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Version 1.1 by Drunk Monkey on 2020-11-20 16:02
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3 ICT: Okay, folks, welcome back, this teachings going to be
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7 specifically dealing with essential to trading the daily
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11 bias. Okay, folks, we're looking at the dollar indexes the
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15 daily chart, and I'm going to cover some essential sun, my
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19 understanding about how to trade daily bias. Before we
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23 begin, just understand that this is not to teach you every
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27 single day Monday through Friday of every month, what the
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31 daily bias is going to be tomorrow. I don't have that
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35 understanding for every single pair, but I do know how to
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39 find a bias across all the pairs. So as a scalper, I can
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43 excel by looking at using some of these concepts and
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47 obviously things that I teach in my tutorials, both free and
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51 in my paid mentorship. So I'm going to cover one or two
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55 things here that I think are paramount, that will help you
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59 at least try to get a hold on daily bias. So if I look at a
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63 daily chart, what we're trying to do is ascertain the
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67 likelihood of it being up close or down close day. Now,
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71 there's absolutely no guarantee of what I'm going to tell
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75 you here being accurate. So you always have to use that as a
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79 reminder, because I'm human, and you're human too. So you're
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83 going to make mistakes just as well as I can make a mistake.
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87 And I can be wrong. So I don't want you to take what I'm
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91 stating here, as the panacea be all end all to understanding
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95 what daily biases, there's a number of things that we can do
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99 to get a better opinion about what the daily bias will be
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103 tomorrow or today. But it doesn't guarantee results that are
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107 going to be positive. So you always have to consider that
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111 okay, but it's certainly Some things that you can practice
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115 in a demo account and build your understanding about daily
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119 bias in the sandbox, if you will of a demo. So, I like to
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123 look for intermediate term and short term highs and
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127 intermediate term or short term lows. And what I have here
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131 is I have this high delineated and had this low these highs
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135 up here
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139 this low,
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143 this low, this high and this group of lows down here, okay,
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147 which is just an extension of this low back here. Now I
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151 teach that is when the markets not in a trending model, and
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155 for a parabolic move up or down. The market is going to work
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159 off of traditional support resistance theory. Now the
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163 problem is which support resistance do we use? So I look for
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167 the key turning points. There are obvious ones now you can
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171 use these short term ones in here, but then When is here
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175 because the market, the market moved from that low all the
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179 way up to this high, consolidated try one more time to go
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183 higher, failed, went lower, constant support here, found
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187 resistance found support tried one more time failure, the
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191 market moved higher. So we're looking at the ebb and flow of
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195 how the market moves from a point of overbought to oversold
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199 to equilibrium and consolidation and a news move that would
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203 take us to an overbought or oversold condition. That's a
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207 range bound market, which is where we're seeing the dollar
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211 trading right now has a slightly bullish bias to it and it
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215 has had that for a couple weeks now. But for now, I just
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219 wanted to cover how I interpret the first thing I look for
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223 is are we coming off of a run above an old high that may see
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227 it trade back below it or are we trading below an old low
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231 that may see it trade back above it? But I do is I look for
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235 these intermediate term price points and swing highs and
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239 swing lows on the daily to see if we have moved above an old
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243 high because we could very easily reject that and trade
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247 lower. Or if we trade below an old low, we could see it come
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251 back above it and stay inside the previous determined range.
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255 So if we look for candles or daily ranges that run above and
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259 all high, chances are we could see continue going higher.
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263 But we also have to be mindful that we could see an eventual
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267 turnaround or reversal and it could start to go back below
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271 that old high because this could be very easily seen as a
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275 false break. Same way with old lows. As we see here, the
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279 market does in fact trade through it tries to make a lower
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283 low, couldn't do it failed again and then started to trade
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287 higher. So we have to have these intermediate term swing
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291 points on our daily chart because they're going to be
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295 potential reversal points failing to Follow through after
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299 breaking in old high or breaking resistance or failing to
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303 make a lower low and trend lower after breaking below old
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307 support. So, when the market is not trending, this is a
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311 scenario that it will typically trade within, which is a
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315 classic support resistance theory. The problem with support
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319 resistance theory is which high and which low in which
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323 resistance and what support Do you use. So, I start with
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327 these swing points like this or turning points where it
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331 could potentially be reversals and can see how price events
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335 he does straight above this high here finds a measure of
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339 resistance, it consolidate so we're in a point of
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343 equilibrium and the markets digesting whether or not it
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347 wants to stay at these levels for trade higher or trade
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351 lower as we see the market trades below. These lows in here.
