ICT Unicorn Model [LuxAlgo]

23 Jan

The ICT Unicorn Model indicator highlights the presence of "unicorn" patterns on the user's chart which is derived from the lectures of "The Inner Circle Trader" (ICT).

Detected patterns are followed by targets with a distance controlled by the user.

🔶 USAGE



At its core, the ICT Unicorn Model relies on two popular concepts, Fair Value Gaps and Breaker Blocks. This combination highlights a future area of support/resistance.

A Bullish Unicorn Pattern consists out of:

• A Lower Low (LL), followed by a Higher High (HH)
  
• A Fair Value Gap (FVG), overlapping the established Breaker Block
  
• A successful re-test of the FVG which confirms the pattern.
  

A Bearish Unicorn Pattern consists of:

• A Higher High (HH), followed by a Lower Low (LL)
  
• A Fair Value Gap (FVG), overlapping the established Breaker Block
  
• A successful re-test of the FVG which confirms the pattern
  

The pattern detection depends on detected swings, which can be controlled by the Swing setting. Using higher values of this setting will return longer-term breaker blocks.

🔹 Using Risk/Reward Targets



A confirmed Unicorn pattern will show a blue (Target) / grey (Stop Loss) "Risk/Reward" areas (RR).

When the Stop Loss or Target is hit, a white line is shown on the concerned side.



The Risk/Reward ratio can be adjusted in the "Targets" settings.

🔹 Trailing Stop

As seen in the previous snapshots, besides the RR areas, this indicator also includes an optional Trailing Stop.



This can be helpful to lower your risk, by exiting earlier than if you would wait until the Stop Loss is hit.



This example shows a successful bullish and bearish Unicorn Pattern. In this scenario, the Trailing Stop could be used for partial Take Profit.

The goal of this publication is to show confirmed Unicorn Patterns. To increase the chance of success, it is important to evaluate the bigger picture & use this in confluence with your price action analysis. For example, look for potential areas of liquidity, consider this pattern only during certain market sessions, avoid trading during heavy impact news, &/or incorporate other aspects of technical analysis rather than just following this pattern blindly.



🔶 DETAILS

🔹 Combine

When disabled, all potential Unicorn Patterns will delete previous unconfirmed patterns:



Enabling Combine ensures the last Unicorn Patterns in the opposite direction will remain.



While the latter bullish pattern became invalid, another one formed.



The combination of the previous bearish pattern, and looking at the big picture, the bullish pattern did not have much chance to be successful.



While disabling 'combine' helps minimize clutter, enabling this feature can give a pattern more chance to hit the SL/Target level.



🔹 Mitigated FVG



Users can determine if a pattern becomes invalid due to a mitigated FVG, causing the pattern to be deleted.

🔹 New pattern detected

When a new pattern is detected, the previous unconfirmed pattern in the same direction (bullish - bullish or bearish - bearish) will be deleted. This will always be the case, whether "Combine' is enabled or disabled.



When the previous pattern was confirmed but no SL or Target level was hit, this pattern will stop updating.

🔶 SETTINGS

🔹 Unicorn

• Swings: This sets the length of swings, used for the underlying ZigZag and Unicorn Patterns detection.
  
• Bull: Enable/disable Bullish patterns, and set the color of FVG box and Trailing Stop.
  
• Bear: Enable/disable Bearish patterns, and set the color of FVG box and Trailing Stop.
  
• Combine: When enabled, patterns in opposite directions (bullish/bearish) can exist at the same time. disabling this feature tends to give less clutter. See the "Usage" section for more information.
  

🔹 Targets

• Risk/Reward: Sets the Risk/Reward ratio.
  
• Trailing Stop: Set the length of small swings, which is used for the Trailing Stop.