Skip to Content

ICT Market Maker Primer Course - 13 - Essentials To Trading The Daily Bias.srt

Last modified by Drunk Monkey on 2021-06-10 06:20
1 00:00:12,480 --> 00:00:22,770 ICT: Okay, folks, welcome back, this teachings going to be specifically dealing with essential to trading the daily bias. Okay, folks, we're looking at the
2 00:00:22,770 --> 00:00:33,300 Dollar Index, this is a daily chart. And I'm going to cover some essentials and my understanding about how to trade daily bias. Before we begin, just understand
3 00:00:33,300 --> 00:00:41,700 that this is not to teach you every single day Monday through Friday of every month, what the daily bias is going to be tomorrow, I don't have that
4 00:00:41,730 --> 00:00:53,700 understanding for every single pair. But I do know how to find a bias across all the pairs. So as a scalper, I can excel by looking at using some of these
5 00:00:53,700 --> 00:01:02,730 concepts, and obviously things that I teach in my tutorials, both free and in my paid mentorship. So I'm going to cover one or two things here that I think are
6 00:01:02,730 --> 00:01:14,640 paramount, that will help you at least try to get a hold on daily bias. So if I look at a daily chart, what we're trying to do is ascertain the likelihood of it
7 00:01:14,640 --> 00:01:26,850 being up close or down close day. Now, there's absolutely no guarantee of what I'm going to tell you here being accurate. So you always have to use that as a
8 00:01:26,850 --> 00:01:35,970 reminder, because I'm human, and you're human too. So you're gonna make mistakes, just as well as I can make a mistake. And I can be wrong. So I don't
9 00:01:35,970 --> 00:01:46,500 want you to take what I'm stating here as the panacea be all end all to understanding what daily biases, because there's a number of things that we can
10 00:01:46,500 --> 00:01:57,420 do to get a better opinion about what the daily bias will be tomorrow or today.  But it doesn't guarantee results that are going to be positive. So you always
11 00:01:57,420 --> 00:02:06,030 have to consider that, okay. But it's certainly some things that you can practice in a demo account and build your understanding about daily bias in the
12 00:02:06,030 --> 00:02:16,830 sandbox, if you will of a demo. So I like to look for intermediate term and short term highs and intermediate term or short term lows. And what I have here
13 00:02:16,830 --> 00:02:32,370 is I have this high delineated, and I have this low, these highs up here, this low, this low, this high, and this group of lows down here, okay, which is just
14 00:02:32,370 --> 00:02:46,410 an extension of this low back here. Now I teach that when the market is not in a trending model, and for a parabolic move up or down, the markets going to work
15 00:02:46,410 --> 00:02:56,610 off of traditional support resistance theory. Now the problem is, is which support resistance do we use. So I look for the key turning points. There are
16 00:02:56,610 --> 00:03:05,520 obvious ones. Now you can use these short term ones in here, but the main one is here, because the market, the market moved from that low all the way up to this
17 00:03:05,520 --> 00:03:16,260 high, consolidated tribal Montana go higher field went lower, constant support here, found resistance found support, tribal, more time failure, the market
18 00:03:16,260 --> 00:03:27,990 moved higher. So we're looking at the ebb and flow of how the market moves from a point of overbought to oversold to equilibrium and consolidation and a news
19 00:03:28,380 --> 00:03:37,830 move that would take us to an overbought or oversold condition. That's a range bound market, which is where we're seeing the dollar trading right now has a
20 00:03:37,830 --> 00:03:46,650 slightly bullish bias to it, and has had that for a couple of weeks now. But for now, I just want to just cover how I interpret the first thing I look for is,
21 00:03:46,950 --> 00:03:57,870 are we coming off of a run above an old high that may see it trade back below it? Or are we trading below an old low that may see a trade back above it, what
22 00:03:57,870 --> 00:04:06,000 I do is I look for these intermediate term price points and swing highs and swing lows on the daily to see if we have moved above an old high because we
23 00:04:06,000 --> 00:04:15,120 could very easily reject that and trade lower. Or if we trade below an old low, we could see it come back above it and stay inside the previous determine range.
