ICT Forex - Trading The Key Swing Points
Summary
TLDRThis video script offers a comprehensive guide on trading key swing points in the forex market, focusing on the Asian, London, and New York market opens, as well as the London close. It explains how these sessions can create daily highs or lows and how traders can use this information to anticipate market movements. The presenter emphasizes the importance of understanding the interaction between these sessions and higher timeframe support/resistance levels to identify high-probability turning points, encouraging viewers to study market charts for a deeper understanding.
Takeaways
- 📈 Swing points are critical in trading and include the Asian open, London open, New York open, and the London close.
- 🌏 The Asian open can set the day's high or low, and the market may consolidate and then expand from there.
- 🌆 The London open can create new highs or lows or be part of a retracement from the Asian session's movement.
- 🌃 New York open can also establish the daily range high or low, and may be influenced by news events or liquidity.
- 🔄 Retracements are common, where a session's low or high can be followed by a return move into the opposite direction.
- 📊 The London close often represents the opposite end of the range from where the day started, but it's not a hard rule.
- 📉 Sometimes the London close can create a new high or low, especially after a period of consolidation.
- 🔄 The market can reverse at the London close, setting the stage for the following week's trading direction.
- 📝 Traders should use higher timeframe price levels in conjunction with key swing points for better trading decisions.
- 📈 Studying 15-minute or 30-minute charts can help identify significant turning points in relation to higher timeframe support and resistance levels.
- 💡 The Inner Circle Trader offers more in-depth education on these concepts for those interested in further learning.
Q & A
What is the main focus of the teaching module discussed in the transcript?
-The main focus of the teaching module is trading the key swing points, specifically revisiting the Asian open, London open, New York open, and the daily range engineering.
What is the general rule of thumb for the daily range according to the 'power three' teaching?
-The general rule of thumb is that after a consolidation, the range learning increases, with the higher low of the daily range being part of the expansion, and the London close creating the higher low of the date or the opposite end of the range formed in London.
Can the Asian open create the daily high or low, and if so, what is the implication for trading?
-Yes, the Asian open can create the daily high or low. If it does, and the market then forms the highest point during the London session, it suggests a potential retracement in the initial leg of the intraday move, which could be an optimal trade entry.
What is the typical scenario for the London open according to the 'power three' teaching?
-The typical scenario for the London open is that it can create the low or high of the day. If the Asian session creates the low, the London open can be part of a retracement, indicating a continuation of the bullish trend.
How can the New York open affect the daily range, and what does it signify?
-The New York open can create the high or low of the daily range. It can signify a bearish or bullish trend, depending on whether it forms a high or low after a consolidation or retracement from the London open.
What is the significance of the London close in terms of the daily range?
-The London close typically represents the opposite end of the range for a bullish trend, where it has created the low of the day. However, it can also create the high of the day in certain market conditions.
How can traders use the information about key swing points and time of day in their trading strategy?
-Traders can use the information about key swing points and time of day by overlaying these specific points with higher timeframe levels. This can help anticipate high probability turning points and make informed trading decisions.
What is the recommendation for traders to better understand the market's behavior at key swing points?
-The recommendation is for traders to study charts on a 15-minute or 30-minute timeframe, observing when significant daily highs and lows form, and how they relate to higher timeframe support and resistance levels.
What is the purpose of studying the market's behavior at key swing points in relation to higher timeframe levels?
-Studying the market's behavior at key swing points in relation to higher timeframe levels helps traders to identify significant turning points and anticipate market movements, enhancing their trading strategy.
How can the information from the 'power three' teaching be applied to trading decisions?
-The information from the 'power three' teaching can be applied to trading decisions by understanding the characteristics of each key swing point and using them to identify potential retracements, continuations, and reversals in the market.
What is the importance of the 'power three' teaching in the context of trading?
-The 'power three' teaching is important as it provides a framework for understanding market behavior during key trading sessions and helps traders to anticipate and prepare for potential market movements based on historical patterns.
