ICT Pinescript Tutorial – Friday's Asian Range Concept

Summary

This video walks through the creation of a trading script based on ICT's Friday Asian Range concept, which leverages the high and low of the Thursday night Asian session to predict liquidity for the upcoming week. The script, designed for 5- and 50-minute charts, uses time validation, plots boxes and lines for key price levels, and offers alerts for significant price movements. It also includes options for historical session tracking and standard deviation lines, with a focus on efficient management of previous ranges and alerts. The script is an example of algorithmic thinking applied to market modeling.

Takeaways

• 😀 The Friday's Asian Range concept by ICT is used to identify potential liquidity zones for the next trading week, based on the time window from 7 PM Thursday to midnight.
• 😀 The concept is effective for framing high-probability trades, especially when applied to specific timeframes like 5-minute or 15-minute charts.
• 😀 The script checks the current timeframe and triggers a runtime error if the user selects a time that is not 5-minute or 50-minute, as the concept is valid only on these intervals.
• 😀 Global variables and line styles are set up to handle drawing and displaying elements on the chart, including transparency and color adjustments for better visualization.
• 😀 The script offers customization options for users, allowing them to define whether they want to use the body or wick of the range to determine the high and low points.
• 😀 Historical sessions are supported, enabling users to visualize previous ranges, with the option to limit how many past sessions are displayed at once.
• 😀 Alerts are integrated into the script to notify users when specific price levels, defined by body or wick deviations, are reached during the Asian range.
• 😀 A function is implemented to extend the lines and plot them into the next trading week, based on either the wick or body range, without needing to re-enter price levels manually.
• 😀 The logic behind the Asian range involves tracking the start and end of the range, updating high and low points for both the body and the wick during the active range period.
• 😀 The script allows for the deletion of older ranges and historical sessions once a user-defined limit is reached, ensuring the chart stays clean and focused on the most recent data.

Q & A

What is the purpose of the ICT Friday's Asian range concept discussed in the script?

The purpose is to use Friday's Asian range (from 7 PM to midnight on Thursday in New York time) to outline potential liquidity for the next trading week. This provides parameters for key trading zones such as PD arrays and high-probability trade areas.

What timeframes does the script specifically support for the Asian range concept?

The concept is only valid on the 5-minute and 50-minute timeframes, as taught by ICT principles.

How does the script handle timeframes other than 5-minute and 50-minute?

The script includes a runtime error that prevents it from executing its logic unless the user is on either the 5-minute or 50-minute timeframe.

What are the two types of Asian ranges defined in the script?

The two types are 'body Asian range,' defined by the high and low of the open/close prices, and 'wick Asian range,' defined by the highest and lowest wicks during the range.

How does the script alert the user about significant price movements related to the Asian range?

The script uses standard deviation levels calculated from the Asian range's high and low to trigger alerts when the price crosses these levels. Alerts can occur for both body-based and wick-based price deviations.

What mechanism does the script use to ensure old sessions are cleared from visualization?

The script clears old boxes, lines, and labels by comparing the number of historical sessions defined by the user. It deletes these historical visualization elements when they exceed the user's specified limit.

What are the inputs that users can define for this indicator/script?

Users can define the type of Asian range to display (body-based or wick-based), the number of historical sessions to show, and enable/disable alerts based on the calculated range deviations.

What are 'standard deviation lines' in this context, and how are they used?

Standard deviation lines are price levels plotted above and below the Asian range high/low. They are calculated as multiples of the price range and are used to identify potential breakout areas or trading opportunities.

How does the script initialize its range variables at the start of a new Asian range window?

The script detects the start of a new Asian range by checking if the time has just entered the 7 PM to midnight range on Thursday. If so, it resets variables like high, low, and standard deviation calculations to initialize the range from scratch.

How does the script ensure that alerts are not triggered too frequently?

The script implements an alert frequency mechanism by ensuring that alerts are only triggered once per bar when the specified conditions for a breakout are met.