the

The introduction to
naked price action
inspired by
ICT concepts
 THE ALGORITHM
‘An algorithm is responsible for moving price in the markets.' ICT
We are taught that price is moved by buying and selling pressure, and that the direction of the
market is determined by which side has the larger inflows of cash. This is false. The truth is, they
are not going to let the entire financial system be at the mercy of random buying and selling. Using
computer programming to automate the markets with an algorithm is much more efficient and
reliable.
Michael (ICT - The engineer of the algorithm) calls this algorithm IPDA (The Interbank Price
Delivery Algorithm)
The objective of the IPDA

 induce traders to take position

 Create panic and fear to get Traders to think irrationally
 Hit the stop Losses and clear the orders.
 force traders into margin trouble and pocket the money
 manipulate price in order to generate liquidity into the market place and to offer fair value.

This allows smart money (large institutions e.g banks), who understand how these algorithms work
to capitalize on the movement of price.
There are two main targets that IPDA seek:
1. Liquidity above/below old highs and old lows
2. Areas of inefficiency price action
Understanding WHEN and to WHERE IPDA will manipulate price, can give unmatched levels of
precision and edge in the market.
What is Liquidity?
Liquidity is what makes the market move, not of supply and demand. Rather, liquidity because this
is a market that moves based on price manipulations and to be there Price manipulation in order to
obtain liquidity. After we understand why liquidity is important, let's move to the most important
stage, which is how do we know where the liquidity is in the chart? Well first you have to know
something. We don't know where the Liquidity is because we don't have the data that the Center
Bank has. We can only expect where liquidity can be found, and there are potential places where
liquidity is very large, and probabilistic places where liquidity is weak. You have to know that every
top and bottom in a market is liquidity. But to know whether this is important liquidity or not, we
must understand that HIGHER TIME FRAME LIQUIDITY is not the same as LOWER TIME FRAME
LIQUIDITY because the larger the time frame, the greater the liquidity, and therefore the liquidity is
more, and the more we go down to smaller time frames, the more liquidity will be Weak. Therefore,
we will divide liquidity and its importance into three types:

 MAJOR LIQUIDITY
 MEDIUM LIQUIDITY
 MINOR LIQUIDITY
1. MAJOR LIQUIDITY
PREVIOUS MONTHLY HIGHS AND LOWS
PREVIOUS YEARLY HIGHS AND LOWS
PREVIOUS WEEKLY HIGHS AND LOWS
PREVIOUS DAILY HIGHS AND LOWS
SWING STRUCTURE HIGHS AND LOWS(HTF)
Example:

Where Is Liquidity Here?

All this highs and Lows Is Liquidity Actually
but where the liquidity which looks more important?
After it takes a liquidity price, it REVERSES. Well, it is not that simple. I know that you are
wondering how we will know if the price will be reversed or not? Forget this question because you
will understand it after you finish reading this book. Now I just want you to pay attention with me
and understand that after the price takes important liquidity (important liquidity means that there
is a lot of money there is enough for the price to make a big movement because we are in the
monthly chart) it will reverse and WE call THAT (TRAP)
MAJOR SWEEP OF LIQUIDITY= MAJOR MOVE
PWH=PREVIOUS WEEKLY HIGH
PMH =PREVIOUS MONTHLY HIGH
PDH=PREVIOUS DAILY HIGH
PML=PREVIOUS MONTHLY LOW
PWL=PREVIOUS WEEKLY LOW
PDL=PREVIOUS DAILY LOW
PYH=PREVIOUS YEARLY HIGH
PYL=PREVIOUS YEARLY LOW
A Trap!!!

Let’s see what most retail traders do in the market influenced by the algorithm when generating
liquidity.

