ICT - Mastering High Probability Scalping Vol. 3 of 3

Summary

In 'Mastering High-Probability Scalping, Volume 3,' the focus is on previous day liquidity runs and price action analysis. The video covers the 'Power 3' concept: accumulation, manipulation, and distribution phases. It provides strategies for confirming daily bias and timing trades during the New York session, emphasizing waiting for optimal retracement levels. The importance of money management and setting appropriate risk levels is highlighted. The video also addresses when to expect reversals and the significance of 60-minute chart reference points. Practical examples and advice on developing trading skills through experience are included.

Takeaways

• 📊 The 'Power of 3' in trading consists of accumulation, manipulation, and distribution phases.
• 📈 A bullish daily bias is confirmed by bullishness in the London session, rejecting attempts to go lower.
• 🕖 Optimal long entries are typically between 7:00 a.m. and 9:00 a.m. New York time, targeting retracements of at least 20 pips.
• 📉 For bearish setups, confirm a bearish London session with a rejection of the midnight opening price and a move of at least 30 pips lower.
• 🕖 Optimal short entries are also between 7:00 a.m. and 9:00 a.m. New York time, with at least a 20 pips retracement.
• 📉 A 60-minute chart can help anticipate reversals at obvious old highs or lows, but sometimes price won't respect these levels.
• 💰 Implement strict risk controls, such as risking 1% per setup and gradually increasing to 2% if it suits your risk tolerance.
• 📈 Use Fibonacci levels for entry and target points, and adjust your stop-loss and take partial profits based on these levels.
• 📉 Expect to encounter losses and stopped-out trades, and manage them with a disciplined approach.
• 📊 Study and experience are key to mastering trading, and there is no rigid rule for exits; it requires ongoing learning and adaptation.

Q & A

What are the three components of generic price action referred to as 'Power 3'?

The three components of generic price action referred to as 'Power 3' are the accumulation phase, the manipulation stage, and the distribution phase. The accumulation phase involves accumulating long or short positions, the manipulation stage involves price moving in the opposite direction of the intended future direction, and the distribution phase involves price expanding in the intended direction.

How do you confirm a bullish daily bias using the London session?

To confirm a bullish daily bias using the London session, you should see a measure of bullishness after an attempt to go lower is rejected, resulting in a price rally. This confirmation, combined with a bullish daily bias, suggests the London session was indeed bullish.

What is the optimal time frame to look for long entries in the New York session?

The optimal time frame to look for long entries in the New York session is between 7:00 a.m. and 9:00 a.m. New York time. During this period, you should wait for a price retracement lower, typically from a swing high intraday.

What is the significance of a 20 pips retracement for a long entry setup?

A 20 pips retracement is significant for a long entry setup because it is considered an optimal trade entry. If a retracement of at least 20 pips forms by 9:00 a.m., it indicates a good entry point for a long position. If no such retracement occurs, it is advisable to avoid taking trades.

What criteria should be met for a bearish daily bias in the New York session?

For a bearish daily bias in the New York session, price should move above the opening price at midnight New York time and then reject that level, trading at least 25 to 30 pips lower during the London session. This indicates a continuation of bearishness into the New York session.

How should you approach retracement levels for short entries in the New York session?

For short entries in the New York session, you should look for a retracement higher of at least 20 pips after 7:00 a.m. New York time. Enter at the 62% retracement level as price rallies higher, and anticipate a retest of the intraday low or the previous day's low.

What is the role of the 60-minute chart in identifying potential reversals?

The 60-minute chart helps identify potential reversals by showing old highs or lows that have previously caused price to reverse. If price reaches one of these levels, it is likely to encounter resistance or support and potentially reverse direction.

Why is it important to implement strict risk controls in trading?

Implementing strict risk controls is important because it protects your trading account from significant losses. By limiting risk to 1-2% of your total account equity per trade, you can manage losses effectively and ensure responsible equity growth.

What is the recommended risk percentage per trade for new traders?

For new traders, it is recommended to risk 1% of their total account equity per trade. Gradually, as they gain experience and if it meets their risk tolerance, they can work their way up to 2% per trade.

What should you do if a trade encounters a significant reference point on the 60-minute chart?

If a trade encounters a significant reference point on the 60-minute chart, such as an old high or low, it is advisable to be very cautious. Either avoid the trade, be very nimble about exiting, or expect a potential reversal at that level.