ICT Gems: Understanding The ICT Judas Swing | ICT CONCEPT

[00:00:00]Generally, my teachings are like this.

[00:00:02]If I'm bullish, I'm expecting the opening price to be near the low of the day or the session.

[00:00:11]Then it trades lower, making some important low, and then rallies, creates a high, and then closes near the high of the day.

[00:00:21]Now, it's not important for you to try to predict the closing price.

[00:00:26]What I'm trying to train you to anticipate is the likelihood of the market making some kind of a fake move, like a Judas swing. Okay, Judas swing is the false move.

[00:00:38]Typically, in London and in New York session, there are fake runs.

[00:00:44]Okay, so let's define the ICT Judas swing.

[00:00:47]First and foremost, you start hunting the Judas swing at midnight New York time. Okay, so this is the New York opening price, and it ends at 5:00 a.m. New York time.

[00:01:00]And that's basically the entire 5-hour window that would be utilized for anticipating this price move.

[00:01:08]Now, I'm not suggesting that everyone sit up >> [laughter] >> all night long waiting for this Judas swing to appear.

[00:01:16]There's some things that you would look for, obviously, but I can't cover everything in one teaching, so I'm giving it to you in small little pieces.

[00:01:23]But, for the most part, between midnight New York time and 5:00 a.m. New York time, there's going to be a high or low formed for the daily range. Now, we understand that typically is on the basis of London high or London low forming.

[00:01:36]Now, the Judas swing is a false run that trips up traders that lack the understanding of true direction of the day.

[00:01:42]Now, this is going to come by way of higher time frame analysis and implementing that in the intraday price action.

[00:01:50]Here we have an example of a Judas swing, and I'm going to now teach you the implementation of it in a bullish condition.

[00:01:59]Okay? So, here we have the Euro dollar chart.

[00:02:02]And I want you to take notice that we have the Asian range applied.

[00:02:06]We also have the midnight delineation in New York.

[00:02:12]I've also highlighted the opening price at midnight. So, this is the New York opening price.

[00:02:17]So, whenever you hear me refer to New York open price, it's that price, okay?

[00:02:21]Whatever the opening price is exactly at midnight New York time.

[00:02:27]I draw that out to around 11:00 in the morning.

[00:02:30]And obviously, we see the Asian range high, Asian range low.

[00:02:34]The premise is we would have to already arrive at an analysis that lends well to bullish prices for Euro dollar for this particular day.

[00:02:44]If we have that assumption and we stick to our guns, if you will, about only taking a trade based on what I'm going to suggest to you here in your demo account, I think you're going to see there's a repeating phenomenon inconsistency. If you apply it, it will not give you a trade every single day to practice with. It will give you a setup a few times a week. If you look at the majors that are coupled with the dollar, Euro dollar, cable, Aussie dollar, dollar yen, there's four markets that if you just watch those, they'll give you a wide array of potential scenarios where this type of thing forms.

[00:03:21]Now, what is the Judas swing here and how is it implemented on a bullish scenario?

[00:03:28]We're looking for an Asian range that is in a tight consolidation.

[00:03:32]We look for initial run up to trip traders in.

[00:03:36]So, buy stops are hit.

[00:03:38]Traders are now long on a breakout. We wait for the market to trade down below the Asian range low to take the stops, anticipate some measure of a sweep, 10 20 pips or so.

[00:03:50]But this move below the opening price that's shaded in here, this is actually the ICT Judas Swing. Now this is a bullish Judas Swing and it creates the low of the day inside of the London session.

[00:04:01]The London low to ends up becoming the low of the actual day.

[00:04:06]So what we look for is obviously a higher time frame premise that we are anticipating bullishness or a higher close on the day and we wait. We wait for a scenario where the Asian range is tripped by running the stops above the Asian range high.

[00:04:23]Okay, this is the first level of manipulation and then we anticipate a move below the opening price.

[00:04:30]Preferably we want to see it trade below the Asian range low. If you were to trade just below that Asian range low as an entry and use a respectable amount of pips in terms of a stop, it might get you into a pretty good trade.

[00:04:43]Below below this Asian range low to a certain degree of support an old high could trade to. You know, classic support resistance ideas would lend well here as well. But long and short, we want to see a measure of move below the opening price. So the actual drop below the opening price is a ICT Judas Swing.

