I Simplified ICT Daily Bias..

Summary

This video outlines a systematic approach to trading using liquidity sweeps, fair value gaps (FVGs), and market structure shifts. It emphasizes the importance of time frame alignment, with strategies for both bullish and bearish biases across daily, 1-hour, and 5-minute charts. Key concepts include identifying liquidity draws through FVGs and using Fibonacci retracements for entry points. The speaker provides real-life examples to illustrate these methods and invites viewers to test the strategies in real-time through a 7-day free trial. This methodical and mechanical approach is designed to help traders master their biases and increase profitability.

Takeaways

• 😀 Timeframe alignment is crucial for confirming a trading bias. Start with a daily timeframe for liquidity sweeps and then drop to smaller timeframes like 1-hour for market structure shifts.
• 😀 The market structure shift (MSM) on smaller timeframes confirms the overall bias, helping to enter trades with a higher probability of success.
• 😀 External liquidity refers to significant highs or lows, while internal liquidity refers to fair value gaps (FVGs). Both are essential for identifying valid entry points.
• 😀 Fair value gaps (FVGs) should be closely monitored after liquidity sweeps. These gaps can provide valuable draw-on liquidity levels for setting targets.
• 😀 After identifying an FVG, wait for the price to retest it before making a move. Retests confirm the bias and often lead to strong price movement.
• 😀 Inverse FVGs play a key role in confirming trades. When the price taps and reverses within an FVG, it often leads to significant price action in the direction of the new bias.
• 😀 A market structure shift on the 1-hour timeframe is an essential confirmation signal for a trend reversal. This shift indicates when to take positions in the market.
• 😀 The use of Fibonacci retracement helps identify potential levels where FVGs may occur, particularly below the 0.5% retracement level.
• 😀 For direct entry, a 1-hour market structure shift can be enough, but confirmation through the 5-minute chart can refine entry points and increase the accuracy of the trade.
• 😀 The strategy discussed is highly mechanical and requires practicing the identification of liquidity sweeps, fair value gaps, and market structure shifts to become effective.
• 😀 The final method of inversing FVGs is simple and highly effective. When multiple FVGs are identified, the price typically retraces to these levels before moving towards the drawn liquidity.

Q & A

What is the significance of fair value gaps (FVGs) in this trading strategy?

Fair value gaps (FVGs) are areas on a price chart where price has moved too quickly, leaving an unfilled gap. These gaps are critical because they represent areas where price may return to fill the gap, offering high-probability trade setups for traders looking to enter the market when the price revisits these gaps.

How does the market structure shift (MSS) play a role in confirming the trade bias?

A market structure shift (MSS) on a lower timeframe, such as the 1-hour or 5-minute chart, confirms whether the market is moving in the direction of the trader's bias. After identifying an FVG on the higher timeframe (e.g., daily), the MSS on a smaller timeframe validates the trader's prediction, confirming whether the market is trending as expected.

Why is timeframe alignment important in this trading strategy?

Timeframe alignment ensures that the trader's bias is consistent across multiple timeframes. For example, after analyzing the daily timeframe for liquidity sweeps and FVGs, the trader drops down to the 1-hour chart to confirm the bias with a market structure shift, and then uses the 5-minute timeframe for precise entry. This multi-timeframe analysis increases the probability of a successful trade.

What is the difference between external liquidity and internal liquidity?

External liquidity refers to the highs and lows on a price chart, which often represent areas of liquidity that the market may target. Internal liquidity, on the other hand, refers to fair value gaps (FVGs) within the range of price movement. Traders target both types of liquidity, using them to identify potential entry points for trades.

How does a trader confirm their bias when using the FVG strategy?

To confirm the bias using the FVG strategy, a trader looks for a market structure shift (MSS) on a smaller timeframe, like the 1-hour chart. If the price action aligns with the expected bias (e.g., bearish or bullish) after the shift, the trader can enter a trade. The confirmation also involves waiting for price to revisit FVGs or key levels for optimal entries.

What is the role of the 5-minute timeframe in this strategy?

The 5-minute timeframe is used for fine-tuning the entry. After confirming the market structure shift on the 1-hour chart, the trader checks for further confirmation on the 5-minute chart, where they look for smaller shifts in market structure to pinpoint the best entry points for a trade.

What is the concept of FVG inversion and how does it impact trade decisions?

FVG inversion occurs when the price revisits and breaks through a previous fair value gap, either by closing above or below it. This inversion signals a strong move in the direction of the liquidity target (either highs or lows). After an inversion, the trader waits for a retest to confirm the new market direction and switches their bias accordingly.

What happens if a trader enters a trade after FVG inversion without a retest?

If a trader enters after FVG inversion without waiting for a retest, they may face higher risk. While the market could move in the predicted direction, the lack of a retest could mean that the price is less stable, increasing the chances of a reversal or false breakout. Retests provide additional confirmation of the move.

How does the strategy work when analyzing multiple FVGs within the same range?

When multiple FVGs exist within the same price range, the trader must wait for all of them to be inversed before confirming their bias. Once all FVGs have been inverted, the trader can switch their bias to either bullish or bearish and look for a retest of the final FVG to enter a trade.

Can this strategy be applied to all timeframes?

Yes, this strategy can be applied to various timeframes, but the daily and 4-hour timeframes are often used for identifying the broader trend and bias. The 1-hour and 5-minute timeframes are employed for confirmation and precise entries. However, traders can adapt the method to shorter timeframes like 15-minute or 1-minute charts, depending on their preference and trading style.