ICT High Probability Scalping

December 29, 2022

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

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
Wait for 7 AM NY time to stalk for long
Between 7 AM – 9 AM NY time, setup will typically form
After 7 AM NY time, wait for price retracement lower
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
Ideally, select retracements of at least 20 pips lower
If no retracement of 20 pips form by 9 AM – don’t take anything
If it does form – enter 62% fib as it drops
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

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
Wait for 7 AM NY time to stalk for shorts
Between 7 AM – 9 AM NY time, setup will typically form
After 7 AM NY time, wait for price retracement
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
Ideally, select retracements of at least 20 pips higher
If no retracement of 20 pips form by 9 AM – don’t take anything
If it does form – enter 62% fib as it rallies
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.