The
majority of traders lose money because they enter the market at the wrong time. In this breakdown, I will explain the exact entry models I
utilized to generate over one million dollars in just two years,
analyzing each one step by step. Although
I have been trading for 14 years, it was only in the last few that I
truly refined my strategy. It took nearly a decade for me to achieve
consistency; consequently, I am sharing my experience and knowledge here
to help you shortcut your own journey toward becoming a profitable
trader.
ICT Entry Models: Premium/Discount—Liquidity Raids—Fair Value Gaps—Order Blocks—Breaker Blocks.
I. Premium and Discount
The first entry model is the fundamental concept of premium and discount. We utilize the Fibonacci retracement tool to define our specific trading range by anchoring it to a swing low and a swing high if we are bullish, or a swing high and a swing low if we are bearish. This allows us to identify the 50% equilibrium level, as well as the deep discount and premium zones.
Discount, Equilibrium, and Premium Zones: S&P 500 (1 hour candles).
After establishing these swing points, we wait for a retracement beyond the 50% threshold—into discount for buys or premium for sells—before hunting for an entry. Our objectives are typically a Fibonacci extension outside the range or the range high/low. In a bullish scenario, we wait for price to dip into the discount zone before targeting the previous high or a specific Fibonacci extension. Conversely, in a bearish scenario, we target the previous low or the extension.
Discount, Equilibrium, and Premium Zones: EURUSD (15 minute candles).
Regarding execution, candle confirmation is not strictly necessary. For instance, within a bullish range, any area below the 50% mark is considered a discount and serves as a favorable entry point. This model is particularly effective for limit orders, allowing traders to execute without being anchored to their screens. We enter long via a buy limit and place the stop loss outside the range. Because a setup is not technically invalidated until the initial swing point is breached, your stop loss should remain at that level to avoid being "chopped up" by price volatility.II. Liquidity Raids
This entry model identifies zones where "smart money" is likely accumulating positions: liquidity raids, commonly known as "Turtle Soup." First, we identify the specific liquidity pool we expect to be raided, such as a Previous Weekly High (PWH), Previous Daily Low (PDL), or session-specific levels like the Asian range.
Liquidity Raids: EURUSD (5 minute candles).
A common mistake among novice traders is entering the market the moment a level is penetrated. Instead, we wait for a candle to close back inside the range. We look for a strong rejection followed by a close above or below the previous swing point. Only then do we enter, placing our stop loss beyond the newly created swing high or low. This ensures a superior risk-to-reward ratio, as it allows the market to signal an actual intent to reverse rather than forcing us to catch a "falling knife."
III. Fair Value Gap (FVG)
The Fair Value Gap (FVG) is a three-candle pattern where the second candle is so impulsive that the wicks of the first and third candles do not meet, leaving an imbalance, a "gap." We wait for the market to rebalance by trading back into this zone.
Bullish Fair Value Gap: EURUSD (15 minute candles).
Ideally, the entry should be executed as price moves against the desired order flow. If we are looking to go long, we buy while price is actively dipping into the gap. While many traders demand extra confirmation, the most effective entries often occur when the market looks visually "weak," as this is where you secure the best pricing.
Stop-loss placement can be aggressive (at the gap's edge) or conservative (at the high/low of the first candle). I recommend the conservative approach to give the trade sufficient room to breathe.
IV. Order Blocks
An
order block is a down-closed candle prior to a move higher or an
up-closed candle prior to a move lower. High-probability order blocks
are those paired with an FVG. When an FVG rests immediately above or
below an order block, it validates the level as a high-probability zone
for institutional activity.
Order Blocks and Breaker Blocks: Gold (5 minute candles).
We enter as the market retraces into that order block, anticipating a rejection. For instance, if several consecutive candles form an order block that aligns with an FVG, the bodies of the subsequent candles should respect that level.
V. Breaker Blocks
The
breaker block combines liquidity concepts with order blocks. It is an
order block formed prior to a raid on liquidity that is subsequently
broken by a decisive move. If price sweeps liquidity and then aggressively trades through the original order block, that level transitions into a "breaker." We enter on the retracement back into the breaker's range.
Breaker Block: EURUSD (5 minute candles).
Stop-loss
placement can be complex; I tend to favor a conservative placement
because breakers can produce deep wicks that may stop out aggressive
traders before the trend resumes. Often, a breaker overlaps with a fair
value gap; in such cases, you might utilize the 50% equilibrium of the
gap or the high/low of the original order block to set your invalidation
point.ooo00O00ooo
Ultimately, whether you are utilizing premium/discount, liquidity raids, or gaps, success depends on proper stop-loss placement and trade management. A stopped-out trade does not necessarily mean the setup failed—it often suggests the stop loss was too aggressive for the market's inherent volatility.
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