100% Mechanical ICT Trading Strategy (3 Steps, No Daily Bias)

Step-by-Step Tutorial: 100% Mechanical ICT Trading Strategy

Step 1: Understand the Strategy Parameters

1. This strategy is specifically tested for ES Futures on the three-minute time frame.
2. The strategy involves a one-to-one risk to reward ratio, with both stop loss and profit target set at 40 ticks or 10 points on ES.
3. Market structure, multi-time frame trend, and fair value gap structure are the key criteria for trade setups.

Step 2: Market Structure Analysis

1. Identify market structure by looking for swing highs and swing lows on the current time frame.
2. Utilize multi-time frame trend analysis by checking market structure on a higher time frame, such as the one-hour chart.
3. Ensure the market structure is in alignment across different time frames to confirm the trend direction.

Step 3: Fair Value Gap Setup

1. Look for fair value gaps that coincide with a break of market structure, either through swing highs or swing lows.
2. Enter the trade when price comes into the fair value gap and all other criteria are met.
3. Define the entry point, stop loss, and profit target based on the rules of the strategy.

Step 4: Implementing the Strategy

1. Enter the trade at the open of the following candle when all criteria are fulfilled.
2. Set the stop loss 10 points above the entry and the profit target 10 points below the entry.
3. Monitor the trade and exit when the profit target is reached or the stop loss is triggered.

Step 5: Backtesting and Optimization

1. Use backtesting tools to analyze the performance of the strategy over time.
2. Experiment with different parameters, such as time frames and risk to reward ratios, to optimize the strategy.
3. Evaluate the results to determine the most effective settings for the strategy.

Step 6: Review and Refine

1. Review the equity curve and trade history to gain insights into the strategy's performance.
2. Refine the strategy based on the backtesting results and adjust parameters as needed.
3. Consider the psychological aspect of trading and choose a risk to reward ratio that suits your trading style.

Step 7: Continuous Improvement

1. Continuously test and refine the strategy to adapt to changing market conditions.
2. Explore different combinations and setups to enhance the strategy's effectiveness.
3. Stay informed about market trends and developments to make informed trading decisions.

Step 8: Conclusion

1. Developing a mechanical trading strategy like the one discussed can provide a systematic approach to trading.
2. Utilize backtesting tools and data analysis to validate and improve the strategy over time.
3. Build confidence in your trading decisions by following a structured and tested approach.

By following these steps, you can implement and optimize a mechanical trading strategy based on the principles outlined in the video. Remember to adapt the strategy to your own preferences and risk tolerance for optimal results.