ICT Mentorship Core Content - Month 08 - Defining The Daily Range

Summary

In this lesson from the April 2017 ICT mentorship, the focus is on defining the daily range within the context of ICT's 24-hour interbank trading day. The lesson explains key time frames such as the Asian range, London Kill Zone, New York Kill Zone, and ICT True Day, all based on New York Eastern Standard Time. These precise time windows are used to frame market cycles, identify high-probability trade setups, and understand when significant price movements are likely to occur. The session emphasizes the importance of using these time references to predict market behavior and make informed trading decisions.

Takeaways

• 😀 The retail 24-hour trading day is not the same as the IFTA (Interbank Price Delivery Algorithm) true 24-hour cycle, and understanding this distinction is crucial for precision in day trading.
• 😀 Retail charts often use period separators, but institutional traders use more precise time-based frames, which are key to high-probability trade scenarios.
• 😀 The IFTA True Day starts at **12:00 AM EST** and ends at **3:00 PM EST**, marking the start and end of the interbank trading cycle.
• 😀 The Asian range is from **12:00 AM to 3:00 AM EST** and is often characterized by smaller price movements and less significant trading opportunities.
• 😀 The London Kill Zone runs from **1:00 AM to 5:00 AM EST** and is when the market sees heightened volatility due to London’s market opening.
• 😀 The New York Kill Zone spans from **7:00 AM to 10:00 AM EST** and is considered the most significant time for price action, driven by New York’s market open.
• 😀 The London Close Kill Zone, from **10:00 AM to 12:00 PM EST**, typically sees a lull or consolidation after the London market closes.
• 😀 Key turning points in price often align with the IFTA true timeframes, with significant highs and lows forming during the London and New York Kill Zones.
• 😀 The **8:20 AM CME Open** is a critical time for price action, marking significant short-term lows or price rallies that institutional traders track.
• 😀 The **3:00 PM EST** New York Close marks the end of the IFTA True Day, encapsulating final movements in the market, often influenced by key events like FOMC releases.

Q & A

What is the main difference between retail and interbank trading days?

Retail trading days are based on the 24-hour periods set by the MT4 platform, usually marked with period separators, while interbank trading days (IPTA) are the official 24-hour cycles used by institutions. The interbank day has a different structure, influencing high-probability trade scenarios.

Why is it important to use the same time references as interbank traders?

Using the same time references as interbank traders aligns your analysis with institutional activities, which increases the likelihood of identifying high-probability trades. Time plays a crucial role in understanding price action and institutional order flow.

What is the 'Asian Range' and when does it occur?

The Asian Range refers to the price action during the Asian session, which starts at midnight (12:00 AM) EST and ends at 3:00 AM EST. This range sets the early tone for the trading day.

What is the purpose of the London Kill Zone and what are its timings?

The London Kill Zone is a critical time window from 1:00 AM to 5:00 AM EST, marking the peak of price action during the London session. It is used to identify key price moves as the market transitions from the Asian to the London trading hours.

What happens during the New York Kill Zone and when does it take place?

The New York Kill Zone occurs between 7:00 AM and 10:00 AM EST. During this period, the market is highly active as it overlaps with both the London session and the opening of the U.S. markets.

Can you explain the London Close Kill Zone?

The London Close Kill Zone runs from 10:00 AM to 12:00 PM EST. It marks the end of the London trading session and is often a quieter period where price action may consolidate or set up for the next move.

What is the IPTA True Day and its significance?

The IPTA True Day is the 24-hour interbank trading day, beginning at midnight (12:00 AM) EST and ending at 3:00 PM EST. This period reflects the full interbank cycle and is essential for framing daily price action and understanding institutional market behavior.

Why is the 8:20 AM CME open important?

The 8:20 AM CME open is significant because it often marks a key turning point in the market. It correlates with short-term price movements and sets up important price levels that traders can use for potential entries or exits.

What is the typical price behavior during the London Kill Zone?

During the London Kill Zone, the market typically forms a high around 5:00 AM EST at the end of the session. This price action is crucial for setting up potential trades, especially as it marks the transition between the London and New York sessions.

What is meant by the 'New York Close' in this context?

The 'New York Close' refers to the close of the IPTA True Day, which happens at 3:00 PM EST. It is a significant moment as it marks the end of the institutional trading cycle and often encapsulates any final market moves related to economic news or FOMC announcements.