ICT Day Trade Routine

Date: 2025-01-17

[00:15] Hey folks, welcome back to Lesson 8 of the May 2017 ICT Mentorship, ICT Amplified Day Trading and Scalping. This lesson is the ICT Daily Day Trade Routine. Okay folks, when it comes to day trading or even scalping, the first thing I like to do is consider the economic calendar for the next trading day, or the day that’s going to be traded. Now, this can be viewed obviously at the end of the previous trading session, but generally you want to know what economic drivers are going to be released during the particular day of study or day trading.

Calendar and session timing

[00:51] So we have here May 30th, 2017. This is the economic calendar for Tuesday, May 30th. What we look for are high-impact and medium-impact news events for the day. Next, what I want to do is take a look at the times of those releases respective to the Kill Zones of London Open and New York Open, because those are the two dominant high-volume times of the day. So we want to be looking for those news events that may unfold during those respective times.

[01:28] During London, we’re looking for the high or low to form for the day. It’s usually under the guise of manipulation. With that manipulation, we know that generally it’s going to be seen with an economic news release or some kind of volatility injection based on what we see on a high- or medium-impact basis. You want to look for pairs in the London session or the New York session that have a medium- or high-impact news event. In this case, we have a medium-impact news event for EUR/USD at 3:00 AM Tuesday.

[02:03] It’s the Spanish Flash CPI that’s due at 3:00 AM on Tuesday, so we’ll be looking for some manipulation that’ll occur at that 3 o’clock hour, which is the heart of the London Open Kill Zone. So we know that we’ll have an opportunity potentially to see a day trade or scalp form around 3:00 AM that particular day, or our next live session. Given the fact that we’ve already highlighted and narrowed down our focus to one particular pair, which is EUR/USD on Tuesday, we know the time of day we are expecting the trade to form based on the calendar.

[02:42] At 3:00 AM, there’s a medium-impact news event for EUR/USD. So now we have to go back to the charts and look for framework about that particular pair, but we first start with the Dollar Index. Okay, so now we’re looking at the Dollar Index. This is the daily chart, and the first thing we’re going to be doing is looking at the last trading day. Okay, that’s going to be here, Friday, May 26th, 2017. What we’re going to do is look for the IPDA Data Ranges. So just grab a trend line here and anchor it on a high or low of the last trading day.

[03:23] The easiest way of doing it: drag it to the left and let go of it again, and then re-click on it and drag it again. Now you’ll notice there’s a number to the right of the cursor. It’s 37, and then it’s 38, 39. What I’m going to be doing is dragging that out until it says 60. So it gives me a rough approximation of the last 60 trading days. Now, in this case, it’s going to be factoring in Sundays, so some of these candles—

[03:56] This is a quick and dirty way of looking for the up-to-date ranges. But if your platform doesn’t have Sundays, you don’t have to consider this at all. For the sake of this presentation, we do have a platform by way of Forex LTD’s demo account that does include the Sunday candle, so we have to compensate for that. You can see here I’ve added a vertical line on every Sunday using the trend line going back 60. So how many trading days here are Sundays?

[04:26] We have 10 Sundays in here we have to deduct because we don’t consider those reliable data. So we have to go out one, two, three, four, five, and there’s another Sunday. One, two, three, four, five. So this is 60 trading days in the past. That occurs on March 6th, 2017. So we have to include that for our lookback. We have our lookback period here. This is that Sunday, okay? So we have to go one more day forward right there. Okay, so it’s 60 trading days back.

Building IPDA data ranges

[05:18] Now that we have that, that’s our longest lookback period for IPDA Data Ranges, or 60 trading days in the past. Using that theory, removing the Sundays, we have our 60-day lookback for IPDA Data Range, the 40-day lookback for IPDA Data Range, and the last 20 days for IPDA lookback. So now we have our ranges that we work from for Fibonacci. We look for our PD Arrays inside this range. In essence, what we’re looking at is the entire daily chart. Our only primary focus initially is in the last 60 trading days, as defined as you see here.

[06:01] You always count yesterday’s day as one and go backwards, skipping Sundays, to get 60 days, then 40 days, and then 20 days. There’s your true IPDA Data Ranges. So that’s the range that we’re working in for the daily on the Dollar Index. Every new day, IPDA Data Ranges add one more day to the ranges themselves, and we cut off one day looking back. So it’s always shifting dynamically forward. Once you have this defined, you can create a box like this and simply move the box one day forward, and you’ll have everything each time.

[06:41] It never needs to change; it just keeps shifting forward. You’d have to create a new box for the 40-day and the 20-day respectively, and just shifting those three boxes forward, you always have the lookback period calibrated correctly with no candles for Sunday. Now, for those individuals that do not have a live trading platform, when you eventually decide on your own when you want to go into live trading with the content, should you decide to do that, I’m never going to tell you when to do that.