Outlines
📈 Trading Key Swing Points in Forex Markets
This paragraph discusses the concept of trading key swing points in the forex market, focusing on the Asian open, London open, New York open, and the daily range. The speaker explains the typical pattern of consolidation followed by expansion in the market, and how the lows and highs of the day can form during these sessions. The importance of the New York open and London close in creating significant market movements is highlighted, along with the potential for these sessions to create retracements or continuations of the market trend. The speaker also suggests using this information to anticipate market movements and identify optimal trade entry points.
📊 Utilizing Swing Points with Higher Timeframe Levels
The second paragraph delves into the application of swing points in conjunction with higher timeframe levels for trading strategies. It emphasizes the significance of observing market behavior during specific times of the day and how these can overlap with key resistance or support levels on a daily timeframe. The speaker provides hypothetical scenarios to illustrate potential trading opportunities when market conditions align with these timeframe levels. The paragraph also encourages traders to study the market's behavior at 15-minute or 30-minute intervals to identify significant turning points and understand the market's storyline over time. The speaker concludes by directing interested parties to their website for further information.
Mindmap
Keywords
💡Swing Points
💡Asian Open
💡London Open
💡New York Open
💡London Close
💡Consolidation
💡Expansion
💡Retracement
💡Impulse Leg
💡Daily Range
💡High Timeframe Levels
Highlights
The teaching module focuses on trading key swing points in the forex market.
Swing points include the Asian open, London open, New York open, and the end of the day close.
The general rule of thumb for swing points is consolidation followed by expansion in the daily range.
The New York open can be part of an expansion or a retracement from the London open.
London open can create a new low or high, or be part of a retracement from the Asian session.
The Asian open can sometimes set the daily high or low, contrary to typical power three scenarios.
If the Asian session creates a low, a drop in London is likely a retracement for a bullish assumption.
The New York open can create a high or low, influenced by news events or liquidity.
London close often represents the opposite end of the range from where the day started.
London close can create a high or act as a reversal point in the market trend.
Traders should use higher timeframe price levels in conjunction with key swing points.
The presentation suggests using a 15 or 30-minute timeframe to identify significant market turns.
Studying swing points in relation to higher timeframe support and resistance levels can identify high probability turning points.
The presentation introduces a blend of traditional rules with new insights for trading swing points.
The Inner Circle Trader offers mentorship for a deeper understanding of trading strategies.
The speaker emphasizes the importance of versatility in trading to anticipate market movements.
The presentation concludes by encouraging traders to visit the Inner Circle Trader website for more information.
Transcripts
you
you
welcome back folks this teaching is
going to be specifically dealing with
trading the key swing points
okay so what swing points are going to
be teaching in this module we're going
to be revisiting the Asian open a London
open the New York open and the done then
close all
right so engineering the daily range now
obviously I teach with power three that
the general rule of thumb is get age' is
a consolidation then learning increase
the higher the low of the daily range
New York is part of the expansion and
then London close creates the higher low
of the date or the opposite end of the
range that's formed in London but not
always is that the case in some
instances the Asian open will create the
daily high or low as seen here in this
example below the day's formed during
the Asian open and then the highest
formed in the London session
conversely as I mentioned in the
beginning this is a typical power 3
scenario where we have consolidation in
Asia then when it's bullish we create
the low of the day and then it expands
throughout the rest of the day
now London open it can create obviously
as I teach with power three it can
create the low or high the day in this
example here you can see the London
session creates the very low lower than
it was at the beginning of the trading
in Asia
or London can be part of a retracement
when the asian session creates the low
today so the way we're going to use this
information is if Asia
creates a low or high the Danis example
creates a low and starts to run and
expands outside of the Asian range this
drop down in London is typically going
to be a retracement of the initial leg
or impulse leg of the intraday move if
we're bullish we're going to assume that
Asia creates the low and we're retracing
down into what would be optimal trade
entry and that could be eight long so
the long and open can be a part of the
move that occurs and originates from the
Asian open
now the New York open this to can create
