ICT Mentorship - April 2017 - Lesson 1: Essentials to ICT Day Trading

Overview

• Focus: ICT Day Trading Model
• Aim: Capitalize on daily movements within a 24-hour trading period
• Misconceptions: Day trading is precise but challenging; not every day is ideal for trading
• Average Setups: 2 setups per trading day

Key Concepts

• Daily Range: Targeting 65-70% of the daily range
  • Usually close to the last five days' average daily range
• Directional Bias: Important for setting up day trades
  • Ideal to trade in the direction of the weekly timeframe
• Limiting Risk: Day trades allow for smaller stop losses
• Day of Week & Time of Day: Critical in determining trade setups

Trading Strategy

Time of Day

• London Open: 1 am - 5 am New York Time
• New York Open: Primarily the easiest session
• London Close: 2 pm - 3 pm New York Time
• Asian Session Open: 8 pm New York Time
• London Lunch: 5 am - 7 am New York Time

Day of the Week Characteristics

• Monday: Small range, but can set high/low of the week
• Tuesday: Good for trading; often sets weekly low/high
• Wednesday: Ideal day trading due to mid-week data
• Thursday: Possible reversals, often caps weekly range
• Friday: Typically smaller range unless objectives unmet

Weekly Range Framework

Sunday Opening Price

• Drawn out until Thursday
• Important for identifying intra-week reversals
• If price trades above/below Sunday’s opening, it indicates potential weekly direction

Case Studies

1. Example 1: Trading below Sunday’s opening in a bearish market
   • Importance of PD arrays
2. Example 2: Trading above Sunday’s opening despite a bearish start
   • Role of fair value gaps and order blocks
3. Example 3: Anticipating moves based on PD arrays
   • How reversals are impacted by hitting PD arrays

Conclusion

• Importance of understanding PD arrays and IPTA (interbank price delivery algorithm)
• Need to blend these elements with the opening price to determine weekly ranges and set up day trades
• Emphasis on studying and applying these concepts thoroughly for effective day trading
• Build on these fundamentals to develop a complete day trading system