Market Maker Buy Model (MMBM) – ICT Trading Model

ICT presents two types of trading Models: ICT Market Maker Buy Model (MMBM) and ICT Market Maker Sell Model (MMSM). ICT Market Maker Buy Model is particularly used in Forex and other financial market. It is based on institutional Order Flow. It aims to anticipate price movement by analyzing liquidity and institutional movements.

This article explores core concept of ICT Market Maker Buy Model, its components and trading with MMBM.

Understanding ICT Market Maker Buy Model (MMBM)

ICT MMBM is a trading model presented by Michael Huddleston that illustrates the transition of price from bearish to bullish. It provides structured approach to anticipate market movement. ICT MMBM contains several critical factors that must be aligned before implementing the model. This ensures the validity of the model. These factors include higher timeframe market structure, daily bias and draw on liquidity, and the presence of sell program on lower timeframes prior to the higher timeframe PD Array.

In Market Maker Buy Model (MMBM), higher timeframe market structure should be bullish. It is the foundational requirement of this model. This means that on higher timeframe market must demonstrate consistent higher highs and higher lows. This is an indication of upward momentum. The structure reflects prevailing dominance of buyers and sets the stage for bullish price delivery. This gives the confidence to rely on institutional order flow. This alignment provides macro perspective of market analysis.

The next important thing is that our directional intent should be accurate. It can be acquired through Daily Bias or Draw on Liquidity. Daily bias represents the market’s likely direction for the next day. Draw on Liquidity must align with a bullish narrative. This means that the market is targeting buy-side liquidity. It can be swing highs, equal highs or imbalances zones and Fair Value Gaps above the current price. This alignment increases the likelihood that institutional players will take the prices higher.

Market must be bearish on lower timeframes. There should be evidence of a sell program on lower timeframes. This involves a deliberate downward movement aimed at clearing out liquidity below significant lows, enticing retail traders to short the market. This engineered liquidity grab allows institutions to accumulate long positions at discounted prices, positioning themselves for the impending bullish expansion.

These are the few prerequisites of ICT Market Maker Buy Model. All of the factors must be combined for successful trading. Traders can better anticipate and execute trades aligned with institutional order flow.

Major Components of ICT MMBM

ICT concepts are relative in nature. These concepts can be combined in order get the confidence required for trade execution. There are four interconnected components that are the foundation concepts used for trade execution in alignment with institutional price movement.

First among them is the Ranging Market scenario. It is considered as an important phase of Market Maker Buy Model (MMBM). This is also known as lateralization period where market moves within a confined range. In this phase, market moves between two limits. It is a state of temporary equilibrium between buyer and sellers.

Second thing is Engineering Liquidity. In this phase of the market movement, price forms lower highs. This encourages retail traders to sell and, at the same time, accumulating order below the swing lows. These moves are designed by institutions to set up a liquidity trap. This creates illusion of bearishness in the market. The generated liquidity during this phase becomes fuel for the next phase of the model. Smart money uses these orders to facilitate large buy-side positions.

Third is the Smart Money Reversal. It is the transition of market from bearish to bullish. Here, market aligns with higher timeframe market structure. This occurs when market reaches HTF PD Array. This can be an Order Block, or a Fair Value Gap. At this point, institutions reverse the trend and continue its new market direction. This phase confirms he market’s intent to shift higher and forms the foundation for the final component.

Fourth and the final is the Liquidity Hunt where price target key levels of buy-side liquidity. These are the old highs during the engineering liquidity phase. The high of the major consolidation also serves as the liquidity area. This upward movement not only sweeps these liquidity levels but also completes the cycle of price delivery.

These are the are the most important components that must be combined for better entries and exits. However, additional confluences can be made in order to get better result. Remember, it would be better if your trading strategy is simple and clean containing the logic and psychology necessary for your confidence.

Trading with ICT MMBM

In order to follow the structured approach of Market Maker Buy Model, we have to follow the following steps:

• Confirm that higher timeframe structure should be bullish. Series of higher highs and higher lows signifies strong uptrend. Additionally, determine your next Draw on Liquidity near the swing highs, equal highs or imbalances zones above the current price.
• After identification of institutional Order Flow, shift to a lower timeframe and identify a bearish trend. This bearish trend is nothing but a retracement for higher timeframe. Typically, this bearish trend on smaller timeframe ends near HTF PD Array.
• When price reacts to higher timeframe PD Array, wait for bullish confirmations. These confirmations come in various ways. It can be identified through Market Structure Shift (MSS) or Change of Character (CHOCH). This signifies a transition to bullish order flow.
• After confirmation, execute a buy trade when price retraces into a Fair value Gap below the MSS level. This is just the one case of executing buy entries. It is also possible that market continue its direction from Breaker Block or market forms Unicorn Model there.
• Place your stoploss 10-20 pips below the last swing low, the low formed before the MSS. Your take profit is the near draw on liquidity which are the old highs or imbalances.

This approach ensures alignment with institutional order flow and maximizes the probability of capturing significant price movement. By adhering to the steps outlined, trader can catch and capitalize on the ICT Market Maker Buy Model with confidence.

Final Note

The ICT Market Maker Buy Model is a powerful framework for trading in alignment with institutional order flow, but it requires practice, discipline, and a solid understanding of market dynamics. Always backtest and refine your approach before applying it in live markets.

Trading involves significant financial risk and may not be suitable for all investors. Past performance does not guarantee future results. Never trade with money you cannot afford to lose. Use proper risk management, and seek professional advice if needed. You are solely responsible for any trading decisions you make.

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