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355 Can't rally above and collapses trades below. It reprice is
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359 all the way down below an old low Then rejects, comes back
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363 into an area of consolidation then rejects again, expansion
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367 lower, finds a low, cannot find momentum through it
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371 consolidates around it tries one more time to go lower, then
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375 trades higher. Every time the market breaks a swing high.
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379 And if we look to the left of that swing high, where's the
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383 next old intermediate term high, this one here. So there's
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387 nothing for it to potentially reverse inside of until we get
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391 up to here. So if we're going to use simple classic
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395 resistance and support levels, we can see that this is the
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399 one we're gonna be looking for. Okay, so if we're trading
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403 around here, and we're looking here, this is gonna be in the
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407 form of resistance. So the markets want to try to get back
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411 up to that level. The market does, in fact, try to make an
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415 attempt to do that. But when we have these ideas, suggesting
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419 classic support Short term resistance, okay? That's what
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423 this whole level is here. The markets tried to go through it
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427 one more time, try to get through an old low, and then trade
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431 it throw it back above this swing high here. So what I'm
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435 going to teach you is this is what I look for for daily
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439 bias. Now, there's a lot of folks on social media that were
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443 looking for a weaker dollar. And ignoring these types of
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447 phenomena, and I'm going to show you here, you're going to
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451 have that error as well. But if we know that there is a
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455 support level here, we tried several times ago below it, and
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459 then we had a swing high broken, what's the market really
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463 telling you? It wants to go higher. So what's the next level
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467 to reach for? This short term resistance level? Okay, so we
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471 can see that it wants to get to 9417. That's the high of
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475 this candle here. So what do we do at that point? Once we
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479 clear this high here, what's the best Well, if you look at
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483 this little diagram, I have it right here. This is gonna
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487 refer to the previous day now this could be a bullish or
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491 bearish day doesn't make a difference. But when the market
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495 is bullish as we've outlined Today we're here we're going to
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499 be looking for the previous day's high to be the target and
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503 the previous day's low to be supported. In other words,
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507 there shouldn't be any movement below the previous day's
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511 low. It should all focus on the buy side means reaching for
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515 the previous day's high. When the markets bearish this
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519 scenario would be reversed. We would be looking for price
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523 having an inability to get above the previous day's high and
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527 see the previous day's low using this criteria here, okay,
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531 once we broke this, candles, swing high here, daily bias on
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535 this candle and this candle and this is a Sunday we would
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539 look for Monday as well. And then Tuesday we would look for
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543 bullishness, so if we use This same theory,
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547 we're going to draw
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551 this particular candle right here is the one that broke the
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555 swing high and then we know they have a resistance level it
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559 could probably reach for. So we're going to be looking for
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563 the next day
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567 to trade
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571 not to the previous day's low, but to and through previous
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575 day's high. So this next day, what's the daily bias? Here's
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579 the opening, what's the bias? It's going to want to reach
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583 for this high. So where's it wanting to go up? So what are
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587 we gonna focus on? previous day's low or previous day's
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591 high? previous day's high? Because it's bullish, it's
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595 wanting to go higher. So the market trades up creates up
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599 clothes day. Then we take this thing thing and apply it to
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603 the new day
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607 okay, So we have a very simple approach
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611 this little box up here. Now we have yesterday this is what
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615 this one this candles date on December 8. This candles last
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619 Thursday's tie, which would be 93 ad market opens and we're
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623 going to see it trade through that. And with the
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627 anticipation it's going to eventually try to reach for this
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631 daily high. So when this happens again, we don't think about
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635 the daily low from the previous day. We're focusing on the
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639 movement through the previous day's high and or eventually
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643 reaching to this level here on the daily market closes in
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647 the middle of the range. Here is Sunday's. Trading then
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651 Monday the same phenomenon you would look for the market to
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655 want to trade through what on Monday we would look for this
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659 previous Friday's low could be supported and we would look
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663 for price to run through previous Fridays Hi, again, this is
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667 Sunday. We wouldn't expect anything there. Monday we see it
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671 open here. A little bit of movement above it, but it does in
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675 fact, Pierce Friday's low. And it comes back and closes,
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679 where it opens. So is there any significant change in the
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683 underlying direction? No. Can we trade to this high yet? No.
