The ICT Turtle Soup Trading Strategy is a powerful price action method developed by the Inner Circle Trader (ICT). This strategy capitalizes on liquidity grabs and false breakouts to identify high-probability reversal trades.
Whether you’re a beginner or an experienced trader, this guide will walk you through the step-by-step process of executing the Turtle Soup strategy effectively. We’ll cover key concepts, entry rules, risk management, and real-world examples to help you trade like a pro.
What is the ICT Turtle Soup Trading Strategy?
The Turtle Soup (TS) strategy is based on the idea that markets often fake out traders by breaking key support/resistance levels before reversing. ICT’s version refines this concept using order flow, liquidity pools, and market structure shifts.
This strategy works best in forex, stocks, and futures markets, particularly in high-liquidity sessions like London and New York.
Top Features of the ICT Turtle Soup Strategy
1. Liquidity Grab Concept
- Markets often “sweep” liquidity beyond key levels before reversing.
- Traders look for false breakouts of swing highs/lows.
2. Market Structure Shift (MSS)
- A confirmed break of structure indicates a potential reversal.
- Requires a higher high (HH) or lower low (LL) to confirm trend change.
3. Optimal Trade Entry (OTE)
- ICT’s Fibonacci-based retracement zone (62%-79%) for high-probability entries.
4. Time & Price Alignment
- Trades are best taken during key market hours (London open, NY session).
Step-by-Step Guide to Trading ICT Turtle Soup
Step 1: Identify a Strong Swing High/Low
- Look for a clear swing high (SH) or swing low (SL) on the higher timeframe (HTF).
- The market should break this level temporarily before reversing.
Step 2: Wait for a False Breakout (Liquidity Sweep)
- Price must break the swing point but fail to continue.
- A quick wick or candle close back inside the range confirms the fakeout.
Step 3: Confirm Market Structure Shift (MSS)
- Price must form a new higher low (HL) in an uptrend or lower high (LH) in a downtrend.
- This confirms the reversal is valid.
Step 4: Enter at Optimal Trade Entry (OTE) Zone
- Wait for a pullback to the 62%-79% Fibonacci retracement of the recent move.
- Enter when price shows rejection (pin bar, engulfing candle) at this level.
Step 5: Set Stop Loss & Take Profit
- Stop Loss (SL): Place beyond the recent swing point or liquidity sweep.
- Take Profit (TP): Target previous support/resistance or 1:2/1:3 risk-reward ratio.
Best Timeframes & Pairs for Turtle Soup Trading
- Timeframes: 1H, 4H, Daily (higher accuracy).
- Forex Pairs: EUR/USD, GBP/USD, USD/JPY (high liquidity).
- Indices: S&P 500 (ES), NASDAQ (NQ).
Common Mistakes to Avoid
❌ Trading low-liquidity sessions (leads to false signals).
❌ Ignoring market structure shifts (leads to premature entries).
❌ Overtrading (stick to high-probability setups only).
Example Trade Setup (EUR/USD 4H Chart)
- Swing High Broken: Price breaks a key resistance but quickly reverses.
- False Breakout Confirmed: A bearish engulfing candle forms.
- MSS Forms: Price makes a lower high, confirming downtrend.
- Entry at OTE Zone: Price retraces to 70% Fib level, then drops.
- Profit Taken: 1:3 Risk-Reward achieved.
Conclusion
The ICT Turtle Soup Trading Strategy is a highly effective method for catching reversals after liquidity sweeps. By mastering false breakouts, market structure shifts, and optimal entries, you can significantly improve your trading accuracy.
🚀 Ready to test this strategy? Check out the latest trading tools and broker offers to get started today!
FAQs
1. What markets work best with the Turtle Soup strategy?
Forex (EUR/USD, GBP/USD), indices (S&P 500), and liquid stocks work best.
2. Which timeframe is ideal for Turtle Soup trading?
4H and Daily timeframes provide the most reliable signals.
3. How do I confirm a false breakout?
Look for a wick rejection or strong reversal candle closing beyond the breakout level.
4. Can I use Turtle Soup for scalping?
Yes, but stick to 15M or 1H charts for better accuracy.
5. What’s the best risk-reward ratio for this strategy?
Aim for at least 1:2 or 1:3 to maximize profitability.