ICT Model 5 (The 5 Box Setup)

This model focuses on how price behaves around a high-timeframe level. You’ll often see price go through a process of consolidation, liquidity sweep, and retest before making its real move.

By understanding these five steps, you can learn to time your entries with precision, using clear structure and logic.

Steps

Let’s break it down:

Step 1: Identify the High Timeframe Point of Interest (HTF POI)

Start by finding a strong level on a higher timeframe (like 1H, 4H, or Daily). This can be:

• A swing high or low
• An order block
• A fair value gap (FVG)

This is your “anchor” — where you expect the price to react.

Step 2: Observe the Original Consolidation Range

As the price approaches the HTF POI, it often pauses and moves sideways. Mark the top and bottom of this consolidation — this becomes your “box”.

This range builds liquidity — because traders place stop losses above and below it. These levels will likely be targeted next.

Step 3: Wait for the Aggressive Move (Liquidity Sweep)

Next, price usually makes a fast and aggressive move out of the box — either above or below.

This is where the market grabs liquidity by hitting stop losses outside the range. This move is key — it shows the market has collected enough orders to fuel the next leg.

Step 4: Retest of the Original Consolidation Box

After the sweep, the price often returns to the original consolidation box. This retest is your entry trigger.

It shows the market is rejecting the sweep and ready to move in the opposite direction, confirming the shift in momentum.

Step 5: Enter the Trade with a Good Risk-to-Reward

Once price retests the box:

• Enter your trade in the direction of the reversal.
• Place your stop loss beyond the liquidity grab.
• Target the next HTF level, fair value gap, or external liquidity

Always make sure the trade offers a favorable risk-to-reward, ideally 1:2 or better.

Quick Tip

Don’t rush into trades just because you see a sweep. Wait for the retest of the box and confirmation of direction. The best setups are clean, obvious, and follow this structure.