[07:10] Obviously, that’s part of the mentorship. I’ll never tell you when to do that. It’s completely an individual decision on your part. I can’t tell you when to trade with live money. That’s why we operate in the demo accounts. Everything we’re teaching here is for demo purposes. But should you elect to trade with a live account using this information, you do so at your own risk. But if you don’t have Sunday candles, you don’t have to do it like this. You simply count yesterday’s daily candle as day one and go back 60 days, go back 40 days, and go back 20 days, and you’ll have the up-to-date ranges that keep shifting forward dynamically.

[07:45] When we get to a new quarter, or every three months, we anticipate a shift in market structure, and therefore there will be a quarterly shift that takes place. We receive that as potential trend reversals, but we don’t always expect it. We could see it unfold, but again, it’s not a panacea. It’s not the be-all, end-all. We just anticipate a likely shift in direction for the next two to three months. Okay, so now we can take this off. Now we have our Data Ranges in here.

[08:23] With that, we want to be looking at the last 20 days. Where are our PD Arrays? Okay, so we have a low here and we have a high here. For day trading, you’re going to operate in those last 20 days most of the time. Now, if we have already exhausted everything inside of the last 20 days in terms of all the PD Arrays—we’ve already traded through any premium array or traded down through and away from a discount array in the last 20 days, which is highly unlikely, but it can happen.

[09:06] You would go back and look into the last 40 trading days for the IPDA Data Range for the last 40 trading days. But in day trading and scalping, you’re primarily going to work in the 20-day lookback period. So we have this outlined here as the high and the low. You’ve seen me do this a lot in my video work where I just go about doing it and it’s not a big deal. Everybody just sits back and watches it. But we have price trading right here, and we have a bearish Order Block mean threshold.

Mapping daily PD arrays

[09:42] I’m just going to eyeball it right there so you have that on your chart. Going above that, we have a gap in here with a Breaker here. So what I’ll do is I’ll always elect to go with the lower first, especially a Breaker, because it takes precedence over everything else. So I’m looking at the Breaker’s low. Notice I’m not counting that wick here like traditional support and resistance guys. They would use that low here at 98.46. I’m more concerned about the down candle. So I want that 98.53. I want that low.

[10:21] So I have that on my chart. Then we also have this level up here. So it’s part of the shorter line, so I ain’t got to do any kind of adjustments on the length. I want to note this also because this could potentially be a Fair Value Gap that needs to fill. The high of this candle here, which comes in at 98.14, begins the Fair Value Gap support, and the resistance is up here. But we also have a rough midpoint that is a Breaker.

[10:57] Okay, so these two down candles begin the Breaker, which we saw this short-term high being violated and then rejecting lower. So we know that there’s going to be most likely a reason to want to mitigate something up here. Even if it’s going to be a small little retracement, we have to bear in mind that this could be a sticking point for price going higher.

Then we have a smaller little Fair Value Gap in here, which we’ll delineate. Again, this is on a daily chart, so we’re going to have several levels in here that we’ll be seeing.

[11:31] But in here, it’s a Sunday gap. Okay, so it’s going to be less likely to be that much in terms of influence. While we do note it here, because it’s on a Sunday candle, the gap is essentially all the way up to here. We’re going to use that last up candle’s low as an anchor point. Now, for those without Sunday candles, you wouldn’t have this on your chart at all. But we have to use it because it’s Sunday’s small little movement up, then broke down.

[12:11] That may be a short-term resistance point. If you don’t have a candle on Sundays, you’re going to simply go back to here, which is the last bearish Order Block, which is an up close. Wait for the down move. That low closes in the Fair Value Gap. Notice we’re not using this one, okay, because it has a down close. We want to see the last up close. That’s where the Fair Value Gap begins as its resistance point. So we’re down here. There are our levels, or PD Arrays, going on the upside.

[12:41] Notice that in the last 20 days, what we’re doing is framing the market. Are we in a premium or are we in a discount market? Well, if this is the range, the high and the low, where would that be right now if we looked at price trading, say it opened up on Sunday here, or very close to the close on Friday? Would that constitute a market that’s at a premium or at a discount? Clearly it’s at a discount. Now, because it’s in the discount of the 20-day lookback, it doesn’t mean just go in there and buy it and expect it to go straight up for the dollar.

[13:24] You have to look at where we are in terms of historical reference points. Even though we go back 60 trading days, okay, we are really low in the last 60, the last 40, and the last 20. So we’re really down there historically. Looking beyond the last 60 trading days for a macro view, we have always referred to this low back here in recent analysis because it’s going to be influential. So price did sweep below that like we were expecting, and we saw a little bit of a move up.

