ICT market structure refers to the way the market behaves and shifts based on various factors such as institutional order flow, imbalances, and key levels. It is represented in a series of either higher lows and higher highs = bullish, or series of lower highs and lower lows = bearish, and the actual turning points that include highs and lows within it (intermediate highs and lows).
The market trades in a generic pattern or rhythm and it is easy to read if one is aware of the basic structure price tends to move in.
- Generally, the market trades from short term low (STL) to short term high (STH) back to a new short-term tow (STL). As these STL’s and STH's form, they will develop a 'market structure' of price action.
- Any short term low (STL) that has higher short-term lows (STL) on both sides of it is considered an Intermediate term low (ITL).
- Any short term high (STH) that has lower short-term highs (STH) on both sides of it is considered an intermediate term high (ITH).
- Any Intermediate term low (ITL) that has higher intermediate term lows (ITL) on both sides of it is considered long term low (LTL).
- Any Intermediate term high (ITH) that has lower intermediate term highs (ITH) on both sides of it is considered long term high (LTH).
The mid-level time frame will act as an Intermediate-Term Perspective. Following the Trade Setup Opportunity found on the HTF, the mid-level will give you more definition in terms of structure based on that HTF Level. Managing trades will be done via a mid-level time frame.
The lowest time frame will act as a Short-Term Perspective. Following the Trade Setup Opportunity found on the HTF and insights given with the mid-level. The Short-Term Perspective will give you even more definition in terms of structure. Timing trades with entries will be done via the lowest time frame.
ICT Advanced Market Structure pairs very well with the ICT Market Maker Buy Model and Sell Model.
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