ICT High Probability Scalping

What are high-probability scalps?

Focus:

  • Highlighted opportunities in scalping the forex
  • Learn directional bias for HTF institutional sponsorship
  • Determine the highest probable times of the day
  • Framing high probability setups for runs on liquidity
  • 10 – 30 pip swings
  • There will be times scalping setups will overlap with long-term conditions
  • Running out the previous day’s highs/lows
    • Targetting buy stops above the previous day’s high or 1 / 2 days ago
    •  Always going to be looking previous 3 days as your range (counting the current day as day 1)
    • The reason for 3 days is because every swing high/low consists of 3 individual bars

USDCAD – Example

H1 CHART

  • Highlighted individual daily highs + lows
  • Use Daily TF to determine bias
  • Use H1 TF to look for draws on liquidity

  • If we are bullish – seek to run previous day(s) highs / old highs (vice versa for bearishness)
    • Known as draw on liquidity (DOL)
    • Going to be in the form of buy-side liquidity or buy stops
    • The market will be drawn to that level and dip into the liquidity pool

  • Any of the 3 candles for swing points can be up or down close
  • The formation is most important – only 3 candles are needed to form this pattern
    • Daily swing low should have the middle candle being the lowest low and higher lows to the left and right
    • Daily swing high should have the middle candle being the highest high and lower highs to the left and right

Bullish scenario

  • Only interested in looking for a daily swing low after a daily swing high has been broken
    1. Once the highest high of the daily swing high is traded through – this indicates bullish momentum
    2. Wait for a pullback and swing low to form to show oversold conditions
    3. After a swing low forms we wait for the last swing candle of the 3 to be violated to the upside ⇒ We play the pullback and target the previous day(s) highs

Bearish scenario

  • Only interested in looking for a daily swing high after a daily swing low has been broken
    1. Once the lowest low of the daily swing low is traded through – this indicates bearish momentum
    2. Wait for a swing high to form to show overbought conditions
    3. After a swing high forms we wait for the last swing candle of the 3 to be violated to the downside ⇒ We play the pullback and target the previous day(s) lows

EXAMPLE – BULLISH SCENARIO

DAILY CHART

H1 CHART (HIGHLIGHTED PURPLE ON DAILY CHART)

  • Red line = London KZ
  • Blue line = New York KZ

  • As we are bullish, we expect the previous day’s high to go (denoted by the line)
  • We use our fib tool to draw from the lowest body of the previous day’s range to the highest point before a retracement

  • Expecting a retracement the next day into OTE
  • After retracement, we can look to target the previous day’s high or our current day’s higher high – both are valid buy-side liquidity

EXAMPLE 2

Note that the entry was provided outside KZ, this makes it a low probability

Implementing daily bias

Referring to daily chart

Bullish scenario

  • Wait for a swing high on the daily to be broken = Bullish stage
    • Swing high = Candle with lower highs to both sides
    • We anticipate buying opportunities in the future
  • When price retraces, look for a swing low to form but does not break a recent swing low
    • Swing low = Candle with higher lows to both sides
  • When swing low forms – anticipate the 3rd daily candle’s (last candle of the swing low formation) high to be raided or traded through the following day
    • The candle that opens after this should preferably open below the 3rd candle’s high
  • Look for previous day highs to be raided each day until a swing high on the daily forms or price reaches a key S&R level

Circle is swing low Blue line is 3rd daily candle expected to be raided or traded through

Bearish scenario

  • Wait for a swing low on the daily to be broken = Bearish stage
    • Swing low = Candle with higher lows to both sides
    • We anticipate selling opportunities in the future
  • When price retraces, look for a swing high to form but does not break a recent swing high
    • Swing high = Candle with lower highs to both sides
  • When swing high forms – anticipate the 3rd daily candle’s (last candle of the swing high formation) low to be raided or traded through the following day
    • The candle that opens after this should preferably open above the 3rd candle’s low
  • Look for previous day lows to be raided each day until a swing low on the daily forms or price reaches a key S&R level

GBPUSD EXAMPLE – BULLISH

DAILY CHART

  • After a swing low is created, we wait for the third daily candle’s high to be traded through before we can start looking for longs – in this example, we can be a buyer where the mouse is and target PDH

*Note: this is my personal notes from the ICT’s video. I have screenshotted and noted what is important for my studies I recommend watching the videos by yourself.

M15 CHART

  • The left side to the middle vertical line is the previous day, and the right side is the day where we can look for longs
  • The green horizontal line is PDH
  • We use session highs and lows of the previous day to find our optimal trade entries (as mentioned in Vol 1)
  • We are only interested in trading when the price reaches the optimal entry

ICT power of 3 concepts

When the daily bias is bullish:

  • 3 components that make up generic price action
    • Accumulation phase – longs or shorts accumulated
    • Manipulation phase – price goes opposite direction to what the intended future direction will be
    • Range expansion / Distribution
  1. Confirm London session was bullish
    • The measure of bullishness after an attempt to go lower was rejected and the price has seen a rally + Daily bias bullish
  2. Wait for 7 AM NY time to stalk for long
  3. Between 7 AM – 9 AM NY time, setup will typically form
  4. After 7 AM NY time, wait for price retracement lower
  5. NY session will typically retrace from a swing high intraday that was formed for a daily high or a short-term high during the London session
  6. Ideally, select retracements of at least 20 pips lower
  7. If no retracement of 20 pips form by 9 AM – don’t take anything
  8. If it does form – enter 62% fib as it drops
  9. Expect the price to retest the high of the day or the previous day’s high ⇒ Look for targets 1 & 2 on the fib

 

When the daily bias is bearish:

  • 3 components make up generic price action
    • Accumulation phase – longs or shorts accumulated
    • Manipulation phase – price goes opposite direction to what the intended future direction will be
    • Range expansion / Distribution
  1. Confirm the London session was bearish
    • Want to see the price move above the opening price at midnight NY time then reject and go lower ⇒ Should anticipate the idea of the NY session continuing in bearish conditions
  2. Wait for 7 AM NY time to stalk for shorts
  3. Between 7 AM – 9 AM NY time, setup will typically form
  4. After 7 AM NY time, wait for price retracement
  5. NY session will typically retrace from a swing low intraday that was formed for a daily low or a short-term low during the London session
  6. Ideally, select retracements of at least 20 pips higher
  7. If no retracement of 20 pips form by 9 AM – don’t take anything
  8. If it does form – enter 62% fib as it rallies
  9. Expect the price to retest low of the day or the previous day’s low ⇒ Look for targets 1 & 2 on the fib

EXAMPLE

  • The vertical line denotes 7 AM NY time

When to expect reversals

  • When the H1 chart trades to an obvious old high or old low that has shown a clear willingness to reverse price before – this will likely repeat
  • Sometimes the price will not respect an old high or low and those generic S&R levels will give way and we never know for sure
  • Far better to expect them to cause a reaction than not to ⇒ Plenty of moves and price swings between these key HTF price points to never have to worry about them

Money management

  • Important to implement strict risk controls
  • Consider using 0,5% per setup and gradually working your way up to 2% if it meets your “risk tolerance”
  • Important not to try to swing home runs or take larger risks. One trade will not make you rich.
  • Over-leverage will impede your development and drastically decrease your chances of seeing responsible equity growth
  • Rather focus on consistent build-up of your account

*Note: this is my personal notes from the ICT’s video. I have screenshotted and noted what is important for my studies I recommend watching the videos by yourself.

 

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