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NWOG - New Week Opening Gap
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NWOG - New Week Opening Gap

Introduction to ICT New Week Opening Gap

In this section, the speaker introduces the concept of ICT New Week Opening Gap (NWOG), which is a tool used to give large fund fair value. The speaker explains that NWOG is not a new concept but rather an approach to utilizing and how algorithms refer back to it as a point of fair value.

What is ICT New Week Opening Gap?

  • NWOG is the Sunday opening price minus the closing price on the previous week's Friday.
  • It can be located using a one or five-minute chart.
  • NWOG is a real liquidity void that reprices into it and can refer back to it weeks ago, months ago, or more.
  • A minimum of four new week opening gaps should be on your chart for proper perspective of large fund fair valuation.

Importance of Having Multiple Weeks' Worth of NWOG

In this section, the speaker emphasizes the importance of having multiple weeks' worth of NWOG on your chart for proper perspective of large fund fair valuation.

Why Have Multiple Weeks' Worth of NWOG?

  • Having at least five weeks worth keeps a dynamic four-month perspective and gives you a little bit of overlap.
  • Referring back four weeks ago provides insight into what we've seen for this week.
  • Using candles, green means bullish (up close candle), black means bearish (down closed candle).
  • Once filled, gaps are generally discarded but holding onto them allows algorithms delivering price to refer back to these price points.

Understanding New Week Opening Gaps

In this section, the speaker explains how to use Fibonacci levels to anchor new week opening gaps and how to label them for future reference. They also discuss how these gaps can be used as support and resistance levels.

Anchoring Fibonacci Levels to New Week Opening Gaps

  • Use Fibonacci levels anchored to Friday's closing price and Sunday's opening price.
  • If Sunday's opening price is lower, drag the Fibonacci down to it and anchor it there.
  • The 50 level represents consequent encroachment for an inefficiency or gap.
  • A fully dressed new week opening gap includes the high, low, and consequent crochet in the middle.

Labeling New Week Opening Gaps

  • Label each new week opening gap with its corresponding Sunday date for future reference.
  • This helps keep track of multiple gaps on a chart and makes it easier to identify them later on.
  • Annotate using text points of a trend line or other annotation tools.

Adding Quadrants

  • Splitting new week opening gaps into quarters can help with analysis.
  • Add quadrants by finding the midpoint between the high and low of the gap, as well as between the 50 level and low/high of the gap.

Using New Week Opening Gaps as Support/Resistance Levels

  • Having at least four or five new week opening gaps on a chart provides a rolling 30-day look back period.
  • These gaps can act as support/resistance levels that indicate fair value for an asset.
  • Price often refers back to these levels over time.

Understanding New Week Opening Gaps

In this section, the speaker explains how to identify and use new week opening gaps in trading.

Importance of New Week Opening Gaps

  • New week opening gaps indicate whether the market is range-bound or trending.
  • Price often gravitates back to previous week's new week opening gap as support or resistance.
  • It's important to keep track of new week opening gaps on your chart and use them as a template for future trades.

How to Identify New Week Opening Gaps

  • Place a trend line on Friday's closing price and measure the difference between that price and Sunday's opening price.
  • Use two approaches: "new week opening gap actual" (Friday close to Sunday open), and "new week opening gap" (Friday close to Monday open).
  • Having both templates allows you to see different new week opening gaps and how fair valuation is utilized throughout the weeks.

Homework Assignment

  • Use Monday's 9:30 am ES opening price and Friday's 4:59 pm closing price as another new week opening gap.
  • Review charts regularly using both templates.
Playlists: 2023 ICT Mentorship
Video description

CFTC RULE 4.41 – HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN Trading performance displayed herein is hypothetical. Hypothetical performance results have many inherent limitations, some of which are described below. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown. In fact, there are frequently sharp differences between hypothetical performance results and the actual results subsequently achieved by any particular trading program. One of the limitations of hypothetical performance trading results is that they are generally prepared with the benefit of hindsight. In addition, hypothetical trading does not involve financial risk, and no hypothetical trading record can completely account for the impact of financial risk in actual trading. For example, the ability to withstand losses or to adhere to a particular trading program in spite of trading losses are material points which can also adversely affect actual trading results. There are numerous other factors related to the markets in general or to the implementation of any specific trading program which cannot be fully accounted for in the preparation of hypothetical performance results and all of which can adversely affect actual trading results. U.S. Government Required Disclaimer – Commodity Futures Trading Commission Futures and Options trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the futures and options markets. Don’t trade with money you can’t afford to lose. This is neither a solicitation nor an offer to Buy/Sell futures or options. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this web site. The past performance of any trading system or methodology is not necessarily indicative of future results. Trade at your own risk. The information provided here is of the nature of a general comment only and neither purports nor intends to be, specific trading advice. It has been prepared without regard to any particular person’s investment objectives, financial situation and particular needs. Information should not be considered as an offer or enticement to buy, sell or trade. You should seek appropriate advice from your broker, or licensed investment advisor, before taking any action. Past performance does not guarantee future results. Simulated performance results contain inherent limitations. Unlike actual performance records the results may under or over compensate for such factors such as lack of liquidity. No representation is being made that any account will or is likely to achieve profits or losses to those shown. The risk of loss in trading can be substantial. You should therefore carefully consider whether such trading is suitable for you in light of your financial condition. If you purchase or sell Equities, Futures, Currencies or Options you may sustain a total loss of the initial margin funds and any additional funds that you deposit with your broker to establish or maintain your position. If the market moves against your position, you may be called upon by your broker to deposit a substantial amount of additional margin funds, on short notice in order to maintain your position. If you do not provide the required funds within the prescribed time, your position may be liquidated at a loss, and you may be liable for any resulting deficit in your account. Under certain market conditions, you may find it difficult or impossible to liquidate a position. This can occur, for example, when the market makes a “limit move.” The placement of contingent orders by you, such as a “stop-loss” or “stop-limit” order, will not necessarily limit your losses to the intended amounts, since market conditions may make it impossible to execute such orders.