ICT Daily Bias Strategy Simplified For Beginners (FULL TRADING PLAN)

Introduction

This tutorial simplifies the ICT Daily Bias Strategy for beginner traders. Understanding daily bias is essential for making informed trading decisions and improving profitability. This guide will walk you through the process of identifying daily bias using liquidity and fair value gaps, along with practical examples for effective trading.

Step 1: Understand Liquidity and Fair Value Gaps

• Liquidity is the market's tendency to seek out areas where orders are placed.
  • Buy-side liquidity is located above previous highs.
  • Sell-side liquidity is found below previous lows.
• Fair Value Gaps (FVG) occur when there is an imbalance in buying and selling pressure.
  • A bullish FVG consists of three candles with strong buying pressure (Candle 1, Candle 2, Candle 3).
  • A bearish FVG consists of three candles with strong selling pressure.

Practical Tip

Always look for old highs and lows to identify where liquidity is resting, as this will direct your trading bias.

Step 2: Identify Daily Bias

• Choose an appropriate time frame for analysis:
  • Weekly Time Frame: For an overall market view.
  • Daily Time Frame: To analyze candle details and structure.
• Look for liquidity and fair value gaps:
  • Mark out areas where liquidity has been taken and gaps have formed.
  • Example: If price sweeps old highs before reversing, it indicates potential bearish bias.

Common Pitfall

Avoid trading against the identified daily bias, as this usually results in losses.

Step 3: Analyze Lower Time Frames for Entry Points

• After establishing daily bias, move to lower time frames (like the 4-Hour):
  • Look for structure and potential pullbacks to refine entry points.
  • Identify other fair value gaps that align with your bias.

Practical Example

1. If the daily bias is bearish, look for sell opportunities at the consequent encroachment of a bearish FVG.
2. Watch for price action to confirm entry, such as a tap into the FVG followed by a downward movement.

Step 4: Set Targets Based on Liquidity and Fair Value Gaps

• Once you establish your bias and entry points, identify potential targets:
  • Look for highs or lows that represent resting liquidity.
  • Consider the fair value gaps that may act as magnets for price.

Key Consideration

Ensure that your targets align with the overall trend established by your daily bias analysis.

Conclusion

The ICT Daily Bias Strategy is a powerful tool for traders. By understanding liquidity and fair value gaps, you can determine your daily bias, identify entry points, and set realistic targets. Always analyze higher time frames for bias and confirm with lower time frames for entry. Practice this strategy consistently to enhance your trading skills and unlock profitability.