ICT Forex - The ICT London Killzone

Summary

Highlights

• The London Killzone offers a significant chance to catch the high or low of the day. 🌆
• ICT shows how aligning trades with New York time enhances trading strategy and precision. 🕒
• A focus on euro-dollar and British Pound pairs can yield 25 to 50 pips per trade. 💰
• Reflecting on personal trading experiences since the 90s, the creator shares valuable insights. 💡
• Trading during the London session requires caution due to high market volatility, similar to a lightning bolt. ⚡

Key Takeaways

• The London session is vital for forex traders, offering high volatility and opportunities for profitable trades. 📈
• Timing is crucial; knowing the 2 a.m. to 5 a.m. window in New York time is essential for effective trading. ⏰
• Understanding market setups during the London Killzone can help identify the day's high or low price. 🔍
• The same strategies can be used in other asset classes, not just forex, making this knowledge versatile. 🌐
• Make sure to study your charts and recognize patterns, as they can lead to significant trading insights. 📊

Overview

Chapters

• 00:00 - 00:30: Introduction to the ICT London Open Introduction to the ICT London Open: This chapter covers the fundamentals of the London kill zone in trading, explaining the ICT (Inner Circle Trader) concepts that will be employed. It emphasizes the critical roles of time and price in successful trading strategies within this framework.
• 00:30 - 01:30: The Importance of the London Session The chapter discusses the significance of the London session in the 24-hour banking cycle. It mentions that the London open is one of the most important time frames in this cycle. The chapter promises to introduce the reader slowly into understanding its vast and critical nature.
• 01:30 - 03:30: Optimal Trade Entry Patterns The chapter discusses the optimal trade entry patterns for short-term traders, emphasizing the importance of understanding higher time frames and being aware of economic calendar releases that occur overnight. It highlights the euro-dollar and British pound pairs as ideal for this trading style due to their favorable magnitude and the opportunities they provide.
• 03:30 - 05:00: Time Conversion and Its Importance In this chapter, the focus is on the importance of time conversion in trading specific currency pairs. The example provided discusses trading during optimal times for pairs like the lung and open. A recommended trading window is from 2:00 a.m. to 5:00 a.m. New York time, where a pattern can offer a scalp of 25 to 50 pips. The chapter emphasizes the significance of understanding different time zones to avoid confusion and optimize trading strategies based on time.
• 05:00 - 07:00: Analyzing Specific Trading Days The chapter discusses the importance of understanding specific trading days by aligning them with New York time. It suggests physically synchronizing your schedule with New York time, as it serves as a standard reference point for global trading activities. To accurately follow this, the reader is advised to set a clock to New York time and correlate it with both their local time and their broker’s schedule. This method resolves the common confusion that arises from the global variations in time zones.
• 07:00 - 09:30: Universal Trading Concepts The chapter titled 'Universal Trading Concepts' discusses the concept of the ICT London kill zone, which is a specific time frame deemed ideal for learning and trading by a trader, particularly between 2 a.m. and 5 a.m. relative to New York time. The chapter begins with acknowledging the global audience and the challenge of translating time zones for learning purposes. It also references a chart of the euro-dollar exchange rate, although details of the chart's analysis are not provided in the transcript.
• 09:30 - 11:30: Market Trends and Low-Risk Entry Points This chapter discusses two specific trading days with a focus on identifying market trends and low-risk entry points. The speaker highlights a pattern in the price action where an initial drop is followed by a rally that creates the day's high. The contrast between the day's low and high is used to analyze market behavior and identify potential entry points for traders. This analysis aims to equip traders with the insights needed to anticipate market movements and make strategic trades.
• 11:30 - 15:00: The Dynamic of the London Session The chapter "The Dynamic of the London Session" discusses the price rally of the euro dollar, emphasizing the significance of the time marked by the vertical red line at midnight New York time. This delineates the transition into a new trading day, a crucial moment for analyzing price movements within the session. The segment highlights how the euro dollar experienced a rally during a specific period, providing insight into trading dynamics at play.
• 15:00 - 17:00: Characteristics of the London Session The chapter discusses the characteristics of the London trading session, highlighting its significance in setting the high or low of the trading day. It encourages readers to analyze charts and observe that the London open often marks critical price movements. The session usually sees price highs or lows being established, followed by a period of consolidation and a close somewhere in the mid-range. Readers are encouraged to study these patterns to better understand market dynamics.
• 17:00 - 20:30: Daily Bias and Optimal Trade Entry The chapter discusses the concept of daily bias and optimal trade entry using a specific time window between 2:00 a.m. and 5:00 a.m. New York time. It highlights how, within this timeframe, the market can create a high for the day before trading progressively lower. This pattern is exemplified through scenarios where the market spikes up to form the day's high and then declines, a concept crucial for students and traders to understand for effective trade execution.
• 20:30 - 21:00: Conclusion and Future Learnings The chapter discusses a significant discovery in the speaker's career, which pertains to identifying the peak of the day in terms of market trends. This discovery is deemed one of the most valuable insights from their tutorials, providing them with the ability to predict daily market highs with a reasonable degree of accuracy and consistency. The text leaves readers with the notion of the potential benefits such predictive capability could bring.