[13:54] So we are in a discount market with a lot of PD Arrays on the upside that could be traded to, even still keeping the bearish tone on the daily Dollar Index. This trend could continue going lower, but we have to outline where price could be reaching up to should it start to move higher. Now for the discount arrays, because we’ve done all the premiums, which are above market price. Where we’re at now and what’s below us, we have a bullish Order Block right here, the last down-close candle right in here, and we’ll draw that out.

[14:34] Okay, and I’m going to disregard any mean threshold here because it’s already worked on both sides of that. But this candle here, this last down candle, has been violated by its high being 97.42. We have a high on this candle at 97.44. So now this candle also becomes a Propulsion Block, which is another Order Block that’s bullish that creates a higher high. Now, I’d like to see them a little bit more separated than this, but we refer to that level as well, and we’ll use that one going forward.

[15:22] That was also validated on Friday by a move through that candle’s high. So we have this level at 97.38, which is the opening, or 97.39 in this case, close enough. We’ll use that as a bullish Order Block basis point for discount. So now we have all of the PD Arrays for the Dollar Index in the last 20 days. We do have a Rejection Block down here with the lowest down close, so we also have that as well. Okay, so every one of the PD Arrays is now labeled or delineated on the daily.

[16:06] Now we’ve got to look at what the institutional order flow is for this market. We’re seeing in the last 60 days up candles, which are bearish Order Blocks. When price moves down away from it, it’s being respected here. Up candles here after a void—price has traded up to it in the last 40 trading days. It’s respected that and gone lower. We’ve had a gap in here; price traded up into that, filled it, and sold off. Price has broken lows. So institutional order flow for the Dollar Index is what?

[16:44] Bearish. So we have to elect to side on looking to go short, preferably. That’s where the highest-probability trades are, with odds in our favor. But since we’re day trading, we can counter-trend trade that if we have the ranges defined in the form of a discount. So we’re already in an extreme, especially down here. We have this old low we traded down below, so there’s a potential reversal scenario where we could see some measure of retracement. It doesn’t have to retrace, but we can reasonably expect it to.

[17:21] So we’ve seen this down candle trade through, and we have a couple different gaps up in here, and we have a last up candle right in here, a small little Rejection Block right at that candle’s close as well, which I won’t add because it’s just going to be one more level on here. But we would add that as price got closer to it, and you would consider it also in your own notes. But to keep the charts clean, that’s what we would do. Now you would take this same element and add it to EUR/USD’s daily chart, and we’ll do that now.

[17:57] Okay, so we have the IPDA Data Ranges for 60, 40, and 20 on the EUR/USD daily chart now, and we’re going to look inside the last 20-day lookback period and identify the range. So we have the high of the last 20 days here, and the low in the last 20 days is here. Okay, so are we in discount or premium referencing the last 20 days? We’re at a premium. So now we also go back here and look at a historical high.

[18:41] Okay, because you have to have a macro perspective. We’ve traded above this old high, disregarding that wick. We’ve traded above an old high. We are in the last 20-day range. We are at a premium. So now we’re going to go through and add up all the discount arrays that would be below us in price. You go through and grab a little trend line here. We have that Order Block here, bullish Order Block, so we have to frame that and take this vertical line off.

[19:20] Okay, and so we have a bullish Order Block here. You would note the mean threshold as price gets down to it as well, but we’re going to keep the charts very clean for right now. We have a Fair Value Gap that begins with this candle’s low down to this candle’s high. So we have our liquidity void here, Fair Value Gap is in here, and inside this last 20 days we also have an old high. So you have to reference that. You can see how nice, by understanding the Data Ranges, it limits your focus to what’s only salient at the time right now.

[20:05] Like, what’s important? What are the things that you need to be concerning yourself with? These operations and concepts are what help you arrive at that, so you can think about price algorithmically like IPDA does.

We have a small little Fair Value Gap down here as well, should price find its way back down here. We have that small little area in here that could fill in, and let’s extend it out a little bit more in time. So there are our discount arrays, and the premium array we have is the Rejection Block on the last up, highest close here.

[20:45] So we’ll have that, and then we have the old high naturally that forms the 20-day lookback period’s range high right in here. And that’s it. Now we simply go down into a 4-hour and we do the same thing after we note what’s easy: what’s the institutional order flow right now? Well, you can see in the last 60 days we had down-close candles, which are bullish Order Blocks. When price moves away from it, price has respected it. Yes. Okay, we had down candles here in succession, which is one big bullish Order Block.

