The ICT Student’s Guide To PD Arrays Based on the Teachings of the Inner Circle Trader By Ima Trader
The ICT Student’s Guide To PD Arrays: Based on the Teachings of the Inner Circle Trader Copyright © 2023 Phoenix Wealth Management, LLC All Rights Reserved All rights reserved. No part of this book may be reproduced or transmitted in any form or by any means, electronic, or mechanical, including photocopying, recording, or by an information storage and retrieval system, without permission in writing from the author and the Publisher. All translations of this work must be approved in writing by the author. Please contact Phoenix Wealth Management, LLC for permission to translate and/or distribution rights. Printed in the United States of America. First Edition v1.0 Limit of Liability/Disclaimer of Warranty: While the publisher and author have used their best efforts in preparing this book, they make no representations or warranties with respect to the accuracy or completeness of the concepts of this book and specifically disclaim any implied warranties of merchantability or fitness for a particular purpose. No warranty may be created or extended by sales representatives or written sales materials. The advice and strategies contained herein may not be suitable for your situation. You should consult with a professional where appropriate. Neither the publisher nor author shall be liable for any loss or profit or any other commercial or personal damages, including but not limited to special, incidental, consequential, or other damages.
Table of Contents 1 - Introduction Thank You Inner Circle Trader (ICT) How To Best Use This Book? Additional Learning 2 - Premium/Discount Array Matrix 3 - Old High 4 - Bearish Rejection Block (-RB) 5 - Bearish Order Block (-OB) 6 - Fair Value Gap (-FVG) 7 - Implied Fair Value Gap (-IFVG) 8 - Bearish Liquidity Void 9 - Bearish Breaker Block (-BB) 10 - Bearish Mitigation Block (-MB) 11 - Discount Arrays 12 - Old Low 13 - Bullish Rejection Block (+RB) 14 - Bullish Order Block (+OB) 15 - Fair Value Gap (+FVG) 16 - Implied Fair Value Gap (+IFVG) 17 - Bullish Liquidity Void 18 - Bullish Breaker Block (+BB) 19 - Bullish Mitigation Block (+MB) 20 - Bearish Propulsion Block (-PB) 21 - Bullish Propulsion Block (+PB) 22 - Bearish Vacuum Block (-VB) 23 - Bullish Vacuum Block (+VB) 24 - Bearish Reclaimed Order Block (-ROB) 25 - Bullish Reclaimed Order Block (+ROB) 26 - Inversion Fair Value Gaps 27 - Long Wicks 28 - Conclusion Additional Learning Opportunities Recommended Study Guides on Amazon Thank You Dedication Disclaimer Forex & Futures Risk Disclosure: Market Opinions: Government Required Risk Disclaimer and Disclosure Statement:
1 - Introduction I go by the name, Ima Trader, and I’m a Trader. See what I did there? Anyway, I am a Market Speculator and if you are starting to read this book then that probably means you are too. I have spent the last several years learning how to trade the markets effectively. I bounced from concept to concept without any success, until I came across the Inner Circle Trader’s concepts. After spending the time in my own charts and trying to disprove his concepts without any luck, I learned how the markets actually book price and how to trade them. My hope for you is that you will spend the time in your own charts and learn to trade successfully too. Thank You Inner Circle Trader (ICT) I want to take a quick minute and Thank the Inner Circle Trader, referenced throughout this book as “ICT”, Michael J. Huddleston. Through spending countless hours studying all of his Free teachings on his YouTube Channel @InnerCircleTrader and through his daily tweets on Twitter @I_AM_The_ICT, I have learned his Smart Money Concepts and became a profitable Market Speculator. *** I am NOT the originator or creator of these concepts and do NOT in any way take credit for that. These concepts were made public by the Inner Circle Trader, Michael J. Huddleston, and this book is meant to be used as a study guide to assist you in learning his concepts. *** How To Best Use This Book? As you may know, there is a steep learning curve with ICT’s teachings and my hope for you reading this book, is that you can use this book as a study guide while going through his YouTube Channel content. That is how I studied and learned his concepts and why I made this short study guide. I know it will be of great value to you as you learn his concepts. I was going to write a bunch of information on each of the PD arrays, but the reality is, I wanted this book to be used as a quick reference guide to help supplement the teachings of ICT on his YouTube channel. This book will give you a basic understanding of ICT’s Premium/Discount Arrays (PD Arrays) used in his teachings. These are the fundamental building blocks to his overall strategies and used daily while trading Smart Money Concepts. Memorize their patterns, their conditions and commit them to your memory so they become second nature. Then, go into your own charts and mark them up to see for yourself how they are respected and see if they work or not. Additional Learning You can find more examples of all the PD Arrays and live chart markups using other ICT Concepts on my YouTube channel at www.youtube.com/@ImaTrader4Life. I also post a lot of daily, weekly and quarterly recap videos there as well. To further your studies, be sure to checkout our other ICT Study Guides at the back of the book. In the next chapter let’s talk about the Premium/Discount Array Matrix or PD Array Matrix. 1
