Namely, in intraday trading speaking, ICT intraday profiles are a concept that was popularized, according to Michael J. Huddleston, alias ICT. It involves understanding specific market behavior usually under the framework of smart money concepts and applying that toward trading effectively within the day. The expression "profiles" here generally refers to the manner of price behavior during the day and how traders can interpret such behaviors for potential setups.
Key Concepts in ICT Intraday Profiles:
1: Market Structure:
In developing potential setups, it's essential to know the structure of a market-whether it's in an uptrend, a downtrend, or a range-bound environment.
That includes finding higher highs and lower lows for trend analysis and consolidation phases, among other variations.
2: Liquidity Pools:
Probably an essential backbone behind ICT is the idea of price movement to areas of concentrated liquidity-stop loss clusters and previous swing highs/lows.
These liquidity pools-or "liquidity voids"-are the points of interest where traders look for either price reversal or acceleration.
3: Time of the Day:
Intraday traders using ICT concepts are usually focused on particular times for trades; this would include the London Open, the New York Open, and other key sessions in the market.
These times tend to have higher volatility and liquidity that heighten the probabilities of price moving in predictable patterns.
4: Order Blocks:
This is an area of intense buying/selling activity from institutions. An order block is a zone of price in which a lot of orders are placed, and because of this, when the price comes into one of these zones, it reverses or continues.
These blocks may be identified by traders, who could then make better forecasts about where price may reverse or break.
5: FVGs stand for Fair Value Gaps:
A Fair Value Gap is a price gap created at an imbalance on which price moves rapidly one way leaving two price levels apart.
Often, price will come later and fill these imbalances, and traders can use this in predicting possible price moves back into the gap.
6: Internal vs. External Liquidity:
Internal liquidity would relate to the liquidity within a particular market session, whereas external would relate to broader global liquidity influences such as economic reports or geopolitical events.
The trader is seeking those moments when liquidity changes either from internal or external sources, which may provide significant price moves.
7: The ICT Trading Range:
In a given session, the trading range is established whereby thereafter trading would be conducted based on the way the market would behave relative to the established range.
One would expect that the price will tend to revert or break out of this range depending on the market structure.
8: Engulfing Patterns and Retracements:
These can give indications of possible entry points in the ICT trade. For instance, after a robust move, a retracement into an order block or liquidity zone could present a trading opportunity.
9: ICT Power of the Market Profile:
A Market Profile is a concept that reflects a view of the price distribution across time during a session.
It enables the traders to see where the price is most accepted and the areas of rejection, which is another important concept called "point of control," very key toward intraday decisions.
Practical Utilization of ICT Intraday Profiles
1: Entry and Exit:
Several traders enter into the trade by merely using order blocks, liquidity pools, and time-based analysis for price likely to react at an area.
For example, if the price comes towards the order block during the London Open, a trader might expect a reversal or continuation at that level.
2: Risk Management:
Since the intraday profile of ICTs can reveal where the price of a security is likely to reverse or continue, traders take advantage of this by placing their stop losses accordingly and setting their profit targets.
This is a good stop loss that can be set just beyond a high probability level, like just beyond a liquidity zone.
3: Time Frame Considerations:
An ICT trader would often combine higher timeframes to confirm signals.
In such a case, the trader could use an upper timeframe for the context of a daily or 4-hour chart and then zoom into the lower timeframes-15-minute, 1-minute charts for exact entries and exits.
Popular ICT trading tools for Intraday trade:
1: ICT Kill Zone:
A time window, price usually makes the most moves. Usually, it is in the timeframe near the London Open and the New York Open. That is the time when the traders try to capture high-probability trades.
2: ICT Liquidity Map:
Traders plot the potential liquidity zones to see where the price is likely to get attracted due to the aggregation of liquidity, mainly around major support and resistance levels.
3: Market Structure Shifts:
ICT followers are looking for changes in market structure as an indication of the initiation of a trend or reversal. It is generally in combination with other tools, such as fair value gaps, for confirmation of a trade setup.
Conclusion:
The ICT intraday profile represents a mix of market structure analysis, order flow, considerations of liquidity, and time factors that can help an intraday trader to foresee the movements of prices in a short-term context. By understanding how price reacts to institutional trading activity, liquidity zones, and fair value gaps, traders can build further strategies for entering but also exiting within the fast-paced world of intraday trading. It is a strategy that calls for attention, patience, and an eye for price action around key levels and times.
If you are going into concepts of ICT, it's often recommended to practice and backtest these ideas on historical data first, in order to have a better feel when it comes to live market conditions.