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ICT Daily Bias PDF Guide

By AliFx
Published on March 12, 2024

Introduction
ICT Daily Bias is a concept developed to enhance trading strategies by
focusing on daily market trends and liquidity patterns. It centers on the
identification of key factors such as sell-side and buy-side liquidity, fair value
gaps, order blocks, volume imbalances, and recent highs and lows. These
elements collectively help traders understand where the market is likely to
move next, by pinpointing areas of significant liquidity that could attract price
movement.

In essence, ICT Daily Bias acts as a strategic guide, aiming to make complex
trading concepts more accessible and actionable. By analyzing the market
through this lens, traders can make more informed decisions about when to
enter or exit trades. This methodology leverages the fractal nature of price
movements, encouraging traders to look at patterns and behaviors across
different timeframes to better predict future market behavior.
This approach not only simplifies the process of trading but also empowers
you with the tools to analyze the market in depth. As you incorporate ICT Daily
Bias into your trading routine, you will find yourself making choices that are
not just based on intuition but are backed by a comprehensive analysis of
market dynamics. This can significantly improve your trading strategy, leading
to better outcomes and a more confident presence in the markets. Let ICT
Daily Bias guide you towards smarter, more informed trading decisions.

Fundamental Concepts of ICT Daily Bias

Delving deeper into ICT Daily Bias requires a solid understanding of its
fundamental concepts. These concepts form the bedrock of the strategy,
guiding traders through the nuanced landscape of the forex market.

A. Liquidity Analysis
Liquidity analysis stands at the forefront, emphasizing the movement of
money within the market. It is pivotal in forecasting market directions.

1. Identification of Liquidity Pockets Liquidity pockets are zones

where significant buy or sell orders accumulate, acting as magnets
for price movement. Traders can identify these areas by analyzing
past price actions and market behavior. Recognizing these zones
enables traders to anticipate potential price movements towards
or away from these pockets, informing strategies for entry and
exit points.
2. Market Movement Dynamics Understanding how the market
transitions between these liquidity pockets is crucial. The market
moves in search of liquidity, navigating from one pocket to
another, guided by the collective actions of institutional traders
and banks. This understanding helps traders grasp the underlying
currents of market movements, enabling them to predict with
greater accuracy where the price is likely to head next.
B. Fractality of Price Movement
The concept of fractality highlights the repetitive nature of market movements
across different timeframes, revealing patterns that traders can exploit.
 1. Mirror Patterns Between Higher and Lower Timeframes The
fractal nature of the market means that patterns, such as trends
and reversals, observed on larger timeframes like weekly charts,
often repeat on smaller timeframes, including daily charts. This
repetition offers traders a unique advantage, as it allows for the
prediction of market movements with a degree of confidence,
based on the behavior observed on higher timeframes.
2. Price Disrespect on Lower Timeframes While larger timeframes
provide a clearer, more reliable view of market trends, smaller
timeframes are subject to more volatility and ‘noise.’ This can lead
to price movements that seem to disregard previously identified
patterns and trends. Successful traders understand this
discrepancy and adjust their strategies to mitigate the risks
associated with the unpredictability of lower timeframes.
C. Utilizing Weekly Bias for Daily Analysis
Incorporating a longer-term perspective into daily trading decisions enriches
the strategy by providing context and direction.

1. Importance of Weekly Market Trend The weekly market trend

is a powerful indicator of the market’s overall direction. A bullish
or bearish trend on the weekly chart can set the stage for daily
trading, offering a macroscopic view that should guide daily
trading decisions. Understanding the weekly trend helps traders
align their daily trades with the broader market movement,
increasing the chances of success.
2. Focusing on Daily Opportunities Aligned with Weekly
Trends Once the weekly trend is identified, traders should look
for trading opportunities on the daily chart that align with this
trend. For example, in a weekly bullish trend, traders would seek
opportunities to buy on daily dips, targeting areas of liquidity that
suggest upward continuation. This alignment ensures that daily
trading strategies are in harmony with the larger market
dynamics, leveraging the momentum of the weekly trend for
more effective trading outcomes.
Developing ICT Daily Bias: Step-by-Step
Approach
Creating an effective ICT Daily Bias involves a methodical approach that can
significantly enhance your trading strategy. This step-by-step guide simplifies
the process, making it accessible for traders at all levels.

A. Step 1: D1 Timeframe Analysis

The first step centers around the daily (D1) chart, a favorite among
institutional traders for its balance between detail and broader market
perspective.

