Mastering Time-Based Trading: A London Time-Based Interval for Success
The Main Condition
In order for price to move, it is vital to understand why it moves. According to ICT (The Inner Circle Trader), price has two functions:
- Fill up Inefficiencies (commonly referred to as Fair Value Gaps)
- Purge Liquidity (raids on liquidity for the purposes of off-setting positions against counterparty participants in the market place)
Keep this in mind for what I am about to tell you with regard to time-based trading.
The London Time Interval: Sweet Spot
During the London Session, characterised as between 02:00AM EST to 06:00AM EST, there is a sweet spot of time derived from our amalgamation of 90-minute delivery intervals.
This sweet spot is between 02:30AM EST to 04:30AM EST. In this time interval, you want price to either be coming from fulfilling one of its two algorithmic functions or make its way towards performing that function. From there onwards, your job is to secure your entry using a trading technique within a trading strategy that fits your personality and your personality alone
Here is an example from Friday, 08th of September 2023:
Over here, you can see that the optimal entry, in the form of a retracement in price occurred that allowed a position to be taken to go short.
Concluding Note
It is vital to do your own backtesting to get used to this idea and to be able to see how time-based trading can change the way you look at price. It is not always about Fair Value and Liquidity. Time will always deliver price.
