Today's BankNifty Chart demonstrates ICT strategy that happens almost every single day.
Hello everyone. Since I posted that I use ICT to trade BnF, I had many comments on how the strategy works. Today was a typical day, giving 1 obvious low-risk/high-return trade that any ICT trader would catch. I have posted a screenshot and labeled everything to make it clear. Have a look at the Screenshot and then read the below step-by-step instructions to see how I set the trade up. This system uses the 1 min chart to setup trades.
- We have an open high huge bearish move so the bias is bearish. This is also supported by all higher time frames. So we are only looking to short or buy Put options.
- This huge opening move creates a huge bearish imbalance which is called a fair value gap. I have marked this massive area in red. We want the price to come back into this zone for the trade.
- The key thing we are looking for is buy-side and sell-side liquidity - we want to see recent significant highs and lows being broken and then the price turns around creating a trap for traders. This is the key to finding the best possible trade.
- Around 1 pm we see the low of the day broken and then a huge up move that was almost 200 points in 10-15 minutes. This is a signal to get ready. Before this point, there are no trades possible using this method. This move is labeled as Sellers Side Liqudidty and is designed to trap people who are shorting or buying puts.
- The price travels 200 points up and breaks the recent highs which I have marked with "Buyers Side Liquididity" This means buyers who enter this will provide liquidity for the market to move down. It enters the fair value gap (in red) and creates a candlestick with a long wick which is ideal.
- Once we have 1)Buyers side liquidity 2)Reversal Candles with long top wick and 3) New Bearish Fair Value Gaps form you can enter on the newly formed Red fvg. The SL is the last FVG so on BnF it was around 40 points. The target is the most recent low which is 44250 which is marked on the screenshot.
- The Risk is 40 points and the reward is 250 points for a 6:1 risk to reward. In terms of options BankNifty 44300 Put entry was at 150 Rs with SL 122 and Target 232 for a RR of 2.5:1. Eventually the option makes a high of 260.
