ICT Forex - Trading The Key Swing Points

Summary

This video script offers a comprehensive guide on trading key swing points in the forex market, focusing on the Asian, London, and New York market opens, as well as the London close. It explains how these sessions can create daily highs or lows and how traders can use this information to anticipate market movements. The presenter emphasizes the importance of understanding the interaction between these sessions and higher timeframe support/resistance levels to identify high-probability turning points, encouraging viewers to study market charts for a deeper understanding.

Takeaways

• 📈 Swing points are critical in trading and include the Asian open, London open, New York open, and the London close.
• 🌏 The Asian open can set the day's high or low, and the market may consolidate and then expand from there.
• 🌆 The London open can create new highs or lows or be part of a retracement from the Asian session's movement.
• 🌃 New York open can also establish the daily range high or low, and may be influenced by news events or liquidity.
• 🔄 Retracements are common, where a session's low or high can be followed by a return move into the opposite direction.
• 📊 The London close often represents the opposite end of the range from where the day started, but it's not a hard rule.
• 📉 Sometimes the London close can create a new high or low, especially after a period of consolidation.
• 🔄 The market can reverse at the London close, setting the stage for the following week's trading direction.
• 📝 Traders should use higher timeframe price levels in conjunction with key swing points for better trading decisions.
• 📈 Studying 15-minute or 30-minute charts can help identify significant turning points in relation to higher timeframe support and resistance levels.
• 💡 The Inner Circle Trader offers more in-depth education on these concepts for those interested in further learning.

Q & A

What is the main focus of the teaching module discussed in the transcript?

The main focus of the teaching module is trading the key swing points, specifically revisiting the Asian open, London open, New York open, and the daily range engineering.

What is the general rule of thumb for the daily range according to the 'power three' teaching?

The general rule of thumb is that after a consolidation, the range learning increases, with the higher low of the daily range being part of the expansion, and the London close creating the higher low of the date or the opposite end of the range formed in London.

Can the Asian open create the daily high or low, and if so, what is the implication for trading?

Yes, the Asian open can create the daily high or low. If it does, and the market then forms the highest point during the London session, it suggests a potential retracement in the initial leg of the intraday move, which could be an optimal trade entry.

What is the typical scenario for the London open according to the 'power three' teaching?

The typical scenario for the London open is that it can create the low or high of the day. If the Asian session creates the low, the London open can be part of a retracement, indicating a continuation of the bullish trend.

How can the New York open affect the daily range, and what does it signify?

The New York open can create the high or low of the daily range. It can signify a bearish or bullish trend, depending on whether it forms a high or low after a consolidation or retracement from the London open.

What is the significance of the London close in terms of the daily range?

The London close typically represents the opposite end of the range for a bullish trend, where it has created the low of the day. However, it can also create the high of the day in certain market conditions.

How can traders use the information about key swing points and time of day in their trading strategy?

Traders can use the information about key swing points and time of day by overlaying these specific points with higher timeframe levels. This can help anticipate high probability turning points and make informed trading decisions.

What is the recommendation for traders to better understand the market's behavior at key swing points?

The recommendation is for traders to study charts on a 15-minute or 30-minute timeframe, observing when significant daily highs and lows form, and how they relate to higher timeframe support and resistance levels.

What is the purpose of studying the market's behavior at key swing points in relation to higher timeframe levels?

Studying the market's behavior at key swing points in relation to higher timeframe levels helps traders to identify significant turning points and anticipate market movements, enhancing their trading strategy.

How can the information from the 'power three' teaching be applied to trading decisions?

The information from the 'power three' teaching can be applied to trading decisions by understanding the characteristics of each key swing point and using them to identify potential retracements, continuations, and reversals in the market.

What is the importance of the 'power three' teaching in the context of trading?

The 'power three' teaching is important as it provides a framework for understanding market behavior during key trading sessions and helps traders to anticipate and prepare for potential market movements based on historical patterns.

Outlines

00:00

📈 Trading Key Swing Points in Forex Markets

This paragraph discusses the concept of trading key swing points in the forex market, focusing on the Asian open, London open, New York open, and the daily range. The speaker explains the typical pattern of consolidation followed by expansion in the market, and how the lows and highs of the day can form during these sessions. The importance of the New York open and London close in creating significant market movements is highlighted, along with the potential for these sessions to create retracements or continuations of the market trend. The speaker also suggests using this information to anticipate market movements and identify optimal trade entry points.

