Master the ICT Turtle Soup Trading Strategy

What You'll Learn

• Identify high-probability liquidity sweeps by distinguishing genuine breakouts from ICT Turtle Soup fakeouts.
• Master the precise entry mechanics, including when to use market execution versus waiting for specific candle confirmations.
• Determine logical stop-loss placements that protect your capital while minimizing the risk of being stopped out prematurely.
• Calculate realistic take-profit targets and risk-to-reward ratios optimized for this specific reversal strategy.
• Select the most effective timeframes and trading sessions to increase the accuracy and success rate of your setups.

What You'll Learn

• Distinguish between a genuine breakout and a Turtle Soup liquidity sweep to avoid falling into common market traps.
• Identify the most effective timeframes and specific times of day to hunt for high-probability ICT setups.
• Execute precise trade entries using both immediate market execution and limit orders at key liquidity levels.
• Position stop losses logically and set realistic take-profit targets to maintain a professional risk-to-reward ratio.
• Apply technical confirmation criteria, such as Market Structure Shifts, to validate the strength of a potential reversal.

Mastering the ICT Turtle Soup Trading Strategy

Are you looking to elevate your trading skills? The ICT Turtle Soup Trading Strategy might be the powerful approach you need. It masterfully blends institutional trading insights with classic breakout techniques, offering traders a unique advantage in the forex and stock markets.

This guide will dive deep into the world of ICT Turtle Soup trading. We’ll unpack its secrets and show you exactly how to implement this strategy for potentially impressive results.

The ICT Turtle Soup strategy is all about identifying and capitalizing on false market breakouts. Its core principle is simple: when price breaks a key level but quickly reverses, it’s a strong signal that the market will move in the opposite direction of that initial breakout.

This method has become a favorite among traders because it helps pinpoint high-probability setups and performs well across various market conditions. In this article, you will learn:

• A clear definition of the strategy

• Its history and evolution

• The core principles and components

• A step-by-step implementation guide

• The benefits and potential risks

• Best practices to optimize your trading

• Answers to common questions

• Inner Circle Trader (ICT) Methods: Developed by Michael Huddleston, these techniques focus on understanding and predicting institutional order flow—how the big players move the market.

• Turtle Trading: Created by Richard Dennis and William Eckhardt in the 1980s, this was a trend-following system that used breakouts for entries. The term “turtle soup” originated here, referring to trades that faded, or went against, failed breakouts.

• Order Flow Analysis: Learn to read how large institutions influence the market and identify key levels where their orders are likely concentrated.

• Support and Resistance Levels: Pinpoint critical price points where the market has historically reacted strongly.

• False Breakout Recognition: Develop the skill to see when price pierces a key level but lacks the momentum to continue, signaling a reversal.

• Momentum and Price Action: Analyze candlestick patterns and price behavior to confirm your trade setups and entry timing.

• Risk Management: Always implement strict risk controls to protect your capital and ensure long-term profitability.

• Previous swing highs and lows

• Major round numbers (e.g., 1.3000 on EUR/USD)

• Daily, weekly, or monthly opening prices

• Key Fibonacci retracement levels

• A rapid rejection and pullback from the breakout level.

• The formation of reversal candlestick patterns like pin bars or engulfing patterns.

• A clear lack of momentum or follow-through in the direction of the breakout.

Step 4: Enter the Trade

When you’ve confirmed a failed breakout, it’s time to enter a position in the opposite direction of the initial move. For instance:

If price breaks above* a resistance level but quickly falls back below it, you would enter a short (sell) trade. If price breaks below* a support level but quickly rallies back above it, you would enter a long (buy) trade.

Step 5: Set Your Stop Loss and Take Profit

Finally, manage your risk by placing a stop loss just beyond the high or low of the false breakout. For your take profit, you can target previous, significant support or resistance levels where the price is likely to react again. This disciplined approach is crucial for successfully trading the ICT Turtle Soup strategy.

Frequently Asked Questions

Which timeframes are most effective for identifying Turtle Soup setups?

While this strategy is fractal and works on any chart, it is most reliable when you identify liquidity pools on the 1-hour or 4-hour timeframes. For the actual entry, traders often drop down to the 5-minute or 15-minute charts to catch the immediate rejection after the sweep occurs.

How many pips should the price sweep past the old high or low for a valid setup?

A standard Turtle Soup typically involves a "fakeout" of 5 to 20 pips beyond a key level like a Previous Daily High or Low. If the price moves significantly further without showing an immediate sharp rejection, the setup is likely a breakout rather than a liquidity grab.

What is the recommended risk-to-reward ratio for this ICT strategy?

You should aim for a minimum risk-to-reward ratio of 1:2 by targeting the nearest internal liquidity or the opposing swing point. Because your stop loss is placed tightly just a few pips beyond the "tail" of the sweep, these setups often provide high-RR opportunities exceeding 1:3 or 1:4.

Does the Turtle Soup strategy work better in trending or ranging markets?

This strategy excels in ranging or consolidating markets where price frequently hunts liquidity above and below established boundaries. In a strong trend, it is safer to only trade Turtle Soups that sweep counter-trend liquidity to join the dominant higher-timeframe move.

Do I need a Market Structure Shift (MSS) to confirm the entry?

A classic Turtle Soup is often a direct entry as price sweeps the level, but waiting for a 1-minute or 5-minute MSS provides an extra layer of confirmation. You can either place a limit order 5-10 pips beyond the key level or wait for a candle to close back inside the range to signal the reversal.

Frequently Asked Questions

What timeframes are most effective for spotting ICT Turtle Soup setups?

