ICT Forex - Higher Time Frame Concepts

Higher Timeframe Concepts

The module focuses on key levels and price rejections in higher timeframe concepts.

Key Levels

• Yearly highs and lows are the last 12 months, a rolling calendar.

• Monthly highs and lows are the last three months.

• Weekly highs and lows are from the previous week.

• Use these levels as reference points for support and resistance.

Price Rejections

• Double-top sweeps occur when price action creates equal highs, then trades lower after rejecting above those highs.

• Double-bottom sweeps occur when equal lows form, then price trades back down to that level before rejecting higher.

• Simple runs on old lows involve running out of a previous low, then rejecting it to go higher.

• Runs on old highs involve trading through an old high, breaking out, then returning back into the range trading in the opposite direction.

Dollar Index Analysis

The section discusses analyzing the dollar index from a daily chart perspective.

Prevailing Trend

• The prevailing trend has been down for the entire year on the dollar index.

• We have been consolidating sideways since breaking a significant low but also traded below this low while inching higher.

Support and Resistance Levels

• Look for relatively obvious support/resistance levels using yearly/monthly/weekly highs/lows.

• Draw these levels to identify where we are currently trading.

Understanding Market Ranges

In this section, the speaker discusses how to identify potential market ranges and opportunities for profit.

Identifying Market Ranges

• To identify potential market ranges, traders should assess where the market is currently and determine if it's likely to move up or down.

• Traders can then look for opportunities within that range to make a profit.

• The speaker notes that there are certain times of the year when the market is more likely to trend or consolidate, and traders should take this into account when assessing potential ranges.

Assessing Market Direction

In this section, the speaker discusses how to assess market direction based on recent price action.

Recent Price Action

• The speaker looks at recent price action in order to assess where the market may be headed next.

• They note that if the market continues to trade above equal highs, it may be reaching for higher levels.

• Conversely, if it trades below equal lows, momentum may be building for a move lower.

Applying Price Action Concepts Across Timeframes

In this section, the speaker emphasizes that price action concepts apply across all timeframes.

Fractal Nature of Price Action

• The speaker notes that price action concepts seen on lower timeframes also apply on higher timeframes.

• They emphasize that price is fractal and traders should expect similar phenomena across different timeframes.

• The speaker provides an example of how recent price action in EUR/USD reflects similar patterns seen in other markets.

Analyzing EUR/USD Price Action

In this section, the speaker analyzes recent price action in EUR/USD.

Recent Price Action in EUR/USD

• The speaker notes that recent price action in EUR/USD has seen the market trend higher as the dollar index traded lower.

• They analyze recent swings in price and note that the market may be stuck in a range for the remainder of December.

• The speaker provides insights into potential momentum building for a move lower, based on recent price action.

Eurodollar and Cable Analysis

The speaker analyzes the Eurodollar and Cable markets, discussing their current trends and potential future movements.

Neutral to Bearish on Eurodollar

• The market has been uptrending but is currently difficult to predict.

• It's uncertain what direction it will move next, despite a classic chart pattern that suggests a bull flag.

• The dollar index negates this pattern, making it more likely that the market will go sideways or attempt to break below equal lows.

Uncertain Conditions for Cable

• The dollar looks like it wants to go higher, making it uncertain whether Cable will follow suit.

• There's a risk that some fundamental factor could cause Cable to rise, but this seems unlikely given current market conditions.

• The speaker wouldn't touch this pair but would reach for equal lows if forced to trade.

Consolidation for Aussie Dollar and New Zealand Dollar

Aussie Dollar

• This pair doesn't have any real clear direction and is in the middle of its range.

• We've had an optimal trade entry long but now there's uncertainty about where it wants to go next.

• The move is done for now, so we'll have to wait for a new setup.

New Zealand Dollar

• Every low has been taken out with no clear defined market structure in place.

• It may return back to its low point, but there's no way of knowing what will happen after that.

Potential Leg Higher on Dollar CAD

• There was an attempt to trade lower before coming back roaring higher eventually taking out the swing high.

• There's consolidation suggesting another leg higher on dollar CAD.

Analyzing Forex Charts

In this section, the speaker analyzes forex charts and looks for evidence of clear direction.

Euro Dollar

• The speaker notes that there are areas where equal lows have been taken out and rejected.

• The most likely direction is up, which is also in line with the dollar index at the beginning of the video.

Dollar Swissy

• The pair doesn't have a real directional bias yet.

• Price has come down below equal lows and ran through it but rejected.

• If there's dollar bullishness, we could see another leg higher to reach above these equal highs.

Dollar Yen

• This pattern is a really obvious trading range.

• We're looking at double bottoms and old highs noted and also have the yearly high to find with this range here looking back 12 months.

• We're inside that range here, so if we're expecting bullishness on the dollar, we would reasonably expect the dollar yen to make an attempt to get higher.

Trading Range

• Don't trade it in the middle of the range; wait for longer-term setups.

• Look for bold lows to be ran out which it does here and then rejection what makes the rejection it trades back above it old low once that happens you would look for an old high or equal highs to reach for.

Trading Strategies for New Traders

In this section, the speaker discusses trading strategies for new traders who are primarily focused on daily charts.

Key Points:

• Look for opportunities to buy when price trades back above a low point and sell when it trades below a high point.

• Trade towards equal highs or lows, as these are areas of liquidity that large funds will be interested in.

• Anticipate rallies after taking profits from equal lows or highs.

• Look for double tops and old highs/lows on daily charts as they are highest probability levels.

Understanding Liquidity Pools

In this section, the speaker explains how retail stops differ from those of large funds and how markets gravitate towards areas of liquidity.

Key Points:

• Large funds trade billions of dollars and have larger areas of interest for buying and selling.

• Markets go after large liquidity pools based on other institutional traders or large funds.

• Retail stops are placed where the books tell you, but markets go to large liquidity pools instead.

• Find opposite direction where the liquidity would be below the lows.

Trading Double Bottom Patterns

In this section, the speaker discusses trading double bottom patterns and how they can indicate market trends.

Key Points:

• Double bottoms can indicate market trends and provide opportunities to buy at lower prices.

• Wait for price to come back above a low point before buying.

• Look for areas of liquidity below the lows.

• Double bottoms can be used to anticipate rallies.

Impact of Dollar Strength on USD/JPY Pair

In this section, the speaker discusses how dollar strength impacts the USD/JPY currency pair.

Dollar Strength Promotes Strength in USD/JPY Pair

• When the first currency in a pair is the dollar, as it is with USD/JPY, dollar strength in the index promotes strength in this pair.

Conclusion and Additional Resources

The speaker concludes the presentation and provides information on where to find more resources.

Conclusion and Additional Resources

• The presentation concludes with an invitation to visit innercircletrader.com for more resources.