosen two main methods to trade with, one is in my first thread, and this is the second. I hope that both threads will provide examples of the trades from these strategies and how fairly new traders can profit from them with patience and discipline…and lastly so i can make money for myself lol.

This thread will benefit me because I will be able to document my trades and will keep me focused on sticking to the rules as I know others will be watching. I hope at the same time it manages to help you too.

[B]Patience Pays![/B]

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Ok lets get to work!
This is what your chart should look like and as you can see we are in a sell programme for both cable and fiber, there was a nice opportunity last week to get short but lets look to the future not the past.

18 is below the 40, and widening, we are now waiting for a fractal to form, I slightly prefer the Euro as it has broken the low from 1st July which could be a nice big swing down for our targets. Once a fractal is formed, (i’ll be using the 3 bar pattern) then the following day i will be looking for a sell. This might not happen for a week, but I will of course be tracking it daily and keep you posted of my progress.

Patience Pays

9.7.12shortterm.jpg700×377 32.1 KB

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Best wish of luck Tycoon…

Martin
Montreal, Canada

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Now these conditions are in place at London open you will be looking for a entry. For buys anything below the asian range high, for sells anything above the asian range low. I

Read more: 301 Moved Permanently

Hello again

Just an observation. I’m listenibg back to Micheal document about short tern trading.
Short Term Trading - Inner Circle Trader - YouTube

In it, at 12:15 minutes, he suggest to wait for the opening in Asia, the wait for a retracement toward a level to entered a trade. In your definition, you suggest to wait for an entry in the London open.

While my English is not perfect, I see there a subtle difference. It could be that this is the way that you want to look at the market. If so, OK.

Again, good luck

Martin :slight_smile:

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good luck Tycoon… I will be following along cheering you on!

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Wow! you guys found me quick!! I didn’t think many people looked in the swing trading section. Really appreciate the encouragement guys, thanks a lot, i mean that.

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Nice observation Martin, I think he was saying that you should note the opening price and anything below it you are looking for a buy and anything above it you are looking for a sell. I believe he meant in LO as we rarely see him trade the asian session. I dont think there is a right or wrong, and as long as you can stick to Killl Zones, and find a entry technique on the day, like an OTE, SMT, judas swing, turtle soup or a reflection pattern then just take it. with a 30pip stop you should be fine if you have the direction right and a lot of the time you can catch 25-30 pips and go to break even, even if you don’t have the daily direction correct.
I really like this strategy because of the risk reward ratio, the wins should cover more than a few losses, giving you a nice buffer. I just hope I catch one early on!

Good Luck Martin

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Just curious, is anyone else trading this method?

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First of all, good luck with this thread as well. Hope you wheel in some nice pips.

I recently started with swing trading as well, next to the day trading.
While my focus with day trading is on eu and gu, the pairs for swing trading are audusd, nzdusd and usdcad

Tomorrow for starters I will check if audusd formed a new fractal low in an up trending market. Today a nice bullish hammerhead was formed to justify a long entry on Wednesday if we see higher low at market close tomorrow night

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Ticoon, I did not do any backtest, but I do observe that in heavy trending day, the high or low is sometime created in the asian session opening. Maybe ICT could comment or clarify is own view. Like you, I accept the fact that there is no good or wrong answers, but the closest to “heaven” is ICT

Keep us inform.

A good day to you and the others reader

Martin

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Yeah hopefully ICT will give us some feed back on this when he is back from holiday

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Glad to hear someone else trading it, hope to see you riding the lightning with me :wink:

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great thread again man. You got a plan and stick to it but remember to build on it. I do not trade the same as you but what you got is sound that I will not deny. Good job on your work. I am happy to see ICT decedents (so to speak) to have found what they like and venturing out into the deep end of the pool. Stay focused there is sharks in these waters but with skill and common sense you have what it takes to swim. Still following hoping for big things your way.

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Wise words! Thanks Bob, looking to build on it especially with the targets. I really feel good about getting these two threads together, they have already made me more structured and organised about what i should be looking for on a day to day basis. like ICT says you don’t need to use all of his tools, just go with something you are comfortable with, use that edge and just milk it!

i’m hoping for big things too! thanks again man

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I actually bite the bullet and went long on the [email protected], an OTE in asian session.

It looks like today a fractal will be formed, together with the higher highs and lower highs in an uptrend, it’s a good candidate.
Initial target will the the previous swing point at 1.0450

Update: I took 60 pips off and moved sl to be. Now I can enjoy a stress free ride all the way up :cool:

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Good call as much as I love to short the Aussie even I cant deny price looks to want to push up right now.

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Good things you did. AUDUSD was in OTE from the previous days range for almost 6hrs. Good Job.

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Thanks, your chance to sort the Aussie will come. The fomc meeting minutes which just ended presented a nice opportunity :slight_smile:
Check the 1 hour, it stopped at the 1.0280 big fig ( also ADR was met), presented an OTE to go short.
I didn’t sell my entry to catch some extra pips because this is not the purpose of this thread :wink: I will hold the remainder of my stress free position at least until 1.0450

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Thanks, I’m glad I finally saw something obvious. Entry price was 1 pip above today’s low, talk about calling the low. Or is it just sheer luck :slight_smile: