ICT IPDA Trading Strategy – How to Use IPDA Data Ranges to Find Liquidity and Trade Setups

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The ICT IPDA trading strategy is a higher timeframe approach that traders use to understand where price may be delivered before looking for an actual trade entry. Instead of starting with a five minute chart and searching for a Fair Value Gap or Market Structure Shift, the IPDA framework starts much higher.

The trader first studies the larger price range, identifies important highs, lows, liquidity and imbalances, and then uses that information to develop a directional bias.

IPDA stands for Interbank Price Delivery Algorithm. Within the Inner Circle Trader methodology, IPDA is used as a conceptual explanation for how price is delivered through different areas of liquidity and imbalance. One of the most important parts of the framework is the use of 20, 40 and 60 trading day data ranges.

The purpose is not to predict exactly what the market will do on a particular day. Instead, IPDA helps the trader answer a more useful question: where could price reasonably be delivered next?

Once that larger objective has been identified, the trader can move down to lower timeframes and wait for confirmation through concepts such as liquidity sweeps, displacement, Market Structure Shift, Fair Value Gaps and other PD arrays.

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What Is ICT IPDA?

ICT IPDA refers to the Interbank Price Delivery Algorithm, a concept taught within ICT trading methodology. It describes the idea that price delivery is not completely random and that price can move between areas where liquidity and inefficiencies exist.

In practical ICT analysis, the trader is primarily interested in two things. The first is liquidity and the second is imbalance.

Liquidity can be found around obvious highs and lows where traders are likely to place stop orders. Buy-side liquidity is generally located above significant highs, while sell-side liquidity is found below significant lows.

Imbalance occurs when price moves aggressively and leaves an inefficient area behind. A Fair Value Gap is one of the most common examples of this type of price imbalance.

The IPDA framework brings these ideas together with time. Rather than looking at every old high, low and Fair Value Gap on the chart, the trader focuses on specific historical price ranges.

This is where the 20, 40 and 60 trading day IPDA ranges become important.

What Are IPDA Data Ranges?

IPDA data ranges are specific periods of historical daily price data used in ICT IPDA trading startegy to study where important highs, lows, liquidity and imbalances are located.

The three commonly used periods are 20 trading days, 40 trading days and 60 trading days.

Twenty trading days roughly represents one trading month. Forty trading days represents approximately two trading months, while 60 trading days represents approximately three trading months.

These should be treated as trading days rather than simply counting 20, 40 or 60 calendar days.

The idea is simple. The trader looks back over these periods and identifies the highest high and lowest low within each range. These levels can then become important reference points when developing a higher timeframe bias.

For example, if the highest price during the most recent 20 trading days is above the current market price, that high may represent an area of buy-side liquidity. If the lowest price of the same period is below the market, it may represent sell-side liquidity.

The 40 and 60 day ranges provide a larger view of the same market.

The 20 Day IPDA Range Strategy

The 20 day range is generally the most recent window that an ICT trader studies.

Open the daily chart and look back over the most recent 20 trading days. Mark the highest high and lowest low within that period.

You now have two important reference levels. The high can represent a potential buy-side liquidity pool, while the low can represent a potential sell-side liquidity pool.

However, simply marking these levels does not mean price must reach them. This is an important distinction.

IPDA analysis should not be treated as a prediction that the highest high will automatically be taken or that the lowest low will necessarily be swept. These levels are areas that deserve attention because they represent meaningful historical extremes within the selected data range.

The trader then studies how price behaves around these levels.

If price approaches the 20 day high and takes it with strong momentum, the trader needs to determine whether this is genuine expansion or a liquidity sweep. If price trades above the high and quickly rejects the level, the reaction may provide information about the next phase of delivery.

The same idea applies to the 20 day low.

The 40 Day IPDA Range Strategy

The 40 day range gives the trader a broader view of historical price delivery.

After marking the 20 day high and low, expand the analysis to 40 trading days. Again, identify the highest high and lowest low.

The important point is that the 40 day range contains more historical information than the 20 day range.

A market may first take liquidity from a relatively recent high or low and then continue toward a more distant level. This is one reason why looking only at the nearest swing can sometimes give an incomplete picture.

Imagine that price is trading below the 20 day high. That high is taken during a strong rally, but there is still a significant 40 day high above it.

The trader does not automatically assume that the first liquidity sweep marks the end of the move. The larger range provides another reference point that could become relevant.

This creates a hierarchy of liquidity.

The nearest level may be relevant to short term price delivery, while a more distant level can become important if price continues expanding.

The 60 Day IPDA Range Strategy

The 60 day range gives an even broader view of price.

Mark the highest high and lowest low over the previous 60 trading sessions. These levels represent the extremes of approximately three months of daily trading data.

At this point, the chart begins to provide a much clearer picture of where significant historical liquidity may exist.

Suppose the 20 day high, 40 day high and 60 day high are all located at different prices. Instead of treating every old high on the chart as equally important, you can now organize those levels according to their position inside the IPDA framework.

The same applies to the lows.

This is one of the most useful aspects of IPDA analysis. It gives the trader a structured way of looking at historical price rather than randomly drawing dozens of liquidity levels.

How IPDA Uses Liquidity

Liquidity is one of the most important parts of an ICT IPDA trading strategy.

Buy-side liquidity is generally found above previous highs. Sell-side liquidity is generally found below previous lows.

These areas can become important because traders often place stop losses and pending orders around obvious market extremes.