ICT Forex - The ICT London Killzone Transcription

• 00:00 - 00:30 okay folks welcome back this teaching is going to be specifically dealing with the ICT London open kill zone okay so the London kill zone what ICT concepts are going to use in this module the importance of time and price again the
• 00:30 - 01:00 London open the London session important characteristics of London okay folks this is one of those topics where it's a very vast subject so I'm introducing you slowly into one of the most important time frames of the 24-hour banking cycle the lung and open is typically a time
• 01:00 - 01:30 where I like to trade because it gives me a lot of opportunities and it's well it's magnitude is a lot more favorable for a short-term trader it comes with it a great deal of responsibility in terms of knowing what the higher time frames are doing a lot of economic calendar releases come out overnight and they can be very volatile but the euro dollar and the British Pound pairs are ideal for
• 01:30 - 02:00 this time of day and that's why I've elected to trade those two pairs the lung and open frequently sets up an optimal trade entry pattern that can offer 25 to 50 pips for a scalp the key times to monitor are 2:00 a.m. to 5:00 a.m. New York time so in other words the easiest way to avoid me confusing you about the time is determine whatever time it is in
• 02:00 - 02:30 your area relative to what it is in New York time okay and physically wait for 2:00 a.m. to be in New York and then calibrate that with your broker and your local time and always a clock for New York and you'll know exactly what I'm referring to in terms of time it's the easiest way I can overcome that barrier because it's been a point of confusion many times because I don't know where you are globally and
• 02:30 - 03:00 you're all in different locations of the globe I don't know what the the translation is going to be in terms of time so the conversions are going to be up to you but the ideal ICT London kill zone for your learning is going to be 2 a.m. to 5 a.m. and it's relative to New York time now if you look at this chart here this is a euro dollar chart and
• 03:00 - 03:30 what I'm highlighting here is two specific trading days and I want you to take a look at the red it's like a deep red vertical line is two of them immediately to the right of the leftmost vertical red line we see price action drop down initially and then rallies up and it creates the very high of the day the day's low forms down here and it
• 03:30 - 04:00 comes off a low and close closes off the low the next trading day again here is the vertical red line and it's telling aids New York time midnight ok so midnight in New York that's what this vertical red line delineates for this particular day and this represents midnight in New York on this trading day so we can see that the price rallies again for the euro dollar up into this small little segment of time and it
• 04:00 - 04:30 creates a high and trades down crease to low the day later on and goes in consolidation and closes in the middle of the range the key takeaway that I want you to more or less be encouraged to go through your charts and study is that London open generally has the highest probability of creating the high or the low of the day so here we see price trading up to and this little blue
• 04:30 - 05:00 line segment and this little blue line segment is just delineating that little pocket of time that window of opportunity between two o'clock in the morning and 5:00 a.m. New York time you can see how beautifully goes up trades makes the high the day and then trades progressively lower same thing here on this day it trades up spikes up creates the high the day and then sells off ok this is one of the biggest things that a lot of students of mine and people that
• 05:00 - 05:30 have dis casually looked at my things in terms of my tutorials this is one of the biggest wealth in my career it was the biggest discovery because it helps me determine where when I'm bearish the actual height of the day is going to form and if I can do that with a reasonable measure of accuracy or consistency just imagine if you could
• 05:30 - 06:00 get three to four opportunities where you can get the high or very close to the high today and ride the majority of the daily range if you could do that a few times a month you can do exceptionally well as an FX trader now it doesn't limit itself to just forex this same phenomenon occurs in other assets now I don't trade Bitcoin or cryptocurrencies but I have students of mind that swear by this working in that asset as well it works in commodities it
• 06:00 - 06:30 works in bonds it works in just about everything that trades electronically overnight incidentally you can anticipate things like this to occur in index trading so if you're trading for instance the dax the the flipsie or the sp500 or doubt or Nasdaq futures contracts overnight trading you can see the same phenomenon occur as well so it really isn't limited to just Forex now
• 06:30 - 07:00 because I taught it to the trading community they assumed that it was limited and only salient to Forex or foreign exchange I used this same concept as a commodity trade in early 90s so it's not that we have a asset class that it can only function in with this type of trading or this type of price action it's completely Universal and that's pretty powerful now
• 07:00 - 07:30 if we have a market that is let's say in a strong trending environment you want to be really focusing in on London because London will give you at the highest probability of a low-risk entry price point okay and conversely we can see when the market is bullish the tendency is for the market to trade down
