ICT Daily Bias

Summary

This video explains how to determine daily market bias using key concepts like liquidity, swing highs and lows, market structure shifts, and imbalances. The approach focuses on identifying where liquidity is taken or accumulated, then observing price movements relative to these levels. The presenter discusses a method of trading based on liquidity grabs, short-term trend shifts, and equilibrium analysis, ultimately aiming for a distribution to higher or lower levels. Viewers are encouraged to monitor liquidity zones, short-term structure changes, and use strategic entries and exits for optimal trades.

Takeaways

• 😀 Previous liquidity taken indicates where price is likely to distribute higher or lower based on where liquidity was grabbed.
• 😀 Swing highs and swing lows, along with relative equal highs and lows, help identify where market participants have their stops and provide key liquidity levels.
• 😀 Market structure shifts and imbalances signal a change in trend and are crucial for identifying potential price movements.
• 😀 Equilibrium levels (premium vs. discount) help determine whether liquidity should be distributed higher or lower after being taken.
• 😀 Identifying lower highs and lower lows can reveal downtrends, while higher highs signal potential changes in the trend direction.
• 😀 After a market structure shift indicating an uptrend, a move down to grab liquidity might precede a higher move towards the target.
• 😀 On the one-hour and lower time frames, the strategy focuses on bearish bias until liquidity is grabbed, at which point a bullish bias may return.
• 😀 On higher time frames, such as the daily chart, liquidity under relative equal lows is a key target before switching to a bullish bias.
• 😀 The ideal trades during a bearish bias involve waiting for a false move up to grab liquidity before moving lower.
• 😀 Even with a wrong bias, this trading strategy helps avoid entering bad trades by focusing on liquidity and structure shifts.
• 😀 The strategy emphasizes trading based on liquidity levels and market imbalances, even if it means temporarily having a bearish stance in an overall bullish market.

Q & A

What is the main focus of this video?

The main focus of the video is daily bias and how to identify the likely price direction by analyzing various market factors, such as liquidity, market structure, imbalances, and swing highs/lows.

Why is previous liquidity important in determining price movement?

Previous liquidity is important because once liquidity is taken or accumulated, the market tends to distribute it either higher or lower. This distribution of liquidity helps in predicting where the price is most likely to go next.

What role do swing highs and swing lows play in this analysis?

Swing highs and swing lows help identify areas where market participants may have placed their stops. These levels are crucial because they represent potential liquidity pools that could be targeted by the market.

What is the significance of market structure shifts and imbalances?

Market structure shifts and imbalances indicate changes in trend direction. A shift in market structure with displacement typically signals a trend reversal, while imbalances (such as fair value gaps) indicate areas where price is likely to return to in order to continue moving in the new trend direction.

What does the concept of equilibrium, premium, and discount mean in this context?

Equilibrium refers to a balanced state in the market, where the price is neither too high nor too low. A premium means the price is higher than the equilibrium, and a discount means the price is lower. These concepts help in determining whether to buy or sell based on the current price level.

How do lower highs and lower lows contribute to market analysis?

Lower highs and lower lows indicate a bearish trend. Identifying these patterns helps in understanding the market's direction. However, if a market structure shift occurs, with a higher high being formed, it could signal the start of an uptrend, suggesting a potential change in bias.

What is the daily bias in the context of the script?

The daily bias refers to the overall market outlook for the day, determined by analyzing liquidity, market structure, and other factors. In the script, the bias is initially bearish until liquidity is grabbed, after which the bias turns bullish.

How does the script recommend using liquidity for trade decisions?

The script suggests looking for liquidity areas, such as relative equal highs and lows, where the market is likely to move in order to grab liquidity. Traders should then look for price reversals at these levels to make informed trade decisions.

Why is the concept of relative equal highs and lows emphasized in the script?

Relative equal highs and lows are emphasized because they are areas where liquidity is concentrated, typically where many traders have placed their stops. These levels often attract price action as the market targets them before moving in the desired direction.

How does the author handle a situation when their initial bias is wrong?

The author suggests that even if the initial bias is wrong, traders can still profit by trading the price movements as they occur. For example, if the market moves against the expected bias, the trader can buy at a lower price and sell at a higher price, taking advantage of market fluctuations.