Investment Plan for Retirement

Instruments

Trading Instruments

All indicators in this system are designed to be used on charts of 1X 24x5 trading instruments, but we will trade 3X ETFs to manage risk.

Using the indicators on charts of 3X ETFs is fine, but it won't be as smooth as when using them on 1X instruments due to the volatility decay of the 3X ETFs.

For precise higher-timeframe analysis, use only Futures data to evaluate ICT PD arrays on D/W/M charts. However, free Futures data quotes come with a 10-minute delay, so use real-time (e.g. CFD, 1X ETF, or paid Futures) data for precise entries/exits on the lower timeframes.

For liquidity and risk management, only trade widely held asset classes with a market capitalization of at least 10 trillion USD. The currently tradeable asset classes are listed below.

Trade at most 30% of capital in any one asset class, so the maximum loss is limited to 30% even if the asset crashes 100% overnight.

Trade at most 2 distinct assets at the same time, because in times of stress, uncorrelated classes may become highly correlated.

Most of the capital should be kept in safe money market or short-term bond funds, such as BOXX, BIL, or SGOV. In the event of a potential US debt default or a USD/banking crisis, keep more capital in 1X Gold ETFs, such as GLD, GLDM, or IAU.

Equity asset class

SP500: chart on ES (Futures) or SPX500 (CFD), and trade SPXL (3X ETF) for long positions only.
Nasdaq 100: chart on NQ (Futures) or NAS100 (CFD), and trade TQQQ/SQQQ (3X ETF) for long/short positions respectively. TQQQ/SQQQ has about 5X the volatility of SP500.
Semi SOX Index: chart on SOXX (ETF), and trade SOXL/SOXS (3X ETF) for long/short positions respectively. SOXL/SOXS has about 10X the volatility of SP500, so it is prudent to reduce the position size when trading it.

Commodity asset class

Gold: chart on GC (Futures), and trade GLD (1X ETF) or GDXU (3X ETN without K-1). GDXU is a mining stock ETN, not a gold ETF, so trade it with caution and a strict stop, since it could behave like equity in some situations. SHNY is the corresponding 3X Gold ETN, but it currently has low trading volume.

Bond asset class

US T Bond: chart on ZB (Futures) or US30YUSD (CFD), and trade TMF (3X ETF) for long positions only.

Indicators

ICT and TA Indicators

ICT stands for Inner Circle Trader, a methodology developed by Michael J. Huddleston. It focuses on tracking institutional order flow and liquidity to identify market manipulation and structural price imbalances, aligning trades with those of large financial institutions.

Watch this playlist on key ICT concepts: "2016 ICT Private Mentorship Core Content Month 04."

Watch this playlist on how to use ICT concepts in trading: "2022 ICT Mentorship."

ICT indicators TM-LVL, RANGE, GP-BLK are used to automate the identification of ICT concepts on the charts.

Traditional TA indicator UD-SR has nothing to not with ICT:

Up Down: EXTREME UP DOWN (OVERBOUGHT / OVERSOLD). It gives a heads-up for a potential change in direction on different timeframes, for both short-term day trading and long-term swing trading.
SR Line and TC Label: SUPPORT RESISTANCE LINE WITH TREND CHANGE LABEL. This feature automatically identifies the traditional trading concepts of support/resistance and trend change on the chart.

Swing Trade Long: UD-SR indicator is sufficient.

Swing Trade Short: Very high risk and it is not recommended.

Day Trade Long: UD-SR indicator could be enough. However, ICT Concepts are recommended.

Day Trade Short: UD-SR indicator is not enough. Must have ICT Concepts.

Quick summary of using ICT Concepts to enter each trade: "STOP Pattern Trading If You Want To Become Profitable". This is a study notes of the video.

TM-LVL

TM-LVL implements some of the most important ICT concepts on times and levels.

RANGE

RANGE implements Open Range Gap, Pre-market Range, and Dealing Range of ICT Concepts.

GP-BLK

GP-BLK display frequently used gaps and blocks in ICT PD arrays.

UD-SR

Identify trends on higher timeframes from 1W, 1D, 4H, 1H to 15m.

