Strategy Library

Break and retest

Setup

• Mark a support or resistance level price has turned from at least twice
• Treat the level as a zone of prices, not one exact price

Entry

• A candle closes beyond the level, not just a wick through it
• Price comes back to the broken level within a few candles
• A rejection candle forms at the level (pin bar, engulfing or similar)
• Enter on a stop order just beyond the rejection candle, in the direction of the break

Stop

• Beyond the rejection candle and the broken level

Target

• The next support or resistance level, or a fixed 2R, or the height of the range before the break measured from the level

Trend pullback to a moving average

Setup

• The trend is up when price is above the 20 (or 21) EMA, that is above the 50, that is above the 200, and all are rising (mirror it for a downtrend)
• Wait for price to pull back to the 20 or 21 EMA

Entry

• Either: enter when a candle bounces off the average and closes back in the trend direction
• Or: skip the first attempt to resume the trend and enter on a stop order above the second one (Al Brooks calls these H1 and H2)

Stop

• Below the pullback low (above the high in a downtrend), or out on a candle close beyond the 21 EMA

Target

• The sources leave targets open: set your own, such as the last swing high or a fixed R

Moving average crossover

Setup

• Choose one pair of averages and one type, for example the 50 and 200 SMA on the daily chart

Entry

• Enter after a candle closes with the fast average above the slow one (below it for a short)

Stop

• Out on the opposite cross, or on a close beyond the faster average, as your written rule says

Target

• None: a crossover system exits on its exit signal, not at a target

Pin bar at a key level

Setup

• Mark the levels you count as key before the candle forms
• A pin bar: a small body with a wick at least two thirds of the candle
• The pin bar forms at your level, its wick poking through and its body closing back on the right side

Entry

• Either: enter at the pin bar close
• Or: wait and enter on a break beyond the pin bar in the direction it points

Stop

• Beyond the end of the wick

Target

• The next opposite level, or 2R to 3R

London breakout

Setup

• Mark the Asian range: the high and low from 00:00 to 07:00 GMT (adjust for daylight saving)
• Skip days when the range is so wide that the stop leaves no room for your target

Entry

• After 07:00 GMT, enter when a candle closes beyond the range high (long) or low (short)
• Skip the break if the breakout candle is a pin bar pointing the other way

Stop

• The middle of the range, or just beyond the most recent swing, or the far side of the range

Target

• A fixed R such as 1.5R, or close at the end of the London session

Inside bar breakout

Setup

• An inside bar: its high is at or below the mother bar's high and its low at or above the mother bar's low, wicks included
• In a trending market, or at a support or resistance level you marked before

Entry

• Either: a buy stop just above the mother bar (sell stop just below it)
• Or: a stop order just beyond the inside bar itself, or wait for a candle to close beyond the level

Stop

• The other side of the mother bar, or of the inside bar if you entered on it

Target

• The size of the mother bar, the next support or resistance, or 2R and up

Fibonacci pullback

Setup

• A trending market: draw from the swing low to the swing high in an uptrend (high to low in a downtrend)
• Watch 38.2% to 61.8%, with 50% in the middle and 61.8% the golden retracement; many traders call 50% to 61.8% the golden zone

Entry

• Enter when a confirmation appears in the zone, such as a rejection candle, ideally where the level meets old support or resistance

Stop

• Beyond the next Fibonacci level, or beyond the start of the swing

Target

• The prior high or low, or an extension such as 161.8%

Range trading

Setup

• A range: price has turned up from support at least twice and down from resistance at least twice
• No trend: flat averages that price keeps crossing
• The range is wide enough for at least 2R after spread and costs

Entry

• Buy near support or sell near resistance, by hand or with a limit order

Stop

• Just beyond the edge of the range, with room for price to overshoot it

Target

• The other side of the range, or just short of it

Opening range breakout

Setup

• Fix the range length before the open: the first 5, 15, 30 or 60 minutes
• Fix which session open you use (for futures, the regular session, not overnight)
• Mark the high and low of that range

Entry

• Either: a candle closes beyond the range high (long) or low (short), and you enter at the next open
• Or: stop orders a set distance above the high and below the low; the first to fill is the trade

Stop

• The other side of the range, or the extreme of the first candle

Target

• A multiple of the risk, or close at the end of the session

Supply and demand zones

Setup

• Find a strong move away: large candles or a gap, not a slow drift
• Mark the base before it, from its high to its low, using wicks or bodies the same way every time
• Drop-base-rally and rally-base-rally make demand; rally-base-drop and drop-base-drop make supply
• Prefer zones price has not come back to yet

Entry

• Either: a limit order at the near edge of the zone
• Or: wait for a rejection candle inside the zone

Stop

• Just beyond the far edge of the zone

Target

• The next opposite zone, as long as it leaves enough room

Turtle soup

Setup

• Price makes a new 20-day low (mirror it for highs)
• The previous 20-day low was made at least 4 sessions earlier

