ICT Market Structure Shift – ICT MSS

Do you want to master the ICT market structure shift (MSS) like a pro trader to level up your trading skills?

ICT market structure shift is a powerful technical method used by ICT traders to predict and trade the future move of any asset like forex, stocks, indices and commodities.

In this article, we will teach you all about ICT market structure shift (MSS) from definition to its formation and identification to its use along with visual examples.

Lets start with defining ICT market structure shift.

What is ICT Market Structure Shift?

As the word shift indicates change in the direction and market structure is basically the trend of market. So theoretically market structure shift (MSS) means change in the direction of market trend either from bullish to bearish or bearish to bullish.

ICT market structure shift (MSS) is an initial signal of market changing its trend which can either be a short term or long term change in market structure.

Basis of ICT market structure shift

Basis of ICT market structure shift (MSS) lies in the concepts of swing highs , swing lows & displacement move. So to understand ICT market structure shift (MSS) you first need to go through these concepts listed below.

Swing High is a three candle formation in such a way that the high of 1st & 3rd candle is lower than than the high of 2nd candle. We can say that the high of middle candle is highest than the following left and right candle’s high.

Swing Low is a three candle formation in such a way that the low of 1st & 3rd candle is higher than than the low of 2nd candle. We can say that the low of middle candle is lowest than the following left and right candle’s low.

As illustrated below :

Displacement Move in short is a powerful move in one side. It can be with a single candle or number of candles positioned in same direction.

These candles typically have large real bodies and very short wicks, suggesting very little disagreement between buyers and sellers. Displacement with number of candles also have a fair value gap (FVG) between the candles.

As illustrated below :

How to identify ICT Market Structure Shift?

ICT market structure shift (MSS) is indicated by a break of swing high or swing low with a displacement move.

On the basis of market structure either bullish or bearish ICT market structure shift (MSS) is divided into two types explained below.

Bullish Market Structure Shift means market structure shifting from bearish to bullish. As we know in a bearish market price moves down making lower swing highs.

So when market moves up with displacement and breaks the lower high (which already has taken a previous low) is known as bullish market structure shift as illustrated below.

Bearish Market Structure Shift means market structure shifting from bullish to bearish. As we know in a bullish market price moves high making higher swing lows.

So when market moves down with displacement and breaks the higher low (which has already taken a previous high) is known as bearish market structure shift as illustrated below.

How to Trade ICT Market Structure Shift?

To Trade a Bullish Market Shift draw Fibonacci from low to high of displacement move shifting market structure and mark the 50% retracement level. Below 50% retracement level mark any fair value gap (FVG), order block or breaker block.

When market moves down and retest the FVG, order block or breaker block below 50% retracement level you can execute a buy trade while your stop loss will be 10/20 pips below the low of displacement move and for profit target you can target a 1:2 risk reward ratio or any old high as liquidity.

To Trade a Bearish Market Shift draw Fibonacci from high to low of displacement move shifting market structure and mark the 50% retracement level. Above 50% retracement level mark any fair value gap (FVG), order block or breaker block.

When market moves up and retest the FVG, order block or breaker block above 50% retracement level you can execute a sell trade while your stop loss will be 10/20 pips above the high of displacement move and for profit target you can target a 1:2 risk reward ratio or any old low as liquidity.

A real market example is shown below in the picture.

Final Thoughts

While using ICT market structure shift in forex trading, we should keep in mind that no strategy is foolproof in forex, so you should not risk all your capital on this strategy.

Plus to mitigate your risks, you should always trade with stop loss in place to keep your equity safe.