Trade Conditions and Setup Progressions
Also: HTF Setup Progression, Discount-to-Premium Trade Framework, Position Trade Setup Progression
Visual Context Required
This concept requires chart visuals for full understanding.
Trade conditions and setup progressions describe how institutional price movement unfolds from a discount (buy zone) to a premium (target zone), or from a premium (sell zone) to a discount (cover zone), across the monthly, weekly, and daily timeframe hierarchy. The framework works as follows: BULLISH SETUP PROGRESSION (discount to premium): 1. Define range on monthly chart (old high = premium, old low = discount); mark equilibrium. 2. Identify monthly discount PD arrays for entry (in hierarchy order: mitigation block, bullish breaker, liquidity void, fair value gap, bullish order block, rejection block, old low/historic high). 3. Target monthly premium PD arrays as exit objectives (mitigation block, bearish breaker, fair value gap, bearish order block, rejection block, old high/historic low). 4. Zoom to weekly chart; identify which weekly PD arrays confirm the monthly discount entry zone and which weekly premium arrays are upside targets. 5. Zoom to daily chart for precise entry; use daily bullish order blocks (down candles in uptrend) as re-entry points. 6. If a daily PD array fails to hold, fall back to the weekly PD array; if weekly fails, fall back to monthly PD array. BEARISH SETUP PROGRESSION (premium to discount): Reverse of the above: enter at monthly premium PD array, target monthly discount PD arrays. Use weekly and daily arrays to refine entry and targets. In both cases, price always first attempts to rebalance back to equilibrium before reaching the full premium or discount objective. Equilibrium is the minimum target in any directional trade.
Identification8
- Determine monthly trading range: mark most recent swing high (premium) and swing low (discount)
- Identify equilibrium as midpoint of monthly range
- Classify current market price as premium, discount, or equilibrium
- At discount: scan for bullish PD arrays using hierarchy (mitigation block first)
- At premium: scan for bearish PD arrays using hierarchy (mitigation block first)
- Carry monthly and weekly PD array levels onto the daily chart
- In uptrend on daily: every down candle = potential bullish order block re-entry
- In downtrend on daily: every up candle = potential bearish order block re-entry
Entry3
- Enter long at discount PD array (bullish order block, bullish breaker, fair value gap, or old low)
- Enter short at premium PD array (bearish order block, bearish breaker, fair value gap, or old high)
- In ongoing uptrend on daily: enter long on return to most recent down candle (bullish order block)
Stop2
- Stop below the discount PD array entry level (for longs); proportionate to timeframe
- Stop above the premium PD array entry level (for shorts); proportionate to timeframe
Target3
- Minimum target: equilibrium of the most recent trading range
- Full target: opposing premium or discount PD array on the monthly
- Intermediate targets: weekly PD arrays (breaker, fair value gap, order block, rejection block)
Invalidation3
- Daily PD array fails to support: step up to weekly PD array
- Weekly PD array fails to support: step up to monthly PD array
- Price closes strongly beyond the monthly premium/discount extreme without reaction: re-evaluate range
Inferred Conditions (Unvalidated)
- One-sided (impulsive) price moves reaching a distant PD array indicate absorption of closer arrays; the distant array is the true institutional reference
- During a long-term uptrend, banks scale into longs at every down candle; the footprint is visible as: down candle → subsequent up move → price returns to the down candle → rally resumes
- Monthly and weekly PD array levels should always be visible on the daily chart even for day traders — they frequently act as intraday turning points
- After an unexpected large move (e.g., election-driven), check the weekly chart immediately to identify which weekly PD array was reached — this explains the apparent irrationality on lower timeframes
ICT Quotes
"When markets are at a premium or a discount, they're always going to initially look to rebalance. That means the equilibrium price point between the last recent range. So even if it doesn't go all the way up to a premium or down to a deep discount, you can always reasonably expect it to go back to equilibrium."
"Every time you look in an uptrend, you want to focus on the down candles because that's where institutions are going to buy. Either they're buying at the time of the down candles creation, which is usually always the case. And then if it comes back to that same down candle at a later time, they will buy more at that time."
"If you lose a level, if you lose an order block, for instance... don't be concerned, just go out to a weekly chart, and you'll see what they're reaching for. If you can't find it on a weekly chart, which is probably unlikely, but if you can go out to a monthly chart, and you'll probably see much clearer where they're trying to push price."
"The algorithm is going to work predominantly on a daily timeframe. But if the levels are already worked enough, and already absorbed all of the potential liquidity because it's already been trading to them, it will go out to that larger open float. And that usually will dip you into the weekly ranges."
Timeframes
Version History1 version
53-ICT Mentorship Core Content - Month 5 - Trade Conditions and Setup Progressions.srt
"We're dealing with trade conditions and setup progression... we're gonna be focusing on a buying opportunity when a market went to a deep discount on a monthly, weekly and daily timeframe, and how we …"
Initial definition from January 2017 mentorship lesson 6.2
Notes
This lesson provides the practical worked example for the USD/JPY November 2016 long trade referenced in the money management lesson (file 51). The example traces the full progression: monthly bullish order block at 99.00 and rejection block from November 2016 price action → weekly bullish order blocks (two levels) → daily entry at bullish order blocks → upside targets including weekly fair value gap, weekly rejection blocks, weekly bearish order block at 118.61–118.66. ICT explicitly demonstrates the multi-timeframe PD array cascade for both entry and target identification.
Asymmetry Notes
The progression is structurally symmetrical for bullish and bearish scenarios. The only asymmetry is the specific arrays encountered — bullish arrays in discount, bearish arrays in premium — which are defined in their own concept files and organised under htf-pd-array-hierarchy.yaml.