05:01

📊 Utilizing Swing Points with Higher Timeframe Levels

The second paragraph delves into the application of swing points in conjunction with higher timeframe levels for trading strategies. It emphasizes the significance of observing market behavior during specific times of the day and how these can overlap with key resistance or support levels on a daily timeframe. The speaker provides hypothetical scenarios to illustrate potential trading opportunities when market conditions align with these timeframe levels. The paragraph also encourages traders to study the market's behavior at 15-minute or 30-minute intervals to identify significant turning points and understand the market's storyline over time. The speaker concludes by directing interested parties to their website for further information.

Keywords

💡Swing Points

Swing points refer to the significant price levels at which the market reverses its direction. In the context of the video, swing points are pivotal for trading strategies, as they mark the high or low of a trading session or day. For example, the script discusses how the Asian open, London open, New York open, and London close can all act as swing points, influencing trading decisions.

💡Asian Open

The Asian Open is the start of the trading day in the Asian markets. It is a key swing point that can set the tone for the day's trading activity. The script mentions that the Asian open can create the daily high or low, indicating its importance in establishing early market direction.

💡London Open

The London Open signifies the beginning of the trading session in the London markets. It is highlighted in the script as a potential swing point that can create new highs or lows, or be part of a retracement, significantly impacting the day's trading range.

💡New York Open

The New York Open is the start of the trading session in the New York markets. As explained in the script, it can also be a critical swing point, sometimes creating the day's high or low, or being part of a retracement, which can influence subsequent market movements.

💡London Close

London Close refers to the end of the trading session in London. The script describes it as a swing point that often forms the opposite end of the trading range for the day, either the high or the low, and can act as a reversal point in the longer term.

💡Consolidation

Consolidation in trading terms is a period of price stability after a significant price movement. The script uses this term to describe market behavior where there is a pause or slight retracement before the market moves in the direction of the trend, which is crucial for identifying potential swing points.

💡Expansion

Expansion in the context of the video refers to the increase in market volatility or price movement after a period of consolidation. It is used to illustrate how the market can move from a stable phase to a more dynamic one, often leading to the formation of new swing points.

💡Retracement

A retracement is a temporary reversal in the market following a strong price movement. The script explains that retracements can occur during different trading sessions, such as a drop in the London session after an initial move established in the Asian session, indicating a potential buying opportunity.

💡Impulse Leg

The impulse leg is the initial part of a market movement that sets the direction for the day's trading. In the script, it is mentioned in the context of retracements, where if the Asian session establishes a low and the market moves higher, a retracement in London could be seen as a continuation of the impulse leg.

💡Daily Range

The daily range is the difference between the highest and lowest price of a security within a single trading day. The script discusses how the daily range is engineered through the interaction of different trading sessions and how understanding this can aid in trading strategies.

💡High Timeframe Levels

High timeframe levels refer to significant price points on longer-term charts, such as daily or weekly charts. The script suggests using these levels in conjunction with key swing points to anticipate market reactions, such as selling at a resistance level during the London close, even if the day was bullish.

Highlights

The teaching module focuses on trading key swing points in the forex market.

Swing points include the Asian open, London open, New York open, and the end of the day close.

The general rule of thumb for swing points is consolidation followed by expansion in the daily range.

The New York open can be part of an expansion or a retracement from the London open.

London open can create a new low or high, or be part of a retracement from the Asian session.

The Asian open can sometimes set the daily high or low, contrary to typical power three scenarios.

If the Asian session creates a low, a drop in London is likely a retracement for a bullish assumption.

The New York open can create a high or low, influenced by news events or liquidity.

London close often represents the opposite end of the range from where the day started.

London close can create a high or act as a reversal point in the market trend.

Traders should use higher timeframe price levels in conjunction with key swing points.

The presentation suggests using a 15 or 30-minute timeframe to identify significant market turns.

Studying swing points in relation to higher timeframe support and resistance levels can identify high probability turning points.

The presentation introduces a blend of traditional rules with new insights for trading swing points.

The Inner Circle Trader offers mentorship for a deeper understanding of trading strategies.

The speaker emphasizes the importance of versatility in trading to anticipate market movements.

The presentation concludes by encouraging traders to visit the Inner Circle Trader website for more information.

