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.