Lecture on Daily Bias and Draw on Liquidity

Introduction

• Focus on daily bias and draw on liquidity
• Thanks to n9xm trader for teaching these concepts
• Use previous day high and low to frame draw on liquidity or daily bias

Using Previous Day High and Low

• If price isn't consolidating, it will likely take out the previous day high, low, or both
• Trend Analysis:
  • Trending upwards: expect price to reach previous day high
  • Trending downwards: expect price to reach previous day low
• Framing Reversals:
  • If price reaches previous day high and reverses, it's a signal
  • Similarly, if it reaches previous day low and reverses, take note

Examples

• Example 1:
  • Previous day high taken, expecting higher movement
  • If price cannot close over a previous high and falls back, check if previous day low gets taken
• Example 2:
  • Reach and close below previous day low
  • Expectation: if it closes outside range, reversal to previous day high anticipated

Weekly Highs and Lows

• Mark out previous week's high and low
• Can frame a reversal or draw on liquidity

Examples

• Example 1:
  • Weekly range used to predict move to the other side of range
• Example 2:
  • DXY daily chart: price action around weekly high and lows

Swing Points and Displacement

• Swing Points: high or low points that can signal reversal or continuation
• Failure to Displace:
  • If price fails to displace over a swing high, bias downwards
  • Similarly, if it fails to displace under a swing low, bias upwards

Next Day Model

• Use PD arrays or old highs/lows
• Expect price to move higher if it fails to displace below a low
• Expect price to move lower if it fails to displace above a high

Practical Chart Analysis

• DXY Example:
  • Fair value gaps and how price draws towards them
  • If price cannot displace below previous day low, expect a move to previous day high

Trade Examples Based on Bias

• London Session Trade:
  • Example of marking out previous day highs and lows, then entering based on bias
• New York Session Trade:
  • Demonstrates using next day model in real-time trade decision

Conclusion

• Key Takeaways:
  • Use previous day/week highs and lows to determine liquidity draw
  • Swing points and displacement are crucial for predicting movement
• Practical Application: Implementing these strategies can improve understanding of market trends and potential reversals
• Encouragement to like, subscribe, and comment for more content

Note:

To fully appreciate and understand these strategies, familiarization with market structure, fair value gaps, and other trading concepts is recommended.