[00:05:05]When the market's bullish, otherwise just any little little movement below it like this one here, this would not start an ICT Judas Swing.

[00:05:13]The Judas Swing is first it leads traders in on the wrong side and then it tears lower going below the Asian range low and this whole move below the opening price, that's exactly the ICT Judas Swing.

[00:05:28]Okay, so we're looking at the Dollar/CAD here.

[00:05:30]Very similar to what we just mentioned on the previous pair, the Euro/Dollar.

[00:05:34]Now we're going to be looking at the Dollar/CAD with very similar idea.

[00:05:38]Uh the idea of going into this day was higher time frame bearishness so we anticipate a lower close based on what we would anticipate from either a time frame daily or weekly. But, for this example, again, the Asian range, small tight consolidation, we want to see it drop down, trip traders in right away, then run on the other side of the Asian range high.

[00:05:59]That movement above the opening price, above the Asian range high, that is the Judas swing.

[00:06:04]This is the false or trap move that I use to get in on London setups. Now, that's not the only setup, but that's one characteristic of the setups that I use. Now, right away, some of you are going to say, "Well, you're holding things back, Michael. That's not fair."

[00:06:19]Well, that's why I have a mentorship. I don't hold anything back there. But, I've given you enough here that if you look through your price charts, okay, even if you are not trading them live with your demo account, look for these things in hindsight.

[00:06:33]Because by printing them out and creating a a study log of what these individual days look like, it will build a historical reference in your memory. And even though you weren't actually in these moves, if you are able to watch price action live, you'll start to see when it should be happening. Again, the number one premise going into this, when it's bearish, we want to anticipate lower prices, momentum lower.

[00:07:01]So, that way we'll be looking for after midnight, New York time, we want to see price initially drop down below the Asian range low. When that happens, we are set to wait and anticipate the run back above the Asian range high.

[00:07:17]When it does that and goes above the opening price, at that moment, right here on this candle, this becomes the Judas swing.

[00:07:22]Because it's now leading people in on the wrong side. Why? Because we have already arrived at a bearish tone on the marketplace. So, all right, now it's suggesting lower prices, while any rally intraday at this time of day should be viewed as a suspect rally or a fake move.

[00:07:40]It's going to run up here and get everybody Notice the most energy is seen with it making the high of the day.

[00:07:46]This is slow, lethargic movement below.

[00:07:50]That's typical. That stop running below the Asian range low.

[00:07:54]Those short holders that have been trading short now on a breakout, their stops going to be waiting above here.

[00:07:59]10 20 pips type of scenario to unfold.

[00:08:03]That's about how far the Judas swing will reach for.

[00:08:06]Creates the high of the day and then quickly moves away. That's a telltale hallmark sign that traders have now been trapped and any return back to it, all I'm seeing is an Asian range return.

[00:08:19]Back to the high, doesn't give them an opportunity to see higher prices and then quickly accelerates going lower in the New York session.

[00:08:27]So, hopefully I've given you a little bit more detail and insight about what makes an ICT Judas swing. It really is nothing more than this. Just watch the video a few times. The elements and characteristics of it are very simple.

[00:08:41]You want to see the manipulation first when it's bearish below the Asian range low, then come above the opening price at midnight and then go through the Asian range high. Once it does that, that's a Judas swing.

[00:08:51]Generally, my teachings are like this.

[00:08:53]If I'm bullish, I'm expecting the opening price to be near the low of the day or the session.

[00:09:02]Then it trades lower making some important low and then rallies.

[00:09:08]Creates a high and then closes near the high of the day.

[00:09:12]Now, it's not important for you to try to predict the closing price.

[00:09:17]What I'm trying to train you to anticipate is the likelihood of the market making some kind of a fake move, like a Judas swing. Okay, Judas swing is the false move.

[00:09:29]Typically, in London and in New York session, there are fake runs.

[00:09:36]On Monday, we had price drop down overnight.

[00:09:41]Consolidated and then we have a little bit of a rally ahead of the equities open. Okay, so in here we have 8:30 in the morning.

[00:09:49]If you look at 8:30, what do we have? We have the highs over here. They're suspect cuz they're relative equal highs there.

[00:09:56]But look what we left here ahead of 8:30.