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687 So we take that same premise.
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691 Now we apply to
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695 this candle, which is Monday of this particular week of the
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699 recording. And we see it open here. So what's the bias?
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703 We're looking for the previous day's high. Why? Because we
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707 have yet to trade back to this old resistance level. market
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711 opens here, trades up trades through it, but look what it
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715 does. It comes right back inside the daily range. Okay, in
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719 the next trading session right now, at the time of this
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723 recording, it's 9:26pm New York time on December 12. 2017
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727 and the candle is already starting here, it opened a little
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731 bit of moving up, and now we're moving a little bit lower.
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735 So it may want to trade a little bit higher, go a little bit
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739 higher through this old high. But as we're reaching for
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743 these intermediate term levels on the daily chart, we're
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745 187
746 00:12:16,350 ~-~-> 00:12:19,800
747 factoring in, does it have enough range or reach for above
748
749 188
750 00:12:19,830 ~-~-> 00:12:22,950
751 or below, and then we take that approach and apply
752
753 189
754 00:12:22,980 ~-~-> 00:12:26,490
755 immediately to the previous day's high and low as we have
756
757 190
758 00:12:26,490 ~-~-> 00:12:29,670
759 here. And what you're determining is, if we're bullish,
760
761 191
762 00:12:29,700 ~-~-> 00:12:32,160
763 we're gonna be focusing on the previous day's high for
764
765 192
766 00:12:32,160 ~-~-> 00:12:35,850
767 momentum, and more bearish, or we focus on the previous
768
769 193
770 00:12:35,850 ~-~-> 00:12:40,950
771 day's low for momentum. Very rarely do you see both sides of
772
773 194
774 00:12:40,950 ~-~-> 00:12:44,700
775 the previous day's candle tagged or traded through? If it
776
777 195
778 00:12:44,700 ~-~-> 00:12:48,660
779 does, it's usually in decisiveness, or it's going to be a
780
781 196
782 00:12:48,660 ~-~-> 00:12:51,540
783 reversal soon, and they're clearing the board on both sides
784
785 197
786 00:12:51,540 ~-~-> 00:12:54,030
787 of the marketplace. And when you start seeing those types of
788
789 198
790 00:12:54,030 ~-~-> 00:12:57,720
791 things, get prepared, because the market could be in fact
792
793 199
794 00:12:57,810 ~-~-> 00:13:00,690
795 about the reverse. You can see that actually has thing here,
796
797 200
798 00:13:01,290 ~-~-> 00:13:03,870
799 previous day's high and low here the next day trades through
800
801 201
802 00:13:03,870 ~-~-> 00:13:07,410
803 it, and it's low as violated too. So we're about to see a
804
805 202
806 00:13:07,410 ~-~-> 00:13:12,300
807 reversal next day reversal. Okay, and I'll show you another
808
809 203
810 00:13:12,300 ~-~-> 00:13:13,320
811 example of that.