For an ICT trader, the important question is not simply where liquidity exists. The more useful question is:

Which liquidity is price most likely to seek?

This is where the higher timeframe IPDA ranges become useful.

If price is trading between a 20 day high and a 20 day low, but the 20 day low has already been taken while a significant 40 day high remains untouched, the trader can begin studying whether price is shifting toward the opposite side of the range.

This does not guarantee a move. It creates a framework for interpreting what happens next.

The lower timeframe must still provide confirmation.

IPDA and Draw on Liquidity

The concept of Draw on Liquidity is closely connected with ICT IPDA trading strategy.

A draw on liquidity is simply the price level that the trader believes is currently attracting price based on the surrounding market structure and liquidity.

For example, suppose gold has already swept a significant sell-side liquidity level below a recent low. After the sweep, price begins showing bullish displacement.

If a major high remains untouched above the market, that high may become a potential draw on liquidity.

The trader can then stop looking for random long entries and instead focus on finding a bullish setup that supports movement toward that objective.

This is an important difference between using IPDA as a framework and simply trading individual ICT patterns.

The objective comes firs and the entry comes later.

IPDA and Fair Value Gaps

Liquidity is only one side of the ICT IPDA trading startegy, Imbalance is the other.

When price moves aggressively, it can leave behind a Fair Value Gap. These areas represent inefficient price delivery and may later become relevant when price retraces.

For example, suppose price moves aggressively higher after taking sell-side liquidity. During the move, a bullish Fair Value Gap forms.

The higher timeframe liquidity analysis may provide the directional context, while the lower timeframe Fair Value Gap can provide an area where an entry may be considered.

This creates a much more structured process. Instead of saying, There is a bullish FVG, so I will buy, the trader can ask:

Where is price coming from?

What liquidity has already been taken?

Where is the next likely draw on liquidity?

Is the current market structure supporting that direction?

Did displacement create the FVG?

Is the FVG located at a logical area for the trade?

These questions make the setup much more selective.

ICT IPDA Trading Strategy: Step by Step

The actual ICT IPDA trading strategy can be kept relatively simple.

Starting with the daily chart.

Mark the highest high and lowest low of the relevant 20 trading day range. Then mark the corresponding extremes of the 40 and 60 trading day ranges.

Next, identify important liquidity levels and major imbalances inside these ranges.

Do not mark every single FVG or every minor swing. Focus on areas that have clear relevance to the current price.

Now look at where price is trading relative to these levels.

See whether price is approaching buy-side liquidity or sell-side liquidity. Check whether an important level has already been taken or it remains untouched.

The next step is to establish a directional hypothesis.

For example, if price has taken significant sell-side liquidity and then begins showing strong bullish displacement, you may begin looking for a move toward an important buy-side liquidity pool.

At this stage, you still do not have an entry but you have a potential direction and a potential objective.

Now move to a lower timeframe such as the 15 minute, 5 minute or another timeframe appropriate for your trading model.

Wait for price to reach an area where you expect a reaction.

This could be a liquidity sweep, a Fair Value Gap, an Order Block or another relevant PD array.

Then wait for confirmation. The trade is then managed toward the previously identified liquidity objective.

The exact entry model can vary. IPDA itself does not provide a fixed entry signal.

What IPDA Does Not Tell You

One of the biggest mistakes traders make is treating IPDA as a complete trading system.

It is not.

Drawing the 20, 40 and 60 day ranges does not automatically tell you whether to buy or sell. It does not tell you where to place a stop loss. It does not guarantee that price will reach a particular liquidity level.

It does not mean every high or low inside the range will be swept. And it does not eliminate the need for risk management.

IPDA is better viewed as a framework for organizing higher timeframe information.

The actual trade decision still requires additional analysis.

ICT IPDA Trading Strategy Mistakes

One common mistake is treating every IPDA level as an exact target.

A 20 day high can be important without necessarily being the next destination for price. Market conditions can change before price reaches the level.

Another mistake is ignoring the difference between a liquidity sweep and genuine expansion.

Price moving above a high does not automatically mean that the market will reverse. Likewise, a strong move through a high does not automatically mean the market will continue indefinitely.

The reaction after the level is often more informative than the level itself.

Another problem is using IPDA without a clear execution model.

A trader may correctly identify the higher timeframe draw on liquidity but still enter too early. Waiting for displacement, Market Structure Shift and a suitable PD array can make the execution process much more controlled.

Finally, traders sometimes put too many levels on the chart.

The purpose of the 20, 40 and 60 day framework is to simplify your analysis, not make your chart unreadable.

Final Thoughts on the ICT IPDA Trading Strategy

The biggest value of IPDA is not that it gives traders another entry pattern. Its value is that it encourages traders to start their analysis from the bigger picture.

Instead of opening a five minute chart and immediately searching for an FVG, start by asking where price is located within the larger range.

Look at the 20, 40 and 60 trading day data ranges and identify the important highs and lows. Study the liquidity around those levels.

Look for significant imbalances and determine which side of the market may represent the current draw on liquidity.

Then move down to the execution timeframe and wait for price action to confirm the idea.

In simple terms, IPDA can be viewed as the map, while liquidity provides the destination and the lower timeframe setup provides the entry.

That distinction is important.

The goal is not to predict every move the market will make. The goal is to understand the larger price delivery framework and then wait for price action to provide a trade that fits that framework.