Entry

• A buy stop a little above the old 20-day low, so you are filled only if price comes back above it

Stop

• Just under the new low

Target

• The sources leave targets open: set your own, such as the middle of the range or a fixed R

Turtle channel breakout

Setup

• Work out N, the 20-day average true range, for each market
• Size one unit so that 1 N equals 1% of the account

Entry

• System 1: enter one unit when price trades one tick beyond the 20-day high (long) or low (short), and skip it if the last 20-day breakout would have been a winner
• If you skipped a System 1 signal, take the 55-day breakout instead so you do not miss a big move
• Or System 2: enter one unit on every 55-day breakout, with no filter

Stop

• 2 N from the entry, so no trade risks more than 2% of the account

Target

• None: the system exits on its exit signal, not at a target

RSI(2) pullback

Setup

• For longs, the close is above the 200-day simple moving average (below it for shorts)

Entry

• Buy when the 2-period RSI is at or below 5 (or 10); sell short at or above 95 (or 90) below the 200-day
• Enter just before the close, as Connors did, or at the next open

Stop

• The original rule uses no stop. Plan your own before you trade it, such as a fixed stop or a time exit

Target

• Exit on a close above the 5-day simple moving average (below it for a short)

Bollinger Band squeeze

Setup

• Bollinger Bands at 20 periods and 2 standard deviations
• A squeeze: BandWidth near the low of its six-month range (some use the lowest quarter of it)

Entry

• Upside: a break above the upper band, confirmed on the chart (a break of resistance); downside: below the lower band, confirmed by a break of support
• Or Bollinger's stricter version: a close inside the bands, then a close outside, then price beyond that close on the third day

Stop

• The sources give no stop. Set your own, such as beyond the other band or the other side of the squeeze

Target

• The sources give no target. Set your own; closes outside the bands are first read as continuation

Order blocks and fair value gaps

Setup

• Set a direction from the higher timeframe
• Wait for a sharp move (displacement) that breaks structure
• Mark the fair value gap the move left, and the order block: the last opposite candle before it

Entry

• Wait for price to come back into the gap or the order block, in the direction of the break
• Say where in it you enter: the near edge, the middle of the gap, or after a lower timeframe confirmation

Stop

• Just beyond the order block

Target

• The next liquidity: a prior high or low the move was heading for

ICT Silver Bullet

Setup

• Before the window, mark the liquidity on both sides: the nearest old highs and lows price has not taken
• Trade only inside one of the windows (New York time): 03:00 to 04:00, 10:00 to 11:00 or 14:00 to 15:00

Entry

• Inside the window, wait for a sweep of one side or a market structure shift
• Enter on a fair value gap that forms inside the window, in the direction of the move away from the sweep

Stop

• Beyond the swing that made the sweep

Target

• The opposing liquidity you marked before the window

ICT 2022 model

Setup

• Name the higher timeframe draw: the liquidity or gap price is likely to reach next
• Trade only inside a killzone (London 02:00 to 05:00 or New York 07:00 to 10:00, New York time)
• Wait for a sweep of a known liquidity pool against the draw

Entry

• A sharp move (displacement) breaks structure the other way and leaves a fair value gap
• Enter on the return into that gap (or the order block behind it)

Stop

• Beyond the swing that made the sweep

Target

• The opposing liquidity: the draw you named on the higher timeframe

Power of three and the Judas swing

Setup

• Mark the midnight open (00:00 New York time) and the range from 00:00 to 02:00
• Have a written bias for the day from the higher timeframe

Entry

• For a bullish day: price trades below the midnight open and the 00:00 to 02:00 low (the Judas swing)
• Enter once an M15 candle closes back above the midnight open before 05:00 New York time (mirror it for a bearish day)

Stop

• Beyond the low (or high) of the Judas swing

Target

• The liquidity on the other side, such as the previous day high, in the direction of your bias

Optimal trade entry (OTE)

Setup

• Pick the leg from a swing that swept liquidity or broke structure, not a minor wiggle
• Draw the retracement over it and mark 50% (equilibrium), 62%, 70.5% and 79%

Entry

• In an up leg, enter on a pullback into the 62% to 79% band, in discount (mirror it in a down leg)

Stop

• Beyond the start of the leg (the swing low for a long)

Target

• The end of the leg, or the liquidity beyond it

Breaker block retest

Setup

• Price makes a lower low that sweeps the sell-side liquidity under an old low (mirror it for bearish)
• Then a candle closes above the prior swing high
• Mark the breaker: the last up-close candles before that lower low

Entry

• Enter when price comes back to the breaker, in the direction of the break

Stop

• Below the breaker, or below the swept low

Target

• The next liquidity above, such as old highs