812
813 204
814 00:13:15,570 ~-~-> 00:13:18,450
815 See here, we have here as well.
816
817 205
818 00:13:19,860 ~-~-> 00:13:25,710
819 We have a Thursdays range. Now this low comes in at 9442.
820
821 206
822 00:13:26,850 ~-~-> 00:13:31,110
823 And the low end here is 9442. So it's equal but still very,
824
825 207
826 00:13:31,260 ~-~-> 00:13:37,110
827 very close to the high. This is Sunday and a Monday. Nothing
828
829 208
830 00:13:37,110 ~-~-> 00:13:40,590
831 shown there but end up getting a very, very important high
832
833 209
834 00:13:40,890 ~-~-> 00:13:45,330
835 eventually afterwards. And now this is called an outside day
836
837 210
838 00:13:45,540 ~-~-> 00:13:49,470
839 when you have a previous day's range that's violated with
840
841 211
842 00:13:50,220 ~-~-> 00:13:56,130
843 this example it to as high as 9398, the lowest 9367 this
844
845 212
846 00:13:56,130 ~-~-> 00:14:00,840
847 candles low is 9358 and the highest 99 United services is an
848
849 213
850 00:14:00,840 ~-~-> 00:14:03,720
851 outside day with a down close that's typically bullish
852
853 214
854 00:14:04,740 ~-~-> 00:14:07,230
855 reason why it creates a false break above the previous day's
856
857 215
858 00:14:07,230 ~-~-> 00:14:10,350
859 high and then closed on the low if we're in a bullish
860
861 216
862 00:14:10,350 ~-~-> 00:14:14,100
863 market, but overall in that occurs, generally sets up a
864
865 217
866 00:14:14,100 ~-~-> 00:14:17,040
867 really good buy scenario. I've learned that from Larry
868
869 218
870 00:14:17,040 ~-~-> 00:14:20,640
871 Williams and that's from like old school stuff. But you got
872
873 219
874 00:14:20,640 ~-~-> 00:14:23,100
875 to have a context behind it can't just take it outside, they
876
877 220
878 00:14:23,100 ~-~-> 00:14:24,930
879 would have done closing this naturally assume it's going to
880
881 221
882 00:14:24,930 ~-~-> 00:14:27,720
883 be a bullish day. But you can see it does, in fact, give a
884
885 222
886 00:14:27,720 ~-~-> 00:14:31,770
887 huge opportunity to be a buyer on this day. And my
888
889 223
890 00:14:31,770 ~-~-> 00:14:34,740
891 application the outside days when it does that, it sets up a
892
893 224
894 00:14:34,740 ~-~-> 00:14:38,370
895 potential short term reversal. What les Williams brought to
896
897 225
898 00:14:38,370 ~-~-> 00:14:41,010
899 the table with it is it creates a short term oversold
900
901 226
902 00:14:41,040 ~-~-> 00:14:43,470
903 scenario. So it doesn't necessarily mean it's a reversal. It
904
905 227
906 00:14:43,470 ~-~-> 00:14:47,790
907 just means it's maintains a continuation pattern, according
908
909 228
910 00:14:47,790 ~-~-> 00:14:52,320
911 to his definitions, all right. And here's another scenario
912
913 229
914 00:14:52,320 ~-~-> 00:14:57,630
915 here outside day. We have the candle here. The high comes in
916
917 230
918 00:14:57,630 ~-~-> 00:15:03,390
919 at 9323 and a low is 9280. One, the very next day the highs
920
921 231
922 00:15:03,390 ~-~-> 00:15:09,480
923 taken out 9324, new lows 90 to 75. So reversal day, and then
924
925 232
926 00:15:09,480 ~-~-> 00:15:12,180
927 we can see the market doesn't want to trade higher as a
928
929 233
930 00:15:12,180 ~-~-> 00:15:17,040
931 result. So you won't always get the outside day at turning
932
933 234
934 00:15:17,040 ~-~-> 00:15:19,380
935 points, but I like to look for it because it builds a lot of
936
937 235
938 00:15:19,380 ~-~-> 00:15:23,940
939 confidence behind it. And by using these tools, okay, and
940
941 236
942 00:15:23,940 ~-~-> 00:15:29,700
943 when the market also breaks, more or less, a swing high of
944
945 237
946 00:15:29,700 ~-~-> 00:15:32,490
947 importance, and we have a level that doesn't have anything
948
949 238
950 00:15:32,490 ~-~-> 00:15:36,090
951 else until we get to hear the bull it's bullish, okay. It's
952
953 239
954 00:15:36,090 ~-~-> 00:15:38,820
955 bullish, avoid this whole scenario, like looking at this
956
957 240
958 00:15:38,820 ~-~-> 00:15:42,180
959 high to this low point is on looking for optimal trade entry
