Magic Indicator Strategies
Learn about the ICT fair value Gap trading strategy, which uses an easy-to-read technical indicator to identify temporary currency price imbalances. The indicator displays fair value Gap candles, liquidity taken, buy and sell signals, and more. To use the strategy, follow a set of conditions based on bearish or bullish fair value Gap signals, bearish candlesticks, and demand zones to determine entry and exit points. Trader Edge is recommended for backtesting strategies and finding proven indicators and trading strategies.
Magic Indicator Strategies: How to Profit with ICT Fair Value Gap Trading
Introduction
Are you tired of complicated trading strategies that leave you confused and frustrated? Look no further than the ICT fair value gap trading method, a game-changing forex trading strategy. This strategy is based on only one easy-to-read technical indicator, the ICT 2022 mentorship model, that not many traders know about. In this article, you will learn all about this indicator, the ICT fair value gap method, and a step-by-step guide to using it for finding high probability trade entries.
What is the ICT Fair Value Gap Trading Method?
The ICT fair value gap trading method is a forex trading strategy that aims to exploit temporary imbalances in currency prices. In simple terms, it works by identifying gaps or differences between the perceived fair value of a currency pair and its current market price. These gaps represent temporary imbalances that are likely to be corrected over time. The ICT fair value gap trading method uses the ICT 2022 mentorship model, a multifunctional indicator that displays structure breaks, liquidity taken, fair value gap candles, and buy and sell signals.
Understanding the ICT 2022 Mentorship Model Indicator
The ICT 2022 mentorship model is a free TradingView tool, created by Trade4op. This indicator is multifunctional and displays various market aspects, including structure breaks, liquidity taken, fair value gap candles, and buy and sell signals. Structure breaks are green and red dotted lines that appear when a currency pair’s market structure is broken. Fair value gap candles are colored in yellow, and bullish and bearish fair value gap zones are plotted. These zones are likely to be retested by price in the near future. When a retest occurs, the indicator prints buy and sell labels that can be used for entering long and short trades.
Using the ICT Fair Value Gap Method for Finding High-Probability Trade Entries
To use the ICT fair value gap method for finding high-probability trade entries, here is the strategy we suggest. For a signal to sell to be valid, we need the following conditions in place:
1. A bearish fair value gap must be present in the market.
2. The price must return to the gap for a liquidity grab.
3. A bearish candlestick must be formed with its closing price below the fair value gap red zone.
If the currency pair is undervalued, the expectation is that its price will rise to reach its fair value. Conversely, if it’s overvalued, the price is expected to fall.
The next condition is to have a Bearish Candlestick formed with its closing price below the Fair value gap Red Zone. The signal should be skipped if a bearish candle does not form and the price exceeds the fair value gap to the upside.
If rules 1-3 are met, draw a demand zone to find out whether there is enough room for you to make a profit. If the price is positioned very closely to the demand zone, no short trades should be taken. Enter the trade only if there is plenty of room for the price to move to the downside. Place the stop loss at the recent swing high and target the next demand zone. Once the price has moved in your favor, adjust the stop loss to the break-even level.
Examples of Using the ICT Fair Value Gap Method for Finding High-Probability Trade Entries
Let’s examine some examples of using the ICT fair value gap method for finding high-probability trade entries. In the first example, we see a signal to sell, but a bearish candlestick wasn’t closed below the bearish fair value gap red zone. In the next example, a signal to sell was printed, but the bearish candle bar wasn’t formed at all. It’s a losing trade that could have been eliminated. The following example shows two signals to sell, but only one has been confirmed.
In the next cell signal, all the rules were in place, and it was a clear winner. The other signals were false and would not have been taken. The indicator isn’t just for finding profitable sell entries. As seen in the last example, a signal to buy was printed after the market broke all the major demand zones.
Conclusion
In conclusion, the ICT fair value gap trading method using the ICT 2022 mentorship model indicator, is a game-changing forex trading strategy. It is an easy-to-understand and implement strategy, suitable for forex trading beginners and veterans alike. For best results, always backtest your trading strategies to ensure their success rate. Consider using reputable backtesting tools like Trader Edge, which also includes free training courses and trading strategies. With this strategy up your sleeve, you can turn your forex trading around and begin making consistent profits.
References
1. “Don’t Trade With Magic, Use These Indicator Strategies Instead!” Magic Indicator Strategies, YouTube, 7 Jan. 2022, https://www.youtube.com/watch?v=EmTgoEjBpOk
2. “ICT (Inner Circle Trader) Fair Value Gap Trading.” Trading Strategy Guides, 15 Oct. 2021, https://tradingstrategyguides.com/ict-inner-circle-trader-fair-value-gap-trading/
3. “Trader Edge.” Trader Edge, https://traderedge.net/
