The Turtle Soup trading strategy was developed by Linda Bradford-Raschke and published in her 1996 book Street Smarts: High Probability Short-Term Trading Strategies.
The strategy’s name is a reference to a well-known strategy called Turtle trading, taught by Richard Dennis and William Eckhardt in the 1980s to a group of novice traders called the 'Turtles'.
Linda
Bradford-Raschke inverted the reasoning behind the original Turtle
strategy in order to develop a short-term trading method using false
breakout reversals at key levels. The strategy can be used on 1 hour, 4 hour or daily charts. The method is simple but requires understanding of order flow and market structure.
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ICT Turtle Soup is a concept from Michael Huddleston's teachings that describes a pattern where price breaks a short-term high or low, creating the impression that the move will continue, only to reverse and travel in the opposite direction. Traders use this pattern to anticipate the reversal that follows the initial breakout, and notably, a shift in market structure isn't required to validate the setup, since the trade is built around sweeping external range liquidity rather than confirming a structural break.
The foundation of the strategy is identifying genuinely high-liquidity levels, since it isn't enough to trade above any old high or below any old low. Traders need to locate levels where a meaningful concentration of buy or sell orders is actually resting. This means looking for order blocks, which are areas showing a heavy concentration of orders and therefore elevated liquidity; identifying fair value gaps, the imbalances between current price and fair value that hint at where price is likely to react; incorporating higher time frames such as the 15-minute or 1-hour chart to gain broader context and find confluence across timeframes; and watching for relative equal highs and lows, since repeated tests of a similar price level mark a level worth trading against.
The foundation of the strategy is identifying genuinely high-liquidity levels, since it isn't enough to trade above any old high or below any old low. Traders need to locate levels where a meaningful concentration of buy or sell orders is actually resting. This means looking for order blocks, which are areas showing a heavy concentration of orders and therefore elevated liquidity; identifying fair value gaps, the imbalances between current price and fair value that hint at where price is likely to react; incorporating higher time frames such as the 15-minute or 1-hour chart to gain broader context and find confluence across timeframes; and watching for relative equal highs and lows, since repeated tests of a similar price level mark a level worth trading against.
Two types of ICT Turtle Soup Setups.
In
practice, the approach starts on the higher time frame. Once bullish
order flow is established and price has tested a higher-time-frame point
of interest, that confirms continuation is likely and the trader begins
watching for a similar setup on the lower time frame. On the LTF, the
trader waits for sell-side liquidity to be swept, then looks for the
reversal Turtle Soup pattern to form. From there, the trader can wait
for a market structure shift and a retracement back into the breaker
block, fair value gap, or order block before entering.
Two supporting concepts round out the framework. The first is premium and discount arrays: a premium array sits above the midpoint of a dealing range and marks a sell level where buy stops are likely resting, while a discount array sits below the midpoint and marks a buy level where sell stops are resting. The second is breaker blocks: a bearish breaker forms after price sweeps a low and reverses upward through prior structure, while a bullish breaker forms after price sweeps a high and reverses downward through prior structure — both mark zones where the trader can look to enter in the direction of the reversal.
Two supporting concepts round out the framework. The first is premium and discount arrays: a premium array sits above the midpoint of a dealing range and marks a sell level where buy stops are likely resting, while a discount array sits below the midpoint and marks a buy level where sell stops are resting. The second is breaker blocks: a bearish breaker forms after price sweeps a low and reverses upward through prior structure, while a bullish breaker forms after price sweeps a high and reverses downward through prior structure — both mark zones where the trader can look to enter in the direction of the reversal.
Before taking a Turtle Soup trade, five conditions should line up: there should be a clear higher-time-frame point of draw on liquidity, price should be sitting in a premium or discount portion of the dealing range, price should have run equal highs or lows or the prior daily high or low, price should show an immediate rejection at that level, and the setup should be occurring above or below the midnight open.