Retails Trader: Beautiful Breakout Let's take A sell

The Algorithm trader: IPDA manipulation and collection of $$$, beautiful Fake Breakout(TRAP)
let's take a buy after Grab the Retail Traders Stop
Losses
Now you see how the market delivered after grabbing and inducing sellers??!
I’m pretty sure you don’t want to be in that position.
This is how IPDA generate liquidity and you should be fully aware when such things happen in
order to provide yourself with the edge in the market

MINNOR LIQUIDITY
You can find minor liquidity it on the Minutes time frame (30min..15min..1min Also)
We use This Liquidity ON THE INTRADAY …SCALPING ALSO AND CONFIRMATION ENTRY
So the difference between liquidity is a difference in movement if you want 20 pips per day ... Minor
is enough ... if you want A LOT OF PIPS you need TO FOCUS ON MEDIUM AND MAJOR liquidity
AFTER PRICE GRAB LIQUIDITY THE MARKET MOVES SO THE ALGO SET THE ORDER
AND PRICE REVERSE
HTF LIQUIDITY>LTF LIQUIDITY
MONTHLY LIQUIDITY >WEEKLY LIQUIDITY>
DAILY LIQUIDITY>HOURLY LIQUIDITY> MINUTES LIQUIDITY
INDUCEMENT
Inducement is just a liquidity close to ORDER BLOCK.
It occurs at the specific point or zone in the market where traders believe it is the correct time to
enter a trade based on their analysis and trading systems, which is used by central banks and large
financial institutions to fall retail traders into their traps.

Where can we find inducement?

1. Order Blocks
2. Support and Resistance
3. Swing highs and swing lows
4. Trend lines
1. Order block
Optimized supply and demand zones that when the price reaches to them it may potentially change
its direction to the opposite. This place can sometimes be a place where smart money places their
orders it most of the times it is respected by the price delivery.
2. Support and resistance
Price change its direction every time price comes back at them
3. Swing highs and low
These are the highest and lowest points that price has recently hit
4. Trent lines
Pivot highs and lows in the market

AMD
DAILY CYCLE
POWER OF 3
ACCUMULATION MANIPULATION DISTRIBUTION(AMD)
‘Everything starts with consolidation generation of liquidity ' ICT

IPDA holds price in a range. This allows liquidity to build up above the consolidation range in the
form of buy stops, and below the consolidation range in the form of sell stops. This is known as
the accumulation phase.

IPDA will then reprice below the consolidation range, triggering the sell stops into active market
orders. This is known as the manipulation phase (often referred to as the Judas swing). Look at the
picture below.
Smart money will pair liquidity from the willing sellers (sell stops) with long positions, and offload
these positions to willing buyers above the consolidation range (buy stops). This is known as the
distribution phase.
This whole process is a part of IPDAs market efficiency paradigm logic, whereby smart money will
sell to the buyers and buy back from the sellers (and vice versa). This is obviously oversimplified
and there are ways to determine when and where this process is likely to happen, but that is
beyond the scope of this e-Book. The speed of the manipulation leg also causes FOMO for sellers,
who are chasing the market, thus entering short in the expansion leg lower. This is also another
example of how IPDA will engineer
liquidity by the manipulation of price. The same concept can be seen with other retail patterns such
as trend lines, support and resistance, head and shoulder patterns, bull and bear flags etc.
Each of these patterns are designed to draw retail money into the marketplace. When trading, one
should consider 'Where are the retail stops?' when undertaking their trade analysis.

DAILY CYCLE
So what actually happens in A typical Day
There are 3 most important sessions of trading in a day:
ASIA> LONDON>NEW YORK
 Accumulation
the initial high and the Low of the day are set
 Manipulation
Trap False move out of the Asia Range against the Real intended move
 Distribution
Trend move real move Form THE (HIGH OF THE DAY)
End of the day Reversal (close of the day)
The Power of Three can be found in all time frames with the patterns repeating

ASIA
Range to build up liquidity (ACCUMULATION)
LONDON
Price grab Frankfurt low +PDL (so Maybe this Low is the low of the Day)
NEW YORK
Trap On the New York open price CREATE a trap A fake momentum shift (Bos) you will understand
the
fake Break of Structure (Bos) (I explain the fake Bos on the Algorithm structure part) so that supply
zone is just a trap A Lot of smart money kids lose money on that trap
 Daily
high

