ICT Price Action Lecture: Liquidity Purge & Revert

Finance-specific summary (liquidity purge & revert; ICT-style price action framework)

The speaker argues that markets are “engineered” / algorithmically controlled, and that many price moves reflect liquidity hunting rather than conventional retail ideas like “support/resistance is where price repels.”

The core framework is:

1. Identify when price runs below/above prior daily highs/lows to purge one side of liquidity.
2. After the purge, look for a revert back toward the opposite side’s liquidity pools.

The lecture is demonstrated on FX, specifically USD/CAD (the speaker says he doesn’t trade it often, but uses it when EUR/USD or GBP/USD setups aren’t present).

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Instruments / tickers / assets mentioned

• USD/CAD (primary example)
• EUR/USD (alternative)
• GBP/USD (alternative)
• AUD/USD (alternative)

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Methodology / step-by-step framework (as described)

A) Liquidity pool identification (daily / major levels)

Define liquidity based on prior structure:

• Buy-side liquidity: liquidity resting above old highs, including areas of relative equal highs.
• Sell-side liquidity: liquidity resting below old lows, including areas of relative equal lows.

Liquidity can be referenced by either:

• A single prior high/low, or
• A collection of relatively equal highs/lows.

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B) The “purge” trigger

A key event is when price runs below an old daily low—described as a sell-side liquidity purge.

He also uses an “event day” concept:

• The day price trades below the old daily low is Day 1.

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C) Three-day lookback (Day 1–Day 3)

After the purge day, the framework uses a 3-day range/lookback to map relevant liquidity pools.

He emphasizes that you don’t need long lookbacks (e.g., 20/40/60 days, or hit counts from years ago), because markets react to predetermined levels and algorithmic behavior.

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D) Revert target logic

After the purge (sell-side taken out), price is expected to revert toward buy-side liquidity.

This is filtered using range equilibrium:

• Apply Fibonacci to the high-to-low of the pre-purge range.
• Focus on the 50% level as equilibrium.
• If price is at/above the 50%, it is treated as a “premium market” area (potentially reducing willingness to buy), though it may not automatically invalidate a long position already taken.

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E) Invalidation / “mode change” concept

If the purge occurs but price does not follow the expected path, the speaker describes a shift into a different “mode,” implying additional thresholds/confirmations (e.g., subsequent breaks above key highs).

He also references a market structure break idea tied to whether a day’s high is traded to/through after the purge.

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F) Intraday execution example (15-minute context)

After mapping daily liquidity, he drills into hourly / 15-minute timeframes to find “optimal trade entries.”

He distinguishes between:

• Candle bodies: used for entry pinpointing (rather than wicks/tails)
• Wicks/tails: used for range measurement and equilibrium calculations

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G) Statistical / placement metrics

He repeatedly uses standard deviation zones (example bands: -0.5, -1, -1.5, -2, -2.5) as probabilistic areas where price might retrace or where entries might be located relative to liquidity and equilibrium.

These are framed as probabilistic zones, not guaranteed outcomes.

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Key timelines / dates / session framing

The narrative includes example dates:

• 9th of November: price trades down and goes below the targeted old low (purge begins)
• 10th of November: expectation of a break above the old high (shift toward buy-side liquidity)
• 11th of November: analyzed on 15-minute for execution/entry logic

Session/execution structure includes:

• Midnight-to-midnight
• “Kill zones” (mentioned later), including:
  • London open kill zone
  • New York open kill zone
  • Close kill zone

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Explicit recommendations / cautions

• He says he is not teaching a classical “pattern trader” approach (e.g., harmonics like Bat/Gartley or Fibonacci-only oscillator methods).
• The framework is intended to be investigated independently (not blindly applied).
• He discourages retail-style logic and emphasizes studying where liquidity is likely engineered.
• He warns viewers to treat the lesson as a model framework, not a complete system learned from a single video.
• He discourages “torturing the data” and implies the model needs underlying logic.

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Performance metrics / numbers mentioned

• No portfolio performance, returns, or backtest statistics are provided.
• The only numeric concepts used are:
  • Fibonacci 50% (equilibrium filter)
  • Standard deviation bands: -0.5, -1, -1.5, -2, -2.5
  • Three-day lookback window (Day 1–Day 3)
  • Mentions alternatives he says you don’t need: 20, 40, 60 days

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Disclosures / disclaimers

• Content is described as something viewers should investigate independently.
• The speaker states he is not actively trading USD/CAD a lot (it’s used primarily as an example).
• He also uses a typical personal disclaimer tone (inviting viewers to suspend belief in other models during the recording), though it is not presented as a formal regulatory disclaimer.

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Presenters / sources

• Presenter: the video speaker (ICT / Inner Circle Trader, as referenced by the narrator “ICT”)
• No additional guest presenters or external sources are named.