ICT Market Flow/Structure - Help Please

Beginner Questions
1

I’m having a really tough time understanding market structure. Market flow on the other had seems easier. If a 4H or Daily fractal H/L is broken market flow is then broken or reversed. Is that correct?

What if daily and 4H market flow don’t match?

Can anyone help clarify these two concepts?

2

A swing high is a setup where the fractal candle has two lower candles on each side. The most recent fractal formed is the pivotal line and market flow is bearish until this high is broken to the upside.

A swing low is a setup where the fractal candle has two higher candles on each side. The most recent fractal formed is the pivotal line and market flow is bullish until this low is broken to the downside.

Keep in mind that you need only to monitor the most recent swing points for Market Flow.

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EUR/USD just recently breached the swing point I labeled as “1” and with this, Market Flow is currently down. For Market Flow to be bullish again, EUR/USD has to trade above the most recent swing high, which currently is the one formed yesterday, labeled as “2”.

You can use it only on one timeframe (H4 is favourable) or with the H1, H4 and Daily. If market flow is in agreement with all three timeframes, the momentum of the price movement is very strong.

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3

Regarding Market Structure, you have to understand that price moves from a swing point to another and that every swing has an equal counter swing it is unfolding from and attempting to fulfill. Those short term swing points (ST low/ST high) form the other swing points:

  • Intermediate Term Low (ITL) - STL that has higher STL on both sides
  • Intermediate Term High (ITH) - STH that has lower STH on both sides
  • Long-Term High (LTH) - ITH that has lower ITH on both sides
  • Long-Term Low (LTL) - ITL that has higher ITL on both sides

OTE is based on those concepts. You take advantage of the counterswings that happen because of profit-taking/market makers looking for additional liquidity and so on, to position yourself in the direction of the overall trend.

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4

Thanks FXTraderCro! You’ve really helped me better understand market flow and structure.

5

FXtraderCro or ICL

Could you elaborate on that

OTE is based on those concepts. You take advantage of the counterswings that happen because of profit-taking/market makers looking for additional liquidity and so on, to position yourself in the direction of the overall trend.

Read more: 301 Moved Permanently

Does it mean that before looking for OTE, I should get a trend defined by the STL and STH?

Possible to have a screen shot to explain. I’m visual and picture sometime easier to understand than English ( for me)

Martin :slight_smile:

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6

Hi FXTC,

Thank you for clarifying market structure. But I still have the following questions: Can you please explain how you do define and identify STL/H, ITL/H, LTL/H? And do you identify these swing points in a specific timeframe?

OMFX

7

Hi Martin,

No, I was refering only to the concept behind the OTE in general, it doesn’t mean you can only trade it after a STL/STH.

But there is a great way to trade the STLs/STHs, I can recommend this video:

Short Term Trading - Inner Circle Trader - YouTube

Hope that helps. :slight_smile:

8

Hi OMFX,

I personally use only the Daily, you can try others too, but stick with the higher time frames. :slight_smile:

Also, I have uploaded the Market Structure indicator for you:

ICT Market Structure.ex4 - 4shared.com - online file sharing and storage - download

It will help you identify them and you’ll understand the concept better. Red are ITLs/ITHs and Blue are LTLs/LTHs. You can add the standard fractal indicator on MT4 for easier visualization.

Happy trading

9

Hi FXTC,

Thank you very much for the indi. I applied it on the GU Daily chart below. Since the June 29 Price Action broke the June 26 Fractal High, Market Flow is UP. But the Price Action did not break June 20 ITH, so the Market Structure is still DOWN. Please comment whether I have analyzed the MF and MS correctly. Again thank you for sharing.

10

I see it the same way you do, until that swing point/ITH is broken, MS is still down.

11

Thanks a lot for the comprehensive response, FXTraderCro. It’s nice to get confirmation that what I’m doing is correct - that and my trading balance seems to keep on growing these days :slight_smile:

Cheerz

12

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Hi All,

I am really struggling with this :confused:, can you please take a look at the attached chart and let me know if I am getting this clear in my head so I know I am on the right lines? (Or not)

Hope I am :slight_smile:

Market Flow Chart.jpg700×394 27.6 KB

13

Hi Tommy,

Yeah, spot on! :slight_smile:

MF is now down until it breaks above the most recent swing high.

14

Thanks FXTraderCro - Don’t know why that took me so long to understand! Appreciate the feedback, it’s always good to hear from someone else I have done something right. In terms of Market Structure, will this remain Bearish/Down unitl the formation of another ITL which is then followed by price breaking to the upside of the ITH formed on the 18th June?

Again, thanks for the help and support.

Tommy

15

I use Market Flow for a more short-term orientation of the market and Market Structure for the long-term. For me, MS is down until the most recent ITH is broken (currently ITH from 06/17), not the most recent swing high like in MF. That’s how I look at it, so I agree with what you’ve stated. :slight_smile:

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Thanks FXTraderCro - Again!

17

hey thanks for the indicator but i am having diffcult spoting which exact position we are at the market structure . take a loot at eurusd . i am having diffculty to find the directiona and position . can somebody help me with this ?

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18

Hmmmm happy i came across this thread, hope to learn more

19

:+1: Understanding market structure is the key to price action based trading.

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