ICT Forex - Essentials To Trading The Daily Bias

Essentials to Trading the Daily Bias

In this section, the speaker discusses some essential concepts for trading daily bias. He emphasizes that these concepts are not a guarantee of accuracy and should be used in conjunction with other strategies.

Understanding Daily Bias

• The speaker explains that he looks for short-term highs and lows to determine the likelihood of an up or down close day.

• He cautions that there is no guarantee of accuracy and that traders should always consider their own mistakes.

• The speaker suggests using demo accounts to practice understanding daily bias.

Traditional Support Resistance Theory

• The speaker explains that when the market is not trending, it will work off traditional support resistance theory.

• He suggests looking for key turning points and swing highs/lows on the daily chart to determine potential reversal points.

• The speaker notes that range-bound markets have a slightly bullish bias but can still see eventual turnarounds or reversals.

Using Intermediate Term Swing Points

• The speaker recommends looking for intermediate term swing points on the daily chart to determine potential reversal points.

• He notes that failing to follow through after breaking an old high or breaking resistance can be a potential reversal point, as well as failing to make a lower low and trend lower after breaking below old support.

Understanding Daily Bias

The speaker discusses how to determine daily bias using classic resistance and support levels.

Determining Resistance and Support Levels

• The market trades below the lows, can't rally above, collapses, trades below it, re-prices all the way down below an old low and then rejects.

• The market tries one more time to go lower and trades higher every time the market breaks a swing high.

• Classic resistance and support levels are used to determine that 90.417 is the short-term resistance level.

Using Previous Day's High as Target

• When the market is bullish, we look for the previous day's high to be the target and the previous day's low to be supported.

• When the market is bearish, we look for price having an inability to get above the previous day's high and seek the previous day's low.

Applying Daily Bias Theory

• Once we broke this candle's swing high here bit daily bias on this candle.

• We take this thing thing and apply it to good need a.

• There is no box in the hood up here now we have yesterday this is what this one this candles date on December 8th.

Reaching Short-Term Resistance Level

The speaker explains how to reach short-term resistance level by analyzing daily bias.

Analyzing Daily Bias

• If there is a support level here, we tried several times to go below it and then had a swing high broken.

• What's next? It wants to go higher so what's the next level? Short term resistance level at 90.417.

Focusing on Previous Day’s High

• We focus on movement through previous day’s high and/or eventually reaching short-term resistance level.

• The market closes in the middle of the range here is Sunday's trading then Monday the same phenomenon.

Applying Daily Bias Theory

The speaker discusses how to apply daily bias theory to determine market trends.

Determining Market Trends

• This particular candle broke the swing high and then we know they have a resistance level it could probably reach four.

• We're going to be looking for the next day to trade not to the previous day's low but to and through previous stays high.

• When this happens again, we don't think about the daily low from the previous day.

Focusing on Movement Through Previous Day’s High

• We're focusing on movement through previous day's high and/or eventually reaching short-term resistance level.

• The market trades up creates up close day then we take this thing thing and apply it to good need a.

Understanding Market Direction

In this section, the speaker discusses how to determine market direction by analyzing previous day's high and low.

Analyzing Previous Day's High and Low

• The speaker explains that if the market opens low and closes where it opened, there is no significant change in the underlying direction.

• To determine market direction, the speaker applies this premise to the current candlestick chart.

• The bias is determined by looking at the previous day's high or low. If the market has yet to trade back to an old resistance level, then focus on the previous day's high for momentum. If bearish, focus on the previous day's low for momentum.

• Rarely do both sides of a previous day's candle get tagged or traded through. If it does happen, it could indicate indecisiveness or an upcoming reversal.

Outside Day Reversals

In this section, the speaker discusses outside day reversals and how they can be used as a potential short-term reversal indicator.

Outside Day Reversals

• An outside day occurs when a previous day's range is violated with a down close. This creates a false break above the previous day's high and then closes on its low.

• If we're in a bullish market overall and an outside day occurs, it generally sets up a good buy scenario.

• Larry Williams' definition of an outside day is that it creates a short-term oversold scenario. It doesn't necessarily mean it's a reversal but many times it is a continuation pattern according to his definitions.

• When analyzing daily charts for bullishness or bearishness, look for optimal trade entry points by avoiding scenarios like selling off too much stuff without reaching important swing highs first.

Applying Analysis to the Dollar Index

In this section, the speaker discusses how to apply analysis of market direction and outside day reversals to the dollar index.

Analyzing the Dollar Index

• If daily chart analysis shows bullishness for the dollar index, it translates to a bullish sentiment overall.

• When analyzing swing highs and lows, look for optimal trade entry points by avoiding scenarios like selling off too much stuff without reaching important swing highs first.

Euro Dollar Analysis

In this section, the speaker discusses the Euro Dollar analysis and how it is reaching for a short-term low.

Reaching for Previous Day's Low

• The Euro Dollar is bearish and is focusing on the previous day's low.

• It will trade through the previous day's low and reach for an old intermediate term low on the daily chart.

Daily Bias

• The price of Euro Dollar is dropping down and reaching for a short-term low.

• The daily bias should be to move lower below this low using what has been taught in this analysis.

Trading Scenario

• Each trading day opens with a small tail power three Judas swing, sells down, reaches for the previous day's low, opens false rally G2 swing, sells it again, reaches for the previous day's low, and so on.

• On Monday trading range, it opens rallies up because of short-term over-vault scenario comes off the highs that are a potential reversal scenario.

• Ultimately trades through Friday's range and then reaches for a short-term low.

Conclusion

• This analysis provides insight into building bias and inter-market relationships as well as justifying bullish or bearish news in foreign currencies using daily bias.