ICT Charter PAM 5 - Trade Plan
Last modified by Drunk Monkey on 2024-02-09 09:36
Outline
00:04 - Day trading strategy using price action models.
- Preparation involves noting medium and high impact events for the markets being followed, and studying them to predict a specific weekly range.
01:47 - Technical analysis and trading strategies.
- Identify low or high of the past 20 days to determine current dealing range, anticipate price movement based on weekly range bias.
- Trader uses premium/discount fair value gap setups for entries, scalping protocols for risk reduction.
05:28 - Trading strategies using liquidity levels.
- ICT targets sell side liquidity below previous day's low or intra-week low, and buy side liquidity above previous day's high or intra-week high.
06:35 - Trading strategies using institutional order flow.
- Trader anticipates a five-minute chart trade entry during London or New York open, filtering shorts at a premium fair value gap.
- ICT uses standard deviations and PD array convergence to enter short trades, with a target of 40-50 pips per position.
- When entering along, ICT places a buy limit order with a target of 40-50 pips per position, using standard deviations and PD array convergence as entry criteria.
10:35 - Risk management and trade management strategies.
- ICT emphasizes importance of stop loss management and money management in trading.
- Trading model aims to reduce drawdowns by adjusting risk percentage based on past losses.
Transcription
| 1 | 00:00:04 --> 00:00:14 | ICT: Okay folks, welcome back. This is the prediction model, number five day trading tree plan. And it focuses on 40 to 50 pips portrayed. |
| 2 | 00:00:24 --> 00:00:34 | Okay as at Price Action Model number five day trade plan 40 To 50 pips per trade, again, I'm warning you that we will see a lot of these slides throughout |
| 3 | 00:00:34 --> 00:00:46 | each model and trade plan. We move through preparation, opportunity discovery, trade planning, trade, execution and trade management. So if you have not |
| 4 | 00:00:46 --> 00:00:59 | watched the model five, content, the presentation and then there's a supplementary lesson that I added on for that model, watch both of those before |
| 5 | 00:00:59 --> 00:01:11 | you go into this otherwise, it's not going to mean much to you at all. And again, these trade plans rely heavily on the notion that you have taken copious |
| 6 | 00:01:11 --> 00:01:21 | notes throughout the core content that you have studied the individual price action models, and the supplementary lessons for those that have been provided |
| 7 | 00:01:21 --> 00:01:34 | thus far. Okay, so preparation, we're going to note all medium and high impact events for the markets that you're following. And you're gonna study the events |
| 8 | 00:01:34 --> 00:01:42 | on the week to come and consider how the current market structure and the calendar events may suggest a specific weekly profile for that week's range. |
| 9 | 00:01:47 --> 00:01:55 | Okay, we're gonna determine the IP the data range of the last 20 days now this is the only if the data range you have to be concerned about, we don't count |
| 10 | 00:01:55 --> 00:02:05 | Sundays. So we're gonna be noting the highest high and the lowest low in the past 20 trading days. And this is going to be your current dealing range. So 20 |
| 11 | 00:02:05 --> 00:02:08 | days ago, that's where our focus is. |
| 12 | 00:02:14 --> 00:02:28 | Again, inside that range. When we're bullish or bearish, we have to determine what the highest highs and lowest lowest inside this dealing range, we will look |
| 13 | 00:02:28 --> 00:02:39 | for the next draw on liquidity, where is price likely to trade to next above the previous day's high or below a previous day's low minimum of 40 pips remember |
| 14 | 00:02:39 --> 00:02:49 | this model focuses on the low end of 40 pips to an average of 50 pips per trade. Now, you can get more as we get into the other slides that talk about that. But |
| 15 | 00:02:50 --> 00:03:04 | I want you to focus primarily on this range, if you will, and we will look for a PD array in the direction of the weekly range bias. We anticipate price to move |
| 16 | 00:03:04 --> 00:03:13 | to a PD array that would support our weekly bias on a day and economic event found on economic calendar with the current or next trading week. This is what |
| 17 | 00:03:13 --> 00:03:27 | we wait for this will be a run on the basis of a low resistance liquidity run. Opportunity discovery, we're going to identify the previous day low or an intra |
| 18 | 00:03:27 --> 00:03:39 | week low when the bias is bearish. We're going to identify the previous day high or an intra week high when the bias is bullish. We're going to expect a daily |
| 19 | 00:03:39 --> 00:03:54 | range expansion in the direction of this bias. Trade planning when the market is primed, we want to look for convergence of both manipulation in price opposite |
| 20 | 00:03:54 --> 00:04:03 | to our trade bias. At a time the economic calendar suggests the volatility injection will likely unfold. We will short premium fair value got in by |
| 21 | 00:04:03 --> 00:04:16 | discount fair value gap setups. When we are bearish, we will frame a short entry when the price has moved up into a 15 minute premium fair value got pdra that |
| 22 | 00:04:16 --> 00:04:27 | converges with a standard deviation of no more than three standard deviations during London Open or New York open. We can implement scalping protocols on this |