The above picture is the same chart as the previous but now on 15 min time frame.
D.O.P(DAILY Opening Price)
BELOW THE D.O the discount and
ABOVE THE D.O.P the premium
Build up>INDUCE>Trap >SHIFT
Low of the day form on London session
New York Complete what London wanted to do
You can see A New York Trap then continuation to CREATE the high of the Day
 Minor Asia $$$
Frankfort high

Asian low
Frankfort
low Manipulation on NY / Low
London low
and high of day formed

You see: ASIA LOW SWEEP

FRANKFURT ALWAYS CREATE A FAKE
MOVES SO THAT FFH IS JUST LIQUIDITY
AND PRICE GRAB THE FFL LIQUIDITY AND THE ASIA Low On THE LONDON OPEN
Money ENTER to The Market in London/New York High volatility Times …and 90%Of The Times
London and New York forms The High and Low of the day …
The High and Low of Asia is A MEDIUM LIQUIDITY and The middle of Asia is A minor liquidity
After it takes Asia Low and London low price goes in the opposite direction to take Asia High

What to do??
Once You identified where you are from Cycle
Then You Can drop down to lower time to find a trade Setup
15,5,1MIN TIME FRAME VERY CLEAR
BUILD UP LIQUIDITY >GRAB LIQUIDITY
NOTES: I want to see the sweep of Asia high or Asia Low aggressive to grab all the Liquidity

NOTE: Cycle
Build Up>grab>reverses
Follow the liquidity follow the Algorithm

90MIN CYCLE
We start accounting from (00:00) Mid night New York time. Every 90min min There is a possibility
that the price will make a big move...so every 90 min we will define the opening price to KNOW
WHERE IS THE FAKE MOVE
HTF LIQUIDITY CYCLE
We have to know that every 3 to 5 days the price changes direction, why? because INTERNAL
BANK PRICE DELIVERY ALGORITHM is always looking for data for the last 3 or 5 days or the last 3
or 5 weeks. or months or years and from here they understand that ALGO is divided into types
Long term Algorithm and short term algorithm
Internal Bank: is the one who stores the data for all the places that have liquidity.

HTF CYCLE
You have to know that there are two types of algorithm in the algorithm market in the short term
and algorithm in the long term. In the long term for algorithm after it takes important liquidity and
SETS the orders its targets are either short or long this depends on the amount of liquidity that it
took.

The high of the last 40 days IPDA Target

The high of the last 20 days

After price grab a major Liquidity And Break PDH (MOMENTUM SHIFT) +mss :bullish momentum
shift
We go to the start of the month (April)
And we see The Last 20/40/60/90Days
And we define The highest high on the last 20 days and the highest high on the last 40d…This is the
Algorithm Target.
After 20 Days from The Trap There is a great possibility that the price will reverse ... not
necessarily after 20 days, but most of the time after 20 days, maybe a little less, maybe a little more,
BUT the average is 20 days, see the picture above
 20 days

ssl

bsl

Always for Confirmation here on letter A with lime color, we have a bullish momentum shift
You see that the Reversal has not happened after 20 days because it is not necessary (the price
moves after taking important liquidity) CONFLUENCE HERE Bullish MOMENTUM SHIFT
Now on letter B The Trap and The target Hits on the same month. This will make the price build
liquidity ... in this case go to the HTF see where the liquidity price is built and where that in
Now on the weekly time frame we can see the 2022 high (shown by turquoise color) the price
moved to sweep the liquidity
At letter C the price engineered liquidity and them break the structure with momentum (mss)
A change in direction and money transfer. The BSL become target after it took all the SSL CHANGE
FROM THE SELL SIDE PRICE DELIVERY TO THE BUY SIDE PRICE DELIVERY on lime color A.
Also check at the begging of that chat (money transfer) Price delivery change from Bearish to
Bullish
(From SSL to BSL)

ALGO MARKET STRUCTURE

It is the map that will help to understand and predict the next movement and it will make you
understand where you are, are you in correction or continuation SO THE HTF MARKET
STRUCTURE is the most important.