CHAPTER 20
A Bank of 40 Questions
Use these as an exam: answer first, then compare. Five a day finishes the bank in eight days.
Q1 - What is ICT?
Answer: A liquidity-based delivery model: price first collects stops, then delivers to the opposite pool.
Q2 - BOS versus CHoCH?
Answer: A BOS breaks structure with the trend; a CHoCH is the first break against it.
Q3 - When is it an MSS?
Answer: When a CHoCH comes with displacement and leaves an FVG.
Q4 - Why does an FVG work?
Answer: Because price was unbalanced there; the market returns to fill the rest of the institutional order.
Q5 - What is the CE of an FVG?
Answer: The exact 50 percent of the gap - most orders sit there and the stop can be tighter.
Q6 - What is an order block?
Answer: The last opposing candle before displacement, where the bulk order was filled.
Q7 - OB versus breaker?
Answer: An OB is fresh orders; a breaker is a failed OB now working from the other side.
Q8 - What are premium and discount?
Answer: Above the 50 percent of the range is premium (good for selling); below is discount (good for buying).
Q9 - What is OTE?
Answer: The 62 to 79 percent retracement zone, where entries with the trend give the best R.
Q10 - What are BSL and SSL?
Answer: Buy stops resting above highs (BSL) and sell stops resting below lows (SSL).
Q11 - How do you tell a sweep from a breakout?
Answer: Read the close: back inside means a sweep; a held body close beyond means a breakout.
Q12 - What is the DOL?
Answer: Draw on liquidity - the pool price is being delivered to; it is your take profit.
Q13 - What is a liquidity void?
Answer: An area crossed extremely fast with almost no trading; it tends to get refilled.
Q14 - Internal versus external structure?
Answer: External is the range extreme; internal is the swing inside it. Internal usually goes first.
Q15 - What is a killzone?
Answer: The window where large orders execute - London 13:00-16:00 and New York 18:30-21:00 Dhaka.
Q16 - What is Power of 3?
Answer: The three phases of the day: accumulation, manipulation, distribution.
Q17 - What is a Judas swing?
Answer: The first false move of a session, designed to trap breakout traders.
Q18 - True day and the midnight open?
Answer: The 00:00 New York open (11:00 Dhaka) is the daily equilibrium; above it means a bullish bias.
Q19 - What is SMT divergence?
Answer: One correlated market makes a new high while the other fails - trade the weak one.
Q20 - What is a nested FVG?
Answer: A lower-timeframe FVG inside a higher-timeframe FVG - the most precise entry.
Q21 - What is an IFVG?
Answer: A failed FVG that now acts as a zone for the opposite direction.
Q22 - How much risk per trade?
Answer: 0.5 percent for the first six months, never more than 1 percent later. Two trades a day maximum.
Q23 - Where is TP1?
Answer: At the nearest liquidity pool; close 50 percent there and move the stop to break-even.
Q24 - Where does the stop go?
Answer: Beyond structural invalidation - past the sweep high or low, never inside the zone.
Q25 - Why is a stop inside the zone bad?
Answer: Because it is liquidity - the market wants it before the zone can work.
Q26 - How many trades per day?
Answer: Two, maximum. A third is usually a sign of fatigue.
Q27 - Should you trade the news?
Answer: No new entries around the release. Wait for the first five-minute candle to close.
Q28 - Which timeframe gives the bias?
Answer: Monthly, weekly and daily. A one-minute chart cannot change the bias.
Q29 - How many timeframes?
Answer: Three: bias, entry zone, trigger.
Q30 - How do you backtest?
Answer: One model, 50 trades, a screenshot and R for each, then compute win rate and average R.
Q31 - What is average R?
Answer: The average profit or loss per trade in R units: (win% x avg win) minus (loss% x avg loss).
Q32 - What gain recovers a 50 percent drawdown?
Answer: 100 percent - which is why capital protection matters more than returns.
Q33 - How do you stop emotional trading?
Answer: A written checklist, a hard floor of 7/10, and a hard limit of two trades a day.
Q34 - How do you avoid revenge trading?
Answer: Close the charts for 30 minutes after a loss. Return only for a fresh setup.
Q35 - Which session is best?
Answer: New York AM, 18:30-21:00 Dhaka - the most displacement and the cleanest FVGs.
Q36 - How do you set the daily bias?
Answer: Four questions: weekly draw, daily structure, premium or discount, and SMT - then score them.
Q37 - What if there is no setup?
Answer: Doing nothing is a trade. Being flat is a position.
Q38 - What do you do after a loss?
Answer: Log the reason and grade the process; a loss on a good process is still a good trade.
Q39 - When do you go live?
Answer: After 50 demo trades on one model with positive average R and a maximum drawdown under 5 percent.
Q40 - How many pairs at once?
Answer: One or two (EURUSD, NAS100). More pairs mean more noise, not more edge.
Q41 - What next after this book?
Answer: Pick one model, follow the 30-day plan, and mark twenty charts every day.
Educational material only · not financial advice.