24 00:04:15,330 --> 00:04:29,760 So if we look for candles or daily ranges that run above an old high chances are we could see a continue going higher. But we also have to be mindful that we
25 00:04:29,760 --> 00:04:38,970 could see an eventual turnaround or reversal and you can start to go back below that old high because this can be very easily seen as a false break. Same way
26 00:04:38,970 --> 00:04:49,680 with the old lows. As we see here. The market does in fact trade through it tries to make a lower low, couldn't do it failed again and then started to trade
27 00:04:49,680 --> 00:05:00,450 higher. So we had to have these intermediate term swing points on our daily chart because they're going to be potential reversal points failing to Follow
28 00:05:00,450 --> 00:05:09,870 through after breaking an old high or breaking resistance, or failing to make a lower low and trend lower after breaking below old support. So when the market
29 00:05:09,870 --> 00:05:12,990 is not trending, this is the scenario that it will typically
30 00:05:13,620 --> 00:05:23,070 trade within, which is a classic support resistance theory. The problem of support resistance theory is which high and what's low in which resistance and
31 00:05:23,070 --> 00:05:34,320 what support Do you use. So I start with these swing points like this, or turning points where it could potentially be reversals can see how price Vinci
32 00:05:34,320 --> 00:05:43,350 does trade above this high here finds a measure of resistance, it consolidate, so we're in a point of equilibrium. And the markets digesting whether or not it
33 00:05:43,350 --> 00:05:54,630 wants to stay at these levels or trade higher, or trade lower. As we see the market trades below. These lows in here, can't rally above and collapses trades
34 00:05:54,630 --> 00:06:09,660 below. It reprice is all the way down below an old low and then rejects, comes back into an area of consolidation then rejects again, expansion lower, finds a
35 00:06:09,660 --> 00:06:21,870 low, cannot find momentum through it consolidates around it tries when we're trying to go lower, and trades higher. Every time the market breaks a swing
36 00:06:21,870 --> 00:06:32,970 high. And if we look to the left of that swing high, where's the next old intermediate term high, this one here. So there's nothing for it to potentially
37 00:06:32,970 --> 00:06:41,580 reverse inside of until we get up to here. So if we want to use simple classic resistance and support levels, we could see that this is the one we're gonna be
38 00:06:41,580 --> 00:06:50,220 looking for. Okay, so if we're trading around here, and we're looking here, this is gonna be in the form of resistance. So the markets want to try to get back up
39 00:06:50,220 --> 00:07:02,910 to that level. The market does, in fact, try to make an attempt to do that. But when we have these ideas, suggesting classic support, short term resistance,
40 00:07:03,120 --> 00:07:16,020 okay. That's what this whole level is here. The markets tried to get through it.  One more time, try to get through an old low, and then treat it throw it back
41 00:07:16,020 --> 00:07:25,320 above this swing high here. So what I'm going to teach you is this is what I look for for daily bias. Now, there's a lot of folks on social media that were
42 00:07:25,320 --> 00:07:35,880 looking for a weaker dollar. And ignoring these types of phenomenon I'm going to show you here, you're going to have that error as well. But if we know that
43 00:07:35,880 --> 00:07:43,740 there is a support level here, we tried several times ago below it, and then we had a swing high broken, what's the market really telling you? It wants to go
44 00:07:43,740 --> 00:07:53,940 higher. So what's the next level to reach for this short term resistance level?  Okay, so we can see that it wants to get to 9417. That's the high of this candle
45 00:07:53,940 --> 00:08:04,440 here. So what do we do at that point? Once we clear this high here, what's the bias? Well, if you look at this little diagram I have over here, this is going
46 00:08:04,440 --> 00:08:10,620 to refer to the previous day. Now this could be a bullish or bearish day doesn't make a difference. But when the market is bullish, as we've outlined today,
47 00:08:10,620 --> 00:08:22,440 we're here we're gonna be looking for the previous day's high to be the target and the previous day's low to be supported no words there shouldn't be any
48 00:08:22,440 --> 00:08:33,210 movement below the previous day's low, it should all focus on the buy side. That means reaching for the previous day's high. When the markets bearish, this
49 00:08:33,210 --> 00:08:44,490 scenario would be reversed, we would be looking for price having an inability to get above the previous day's high and see the previous day's low using this
50 00:08:44,490 --> 00:08:55,920 criteria here, okay, once we broke this, candles, swing high here, with daily bias on this candle, and this candle, and this is a Sunday, we would look for
51 00:08:55,920 --> 00:09:10,380 Monday as well. And then Tuesday we would look for bullishness, so if we use this same theory, we're gonna draw this particular candle right here is the one
52 00:09:10,380 --> 00:09:23,610 that broke the swing high and then we know they have a resistance level could probably reach for. So we're going to be looking for the next day to train not
53 00:09:23,610 --> 00:09:33,900 to the previous day's low, but to and through previous day's high. So this next day was the daily bias. Here's the opening. What's the bias? It's going to want
54 00:09:33,900 --> 00:09:42,510 to reach for this high. So where's it wanting to go up? So what are we going to focus on? previous day's low or previous day's high? previous day's high?
