ICT Theory × Institutional Investors & Smart Money | Part ⑤ 'Quarterly Theory' Explanation

1. Recap of Last Time

The ICT theories (ICT Concepts) introduced so far were proposed by American trader Michael J. Huddleston, and they systematically organize concepts such as the market’s algorithmic movements, liquidity, order blocks, and fair value gaps.

Based on this theory that has influenced traders around the world, many new applied methods have emerged. The Quarterly Theory introduced here is one of them, focusing on how to subdivide time.

2. Basics of Quarterly Theory

Quarterly Theory is a method that divides market time into four segments.
For example, in a daily chart, you can divide one day into six-hour segments, creating four sessions: Asia, London, New York, and the afternoon.
By decomposing the market in this way by time, you can understand the market’s rhythm, such as which time periods tend to move and which are prone to pullbacks.

What’s important is that this subdivision is fractal. In trading, fractals primarily refer to chart patterns. A fractal repeats the same “four-segment” structure at any scale, whether a year or a day.

3. Concrete Examples of Fractal Structure

Quarterly Theory divides time into four parts as follows.

Yearly Cycle: divide a year into three-month intervals to form four segments
Monthly Cycle: divide a month into four segments by weeks (excluding incomplete weeks at the month’s start)
Weekly Cycle: designate Monday, Tuesday, Wednesday, and Thursday as one segment each, totaling four segments (Friday has a different role, so it is not included)
Daily Cycle: divide a day into six-hour segments for four segments (Asia, London, NY, and the afternoon session)

Trading Session: each session is further divided into four portions of 90 minutes

4. The Role of Q1 and True Opening

What is particularly noteworthy in quarterly theory is the first quarter (Q1 / First Quarter).
Q1 functions as a barometer to gauge the subsequent market development.

If Q1 moves a lot → Q2 tends to consolidate
If Q1 is small → Q2 tends to expand

Furthermore, the concept of “True Opening” is essential.
This viewpoint uses the beginning of the second quarter of each cycle as a reference point and serves as a key indicator for buy/sell decisions.

5. Typical True Openings in JST

In quarterly theory, “True Opening” is especially important. It uses the start of the second quarter of each cycle as a reference point and serves as a basis for trading decisions. In bullish conditions, buy below the True Opening; in bearish conditions, sell above the True Opening.

Converted to Japan Standard Time (JST), typical True Openings are as follows. (All times shown in JST)

Year: First Monday of April at 13:00
Month: Second Monday at 13:00
Week: Monday at 07:00
Day: Every day at 13:00

Asian Session: 08:30
London Session: 14:30
New York Session: 20:30
Afternoon Session: 02:30

6. 90-Minute Cycle (Japan Time / JST)

Each session is further divided into four quarters at 90-minute intervals.
The following table is converted to JST.

Asian Session
Q1: 07:00 – 08:30
Q2: 08:30 – 10:00
Q3: 10:00 – 11:30
Q4: 11:30 – 13:00

London Session
Q1: 13:00 – 14:30
Q2: 14:30 – 16:00
Q3: 16:00 – 17:30
Q4: 17:30 – 19:00

New York Session
Q1: 19:00 – 20:30
Q2: 20:30 – 22:00
Q3: 22:00 – 23:30
Q4: 23:30 – 01:00 (next day)

Afternoon Session
Q1: 01:00 – 02:30
Q2: 02:30 – 04:00
Q3: 04:00 – 05:30
Q4: 05:30 – 07:00

By organizing it this way, you can instantly see which time and which quarter the market is in.

7. Summary

Quarterly Theory is a time-management method developed on the ICT theory foundation.
By decomposing the market by time, you can find a certain rhythm and regularity even in movements that appear random.

For those who learned “how the market moves” in the previous ICT theory, the Quarterly Theory will provide a perspective on “when the market moves.”