ICT Turtle Soup Entry: Trading False Breakouts of Highs and Lows

Breakouts attract traders. When price pushes above an obvious high, some traders buy the break, and those who were short place their stops just above it. If the push fails and price falls back, both groups are suddenly on the wrong side. Turtle Soup is the name for trading that failure. It is older than ICT, and ICT traders have adapted it to their own vocabulary of liquidity and sweeps.

What it is

The original idea

Turtle Soup comes from Linda Bradford Raschke, who published it with Laurence Connors in the 1990s. The name is a joke at the expense of the Turtle traders, a group trained in the 1980s to buy new 20-day highs and sell new 20-day lows. Raschke's setup did the opposite: in broad terms, it looked for a market making a new 20-day extreme where the previous extreme had been set several sessions earlier, then traded back through the old level when the breakout failed. The exact original rules are more specific than this summary, and later traders have adjusted them freely.

The ICT version

ICT traders use the same principle on any obvious level where stops are likely to rest: a previous day high or low, a session high or low, or relative equal highs and lows. The sequence is:

1. Price trades beyond the level, running the stops (a sweep).
2. Price fails to continue and closes back inside.
3. The trader enters in the opposite direction of the break, with a stop beyond the false-break extreme.

ICT usage usually adds two filters: the sweep should happen at a higher-timeframe PD array (such as a bearish FVG for a short), and it should happen in a kill zone, when session flow is more likely to produce a real reversal. In effect, Turtle Soup is the classic name for what this course calls a liquidity sweep reversal.

How to identify it

1. Mark obvious levels in advance: previous day high and low, the Asian range, clean equal highs or lows.
2. Check the higher timeframe. Is the level inside or near a PD array that supports a reversal?
3. Watch the clock. Prefer sweeps during the London (02:00–05:00 ET) or New York AM (07:00–10:00 ET) kill zones.
4. Wait for the close. On your execution timeframe, a candle body must close back inside the level.
5. Look for follow-through. A displacement candle or a break of a short-term swing in the new direction adds confidence.
6. Set the stop beyond the extreme and confirm the target is far enough to justify it.

Worked example: a bearish Turtle Soup on GBP/USD

All prices are illustrative. Assume GBP/USD, 15-minute chart.

• Previous day high: 1.2745.
• Asian range: 1.2702 to 1.2731.
• Higher-timeframe context: a bearish 1-hour FVG sits between 1.2750 and 1.2762, and the daily bias is bearish.
• At 03:15 ET, inside the London kill zone, price rallies through the previous day high to 1.2758, 13 pips beyond it and into the 1-hour FVG.
• The 03:15 candle closes at 1.2738, back below 1.2745. That close is the trigger.

The stop at 1.2761 sits 3 pips above the sweep high. Risk = 1.2761 − 1.2738 = 23 pips. Target 1 is 36 pips away (about 1.6 times the risk) and target 2 is 58 pips away (about 2.5 times the risk).

On a $10,000 account risking 1% ($100), with GBP/USD worth roughly $10 per pip per standard lot, position size = $100 ÷ (23 × $10) ≈ 0.43 lots. A common plan is to take part of the position at the Asian low and move the stop to breakeven.

Some traders prefer to wait for a retrace toward 1.2745 after the close and short there with the same stop. That improves reward-to-risk (16 pips of risk) but misses the trade when price falls straight away.

Invalidation: a 15-minute close back above 1.2745 suggests the breakout may be real after all. A trader may exit there rather than wait for the full stop.

How traders use it

• As a stand-alone reversal entry at the day's obvious levels.
• As the first step of a bigger model. A Turtle Soup sweep is often the manipulation leg in a Power of Three day or the sweep in a Candle Range Theory setup.
• With a lower-timeframe refinement. After the close back inside, some traders drop to the 1-minute or 5-minute chart and enter on a small FVG instead of at market.
• Against breakout traders' habits. It works best, when it works, on levels that are so obvious that many orders sit beyond them.

Trading carries substantial risk of loss. False breakouts and real breakouts start the same way, so keep risk per trade small and accept that some fades will be run over.

Common mistakes

• Fading every new high. Without a PD array and a time filter, you are simply trading against momentum.
• Entering on the wick. Selling while price is still above the level means guessing that it will close back inside.
• Stops inside the sweep. A stop below the false-break extreme gets taken by a second probe.
• Ignoring news. A high-impact release can produce a sweep and then a genuine breakout within minutes.
• Re-entering repeatedly. If the level breaks and holds, the idea is wrong; step aside.

Summary

Turtle Soup is a false-breakout fade, named by Linda Bradford Raschke after the Turtle traders' breakout rules. ICT traders apply it to swept liquidity levels: price trades beyond an obvious high or low, closes back inside, and the trader enters the other way with a stop beyond the extreme. It is strongest at a higher-timeframe PD array inside a kill zone, and like every model it needs a clear invalidation and modest size.