2 - Premium/Discount Array Matrix For Smart Money to accumulate positions they have to short in a premium and buy in a discount. But why? Well for them to efficiently accumulate their positions they must do literally the opposite of what a retail minded trader would do. When the market is in a premium, it means that the market has been trading higher, so retail looks at that as a bullish market environment, so they buy. This provides smart money with the opportunity to get short and use the retail buyers as the required liquidity to fulfill their sell orders. When the market is in a discount, it means that the market has been trading lower, so retail looks at that as a bearish market environment, so they short. This provides smart money with the opportunity to get long and use the retail sellers as the required liquidity to fulfill their buy orders. The PD Array Matrix is a concept mentioned in ICT's teachings, which refers to the hierarchy of certain price levels, ranging from the highest form of a Premium Array to the lowest form before reaching equilibrium. These levels help traders identify key price levels and form a directional bias in their trading strategies. A Premium PD Array is a level where price is expected to face resistance, while a Discount PD Array is a level where price is expected to find support. Price trades from and to these different PD Arrays in a certain order. What I mean by that is if there is a Breaker Block and an Order Block right above the Breaker Block, price should most likely react from the Breaker Block and ignore the Order Block. The vast majority of the time, this will play out that way, but of course, sometimes it 2
will go past the Breaker Block and tap into the Order Block then retrace. If there isn't an obvious Mitigation Block or Breaker Block, then price would most likely trade into the next PD Array according to the hierarchy. For more information, the PD Array Matrix and all the PD Arrays are discussed in detail in Month (5) five of ICT's Core Content on his YouTube channel. Additionally, You can find more examples of all the PD Arrays and live chart markups using other ICT Concepts on my YouTube channel at @ImaTrader4Life. Ok, so now let’s start with the Premium Arrays going from the top down, starting with an Old High. 3
3 - Old High An Old High refers to a previous high point in the price that can act as areas of resistance or potential targets for liquidity runs, as buy stops may be resting above these levels. When the market reaches an Old High, it may encounter resistance in the form of Old Lows and Old Highs, making it difficult for the price to continue rising. However, not every Old High should be considered a selling point, as the market may trade through it and continue to rise. 4
4 - Bearish Rejection Block (-RB) A Bearish Rejection Block occurs in major to intermediate term downtrends when a price high has formed with long wicks on the high or highs of the candlestick(s). Price reaches up above the body of the candle or candles to run the buyside liquidity out before the price declines. This pattern shows underlying distribution and can be used to identify potential resistance levels. 5
5 - Bearish Order Block (-OB) A Bearish Order Block is a concept in trading where a series of up candles or price bars occur right before a significant downward move in the market. It is considered a potential area of resistance and can be used as a selling opportunity. To identify a Bearish Order Block, look for the last consecutive up candles before a down move, as these candles represent the potential Bearish Order Block. 6
6 - Fair Value Gap (-FVG) A Fair Value Gap (FVG) is a concept in trading that refers to a range in price delivery where one side of the market liquidity is offered and typically confirmed with a liquidity void on lower time frame charts in the same range of price. It can occur when price gaps create a vacuum of trading, resulting in an actual price gap. In the context of Inner Circle Trader's teachings, FVGs are used to identify areas where price is expected to eventually trade back up into the gapped area, filling in the gap and finding fair value. 7
7 - Implied Fair Value Gap (-IFVG) An Implied Fair Value Gap acts like and is used the same way as a regular Fair Value Gap. The difference is that instead of the gap being from the low of the first candle and the high of the third candle, it’s taken from the Consequent Encroachment (CE) of the long wicks instead. 8