[00:09:59]We had this huge imbalance.

[00:10:02]So if we run these highs out after the open at 9:30, it's likely to trade down into that and rebalance. But watch what it does. It And we trade up into that level here, which creates the fair value gaps low end parameter.

[00:10:20]Remember, this is Monday's trading.

[00:10:22]It sells off. So this line isn't here on Monday.

[00:10:25]It's It's not what we're looking at.

[00:10:27]We're looking at the likelihood of coming back down into this area here after taking these highs out.

[00:10:34]If it does so, if it trades back into this imbalance, that's a good candidate to go long.

[00:10:41]Now the imbalance in here, if you go to the left of it, you can see the down close candles, that's your bullish order block.

[00:10:48]The market trades down, hits the order block, and it's an afternoon trade, so it starts to rally, and then consolidates into the close.

[00:10:56]Overnight we create a wicked run last night. This was an It ran last night and most of all the move for today was done before we even got to the opening of the morning.

[00:11:08]You don't need to try to predict the closing price with power three, which is accumulation, manipulation. So in other words, if you're bullish, it opens where you think it's going to trade higher, it's going to be most likely a small little move lower. That's the move you want to try to go in and hunt along. If you miss it, you want to try to get long real close to where the opening price is. Now the question is going to be is where is the opening price?

[00:11:34]Well, I like 8:30. Okay, you can use the opening price here at 8:30.

[00:11:40]Draw that out in time. Did we go below it? Yes. Did we go inside the imbalance?

[00:11:44]Yes. Did we take out a short-term low?

[00:11:45]Yes. Did we hit an order block? Yes. Was it an optimal trade entry? Yes.

[00:11:50]Lots of factors there.

[00:11:52]Over here, same thing. Opening price here.

[00:11:55]Did we trade lower than that? Yes. Did it go even lower than that later on in the afternoon? Yes.

[00:12:01]Then it rallied, taking out the relative equal highs here. And again, gravitating towards that upper end of that fair value gap on the daily chart.

[00:12:12]Now, I'm on a 5-minute chart on that same February 14th.

[00:12:17]And I want to take you closer to what price has done in here.

[00:12:21]That imbalance, the lowest portion of it here with all the down-closed candles here. Now, this is anchored to the daily bullish order block.

[00:12:29]But, you can see how we traded into it here with 1 2 3 4 down-closed candles. That is a complete order block on this time frame.

[00:12:39]So, consecutive down-closed candles right before a price surge that has an imbalance, that's how you find your order blocks.

[00:12:48]Okay, so a high-probability order block would be your narrative where your bias is bullish.

[00:12:55]You're looking for a displacement.

[00:12:56]That's this right here.

[00:12:58]When the market runs real quick higher.

[00:13:00]And the down-closed candles, you want to mark that out and anticipate a return back into that. Now, again, this level is not there yet. We don't know this level until Monday's close.

[00:13:11]So, don't be tricked thinking that I had this level here and I knew it was going to go right to that level and turn. I'm not suggesting that at all. What I'm suggesting is let's watch what happens.

[00:13:20]When it creates that high, it breaks down.

[00:13:24]All of price action here gets overran into a retracement back down into this imbalance here. The low of this candle and the high of this candle, that right there, that's your fair value gap.

[00:13:37]With an order block and optimal trade entry.

[00:13:43]Rallies, even though it's sloppy, it's still continuously driving higher.

[00:13:50]This high at the close on this day here at say 4:30, okay? 4:30 in the afternoon to me, that's like the close for me.

[00:13:59]Now, it trades a little bit later than that and then closes for a little while. And it also technically closes when the bell rings at 4:00 p.m.

[00:14:08]in local time in New York.

[00:14:11]Because there's a little bit of trading past that, I like to just look at 4:30 and just consider that where we are in terms of what we've done for the full range and then determine what I have left for any imbalance or liquidity pools.

[00:14:25]So, when we open up at 8:30, do we go in here and start buying it just because it's gone up overnight? No, we don't chase it. You have to wait. No, we don't chase it. We have to wait for more information. What information are we waiting for?

[00:14:39]Well, typically whenever you see a big run up or a big run down, there's a consolidation that takes place shortly after.

