Hello fellow traders! I’ve noticed that many of you are having trouble figuring out the ICT daily bias. Don’t worry I’ve been there too. After spending some time working on it, I’ve found a simple trick that can help you understand and use the ICT daily bias in your trading strategies.
If you’re new to this concept, let me explain what the ICT daily bias is in straightforward terms.
What Is ICT Daily Bias?
The ICT daily bias is basically the expected direction of the market for the day. It’s like having a weather forecast for trading—it helps you anticipate whether the price is more likely to go up or down. Knowing this can help you spot and seize trading opportunities more effectively.
How to Find the ICT Daily Bias
To determine the ICT daily bias, you need to understand something called the ICT Market Structure Shift. But don’t worry, we’ll keep it simple.
For this method, we’ll use only the daily timeframe that’s the 1-day chart. Here’s how you can figure out the daily bias of an asset:
First, open the daily chart of the asset you’re interested in. Look for a recent shift in the market structure. This means noticing whether the price has started to make higher highs and higher lows (suggesting an upward move) or lower highs and lower lows (suggesting a downward move).
Identifying a Bullish Daily Bias
If the price has recently shifted its structure to the upside, this indicates a bullish bias. Here’s how you can trade with this bias:
Start by finding the Discount Zone or the sweet spot of the ICT Optimal Trade Entry (OTE) pattern. This is an area where the price is considered undervalued, making it a good place to buy.
Wait for the price to return to this discount area or OTE sweet spot. While the price is moving back to this area, make sure it doesn’t shift its structure to the sell-side (which would signal a bearish trend).
When the price reaches the discount area or OTE sweet spot, look for confirmation. This could be a market structure shift to the upside on a lower timeframe chart, but don’t go lower than the 15-minute chart. Remember, the higher the timeframe you use for confirmation, the more reliable it will be.
Once you have confirmation, you can enter a buy trade. Aim for areas where the price is likely to move easily, known as low-resistance liquidity runs. You can continue trading on the buy-side until the daily chart shows a shift to the sell-side.
Identifying a Bearish Daily Bias
If the price has recently shifted its structure to the downside, indicating a bearish bias, here’s how you can trade:
Start by identifying the Premium Zone or the sweet spot of the ICT Optimal Trade Entry pattern. This is an area where the price is considered overvalued, making it a good place to sell.
Wait for the price to return to this premium area or OTE sweet spot. Ensure that while the price is moving back to this area, it doesn’t shift its structure to the buy-side (which would signal a bullish trend).
When the price reaches the premium area or OTE sweet spot, look for confirmation. This could be a market structure shift to the downside on a lower timeframe chart, but again, don’t go lower than the 15-minute chart. The higher the timeframe of your confirmation, the more dependable it will be.
After getting confirmation, you can enter a sell trade. Target areas where the price is likely to move easily, known as low-resistance liquidity runs. You can keep trading on the sell-side until the daily chart shows a shift to the buy-side.
Final Thoughts
Understanding the ICT daily bias can greatly enhance your trading by helping you align your trades with the market’s expected direction. Remember to always wait for confirmation before entering a trade and to use higher timeframes for more reliable signals.
Frequently Asked Questions (FAQs)
The ICT Market Structure Shift refers to a change in the overall trend of the market. It happens when the price action changes from making higher highs and higher lows to making lower highs and lower lows, or vice versa. This shift signals a potential change in the market’s direction, which traders can use to anticipate future price movements and adjust their trading strategies accordingly.
The Discount Zone is an area on the chart where the price is considered undervalued, making it a good spot for buying opportunities. The Premium Zone is where the price is considered overvalued, making it ideal for selling opportunities. These zones are often identified using tools like Fibonacci retracement levels. Typically, the Discount Zone lies between the 61.8% and 100% retracement levels, while the Premium Zone is between the 0% and 38.2% levels.
The ICT Optimal Trade Entry (OTE) pattern is a trading setup that helps traders find optimal entry points within a trending market. It involves using Fibonacci retracement levels to find the “sweet spot” where the price is likely to reverse temporarily before continuing in the direction of the main trend. This sweet spot is usually between the 62% and 79% retracement levels.
Lower timeframes like 1-minute or 5-minute charts can be more volatile and may produce false signals due to market noise. By using timeframes no lower than 15 minutes for confirmation, you reduce the likelihood of being misled by short-term fluctuations and improve the reliability of your trade signals. Higher timeframes provide a clearer picture of the market’s overall direction.
You can continue trading in the direction of the daily bias until the daily chart shows a shift in the market structure to the opposite side. For example, if you have a bullish daily bias, you can keep looking for buying opportunities until the daily chart indicates a shift to a bearish structure. It’s important to regularly monitor the daily chart for any signs of a market structure shift so you can adjust your trading strategy accordingly.