8 - Bearish Liquidity Void A Bearish Liquidity Void refers to a situation where there is a lack of buyside liquidity in the market, causing the price to move aggressively lower. In such cases, the market is expected to eventually move back up with a high probability, filling the Liquidity Void and trading over the same price levels that were previously void of buyside liquidity. This means that the price is likely to revisit the range where the void occurred, balancing out the price action with bullish price movement. 9
9 - Bearish Breaker Block (-BB) A Bearish Breaker Block is a bearish range or down-close candle in the most recent swing low prior to an Old High being violated. It occurs when the market trades higher, takes out an Old High, and then breaks below the low that made the new high. The buyers who bought this low and later see the same swing low violated will look to mitigate the loss. When the price returns back to the swing low, it is considered a bearish trade setup worth considering. 10
10 - Bearish Mitigation Block (-MB) A Bearish Mitigation Block is a bearish range or Down Close Candle in the most recent Swing Low that fails to take out a Swing High. The Buyers that buy this Low and later see this same Swing Low violated, will look to mitigate the loss. When Price returns back to the Swing Low, this is a Bearish Trade Setup worth considering. 11
That concludes the Premium PD Arrays in the PD Array Matrix. You can find more examples of all the PD Arrays and live chart markups using other ICT Concepts on my YouTube channel at www.youtube.com/@ImaTrader4Life. I also post a lot of daily, weekly and quarterly recap videos there as well. 12
11 - Discount Arrays Ok, so now let’s start with the Discount Arrays going from the bottom up, starting with an Old Low. 13
12 - Old Low An Old Low refers to a previous low point in the price that can act as areas of support or potential targets for liquidity runs, as sell stops may be resting below these levels. When the market reaches an Old Low, it may encounter resistance in the form of Old Lows and Old Highs, making it difficult for the price to continue lowering. However, not every Old Low should be considered a buying point, as the market may trade through it and continue to lower. 14
13 - Bullish Rejection Block (+RB) A Bullish Rejection Block occurs in major to intermediate term uptrends and is formed when a price low has a long wick or multiple wicks. The low or lows of the candlestick(s) reach down below the body of the candle to run the sellside liquidity out before the price rallies higher. To frame the Bullish Rejection Block, identify the lowest wick low and the lowest open or the lowest close that makes the swing low on the timeframe you're looking for the pattern. When price trades back down into the high of the block, you can be a buyer just below it or wait for the price to trade through it and then be a buyer on a stop just above that particular level. 15
14 - Bullish Order Block (+OB) A Bullish Order Block is the lowest candle or price bar with a down close that has the most range between open to close and is near a support level. It is validated when the high of the lowest down candle or price bar is traded through by a later formed candle or price bar. When price trades higher away from the Bullish Order Block and then returns to the Bullish Order Block candle or price bar high, this is considered bullish and can be used for a bullish entry. 16
15 - Fair Value Gap (+FVG) A Fair Value Gap (FVG) is a concept in trading that refers to a range in price delivery where one side of the market liquidity is offered and typically confirmed with a liquidity void on lower time frame charts in the same range of price. It can occur when price gaps create a vacuum of trading, resulting in an actual price gap. In the context of Inner Circle Trader's teachings, FVGs are used to identify areas where price is expected to eventually trade back up into the gapped area, filling in the gap and finding fair value. 17
16 - Implied Fair Value Gap (+IFVG) An Implied Fair Value Gap acts like and is used the same way as a regular Fair Value Gap. The difference is that instead of the gap being from the low of the first candle and the high of the third candle, it’s taken from the Consequent Encroachment (CE) of the long wicks instead. 18
17 - Bullish Liquidity Void A Bullish Liquidity Void refers to a situation where there is a lack of sellside liquidity in the market, causing the price to move aggressively higher. In such cases, the market is expected to eventually move back down with a high probability, filling the Liquidity Void and trading over the same price levels that were previously void of sellside liquidity. This means that the price is likely to revisit the range where the void occurred, balancing out the price action with bearish price movement. 19