960
961 241
962 00:15:42,330 ~-~-> 00:15:44,940
963 in sell off and all that stuff. It's already shown a
964
965 242
966 00:15:44,940 ~-~-> 00:15:48,630
967 willingness to want to go below this low multiple times. And
968
969 243
970 00:15:48,630 ~-~-> 00:15:53,100
971 then it broke a swing high, so the momentum is bullish. And
972
973 244
974 00:15:53,100 ~-~-> 00:15:54,870
975 that's going to reach for this now if we're doing that
976
977 245
978 00:15:54,870 ~-~-> 00:15:58,920
979 analysis on the daily for the dollar index. And we've
980
981 246
982 00:15:58,920 ~-~-> 00:16:02,400
983 arrived at a bullishness For the dollar, what does that
984
985 247
986 00:16:02,400 ~-~-> 00:16:05,910
987 translate for foreign currency in terms of daily bias? It's
988
989 248
990 00:16:05,910 ~-~-> 00:16:08,160
991 going to be a mirror image. So if we go over to the euro
992
993 249
994 00:16:08,160 ~-~-> 00:16:12,300
995 dollar, we can see that the euro dollar has been bearish as
996
997 250
998 00:16:12,300 ~-~-> 00:16:15,810
999 we would reasonably expect. Notice that every single day,
1000
1001 251
1002 00:16:16,110 ~-~-> 00:16:19,380
1003 the daily high is not concerned with at all it's the
1004
1005 252
1006 00:16:19,380 ~-~-> 00:16:23,250
1007 previous day's low. It trades through it. So now we have a
1008
1009 253
1010 00:16:23,250 ~-~-> 00:16:25,830
1011 low here. What's it going to do? It's going to want to trade
1012
1013 254
1014 00:16:25,830 ~-~-> 00:16:28,410
1015 to the previous day's low. It trades through it. So what's
1016
1017 255
1018 00:16:28,410 ~-~-> 00:16:32,610
1019 the next storyline? opens trades down below the previous
1020
1021 256
1022 00:16:32,610 ~-~-> 00:16:35,850
1023 day's low? Next day? What's it gonna do? It's gonna trade
1024
1025 257
1026 00:16:35,970 ~-~-> 00:16:38,430
1027 through not only the previous day's low, but what's it
1028
1029 258
1030 00:16:38,430 ~-~-> 00:16:42,330
1031 really reaching for that old intermediate term low on the
1032
1033 259
1034 00:16:42,330 ~-~-> 00:16:45,450
1035 daily. I'll give you some lipstick on the charts. You can
1036
1037 260
1038 00:16:45,450 ~-~-> 00:16:53,670
1039 see that premium a little bit. So this low here, and its
1040
1041 261
1042 00:16:53,670 ~-~-> 00:16:56,760
1043 price is starting to drop down. It's reaching for this level
1044
1045 262
1046 00:16:56,760 ~-~-> 00:16:59,310
1047 here. Why? Because it's basically the opposite of what we're
1048
1049 263
1050 00:16:59,310 ~-~-> 00:17:04,230
1051 seeing. done here. dollar is reaching for this intermediate
1052
1053 264
1054 00:17:04,230 ~-~-> 00:17:08,310
1055 term high. Well, the Euro dollar is reaching for me term
1056
1057 265
1058 00:17:08,310 ~-~-> 00:17:14,100
1059 low. Each day we're focusing on again this phenomenon here.
1060
1061 266
1062 00:17:14,430 ~-~-> 00:17:17,880
1063 We're focusing on the Euro because dollars bullish, we're
1064
1065 267
1066 00:17:17,880 ~-~-> 00:17:19,920
1067 focusing on the previous day's low and that's where it's
1068
1069 268
1070 00:17:19,920 ~-~-> 00:17:23,040
1071 going to be aiming for to it in through it. That's how you
1072
1073 269
1074 00:17:23,040 ~-~-> 00:17:26,490
1075 think about it when it's bearish. Back to the euro dollar,
1076
1077 270
1078 00:17:27,180 ~-~-> 00:17:30,780
1079 every single trading day opens creates a small little tail
1080
1081 271
1082 00:17:30,810 ~-~-> 00:17:34,590
1083 power three, Judas swing, sell it down close, reach for the
1084
1085 272
1086 00:17:34,590 ~-~-> 00:17:38,880
1087 previous day's low. Next day opens false rally genius swing,
1088
1089 273
1090 00:17:39,030 ~-~-> 00:17:43,230
1091 sell it reach for the previous day's low, does it next day
1092
1093 274
1094 00:17:43,290 ~-~-> 00:17:47,340
1095 opens rallies false rally, Judas swing, sell it, fade it
1096
1097 275
1098 00:17:47,550 ~-~-> 00:17:50,850
1099 reach for the previous day's low boom handled next day open
1100
1101 276
1102 00:17:50,850 ~-~-> 00:17:55,530
1103 small little tail trades lower comes back off the low. Okay.
