How to master the ICT trading strategy? A complete guide for every investor 🧵

If you work in financial markets, you have certainly heard of the ICT methodology. This systematic approach to market analysis includes several key concepts that enable traders to make more informed decisions. Today, we will show you how to combine all ICT elements into a coherent and practical trading strategy that anyone can implement—regardless of experience level.

Building the Foundation: Daily Bias in the ICT System 🛠️

Every successful ICT-based trading strategy begins with defining a clear direction on higher timeframes. This process requires an organized approach starting from the weekly chart. The foundation is creating a daily bias—your basic orientation regarding the price movement direction for the day.

This structure underpins the entire trading approach, which includes two main elements:

1. IRL/ERL (Low Range Imbalance / External Range) – These levels define potential price targets. Price always moves toward these gaps or previous extremes.

2. Candle Bias – The way price reacts to the previous candle indicates a shift in market sentiment and a change in the strength between buyers and sellers.

Understanding IRL/ERL and Candle Bias: Key Components 🔄

To correctly apply the ICT methodology, you must first master reading price actions through the lens of IRL/ERL. The price target always moves toward Fair Value Gaps (FVG) or previous highs/lows (ERL).

When analyzing the previous candle:

• If a high or low has shifted and the new candle has absorbed it, you can expect a potential trend reversal
• This Fibonacci analysis also shows the shifting range and consistent structural reversals
• The act of shifting the previous candle’s extreme signals that the balance of forces in the market has changed

Anatomy of Market Maker Models within ICT 🎯

Every move on higher timeframes (HTF) from IRL to ERL or vice versa always accompanies a Market Maker Model (MMM) on lower timeframes (LTF). This is a crucial observation for all ICT traders.

Practical application:

• Ensure your trades align with the market maker’s target
• After confirming the structure on HTF, focus solely on trades heading toward that target
• Avoid trading Against the Model—that is the most common mistake of beginner traders

Applying ICT Strategy Across Different Timeframes 📅

The ICT methodology does not work on a single timeframe—it requires a holistic view of the market with multiple perspectives simultaneously.

Step 1: Weekly Analysis
Start with the weekly chart and identify your main bias. Determine where the IRL/ERL are located and what the main price targets are at this level.

Step 2: Apply on the Daily Chart
After setting up the weekly chart, repeat this process on the daily. The ideal situation is a complete alignment of these two perspectives—then you get trades with the highest probability of success.

Step 3: Transition to H4 and H1 for Intraday Structure
Once you have clear IRL/ERL levels and candle bias on weekly and daily charts, move to H4 and H1. This will be your direct structure for trades executed during the trading session.

Step 4: The Importance of Time-Based Liquidity (TBL)
TBL is the maximum or minimum from a specifically defined period—usually from the previous day, week, or the session open at 7:30 EST. These points are critical when forecasting breakouts or reversals. The market often tests and, after shifting TBL, changes direction.

Practical Entry Confirmations: Three Pillars of the System 🎯

After establishing your higher timeframe biases and identifying key levels, proceed to lower timeframes (M15 and below) to find precise entry points.

Before each trade, ensure you go through this exact checklist confirming your assumptions.

1. Market Structure Shift on M15 🏗️

• Look for IRL/ERL aligning with your overall bias
• On M1, identify a structure shift, often expressed through a Fair Value Gap (FVG)
• Entry should occur at this FVG, with stop-loss above/below the constructed structure
• Target the opposite liquidity—usually at M15 levels

2. SMT (Supply-Demand Imbalance) Divergence 🔀

• When correlated assets suddenly break correlation, expect a significant price move
• To maximize success chances, combine this observation with keys from HTF (higher timeframes)
• This is an advanced technique you will learn to recognize with practice

3. iFVG (Internal Fair Value Gap) 📉

• If order flow (FVG) at a key HTF level is not respected, a potential reversal begins
• iFVG acts as a warning signal that the market is entering a new phase

Time-Based Liquidity and Order Flows 💧

Understanding market dynamics hinges on recognizing how the market tests historical liquidity levels. TBL—Time-Based Liquidity—indicates where the market will seek orders (buy and sell).

Market makers place their orders at:

• The previous day’s high/low
• The EST session open at 7:30
• Previous weekly and monthly highs/lows

When price tests these levels, and a shift and rejection occur, a strong move in the confirmed direction can be expected.

Case Study: How ICT Works in Practice 📚

Let’s look at a practical example of how all these elements work together in an actual ICT trading strategy:

Scenario:

• TBL (session open or previous day) has shifted
• Opening price is above the previous open
• HTF shows a structural change confirmed by LTF indicating an FVG
• iFVG confirms that order flow at the key level is now on the selling side

Action: On M1, wait for an FVG in line with your HTF bias. When it appears, enter with a stop-loss above the structure, and set your target at the opposite liquidity seen on M15.

This practical example demonstrates how all ICT components—bias, structure, Market Maker Model, TBL, and LTF confirmations—work together to confirm a trading decision.

Final ICT Trader Checklist ✅

Before each trade, ensure all these conditions are met:

• [ ] Weekly + daily HTF clearly define the direction
• [ ] H4/H1 confirms a structural change in line with HTF
• [ ] IRL/ERL on M15 is clearly identified
• [ ] At least one of three confirmations: structural change, SMT divergence, or iFVG
• [ ] TBL (Time-Based Liquidity) has been tested and approved
• [ ] Order flow (FVG) at key levels is understood
• [ ] Stop-loss is clearly positioned (above/below structure)
• [ ] Target aligned with opposite liquidity

ICT trading methodology is a system that requires time to learn and refine, but the results can be significant. The key is consistency in applying these rules across all timeframes and discipline in following the checklist before each trade. Work systematically, backtest, and then save time by managing real risks—this is how you will gain the best experience with the ICT strategy. 🚀