ICT Silver Bullet Strategy: Times, Rules and How to Backtest It

The ICT Silver Bullet is a time-based setup taught by Michael J. Huddleston, known as the Inner Circle Trader (ICT). It looks for a trade inside one of three one-hour windows in New York time (3am to 4am, 10am to 11am and 2pm to 3pm), entering on a fair value gap that forms after price runs liquidity, with a target at the next obvious high or low. It is popular on index futures such as the Nasdaq 100 and S&P 500, and on major currency pairs.

Like other ICT concepts, it is usually taught with chart examples rather than exact rules, which makes it easy to believe and hard to test. This guide sets out the rules precisely enough to backtest.

This is an educational description, not a recommendation. Backtests are not future results, and leveraged trading carries a high risk of loss.

The three windows

Daylight saving time matters: write every rule in New York time and make sure your backtester converts it correctly.

The setup, as testable rules

1. Window: only look for setups inside the chosen one-hour window.
2. Liquidity: identify a level price is likely to run, such as the session high or low so far, or a recent swing high or low.
3. Sweep or displacement: price trades through that level, then moves sharply the other way.
4. Fair value gap: the sharp move leaves a three-candle gap (candle 1's high below candle 3's low, or the reverse).
5. Entry: a limit order at the gap (its edge or midpoint) when price retraces into it, still inside the window.
6. Stop: beyond the swing that created the gap.
7. Target: the next liquidity level in the trade's direction, or a fixed R such as 2R.

Definitions you must pin down

Each choice changes the result. Decide them before you look at results, and keep a note of every variation you try, so you know how much testing went into the final version. See how to tell if a backtest is overfit.

Where it usually fails

• No setup most days. Strict rules may produce only a few trades a month, so the sample builds slowly. See how many trades a backtest needs.
• Missed fills. Limit entries at the gap assume you get filled; in fast moves you may not, and backtests that assume every fill flatter the result.
• The sweep is a real move. Sometimes price runs the level because a trend is starting.
• Hindsight. It's easy to see a "perfect" Silver Bullet on a chart after the fact. A backtest with fixed definitions removes that bias.

How to backtest the Silver Bullet

1. Fix every definition in the table above.
2. Test one window at a time on several years of intraday data, with costs.
3. Hold back an unseen period. See out-of-sample testing.
4. Compare it with a simpler version, such as the same window and target without the fair value gap. If the gap rule doesn't help on unseen data, it may not be doing anything.
5. Run Monte Carlo on the trades.

In Strategy Lab, fair value gaps, inverse fair value gaps, liquidity sweeps and killzones are built-in building blocks, and sweep-then-FVG retests are one of the starter packs. You can set the time window as a session filter or describe your full Silver Bullet rules to TES, the AI strategy coach, then check the rules Strategy Lab reads back before the backtest runs. For the related setup without a fixed window, see the liquidity sweep strategy.

Free tools for this: use the profit factor calculator to work out profit factor from your own trades and the Monte Carlo simulator to see the range of drawdowns your trade results could produce. They run in your browser, with no account needed.