[21:20] Price hits it and trades away. Price comes back down, trades into that same Order Block here, and rallies away. We have a gap that also has to be considered, but we’re not going to do that here because it’s a great deal away. But this would also be noted on your charts as we got closer to it. Then we can go into these last two down candles right ahead of the gap closure. Price trades down into that and below these old lows for a liquidity pool, rejects, and trades higher.

[21:54] We’ve yet to come down here and really try to capitalize any bullish Order Block here. We worked on the wick in here on this candle and on this candle here, but I think it’s going to want to try to come down into there because we are at a premium. But we have to be mindful of this opening and the mean threshold. If that gives way, the mean threshold, then we’re going to be looking for the Fair Value Gap to be a likely candidate for filling in, going down to around 110.15, 110 big figure.

Four-hour retracement framework

[22:25] So let’s go down into a 4-hour chart. Okay, here we are on a 4-hour chart for EUR/USD, and you can see how all the daily PD Arrays in the last 20 trading days look back for IPDA. We can see where IPDA will be looking to consider where liquidity may be resting, or giving traders at the bank level an opportunity to get in and capitalize orders, whether it be long or short. Now, since we’re on the 4-hour chart, we have to again consider what the longer-term institutional order flow is on the daily chart.

[23:00] It’s higher. It’s going bullish. While we are in a premium relative to the last 20 days, and certainly the last 40 and 60 trading days, this could be just an opportunity for price to retrace back down to gather up discount arrays to capitalize new long positions. So when we look at the 4-hour chart, what we’re going to be doing is looking for PD Arrays, yes, but we’re looking for reasons to justify why price could be going down to gather up liquidity for an offset accumulation.

[23:34] So when we have price like this trading in a smaller consolidation like this, we have higher time frame daily PD Arrays. What I like to do is say, okay, if I know the institutional order flow on the daily chart is bullish, I want to first make a case and argue that there are reasons for them to want to take it down, to take out sell stops, to accumulate new long positions. That could be done by two different things. We can see that the lows that were formed here and here—price can go down below that and hit the higher time frame PD Array.

[24:11] Or we can trade down below this one because we have this old low and this old low. So price could stab down below that and basically operate under the guise that we are in a premium market, but it could drop down to a short-term discount market relative to the 4-hour chart. So what am I saying here? Well, we have another little range in here from this low to this high. So if we frame that with a Fib in here, okay, we have Optimal Trade Entry in here, which would be below equilibrium, which is in a discount.

[24:54] And we would also be operating on this down-close candle, which is a bullish Order Block, which is at the 70.5 level. So that’s a level we would be watching to see if there’s any sensitivity should price trade down to it. So you have that as a level to be considering.

And we have the total range from this low down here. Okay, equilibrium is below this low. Then we have a little bit of a gap in here, a lot more gap in here, which is the Optimal Trade Entry also.

[25:27] So we have a little bit of a gap in here, closure, then we have this old high back here as well. So price could come down and retrace from the premium market that we’re in on daily. It could trade all the way down into a discount on the 4-hour just to give an opportunity for banks to capitalize new longs at this old high and close some of this Fair Value Gap. Now notice the Fair Value Gap in here. Let me get the Fib off so you can see it better.

[25:52] The Fair Value Gap with only buy-side delivery, that can fill in down here, and it can retest all this old high and go down below a little bit. So we could look for this daily PD Array at 109.90 to be the basis for a discount reaction on a higher time frame bullish institutional order flow for EUR/USD. So what am I saying? I’m saying that should we break these lows in here and should we go below the Order Block here, we’re going to go down to 109.90 most likely, or this old high back here, which comes in at 110.15.

[26:27] So either one of these two levels here is better for a buy. But while we’re up here, price—we can reasonably expect to see it sell off. Now, if we see price trade through the up-close candle here, which is a bearish Order Block, or the bullish candle right before this down move—if we lose or trade above the mean threshold of that candle there, because we’ve got to look at the PD Arrays on the 4-hour chart, which we’re doing now in conversation—if we go through that, that would nullify any near-term 4-hour bearishness, and they’re going to want to run it higher.

[27:04] So if we do that and we trade through this last up candle, if we trade through that, then we’re going to be looking at these two down candles as a potential bullish Order Block on the 4-hour chart once this up candle is traded through on the upside. So if we violate this entire up candle, or bearish Order Block, then we have to turn our attention to these two down candles, which will become, at a later time, a potential bullish Order Block. So we would be looking at the open on this candle at 112.20 and the high at 112.37.

[27:37] So basically, 112.40 to 112.20—in that range we could be looking for it. We’re going to look down into a 60-minute chart in a minute, but that’s how we would map out two scenarios. Well, obviously, we have to justify the higher time frame daily institutional order flow being bullish. So you look for arguments that would say, okay, if price were to drop down, why would they want to drop it down? Well, they want to take out equal lows, take out some stops, okay?

