ICT Lecture Notes: How New Students Should Start — Part 4: Pillars Of Daily Log Entries

Source: "How New Students Should Start Part 4 \ Pillars Of Daily Log Entries"
Instructor: Michael J. Huddleston (The Inner Circle Trader - ICT)
Core Subject: Establishing Daily Journaling Routines, Market Phase Identification, & The Three Daily Log Pillars

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1. Onboarding Philosophy & Student Progression Plan

1.1 Overcoming Library Intimidation

• The Problem: New students are often overwhelmed by the hundreds of videos in the ICT YouTube library, leading to "Netflix & chill" passive watching or trying to rush through content too quickly without retaining anything.
• The Solution: Strip away ambiguity and focus on a daily, structured routine of recording three daily repeating algorithmic phenomena.
• Asset Focus: Use US Index Futures (NASDAQ / NQ) on 1-minute charts. Futures are regulated (non-CFD) and provide consistent algorithmic price delivery. The same principles apply to Forex, Stocks, and CFDs.

1.2 The 6-Week Onboarding Progression Strategy

Do not attempt to hunt for all three phenomena on Day 1. Follow a phased approach to build pattern-recognition habits:

• Weeks 1–2: Focus exclusively on Pillar 1 (Pre-Market Hours & Liquidity Pools).
• Weeks 3–4: Add Pillar 2 (RTH Opening Range Gap & Consequent Encroachment).
• Weeks 5–6: Add Pillar 3 (Post-10:00 AM Silver Bullet First Presented FVG).
• Advanced Students: If already familiar with ICT concepts but lacking consistency, skip the phased rollout and begin logging all three pillars immediately.

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2. Pillar 1: Pre-Market Hours Phase (07:00 AM – 09:00 AM EST)

2.1 Chart Setup & Window Framing

1. Draw two vertical lines on the 1-minute chart at 07:00 AM EST and 09:00 AM EST.
2. Identify the Highest High and Lowest Low established strictly within this 2-hour window.
3. Annotate any Relative Equal Highs (EQH) or Relative Equal Lows (EQL) inside the window.

2.2 Market Phase / Condition Classification

Classify the pre-market price action into one of two primary market conditions:

• Trending / Expansion: Price makes a continuous directional run from one end of the 7–9 AM window to the other.
• Consolidation / Range-Bound: Price oscillates sideways within a tight range.

2.3 Post-09:30 AM RTH Behavioral Relationship ("The Crystal Ball")

• Pre-market behavior acts as a precursor for how price will deliver after the 09:30 AM EST Regular Trading Hours (RTH) open.
• Consolidation Pre-Market: High probability of a post-9:30 AM expansion run that targets the pre-market EQH/EQL or Highest High / Lowest Low liquidity pools.
• Trending Pre-Market: Post-9:30 AM may expand initially to sweep a liquidity pool, followed by afternoon consolidation.

2.4 Pillar 1 Logging Checklist

• Record raw numbers for Highest High, Lowest Low, EQH, and EQL.
• Log pre-market phase (Trending vs. Consolidation).
• Record time elapsed post-9:30 AM before price reacts off pre-market liquidity pools.

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3. Pillar 2: Regular Trading Hours Opening Range Gap (RTH ORG) & Consequent Encroachment (C.E.)

3.1 Chart Configuration

1. Toggle the TradingView 1-minute chart session setting from ETH (Electronic Trading Hours) to RTH (Regular Trading Hours) in the lower-right corner.
2. Identify the gap between the previous trading day's 16:14 EST close (final 1-min print) and the current day's 09:30 EST open.

3.2 Rectangle Framing & Consequent Encroachment (C.E.)

• Draw a rectangle spanning from the 16:14 EST close to the 09:30 EST open.
• Enable the midpoint line setting in the rectangle tool options to mark Consequent Encroachment (C.E.)—the 50% midpoint of the gap.

3.3 The 70% Midpoint Rule & Execution Targets

• 70% Probability Rule: There is approximately a 70% statistical likelihood that price returns to at least 50% of the RTH gap (C.E.) by 10:00 AM EST.
• Trading Application: When hunting short/long setups (e.g., using an Inversion FVG or Bearish Order Block), target the RTH ORG C.E. level. Full gap closure is not required to take profit.

3.4 Pillar 2 Logging Checklist

• Record gap size in handles.
• Log whether price reached C.E. by 10:00 AM EST.
• Track minutes required post-09:30 AM for price to reach C.E.

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4. Pillar 3: Post-10:00 AM Silver Bullet First Presented FVG

4.1 Identification Rules

1. Mark the 10:00 AM EST vertical line on the 1-minute chart.
2. Locate the very first Fair Value Gap (FVG) or Volume Imbalance (VI) that forms at or immediately after 10:00 AM EST (e.g., the 10:00 or 10:01 AM candle).
3. Draw a rectangle highlighting the FVG (or SIBI/BISI) and extend it to the right.

4.2 Entry Delivery & Liquidity Target

• Monitor the price retracement back into this first presented FVG.
• Target short-term highs or lows (buy-side / sell-side liquidity) formed prior to or immediately following the 10:00 AM FVG creation.

4.3 Pillar 3 Logging Checklist

• Record exact time of FVG formation (e.g., 10:01 AM EST).
• Measure time (in minutes) from FVG creation to first price entry/retest.
• Record total handle range from entry price to target liquidity point.

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5. Journaling Protocol & Data Collection Standard

5.1 Screenshot Requirements & Formatting

• Take 3 clean screenshots per day (1 for each pillar).
• Zoom & Center: Ensure the chart is zoomed and centered to leave ample whitespace around price candles for clean annotations.
• Annotation Aesthetics: Maintain extreme neatness and organization, treating the log entries with professional rigor.

5.2 The 12-Week Dataset Standard

• 6 Weeks Historical: Go back 6 weeks in NASDAQ (NQ) historical data and log all 3 pillars for every trading day.
• 6 Weeks Forward: Walk forward for 6 weeks, logging all 3 pillars daily (approx. 20 minutes per day).
• Result: A 12-week comprehensive dataset proving algorithmic repetition.

5.3 Electronic Journaling & Tagging

• Use digital journaling software to tag entries with searchable keywords (e.g., PreMarket_Consolidation, RTH_ORG_CE_Filled, SilverBullet_10am_FVG).
• Weekend Review Ritual: Review static charts every Saturday/Sunday without live market noise to identify missed details and reinforce pattern recognition.