Why You Should Use 8:30 & Midnight Open (EST) - ICT Concepts

Summary

This video explains the strategic use of the 8:30 and midnight opens in trading, focusing on how these times can serve as key pivot points, targets, and signals for discount and premium levels. The speaker walks through examples, showing how price action around these opens can reveal potential buying and selling opportunities. By analyzing daily profiles and using lower time-frame setups, traders can identify trends and manage risk. Viewers are encouraged to apply these techniques for building a trading framework, with the video highlighting important price behavior, targets, and the impact of news-driven moves.

Takeaways

• 😀 The 8:30 and midnight open times are essential in trading, as they can help identify key entry points based on the daily price action.
• 😀 The daily open-high-low-close (OHLC) profile helps to understand market structure, with the high, low, and close providing key reference points for potential price movements.
• 😀 On sell days, price action typically reaches above the 8:30 and midnight opens before dropping back down to catch the daily range.
• 😀 Conversely, on buy days, the price often moves below the 8:30 and midnight opens before rebounding.
• 😀 A deep discount is considered when the price is below both the 8:30 and midnight open, while a deep premium is when it's above both.
• 😀 Lower time frame setups and potential PD (price displacement) arrays can be used within these zones to find more precise trade entries.
• 😀 If the price fails to close above or below key levels like the 8:30 and midnight opens, it may signal the direction for further moves.
• 😀 These open levels (8:30 and midnight) can act as pivot points, where price can either reverse or continue trending.
• 😀 Price action can give clues, like aggressive displacement or failed retests, signaling potential continuation or reversal at these levels.
• 😀 The strategy can also help to build a framework for days with choppy or unclear price action by using these opens as reference points for entries and targets.

Q & A

Why does the speaker use the 8:30 and midnight open in their trading strategy?

The speaker uses the 8:30 and midnight open to identify key levels for potential trades. These times are significant in the daily price action profile, as they help identify premium and discount areas where price manipulation and key market moves are likely to occur.

What is the importance of the Open-High-Low-Close (OHLC) daily profile in this strategy?

The OHLC daily profile is crucial for understanding the market's daily structure. The speaker uses the OHLC to identify the market's direction (buy or sell day) and to pinpoint potential entry points for trades, using the 8:30 and midnight open as reference points.

What is meant by 'discount' and 'premium' in the context of this strategy?

'Discount' refers to price levels below the 8:30 and midnight open, considered favorable for buying. A 'premium' refers to price levels above these opens, which are viewed as favorable for selling. The strategy uses these levels to identify where price is undervalued or overvalued.

How does the speaker determine whether a day is a buy or sell day?

A buy day is identified when the open is at the low and the close is at the high, while a sell day is characterized by the open at the high and the close at the low. The speaker uses this structure to gauge potential price movement and to look for setups for buying or selling.

What role do lower time frame setups play in this strategy?

Lower time frame setups help the trader identify precise entry points within the areas marked by the 8:30 and midnight open. These setups are used in conjunction with key price levels and PD arrays to determine optimal trade entries.

What is a 'deep discount' and 'deep premium' in this context?

A 'deep discount' occurs when price is below both the 8:30 and midnight open, indicating a stronger buying opportunity. A 'deep premium' occurs when price is above both opens, suggesting a stronger selling opportunity.

How does the speaker use the midnight and 8:30 opens as pivots or points of interest?

The speaker treats the 8:30 and midnight opens as key pivots or points of interest. These levels often act as areas where price will either reverse or consolidate before continuing its move. They are used as potential targets for trades or for confirming the direction of the market.

What is the significance of a failure to close above or below the 8:30 and midnight open?

A failure to close above or below the 8:30 and midnight open often signals further market movement in the direction of the failure. This can be seen as a hint that the market is likely to continue in the opposite direction, indicating more upside or downside potential.

What is a fair value gap, and how is it used in the strategy?

A fair value gap refers to a price imbalance or area where price moved aggressively, often leaving a gap in the order book. These gaps are used as areas to target for potential retracements, and price often revisits these levels as part of its movement back towards equilibrium.

How can the 8:30 and midnight open be used as targets in a trade?

The 8:30 and midnight open can be used as targets in both upward and downward price moves. If price moves towards these levels, they often act as areas where price will either reverse or break through, providing key targets for traders to aim for in their trades.