Daily Bias That Actually Works (Using Only Highs and Lows)

Every single high-quality trade starts with framework off of the higher timeframes.

And this is not something that you need to know many concepts to get right. All you need to know are highs and lows.

But the question still remains of which highs and lows do I actually focus on? And this is where the idea of relevant swings comes into play.

This is something that is the absolute foundation of my system and is included in every single trade that I place.

It tells me if there's opportunity in the market, where the opportunity exists, and which side of the market I should be focused on while completely removing all the unnecessary noise.

Getting right into this, it's first important to understand the actual goal of relevant swings.

The idea is that we want to remove the guesswork, the doubt, the ambiguity from identifying certain highs and lows from the normal way that most traders would approach this.

We're going to be focusing on the highs and lows that exist at the extremes relative to the current market.

And what that does is that when something is at the extremes and the market engages it, we know without a doubt that what happens there is meaningful.

And you're going to get to that understanding of how we identify them using a very simple three-step process, but also the simple reactions that we look for at these points that give us a bias going forward.

The problem most traders face when trying to identify highs and lows is that they are all over different time frames.

They're trying to mark out session highs and lows, highs and lows above and below opening prices around all these different times.

These are things that add confusion. They add doubt. And there's no certainty in the sense of what we should be looking for.

We are going to be completely removing that noise by doing a few simple things. First, we want to be focusing on the right time frames.

We are only going to be using the daily chart for identifying relevant swings.

And as you can see here, you have the option to go below where there's the four hour and the one hour, but that gives you too much detail.

When we go above the daily to the weekly or the monthly, that is too little detail in price.

The daily hits this sweet spot for intraday trading where we are going in and out of the market within the same day, holding trades for a few minutes to a few hours, getting in and out.

This is where we want to be focused on because it gives us enough

detail to be fluid in bias, but also not giving us so much detail in price that we are seeing too many things at once and we're not actually able to identify the areas that matter.

And on the opposite spectrum, the weekly and monthly, it is too high of a time frame to see the current development, to adjust a bias, to go day by day, and it's really not something that you want to be focused on for day trading.

The first and truly most important concept of identifying relevant swings is going to be understanding what a failure swing is.

The concept of failure swings is extremely simple.

It's when we set either a high or low in this current example in the market, an initial low is formed.

And following that, we make deep runs back into that initial low following that point.

And these deep runs that get back into that low are considered failure swings.

The reason being is that when we create a low in the market that could be reversed off of, it should not make deep runs back into that point.

Once price reverses, it should expand away, make shallow retracements.

That is a sign of an expansion or a continuation. When we make deep runs back down into it, that invalidates that point of reversal and shows that lack of wanting to turn in the market.

So anytime we see an initial low formed like this

here, that is the first low formed, then we have price come up, retrace deep back into that low, and then again deep back into this low.

These deep runs back in are considered failure swings, failure swing, and that is the initial low in the market that we want to be focused on.

This here is what we would consider the extreme of the lows.

So this low is not a failure swing to any other daily low to the left, but we have these failure swings that follow it.

We want to look for that initial high or low that was formed, and we can show you an example on the other side of the market. Here we look at the highs.

We have this initial high that was formed, the highest high in this current range, and then following that, price made deep runs back into that high.

deep runs back into it and it created a failure swing another

failure swing and that final initial high

and again this point is what we would consider the extreme

of highs these are the points in the market that

we want to be focused on anything that is considered a

failure swing these deep runs are not considered and

they would be irrelevant for us to be noting them out we simply

block them out of our perspective and focus on the extremes just to reiterate that point any reactions that we see at those failure swings, not the extreme highs or lows, is considered irrelevant.