| 23 | 00:04:27 --> 00:04:36 | stage as well for further reduction in risk. Now, when I'm talking about the three standard deviations, you're going to go through model number five because |
| 24 | 00:04:36 --> 00:04:45 | I actually give you the breakdown what to use whether you use the central bank dealers range or the Asian range of flout. So again, go back to that model and |
| 25 | 00:04:45 --> 00:04:56 | watch the videos and studying that way. You'll know what we're referring to here specifically. When we are bullish, we will frame a long entry when the price has |
| 26 | 00:04:56 --> 00:05:04 | moved down into a 15 minute discount fair value got PD or Ready that converges with a standard deviation of no more than negative three standard deviations |
| 27 | 00:05:04 --> 00:05:13 | during London Open or New York open. Again, much in the same way we said in the previous slide, you can implement scalping protocols on this stage as well for |
| 28 | 00:05:13 --> 00:05:23 | further reduction in risk. And for those that aren't really sure what that means. That models that we use for like five minute charts and one minute charts |
| 29 | 00:05:23 --> 00:05:35 | you can use that in here to make your risk smaller. When we are bearish, we will target the sell side liquidity below the previous day's low or an intra week low |
| 30 | 00:05:35 --> 00:05:45 | inside the 20 day if the data range. The next logical discount array at 40 pips will be the initial objective. There will likely be multiple old daily or intra |
| 31 | 00:05:45 --> 00:05:57 | week lows inside the IP to data range, but we will use the one that frames the potential of at least 40 to 50 pips when we are bullish, we will target to buy |
| 32 | 00:05:57 --> 00:06:06 | side liquidity above the previous day's high or intra week high inside the 20 day at the data range. The next logical premium right at 40 pips will be the |
| 33 | 00:06:06 --> 00:06:14 | initial objective. There will likely be multiple old daily or intra week highs inside the after data range, but we will use the one that frames the potential |
| 34 | 00:06:14 --> 00:06:30 | of at least 40 to 50 pips trade executions when we are bullish, we will note the European Open price on Tuesday and filter all Long's at or below this price |
| 35 | 00:06:30 --> 00:06:40 | level which overlap in a 15 minute discount fair value gap. We will anticipate a five minute chart institutional order flow entry drill trade entry to form |
| 36 | 00:06:40 --> 00:06:54 | inside of a retracement lower during London Open and or New York open kill zones or a sell stop rate. Now this information are you going to do is think the same |
| 37 | 00:06:54 --> 00:07:05 | way for Wednesday and Thursday. Now the model itself is really designed to take this trade on any particular day. On this trade plan. I'm filtering out Mondays |
| 38 | 00:07:05 --> 00:07:17 | I'm filtering out Fridays. So it allows us to give an opportunity for trading on Tuesday, Wednesday and or Thursday, not Thursday for your notes. That day is a |
| 39 | 00:07:17 --> 00:07:25 | wildcard and if you have a large range day on Tuesday and a large range day on Wednesday that worked out in your favor. Don't take the trade on Thursday |
| 40 | 00:07:25 --> 00:07:33 | because you're most likely going to get some kind of consolidation or retracement if you have a small range but when on Tuesday and a large range on |
| 41 | 00:07:33 --> 00:07:40 | Wednesday then you can take the trade on Thursday because it probably has a little bit more room to trade. So that's kind of like the only caveat for this |
| 42 | 00:07:40 --> 00:07:53 | particular trade plan. When we are bearish we will note the European opening price on Tuesday and filter all shorts at or above this price level which |
| 43 | 00:07:53 --> 00:08:01 | overlap in the 15 Minute premium fair value gap. We will anticipate a five minute chart institutional order flow entry drill trade entry to form inside of |
| 44 | 00:08:01 --> 00:08:15 | it retracement higher during London Open and or New York open kill zones or a buy stop read. short trade management when we are entering a short we will place |
| 45 | 00:08:15 --> 00:08:26 | a sell limit order on all positions we will execute with our demo account. We will use the standard deviations and PD array convergence minus five pips as our |
| 46 | 00:08:26 --> 00:08:37 | entry price when using a sell limit order. If multiple orders are used all use the same entry price in the sell limit orders. When we are entering a short we |
| 47 | 00:08:37 --> 00:08:47 | will place a limit order to take 40 pips as our objective on one position, we will place a second limit order to take 50 pips as our second objective. We will |
| 48 | 00:08:47 --> 00:08:55 | use multiple orders to manage the trade idea if you capture a 50 Pip objective, close 80% of the trade and see if it has any more room to run. Now that's |
| 49 | 00:08:55 --> 00:09:04 | assuming that you have a third order active. Similar to the assumption in this slide is you have three working orders. The first one takes profit at 40 pips, |
| 50 | 00:09:05 --> 00:09:16 | the next one takes 50 pips and a third if you get 50 pips that third order has to have 80% of that closed at 50 pips and then let that act as a leader to see |