• 07:30 - 08:00 creating the low of the day in the lung and open ICT kills him again here market trades down after midnight in New York time creates the low of the day between 2 o'clock and 5 o'clock in the morning New York time low as they forms off to the races we go so here's to back-to-back trading days ok if you could have taken along not even at the low ok say you use some of I'm on maybe
• 08:00 - 08:30 a buy stop to get in ok if you trailer by stop above these individual candle highs and eventually it trips you in gets you long and this is held onto it for 30 40 pips each trading day it adds up quickly folks same thing here market creating a low takes off aggressively now I want you to take a look at the relationship between 1 lung and open low
• 08:30 - 09:00 and the immediate day after lemon open low okay we have a range that's framed by the low here and this highest high in between the two London lows this is your trading range right here this would be an optimal trade entry long using previous day's data to today's London set up so you can get an
• 09:00 - 09:30 optimal trade entry on that and price has an expansion on the upside and we can see a very nice opportunity to head a long trade on both days here focusing on London open creating the low the day when the interlining market is poised to go higher okay so the London session itself actually trades a little bit longer than five
• 09:30 - 10:00 a.m. okay but for the sake of my concepts I want to graduate over time the significance of five o'clock in the morning New York time to set o'clock in the morning New York time which is classically like a London lunch the period where it can go quiet it can have minor little retracements but I don't like to see any type of entry between
• 10:00 - 10:30 five o'clock and seven o'clock in the morning New York time because it can tend to wait for the New York open which will cover our next lesson but the price action during the London session sees the highest probability of a large directional move in the 24 hour day so what does that mean if we were to look at the entire 24 hour market and pick it picked up beginning point and filed it around the entire world and where it
• 10:30 - 11:00 began it'll end so we have 24 hours of time if we were to measure the volume or how much action if you wanted to call it any other word its its layman's terms the most bang for your buck is going to be in the London open now that right away draws excitement to younger guys and if you don't know what you're doing you can get really hurt quick in the lemon session because it can be extremely volatile and it can be like a lightning
• 11:00 - 11:30 bolt okay if you're caught on the wrong side of the marketplace and there's a high impact you event that's out during that timeframe you can get mowed over rather quickly and if you don't use stop-loss orders that session is going to treat you very cruelly in the form of taking money from you because London can be extremely one-sided and once it takes off it's pretty relentless it doesn't really give you a chance to get off the hook and the
• 11:30 - 12:00 London trading session actually extends beyond the 5 a.m. our to 7 a.m. New York time the London session sees the highest volume of order execution than any other trading session if we look at the little chart to the right and again all I'm trying to do is show the profile itself we don't need to zoom in and look at details of wicks and candle bodies I just want you to look at it graphically in terms of the way the range is expand
• 12:00 - 12:30 and how it looks overall so we have trading day here of consolidation it creates a little bit of a run up rejects that and trades aggressively lower and then comes off the low and begins the New York session so we have a micro power 3 formation in here so we have the
• 12:30 - 13:00 open the rally up the expansion low off the low closes ok prices fractal folks we can anticipate seeing duplicate patterns that are seen on higher time frames on a lower timeframe so if we understand it's a daily range if it's a bearish market profile or for looking for lower prices the opening on the tail you range or the only bar it's going to be at or near the high today the high is
• 13:00 - 13:30 going to be very limited in terms of how much it goes above the opening price and then the largest portion of the range is going to be between the open and the close and the close is going to be near the low of the day well this is intraday price action between this vertical line here in this vertical line here this is delineating 2 o'clock in the morning to seven o'clock in the morning New York time okay so we're looking at a window of five hours so if we understand that
• 13:30 - 14:00 price can be fractal and we're bearish this could be viewed as a micropower three formation okay now why is that significant and why should I be teaching it to you what's the point of it well if we see in this trading day here it creates a scenario where let's assume for a moment that we were anticipating a bullish market move okay maybe this particularly to a trade down to a level that was some kind of a support level
• 14:00 - 14:30 and we came off of it traded consolidated okay and then we came down initially right after the two o'clock time period and price drops down into a significant low if price doesn't start to run there during the London session we could reasonably expect that the real