the high or low the daily range as well
as you can see there's an example of the
market staying in a consolidation drops
down and when you have to assume that we
would be bearish this particular day but
there may be a big news event that comes
out and it creates a run on liquidity
and we can see that running above these
equal highs here creating the New York
open raid on liquidity that makes the
high the day in the market trades the
lower as a result equally significant we
can see the New York open can be part of
a retracement from the London open here
we see the low formed in London creates
an impulse swing
trades back down into the New York open
creates a nice retracement and then
rallies creating the high the day later
on during a New York and overlap of
London close
so both scenarios this is the classic
scenario this is what I teach and have
taught for years this is the easiest
setup when we want to trade the New York
open so the swing point takes place here
we'd have to assume that were bullish
before and then the low has to be formed
and shares a clear impulse swing during
the London session then retraces during
the loving lunch going into New York
open we can see the turning point here
or swing point that would be treated
rather handsomely now this is a bullish
in area it would just as equally
effective if it was London getting a
high today it trades lower during the
London session then retraces pop into
New York session creating a retracement
which is a classic continuation on the
bearish idea or down close premise for a
daily range or your particular market
and
expansion going towards London close so
everything we're showing here just can
be done in Reverse
ok the London close
now this can be the high or low of the
day typically for bullish and London's
created the low of the day or age has
created a load of the day.i London
closed tends to be the opposite end of
the range now it doesn't always
close to high and/or low into the range
but generally as a rule of thumb I
believe that it will serve you well
other instances it can create the high
the day when it's been an arrangement as
you can see here the market was in a
large consolidation we have equal highs
market runs up throwing London clothes
takes those highs and creates the actual
high the day and trades lower this could
be done in Reverse this could have
easily been equal lows down here and it
could have eventually drove down to get
the equal lows and making the low of the
day and
or it can be a reversal point from a
longer-term perspective as we see here
the market has been trading higher
during the London closed time period
during the London close time here market
makes a reversal on Friday next week
the following link it opens
trades in consolidation and begins to
move lower and lose significant lower on
the following weeks Tuesday so it can
act as a reversal now how do you use
these swing points
you want to be using higher timeframe
price levels and
when these specific key swing points or
time of day
overlap with higher timeframe levels you
can anticipate what would be otherwise
expected on the higher time frame for
instance if we had a key resistance
level that we were watching on a daily
timeframe if we came to this level in
mind and we're going to speak
hypothetically here because there's so
many examples I could literally make a
five to six hour long video and there
wouldn't even scratch the surface which
is the reason I have to have a
mentorship because there's so many types
of conditions and setups that are
available not that you need to know
every single one of them but it makes
you very versatile as a trader as you
can see things in the marketplace that
aren't gonna surprise you you can
anticipate them and wait for them to
come in but if we're looking for our key
resistance level on the daily chart that
could be the time of day when London
trades up to that key resistance point
and at the time of the day we're into
trades there you could be a seller at
London close even while the day was
bullish because it's hitting that higher
timeframe daily resistance price point
that could be the point in which the
best to sell short and that would be a
scenario and the same thing would be
applied to all these key swing points or
time of day because
we have characteristics been shown here
and we also went beyond what was
typically taught as my ICT power 3
there's some blending of the rules and
I've given you generic characteristics
if you will for each of the four major
key swing points so I want you to go
through your charts and pull up a
15-minute time frame or it could be a
30-minute time frame and I want you to
look at all the times that the market
turns and create significant daily highs
and lows and when it makes intro and
weekly highs and lows and look at the
monthly highs and lows when are they
forming and you'll be able to see a
storyline over time studying it in
reference to the higher time frames key
support resistance levels that you would
otherwise look for when these time
periods or key swing points trade to
them you will see significant in high
probability turning points
hopefully you enjoyed this presentation
obviously if you want to find more you
can visit my website at the inner circle
trader.com
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