55 00:09:42,990 --> 00:10:00,300 Because it's bullish, it's wanting to go higher. So the market trades up creates up closed day. Then we take this thing thing and apply it to kidney day okay, So
56 00:10:00,300 --> 00:10:13,320 we have a very simple approach. This little box up here. Now we have yesterday and this is what this one this candles date on December 8,
57 00:10:14,759 --> 00:10:25,739 this candles last Thursday's tie, which would be 9380. market opens and we're going to see it trade through that. And with the anticipation is going to
58 00:10:25,739 --> 00:10:33,749 eventually try to reach for this daily high. So when this happens, again, we don't think about the daily low from the previous day, we're focusing on a
59 00:10:33,749 --> 00:10:44,219 movement through the previous day's high and or eventually reaching to this level here on the daily. The market closes in the middle of the range. Here is
60 00:10:44,249 --> 00:10:54,359 Sunday's trading, then Monday the same phenomenon, you would look for the market to want to trade through what on Monday, we would look for this previous
61 00:10:54,359 --> 00:11:03,479 Friday's low could be supported. And we would look for price to run through previous Friday's high. Again, this is Sunday, we wouldn't expect anything
62 00:11:03,479 --> 00:11:12,809 there. Monday we see it open here. A little bit of movement above it, but it does in fact, Pierce Friday's low. And it comes back and closes where it opens.
63 00:11:12,839 --> 00:11:29,849 So is there any significant change in the underlying direction? No. Can we trade to this high yet? No. So we take that same premise. Now we apply it to this
64 00:11:29,849 --> 00:11:42,209 candle, which is Monday of this particular week of the recording. And we see it open here. So what's the bias? We're looking for the previous day's high. Why?
65 00:11:42,509 --> 00:11:50,909 Because we have yet to trade back to this old resistance level. market opens here, trades up trades through it. But look what it does, it comes right back
66 00:11:50,909 --> 00:12:01,079 inside the daily range. Okay, in the next trading session, right now, at the time of this recording, it's 9:26pm, New York time on December 12 2017. And the
67 00:12:01,079 --> 00:12:10,439 candle is already starting here. It opened a little bit of movement up and now we're moving a bit lower. So it may want to trade a little bit higher and go a
68 00:12:10,439 --> 00:12:17,879 little bit higher through this old high. But as we're reaching for these emergent term levels from the daily chart, we're factoring in does it have
69 00:12:17,879 --> 00:12:27,959 enough range to reach for it above or below. And then we take that approach and apply immediately to the previous day's high and low as we have here. And what
70 00:12:27,959 --> 00:12:36,089 you're determining is, if we're bullish, we're gonna be focusing on the previous day's high for momentum, and more bearish, are we focused on a previous day's
71 00:12:36,089 --> 00:12:47,429 low for momentum. Very rarely do you see both sides of the previous day's candle tagged or traded through? If it does, it's usually in decisiveness, or it's
72 00:12:47,429 --> 00:12:56,699 going to be a reversal soon, and they're clearing the board on both sides of the marketplace. And we start seeing those types of things get prepared, because the
73 00:12:56,699 --> 00:13:05,219 market could be in fact about the reverse. You can see that actually happening here. previous day's high and low here the next day trades through it. And it's
74 00:13:05,219 --> 00:13:20,009 low as violated too. So we're about to see a reversal next day reversal. Okay, and I'll show you another example of that. See here, we have here as well. We
75 00:13:20,009 --> 00:13:33,749 have a Thursdays range. Now this low comes in at 9442. And the low and here's 9442. So it's equal but still very, very close to the high. This is Sunday and a
76 00:13:33,749 --> 00:13:46,079 Monday. Nothing shown there but ended up getting a very, very important high eventually afterwards. And now this is called an outside day, when you have a
77 00:13:46,109 --> 00:14:00,599 previous day's range that's violated with this example it to this highest 9398 and the lowest 9367. This candles low is 9358 and the highest nine 399. So this
78 00:14:00,599 --> 00:14:08,759 is an outside day, with a down close that's typically bullish reason why it creates a false break above the previous day's high and then closes on the low.
