Showing posts with label Short-Term Trading. Show all posts
Showing posts with label Short-Term Trading. Show all posts

Thursday, February 26, 2026

All Five ICT Entry Models Explained | JadeCap

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.
 
 
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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.
 

Sunday, February 22, 2026

S&P 500 Hurst Analysis: Projection into Mid-March 20-Week Cycle Low

The current 40-week cycle began at the November 21, 2025 trough. Its primary components are two 20-week cycles, which averaged 16.9 weeks (118 days = Delta cycle) over recent iterations. 
 
 SPY (daily candles), September 2025 to May 2026.

The low of the first 20-week cycle is expected to occur between March 17 and March 19 (Tue–Thu).
 

 10-day cycle (7.6 days) low = Feb 24 (Tue)
 20-day cycle (15.4 days) low = Mar 3 (Tue)
 40-day cycle (31 days) low = Mar 17 (Tue)
 80-day cycle (57 days) low = Mar 18 (Wed)
 20-week cycle (118 days) low = Mar 19 (Thu)
 
The 40-week cycle (and 18-month cycle) trough is projected into late July (±).
 

Monday, December 1, 2025

Engulfing Bar Strategy | JadeCap

This one pattern helped me make over $4 million in the last three years and even break the world-record payout at Apex. Let me show you exactly how it works:
 
» For a true engulfing pattern, the new candle must break the previous candle’s low and the previous candle’s high. «
 
What Is an Engulfing Bar? We’re simply looking for two candles—along with proper context—to define the pattern: Imagine we have a down candle with its open, high, low, and close. The next candle is what determines whether we have an engulfing bar. For a true engulfing pattern, the new candle must break the previous candle’s low and the previous candle’s high. It completely “engulfs” the previous range (aka Outside Bar/Candle).
 
So picture the first down candle closing. The next candle runs below that low, takes it out, reverses, pushes above the prior high, and closes somewhere near the top half of its range. That two-candle formation gives us a tremendous amount of information about where the next candle—or even the next several candles—may go.
 
Understanding the Context: Inside a higher-timeframe candle (4-Hour or daily), there are dozens of smaller candles—1-minute, 5-minute, 15-minute—that form all the micro-structure. Within that lower-timeframe structure, the engulfing pattern represents:
 
Market Maker Buy Model (for bullish engulfing)

So although it's only two candles on a higher timeframe, those two candles often reflect an entire lower-timeframe reversal model.

The key is the closure. Many beginners think a candle will close as an engulfing bar, only for it to close weakly or back inside the prior range. That invalidates the pattern. A proper engulfing bar should close with a strong, decisive body—typically in the upper 50% for bullish setups, or the lower 50% for bearish setups.

Bullish vs. Bearish ExamplesFor a bullish engulfing bar, the second candle runs below the prior low, reverses, and breaks the prior high (Outside Candle). For a bearish engulfing bar, it runs above the prior high, reverses, and breaks the prior low. Both reflect a higher-timeframe representation of a lower-timeframe Market Maker Model.
 
» Every setup has a failure rate. «
 
What Most Traders Don’t RealizeEvery setup—Engulfing Bars, Fair Value Gaps (FVGs), Market Maker Models—has a failure rate. I learned this the hard way after blowing dozens of accounts trying to trade every engulfing bar I saw. Two things matter:
  1. Every setup fails sometimes. If you backtest these candles, you'll see some of them lose. Your job is not to find the magical 100%-win-rate setup. It doesn’t exist. You may find these patterns work 60% of the time. Your winners must be managed well enough to pay for the losers.
  2. Location matters. A lot. When I was new, I took every engulfing bar. That was a huge mistake.
    If you're bullish, you want the engulfing bar to form at a swing low, ideally after taking out sell-side liquidity.
    If it forms after taking out buy-side liquidity—at a high—it's often a sign of exhaustion and more likely to fail.
    The reverse is true for bearish setups.
Avoid:
Bullish engulfing bars printed at or after taking out buy-side liquidity.
Bearish engulfing bars printed at or after taking out sell-side liquidity.
 
These filters alone drastically improve your win rate.
 
The $98,000 ExampleLet’s walk through the trade from last week. We printed a large bullish engulfing candle immediately after FOMC. The candle swept sell-side liquidity, reversed, broke the prior high, and closed strongly—exactly what we want at a swing low. We were also inside a daily Fair Value Gap (FVG), adding even more confluence.
 
Bullish Engulfing Bar Setup in the NZDUSD (4-Hour candles). 

My first target was buy-side liquidity above the highs. Since the market was near all-time highs, I was also looking for a move toward the psychological 25,000 level. As soon as the futures market reopened at 6 p.m., I entered with a 20-lot position. My stop was below the weekly open. I was looking for roughly a 1:3 risk-to-reward.
 
On the lower timeframes, the price action continued to confirm the model—bullish FVGs forming on the way up, continuation structure holding. Meanwhile, bearish engulfing candles printed at swing lows failed, exactly like we want to see.
 
