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ICT Core Content

Month 4. OrderBlocks [Reinforcing OrderBlock Theory]

A. Bullish Orderblock:

a. Definition: The lowest Candle or Price Bar with a down Close that has the

most range between open to close and is near a “support” level.

b. Validation: When the high of the lowest down close candle or price bar is

traded through by a later formed candle or price bar. (Displacement or

Expansion)

c. Invalidation: Close on the same TF below the 50% level of OB.

d. Price moves:

i. From internal range liquidity to external range liquidity

ii. From external range liquidity to internal range liquidity

e. Think:

i. What time was the orderblock formed?

ii. Reaction after orderblock formation.

ICT Core Content

Month 4. Mitigation Blocks [Reinforcing OrderBlock Theory]

1. Img. 1.1:

a. Think of where positions were taken, where they would find themselves

underwater. Where they could look to minimize the loss from said position.
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ICT Core Content

Month 4. Breaker Block [Reinforcing OrderBlock Theory]

1.

a. Bullish Breaker Block: Bullish range or up close candle in the most recent

SWING HIGH prior to an OLD LOW being violated. The buyers that buy

this high and later see this same SWING HIGH violated - will look to

mitigate the loss.

b. Bearish Breaker Block: Bearish range or down close candle in the most

recent SWING LOW prior to an OLD HIGH being violated. The buyers that

buy this low and later see this same SWING LOW violated - will look to

mitigate the loss.

c. Img 1.1:
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ICT Core Content

Month 4. Reclaimed Block [Reinforcing OrderBlock Theory]

1. Img 1.1:
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ICT - Core Content

Month 4. Reinforcing - Liquidity Pools [When to anticipate raids]

1. Liquidity:

a. Is the “open” interest of buyers and sellers in the market and can be further

defined by those entities at or near specific price levels.

b. Measure of the effect of trade-off from transactions.

i.

BUYERS

sellers

MARKET PRICE

buyers

SELLERS

ii. There will always be a participation of buyers and sellers in the

market. Knowing where their interest may reside in new pending

orders (buy stops above Market place where institutions sell, or sell

stops below Market place where institutions buy)

iii. SELL @ Premium(Pool of buying orders)

iv. BUY @ Discount(Pool of selling orders)

1. If the undertones of the marketplace show signs of

bearishness of an asset, we want to sell above old highs.

v. Understanding retail orders.

1. EXAMPLE:

a. SECURITY: Dollar index

b. HTF BIAS: Bearish

i. We can wait for a rally to go above an old high.

With the expectation that it is a false move, and

the market would reprice lower to a lower level

HTF liquidity reference point: FVG, OB,

IMBALANCE.

vi. Run on bullish liquidity pool:

1. The low that is under the current market price action will

typically have trailers sell stops under it.

2. VALIDATION: When the low is violated or price moves

below the recent low - The sell stops become market orders

to sell at market . This injects sell side liquidity into the

market - paired with smart money buyers.

3. Run into sell-side liquidity causes a change in delivery +

displacement and within that displacement it forms an OB

and FVG.

vii. Run on bearish liquidity pool:

1. The high that is above the current market price action will

typically have trailers buy stops under it.

2. VALIDATION: When the high is violated or price moves

above the recent high - The buy stops become market orders

to sell at market . This injects buy side liquidity into the

market - paired with smart money sellers.

3. Run into buy-side liquidity causes a change in delivery +

displacement and within that displacement it forms an OB

and FVG.
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ICT - Core Content

Month 4. Reinforcing - Liquidity Voids

1. Liquidity Void:

a. Is a range in price delivery where one side of the market liquidity is shown

in wide or “long” one sided ranges or candles. Price typically will want to

revisit this range or void of contrarian liquidity.

b. When price is in balance: Point of equilibrium. At some point price moves

outside of this consolidation. A large move outside of this is called

displacement. This lets us know that there is smart money willing to move

it in a specific direction.

i. There is no specific time limit on filling in these liquidity voids.

ii. Repricing lower after a consolidation is a void caused by sell-side

liquidity = VOID OF BUY SIDE LIQUIDITY(Absence of buyers)

iii. Repricing higher after a consolidation is a void caused by buy-side

liquidity = VOID OF SELL SIDE LIQUIDITY(Absence of sellers)