Institutional trading concepts in ICT (Inner Circle Trader) emphasize price action, market structure, and institutional footprints to identify high-probability trade setups.
Continuation trades involve capitalizing on existing trends by using specific tools and strategies to enter and ride the move further.
By understanding key elements like order blocks, fair value gaps (FVGs), liquidity sweeps, and killzones, traders can find logical entry points during pullbacks or retracements in the trend.
This guide explains how to use these ICT concepts to trade continuations effectively.
1. What Are Continuation Trades in ICT?
Continuation trades occur when price retraces slightly during a trend, creating an opportunity to join the move before it resumes in the original direction.
These trades are based on identifying moments when institutions or “smart money” re-enter the market to drive price further in the trending direction.
2. Key ICT Tools for Continuation Trades
1. Order Blocks
An order block is an area where institutions have placed significant buy or sell orders.
After a retracement, price often reacts to these levels, resuming the trend.
2. Fair Value Gaps (FVGs)
Gaps between consecutive candles in strong moves represent inefficiencies that price often fills partially before continuing in the trend’s direction.
3. Liquidity Pools
During trends, liquidity targets (e.g., swing highs or lows) are key continuation areas where price aims to sweep liquidity before continuing.
4. ICT Fibonacci Levels
Using Fibonacci retracements, traders can identify potential continuation points like the 50% or 61.8% retracement levels.
5. Killzones
Time-based trading sessions like the London Open or New York Open provide high-probability continuation setups when institutional activity is highest.
3. Steps to Identify and Trade Continuations in ICT
1. Analyze the Trend
- Confirm the market direction (uptrend or downtrend) using market structure.
- Look for higher highs (HH) and higher lows (HL) in an uptrend, or lower lows (LL) and lower highs (LH) in a downtrend.
2. Identify the Pullback
- Wait for price to retrace to an institutional reference point (e.g., order block or FVG).
- Ensure the retracement aligns with key Fibonacci levels (e.g., 50% or 61.8%).
3. Look for Confluences
- Combine multiple ICT tools like order blocks, FVGs, and killzones to increase trade probability.
- Example: A bullish FVG overlapping an order block provides strong confluence for a continuation trade.
4. Execute in Killzones
Target killzones like the London Open or New York Open for optimal entries when institutions drive price action.
5. Set Logical Targets
Use liquidity pools or the next significant swing high/low as your take-profit targets.
4. Examples of Continuation Trades Using ICT Concepts
Example 1: Continuation in an Uptrend Using Order Blocks
- Scenario:
- EUR/USD is in an uptrend, making higher highs and higher lows.
- Price retraces to a bullish order block on the 1-hour chart at 1.1100.
- Setup:
- During the New York Open killzone, price tests the order block and shows bullish rejection (e.g., pin bar).
- Enter long at 1.1105 with a stop-loss below the order block at 1.1080.
- Target the previous swing high at 1.1150.
- Result:
- Price resumes the uptrend, hitting the target and offering a 2:1 risk-to-reward ratio.
Example 2: Continuation Using FVG and Liquidity Sweep
- Scenario:
- GBP/USD shows a strong downtrend, breaking below a previous swing low.
- During the London Open, price retraces to fill a bearish FVG at 1.3050–1.3070.
- A liquidity sweep occurs at 1.3080, trapping retail buyers.
- Setup:
- Enter short at 1.3060 after the sweep, with a stop-loss above 1.3085.
- Target the next liquidity pool at 1.3000.
- Result:
- Price continues lower, reaching the target and delivering a high-probability trade.
Example 3: Continuation Using Fibonacci Levels and Killzones
- Scenario:
- NASDAQ is in an uptrend, with price rallying during the Asian session.
- A pullback occurs to the 61.8% Fibonacci retracement during the London Open killzone.
- Setup:
- Enter long at 15,200, with a stop-loss below 15,150.
- Target the recent swing high at 15,400.
- Result:
- Price rallies during the London session, resuming the uptrend and hitting the target.
5. Best Practices for Continuation Trades in ICT
- Wait for Confluence: Use at least 2–3 ICT tools (e.g., FVG + Order Block + Killzone) to validate setups.
- Monitor Market Structure: Ensure the overall market structure aligns with the direction of your continuation trade.
- Set Logical Stop-Losses: Place stop-losses just beyond the retracement area (e.g., below the order block or FVG).
- Focus on Killzones: Time entries during periods of high institutional activity.
- Be Patient: Wait for price to reach your planned area of interest (e.g., order block, FVG, or liquidity pool).
6. Common Mistakes to Avoid while Trading Continuations in ICT
- Chasing the Trend: Entering too late without a pullback leads to poor risk-reward.
- Ignoring Confluences: Relying on a single tool (e.g., FVG) reduces the probability of success.
- Overtrading: Not all pullbacks are valid continuation setups; wait for high-quality setups.
7. Final Thoughts
Continuation trades are powerful strategies that allow traders to capitalize on trends driven by institutional activity.
By combining ICT tools like order blocks, FVGs, liquidity sweeps, and killzones, traders can refine their entries and enhance profitability.
Practice identifying and executing these setups on historical data to build confidence and improve execution in live markets.
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