Mastering ICT Turtle Soup Trading

Summary

Sources

innercircletrader.net

In the world of trading, mastering the ICT Turtle Soup pattern could significantly enhance one's ability to capitalize on market movements. This pattern is a strategic trading approach that identifies potential trend reversals. It's particularly effective in ranging markets, where prices tend to oscillate between established highs and lows. The foundation of this pattern lies in the concept of "fakeouts," where the price briefly breaks out of a significant support or resistance level only to reverse back in the opposite direction. Traders typically mark the breakout of a support or resistance level as a continuation of the trend. However, the ICT approach differs by marking it as a run on the stops of traders who went long on the support level and short on the resistance level. The price moves primarily for two main reasons: to balance an imbalance and to hunt liquidity. After hunting the liquidity of one side, the price moves to hunt the liquidity of the opposite side, a maneuver termed the Turtle Soup pattern. To effectively trade using the ICT Turtle Soup pattern, it is essential to check several key factors. Firstly, the higher timeframe order flow and the draw on liquidity level must be identified. Then, on a lower timeframe, the recent internal range liquidity in the opposite direction of the higher timeframe order flow is marked. When the price raids the internal range liquidity and returns back to the range, a trader can execute trades in the direction of the higher timeframe order flow, capitalizing on the reversal. The term "Turtle Soup" is used to describe this ICT strategy because it targets and benefits from false breakouts, a contrast to the original "Turtles" trading group's focus on genuine breakouts. The term "soup" humorously implies that this method involves creatively profiting from scenarios where the Turtles' breakout strategy doesn't work as expected. Just as making soup from turtles involves transforming them into a valuable dish, the Turtle Soup trading pattern aims to convert unsuccessful breakout attempts into profitable trades. This pattern is not only applicable to intraday trading but also to scalping and swing trading. For optimal results, it is recommended to use this pattern in conjunction with other ICT concepts like ICT PD Arrays. While no trading strategy guarantees 100% success, the Turtle Soup pattern, with a good understanding, can achieve almost eighty percent success rate. However, it is crucial to remember that no strategy is foolproof in forex trading. Therefore, traders should not risk all their capital on this strategy alone and should always trade with a stop loss in place to protect their equity.