[28:07] And they can come back down into this Order Block here relative to the 4-hour chart. But we are referencing the daily more than the 4-hour. So we have these PD Arrays, which is this old low. Price can trade down below that, and if it trades down below that, this old high becomes influential. Okay, and obviously we’ll get more detail as we go, but you start looking for scenarios and why, and justify why the argument for continuing the higher time frame institutional order flow should be the case.

[28:38] But if you can’t make a sound argument for entries based on that, then you have to start electing to say, okay, we are in a premium market. Maybe the market needs to go down into a discount, yes, to go higher. But if it takes out specific discount arrays, then we’re probably changing tide and it’s going to want to go lower, more on an intermediate-term basis versus a short-term basis. So we’re going to drop down to a 60-minute chart and do the same thing, understanding that if we look with Ctrl+Y, this would give us our weekly perspective, or what the weekly ranges look like from a profile standpoint.

[29:18] We can see each week: it opens, trades down, and comes off the low. It starts this week, trades all the way up, and closes on the high of the week—the week before the time of this recording. Then the last week we just closed, at the time of this recording, we’ve had basically a consolidation week. Okay, so while it has had opportunities to sell off and we’ve seen those unfold, overall this market, or pair, the euro, has been in consolidation this week.

[29:47] So we know that there’s a support level that’s created for this week, and if we trade down below it, we have an Order Block to watch for potential new buying in. If it trades off of there and starts to go higher, we know that we can anticipate bullish institutional order flow on the 4-hour chart and see it be supported on the daily as well. Then we can continuously look and go into the market looking for longs, which is what we’ll start building cases for now on the 60-minute chart.

[30:17] So let’s do that now. Okay, so now we have a 60-minute chart of the euro. Now we have all the individual days broken down with Ctrl+Y used. But now I’m going to take that off for a second. We’ll come back to it in a moment. So now we have our clean chart here, and we can see the equal lows—this low here and this low here. Below us, again, this is a daily PD Array. We have below us the discount array of this bullish Order Block, which is these two down-close candles.

[30:48] And I want you to take a close look. Again, we’re looking for confluences of PD Arrays that overlap with one another and justify: if they’re going to take this market lower, is it going down just to give them an opportunity to buy at a cheaper price for longer-term institutional order flow being higher to unfold and look for those 113s, 114s on the euro, or are we going down for a more sustainable move? We can’t guess that yet. We can’t determine that yet. And don’t ever try to think that you can.

[31:18] We are looking for probabilities right now. We’ve been in a consolidation, so they could be taking us in a consolidation to build a larger liquidity pool of sell stops below the marketplace and drop down to take those sell stops to capitalize new longs on. If they’re doing that, where could they do it? Well, on an hourly basis, a PD Array—we have a Fair Value Gap right in here. It starts at this candle’s high and this candle’s low. So in here we have a Fair Value Gap.

[31:48] So right here, this is a Fair Value Gap, and to the left of it we have two down-close candles right before a nice move. So we know there’s a bullish Order Block right there.

We have a convergence of two discount arrays right here, and it’s below the equal lows. Okay, so the low comes in at 111.62, and this level comes down here, starts at a low of 111.36, and the high on this candle for gap support would be 111.30. So 111.30, 111.35—should price trade down to that level, okay, we could expect some measure of bullishness.

[32:52] Now, how do we use this information? If price trades down to this level here, okay, if it does that, we want to be on a 15-minute time frame and look for our standard deviations. We want to be doing the Central Bank Dealers Range, we want to be doing the Flout, which is Central Bank Dealers Range and Asian Range, and Asian Range standard deviations, and we want to project them above and below the marketplace, giving us potential targets to reach for. But also, we want to be looking at the opening price.

[33:26] When price trades down to this level, we will be looking at the opening price at 0 GMT and the opening price at midnight in New York. And what would we be expecting if we’re expecting some measure of bullishness in here? We’re going to be looking for what? The open and a very small decline, if at all, after the opening at 0 GMT or midnight in New York on a 15-minute chart. By having that protractionary state of the market where it opens and trades down from 0 GMT or the midnight candle in New York, if it trades down below that opening price, we would expect at this level, or very close to it, to be a buy for a day trade.

[34:09] That expectation would be for the London session that particular day. If London fulfills that, we would expect some measure of continuation in the New York session. But if the New York session trades up to, say, these levels up in here, okay, we have a lot of resistance in here, so that could promote a New York session reversal. So that way we’re already framing scenarios. What you have to do is go through your templates and think about, okay, the idea is we have already come down to this level and there’s some bullishness here, and run scenarios in your mind and build a plan.

