ICT Core Content 2017 Month 5 Session 17 | Limit Order Entry Techniques for Long-Term Traders
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📺 Original video: https://youtu.be/WDattjFvNBc?si=9a22Smfkdb6N6nGw
ICT Monthly Mentorship January 2017 Long-Term Analysis Session 17 (Lesson 7.2)
The theme is "Limit Order Entry Techniques For Long-Term Traders." This session explains entry techniques using limit orders, which pair with the stop orders (open prices of bearish/bullish candles) from session 16. The biggest difference this time is that the "closing price" is used as the benchmark.
Point 1 | Basic premise of limit order entries: Difference from stop orders
As before, the premise is the alignment of monthly/weekly PD arrays with the daily chart.
The previous stop orders were placed at the open price of a confirmed bearish (or bullish) candle.
These limit orders are placed at the closing price of the same confirmed candle.
Because of this difference, limit orders aim for execution at a deeper level.
Point 2 | Specific steps for buy limit orders: Place at the close of a bearish candle
The specific steps are shown.
Monthly and weekly charts must suggest PD arrays above the daily price. A confirmed bearish candle is required on the daily chart. The buy limit order is placed at the closing price of that bearish candle.
If the price trades below that closing price on the following day or later, the order is executed. ICT explains that this is equivalent to buying at a "deep, undervalued level" without using any indicators.
Point 3 | Why this method works: Buying at undervalued levels
The conditions under which this method is effective are also touched upon.
There is no need to accurately capture the exact top or bottom. If the market has already shown a break in market structure and has begun to rise, participating "in between" is sufficient for a long-term trade.
In other words, the idea is that you can aim for sufficient profit by joining a market where the direction has already been confirmed, without needing to aim for perfect timing.
Point 4 | Steps for sell limit orders: Place at the close of a bullish candle (mirror image)
The bearish version follows the exact same logic in reverse.
The monthly and weekly charts must suggest a PD array below the daily price. The daily chart requires a confirmed bullish candle. Place the sell limit order at the close of that bullish candle.
This is a technique that targets moments where a temporary 'short-term overbought' condition occurs on the daily level while a long-term decline is expected. However, he emphasizes that it is not just any bullish candle that will do; it must be combined with daily-level PD arrays, such as bearish order blocks, filled voids, breakouts of old highs, or returns to old lows.
Point 5 | Relationship with the Judas Swing
The nature of the price action captured by this sell limit technique is also mentioned.
The session begins, price hits a high in London, and then sells off. This technique often captures the Judas Swing pattern, where that move marks the beginning of a significant long-term decline.
In other words, the sell limit order above the closing price is used specifically to target that 'final push'.
Point 6 | Practical Example: 5 Entry Points and Pips Results for the Japanese Yen
Following sessions 15 and 16, the verification continues with the same Japanese Yen/USDJPY example.
Aiming for a rebound from the weekly bullish order block (near 100) with the weekly bearish order block (near 118-119) as the target.
Between September and November 2016, an example is shown where buy limit orders at the close of bearish candles were executed a total of 5 times.
Profit margins from each entry:
Entry Timing | Price range to weekly PD array | September low: approx. 1,800 pips | Mid-November: approx. 980 pips | Next entry: approx. 785 pips | Next entry: approx. 600 pips | Next entry: approx. 500 pips | Final entry just before the weekly PD array: approx. 360 pips
As the price approaches the target weekly PD array, the profit margin per trade decreases. Even so, it is emphasized that in the smallest case, a profit margin of several hundred pips was secured, which is certainly not negligible.
Point 7 | Summary: The Conclusion That You Can Earn Pips Without Day Trading
Finally, ICT asks the viewers:
'Do you still think that intraday trading is necessary to earn pips?'
By showing that this much profit could be secured using only daily limit entries and focusing on the weekly/monthly PD arrays of a single currency pair, he concludes that there is a framework for achieving sufficient results while keeping risk low, even without day trading or scalping.
Reference Table for XAUUSD Traders
ICT Concept | Practical Points for XAUUSD | Limit orders at the close of bearish/bullish candles: Try the technique of placing limit orders at the close of a confirmed daily candle that aligns with higher timeframe PD arrays even in XAUUSD. | Distinguishing between stop orders and limit orders: Use them according to the situation—open price (stop, entry on strength) vs. close price (limit, entry at deep value). | Attitude of not aiming for the perfect top or bottom: If the XAUUSD trend is already confirmed, consider that there are sufficient profit opportunities even if you join mid-trend. | Relation to Judas Swing: Capture the temporary reversal after the XAUUSD session begins as an opportunity for a sell limit. | Phenomenon where profit margin shrinks as it approaches the target: Incorporate the fact that even in XAUUSD, the profit margin for new entries decreases as it approaches weekly/monthly PD arrays.
Summary
This 17th session explained entry techniques using limit orders (closing prices), which serve as the counterpart to the stop orders (opening prices) covered in session 16. By placing limit orders at the closing price of a confirmed bearish (or bullish) candle, one aims to enter at a deeper, more undervalued level. In the Japanese Yen example, five entries were executed between September and November, and it was specifically demonstrated how the price range to the target weekly PD array gradually narrowed from 1,800 pips down to 360 pips as the price approached the target. The concluding message of this session was that one can secure a sufficient price range using only a single currency pair and a single higher-timeframe PD array, without needing to rely on day trading or scalping.
Next time is session 18, where we will continue to follow the content of the long-term analysis series.