Okay folks, welcome back. This is the first lesson of May 2017 content from the ICT Mentorship. This month we're teaching the ICT Amplified Day Trading and Scalping. This teaching is specifically dealing with the sentiment effect.
Okay, what are buying or selling probabilities the highest? Well, for day trades, as we're specifically teaching in this month, the use of the Asian range and the opening price are key. For day trades, as we're teaching in this month, the use of the Asian range and opening price are key. Bearish short days, or when you're looking to sell short, ideally, you're going to be looking for a move above the opening price and or the Asian range high.
When you're looking to go long, On bullish days, ideally, you're going to be looking to go long below the opening price and or the Asian range low. Now, the market will have a short-term shift in sentiment, and less informed traders will chase price on the impulse or the initial swing intraday. This is classically known from my teaching as the Judas swing, where the market goes into a projectionary state that's opposing the general direction of the close of that particular day. Focusing on strict conditions. like daily and or four-hour direction based on institutional order flow, and combining the PD array matrix for the next level objectives, this will provide you the highest probability setups.
We wait for opposing market directions for high odds setups. Now, when we're looking at order flow that's bearish on the example here in our chart, on the left-hand side, if order flow from an institutional basis on a daily or four-hour is suggested to be bearish or going lower. What we're looking for primarily is a move above the Asian range high and away from that opening price.
Smart money sells above the Asian range high. When institutional order flow is bullish on the daily and or four-hour chart, smart money buys below the Asian range low and below that opening price. Now you're probably saying to yourself, well, what is the opening price? It's going to be either Zero GMT's opening price early in the day, if it's been a consolidation very close to that same area.
In other words, if the range from the zero GMT hour hasn't produced much of a range on the upside or downside, you can still incorporate that opening price as well. But in this teaching, we're focusing primarily on the midnight candle in New York. Conversely, when institution order flow is bearish on the daily and or four-hour chart. The market typically will go above the Asian range high, and that will many times suck in street money, and they will be buying above that on a breakout.
When institutional order flow is bullish on the daily indoor four-hour chart, the moves that go below the Asian range many times trip street money into selling short. That puts them in on the wrong side. Okay, buy conditions for a proper setup for long entries.
Now, what we're going to be referring to is IPTA's suggestion based on the daily or minimum four-hour discount array. It must be in play. In other words, on a daily chart and or four-hour chart, price has recently respected or traded down into a discount PD array, and it's showing a willingness to support price. In other words, we had a reaction of some sort.
So if we see that on a daily and four-hour, and institutional order flow is bullish, we have a very… high odds condition for a buy in a day trade. There's a sufficient range in pips between market price and opposing premium array found on the daily and or minimum four-hour chart. What am I suggesting here?
Is there enough of a range for you to profit if you want to be a buyer today based on the fact that we've traded down to a daily and or minimum four-hour discount array? If we have done that, the conditions are the stage is set for a potential buy or up close day. By itself, it doesn't mean much at all. But if there's a sufficient range between the current market price when you're looking to take the trade and the opposing premium array that would be found on a daily and or four hour chart, in other words, is it like 50, 60 pips?
That's a healthy range for a day trade. Anything less than 40 pips, it's a scalp. It can be done, but I like to see 50 to 60 pips perfectly.
for my own for my own tastes Price declines under the opening price, and again, this is the midnight candle in New York, and the Asian range low. And ideally, the decline under the Asian range low will be to a logical discount array on a 15-minute time frame. Typically, price will not spend much time at the discount array on the 15-minute chart.
Expect price to sharply trade higher away from the 15-minute discount array. The longer price stays or hovers near that 15-minute discount array, the odds drop off precipitously. We want to see immediate response because the banks won't keep that price level at a discount very long if it's going to be good.
And short-term sentiment will be most bearish at the time when we enter our long trades. For sentiment purposes, I use a 10 period Williams percent R and I plot that on my 15 minute time frame. As you can see in our chart here, it gives us a very clear discernible measure of sentiment.
