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Supply Takeout Data PDF

1) The document provides guidance on identifying high-quality "A grade" supply takeout plays versus lower-quality "B grade" plays based on various technical characteristics. 2) Key factors that differentiate A grade plays include strong momentum, tight spreads, exponential highs, strong wall drops ahead of the structure, and clearouts of stops in the middle of the structure. 3) Traders are advised to use alerts to track potential structures and place entries near supply zones, scale out profits, and keep stops tight within prior high-low ranges to minimize drawdowns on plays.

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45 views1 page

Supply Takeout Data PDF

1) The document provides guidance on identifying high-quality "A grade" supply takeout plays versus lower-quality "B grade" plays based on various technical characteristics. 2) Key factors that differentiate A grade plays include strong momentum, tight spreads, exponential highs, strong wall drops ahead of the structure, and clearouts of stops in the middle of the structure. 3) Traders are advised to use alerts to track potential structures and place entries near supply zones, scale out profits, and keep stops tight within prior high-low ranges to minimize drawdowns on plays.

Uploaded by

Active88
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Supply takeout important data

Difference between A grade and B grade play


A grade B grade
-has strong volatility and tight spreads : liquidity : -has low volatility and often wide spreads
-has exponentially progressive HLs : HLs : -has even or slightly lower lows
-has strong momentum supply takeout : momentum : -has slower stalling supply takeout
-has strong ticking action on absorption : ticking speed: -has slow or idle ticking on supply test
-has no DD past flip zone : draw down : -has some DD up to 50% of last leg
-has strong wall drop ahead of structure : drop ahead : -has weaker or choppy down trend ahead
-has clean symmetric even highs : symmetry : -has uneven supply and highs distribution
-has clearout of stops in middle : clearout : -does not have clearout of lows

Market presence:
-supply takeouts are present in most very liquid markets such as : FX, futures, gold, and high cap equities.
-in lower or mid liquid markets they are less present and less reliable
Alert use:
-alerts have to be used to properly play the supply takeout. Trader has to keep rotating between charts every
30 min to see if any structure has potential to develop into play (needs at least 2 highs already in). If it is
good potential then alert should be placed near the supply (or demand for short play), so then trader tracks
development of price after each another retest of supply.
TP:
-for take profit target 1:1 structural depth target should be used or more, best way is to scale 30% of on each
pop higher rather than scaling all out in single move.
-1:1: means for example if H/L distance is 10 pips average in structure, then TP should be aprox that.
SL:
-stop loss should never be more than 50 or 60% of last H/L leg distance because most setups that have
larger DD than that will eventually fail
-finger ready to cut the loss once the supply takeout entry is placed
Momentum move:
-big portion of A grade plays have strong momentum single candle takeout of supply
-after takeout price should not come all the way back within 1 candle next minute , otherwise that could
signal too big counter order flow taking place and stop hunt, on proper supply takeout price should keep
climbing some and then only after 10 minutes or more coming back to retest flip zone
Clearout:
-clearout has to be targeted in order to be valid signal, that means strong drop candle going from
middle of structure where there are no strong supply / demand H/L points, showing that the move
was initiated from shark pushing market order intentionally rather than whole market action doing it
Behaviour change:
-behaviour change is important component of supply takeout, its not always present but if it is it adds
to edge. If behaviour is consistent few times (for example supply rejecting price 3 times with same speed
and strenght) but then it all of sudden changes on same price level (for example 4th time price retests supply
it no longer rejects, it starts to stall there for few minutes) that can indicate absorption and targeted attempt.
-also tracking highs and lows if they are symmetrically progressing and all of sudden that clearly changes
it could point towards rotation.
Numbers of highs / lows in structure:
-number of highs correlates with quality of play usually. The higher the number of highs / lows in structure
the higher quality the play is as the denser the supply will be. Avoid structures with only 2 highs in them, those
are often lower grade plays.
Extended drop ahead of structure:
-best supply takeout plays are often established after extended long lasting drop without much of pullbacks
(wall drop), try focus on those as much as possible, especially if there is high volume stuff on last
parabolic extended candle where structure started to develop (futures especially).

Last updated 1.1.2019

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