[00:14:45]Now, not always. Sometimes it just keeps on ripping higher or lower and you'll either miss a move or if you get lucky, maybe you can participate in it, but this is what I typically look for. So, if there's a lot of range movement overnight, which is overnight, um 2:00 in the morning to 5:00 in the morning, okay? If we get a big run like that, which is what we're seeing here, right away in my mind, I'm thinking don't trade a lot.

[00:15:13]Don't expect a lot of in and out in and out perfect you know perfect precision.

[00:15:19]Wait for a real significant price move.

[00:15:21]Otherwise, you're going to get chopped up.

[00:15:24]Now, what does that mean? Well, when we have the opening here at 8:30, look to the left. What do we have? We have this high here, and then we have the low over here.

[00:15:36]We can use this one cuz they're relatively equal, but I like this one.

[00:15:38]Why? Why do I like this one?

[00:15:40]What's below it?

[00:15:42]Fair value gap.

[00:15:44]See that?

[00:15:45]So, it's likely a trade down after it creates this sloppy opening. Look at all this movement in here.

[00:15:51]So, when I'm watching price, I'm listening for them to want to be a buyer.

[00:15:58]So, when they're trying to be a buyer, that means they're they're already hunting a continuation of this move here.

[00:16:05]I want to see a low form.

[00:16:08]Now, this is what we have for the today.

[00:16:11]We We start going lower first, so that's good. We create a pseudo Judas swing, but did it create a nice low and turn away from it?

[00:16:21]Look at all this back and forth. And it created these suspect lows in here, relatively equal lows. There's going to be sell side building up below that, sell stops, okay?

[00:16:30]When it starts to go higher, anyone that was long overnight, they're going to jam their stop loss right underneath that.

[00:16:38]Okay?

[00:16:39]When this occurs, that's the very scenario I'm looking for. Now, right away in my mind, here's what I want you to understand. If there's a big move overnight for equities, this is not Forex, okay?

[00:16:51]This part is not Forex, it's just for trading like Nasdaq, Dow, and E-mini S&P.

[00:16:57]If there's a big run overnight, avoid the New York session. Don't even mess with the New York session.

[00:17:04]Wait until the other side of lunch at 1:00 in the afternoon New York time, and then anticipate the New York lunch lows taken out or the New York morning session lows, which is what we have here.

[00:17:19]Notice how we rallied up.

[00:17:21]We didn't take out the relative equal highs here that was formed ahead of 7:00 in the morning. Notice that?

[00:17:27]Now, this over here, we know this range up here is the high end of that fair value gap. Why do we know that? Because the 14th stopped trading and it had that indecisive candle on the daily chart. So, it's likely that we might trade up into this range high and this is that range low. So, if we can draw down below that low it was formed initially in New York session.

[00:17:51]We have a fair value gap over here with sell-side.

[00:17:54]While we have yet to take out the buy-side liquidity here at around I don't know, 14,575.

[00:18:02]And then get up to that fair value gap high or the the boundary of it, kind of like the resistance level of it.

[00:18:10]So, this is the draw on liquidity and we have a minor draw on liquidity here with buy-side liquidity.

[00:18:15]Look what we can have in terms of price action.

[00:18:19]The Nasdaq drops down taking out the sell-side, digging into that fair value gap. See that? Look at the bodies of the candles, isn't that neat?

[00:18:27]How it just respects that level back here. Now, that's not random. Okay, these are algorithmic principles that are in play. You don't chase the overnight run and you wait for them to give you a low that everybody overnight will want to put their stop loss right beneath that after it starts to rally above it.

[00:18:46]It's even better when you don't have this high taken out yet. See how it took it up here and it just went right down for them.

[00:18:53]That's engineering liquidity.

[00:18:56]It runs up, consolidates, creates a low, starts to rally and everybody's thinking, "I don't want to lose my profits.

[00:19:04]I don't want to lose out on making more money, but I have to put a stop loss the books tell me I have to do that. So, I do the same kind of stuff, folks.

[00:19:13]I'm not trying to talk down anybody, but I'm just repeating what a retail trader's mindset would be.

[00:19:20]And the logic behind this, okay? So, the narrative with this day was the stops were trailed below these lows.

[00:19:27]The afternoon session, again, creates the low of the day.

[00:19:32]Takes the sell side liquidity out into a fair value gap and then rallies.