But we don't look at the overbought oversold conditions that this indicator usually is over referred to. The conditions really are we're looking at price primarily. And if we get a sentiment confluence, as we see here, this gives us a higher odds.
we probably are going to be on the right side of the marketplace. Why did price go up? As you saw throughout this week, I mentioned that we would probably see the weekly low form on Thursday's New York session.
Price came down, hit the sell stops on two basis. They hit the intraday stops on the New York open 830 employment number, but they did it before the numbers released. And I mentioned during the live session that that day on Thursday.
That's not good, and they're probably pricing in the low of the week. And it's also that sell stop discount PD array, old low on the daily chart. And it rallies up through two fair value gaps, and it hit the gap resistance on the second uppermost fair value gap, stopping dead in its tracks there.
So we had a draw on the daily chart up to a premium array in the form of two fair value gaps pricing off of. The accumulation of those sell stops with the weekly template Thursday's low of the week forming. And we see that subsequent price move again that New York session Thursday weekly low was defined before the fact.
So we're seeing something in this teaching that would otherwise be looked at as hindsight cherry picking, but we watched it unfold in live conditions. Sell conditions, proper setup for short entries. Again, IPTA suggests a daily and or minimum 4-hour premium array is in play.
There is a sufficient range in pips between the market price and opposing discount array found on the daily and or minimum 4-hour chart. Price rallies above the opening price in midnight, New York handle, and the Asian range high. Ideally, the rally above the Asian range high will be to a logical premium array on the 15-minute time frame, and typically price will not spend much time at the premium array on the 15-minute time frame.
We expect price to sharply trade lower away from the 15-minute premium array. The longer price stays or hovers near the 15-minute premium array, the odds fall off precipitously. Short-term sentiment will be the most bullish at the time when we enter our short trades. In this example here, using a 10-period Williams percent R for sentiment purposes, we can see at the time when the bearish order block was traded up into, of Asian range high, we had market sentiment most bullish, and it created the two subsequent highs of the day, and price moved lower. This pair again is the dollar Swiss.
This is in concert with our bearish idea. After that gap was filled on the dollar index for this week's analysis, that's why this pair had such a significant move lower and why this pair respected the outlines that we're giving you here for the teachings. And on its daily chart for the dollar Swiss, we traded up to a rejection block on Thursday.
Friday, we opened, rallied above. The agent range high. and traded down to fill in the discount array, which is in this case the fair value gap seen on the daily chart.
And as you can see here, before Friday's close, the gap was filled. So when we're looking at day trades, notice that there's a specific criteria here that I like to use. Now, every day there isn't going to be a scenario that provides this as a entry. It won't give you an opportunity every single trading day, and that's the purpose.
Day trading is not an everyday trading. I don't think there's any reason why every single trading day that you should be in there trying to find something. Unless you're practicing and looking for concepts to be reinforced and just looking at general price action, I don't think you should be aware that while that study is profitable, it doesn't equate to profitable everyday trading.
So when we teach in this month. the 20 pips per day session. Again, that's not an enticement for you to go in every single day trying to look for 20 pips, but there are going to be conditions that I teach to help you find 20 pips generally in something.
But again, I don't want to try to build in this idea that you need to be a tradeaholic because it's not a good healthy lifestyle as a trader. It's all in consuming. your time and your energy, and it doesn't bode well for long-term success. You end up becoming pip drunk. That's basically what I called it years ago.
And I actually fell victim to that. So I don't want to give those same poor characteristics as a trader to you or even imply that you won't be subjected to the same thing you would be if you go through that same process of trying to trade every single day. Number one, the more you trade, the more likely you're going to get a loss.
The faster that next loss is going to come. And if you're trying to trade every single day, chances are you're probably going to build a false sense of your ability. And the worst thing that can happen is you get a series of good strings of wins. And it makes you think that you're way better than you really are. And the market has a tendency to go into a dry spell.
And what you might think is in the charts today may not be there tomorrow or the day after. So what we're looking for, as outlined in this specific teaching, using sentiment and a rule-based idea about the Asian range, this helps us ferret out the better trades. We won't get this condition every single trading day, but the days that we do, those are the days that this highest probability for day trading are going to be in your favor. Until the next lesson, I wish good luck and good trading.