3 Ways To Stay In A Trend Using ICT Concepts

In the world of trading, especially with smart money concepts (SMC), identifying when a trend will continue is key to securing profitable positions. Today, we’re going to explore three crucial ways to confirm trend continuation using ICT concepts and the Inner Circle Trader’s powerful tools.

1. Displacement: The First Sign of a Trend

The first and most crucial indicator of a potential trend continuation is displacement. This is a strong, convincing move in the market that shows momentum in the direction of the trend. It’s not just about price moving in a direction—it must displace the market structure and create a clear push that suggests the trend has strength.

When you observe a displacement, it’s often the beginning of a trend continuation. This is a foundational principle in ICT trading and is crucial for identifying valid trade entries.

2. Break of Swing Structure: A Key Confirmation

The second factor is a break of swing structure. This refers to when price breaks above or below a significant swing high or low, signaling that the previous structure has been broken. For trend continuation strategies, this break confirms that the trend is likely to continue.

In this case, look for price to close below a swing high or above a swing low, indicating that the previous level of resistance or support has been invalidated and the trend can now continue in the direction of the displacement.

3. Fair Value Gap (FVG) Respect: The Entry Point

The Fair Value Gap (FVG) is a tool that helps to refine your entries. In the context of ICT concepts, FVGs are used to locate areas where price has moved quickly, leaving behind an imbalance in the market. The 50% level of the Fair Value Gap is crucial, as it acts as a key level where price often retraces before continuing in the direction of the trend.

Wicks often indicate FVGs, so look for these on your charts. The wick’s 50% level must be respected as price moves back into it. This is the sweet spot for entering trades, especially when combined with the confirmation of a break in structure and a strong displacement.

A Real-Life Example with NASDAQ 100

Let's take a closer look at an example using the NASDAQ 100 (NAS100) 4-hour chart. After a large displacement, a Fair Value Gap formed. Price then broke below a swing low, confirming that the trend was likely to continue.

When price revisited the FVG, the 50% level was respected, and this gave a high-confidence entry point. In this example, respecting the FVG and entering after the retracement provided excellent risk-to-reward opportunities.

You’ll see similar behavior in multiple trend continuation setups, such as the one observed on September 20th. This was when price broke structure, retested the FVG, and then moved decisively in the direction of the trend.

The Power of Moving Averages in Trend Continuation

Another powerful tool to stay in trend continuation trades is moving averages. In the example above, staying below the 20-period moving average confirmed that the trend was still intact. When price stayed below the 200-period moving average, it signaled that the trend was likely to continue downward.

Using moving averages in combination with displacement, structure breaks, and FVGs helps to further filter and strengthen your trade setups.

Time of Day and Kill Zones

When it comes to executing your trend continuation strategies, timing matters. Trading during key ICT kill zones can dramatically improve your odds. The London open, New York open, and London close are critical times to watch for potential entries.

One notable setup during the 2 PM Silver Bullet trade on September 20th is a perfect example of how to use ICT concepts in real-time to catch a high-probability move.

Fibonacci Extensions: A Hidden Tool for Confirmation

Finally, Fibonacci extensions can act as powerful confirmation tools for trend continuation. By plotting the Fibonacci levels on your chart, you can identify where price is likely to head next. After the initial displacement and structure break, you can use the 1.27 Fibonacci extension as a clue that the trend is set to continue.

For example, price often reaches the 1.27 extension before pulling back and continuing to the 1.618 extension, where liquidity is typically taken below swing lows. This offers a solid exit point once you have confirmed the trend continuation setup.

Summary

Incorporating ICT concepts like displacement, swing structure breaks, and Fair Value Gaps into your smart money trading strategy will elevate your trading game. These tools help you identify when trends are likely to continue, allowing you to ride profitable moves with confidence.

Whether you're trading forex, stock futures, or stocks, mastering these techniques will give you an edge in the market. So, stay focused on these core principles, and with time, you’ll be able to enter high-probability setups confidently.