ICT Daily Bias & 3 Candle Pattern (CISD)

Introduction to ICT Daily Bias & 3 Candle Pattern (CISD)

The ICT Daily Bias framework uses price action patterns to determine market direction, particularly through the “3 Candle Pattern” (CISD). This method is commonly employed by traders following Inner Circle Trader (ICT) concepts to analyze the daily price trend and bias.

The 3 Candle Pattern highlights three key consecutive candlesticks:

1. First Candle (Setup): Indicates the starting point of bias.
2. Second Candle (Signal): Confirms momentum or manipulation.
3. Third Candle (Execution): Represents the continuation of the market direction.

These patterns are validated only if they align with specific market conditions like:

• Price at a Point of Interest (POI): Examples include Fair Value Gaps (FVG), Order Blocks (OB), or Bollinger Bands (BB).
• Liquidity Sweep: A scenario where stop-hunts or liquidity grabs occur, fueling the directional move.
• SMT (Smart Money Technique): Divergence between correlated instruments, strengthening bias.

Trade Setup Ideas with CISD

1. Bullish Setup

• Pattern: Black (bearish candle) → Small green (retracement or indecision) → Larger green (bullish continuation).
• Condition: Price forms inside a POI, with liquidity sweep below key levels.
• Execution: Enter long on confirmation of higher-timeframe market structure shift (LTF MSS).

Stop Loss: Below the liquidity sweep. Take Profit: At the next key resistance or liquidity level.

2. Bearish Setup

• Pattern: Green (bullish candle) → Small black (retracement or indecision) → Larger black (bearish continuation).
• Condition: Price aligns with a bearish POI and sweeps liquidity above highs.
• Execution: Enter short when LTF MSS confirms.

Stop Loss: Above the liquidity sweep. Take Profit: At the next support or liquidity zone.

Key Points to Remember

• Ensure the POI is validated with high-probability zones (e.g., FVG or OB).
• Look for Liquidity Sweeps or SMT divergence to confirm the bias.
• Enter trades only after confirming the LTF Market Structure Shift (MSS) to minimize risk and improve win rate.

By mastering the 3 Candle Pattern and incorporating ICT principles, traders can identify daily directional bias and execute precise entries for improved consistency.