18 - Bullish Breaker Block (+BB) A Bullish Breaker Block is a bullish range or Up Close Candle in the most recent swing high prior to an Old Low being violated. It occurs when the market trades lower, takes out an Old Low, and then breaks above the high that made the new low. The buyers who bought this high and later see the same swing high violated will look to mitigate the loss. When the price returns back to the swing high, it is considered a bullish trade setup worth considering. 20
19 - Bullish Mitigation Block (+MB) A Bullish Mitigation Block is a bullish range or Up Close Candle in the most recent Swing High that fails to take out a Swing Low. The Sellers that sell this High and later see this same Swing High violated, will look to mitigate the loss. When Price returns back to the Swing High, this is a Bullish Trade Setup worth considering. 21
That concludes the standard PD Arrays. However, there are some PD Arrays that aren’t in the PD Array Matrix. They work the same way though and you need to be aware of them. I’m going to show you those next and unlike the PD Array Matrix, I’m going to show them to you as a pair, the Bearish version and then Bullish version. 22
20 - Bearish Propulsion Block (-PB) A Bearish Propulsion Block occurs when a previously up candle (Bearish Order Block) is followed by a new up closed candle that trades back into it. This new up closed candle becomes a propulsion candle, indicating a potential bearish move. The market will show a sudden and violent movement away from that up candle, propelling the price lower. The mean threshold of the propulsion candle should not be violated, and if it does, it might signal that the trade is not favorable, and you should consider exiting or looking for a reversal to go long. 23
21 - Bullish Propulsion Block (+PB) A Bullish Propulsion Block is a down candle that trades into a previous down candle or Bullish Order Block and takes over the role of price support for higher price movement. It is highly sensitive and should never see the mean threshold break half of the body's height or the middle of the range of that candle's body. When it trades back down into the high, the market will show a sudden and violent movement away from that down candle, indicating a bullish price movement. 24
22 - Bearish Vacuum Block (-VB) A Bearish Vacuum Block is a gap in price action created by a volatility event, such as an economic release or geopolitical event, which results in a vacuum of liquidity. This gap may not always be filled completely, as price may only come up to a bearish order block inside the gap before declining lower. 25
23 - Bullish Vacuum Block (+VB) A Bullish Vacuum Block is a gap in price action created by a volatility event, such as an economic release or geopolitical event, which results in a vacuum of liquidity. This gap may not always be filled completely, as price may only come down to a bullish order block inside the gap before rallying higher. 26
24 - Bearish Reclaimed Order Block (-ROB) A Bearish Reclaimed Order Block is a candle or bar that was previously used to sell price, and a short-term decline confirms minor displacement. In the sellside of the curve, these old blocks will be reclaimed for shorts or new entries for short positions. To identify a Bearish Reclaimed Order Block, focus on every up candle that showed a willingness to see price drop during the buyside of the curve or to the left of the high that formed. 27
25 - Bullish Reclaimed Order Block (+ROB) A Bullish Reclaimed Order Block is a candle or bar that was previously used to buy price, and a short-term bounce confirms minor displacement in the buyside of the curve. These old blocks or down candles will be reclaimed for new long positions. In the context of the market maker buy model, every new buying opportunity will match up with the previous down candle while the price was dropping earlier on the sellside of the curve. 28
26 - Inversion Fair Value Gaps An Inversion Fair Value Gap occurs when the regular Fair Value Gap fails and price trades through it. The market trades away from the gap and then comes back to it, offering support/resistance for the price to move in the opposite direction of the regular Fair Value Gap. This concept was first 9ntroduced during one of ICT's tape reading sessions and analysis to identify potential trading opportunities and understand market behavior. 29
27 - Long Wicks A long wick in the context of PD arrays refers to candles with wicks at short-term highs or lows. These wicks indicate gaps in the market, and the bodies of the candles are important for understanding the market narrative. Liquidity often rests just above the bodies of candles with wicks above them and below the bodies of candles with wicks below them. These wicks are used to identify potential premium and discount PD arrays in various timeframes, such as monthly, weekly, daily, and four-hour charts. 30