[34:52] Now, you can’t just say, okay, this is the only way it’s going to unfold, this is the only way that it can happen, because believe me, it can do a lot of different things. But generally, if you think in generic terms, if we’re bullish or bearish, there are only a few templates that you can use based on the day of the week that it trades down to this level. Remember, if it trades down there on Monday—well, Monday’s a bank holiday in the U.S., so I would be more unlikely to be trading that.

[35:18] But for observation purposes, if it does it, you can see it. But Tuesday, when we go back to our live sessions again, it’ll be the day after the holiday. If it trades down to that level, we can reasonably expect to see an open-decline Power of Three formation and an up close, or at least for the London session for a scalp. Then New York, we look for evidence to see if it gets up to that level. Does it have willingness to go through it? If it does, guess what that means?

[35:46] This run down was for stop runs below here, and then institutional order flow will be kicking back in bullish from the daily standpoint. Then we have to switch gears and look for continuation on the upside, which is another open-down move, or Judas, to buy at 0 GMT or at midnight New York, and then look for runs on the liquidity above the marketplace in the premium capacity. But should price fail—say price gets down to this level here and you try to do a buy and it fails and stops you out—then you have to go out to a little bit longer perspective.

[36:25] And consider what these daily PD Arrays may have impact for. We have equal lows below here, and then that Fair Value Gap down here, and that old high. So if we lose the opportunity to find a long at this level because it’s a bullish Order Block and Fair Value Gap and it’s below the equal lows—so if IPDA drops down and no banks come in and step in to capitalize there—well, you’ll get immediate feedback by being stopped out. Then if it does that, we’ll anticipate price running below these lows, not for a buying opportunity, but for targeting purposes for expansion.

Sequencing the daily routine

[37:09] So we could potentially see a sell-off at this level’s failure. We can see a return back to fair value, bearish Order Block, fill in a Fair Value Gap, liquidity void, and then sell off to a run down to this level here, closing in that gap as well. So there’s a formula that we go through. We start with volatility injections by looking at the economic calendar, framing the time of day, what influences and what pairs we’re going to have for London and New York.

[37:45] Then we go in and get an analysis baseline on the Dollar Index. Determine the IPDA Data Range, look at the PD Arrays, consider the PD Array Matrix. Are we in a discount or premium market? Then we go into a breakdown of the pair that has the news driver coming out at that session. We know at 3 o’clock on Tuesday, May 30th, 2017, there’s going to be a medium-impact news event, so we want to be anticipating some measure of manipulation. Now, what could that be?

[38:19] Well, Monday and Sunday could see this level traded to, so I can’t forecast that. But say we stay in a tight range, okay, or we trade a little bit higher. At some point on Tuesday or Wednesday, if we trade down to this level here, that could be a Tuesday low of the week or a Wednesday low of the week. Think—you have to think about those weekly templates. So if we’re looking for reasons to justify why the longer-term daily institutional order flow, which is bullish for euro, could resume by going down to here, then that builds the case for watching the rest of the week unfold.

[38:57] But what day of the week does it hit that level? Consider your weekly templates. If we’re looking for the reasons to justify a continuation of the bullishness on the daily, which is always the case—we’re looking for daily institutional order flow to give us our directional bias—but there are times where, like we are right now on the euro, we’re at a really high premium. It may require it to consolidate longer than what we’ve seen here last week, or it may need to do a deeper retracement down to a discount market to allow banks to buy it at a cheaper level and also unseat, offset, and remove those individuals that are already long that are very aggressive about trailing up their stop losses, or maybe even below here.

[39:38] And they can come down through all this, recapitalize an old high, and folks could be looking at this as a potential reversal long-term, and it very well may be. I’m not trying to pick a top in the euro. I mentioned that earlier last week in our live sessions. I don’t want to do top picking, okay, because the market is showing primarily it wants to go higher, and it’s very strong in the case of its bullishness on the daily. So we don’t want to fight that.

[40:05] We don’t want to stand in front of it because there are large funds and flows going into this currency. So if that’s the case, we need to be justifying reasons to go in and long. So the routine is in summary form as you see here. Everything we do here in this list is one step at a time. We break it down and we look at all of those elements. When we get to the point where we’re looking at a 15-minute time frame, you would be adding the standard deviations for the Central Bank Dealers Range, the Asian Range respectively, and the Flout.

[40:47] So by having those deviations and also incorporating the Average Daily Range, if there’s a confluence of those standard deviations, ADR, and a PD Array on a 15-minute basis, or the 60-minute or 4-hour PD Arrays, then you know there’s a high probability for price to want to expand higher or lower to those respective levels. When I’m picking daily highs and lows and I’m getting really close to it, sometimes right to the pip or a few pips away from it, this is the procedure I’m using. There’s nothing else that I’m doing that’s secret.

