Lower Time Frame Entries Using HTF POI - ICT Concepts

Summary

In this video, the focus is on using higher time frame points of interest to identify entry models on lower time frames. The presenter emphasizes the importance of identifying strength through market moves, using displacement candles and internal liquidity for trade entries. Through detailed examples, the video shows how to spot opportunities for both long and short trades, even if the initial bias is wrong. The presenter also discusses strategies for managing trades with respect to market structure and displacement, concluding with a preview of the next video on displacement failure and its impact on trade positions.

Takeaways

• 😀 Focus on higher time frame points of interest, then switch to lower time frames for entry models.
• 😀 Look for reversals and fair value gaps on higher time frames to plan lower time frame entries.
• 😀 The NASDAQ and ES comparison can reveal strength; NASDAQ not taking lows suggests relative strength.
• 😀 Displacement candles on the one-minute chart are crucial for identifying potential long entries.
• 😀 Use tools like the OTE (Optimal Trade Entry) and order blocks to refine entry strategies on lower time frames.
• 😀 Adjust your displacement ranges as price action unfolds to capture better entries and manage risk.
• 😀 A failure to displace below key lows or break structure suggests a continuation in the direction of the higher time frame bias.
• 😀 Lower time frames, like the 15-second chart, allow for more precise entries even when the higher time frame bias seems off.
• 😀 A strong understanding of liquidity and displacement is key to identifying when to switch bias or take action.
• 😀 Even when your bias is wrong, you can still find profitable trades by following structure and rules, allowing you to adjust your position accordingly.
• 😀 Next week's content will focus on how to handle situations where displacement fails or occurs, and how to shift your position to trade profitably.

Q & A

What is the main strategy discussed in the video?

The main strategy discussed in the video is using higher time frame points of interest (POIs) to anticipate price reversals, and then moving to lower time frames to find precise entry models using displacement, order blocks, and liquidity sweeps.

How does the higher time frame analysis help in identifying trade opportunities?

Higher time frame analysis helps by pinpointing key reversal zones or fair value gaps, where price may reverse. These levels guide the trader to focus on areas where price action is likely to develop a trading opportunity on lower time frames.

What role do lower time frames play in the strategy?

Lower time frames are used to spot specific entry points. Once price reaches a higher time frame POI, traders shift to lower time frames (like 1-minute or 15-second charts) to look for displacement candles, breaks of structure, or liquidity sweeps to confirm an entry.

What is the importance of displacement candles in identifying entries?

Displacement candles are crucial as they signify a shift in market sentiment or a significant price movement. Traders use displacement candles to identify when price is likely to reverse or continue, making them an essential signal for entry on lower time frames.

What does it mean to 'wait for displacement' when entering a trade?

Waiting for displacement means observing a clear shift in price action that indicates the market is moving strongly in one direction. This can be a break of structure or a significant movement away from a previous range, signaling a valid entry point.

How can traders manage missed entries?

Traders can manage missed entries by waiting for another opportunity, such as a price retracement to an Optimal Trade Entry (OTE) zone or a liquidity sweep. This allows traders to re-enter at a better price with a favorable risk-to-reward ratio.

What is an OTE (Optimal Trade Entry) and how does it factor into the strategy?

An OTE is a key level where traders expect price to retrace and provide a favorable entry point. It is often found in zones of discounts or fair value gaps, which are used to identify potential areas where price is likely to reverse and present a good entry.

Why is it important to wait for structure confirmation before entering a trade?

Waiting for structure confirmation ensures that the market is showing clear signs of reversal or continuation. Entering without structure confirmation can lead to false breakouts or losses, so confirming with displacement, liquidity sweeps, or breaks in structure is critical.

How can a trader adjust their bias if they initially take a wrong position?

If a trader takes a wrong position, they can adjust their bias by observing price action for signs of a shift, such as a failure to displace below a low or a clear reversal pattern. This helps them reassess the market direction and take a position aligned with the prevailing trend.

What is the significance of 'liquidity sweeps' in the strategy?

Liquidity sweeps occur when price breaks key lows or highs to collect stop orders or pending trades. Traders use these sweeps to identify potential entry points in the opposite direction, as they often signify a market shift and provide opportunities for profitable trades.