Unleashing the Second-Stage Distribution: A Simple ICT Sell Model

In fast markets, catching the inflection before the crowd can mean the difference between a winning run and getting stuck in churn. Building on core ICT concepts—relative equal lows, premium/discovery arrays, Fibonacci quadrants, and fair-value gaps—this “Second-Stage Distribution” model offers a clear, repeatable way to sell into strength with confidence.

Key Concepts

• Relative Equal Lows: Identify back-to-back swing lows that mark retail stop clusters and sell-side liquidity.
• Premium PD Array: Draw a zone at recent swing highs plus a small ATR buffer—targets institutional buy-stop clusters.
• Fibonacci Quadrants (.25, .50, .75): Partition your PD range to find the critical 75% quadrant where second-stage distribution often develops.
• Fair‐Value Gap (FVG): The unfilled gap after a liquidity sweep—price often “reclaims” this zone before the big move.
• Breaker/Inversion: A clean reclaim of the FVG edge confirms institutional follow-through.

Step-By-Step Sell Strategy

1. Mark Your Structure

Scan a 5–15 minute chart for two almost-equal lows. Connect them with a horizontal line—the “sell-side liquidity” anchor.

2. Define the Premium PD Array

Trace the last 3–5 swing highs. Expand by 0.5 × ATR(14) to capture noise. This becomes your upper “premium” zone.

3. Plot Fibonacci Quadrants

From the top of your PD Array (0%) down to your equal-low line (1.00), draw 25%, 50% and 75% levels. The 75% quadrant is your high-probability entry zone.

4. Wait for the Liquidity Sweep & FVG Formation

Watch for a sharp run up into your premium array that leaves a Fair-Value Gap on the pullback leg. This gap often signals where institutional stops were eaten.

5. Enter on the 75% Retrace + FVG Reclaim

Once price retraces into the 0.75 level and then “reclaims” the FVG (a full candle close back above that gap), place a sell order at the next candle’s open.

6. Manage Risk & Targets

• Stop-Loss: Just above the top of the FVG or premium array (your choice of buffer).
• Target: Your first take-profit at the Relative Equal Low line (1.00). Consider scaling out and trailing the remainder with an ATR(5) buffer.
• Risk-Reward: Aim for at least 1:2 R:R on the initial leg.

Why This Works

• Liquidity Harvesting: Sweeping stops in the premium array creates the price impulse you ride back into the 0.75 zone.
• FVG Magnetism: Fair-Value Gaps draw price back as institutions fill unexecuted orders.
• Second-Stage Conviction: The 75% retrace aligns with where larger orders often enter—selling into the final leg of strength.

Ready to apply this model? Backtest it on your favorite futures or forex pair today, journal each trade, and iterate. With disciplined execution and continuous refinement, you’ll turn this simple ICT approach into a powerful edge.