ICT Mentorship - Core Content - Month 02 - Framing Low Risk Trade Setups

The entire framework rests on understanding that large institutions and banks analyze markets on daily, weekly, and monthly time frames (0:30). Identifying price levels where institutional buying or selling has previously occurred (bullish/bearish order blocks) provides the directional bias and high-probability premise for trade setups. Without this higher time frame understanding, traders are limited in their exposure to high-probability opportunities.

Higher time frames have more influence on price and should be used to determine whether to buy or sell (1:15). They form slowly, giving traders ample time to plan, which is especially beneficial for those who cannot day trade. The daily chart's bullish order block at 0.7512 serves as the anchor level for the entire trade demonstration.

A bullish order block is defined as a down candle at a key support level where banks have previously bought (2:55). The concept is demonstrated at the 0.7512 level on the AUD/USD daily chart, where price trading back into this level creates an expectation of institutional buying. The order block's open/high and midpoint become precise entry zones.

Price deliberately trades below old lows to trigger sell stops, which smart money uses to pair buy orders against (3:30). This "turtle soup" long setup concept is critical - going below an old low alone is not enough to expect a reversal; it must occur at a higher time frame institutional level to be valid.