| 51 | 00:09:16 --> 00:09:28 | if you can get any kind of more pronounced run in that particular market. When we're entering a short we will note the premium array and stand deviation |
| 52 | 00:09:28 --> 00:09:38 | convergence we aim to enter at we will place our stop loss above this high plus 15 pips we will re enter if the trade stops out we can monitor it for a |
| 53 | 00:09:38 --> 00:09:50 | secondary entry day trades may require multiple attempts to secure a solid entry Do not fear this long trade management when we are entering along we will place |
| 54 | 00:09:50 --> 00:09:58 | a buy limit order on opposition's we will execute with our demo account. We will use the standard deviation and PD array conversions plus five pips as our entry |
| 55 | 00:09:58 --> 00:10:08 | price when using the buy limit order If multiple orders EUR USD, all use the same entry price in the buy limit order. When we are entering along, we will |
| 56 | 00:10:08 --> 00:10:17 | place a limit order to take 40 pips as our initial objective on one position, we will place a second limit order to take 50 pips as our second objective, we will |
| 57 | 00:10:17 --> 00:10:28 | use multiple orders to manage the trade idea. If you capture a 50 Pip objective, close 80% of the trade and see if it has any more room to run. When we are |
| 58 | 00:10:28 --> 00:10:38 | entering along, we will note the discount array and standard deviation convergence we aim to enter at. Now think about what I'm stating here. Okay, |
| 59 | 00:10:38 --> 00:10:48 | I've used this slide in previous models, but the assumption again is you've gone through all the trade models. So, model number five gives you the specifics in |
| 60 | 00:10:48 --> 00:10:57 | terms of what those standard deviation convergences are, and how they overlap. Okay, so again, it's important to go back and watch that particular price action |
| 61 | 00:10:57 --> 00:11:08 | model. We will place our stop loss below this low minus 15 pips, we will re enter if the trade stops out, we can monitor it for a secondary entry. day |
| 62 | 00:11:08 --> 00:11:19 | trades may require multiple attempts to secure a solid entry Do not fear this stoploss management, this is always the same for me in any kind of trade. So |
| 63 | 00:11:19 --> 00:11:29 | when we are in profit 25% of our expected objective stop loss can be reduced by 25%. When we are in profit, 50% of our expected objective stop loss can be |
| 64 | 00:11:29 --> 00:11:40 | reduced by 50%. Now that means you're in half of your expected profit and you still have a negative stop loss, you're not rushing to get breakeven, you're not |
| 65 | 00:11:40 --> 00:11:48 | trying to get to plus, you're not strangling the position, you're not worried about it, you're focusing on whether the trade continues in your direction, when |
| 66 | 00:11:48 --> 00:11:57 | the position is that 75% of the expected profit objective stop must be at breakeven at that point. All right, money management. |
| 67 | 00:11:58 --> 00:12:06 | These slides are the same on every model. Again, like I said in the previous trade plan, I'm not going to go through actually reading out everything, it's |
| 68 | 00:12:06 --> 00:12:15 | all here. But I include it for completeness sake. And that way you can use it, you can change all the the numbers here and do the math as I outlined in each |
| 69 | 00:12:15 --> 00:12:20 | slide so that we can get your respective inputs. |
| 70 | 00:12:27 --> 00:12:37 | But I like to say this one all the time, this was one that needs to be reminded of multiple times. If your demo account takes a loss on a trade, and it is a |
| 71 | 00:12:37 --> 00:12:45 | full our percent that you assumed in other words, the risk that you are assuming for that trade, if it's a complete washout, you get stopped out at your maximum, |
| 72 | 00:12:46 --> 00:12:57 | you're gonna drop the our percent by 50%. And when the losses recovered by 50%, and like if you lost $100, if you make 50 hours back, then you're permitted to |
| 73 | 00:12:57 --> 00:13:05 | return back to the maximum our percent per trade, so it's not requiring you to go. If I lose 100, I gotta make 100 Before I can go back to trading the same |
| 74 | 00:13:05 --> 00:13:14 | size. If you know what you're doing with these models and the core content, and you're very disciplined, you're going to get back 50% of what you took as a |
| 75 | 00:13:14 --> 00:13:25 | loss, then start working towards trimming back that draw them if the reduced our percent trade assumes a loss reduced our percent by 50% until the previous trade |
| 76 | 00:13:25 --> 00:13:37 | losses recovered by 50%. If you take a series of five winning trades in a row, drop your our percent by 50%. You are likely to assume a loss eventually, and |
| 77 | 00:13:37 --> 00:13:47 | this will build in equity leveling, and reduce the likelihood of a large drawdown. You want a smooth equity curve that slopes or stair steps higher, not |
| 78 | 00:13:47 --> 00:13:58 | a jagged roller coaster with deep declines. Start back testing collect multiple sample sets with this trade plan. If you're unclear about some of the process, |
| 79 | 00:13:58 --> 00:14:07 | rewatch the lessons for this price action model. I will provide sample sets but do not rely or wait on mine. Dig into your charts and study what has been |
| 80 | 00:14:07 --> 00:14:11 | provided here. So hopefully you found this insightful until next time, I wish you good luck and good trading |