ICT 2022 Model Main Lesson

The ICT 2022 Model is a liquidity-based execution model. The trader is not randomly buying or selling Fair Value Gaps.

The trader first builds a directional idea, identifies where liquidity is resting, waits for a liquidity event, then looks for confirmation through MSS and displacement before using the FVG as the entry zone.

Each week before the new week begins, the trader tries to read what the next weekly candle may seek.

The question is whether price is likely to seek higher prices or lower prices. The goal is not to perfectly predict the weekly close. The weekly chart frames expectation.

Seasonal tendencies can be used as context, but they are not standalone trade signals.

The daily chart is where the trader identifies the main draw on liquidity. The market is usually drawing toward liquidity or imbalance.

Daily swing highs and swing lows matter because buy stops rest above swing highs and sell stops rest below swing lows.

The daily question: where is the obvious liquidity, where is the market likely drawing next, and is price reaching for stops or an imbalance?

The hourly chart refines liquidity pools. Large traders and liquidity providers pay attention to old highs and old lows.

For a bearish expectation, if a significant move lower is expected, anticipate a possible stop hunt above a short-term high first.

For a bullish expectation, if a significant move higher is expected, anticipate a possible stop hunt below a short-term low first.

Once the stop hunt occurs, switch to the lower timeframes and start looking for small imbalances and a Market Structure Shift.

For index futures, the 1-minute, 2-minute, and 3-minute charts can be better than the 5-minute chart for finding imbalances because algorithmic delivery often appears more clearly on smaller timeframes.

This does not mean lower-timeframe gambling. The smaller chart is used only after liquidity has been swept and the model context is already present.

A liquidity sweep is the stop hunt phase.

For a bearish model, buy-side liquidity is taken first. Then price should shift lower.

For a bullish model, sell-side liquidity is taken first. Then price should shift higher.

MSS means Market Structure Shift. After liquidity is swept, price should break opposite short-term structure.

Bearish: after buy-side liquidity is taken, a short-term low is broken.

Bullish: after sell-side liquidity is taken, a short-term high is broken.

Displacement is the strong move away from the swept liquidity. It shows urgency and often creates imbalance.

If there is no clean displacement, the setup is lower quality or may be a No Trade.

The Fair Value Gap is the imbalance used as the entry zone after MSS. The trader is not buying or selling every FVG.

The FVG matters because it appears after liquidity is taken and structure shifts.

Entry can be refined by FVG touch, FVG consequent encroachment / 50%, or the opening boundary of the FVG depending on the example and model rules.

For a short, stop loss should generally be above the invalidation high, often above the first or second candle high around the displacement/FVG sequence.

For a long, stop loss should generally be below the invalidation low, often below the first or second candle low around the displacement/FVG sequence.

The stop belongs beyond the price point that invalidates the displacement/FVG idea.

For targets, use liquidity, imbalance, and dealing range logic. Draw the range from low of day to high of day, or high of day to low of day depending on direction, and highlight the 50% level.

Above 50% is premium. Below 50% is discount.

If selling from premium, look for exits toward a short-term low, sell-side liquidity, or an imbalance on the discount side.

If buying from discount, look for exits toward a short-term high, buy-side liquidity, or an imbalance on the premium side.

TP1 is the primary scored target. TP2 is an optional extended target.

Do not trade if liquidity is swept but MSS does not confirm.

Do not trade if MSS happens but there is no clean displacement.

Do not trade if the FVG forms but price spends too long inside it.

Do not trade if the target is unclear, the setup forms too late, price action is too choppy, or the model sequence is incomplete.

Missing a trade is better than forcing a weak model.