ICT Turtle Soup Trading Strategy – SMC Trading Model

Stop raids and liquidity sweeps are common in Financial Market’s trading. ICT Turtle Soup trading strategy is a powerful trading strategy based on liquidity hunts and stop raids. This pattern anticipates false breakouts and market reversals. This strategy is totally opposite of conventional breakout strategy. Price often hunts liquidity near key support or resistance areas.

This article explores understanding of Turtle Soup trading strategy, concept behind this pattern and trading with ICT Turtle Soup trading strategy.

Understanding of ICT Turtle Soup Trading Strategy

Turtle soup trading strategy is based on hunting stop orders. Market often creates fake breakouts that can be used by smart money to accumulate orders above a resistance level or below a support level.

According to Michael J. Huddleston, market movements are not random. According to him, markets are one hundred percent controlled and algorithm drive price higher and lower. Market moves to fill imbalances and capture liquidity.

Traders place their stoploss orders just above resistance levels or below support levels. When price breaks these key levels, traders following conventional theories assume it a breakout and enter in the direction of the breakout. For SMC traders, these breakouts are fake and consider them as liquidity raids.

Logically, these moves are designed to captured liquidity and trap retail traders. After capturing liquidity, price reverse in the opposite direction. This leads to potential trading opportunities.

These concepts make the ICT Turtle Soup strategy effective. This pattern is useful in ranging markets. In ranging markets, price moves in between established swing highs and lows.

Key Concepts in Turtle Soup

ICT Turtle Soup is a combination of other key concepts like PD Array and liquidity concepts. Along with that we must have a general understanding of the concepts that retail traders use in their trading strategies.

Liquidity Sweep and False Breakout

Traders must have an understanding of support and resistance, and false breakouts. Market makers and institutional traders target stop and pending orders that accumulate above resistance or below support level.

These are also referred to as stop raids that sweeps liquidity. This traps hunts stop order and trap breakout traders. ICT traders anticipate this stop raid and enter when price reverse back into the range.

Role of Liquidity in Market Movement

According to SMC and ICT trading concepts, price moves for two reasons:

• To Balance any Imbalance: If price moves continuously in one direction without sufficient order flow, it will correct back to fill the imbalances.
• To Hunt Liquidity: Market seeks liquidity in the form of stop-loss orders. These stop-loss order accumulates near key Support and resistance levels.

Market structure and Institutional Order Flow

This is one the key concept in ICT Trading. No strategy can be confirmed without taking into consideration market structure and institutional order flow.

Higher timeframe market structure dictates order flow. Traders should align their trades with the dominant trend, depending on their trading type and timeframe selection, to increase the profitability of success.

ICT turtle Soup setups should confirm with a shift in market structure before trade execution.

Best Timeframes for Turtle Soup Trading

Before trading in the market, it is crucial for the traders to understand market timeframes. Timeframe selection in ICT trading is highly dependent upon your trading style.

1-hour or 4-hour timeframe chart can be used to understand the overall order flow and draw on liquidity. Market structure on higher timeframe is highly powerful. It is advised by market professional to align with higher timeframe because it gives us the directional bias. Smaller timeframes lack the ability to give us the directional bias.

15-min chart is ideal for marking internal range liquidity levels. It can be the internal swing highs or lows, order blocks, FVGs, or liquidity void that market often fills.

Lastly, 5-min or 3 min can be used for confirming market structure shift. This shift in market structure verify that the breakout was actually the liquidity sweep.

Trading with Turtle Soup in Bullish Market

In order to trade effectively with the ICT Turtle Soup trading strategy in bullish market, we have to follow the following steps:

In first step, it is crucial to identify higher timeframe order flow. It is recommended to use daily, 4-hour or 1-hour timeframes to determine the overall market trend. In a bullish higher timeframe structure, we look for long entries at liquidity sweeps below support.

In second step, SMC traders mark Draw on Liquidity and internal range liquidity level. These are the key liquidity levels where traders lace stop-losses. It is recommended to FVGs, previous highs, and equal highs to mark liquidity zones.

In third step, SMC and ICT traders wait for a stop raid or liquidity sweep. We have to observe price sweeping below a support level. Ensure the breakout is aggressive and impulsive. This takes out all the available liquidity before reversing.

In fourth step, we normally shift in lower timeframes like 3-min or 5-min. SMC and ICT Traders are advised to look for Market Structure Shift as confirmation that price is reversing.

In fifth and final step, we execute trade in the direction of the trend. Enter in a buy trade only if liquidity was taken. Place stop-loss order below the liquidity sweep and target the next internal range liquidity level.

Trading with Turtle Soup in Bearish Market

In order to trade effectively with the ICT Turtle Soup trading strategy in bearish market, we have to follow the following steps:

In first step, it is crucial to identify higher timeframe order flow. It is recommended to use daily, 4-hour or 1-hour timeframes to determine the overall market trend. In a bearish higher timeframe structure, we look for short entries at liquidity sweeps above resistance.

In second step, SMC traders mark Draw on Liquidity and internal range liquidity level. These are the key liquidity levels where traders lace stop-losses. It is recommended to FVGs, previous lows, and equal lows to mark liquidity zones.

In third step, SMC and ICT traders wait for a stop raid or liquidity sweep. We have to observe price sweeping above a resistance level. Ensure the breakout is aggressive and impulsive. This takes out all the available liquidity before reversing down.

In fourth step, we normally shift in lower timeframes like 3-min or 5-min. SMC and ICT Traders are advised to look for Market Structure Shift as confirmation that price is reversing down.

In fifth and final step, we execute trade in the direction of the trend. Enter in a sell trade only if liquidity was taken. Place stop-loss order above the liquidity sweep and target the next internal range liquidity level.

Final Note

ICT turtle soup trading strategy is highly effective for trader trading false breakout and liquidity sweep. Unlike traditional breakout traders, ICT traders profit from stop hunts by entering when the market reverse back into the range. This is highly structured approach towards trading.

Trading carries significant risk of capital loss. It is advised to trade with the funds that you can afford to lose. These strategies can be back-tested by using past price action. However, the past price action can be used to understand price behavior but do not guarantee success in trading.

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