Welcome back folks. This is lesson three of the Macy 2017 ICT mentorship. ICT amplified day trading and scalping. This lesson is teaching 20 pips per day.
Targeting 20 pips per day. Before we get into it, let me preface it by saying you will not make 20 pips every day. Period. I can't promise you that.
No one can promise you that. Okay, but there are. Certain things that we're going to cover here today that give us a potential to hunt for this as a daily objective.
Not every trading day is obviously like all the others. So one day may have a lot more opportunity than another day. Other days may not have any opportunity at all, despite what it may be showing you in your charts.
You have to be mindful that obviously we all know that there's been many times where I've looked at things and called certain things to happen and didn't happen at all. Now, ideally, you will want to bank 20 pips in any day trade that you take. So every trade that you get into, you have profits, at least take something off at 20 pips.
That's the surest way of banking 20 pips per day. So if you're in there trying to trade every single day, not that I'm advocating that or enticing you to do that. If you do and you get 20 pips, always try to bank something at 20 pips. However, there are a few techniques one can use to ferret out a 20-pip scalp almost every day. Now, again, the emphasis there is almost.
The trader still needs to do their homework and determine what the current market environment is. Consolidation, reversing, expanding. It's all about market profiling.
This lesson, I'm going to teach you two methods that I like to scalp with and aim for 20 pips. Okay, I get a lot of questions about how can I trade the Asian session. Now, obviously, you know I don't like to trade that that much. But when I was active trading Asia, this is one of the ways I did it.
This is a good approach or technique, method, pattern, whatever you want to call it. It's kind of like a complete system, if you will, here. What we're doing is trading the 15-minute New York session stops.
This pattern is good for yen. Aussie and Kiwi crosses. And the buy setup is during Asian session up to 12 a.m. New York time.
You're going to scout short term lows formed in New York session. Now, it's going to be very, very late New York session. Get ready to go into the beginning of the New York crossover into Asia. Obviously, I'm skipping over Aussie and New Zealand, but in my way of thinking.
It's from New York going into Asia. I know I'm going to be disrespectful to the folks in New Zealand or Oz, but that's just the way I view it. Sorry. So late New York for me is basically going into the New Zealand and Aussie Open.
OK, so let's add it like that. Say it to you like that. But the way I interpret it is when New York closes, we're going into Asia. That's just the way I interpret it.
So I'm sure some of you that are very highly critical are going to want to correct me and say, well, that's just not really what that is. But I'm just telling you, this is how I do it. OK.
And if it means anything else to you, I don't trade it that much because I think all the volume should be done in London and New York. But for completeness sake, for those that are desk jockeys in the North American continent, they just cannot participate for whatever reason because of sleep. jobs, business, whatever, life circumstances.
If you want to trade the Asian session, this is one sure way of doing it. So the buy setup again, repeat it, is during the Asian session up to 12 a.m. New York time. We're going to be scouting short-term lows formed in the New York session, trading long after Asia probes the low.
In other words, basically what we're looking for is a turtle soup long. Selling setup is during Asian session. Up to 12 a.m.
New York time, we're going to be scouting short-term highs formed in the New York session, trading short after Asia probes the highs. We're timing off of a five-minute chart. We're targeting 20 pips, and it's a fixed target.
We are not graduating it. We're not trying to turn it into a huge mountainous. Pile of pips, it's straight 20 for 20. 20 stops, 20 target. That's it.
So what does it look like? Well, we have here an example of it. As indicated in the chart here, you can see that there is a short-term high formed prior to the Asian session start, and that short-term high is going to have a very small pocket of stops resting above it. And it's delineated here by late New York stops. Now, when I look at this, I interpret this as very, very low volume liquidity run.
Essentially, what we're doing is we're starting the Asian range. So what we're doing is interpreting the Asian range high forming. When we take a move up.
above that short-term high prior to the Asian session start on a five-minute basis. If it trades above that high, we can look to go short and take 20 pips. The blue ranges you're going to see in this video are all delineating what 20 pips looks like.
