ICT Daily Profile - Seek & Destroy

Summary

In this final video of the daily profile series, the focus is on the 'Seek and Destroy' profile, characterized by indecision candles and range-bound price action. The video explains how London and New York sessions often fail to break out of established ranges, leading to consolidation. The presenter outlines strategies for trading these conditions, including marking out equilibrium and discount/premium zones within the ranges. Emphasizing caution, the video highlights the importance of recognizing low-probability conditions and knowing when to avoid the market entirely.

Takeaways

• 😀 Seek and Destroy profile is characterized by an indecision candle on the daily chart, where price opens and closes at similar levels without clear direction.
• 😀 London session in a Seek and Destroy profile often fails to establish a direction, and both the Asia low and high are tested.
• 😀 The Asia range acts as a key reference point, with price typically returning to this range after attempts to break out.
• 😀 For a Seek and Destroy profile, the strategy is to focus on trading back into the range rather than attempting to trade outside it.
• 😀 Equilibrium, discount, and premium levels of the London range are useful markers for determining potential price movements within the range.
• 😀 In Seek and Destroy conditions, New York session typically consolidates or returns to the established range, with low probability for large movements.
• 😀 If the majority of the daily range is already formed in London, expectations for large price movements during the New York session are generally low.
• 😀 Asia range, daily open, and other key ranges are used to anticipate price rebalancing, where price returns to the previous range after moving outside it.
• 😀 Even when price moves outside the range during London, it is often likely to return to the equilibrium or daily open after failing to sustain a breakout.
• 😀 Understanding and identifying Seek and Destroy profiles is essential not to actively trade them but to avoid low-probability conditions that can lead to consolidation rather than breakout.

Q & A

What is a 'Seek and Destroy' profile in trading?

A 'Seek and Destroy' profile refers to a market condition where there is indecision, and price moves in and out of a defined range without establishing a clear direction. The price oscillates within this range, often triggered by news events or lack of direction on higher timeframes.

What does an indecision candle look like on the daily chart?

An indecision candle on the daily chart appears when the price opens and closes at relatively the same point, with no clear directional movement throughout the day. This often results in a candle with a small body and long wicks on both sides.

How do you identify a 'Seek and Destroy' profile on lower timeframes?

On lower timeframes, a 'Seek and Destroy' profile can be identified by observing price movement within a tight range. London session typically fails to create a clear directional move, with price moving outside and then falling back inside the range. This behavior repeats throughout the day.

Why do 'Seek and Destroy' profiles occur?

These profiles generally occur when the market is waiting for high-impact news events, such as CPI, FOMC, or NFP, or when there is a lack of direction on the higher timeframe charts like the daily chart.

What role does the London session play in a 'Seek and Destroy' profile?

In a 'Seek and Destroy' profile, the London session typically fails to create directional movement and often takes both sides of the Asia range. This sets up consolidation conditions for the New York session.

How can you trade a 'Seek and Destroy' profile effectively?

To trade a 'Seek and Destroy' profile, focus on trading back into the range rather than trying to trade from inside out. Mark the equilibrium (50% level) and premium/discount of the range and look for price to return to these levels.

What is the significance of marking out the equilibrium in the London range?

Marking out the equilibrium of the London range helps identify key levels where price is likely to oscillate back into the range. This is critical when anticipating consolidation, as price is expected to return to the equilibrium level after making a move outside the range.

What does it mean when London creates most of the daily range?

When London creates most of the daily range, it indicates that the New York session is less likely to see a large directional move. This sets up low probability conditions for breakout and typically results in consolidation for the rest of the day.

How do you handle the Asia range during a 'Seek and Destroy' profile?

The Asia range is often used as a reference point. If price moves outside of the Asia range during London or New York sessions, it is likely to return to the range, acting as a 'magnet' for price. Marking this range and tracking price movements helps to identify possible rebalancing points.

Why is it important to avoid participating in a 'Seek and Destroy' profile?

Participating in a 'Seek and Destroy' profile can be risky, as the market is highly indecisive, and price tends to consolidate without establishing a clear trend. It’s important to recognize these conditions and avoid trading them unless you're trading based on specific strategies like returning to the range.