DAILY BIAS SECRETS YOU NEVER KNEW YOU NEEDED (ICT ALUMNI )

Summary

This video teaches a practical framework for determining daily market bias. Start from the higher timeframe (daily/weekly), mark key levels—previous highs/lows, session highs/lows, new day/week opening gaps, power-three references like the midnight open—and track London/New York interactions. Price does one of three things: reach a high/low, rebalance/retrade to an imbalance, or consolidate. Use dealing ranges, three-bar fractals, equilibrium, and nested volume imbalances to identify liquidity targets and likely moves. Backtest daily, apply intermarket relationships, and move up timeframes if unclear. The emphasis: repeatable process, experience, and disciplined observation over guesswork.

Takeaways

• 😀 Price moves in cycles of imbalance, consolidation, and rebalancing, and understanding these phases helps in predicting price behavior.
• 😀 Imbalances and fair value gaps are critical areas in price action that often get revisited, leading to rebalancing before further movement.
• 😀 Consolidation is a key pattern in the market; it represents a pause before the market either breaks out or retraces to important levels.
• 😀 Weekly bias is established by marking key levels (previous highs/lows, weekly range) on the chart and assessing price relative to these levels.
• 😀 Price often moves towards imbalances created in the market, whether at fair value gaps, order blocks, or other inefficiencies.
• 😀 The market tends to revisit and rebalance specific levels before continuing in its trend direction, which is a crucial aspect of price action.
• 😀 Patience is crucial—if the market is consolidating or unclear, it’s important to wait for a clear narrative to form before entering a trade.
• 😀 Higher time frames (like daily and weekly charts) should be prioritized for determining the market bias, as they offer better clarity than lower time frames.
• 😀 Inter-market relationships, such as correlations between S&P, NASDAQ, and DXY, provide valuable confirmation or negation for market bias and trade decisions.
• 😀 A simple trading strategy revolves around identifying key price levels and asking whether price is attacking highs/lows, rebalancing imbalances, or consolidating.
• 😀 If in doubt, move up to a higher time frame for a clearer view of price action and to better understand the bias or potential trade setup.

Q & A

What is the key focus of the video regarding price action and trading strategy?

The video primarily focuses on understanding price action, market bias, and how to use gaps, order blocks, fair value gaps, and volume imbalances to predict market movements. The trader emphasizes the importance of daily and weekly bias in determining potential price actions and trade opportunities.

What are the three main price actions that the trader focuses on in the analysis?

The three main price actions are: 1) Attacking highs or lows (equal highs/lows or single highs/lows), 2) Creating or retrading an imbalance, and 3) Consolidating. These actions help identify the market's potential movement and direction.

How does the trader suggest determining the market's daily bias?

To determine the daily bias, the trader recommends analyzing the daily and weekly charts, marking key areas like previous highs/lows, session highs/lows, and fair value gaps. Then, ask which of the three main price actions is happening—attacking highs/lows, creating/retrading imbalances, or consolidating.

Why is understanding intermarket relationships important in this trading methodology?

Intermarket relationships are important because they can confirm or negate areas of interest and influence daily bias. For example, if indices like the S&P, NASDAQ, and Dow are showing different movements (known as SMT—Smart Money Technique), they can signal the strength or weakness of a potential move in the primary market.

What role do fair value gaps and order blocks play in the trader’s strategy?

Fair value gaps and order blocks serve as critical levels where price is likely to retrace or react. Fair value gaps are areas where price has moved too quickly and may need to rebalance, while order blocks are zones where large institutional orders were placed, often leading to price reactions.

How does the trader use the concept of imbalance to guide trading decisions?

Imbalances occur when price moves too far in one direction without sufficient volume or liquidity, creating areas that are likely to be revisited. The trader looks for these imbalances to be rebalanced or retraded, which can provide entry points for trades as price often revisits these areas before moving further.

What does the trader mean by 'price doesn't go in one direction all the time'?

The trader is emphasizing that price action is not always linear. It often retraces, consolidates, or creates imbalances before continuing in the original direction. Understanding this helps traders avoid chasing price and instead wait for price to retrace or rebalance before entering a trade.

Why is it important to move up to a higher timeframe when in doubt about a trade?

Moving to a higher timeframe helps clarify the broader market trend and bias, which may not be as apparent on lower timeframes. The daily and weekly charts are especially useful in determining the overall market direction and providing clarity when price action on lower timeframes is unclear.

What does the trader mean by 'the best buys come from below, and the best sells come from above'?

This refers to the idea that for a bullish bias, it's ideal to enter trades below the midnight open, while for a bearish bias, it's better to sell from above. This concept is based on the idea that markets move in cycles, and price will often retrace to higher levels before selling off or to lower levels before rallying.

How does the trader recommend dealing with consolidation or unclear market conditions?

In times of consolidation or unclear market conditions, the trader advises patience. If the market is not showing clear price action (i.e., it’s not creating imbalances or moving in a clear direction), it’s best not to trade. Waiting for a clear narrative and better setup is recommended to avoid unnecessary risk.