Now, obviously, all these go sometimes many pips beyond 20 pips, but just for the sake of knowing what it looks like and how much of an opportunity there is. I showed it to you just in a 20 pip spectrum. The setup usually occurs before New York midnight. So what we're doing is we're actually trading inside of the Asian range. By expecting the Asian range to be what it typically is, a consolidation, many times that Asian high will form after a short-term high like this is being delineated in your chart.
Once that's taken out, they fade that and take it the other way down. and making the Asian range low. Many times the Asian range is a lot larger than 20, 30, 40 pips, but many times it's at least enough to get 20 pips out of it.
Here's another example here. This is the dollar yen, another short-term high. Price trades above it during the Asian session.
Fade that, 20 pips. It's seen before midnight during the Asian range as we define it. So between 8 o'clock at night New York time, we see a small little rally up.
They fade that and price trades down. 20 pips allows you to bank that. Now look over towards the far extreme left of the chart and you'll see that there's a fair value gap there. That's what ultimately price was reaching down for.
So there's a lot more potential for downside. besides that 20 pips. That's what makes these trades, in my opinion, favorable if you're going to be trading Asia. You're not trying to get rich on them. You're not trying to make 100 pips, but you use all of the PDR rate matrix ideas I've given you in terms of premium and discount to reach for them as well on these lower time frame.
Here's another example here. This is the dollar-yen. Price trades above a short-term high right at the Asian session.
Again, we're anticipating consolidation. So there's nothing to fear. We're looking for the general sideways environment that Asian session creates. Now, I know some of you are going to say, well, what happens if it keeps running up?
Then you get stopped out. You're stopped at 20 pips. Just like any other trade. You have to have a filter for. Keeping advanced losses from occurring, so your stop loss is fixed at 20 pips.
When you trade above the short-term high, as soon as it trades above it, you're looking to sell short. How many pips above it, Michael? I don't know, five.
Five is a good number. Some of you would be really aggressive and want to sell it just one or two pips above it. Preferably, I like five pips above the short-term highs.
If I can get that, then great. If I can't get it, then I miss it. It's fine. Another example here, short-term high, price rallies above it in the Asian session, creating the Asian range high. Price fades that.
The blue box delineates the 20 pips that would be there for potential payout. And you can see it clearly moves a lot more than just that. So, again, the thing is that you're probably being overly critical because it seems like. Well, where's the definition behind the trades? Well, look at your hire time frame.
Even if these trades are looking to continue on the upside or downside, all we're looking for is that initial whip above a short-term high or below a short-term low. Preferably, we can see in market continuations, if we're bullish, we can see the selling above a short-term high like this. Many times, they actually work out better because what you're doing is you're pricing in the Asian range high. And what do we look for? for upside movement that judah swing down so we're already anticipating asian range that's probably going to want to trade lower or if the move starts a little bit sooner than midnight it could trade down make the judah swing there and give you 20 pips before it starts to go higher and make the higher close on the day without really requiring london sessions due to swing another example here This is the Kiwi dollar beginning of the Asian session.
We have short-term low. Price trades down below that short-term low. Just probes it, takes out the liquidity below that short-term low, and then rallies up. The box represents 20 pips again. You can see it continues even further.
But again, all we're doing is looking for an opportunity to trade between 8 o'clock and midnight New York time. Okay, our second way of scalping, 20 pips. We're going to be trading the New York expansion, and this is a pattern that's good for all pairs.
It's no special favorite pair for this. It's a universal application, and the buy setup is during the New York session up to 10 a.m. New York time.
We're scalping short-term lows formed in the New York open, trading long. After New York probes the lows while London session posted the daily low in the five day average daily range is still pending. In other words, the five day average daily range has not been filled for the day.
London has made the low of the day so far. We've rallied from London. Price is retracing in New York and it's trading down below a five minute short term low.
When it does that, we buy long below that short term low in the in the mindset that it's a turtle suit. It's coming back for short-term sell stops, and we're going to be looking for expansion going towards the five-day average daily range. The sell setup is just the opposite.
