Choosing Your Trading Strategy
There is no "best" strategy — only the best strategy for you. The right approach depends on your personality, schedule, risk tolerance, and trading goals. This guide covers the most effective methodologies used by profitable traders today.
| Strategy | Timeframe | Trades/Week | Best For |
|---|---|---|---|
| ICT Concepts | M15-H4 | 5-15 | Understanding institutional order flow |
| Smart Money (SMC) | M5-H1 | 10-25 | Following "smart money" movements |
| Price Action | H1-D1 | 3-10 | Clean charts, pattern-based trading |
| Scalping | M1-M15 | 50-200 | Quick trades, full-time traders |
| Swing Trading | H4-W1 | 2-5 | Part-time traders, larger moves |
ICT Concepts (Inner Circle Trader)
ICT methodology, developed by Michael J. Huddleston, focuses on understanding how institutional traders (banks, hedge funds) manipulate price to fill their orders. It's become one of the most popular approaches in retail trading.
Core Philosophy
"The market is designed to hunt retail stops and create liquidity for institutional orders. Learn to see what they see, and trade with them — not against them."
Key ICT Concepts
📍 Order Blocks (OB)
The last bullish candle before a strong bearish move (or vice versa). This is where institutions placed their orders.
💧 Liquidity Pools
Areas where retail stop losses accumulate — equal highs/lows, swing points, round numbers. Institutions target these.
⚖️ Fair Value Gaps (FVG)
Imbalance zones where price moved so fast it left a "gap" between candles. Price tends to return to fill these gaps.
🔄 Market Structure Shift (MSS)
When price breaks a significant swing high/low, signaling a potential trend change.
⏰ Killzones
Specific times when institutional activity is highest and setups are most reliable.
• London: 2:00-5:00 AM
• NY: 7:00-10:00 AM
• London Close: 10:00-12:00 PM
📊 Premium/Discount Zones
Price above 50% of range = premium (look to sell). Below 50% = discount (look to buy).
ICT Trade Setup Example
Identify Daily Bias
Check higher timeframe (D1/H4) for trend direction. Are we in a bullish or bearish market structure?
Mark Key Levels
Identify order blocks, FVGs, and liquidity pools on H1/M15.
Wait for Killzone
Only trade during London or NY killzone for best setups.
Liquidity Sweep + Reaction
Wait for price to sweep liquidity (stop hunt) then show rejection at your OB/FVG.
Enter on M1-M5 Confirmation
Drop to lower timeframe for precise entry after market structure shift.
💎 ICT Golden Rule
Never chase price. Wait for price to come to your level. The best ICT trades happen when price sweeps liquidity and returns to fill imbalances — be patient and let the setup come to you.
Smart Money Concepts (SMC)
SMC is an evolution of ICT concepts, focusing on identifying what institutional traders ("smart money") are doing and aligning with their positions. It overlaps heavily with ICT but uses slightly different terminology.
Core Philosophy
"Retail traders provide liquidity. Smart money takes liquidity. Position yourself on the smart money side."
SMC Key Terms
| SMC Term | Also Known As | Description |
|---|---|---|
| Break of Structure (BOS) | MSS (ICT) | Price breaks previous swing high/low, confirming trend continuation |
| Change of Character (CHOCH) | — | First sign of potential trend reversal (break of structure against trend) |
| Order Block | Supply/Demand Zone | Last opposing candle before impulsive move |
| Imbalance/FVG | Gap, Inefficiency | Area of price void that tends to get filled |
| Inducement | Trap, Stop Hunt | Price creates obvious level to lure retail before reversing |
| Point of Interest (POI) | — | Confluence zone where you expect price to react |
SMC Trade Setup
Confirm bias on H4/D1
Structure shift on M15/H1
OB + FVG confluence
Price returns to POI
M1-M5 entry trigger
TP at equal highs/lows
Price Action Trading
Price Action is the "original" form of technical analysis — trading based purely on price movements without indicators. It focuses on candlestick patterns, support/resistance, and trend structure.
Core Philosophy
"Price tells you everything you need to know. Indicators lag. Price leads."
Classic Price Action Setups
🔨 Pin Bar at Key Level
Long wick rejecting a support/resistance zone. Shows strong rejection.
