You are not wrong…that is the one I was referring to. I can’t remember which PTC video it is, but it was one of the earlier ones. Here are the notes I made from the video:
[B]London Close – Intra-day Scalping Set-up
Around 10am EST to 1pm EST there is a likelihood that the market will slip back into its daily range.
Parameters
You want to see a market that is either overbought because it has been trading over its Average Daily Range (5 days) or oversold because it is trading below its Average Daily Range. While this is an ideal condition, it is not necessary that you have that. If it is overbought and we see it trade to a key resistance/support level where the Fib or Pivot Points show a confluence of resistance or support, price should correct if not altogether reverse.
You can use the Optimal Entry on the 15 minute chart to catch this trade.
It is consistent. It happens a couple of times a month. There have been times where it has happened two or three times in a week. But do not expect it to happen every day, and do not think that you won’t get faked out sometimes.
It is a scalping technique, but it can be used to get in to longer term moves at times.
(ICT posts a trade example on the video but unfortunately I can’t get the picture here at the moment)
E.G. We have been trading in a very bullish direction for 3 days. Every day trading in the ‘sell zone’ above the Daily Pivot.
On this day we traded up past R1 (the first yellow line) to the mid-resistance point that is highlighted with the white, thinner line. This was at a time when we were going into the London close, and the pink box highlights the zone where we would be looking for the trade to set-up.
ICT places a Fib at the top of the move, and brings it down to the first swing low which occurred 9 candlesticks after the high. Price then reversed back up, but it never made it into the Optimal Entry (62%-79%) sell zone. Price traded back down for another 4 candlesticks after the small high, and then finally reversed back into the Optimal Entry zone. It is at this point he placed his sell trade with a S/L above the initial high.
More Ideal trade conditions for entry:
The swing low before the Optimal Entry should be 20% of the day’s range or over. In this example the day’s range was 2 pips short of 100 pips (call it a hundred), so we should be looking for price to fall off by 20 pips before swinging up for the Optimal Entry. In this example, it actually fell back by 25 pips.
So, 1.6210 was his entry price. Where should we look to take profits? There are in fact several ways to do that. Here is one:
Take your Fib and place it at the swing low before you took the Optimal Entry. Pull it up to the main high (to the left) that was initially made. The way ICT sets up his Fib gives extensions, and in this case price traded down to the 161.8 extension netting 70 pips.
Another way to find the EXIT for this set-up:
If you take the low for the day, or in this case as we have been trading very bullish for a few days, take the previous days low, and pull the Fib up to the high, our scalping trade exit comes in around the 38% retracement. Further to that, by pulling up the Pivots, we can see that there is a confluence with the 38% retracement and the MR1 (between PP and R1).
So in conclusion, if price has been bullish all day, or for a few days, you should be looking to see price trade back into the day’s range around the London close.[/B]
Sorry I couldn’t get the pictures in, but this is basically Optimal Trade Entry during the London Close ‘kill zone’. Note that from the 7 trades I have taken, only one was Cable, and two were Fiber. The others were USDJPY, EURGBP, and EURJPY x2 (all low spread pairs). What I have found is that ICT’s example where he netted 70 pips is a BEST CASE scenario that came about because we had been trading bullishly for more than just one day. In my limited experience, it seems more likely that the move fades out at the point that you initially drew the Fib to for OTE. This represents a Risk:Reward ratio of 1:1, which might not sound good, but if all the parameters are met, it does seem to have quite a high success rate.
N.B. When I say parameters, the ones that I have been sticking to religiously are: ADR High or Low met AND 20% retracement of the ADR. The first one allows me to easily filter candidates from a possible 8 low spread pairs (sometimes down to 3 or 4 on any given day, less rarely down to none at all) in order to give more opportunities than just Cable or Fiber alone; the latter makes sure that I get a good swing to place the Fib on. Last night I had 4 candidates, but only Fiber came off nicely before retracement back up to OTE. The others either meandered and continued higher, or else didn’t come back to the OTE zone. I don’t mind letting these go because although they might head back into the ADR, they don’t present that low risk entry that I feel comfortable with.
Anyway, this is where I am at right now based on the information that ICT has supplied so far. Don’t take this as the complete article because he has said that there is further stuff to come. You should also note that ICT presented this move as a Cable move, and not as a move that should necessarily be tried on other pairs. It is me that has made the decision to use iot across the board as I need more opportunities based on the fact that I am unable to trade the nice big earners that appear regularly at London open.
With regard to more insight, ICT has promised it, but from what little I have seen in these last few weeks, I think we have the meat of the information here, and we are just waiting for the bells and whistles. He did mention 90% accuracy though, and the fact that I am only looking at 71% so far (5 wins, 1 loss, 1 BE) might just be because of the lack of data to base it on.
Regards
Alishijo
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