Transcripts

you

you

welcome back folks this teaching is

going to be specifically dealing with

trading the key swing points

okay so what swing points are going to

be teaching in this module we're going

to be revisiting the Asian open a London

open the New York open and the done then

close all

right so engineering the daily range now

obviously I teach with power three that

the general rule of thumb is get age' is

a consolidation then learning increase

the higher the low of the daily range

New York is part of the expansion and

then London close creates the higher low

of the date or the opposite end of the

range that's formed in London but not

always is that the case in some

instances the Asian open will create the

daily high or low as seen here in this

example below the day's formed during

the Asian open and then the highest

formed in the London session

conversely as I mentioned in the

beginning this is a typical power 3

scenario where we have consolidation in

Asia then when it's bullish we create

the low of the day and then it expands

throughout the rest of the day

now London open it can create obviously

as I teach with power three it can

create the low or high the day in this

example here you can see the London

session creates the very low lower than

it was at the beginning of the trading

in Asia

or London can be part of a retracement

when the asian session creates the low

today so the way we're going to use this

information is if Asia

creates a low or high the Danis example

creates a low and starts to run and

expands outside of the Asian range this

drop down in London is typically going

to be a retracement of the initial leg

or impulse leg of the intraday move if

we're bullish we're going to assume that

Asia creates the low and we're retracing

down into what would be optimal trade

entry and that could be eight long so

the long and open can be a part of the

move that occurs and originates from the

Asian open

now the New York open this to can create

the high or low the daily range as well

as you can see there's an example of the

market staying in a consolidation drops

down and when you have to assume that we

would be bearish this particular day but

there may be a big news event that comes

out and it creates a run on liquidity

and we can see that running above these

equal highs here creating the New York

open raid on liquidity that makes the

high the day in the market trades the

lower as a result equally significant we

can see the New York open can be part of

a retracement from the London open here

we see the low formed in London creates

an impulse swing

trades back down into the New York open

creates a nice retracement and then

rallies creating the high the day later

on during a New York and overlap of

London close

so both scenarios this is the classic

scenario this is what I teach and have

taught for years this is the easiest

setup when we want to trade the New York

open so the swing point takes place here

we'd have to assume that were bullish

before and then the low has to be formed

and shares a clear impulse swing during

the London session then retraces during

the loving lunch going into New York

open we can see the turning point here

or swing point that would be treated

rather handsomely now this is a bullish

in area it would just as equally

effective if it was London getting a

high today it trades lower during the

London session then retraces pop into

New York session creating a retracement

which is a classic continuation on the

bearish idea or down close premise for a

daily range or your particular market

and

expansion going towards London close so

everything we're showing here just can

be done in Reverse

ok the London close

now this can be the high or low of the

day typically for bullish and London's

created the low of the day or age has

created a load of the day.i London

closed tends to be the opposite end of

the range now it doesn't always

close to high and/or low into the range

but generally as a rule of thumb I

believe that it will serve you well

other instances it can create the high

the day when it's been an arrangement as

you can see here the market was in a

large consolidation we have equal highs

market runs up throwing London clothes

takes those highs and creates the actual

high the day and trades lower this could

be done in Reverse this could have

easily been equal lows down here and it

could have eventually drove down to get

the equal lows and making the low of the

day and

or it can be a reversal point from a

longer-term perspective as we see here

the market has been trading higher

during the London closed time period

during the London close time here market

makes a reversal on Friday next week

the following link it opens

trades in consolidation and begins to

move lower and lose significant lower on

the following weeks Tuesday so it can

act as a reversal now how do you use

these swing points

you want to be using higher timeframe

price levels and

when these specific key swing points or

time of day

overlap with higher timeframe levels you

can anticipate what would be otherwise

expected on the higher time frame for

instance if we had a key resistance

level that we were watching on a daily

timeframe if we came to this level in

mind and we're going to speak

hypothetically here because there's so

many examples I could literally make a

five to six hour long video and there

wouldn't even scratch the surface which

is the reason I have to have a

mentorship because there's so many types

of conditions and setups that are

available not that you need to know

every single one of them but it makes

you very versatile as a trader as you

can see things in the marketplace that

aren't gonna surprise you you can

anticipate them and wait for them to

come in but if we're looking for our key

resistance level on the daily chart that

could be the time of day when London

trades up to that key resistance point

and at the time of the day we're into

trades there you could be a seller at

London close even while the day was

bullish because it's hitting that higher

timeframe daily resistance price point

that could be the point in which the

best to sell short and that would be a

scenario and the same thing would be

applied to all these key swing points or

time of day because

we have characteristics been shown here

and we also went beyond what was

typically taught as my ICT power 3

there's some blending of the rules and

I've given you generic characteristics

if you will for each of the four major

key swing points so I want you to go

through your charts and pull up a

15-minute time frame or it could be a

30-minute time frame and I want you to

look at all the times that the market

turns and create significant daily highs

and lows and when it makes intro and

weekly highs and lows and look at the

monthly highs and lows when are they

forming and you'll be able to see a

storyline over time studying it in

reference to the higher time frames key

support resistance levels that you would

otherwise look for when these time

periods or key swing points trade to

them you will see significant in high

probability turning points

hopefully you enjoyed this presentation

obviously if you want to find more you

can visit my website at the inner circle

trader.com