While this strategy is fractal and works on any chart, it is most potent on the 15-minute and 1-hour timeframes for intraday trading. Focus on identifying sweeps of previous daily or weekly highs and lows during the London and New York sessions for the highest probability of success.

How can I distinguish a genuine Turtle Soup sweep from a real breakout?

A genuine sweep involves price briefly piercing a key level and then quickly rejecting it, often leaving a long wick behind. If price closes strongly beyond the level and begins to consolidate, it is likely a breakout rather than a liquidity grab, and you should avoid the trade.

Do I enter immediately when price hits the level or wait for a confirmation candle?

Aggressive traders often place limit orders exactly at the old high or low to catch the immediate reversal. For a more conservative entry, wait for a Shift in Market Structure (MSS) on a lower timeframe, such as the 1-minute or 5-minute chart, after the sweep has occurred.

Where is the safest place to position my stop loss to avoid being stopped out prematurely?

Place your stop loss approximately 5 to 10 pips beyond the extreme of the wick that swept the liquidity. This buffer protects you from minor price fluctuations while ensuring the trade remains valid as long as that specific liquidity pool isn't breached again.

What is a realistic Take Profit target for this specific strategy?

Your primary target should be the nearest opposing "draw on liquidity," such as a recent swing high or low on the other side of the range. Aim for a minimum risk-to-reward ratio of 1:2, but don't be afraid to trail your stop if the market shows strong momentum toward a major daily level.

Frequently Asked Questions

What are the best timeframes for identifying a Turtle Soup setup?

While this strategy is fractal, it is most effective when identifying liquidity sweeps on the 1-hour or 4-hour charts and refining your entry on the 5-minute or 15-minute charts. Higher timeframe sweeps carry more weight and typically lead to more significant price reversals.

How do I distinguish a Turtle Soup from a genuine breakout?

A valid Turtle Soup requires a "stop run" followed by an immediate rejection and a candle close back inside the previous range. If the price sustains momentum and closes convincingly beyond the level for multiple candles, it is likely a breakout rather than a liquidity grab.

Where exactly should I place my stop loss to avoid being stopped out prematurely?

Place your stop loss approximately 5 to 10 pips beyond the "tail" or wick of the candle that swept the liquidity. This provides enough breathing room for minor volatility while ensuring you exit the trade if the market continues to trend against you.

What is a realistic reward-to-risk ratio for this strategy?

You should aim for a minimum reward-to-risk ratio of 2:1 by targeting the opposing liquidity pool or the nearest Fair Value Gap (FVG). Many traders find success by taking partial profits at 1:1 and trailing the remaining position toward the "draw on liquidity" on the other side of the range.

Does the time of day affect the success rate of this setup?

Yes, Turtle Soup setups are most reliable during the London and New York sessions when high trading volume creates the necessary volatility for stop hunts. Avoid trading this setup during the late New York or Asian sessions, as the lack of volume often leads to stagnant price action rather than sharp reversals.

Frequently Asked Questions

What are the best timeframes for identifying a Turtle Soup setup?

While this strategy is fractal, it is most effective on the H1 or H4 timeframes for identifying major liquidity sweeps. If you are day trading, look for these setups on the M5 or M15 charts during high-volatility sessions to catch quick reversals.

How do I distinguish a valid Turtle Soup from a genuine breakout?

A valid setup requires a "sweep and reject" where price briefly breaches a key level but fails to sustain momentum. If the candle closes strongly beyond the level with high volume, it is likely a breakout and you should avoid entering a reversal trade.

Where is the most logical place to set a stop loss for this strategy?

Place your stop loss approximately 5 to 10 pips beyond the high or low of the "tail" that swept the liquidity. This buffer protects you from minor price fluctuations while ensuring the trade is invalidated if the market continues to trend against you.

What is a realistic risk-to-reward ratio for Turtle Soup trades?

You should aim for a minimum risk-to-reward ratio of 1:2 by targeting the nearest opposing swing high or low. Many traders find success by taking partial profits at 1:1 and letting the remainder run toward the next major liquidity pool.

Does the time of day impact the success rate of this ICT strategy?

Yes, Turtle Soup setups are most reliable during the London and New York sessions when institutional volume is highest. These windows provide the necessary liquidity to trigger stop-runs and the subsequent momentum required to reach your profit targets.

Frequently Asked Questions

Which timeframes work best for identifying ICT Turtle Soup setups?

While Turtle Soup patterns occur on all charts, they are most reliable when you identify liquidity pools on the H1 or H4 timeframes and execute on the M5 or M15. This top-down approach ensures you are trading significant institutional sweeps rather than minor price noise.

How do I distinguish a Turtle Soup reversal from a genuine breakout?

The key is to look for a rapid rejection where price pokes beyond a key level and immediately closes back within the previous range. A genuine breakout typically features strong momentum and sustained candle closes beyond the level, whereas a Turtle Soup relies on "trapping" breakout traders before a fast reversal.

Should I use a limit order or a market execution for the entry?

Many advanced traders place a limit order 5-10 pips beyond the key high or low to catch the sweep as it happens. If you prefer more confirmation, wait for a market execution after a "Shift in Market Structure" occurs on a lower timeframe following the initial liquidity grab.

Where is the safest place to set my Stop Loss to avoid being stopped out?

Your Stop Loss should be placed approximately 5-10 pips beyond the wick of the candle that swept the liquidity. This buffer protects you from minor secondary tests of the level while ensuring the trade is closed if the market continues to trend against your setup.

What is a realistic Take Profit target for this strategy?

Aim for the nearest opposing liquidity pool, such as the most recent swing high or low, which typically offers a 1:2 or 1:3 risk-to-reward ratio. You can also secure the trade by closing 50% of the position at the first Fair Value Gap (FVG) and letting the remainder run to the final target.