One of the cornerstones of Inner Circle Trader’s 2022 mentorship model is the concept of ICT daily bias. This blog post will provide insights into understanding daily bias, guiding you in identifying key factors essential for establishing a robust daily bias in your trading strategy.
Understanding the ICT Daily Bias in Trading
The concept of daily bias revolves around the identification of sell-side and buy-side liquidity, fair value gaps, order blocks, volume imbalances, and recent highs and lows.
These elements collectively represent draws on liquidity, guiding market movement from one liquidity pocket to another.
The approach involves analyzing these aspects on both weekly and daily timeframes, recognizing that price behavior and respect for these elements may vary with the timeframe.
Fractality of Price Movement
Price movement in trading is fractal, meaning that patterns and behaviors observed on higher timeframes like weekly often mirror those on lower timeframes like daily. However, lower timeframes may exhibit more noise and are prone to greater price disrespect of identified trends and patterns.
Utilizing Weekly Bias for Daily Analysis
Understanding the weekly market trend is essential for establishing a clear daily bias. If the weekly trend is bullish, for instance, the focus on a daily timeframe would involve identifying opportunities to go long and targeting specific highs for potential trades.
Step-by-Step Approach For Developing ICT Daily Bias.
Step 1
To establish a daily bias, begin by analyzing the D1 timeframe on the chart. According to Michle Hudleston, Institutional traders and banks utilize the daily chart to execute their orders effectively.
As shown in the chart above, start by marking the recent swing high and swing low using the trend line tool. This marking should be done at the beginning of the week, aiming to anticipate the direction of price movement rather than pinpointing the precise value it will reach.
Step 2
The second step involves identifying the drawn-on liquidity. Determine whether the recent algorithm activity leans towards sell-side or buy-side liquidity on the daily timeframe. If the price has recently swept the sell-side liquidity, there is a strong likelihood that the next drawn-on liquidity will be buy-side, and vice versa. In the chart below, you can observe that the price has recently interacted with sell-side liquidity, and the next anticipated drawn-on liquidity is on the buy-side.
Learn to trade with liquidity
Step 3
For the third step in establishing the ICT daily bias, examine whether the price is within a premium or discount zone. If the price resides in the premium zone, your bias should lean towards a short position. Conversely, if the price is in the discount zone or below 50%, your bias should favor a long position.
Step 4
Are there any fair value gaps or order blocks that substantiate your analysis?
ICT forex essentials to trading the daily bias
The following concepts are the funding of Daily Bias
- Liquidity
- Premium and Discount Zones
- Fair Value Gaps
- Order Blocks
- Breaker Block
ICT Daily bias is a fundamental concept that can significantly enhance your trading success. By comprehending the market’s daily direction, traders can strategically position themselves for profitable trades. Incorporating daily bias analysis in your trading approach can prove to be a game-changer.
Time Frame For Trade Exection
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