1. Importance of the Daily Chart for Institutional

Traders Institutional traders prefer the daily chart because it
filters out the ‘noise’ of shorter timeframes while providing
insights into market trends. This chart offers a clear view of price
movements, helping traders make more informed decisions.
2. Marking Recent Swing Highs and Lows Start by identifying the
most recent swing highs and lows on the daily chart. These points
are crucial as they offer hints about potential future movements.
Marking these swings at the beginning of the week sets the stage
for anticipating market direction.
B. Step 2: Identifying Drawn-on Liquidity
Next, focus on understanding liquidity dynamics and how they affect market
direction.

1. Algorithm Activity and Liquidity Direction Analyze recent

market activity to determine if it’s leaning towards buying or
selling. This involves understanding how algorithms and
institutional orders are influencing market liquidity.
2. Anticipating the Next Drawn-on Liquidity Based on recent
activity, try to predict where the next significant movement of
liquidity will be. For instance, if the market has recently targeted
sell-side liquidity, it might next move towards buy-side liquidity,
and vice versa.
C. Step 3: Premium and Discount Zones
This step involves analyzing the market’s position in relation to its average
price, to decide on a trading bias.
 1. Determining the Bias Based on Price Zones If the price is in a
premium zone (above the perceived fair value), consider a bearish
bias, suggesting prices might drop. Conversely, if in a discount
zone (below fair value), a bullish bias may be more appropriate,
indicating potential price increases.
D. Step 4: Fair Value Gaps and Order Blocks
Finally, reinforce your analysis with additional concepts to solidify your daily
bias.

1. Substantiating Analysis with Additional Concepts Look for fair

value gaps and order blocks that might support your earlier
findings. These elements can confirm your bias, offering a
stronger foundation for your trading decisions. Fair value gaps
indicate areas where the price might rapidly move to ‘fill’ the gap,
while order blocks suggest areas of significant buying or selling
interest in the past that may influence future price movements.
ICT Forex Essentials to Trading the Daily
Bias
Trading with the ICT Daily Bias method involves understanding several key
concepts that are foundational to navigating the forex market effectively.
These essentials provide traders with the tools needed to analyze market
conditions, anticipate movements, and make informed decisions. Let’s delve
into each of these components:

A. Liquidity
Liquidity refers to the availability of buy and sell orders in the market,
influencing how easily trades can be executed without significantly affecting
the market price. High liquidity areas attract price action, serving as magnets
for future movements.

 Key Point: Identifying areas of high liquidity helps traders predict

where the market is likely to move, enabling them to position
their trades around these zones for better entry and exit points.
B. Premium and Discount Zones
The concepts of premium and discount zones help traders assess the market’s
valuation at any given time, providing clues on whether it’s overvalued
(premium) or undervalued (discount).

 Key Point: If the price is in a premium zone, it might be time to

consider selling, as the market could be overbought. Conversely, a
price in the discount zone suggests the market may be oversold,
presenting a potential buying opportunity.
C. Fair Value Gaps
Fair value gaps occur when there’s a significant price move within a short
period, leaving a ‘gap’ that the market may later seek to fill. These gaps can
act as targets for future price movements.

 Key Point: Understanding fair value gaps enables traders to

anticipate areas where the price might return, offering strategic
points for trade entries or exits based on the principle that price
tends to fill these gaps.
D. Order Blocks
Order blocks are areas on the chart where significant buy or sell orders are
placed by institutional traders or banks. These zones can influence the market
direction when the price returns to these levels.

 Key Point: Identifying order blocks provides insights into

potential reversal points or areas of strong support and
resistance, guiding traders on where to place trades in alignment
with institutional market movements.
E. Breaker Block
A breaker block is a concept that identifies a zone where the market structure
has been ‘broken,’ indicating a potential reversal or continuation of the trend.
These blocks are strategic areas for entering or exiting trades.

 Key Point: Recognizing breaker blocks can help traders find high-
probability trade setups, as these areas often signify a shift in
market sentiment or momentum, offering clues on future price
movements.

Conclusion
In conclusion, the ICT Daily Bias approach offers traders a comprehensive
framework for understanding and navigating the complexities of the forex
market. By focusing on key concepts such as liquidity, premium and discount
zones, fair value gaps, order blocks, and breaker blocks, traders can gain
insights into market dynamics, enabling them to make more informed
decisions. The step-by-step methodology for developing a daily bias, coupled
with a deep dive into the essentials of forex trading, equips traders with the
tools needed to identify potential trading opportunities and execute trades
with greater confidence. Embracing these principles and incorporating them
into your trading strategy can significantly enhance your ability to recognize
and capitalize on market trends, ultimately leading to improved trading
outcomes. Whether you’re a novice looking to understand the basics or an
experienced trader seeking to refine your approach, the ICT Daily Bias and its
foundational concepts offer valuable guidance for navigating the forex market
effectively.