Thor's Bread & Butter Model

⚡ This model requires an understanding of ICT Market Structure, Fair Value

Gaps, and Draw On Liquidity to be used in practice. It is not to be used
blindly.

⚡ Thor’s Bread and Butter Model helps you read price action by giving you a
greater understanding of price action.

⚡ This Model works in every market.

⚡ This Model is known for little to no drawdown entries.

Thor's Bread & Butter Model 1

 Thor's Bread & Butter Model
The Model
This model requires two elements for it to form.

Upper Fair Value Gap

Lower Fair Value Gap

Besides those two fair value gaps the rest is situational. What do I mean by that?

Building A Narrative
Price action is created for two reasons:

“To run stops or to rebalance price”

When the market is expanding, fair value gaps are formed.

Typically, before the expansion fair value gaps are formed, the market runs for the stops
of the opposing side, this eventually creates ICT breaker block.
Having this understanding will help you to establish narrative.
Always anticipate stop runs before the expansion. The easiest way to visualize this is by
using the Thor Bread & Butter Model..
Now let’s get into it

Thor's Bread & Butter Model 1

 Thor's Bread & Butter Model
What is The Meaning of The Two FVGs?

In a Bullish Scenario
The Upper FVG acts as a real accumulation area, meaning that “Smart Money”
accumulates long positions and moves price up and down in a short range.
Retail refers this type of price action as consolidation.

The Lower FVG, on the other hand, is used as ICT’s Institutional Order Flow
Entry Drill (IOFED) before repricing higher. Either to rebalance the market or
sell stops.

In a Bearish Scenario
The Lower FVG acts as a real accumulation area, meaning that “Smart Money”
accumulates short positions and price moves in a small range.

Thor's Bread & Butter Model 1

 The Higher FVG is used as ICT’s Institutional Order Flow Entry Drill (IOFED)
before repricing lower. Either to rebalance the market or buy stops.

Thor's Bread & Butter Model 2

 Thor's Bread & Butter Model
What is IOFED?
IOFED is when price only wicks into a fair value gap, but bodies of the candles
closes outside the area.

When you don’t see a full closure of the FVG or candle body close within the FVG,
this is what we refer to as IOFED.

The Real Power Of Three

On the respective lower time frame:

The market first consolidates in the accumulation area.

Then the market wicks into the IOFED area; this can be viewed as a manipulation.

This is a run on stops and grab of liquidity.

Lastly, the market expands after it manipulates into the IOFED area.

Thor's Bread & Butter Model 1

Thor's Bread & Butter Model 2
 Thor's Bread & Butter Model
The Execution
The entry for this model resides in the IOFED zone.

Ideally, a limit order is placed at the IOFED FVG, anticipating an IOFED.

A more conservative approach consists of waiting for the IOFED to be

confirmed and marketing in the position afterwards.

Typically, a setup on the 15 minute time frame and above must be utilized with a
lower time frame confirmation.

This is all dependent on the asset class that you’re trading. Backtesting is
highly recommended.

Depending on your risk management, you can begin to build a position in the
accumulation zone.

For your stop loss, there are multiple approaches

The first and the safest approach would be to place your stop loss at the closest
swing point, before the FVGs.

Thor's Bread & Butter Model 1

 The second approach would be to place your stop loss below the IOFED FVG
when we’re bullish; above the IOFED FVG.

Thor's Bread & Butter Model 2

 Thor's Bread & Butter Model
Real World Example
First and foremost, we need to establish the Higher Time Frame bias.
How do we that..?

Taking a look at the Weekly and the Daily time frame on the ES chart, we can
establish the orderflow is bullish and price is drawn to the buy side.

There is a clear market structure shift, followed by a displacement.

Now that we’ve identified the current orderflow, we can look for the most logical
draw on liquidity.

In this particular case, the most logical draw on liquidity would be the Equal
Highs.

Thor's Bread & Butter Model 1

 Then we wait for a retracement into a logical area to bounce.

In this example, the logical area to bounce would be one of the discount fair
value gaps.

Thor's Bread & Butter Model 2

 On the retracement leg, the market created short term buy side liquidity.

This short term BSL would be our first draw on liquidity.

Thor's Bread & Butter Model 3

Thor's Bread & Butter Model 4
 Thor's Bread & Butter Model
Adding Further Confluence
There are several elements that can be utilized to add further confluence to Thor
Bread & Butter Model.

Breakers and NWOG Low/High at the IOFED FVG.

⚡ Breakers form after a liquidity run. Once it is creates, it indicates the liquidity
run is completed.

⚡ “Breakers can be formed in a continuation leg it is not to be used only for

reversal patterns”

Thor's Bread & Butter Model 1

 In the following example, you can see how the IOFED area can be used by using
NWOG Low as a confluence before CPI data is being release. (PLEASE DO NOT
HOLD ANY POSITION INTO HIGH IMPACT NEWS!!)

Thor's Bread & Butter Model 2

 NWOG High

NWOG Low

Thor's Bread & Butter Model 3

 Thor's Bread & Butter Model
Examples

Thor's Bread & Butter Model 1

Thor's Bread & Butter Model 2
Thor's Bread & Butter Model 3
Thor's Bread & Butter Model 4
 Thor's Bread & Butter Model
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Thor's Bread & Butter Model 1