Summary of ICT Mentorship - Core Content - Month 02 - Framing Low Risk Trade Setups

In the second module of the ICT mentorship program, the focus is on framing low-risk trade setups by utilizing higher time frame charts to inform trading decisions. The main strategies and methodologies discussed include:

Main Financial Strategies:

Higher Time Frame Analysis: Emphasizing the importance of analyzing daily, weekly, and monthly charts to understand institutional order flow and directional bias.
Identifying Key Levels: Locating price levels that align with institutional order flow to frame buy or sell ideas.
Risk Reduction: Lowering risk by refining higher time frame setups to lower time frames, which allows for smaller stop loss placements.

Methodology for Low Risk Trade Setups:

Use Higher Time Frame Charts:
- Analyze daily, weekly, and monthly charts for directional bias and institutional order flow.
Locate Key Support/Resistance Levels:
- Identify significant price levels where institutional buying or selling has occurred (e.g., bullish order blocks).
Refine to Lower Time Frames:
- Transpose higher time frame levels to lower time frames (hourly, 15-minute, and 5-minute charts) to reduce stop loss distances.
Adjust Entry Points:
- Use smaller time frames to find more precise entry points closer to Key Levels, allowing for tighter stop losses.
Calculate Risk/Reward Ratios:
- Aim for a risk/reward ratio of at least 1:3, ensuring that potential profits outweigh the risks taken.

Example Application:

Using the AUD/USD pair, the presenter demonstrates how to identify a bullish order block and refine entry points from a higher time frame down to a 5-minute chart, achieving a tighter stop loss and a favorable risk/reward ratio.

Presenters/Sources:

The content is presented by an instructor from the ICT mentorship program, focusing on practical trading strategies and methodologies.

Notable Quotes

— 09:39 — « The risk the reward is one dollar for three dollars to be made or in terms of reward the risk we're looking at three dollars made for every one dollar risk. »

— 09:46 — « It does require you to understand what you're doing and why you're doing it. »