ICT Consequent Encroachment – Never Miss a Trade

Mastering all ICT concepts is essential to trade using the ICT strategy. Among these crucial concepts is Fair Value Gap which play a significant role in the ICT trading strategy.

ICT consequent encroachment is basically the part of ICT fair value gap , so before diving deep into ICT consequent encroachment you should go through Fair Value Gap .

Consequent Encroachment is basically the 50% measure of ICT fair value gap , this article is designed to educate you properly on consequent encroachment from its identification to its use with real market examples.

Now lets begin with defining the consequent encroachment.

What is ICT Consequent Encroachment?

As we discussed above consequent encroachment is basically the 50% measure of the ICT fair value gap.

Being an ICT trader you all must have noticed that you may miss a trade while waiting for a FVG to be filled completely.

While Michael Huddleston teaches that you don’t need to wait for complete mitigation of a FVG to take a trade.

You have to identify the Consequent Encroachment level of a FVG and wait for price to mitigate it for trade execution.

While price might not fully mitigate the FVG, there’s a higher probability that it will address the consequent encroachment, providing an opportunity for trade entry.

How to Identify Consequent Encroachment?

To identify an ICT consequent encroachment you have to find a Fair Value Gap either bullish or bearish and you have to plot fibonacci tool from high to low of the FVG.

To find the consequent encroachment you need to set following fibonacci levels.

Now mark the 50% line of Fibonacci and its the consequent encroachment level of that FVG.

An illustration is given below to understand consequent encroachment.

How to Trade Consequent Encroachment?

To trade using consequent encroachment of a Fair value gap you need to know the.

(I) Daily Bias

(II) PD Array

(III) Next Draw on Liquidity

So after having known the above elements you have to wait for price to test the PD array in the direction of daily bias.

When price tests the PD array you have to jump to lower time frame and wait for a Market Structure Shift for confirmation of trade entry.

Now when market has shifted the structure with a displacement move having a Fair Value Gap , you have to mark the consequent encroachment of that FVG.

Now wait for price to test the consequent encroachment (CE) level , you can execute your trade when price mitigates the CE.

A live market example is attached below in which price is respecting the consequent encroachment level.

For profit target you may mark the draw on liquidity level.

Is it Necessary for Price to Test Consequent Encroachment?

No! it is not necessary for price to test consequent encroachment level. Price may continue its move without any retracement or price can cross the consequent encroachment level.

Consequent Encroachment is a highly reactive level so its important for you to pay attention to this level.

Can We Execute a Trade at Consequent Encroachment Level without any Confirmation?

You can execute a trade at consequent encroachment level depending upon your risk apatite.

But waiting for a trade confirmation at that level may increase your confidence. 2ndly you can start layering your trades from consequent encroachment level to Optimal Trade Entry level.