The concept of “Friday’s Asian Range” is an important aspect of trading that relates to how price movements on Fridays can influence trading decisions for the following Monday. This idea is particularly emphasized in the context of ICT’s teachings, specifically in the T.G.I.F. (Thank God It’s Friday) setup.
What the Concept Is
The “Friday’s Asian Range” refers to the price range established during the Asian trading session on Friday, which can set the tone for market movements on the following Monday. This range is crucial because it often indicates where the market might head next, especially if significant price levels are reached.
Explanation of the Concept
On Fridays, traders often see a tendency for the market to retrace to a certain percentage (typically 20-30%) of the weekly range. This means that after the market has established a high or low during the week, it may pull back to these levels before the weekend, which can create opportunities for traders to enter positions based on expected movements on Monday [2].
Why the Concept Works
The rationale behind this concept is based on market behavior and liquidity. Traders often place orders at key levels, and as the market approaches these levels, it can trigger buying or selling pressure. This behavior is particularly pronounced at the end of the week, as traders look to close positions before the weekend, leading to potential reversals or retracements [2].
Example(s) from the Video
In the ICT mentorship videos, Michael J. Huddleston discusses how to identify the high and low of the week and then measure the 20% and 30% retracement levels using Fibonacci tools. For instance, if the high of the week is established, traders can look for price to pull back to these Fibonacci levels, which often coincide with significant liquidity zones [2].
Tips in Using the Concept
- Identify Key Levels: Always mark the high and low of the week on your charts. Use these levels to set your expectations for price action on Friday and into Monday.
- Use Fibonacci Retracement: Apply Fibonacci retracement levels to gauge where the market might pull back to within the established weekly range.
- Monitor Price Action: Pay attention to how price behaves around these key levels, especially during the last hours of trading on Friday.
Caveats to Consider
- Market Conditions: Not every Friday will exhibit the same behavior. Market conditions can vary widely, and external news or events can significantly impact price movements.
- Confirmation: Always look for confirmation signals before entering trades based on the Friday range. This could include candlestick patterns or other technical indicators.
In summary, understanding the importance of Friday’s Asian Range can provide traders with valuable insights into potential market movements for the upcoming week, particularly on Mondays. By applying these concepts, traders can better position themselves for successful trades based on historical price behavior [2].
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