ICT Unicorn Model

The ICT Unicorn Model is an innovative trading indicator designed to help traders spot "unicorn" patterns on their charts. Derived from the insightful teachings of "The Inner Circle Trader" (ICT), this indicator assists in identifying key trading setups, with user-controlled target distances to optimize trading strategies.

How to Trade with the ICT Unicorn Model

At its foundation, the ICT Unicorn Model leverages two pivotal trading concepts: Fair Value Gaps and Breaker Blocks. This powerful combination seeks to pinpoint prospective support and resistance zones.

One of the key patterns, the Bullish Unicorn Pattern, is identified by:

• Formation of a Lower Low (LL) followed by a Higher High (HH)
• A Fair Value Gap (FVG) that overlaps an established Breaker Block
• A successful re-test of the FVG confirming its reliability.

The Bearish Unicorn Pattern is similarly identified by:

• Formation of a Higher High (HH) followed by a Lower Low (LL)
• A Fair Value Gap (FVG) overlapping the Breaker Block
• A successful re-test of the FVG that validates the pattern

To refine the pattern detection process, traders can adjust the Swing setting. This allows for customization of swing recognition, leading to identification of either long-term or short-term breaker blocks.

Optimizing Trades with Risk/Reward Targets

Upon confirmation of a Unicorn Pattern, traders will see blue (Target) and grey (Stop Loss) "Risk/Reward" zones (RR) on their chart.

When either the Stop Loss or Target area is reached, a distinctive white line will appear on that side to indicate the outcome.

Traders have the advantage of adjusting the Risk/Reward ratio within the "Targets" settings to better fit their trading goals.

Utilizing the Trailing Stop Feature

A highlighted feature of the ICT Unicorn Model is the optional Trailing Stop.

This feature is beneficial for managing risk effectively, as it allows traders to exit trades prematurely without waiting for the Stop Loss to be reached, thereby potentially preserving profits.

In the above example of a bullish and bearish Unicorn Pattern, the Trailing Stop is utilized for safe and strategic partial profit-taking.

The primary objective of using the ICT Unicorn Model is to successfully identify and trade confirmed Unicorn Patterns. For enhanced success, traders should also gather a broader market perspective—assessing liquidity, market conditions, avoiding volatile news periods, and implementing comprehensive technical analysis alongside pattern recognition.

Detailed Exploration of Features

Comprehensive Pattern Combination

With the Combine feature disabled, previous unconfirmed Unicorn Patterns are removed to reduce chart clutter:

Activating Combine permits opposing Unicorn Patterns (bullish vs. bearish) to coexist, ensuring that recent contrary patterns are still visible:

Although the earlier bullish pattern eventually invalidates, a subsequent pattern may develop.

Through analyzing the interplay between previous bearish patterns and current market conditions, traders can assess opportunities astutely.

Disabling 'combine' functionality helps maintain a cleaner charting environment, but enabling it could enhance trade success probability.

Managing Mitigated Fair Value Gaps

Traders may alter settings to address whether a pattern's invalidation arises due to a mitigated FVG, triggering pattern removal.

On-Chart New Pattern Alerts

Upon detecting a new pattern, any previously unconfirmed pattern in the same trading direction (bullish-bullish or bearish-bearish) is automatically removed, independent of the 'Combine' setting.

Confirmed patterns remain active until a Stop Loss or Target level is achieved.

Customizing Your Settings

Personalizing the Unicorn Indicator

• Swings: Define the swing lengths utilized by the ZigZag indicator and for identifying Unicorn Patterns.
• Bull: Toggle Bullish patterns on/off and customize FVG box and Trailing Stop colors.
• Bear: Toggle Bearish patterns on/off and set colors for FVG box and Trailing Stop.
• Combine: Allow cohabitation of opposing direction patterns or limit to less clutter for clarity.

Setting Trading Targets

• Risk/Reward: Adjust the desired Risk/Reward ratio for trades.
• Trailing Stop: Customize the swing lengths to modulate the Trailing Stop feature effectiveness.

FAQ

How do I access the ICT Unicorn Model indicator? You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.

What are Fair Value Gaps and Breaker Blocks? Fair Value Gaps and Breaker Blocks are key trading concepts used to identify zones of potential support or resistance, assisting in spotting reliable trading patterns.