- Pin bar at major S/R level
- Wick is 2x+ body length
- Closes in direction of trend
- Entry: Break of pin bar high/low
- Stop: Beyond pin bar extreme
🌙 Engulfing Pattern
Large candle completely "engulfs" the previous candle. Shows momentum shift.
- Forms at key support/resistance
- Engulfing body covers prior candle entirely
- Entry: Break of engulfing candle
- Stop: Beyond engulfing candle low/high
📉 Inside Bar Breakout
Small candle contained within prior candle's range. Indicates consolidation before expansion.
- Inside bar forms after strong move
- Wait for breakout of mother candle
- Trade in direction of prior trend
- Stop: Other side of inside bar
🔄 Support/Resistance Flip
Old resistance becomes new support (or vice versa). One of the most reliable setups.
- Identify broken S/R level
- Wait for price to retest from opposite side
- Look for rejection candle at level
- Entry on confirmation, stop beyond level
The Power of Confluence
A pin bar is good. A pin bar at a major support level with trend direction is great. A pin bar at support + Fibonacci 61.8% + previous resistance flip is exceptional. Always seek multiple reasons for a trade.
Scalping Strategies
Scalping involves taking many small trades throughout the day, profiting from tiny price movements. It requires intense focus, fast execution, and strict discipline.
Core Philosophy
"Small profits compound into large gains. Get in, get out, repeat."
⚠️ Scalping Is Not for Everyone
Scalping requires: full-time dedication, fast internet, low-spread broker, quick decision making, and emotional control under pressure. Most beginners should master swing trading first before attempting scalping.
Popular Scalping Methods
🎯 Order Flow Scalping
Using DOM (Depth of Market) and tape reading to see real-time buying/selling pressure.
📊 Range Scalping
Trading bounces between support and resistance in ranging markets.
🚀 Momentum Scalping
Catching explosive moves during news or session opens.
📈 Moving Average Scalping
Using fast MAs (5, 10, 20 EMA) for trend direction and entries.
Scalping Requirements
Equipment
- Fast, stable internet
- Multiple monitors recommended
- One-click trading enabled
Broker
- Raw spreads (0.0-0.3 pips)
- Fast execution (<50ms)
- No restrictions on scalping
Time
- 2-4 hours of focused trading
- During high-volume sessions
- Full attention (no distractions)
Swing Trading
Swing trading captures "swings" in price over days to weeks. It's ideal for traders who can't watch charts all day but want meaningful moves.
Core Philosophy
"Catch the waves, not the ripples. Let the market work for you while you live your life."
Swing Trading Advantages
Time Efficient
30-60 minutes daily. Perfect for people with jobs.
Lower Costs
Fewer trades = less spread/commission paid
Less Stressful
No need to stare at screens. Trade, set stops, walk away.
Better R:R
Larger moves = potential for 1:3, 1:5+ reward ratios
Classic Swing Trade Setup
Weekly Trend Analysis
Determine the major trend direction on W1 chart
Daily Structure
Mark key support/resistance on D1
Wait for Pullback
Let price retrace to your level (don't chase)
H4 Confirmation
Look for rejection candle or pattern on H4
Enter & Manage
Set wide stop (ATR-based), target next major level
💎 Swing Trading Tip
Check charts at the same time each day (e.g., after NY close). This creates routine, prevents overtrading, and ensures you see complete daily candles. Sunday evening analysis sets up your week.
How to Choose Your Strategy
Match your strategy to your personality and lifestyle. Be honest about who you are.
| If You... | Consider... |
|---|---|
| Have a full-time job | Swing Trading — check charts evening only |
| Can dedicate 4+ hours/day | ICT/SMC — structured approach, good for killzones |
| Want simplicity, no indicators | Price Action — pure chart reading |
| Love fast-paced action | Scalping — but only after mastering the basics |
| Are analytical, love patterns | ICT — deep market structure analysis |
| Prefer fewer, higher-quality trades | Swing + Price Action |
The Most Important Rule
Pick ONE strategy and master it. The "shiny object syndrome" — constantly switching strategies — is the #1 killer of trading accounts. Commit to one approach for at least 6 months before evaluating.
Key Takeaways
ICT/SMC
Understand institutional order flow, liquidity hunts, and order blocks.
Price Action
Trade patterns at key levels. Simple, effective, timeless.
Swing Trading
Best for part-time traders. Catch big moves, ignore the noise.
One Strategy
Master ONE approach before trying others. Consistency beats variety.