• 14:30 - 15:00 moves going to be in the next trading session which would be the New York session which is not going to be our teaching here it's the next lesson in this series but you can see the move ensues after the crossover from the London session and then the beginning of the New York session now the London session technically extends even beyond seven o'clock in the morning up into ten to eleven o'clock in the morning New York time okay so basically it's three
• 15:00 - 15:30 o'clock in the morning New York time to 11:00 a.m. to noon all relative to New York time okay so there's an overlap of New York and London trading which makes the next teaching a little bit more interesting as well but the takeaways I want you to have is is that the London session can create the high or low of the day and we can also study the profile that takes place
• 15:30 - 16:00 between the beginning and ending of the overnight session if it's trending okay if we have a trending model like this chances are we could see a rather quiet New York session it doesn't mean that always but it's one way I'd like to look for potentially a slow New York session or we could have a reversal scenario which is what we saw here okay to the right of this vertical line is the New
• 16:00 - 16:30 York session you can see it did have a little bit reversal but went consolidated and basically traded in the middle of the overall range into the close the very next day we had a initial drop down in London creating a low of the day but it closed the session and right in the middle so it didn't really have much of a trend it had a spike low but if we're bullish it didn't really show any kind of indication that in the London session but soon as we crossed over into the New York session and overlap with London then we have the
• 16:30 - 17:00 optimal trade entry then we have the dynamic imbalance or the range expansion occurs for the for the daily upside and up close so London gives us a lot of things to study and I want you to go through your charts and look for examples of the things like this outlined here and I think you'll be rather surprised okay the London session
• 17:00 - 17:30 characteristics now abundant session typically creates the low of the day when the market is primarily bullish and the high of the day when bearish when the market is poised to trade higher on a daily timeframe we can focus on the London session to post a low of the trading day if the daily is poised to trade lower we can focus on the London session to post the high of the trading day
• 17:30 - 18:00 okay and what I've done is instead of putting the Fibonacci on the chart and cluttering it all up I just basically drew a line indicating the high I'm using and the low I'm using now I'm not using the body of the body reference points because it's a daily time frame and I want to encapsulate the entire range with the wicks included it will not change what I'm going to show you here so if you have your daily timeframe on your your $1.00 you'll see
• 18:00 - 18:30 that it will still take us up into optimal trade entry which is basically a non indicator form of overbought or oversold okay so what we're seeing here is the market on the Euro trading up into two seventy point five level failing to get to the 79 level and this candle right here shows a willingness to want to reverse so the next candle we could potentially see this be a bearish candle now I'm not looking at swing
• 18:30 - 19:00 points I'm just looking at in terms of where we are in the higher time frame and this could be a point of interest for a breakdown okay so once we have a bearish candle like this and we're inside the area of optimal trade entry for sell or we would be deemed as a potential sell the very next candle we want to study that because it may give us a condition that frames a power 3 formation with a Down close relative to
• 19:00 - 19:30 the daily chart okay so we have this particular day here which is the 28th of November and we have the market trading sideways until midnight in New York and then we have the market initially drop down we do not worry about that we want to see it rally up into London open it starts this area
• 19:30 - 20:00 right here it's dropping here we want we don't want to see that we want to see price rally up that's where we'll sell notice also that we have equal highs in here okay about 10 pips above this short-term high that gives us the high of the day at the same time we would reasonably expect to see London open create the high today why should the daily bias be bearish because it's been going bullish here while we treated into an area of optimal trade entry and we got one candle showing a willingness to reject
• 20:00 - 20:30 and go lower so we want to look for characteristics like we're seeing here you open and then rally above we can look to be a seller there after it takes equal highs out so we have candy lien by stop liquidity pool okay runs up knocks the stops out and then trades aggressively lower grates the load of the day it comes off a low thing trades at or near below so in relationship to
• 20:30 - 21:00 power three if we're looking at this price action here you can see that would be the daily range so we can see that the opening it's a very limited upside movement above the opening that's just a little portion of price action here it creates the high of the day during the London open kill zone between 2 o'clock and 5 o'clock in the morning dynamic and balance or range expansion for the daily candle or bar creating the low of the day right here then we come off the low
• 21:00 - 21:30 trading near the low of the day in closing right here so this is this you know this whole candle right here this is what it looks like in a open high/low close for a minute so hopefully you found this teaching insightful and until next time I wish you good luck and good trading you