Direction

Market Direction

The market can be in one of 3 different directions, determined by UD, SR LINE, and TC LABEL in the UD-SR indicator:

Downtrend
Sideways
Uptrend

By manually grading the 1W/1D/4H FVGs, Suspension Blocks, and iFVGs found in the GP-BLK indicator into quadrants and octants, and evaluating the price action around those quadrants and octants, one can frequently pinpoint the turning point of a new market direction.

Downtrend Market

In a downtrend market, we will see more

4H UD Triangles
1D UD Squares
1W UD Circles

than

4H UD Triangles
1D UD Squares
1W UD Circles

The stronger the trend, the greater the differences become.

Sequence of Direction Change to Downtrend Market in Higher Timeframes

Price crosses below 1W SR Line: an early indication that could flip-flop a lot. This acts as a trailing stop for the long position in a swing trade.
1D SR Line crosses below 1W SR Line: an early indication that could be reversed by the opposing crossover, starting another leg of the uptrend.
1D TC Label appears: an early indication that could be reversed by the opposite 1D TC Label, starting another leg of the uptrend.
Price crosses below 1M SR Line: an indication that the current uptrend is ending, but this could be reversed if price quickly crosses back above it.
Color changes from 1W SR Line to 1W SR Line: an indication that a severe downtrend is developing, which frequently lasts until 1W UD Circles appear.
Color changes from 1M SR Line to 1M SR Line: an indication that a very severe downtrend is developing, which frequently lasts until multiple groups of 1W UD Circles appear.
During a downtrend, the 1W SR Line and 1M SR Line become strong resistance lines, and price often cannot cross above them. They often act as good entry levels for short positions.
Example: NQ-2021-uptrend-to-downtrend

Equity Market Downtrend

A corrective equity market downtrend follows the last equity uptrend-sideways cycle. If a major policy change, a geopolitical event, or a worldwide crisis happens before or during the equity downtrend, one will likely see:

VIX spikes and stays at 25 or higher
Credit spread BAMLH0A0HYM2 spikes
Potential development into a major bear market

The damage and length of the equity market downtrend vary significantly, so one should become defensive after the 1D TC Label appears, focusing on day trading instead of holding positions for many days.

When the 1W SR Line turns 1W SR Line, it is often followed by steep drops, so one should look for opportunities to short equities and avoid buying equities until the bottoming process is complete.

When Gold or Bonds have lower volatility than equities during the equity market downtrend, they are a good alternative to trade.

Sideways Market

Price stops trending and enters a sideways market when:

Price oscillates above and below the 1W SR Line at the same level many times, and/or
Changes back and forth between the 1D TC Label and the opposite 1D TC Label
It can develop into either another uptrend or downtrend leg.
Example: NQ-2024-sideway-and-2025-sideway

Uptrend Market

In an uptrend market, we will see more

4H UD Triangles
1D UD Squares
1W UD Circles

than

4H UD Triangles
1D UD Squares
1W UD Circles

The stronger the trend, the greater the differences become.

Sequence of Direction Change to Uptrend Market in Higher Timeframes

Price crosses above 1W SR Line: an early indication that could flip-flop a lot.
1D SR Line crosses above 1W SR Line: an early indication that could be reversed by the opposing crossover, starting another leg of the downtrend.
1D TC Label appears: an early indication that could be reversed by the opposite 1D TC Label, starting another leg of the downtrend.
Price crosses above 1M SR Line: an indication that the current downtrend is ending, but this could be reversed if price quickly crosses back below it.
Color changes from 1W SR Line to 1W SR Line: an indication that an uptrend is developing.
Color changes from 1M SR Line to 1M SR Line: an indication that the uptrend has been confirmed.
During an uptrend, the 1W SR Line and 1M SR Line become strong support lines, and price often cannot cross below them. They often act as good entry levels for long positions.
Example: NQ-2022-downtrend-to-uptrend

Closer Look at Start of Uptrend

A new uptrend eventually starts after a downtrend.
It starts with many 4H UD Diamonds and 1D UD Squares.
A major bear market is typically followed by 1W UD Circles
The uptrend becomes apparent when:
1. On the hourly chart, per ICT concepts, major sell-side liquidity is swept, followed by a change in state of delivery (CISD), then a market structure shift (MSS)
2. Price consistently stays above the 1D SR Line
3. Confirmed by a 1D TC Label
4. Followed by the 1D SR Line crossing and staying above the 1W SR Line
5. Eventually the 1W SR Line turns into and stays as the 1W SR Line
Example: NQ-2022-closer-look-start-of-uptrend

Trading

Trading Plan

The goal of every trade is to capture a portion of a high-probability market move, one or two targets a week, while avoiding significant losses.