[41:25] There’s nothing else that’s mystical about it. There are no other indicators that help me do it. It’s the work of looking at it and using the templates that I’ve given you for the weekly and for the daily. So if we know what we’re expecting in terms of a scenario, if we’re bullish, there are only so many weekly templates that outline the range for the weekly range to be bullish. So we would look for evidence to support those. We obviously start from the Monday low of the week, and if Monday doesn’t give us enough evidence, we look for Tuesday low of the week to form.

[41:58] If Tuesday starts to trade up, then we know that Wednesday is probably going to be a good buying day to scalp longs in. And we can do that all the way up into Thursday’s New York Open, where we can basically expect the weekly high to start to form. Doesn’t have to, but those are the conditions we anticipate. Then if Thursday continues higher, we know that there’s probably going to be some profit-taking or—

[44:36] And time in the framework. So it helps you train your eye to look for these scenarios to unfold. But more importantly, it gives you the context to frame your trades. You hear the “plan your trade, trade your plan” stuff. Well, if you don’t know what that means conceptually with my stuff, it simply means going through the notions of: are we bullish or bearish longer-term on the daily? If we’re bullish, we’re going to be focusing on the weekly range to unfold in a bullish capacity. So look at the weekly templates I provided you in the previous months.

[45:05] And say, okay, where are we in terms of each day of the week unfolding that template? Even if you only get one portion of that template to unfold and you made a profit, that’s enough. Don’t try to do it every single day. When we look at scenarios from an individual-day perspective, are we looking for scenarios where the London session is, again, consolidation, then the New York session creates the low of the day? Or are we creating the low of the day right from jump at 0 GMT?

Midnight open execution

[45:35] Or are we going to see the classic buy day where, at midnight New York, we open and trade down, creating a low of the day, and then rally? You don’t know for certain. You don’t know. So if you’re going to trade at 0 GMT every day, or every time you try to trade, you may take losses. Then you have to trade again after midnight New York, and again, that creates and promotes overtrading, or the potential for it. So if you’re willing to leave the market be and never worry about having to get that 0 GMT early start of the daily range and just focus on midnight—which primarily, that’s what I like to do—use that opening at midnight in New York.

[46:19] And if I’m bullish, I want to see a move down below that opening price to some measure of standard deviations of the Asian Range, the Flout, or Central Bank Dealers Range, to a discount PD Array that I can see on a 15-minute time frame, and that may converge also with a daily, 4-hour, or 60-minute discount array. By doing that, it helps me, in terms of confidence, nail down that low of the day. If it happens to occur in the London Kill Zone, I can be buying that all day long and not have any fear about it, using the 33-pip standard deviation that we expect from the opening price.

[46:56] On a classic 100-pip day, opening price trades down up to 33 pips or thereabouts. Also, that framework helps build the model of precision. Then we look for those expansions higher on bullish days with our standard deviations on the Asian Range, the Central Bank Dealers Range, and/or the Flout. Looking for Average Daily Range high to converge as well, again with an opposing premium array that’s seen on the 15-minute, 60-minute, 4-hour, or daily. If the Average Daily Range is smaller than 60 pips, we know that there’s going to be a likelihood of a large-range day eventually for trading institutional order flow.

[47:42] In that bias, we may get much more than the Average Daily Range. So if the Average Daily Range is met before New York or at New York’s open, we know that we probably caught a tiger by the tail, and we need to leave something on for that large-range day to complete itself. It may go past 10:30, 11 o’clock London close, may go deeper into the day at maybe 1 or 2 o’clock. So this is our routine. This is what we do on a day-by-day basis as a day trader, as a scalper, and it gives us context to go into the marketplace and look for things to unfold in a systematic, methodical—and here’s the word I like to use all the time—a generic form.

[48:24] There are still choices that you’re going to have to make as the trader. You need to elect to do one thing over the other, and it’s on a step-by-step basis. If you’re still scratching your head, you’re still looking for the unicorn. That means it’s the perfect, “This is what you do all the time, and nothing else has to be concerned with. You don’t ever have to do anything else.” That’s the type of trade you’re looking for, and they do not exist because there’s never going to be a black-and-white scenario.

[48:58] There never is. You’re never going to have it. What we have are probabilities. We operate inside of probabilities. But if we understand what those probabilities are and the context and the conditions around those setups, the more odds we have in our favor, the more apt we are to risk in the highest-probability, direction-based trading.

[51:37] This is what I do on a daily basis. This is what I always look to do day by day by day, because if I can’t get my weekly objective, this is the operation I go through to try to get my weekly objective in small pieces. Not because I have to have it, but if there’s enough time before Friday’s close, I will go in using this criteria to get me my weekly objective or something. Maybe mitigate a loss or something like that. And you saw me take a loss this week, and how I mitigated it was doing this very same thing.