79 00:14:09,629 --> 00:14:18,029 If we're in a bullish market overall, and that occurs, generally sends up a really good buy scenario. I've learned that from Larry Williams and that's from
80 00:14:18,029 --> 00:14:25,319 like old school stuff. But you get the context behind it. You can't just take a outside day with down closing just naturally assume it's going to be a bullish
81 00:14:25,319 --> 00:14:35,399 day. But you can see it doesn't give a huge opportunity to be a buyer on this day. And my application outside days when it does that. It sets up a potential
82 00:14:35,579 --> 00:14:42,959 short term reversal. What les Williams brought to the table with it is it creates a short term oversold scenario. So it doesn't necessarily mean to
83 00:14:42,959 --> 00:14:55,349 reversal just means it's maintenance of continuation pattern according to his definitions, all right. And here's another scenario here outside day. We have
84 00:14:55,379 --> 00:15:09,359 the candle here. The high comes in at 9323 and a low is 9280. You won the very next day. The highest taking out 9324, no lowest 90 to 75. So reversal day, and
85 00:15:09,359 --> 00:15:13,469 then we can see the market doesn't pack want to trade higher as a result. So
86 00:15:14,400 --> 00:15:23,010 you won't always get the outside day at turning points, but I like to look for it because it builds a lot of confidence behind it. And by using these tools,
87 00:15:23,370 --> 00:15:34,350 okay, and when the market also breaks, more or less, a swing high of importance.  And we have a level that doesn't have anything else until we get to hear the
88 00:15:34,350 --> 00:15:42,750 ball. It's Bosch, okay, it's Bosch avoid this whole scenario, like looking at this high to this low point says on looking for optimal trade entry you didn't
89 00:15:42,750 --> 00:15:51,330 sell off and all that stuff. It's already shown a willingness to want to go below this low multiple times. And then it broke a swing high. So the momentum
90 00:15:51,330 --> 00:16:01,050 is bullish. And it's going to reach for this. Now if we're doing that analysis on the daily for the dollar index. And we've arrived at a bullishness for the
91 00:16:01,050 --> 00:16:09,480 dollar, what does that translate for foreign currency in terms of daily bias to be a mirror image? So if we go over to the euro dollar, we can see that the euro
92 00:16:09,480 --> 00:16:21,900 dollar has been bearish, as we would reasonably expect. Notice that every single day, the daily highs not concerned with at all it's the previous day's low. It
93 00:16:21,900 --> 00:16:28,500 trades through it. So now we have a low here. What's it going to do? It's going to want to trade to the previous day's low. It trades through it. So what's the
94 00:16:28,500 --> 00:16:38,220 next storyline? opens trades down below the previous day's low? Next day? What's it gonna do? It's gonna trade through not only the previous day's low, but
95 00:16:38,220 --> 00:16:52,410 what's it really reaching for that old intermediate term low on the daily. I'll give you some lipstick on the charts, you can see that frame now a little bit to
96 00:16:52,410 --> 00:17:01,590 this low here. And as price is starting to drop down, it's reaching for this level here. Why because it's basically the opposite of what we're seeing down
97 00:17:01,590 --> 00:17:12,030 here, dollars reaching for this intermediate term high while the euro dollar is reaching for intermediate term low. Each day we're focusing on again, this
98 00:17:12,030 --> 00:17:20,880 phenomenon here. We're focusing on the Euro because dollars bullish, we're focusing on the previous day's low and that's where it's going to be aiming for
99 00:17:21,360 --> 00:17:30,780 to it in through it. That's how you think about it when it's bearish. Back to the euro dollar. Every single trading day. Opens creates a small little tail
100 00:17:30,810 --> 00:17:40,740 power three Judas swing, sell it down close, reach for the previous day's low.  Next day opens false rally Judas swing, sell it reach for the previous day's
101 00:17:41,010 --> 00:17:51,720 low, does it next day opens rallies false rally Judas swing, sell it faded, reach from the previous day's low boom handled next day, open small little tail
102 00:17:51,780 --> 00:18:03,900 trades lower comes back off the low. Okay. We're still targeting here. Okay, we're still reaching for that next day. Well, this is going to be Sunday. So
103 00:18:03,900 --> 00:18:16,050 here's a Monday trading range. It opens rallies up against short term over bought scenario comes off the highs. That is a potential reversal scenario. The
104 00:18:16,050 --> 00:18:23,730 next day, same thing, skit, we're looking for what to market the open trade below the previous day's low and then ultimately if it trades through that,
105 00:18:24,420 --> 00:18:33,000 forget Sunday, go to Friday. It trades through Friday's range and ultimately reach for this low here. So we're looking for that scenario here potentially to
106 00:18:33,000 --> 00:18:45,750 trade through this low still is there. So the daily buys today on December 12 2017 should be a move lower below this low using what I'm teaching you here.
107 00:18:46,080 --> 00:18:54,240 Okay. So hopefully, this has been insightful to you guys. It gives you a little bit more framework to work with in obviously, there's so many things that we can
108 00:18:54,240 --> 00:19:04,980 build on to build bias and intermarket relationships as well. But I tried to incorporate the application of the dollar index analysis, and also to justify
109 00:19:05,040 --> 00:19:13,740 what we would do in terms of foreign currencies bullish or bearish ness as well and using daily bias. Okay, folks, hopefully you've enjoyed this presentation.
110 00:19:14,220 --> 00:19:19,200 If you'd liked this presentation and you want to find more, you can visit my website at the inner circle trader.com