ICT Mentorship Core Content - Month 1 - Elements Of A Trade Setup

All price delivery can be categorized into exactly four states—expansion, retracement, reversal, and consolidation (2:05). These conditions interchange throughout market movement, and identifying which condition is currently active is the first step to building any trade setup. Understanding this framework eliminates confusion about what to do next in any market scenario.

Expansion occurs when price moves quickly away from equilibrium, revealing the market makers' intended repricing direction (7:15). The corresponding ICT tool is the order block—specifically the last opposing candle before the impulse move near equilibrium. Traders wait for price to retrace back into this order block rather than chasing the move, as demonstrated with a 100+ pip example (9:30).

Retracement happens when price moves back inside a recently created price range to reprice levels not efficiently traded for fair value (10:45). When price moves too quickly, it creates liquidity voids—pockets where price wasn't delivered at every available level. Traders either get long to fill the void or wait for the void to be filled before expecting continuation in the original direction (12:20).

Reversals occur when price moves opposite to its current direction after market makers have run a level of stops (13:30). The ICT tool paired with this is liquidity pools—stops resting just above old highs and just below old lows. Multiple examples on USD/CHF show price repeatedly running above or below these levels before rejecting and moving the opposite way (14:15).