Best ICT Gold Trading Strategy Using Liquidity & Inducement (FULL COURSE)

Introduction

This tutorial outlines a comprehensive trading strategy for trading gold, based on the ICT/SMC principles discussed by Mulham Trading. The strategy focuses on understanding liquidity, inducement, and technical analysis to enhance trading success. Whether you are a beginner or an experienced trader, following these steps will help you refine your approach to gold trading.

Step 1: Understand Liquidity Sweep and Turtle Soup

• Liquidity Sweep: Identify areas in the market where liquidity is likely to be targeted. This often occurs around significant support and resistance levels.
• Turtle Soup: Look for price reversals after a liquidity sweep. If the market clears stop-losses at these levels, it often leads to a price reversal.

Step 2: Determine Daily Bias and Direction

• Daily Bias: Assess the overall market trend by analyzing recent price action.
• Daily Direction: Use tools like moving averages or trend lines to establish if the market is bullish or bearish.

Step 3: Apply Timeframe Alignment and Top-Down Analysis

• Timeframe Alignment: Ensure that your analysis is consistent across multiple timeframes (e.g., daily, 4-hour, 1-hour).
• Top-Down Analysis: Start from a higher timeframe to determine the overall trend, then drill down to lower timeframes for entry points.

Step 4: Focus on Two Key Liquidity Levels

• Identify and monitor only two primary liquidity levels:
  • Higher Highs: Areas where price has previously peaked.
  • Lower Lows: Areas where price has previously bottomed.
• These levels are crucial for setting entry and exit points in your trades.

Step 5: Identify Valid Pullbacks in Trading

• Look for price retracement that respects the higher timeframe trend.
• Valid pullbacks often occur at significant Fibonacci levels or previous support/resistance zones.

Step 6: Execute Lower Timeframe Entry Trades

• Use lower timeframes (e.g., 15-minute or 5-minute charts) to find entry points after confirming conditions on higher timeframes.
• Ensure you have a good risk-reward ratio, aiming for at least a 1:2 ratio.

Step 7: Analyze Examples and Integrate Your Strategy

• Review historical price charts and analyze how the identified strategies played out.
• Back-testing your strategy on past data can improve your confidence and skill.

Conclusion

By following this structured approach to gold trading, you can leverage the concepts of liquidity and inducement to improve your trading outcomes. Remember to back-test your strategies, focus on key liquidity levels, and maintain proper risk management. Consider booking a mentoring session for personalized guidance as you refine your trading skills. Happy trading!