Trading Bias Part 1
10:24 – AGENDA
13:08 – WHAT DOES TRADING BIAS MEAN?
- It is a predisposition of a trading asset whereby we as traders believe there is a higher probability of a certain outcome as opposed to and other alternate possibility
- To figure out the most probable direction of an asset to move find out:
- where the market is trading away from (a key level?)
- where is it most likely to go from now?
- is the MS broken etc.
14:55 – HOW TO DETERMINE BIAS
- Determining bias can be achieved by understanding very well the 4 components of a price candle (open, high, close, low)
- To help stick to a bias one can use Fractal and select two lows back on a given time frame and only switch gears when that swing low/high is broken BUT only when a key level hits
17:02 – BARS OHLC
- If there is a large distance between the open and the close, we know the move was significant (volatility)
- If the close is near the open it indicates lack of conviction (indecision)
- If the open is far from the previous bar close then we have a gap which can also help with bias (unfinished business)
19:47 – QUICK EXAMPLE
23:17 – DAILY HIGH/LOW
- A very important rule: NEVER long above pdHigh and NEVER short below pdLow
- At these levels, we take profits (limit orders)
- No trader knows at what level upon taking pdLows/pdHighs price will reverse or continue the trend. That is why we always lock in profits.
- If asset is bullish and there is a retracement to a previous day low but price spend little to no time there and quickly closes back inside (15 minute TF) then this can be seen as bullish liquidity grab
- Using the Daily High/Low indicator 15 minute TF is best
27:24 – LIQUIDITY GRAB BEARISH EXAMPLE
- If you continuously see previous daily lows being broken and zero highs being taken you look for shorts only! Only very quick scalp longs are acceptable.
- Each pdLow taken = bearish
32:46 – LIQUIDITY GRAB BULLISH EXAMPLE
- Each pdHigh taken = bullish
- Trading below pdLow might signify weakness.
- Best confirmation and possible entry is when price retraces to at least 50% (fib from high to low) and rejects
43:00 – FRACTAL
- A bullish fractal occurs when there is a low point with two higher low bars on each side of it
- A bearish fractal occurs when there is a high point with two lower high bars on each side of it
- If one is to trade fractal signals the entry would be open price of the third bar after the arrow
- Once the pattern occurs the price is expected to rise following a bullish fractal or fall following the bearish fractal
- Igor only looks at three bars formation otherwise you miss the majority of action
49:47 – EXAMPLE ON OIL
53:28 – LIVE EXAMPLES
1:13 42 – SUMMARY