1104
1105 277
1106 00:17:57,000 ~-~-> 00:17:59,850
1107 We're still targeting here. Okay, we're still reaching for
1108
1109 278
1110 00:17:59,850 ~-~-> 00:18:04,080
1111 that. Next day, well, this is going to be Sunday. So here's
1112
1113 279
1114 00:18:04,080 ~-~-> 00:18:05,940
1115 a Monday trading range.
1116
1117 280
1118 00:18:07,470 ~-~-> 00:18:08,130
1119 It opens
1120
1121 281
1122 00:18:08,280 ~-~-> 00:18:12,270
1123 rallies up, get a short term over bought scenario comes off
1124
1125 282
1126 00:18:12,270 ~-~-> 00:18:16,230
1127 the highs, that is a potential reversal scenario. The Next
1128
1129 283
1130 00:18:16,260 ~-~-> 00:18:19,980
1131 Day Saints same skit, we're looking for what to market to
1132
1133 284
1134 00:18:19,980 ~-~-> 00:18:22,800
1135 open trade below the previous day's low and then ultimately,
1136
1137 285
1138 00:18:22,860 ~-~-> 00:18:26,760
1139 it trades through that. Forget Sunday, go to Friday, it
1140
1141 286
1142 00:18:26,760 ~-~-> 00:18:29,910
1143 trades through Friday's range and then ultimately reach for
1144
1145 287
1146 00:18:29,910 ~-~-> 00:18:32,370
1147 this low here. So we're looking for that scenario here
1148
1149 288
1150 00:18:32,370 ~-~-> 00:18:35,730
1151 potentially to trade through this low still is there. And so
1152
1153 289
1154 00:18:35,730 ~-~-> 00:18:42,390
1155 the daily buys today on December 12 2017 should be a move
1156
1157 290
1158 00:18:42,390 ~-~-> 00:18:46,530
1159 lower below this low using what I'm teaching you here. Okay.
1160
1161 291
1162 00:18:47,880 ~-~-> 00:18:51,090
1163 So hopefully, this has been insightful to you guys. It gives
1164
1165 292
1166 00:18:51,090 ~-~-> 00:18:53,310
1167 you a little bit more framework to work with and obviously
1168
1169 293
1170 00:18:53,310 ~-~-> 00:18:55,890
1171 there's so many things that we can build on to build bias
1172
1173 294
1174 00:18:55,950 ~-~-> 00:18:59,670
1175 and intermarket relationships as well. But I tried to
1176
1177 295
1178 00:18:59,670 ~-~-> 00:19:03,060
1179 implement rate, the application of the dollar index analysis
1180
1181 296
1182 00:19:03,420 ~-~-> 00:19:06,840
1183 and also to justify what we view in terms of foreign
1184
1185 297
1186 00:19:06,840 ~-~-> 00:19:09,690
1187 currencies bullish or bearish ness as well and using daily
1188
1189 298
1190 00:19:09,690 ~-~-> 00:19:10,080
1191 bias.
1192
1193 299
1194 00:19:11,490 ~-~-> 00:19:12,180
1195 Okay folks,
1196
1197 300
1198 00:19:12,270 ~-~-> 00:19:14,730
1199 hopefully you enjoyed this presentation. If you liked this
1200
1201 301
1202 00:19:14,730 ~-~-> 00:19:16,890
1203 presentation and you want to find more, you can visit my
1204
1205 302
1206 00:19:16,890 ~-~-> 00:19:19,200
1207 website at the inner circle trader.com