I showed the live account login on the video: real balance, real fills, floating around $93,000 at one point. But the dollar amount doesn’t matter. If your account is small, making $200 or $400 using the same rules is identical—it’s just a matter of position size. Years ago, I was risking $500–$1,000. As my net worth grew, I increased my risk proportionally. Eventually, price hit my target and I closed the trade for roughly $98,000.
 
Final ThoughtsEngulfing bars are easy to spot—but only powerful when combined with
 
    Proper context
    Liquidity understanding
    Market structure
    Higher-timeframe narrative
    Disciplined trade management
 
Your homework is to backtest and forward-test these exact setups: where the engulfing bar forms, where the liquidity sits, where your stop should go, and how to trail it as price moves in your favor. Scaling in, adjusting stops, and managing the trade all revolve around that one pattern.

With this engulfing bar strategy and the rules I just shared, you now have everything you need to start identifying high-probability opportunities. Remember: profitable trading isn’t about talent or luck—it’s about discipline, patience, and following your rules every single time.

Reference:
 
 
See also:

Friday, August 1, 2025

The Thursday-Friday-Monday Pattern | Tom Hougaard

What happens when we start out trading on a Monday, and the previous Thursday’s high was higher than Friday’s high? Over the last 52 weeks, there were 21 instances where the price action on Friday was unable to trade above the highest point of the previous day, Thursday. I then looked at what happened on the following Monday. If there was a holiday on the Monday, I would view the price action on the Tuesday. Let me show you some examples:

When Thursday’s high was higher than Friday’s high, Monday traded below Friday's low.
 
Considering the random nature of the markets on a day by day basis, there shouldn’t be a pattern, and if there is, I have found an edge to exploit. I was surprised to find that on 20 out of the 21 occurrences, the Dow traded lower on Monday, often lower than Friday’s low. 
 
Here is how to apply this strategy:
1) Switch to the daily time frame.
2) Confirm that Friday's high is lower than Thursday's high.
3) Mark the low of the Friday candle.
4) Move to a smaller time frame for entry.
5) Wait for the price to reach a bearish fair value gap.
6.) Enter a short position, expecting the price to hit Friday's low on Monday.
7) On Monday, monitor the regular New York trading session.

I am not in the business of deluding people, so here is an example where it did not work: 
 
It did not work: Monday did not get below the lows of Friday.  
 
And here is one I traded earlier in August 2019. I went home short over the weekend –always a very risky strategy – and I was rewarded for it (this time!):


I assume you notice that there are often gaps associated with the Thursday-Friday-Monday pattern. Gaps are an inevitable part of trading life. 

  
then how often is Thursday going to trade below the low of Wednesday?
What happens to Monday if the previous Friday trades below the highs of Thursday?

 
oooo0O0oooo
 
But is that actually true: does Tom Hougaard's Thursday-Friday-Monday Pattern really has an edge? Here are the results of the respective 2003-2025 backtests for the S&P 500, Nasdaq, Dow Jones, and Russell 2000:
 
S&P 500: 472 setups; 231 wins: 48.94% win rate: No edge.                            
Nasdaq: 449 setups; 249 wins: 55.46% win rate: Slight positive edge.              
DJIA: 458 setups; 223 wins: 48.69% win rate: No edge.                            
Russell 2000: 464 setups; 258 wins: 55.60% win rate: Slight positive edge.
 
 
                            
 

Saturday, July 19, 2025

"Bull Hook" Toby Crabel Price Pattern in the S&P 500

The Toby Crabel Bull Hook pattern, present on July 18 (Fri), in the S&P 500 Cash Index, implies a potential short-term upward move for trading starting July 21, 2025. 
 
A Bull Hook happens when a bar has a lower range than the previous one, with its opening price
higher than the previous bar’s high and its closing price lower than the previous bar’s close.
 
Price action created the narrowest range of the last 8 days with a lower daily close. The daily bar has a "hook" shape (a bull flag on lower timeframes), hinting at a potential reversal to the upside due to consolidation and a shift in sentiment. The Bull Hook pattern is generally bullish, opening above the previous day's high and closing lower with a narrowing range. It's often followed by upward price moves in the days after. 
 
A recent analysis by Ali Casey provides additional insights. The Bull Hook pattern has limitations, including its better performance in trending or volatile markets, the potential for false signals and losses in some cases, and its reliance on precise execution, which can be influenced by news or macroeconomic events.
 

Friday, July 18, 2025

Simple ICT Day Trading Strategy That Works Every Day │ JadeCap

This trading strategy focuses on entering positions based on significant daily highs and lows, utilizing ICT's "Power of Three" framework—accumulation, manipulation, and distribution. With this approach, I earned $4.5 million and I’m here to show you how simple it can be: 
 
» Do not trade if the market has already hit the target high/low. «
 
The Key is to target historical levels beyond just the last 24 hours and to use the New York midnight open for optimal entry points. By staying committed to the market direction from the previous day and timing your trades around key sessions like New York or London (ICT Kill Zones), you can capture manipulation moves for more favorable risk-to-reward ratios. 
 