28 - Conclusion This concludes all the PD Arrays that you should be aware of at the time of this writing. Please go subscribe to @InnerCircleTrader on YouTube or follow @I_AM_The_ICT on Twitter for more information and to further study his concepts. Additional Learning Opportunities You can find more examples of all the PD Arrays and live chart mark-ups using other ICT Concepts on my YouTube channel at www.youtube.com/@ImaTrader4Life. I also post a lot of daily, weekly and quarterly recap videos there as well. Recommended Study Guides on Amazon 1. The ICT Student’s Guide To Daily, Weekly Templates: Based on the Teachings of the Inner Circle Trader by Ima Trader 31
Thank You As we reach the end of this book, I want to say thank you for reading this book. I want to get this information out to as many people as possible. If you found this book helpful, I would greatly appreciate you leaving me a review. This helps others find the book as well. Dedication I want to thank my friends and family for their support and especially my two daughters, Sydney and Ava. Without your sacrifice of allowing me the time to work in my office for countless hours going through training courses, marking up my charts, listening to me talk about “Smart Money Concepts, Breakers, Fair Value GAPS, Order Blocks and New Week Opening Gap’s”, just to name a few, this would not have been possible. Through your support and encouragement, you continually drive me to be the best father, businessman and Market Speculator that I can be. I love you both very much and always remember to not be afraid to give yourself everything you’ve ever wanted in life, but it takes great effort, determination, unwavering belief in yourself and personal sacrifice to achieve your dreams. I have no doubt you both will change the world and I want to thank you for allowing me to do my part. 32
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LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN. Trading performance displayed herein is hypothetical. Hypothetical performance results have many inherent limitations, some of which are described below. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown. In fact, there are frequently sharp differences between hypothetical performance results and the actual results subsequently achieved by any particular trading program. One of the limitations of hypothetical performance trading results is that they are generally prepared with the benefit of hindsight. In addition, hypothetical trading does not involve financial risk, and no hypothetical trading record can completely account for the impact of financial risk in actual trading. For example, the ability to withstand losses or to adhere to a particular trading program in spite of trading losses are material points which can also adversely affect actual trading results. There are numerous other factors related to the markets in general or to the implementation of any specific trading program which cannot be fully accounted for in the preparation of hypothetical performance results and all of which can adversely affect actual trading results. U.S. Government Required Disclaimer – Commodity Futures Trading Commission Futures and Options trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the futures and options markets. Don’t trade with money you can’t afford to lose. This is neither a solicitation nor an offer to Buy/Sell futures or options. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this web site. The past performance of any trading system or methodology is not necessarily indicative of future results. Trade at your own risk. The information provided here is of the nature of a general comment only and neither purports nor intends to be, specific trading advice. It has been prepared without regard to any particular person’s investment objectives, financial situation and particular needs. Information should not be considered as an offer or enticement to buy, sell or trade. You should seek appropriate advice from your broker, or licensed investment advisor, before taking any action. Past performance does not guarantee future results. Simulated performance results contain inherent limitations. Unlike actual performance records the results may under or over compensate for such factors such as lack of liquidity. No representation is being made that any account will or is likely to achieve profits or losses to those shown. The risk of loss in trading can be substantial. You should therefore carefully consider whether such trading is suitable for you in light of your financial condition. If you purchase or sell Equities, Futures, Currencies or Options you may sustain a total loss of the initial margin funds and any additional funds that you deposit with your broker to establish or maintain your position. If the market moves against your position, you may be called upon by your broker to deposit a substantial amount of additional margin funds, on short notice in order to maintain your position. If you do not provide the required funds within the prescribed time, your position may be liquidated at a loss, and you may be liable for any resulting deficit in your account. 34
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