During New York session up to 10 a.m. New York time, we're going to be scouting short-term highs formed in the New York open session, trading short after New York probes the highs while London session posted the daily high, and the five-day average daily range for that particular day is yet to be fulfilled or pending. Again, the same scenario here, just reversed.
We're looking for a day that London has already posted a daily high or highly favorable of being the daily high. The New York session is having a little bit of retracement higher. It's trading above a short-term five-minute short-term high.
It's taking out buy stops above a short-term five-minute swing high. And the average daily range for the last five days low has not been met yet. That's the condition we're looking to trade in.
We're timing off of a five minute chart. Again, we're targeting 20 pips. It's fixed with a stop loss at 20 pips.
So what does that look like? Well, we have a Aussie dollar here, five minute chart. Price has made a low in London, has had some expansion, it retraced. And on a five minute chart, we can see a short term low violated and also trades back down into what?
Can you see it? We have a five-minute fair value gap back down into an order block as well. Price expands 20 pips, well beyond 20 pips actually, but nonetheless, this is actually the reason why I expected that Aussie dollar to trade up and make a higher high during the live session on New York this past Friday during our live sessions. This was the actual pattern I saw and why I said we were going to see a higher high.
And here it is. You can see it. Another example here again London creating the potential low of the day Expansion on the upside during the New York session price comes down below a five-minute short-term low price Goes below the short-term low it quickly rejects out of there and goes up much more than 20 pips But 20 pips is shaded in blue so you can see the scout that would be available to you Okay, this is the Eurodollar. Same premise.
We have the London Open creating the high of the day. Price trades down. We have a retracement in the New York session. Comes back above a five-minute short-term high for five stops that had been trailed down. Once that short-term high has been violated, selling short above that, looking for 20 pips.
You can see the 20 pips is easily taken in this example here. But nonetheless, not all of them are going to pay like that. 20 pips is very easily seen here. And sometimes, in this example here for the dollar CAD, sometimes you can get more than one example or one setup in the same trading day. In other words, you can get multiple setups.
You're trading off of a five-minute chart, so therefore, there's a lot of potential for it to come back down below short-term lows if it's going to be in a... a rather choppy day with an expansion later in the afternoon. Here we have a London low formed and prices expanded, taking out the high that was formed in early Frankfurt. Price trades down, makes the low in London, trades up, violates it in the New York open, and trades all the way back down below a five-minute short-term low. Stops have been taken.
Price easily rallies 20 pips from that low. giving profitability. And we have a later opportunity where another five minute low is violated and price trades. It's expands well beyond 20 pips again.
So there's two opportunities in this particular currency and it's a dollar cat of all pairs. It's a really low volatility pair generally. And, but you can see how even in this type of environment, you can scalp out 20 pips, but the premise is, is you have to have the strong conviction about what London has already done.
And we're looking for that continuation in the New York session. The ideal scenario is look for a five minute low, let them break down below that five minute low, because what they're doing is they're trying to entice short sellers and breakout artists and also knock out those individuals that are already long that would stand to profit by the next leg up in price. This pattern is a wonderful pattern for just a real strict guideline about how you want to go into the Forex market and trade it. It's actually a really good pattern for S&P trading, too. So if you're an ES trader, you can do this same pattern.
It's very, very good on ES. It's good for Dow futures and triple Qs. It's good for stock trading, too. If you're a day trader on stocks, you can pull up a five-minute chart and say this is a really good pattern to use there as well. I don't advocate day trading stocks because the volume usually isn't enough to push it around.
But you can look in there and you'll see that this pattern is one that works out very, very well. It's really one of those universal patterns. You can apply it to everything, commodities, bonds, and all that business.
But hopefully these two concepts have given you a more focused approach about how you can go in and look for short-term intraday opportunities. They're not always there. But generally, if you look across a lot of pairs and you're just going to be intraday short term scalping, if you really push it hard, there's something you can practice on every day. And notice I said practice because I don't want you thinking you can go in every single day trading and trying to get 20 pips. But if you look at a great number of pairs, 10 or 15 pairs, you'll find something like this panning out every single trading day.
So until next lesson, I wish you good luck and good trading.