» I’m here to show you how simple it can be. « 
 
Now, I'll walk you through the three-step process I use to achieve results every day:

1.) Identify Key LevelsDetermine the previous daily high or low as the target based on bullish or bearish conviction from prior day’s close.
2.) Assess Market Context: Confirm the market is trading below the previous daily high (for bullish trades) or above the previous daily low (for bearish trades) to avoid chasing price.
3.) Apply Power of Three:
Accumulation: Identify a range (e.g., Asian or London session) where orders build up.
Manipulation: Look for a temporary move against the expected direction (e.g., bearish move in a bullish setup) to trap traders.
Distribution: Enter trades as the market moves toward the target high/low, ideally near the midnight open for better risk-to-reward.


Entry and Risk Management
:
  • Enter trades on lower time frames (e.g., hourly) using setups like fair value gaps, order blocks, or liquidity raids that align with the high time frame direction.
  • Place stop losses logically (e.g., at 50% of a Fair Value Gap or below a key level).
  • Exit trades based on time (e.g., end of a 4-hour candle) or when the target is reached, avoiding overnight holds for futures.
Avoid Common Pitfalls:
  • Do not trade if the market has already hit the target high/low.
  • Avoid setups misaligned with the high time frame direction.
  • Trade smaller or not at all if the market has expanded in your direction before entry.
Reference:
 


See
 also:

Thursday, July 17, 2025

ICT Intraday Liquidity & Volatility Trading Playbook │ JadeCap

This strategy focuses on how price reacts to liquidity and volatility during the trading day. Liquidity refers to the areas on a chart where other traders have placed stop-loss orders, usually just above recent highs or just below recent lows. The market often moves into these areas to trigger those stops, and then either reverses sharply or continues strongly in the same direction.

Trade Example - NQ Short (1-H Chart)
 
The goal of this strategy is to spot those liquidity grabs, wait for a clear reaction, and then enter with confidence—either to trade the reversal or the continuation. The method is built for traders who prefer to focus on one trading day at a time, using clear logic, session structure, and precise timing.
 
On this episode of Chart Fanatics we are joined by Kyle Ng (AKA Jadecap). Regarded as ICT's best student and recently achieved a world record payout with Apex. Kyle reveals his complete ICT playbook that allowed him to generate millions from the markets. In this episode you'll learn how to manage open exposure and lock in profits, how to predict the next daily candle and the psychology behind avoiding greed in a trade. Riz Iqbal, May 15, 2025.

Each trade begins with a daily bias: a simple outlook on whether price is likely to move up or down today. Then the trader watches for session liquidity raids (like the Asian or London session highs/lows being taken out), and enters only after confirmation appears through a fair value gap, market structure shift, or divergence between markets. This model works well for intraday trades but can also be used for swing trades when the higher time frame aligns with the setup.

To take a trade using this model, the following must be true:

Clear Daily Bias: Decide if you’re bullish or bearish for the day using the daily chart.
Consider recent highs, lows, inefficiencies, and where the price is likely to go next.
Session Liquidity Zones Marked: These are common stop zones and entry traps:
Previous Day’s High and Low
Asian Session High/Low
London Session High/Low
Wait for a Liquidity Raid: A key session level must be taken out during the New York session — this is your signal
that stop orders have been hit and a potential move is beginning.
Confirmation on Lower Time Frame (15m / 5m). After the liquidity raid, wait for one of these confirmations:
Fair Value Gap (FVG)
Market Structure Shift (MSS)
Turtle Soup (false breakout and reversal)
Breaker Block
Ideal Time Window
Trade setups should form between 9:30 and 11:30 AM EST/EDT.
 
Key Differences Between Internal and External Liquidity.

Target & ExitYour target depends on the setup type. Intraday Targets: Opposite session liquidity, fair value gaps, or  equal highs/
lows. If the trade slows near midday, consider exiting  even before the full target is reached.
Swing Targets: Use higher time frame liquidity zones (daily/weekly highs or lows), imbalances, or major structure. 
Swing trades can be held for multiple days as long as the bias and structure support it. Use time-of-day awareness, price behavior, and your risk profile to decide whether to hold or exit early.

Pros & Cons of the Strategy
This model is designed to deliver high quality, repeatable setups — but like any trading method, there are key things to understand before using it. Note: The cons listed here aren’t disadvantages. They are things to be aware of — important characteristics that require patience, discipline, and proper management to make the model work effectively.
 

Trade Example - NQ Short (15-Min Chart)

Reference:
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If markets continually trend higher, any run on short-term highs should only be seen as short term liquidity being taken. Any retracement lower should be framed as a return to internal range liquidity prior to continuation.This keeps you on the RIGHT side of the market and you stop anticipating major reversals. Never try to pick tops and bottoms. Leave that to the big boys. We only want to ride their coattails. JadeCap's Trading Room, July 16, 2025.
 
Looking for Tuesdays highs on ES. JadeCap's Trading Room, July 17, 2025, 9:03.
 
I stopped adding new concepts and tools and just focused on properly executing what I've already learned. A few lines, context, and ironclad risk management. Stop focusing on the P&L and the size of your trades. If you can trade 1 micro you can trade 10 minis. But you can't do that at scale without a solid PROCESS. JadeCap's Trading Room, July 17, 2025, 14:47