During retirement, time is not on your side, so avoiding losses is more important than making money.

The most profitable part of a market move is typically the initial surge of an uptrend, which can be captured through a swing trade, and the final sharp plunge of a downtrend, which is best captured through a day trade.

Swing Trade Long - Uptrend

In an uptrend market, use SPXL, TQQQ, SOXL, GDXU, or TMF to swing trade long.
Since the position is held overnight, position sizing must be capped at a maximum of 30% to manage risk. Use a smaller position size for SOXL.
This requires the least amount of attention, but can be more costly if the market reverses quickly.

1

Entry

A new trend usually starts in a very volatile fashion with 1W UD Circles, so it is prudent to build up the position size gradually over several days.

2

Exit

When the current uptrend is ending or has ended, close the position.

You can wait 1 or 2 days for a bounce before closing the position, or close 50% first, then close the remaining 50% at the bounce.
The uptrend is very likely to end soon if many 1W UD Circles appear.
If the closing price falls below the trailing stop 1W SR Line, the uptrend has ended.
If 1D TC Label appears, the uptrend has ended.

3

Re-Entry

When 1D UD Squares appear while the 1W SR Line stays Green, it indicates that another leg of the uptrend is starting.
There could be multiple legs in a major uptrend.
If the 1W SR Line becomes Fuchsia, it means a major downtrend is starting, so one should wait for the next uptrend, which begins after 1W UD Circles appear.

4

Exit after Re-Entry

Set the stop loss at the hourly swing low in case of further downside, then follow the Re-Entry step above if stopped out, or the Exit step, until the uptrend ends.

5

(Optional) Reduce Position Size

Reduce the allocation to 30% or less after multiple 1W UD Circles appear and the 1H RS Line crosses below the 1D RS Line.
(Optional) Add back up to 30% after multiple 4H UD Diamonds and/or 1D UD Squares appear.

Example: NQ-2023-2025-uptrend-multiple-legs

Day Trade Long - Uptrend or Sideways

In an uptrend or sideways market, use SPXL, TQQQ, SOXL, or GDXU to day trade long.
Day trading does not hold positions overnight. This requires more precision in entries and exits using ICT concepts, and demands more trading attention.

1

Entry

When the 1W SR Line is Green, and any of the following signals appears, it is a good time to enter a day trade using ICT concepts:

3H UD Triangles appear.
4H UD Diamonds appear.
1D UD Squares appear.
Price falls toward the rising 1D RS Line.
Price falls toward the rising 1W RS Line.

2

Exit

Stop loss at the hourly swing low.
Trail the stop using the 1H RS Line at the hourly bar close.
Take profit if 4H UD Diamonds, 1D UD Squares, and/or 1W UD Circles appear.
In a sideways market, take profit when price rises toward the 1D SR Line.
Take profit at buyside liquidity per ICT concepts.

Example: SOXX-2024-downtrend-to-uptrend

Day Trade Short - Downtrend or Sideways

In a downtrend or sideways market, use the 3X inverse ETFs SQQQ or SOXS to day trade short. This requires more precision in entries and exits using ICT concepts, and demands more trading attention.
A short position carries theoretically unlimited loss potential, so never hold a short position overnight as a swing trade.
The steps below are based on a 1x instrument, so the colors need to be flipped if you use charts of 3X inverse ETFs.

1

Entry

Before a 1D UD Square or 1W UD Circle appears, when any of the following signals appears, it is a good time to go short using ICT concepts:

4H UD Diamonds appear.
1D UD Squares appear.
Price rises toward a flat or falling 1D RS Line.
Price rises toward a flat or falling 1W RS Line.

2

Exit

Stop loss at the hourly swing high.
Trail the stop using the 1H RS Line at the hourly bar close.
Take profit if 4H UD Diamonds or 1D UD Squares appear.
In a sideways market, take profit when price falls toward the 1W SR Line.
Take profit at sellside liquidity per ICT concepts.

Example: SOXX-2024-downtrend

Charts

View Futures Annual Charts