[52:10] But because I’ve been doing it so long, I can see it on the chart real quick. For some of you, it may take you 30, 40 minutes to do this every single day—to break it down, look at it, and weigh out some scenarios. But as you do it more and more and more, your experience level will promote a faster response by you looking at price. Your eyes will automatically go to where the Data Ranges reach back to, where the PD Arrays are on your respective time frames, and it’ll become second nature to you.

[52:37] It’ll be just real quick. And you’ll notice this also by watching price action intraday. That’s why I believe that even if you’re not going to be a day trader, it is so beneficial for you to watch intraday price action. And if you can find a way of screen-capturing intraday price action on a 15- or 5-minute chart, and just let it record all day long if you’re not there, then come back and watch it. Literally just look at it on a sped-up playback, if you will, like I do some of my recordings. I’ll speed it up to save you a lot of time watching this unfold.

[53:15] But if you watch it and you study how price action works and you see it, you build a greater understanding about it because it’s not enough for me to show you static examples. Some of you have come into this with the expectation that I’m going to show you a magical picture and it’s going to remove all the work for you. You’re going to work. You’re going to have to look for these things. You have to weigh it all out and see: is there opportunity here? And if it doesn’t pan out, what does that tell me?

[53:43] And that’s what I’ve outlined here. If we lose this level, these equal lows, I’m expecting a reasonable bounce, or reasons to expect a bounce, at this level here because we’ve seen nice buying. We have a Fair Value Gap there. So at minimum, I think we’re probably going to try to get down there as an opportunity to clear out some stops. If it goes through that and doesn’t support price, I think we’re going down to this old high and the close in this Fair Value Gap.

[54:10] So we’ll look for the 110.20 to 110 big figure, basically, as a downside objective. And guess what that means? Over 100 pips potential profit—more range. Let’s call it that, not profit. So if it moves below this level here, we have about 100 pips more until we get down to that level. Inside that, that’s enough to make money. You would just switch gears and say, okay, if we lose this level here, the next trading day I’m going to look at the opening price at 0 GMT or at midnight New York.

[54:43] I’m going to wait for a rally up above that opening price to some measure of a premium array, maybe closing the Fair Value Gap, a bearish Order Block. Then I’m going to get short on that on the basis of a 15- or 5-minute chart, and I’ll look for range expansion to get down to this level. Then we have to switch gears and think this could be an opportunity for that higher time frame daily institutional order flow to kick back in again and trade higher.

Aligning with daily order flow

[55:10] And that’s all we’re doing as a scalper and as a day trader. You have to be nimble, but the best trades are going to be in sync with the higher time frame institutional order flow. If it’s bullish, we want to be looking to be buyers Monday, Tuesday, and Wednesday. If institutional order flow is bearish, we want to be looking for selling short as a day trader or scalper on Monday, Tuesday, and Wednesday. If you stick to those primary conditions, you won’t have it licked every single trading day, but you will be profitable over the long term.

[55:42] You’re going to have losing weeks, you’re going to have losing trading days, you may have months where you go into a drawdown, but if you stick with this, I promise you, you will get better. But you can’t be the best right out of the gate. You have to grow into it. And these are the criteria that I work within to do it. So now you have my daily routine, what I break down, how I do it. Go in using the Data Ranges, I use the PD Arrays, and I look for using the weekly templates I’ve supplied you.

[56:14] And also what we expect in terms of intraday templates, what we expect and what days of the week to see those most likely unfold. See, what we’re doing is we’re blending time and price scenarios. That’s what those templates provide you. Not all of them are going to unfold, because you’re only going to get one template to unfold for the weekly range and one template for the intraday. But not every one of those templates agrees with one another. When you’re bullish, you want to look at how the weekly templates may unfold, and then you’re focusing on those specific days.

[56:53] If there’s a Wednesday reversal and you’re bullish, that could be a criterion. We could see this consolidation in here and it trade down to this level on Wednesday, and there’s your Wednesday low of the week formed, and then it goes higher. But you have to look for evidence to support those things. You can’t reasonably expect that. But in this case, going into this week, I would consider it for this one because Monday is a U.S. holiday, and Monday may be a quiet trading session. Then Tuesday becomes what would normally be a Monday.

[57:25] So if we’re going to see a reversal higher on euro after going down, it could happen on Wednesday. So have that in your notes going into the new trading week, and we’ll see what happens. Until next time, I will wish you good luck and good trading, and we will be moving into next month’s June content, where we’re doing commodities, stocks, index trading for futures, and bond trading. All those four asset classes complement moves that we can pick and predict in the currency markets.

[58:04] And until then, I wish you good luck and good trading.