LP

TRADING STRATGEY

TRADING STRATGEY

MARKET DIRECTION

Where is the market headed? What direction is the market moving? Can we see LH & LL
or HH & HL?
This will answer whether we are looking for sells or buys.
Check Daily for where the market direction. Keep trading with the trend until it has fully
reversed on the 4H.
If the trade doesn’t go into our directional bias within 8-12h the trade is most likely not
going to work. (Data says otherwise).
Highest TF to find the market direction should be D for a minute then move to 4H to
solidify the direction. 4H usually is where the decision of direction should be made.
Then use the 1H to confirm where the trend is going.
Trend may change on major supply or demand zones. Mark these zones and be cautious
when price moves towards these big zones (e.g., daily/weekly zones).
If the trend is unclear on the 4H or D, choose a different pair to trade.
Go on the D TF and find a pair that is trending. Then come down to the 1H, where you
draw the supply and demand zones.
Keep trading in market direction once you lose a trade and see the market is reversing
let it reverse and trade in its new direction.

MARKET STRUCTURE

Using the 4H look at market structure being broken to the left. Use the line chart to help
visually see where market structure has been broken.

We have a primary zone and secondary zone with the primary zone being the strongest.
If the secondary zone is not respected, we use the primary.

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The X’s are highs being made when the price breaks those higher highs that is market
structure being broken.

This is an example of the trend reversing on the 4H, the market was moving up forming
higher lows and bounced of a strong demand zone, but then broke structure to the left.
This is where we wait for the price to hit supply zones and we short instead of long.

However always be cautious to the left-hand side as there is a strong demand zone.

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DEMAND ZONES

Demand zone is created when there was strong buying pressure breaking market
structure in an uptrend.











In this example you can see two zones we have our primary zone and secondary, where
only our secondary was tapped into. A secondary zone is drawn where there is a pause
in leg up within the current market direction.
In an uptrend, two bearish candles are enough to form another demand zone as it is a
pause in the market. If the trend is too strong, Price may not come back to primary zone.

SUPPLY ZONES

The supply zones each where a leg down breaking market structure to the left.
We draw the zones on the 4H/2H TF which are then refined using the 15M.

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We can see a big leg down with break to the structure on the left. Price came back hit the
zone and reversed down.
Find these on the 4H/2H while refining either 1H which is safer or 15M.
Use the D to draw major zones so when the lower TF you have an idea of where the
zones are to be refined.
Work your way from D for direction to 4H for zones then 1H for entry.

1H ENTRY GUIDE

Is the market moving in the direction I am planning to sell or buy?

Did I draw a leg that broke the market structure to the left-hand side?
The safest option for an entry is first drawing out zones using the 4H and entering on
the 1H with a 3-pin formation.







We want price to print 3 candles into our zone before we take the trade.

- (Candle 1) If the zone looks good, wait for a 1H candle to push into the zone.

- (Candle 2) Wait for another candle to print, preferably a rejection candle with a
wick on the top or bottom.

- (Candle 3) If there is a rejection candle, this third candle should break the low
or high of that candle and NOW, we can enter.

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REMEMBER if you are unsure of the trade on the third candle, wait for ONE MORE
candle, the 4th candle to print and then the following candle to break the bottom or high
to get a SAFER entry. These steps can be used on all time frames like 30M or 15M but for
a start practise on the 1 hour.

TAKING PROFIT

We want to open two positions, as price pushes up into your supply zone it leaves an
area of demand.
This area with a push up should have a zone placed incase price began to reverse off that
demand zone on the way down from your supply zone.

This zone is where you would close your first entry to be safe.
Let your other position that was opened at the same time as the last one run to the
furthest and bigger demand zone. We can use the 1H to do this also the 15M.

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HOW TO SCALE IN

This gets the most out of a winner. This is mostly done on the 5M. We would have
already been in using the 1H, then we go in on the lower TF like the 15M or 5/3M.
We will be looking for another supply zone within our trade that’s already open.
The scale you would usually risk less around 0.5%.








You would like the zone on the 5M TF for price to tap in with a strong rejection. These
will have a tighter SL increasing RR.

CONFLUENCES

FUNDAMENTALS

Go to forexfactory.com, the only two boxes you want checked is the red and orange
folders. Check this every Monday morning before you take a trade.

Anything red you must be aware of. The pair may not move as it is waiting for the news
event to push the market.
Your set up may be manipulated by the news event best not to trade.

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LIQUIDITY

Highs & Lows Liquidity

When we make higher highs or lower lows, majority of people place their stop losses
below these which causes a large amount of liquidity in those areas.

Ranging Liquidity

The market here is generating liquidity for its next move, with a lot of buys or stops on
both levels this gives price the power to move into its next direction.

Trend Line Liquidity

We know if it’s going to break this trend line it’s going to drop sharply as many traders
would have stops on these levels.

Key-Level Liquidity









You can use liquidity grabs for when liquidity is built before a key zone, e.g., liquidity is
built before a key supply zone, it breaks the liquidity line touches the zone and drops.

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IMBALANCE IN THE MARKET

This is where the market has moved irrationally breaking market structure which then
has to go back to fill in gaps back in the market. Usually, one or two large candles with
huge momentum.

Here you can see in an uptrend the market has hit our demand zone with extra
confluence. The imbalance in the market is shown in the leg down breaking market
structure to the left.
This gap must push price back up to refill the gaps in the market. As soon as the gap was
filled price dropped.

HEAD & SHOULDERS

We draw a supply zone on the right shoulder and wait for retest on the 4H.

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THE MONEY CANDLE

This candle will break the high of the previous candle on our supply zone and take
people out then goes back down again in the direction we anticipated it was headed
breaking the low of the previous candle.
We can use this candle for our second entry that would have the higher RR.

BEAR FLAGS

Once we see a strong leg down, we identify a supply zone on the 15M or 1H TF, we wait
for price to climb back to the zone as price breaking back down is very high.

3 PIN FORMATION

The higher TF the higher probability the pattern works. Preferably the Daily and nothing
lower than the 4H. We would like to see this at a key level.
Middle candle needs to be a rejection
candle.
Entry will be at break of middle candle.
Stop loss would be placed above the
wick of the middle candle.

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DXY

DXY is the U.S. Dollar Index, and it is an index of the value of the U.S. dollar relative to a
basket of foreign currencies
This has a strong correlation with any USD pairs we are going to be trading.
On the DXY chart place alerts on key even levels such as 94.100, 94.200, 95.000. price
usually bounce off these prices which may give you some confidence before entering a
trade that may be at supply zone while the DXY is going to hit a major price.

FOREX SENTIMENT TOOL

Majority of people lose money in forex. Most traders like to trade reversals. Do not enter
if majority of people are going short/long as most of them will lose.
Instead draw a zone in the opposite of people’s majority and wait. E.g., everyone going
long, we draw a supply zone and wait to go short.
EUEAUD trend is downwards while majority are going for a buy, we sell at our supply
zone increasing likely hood of the price going in our direction not the majority.
When entering be very patient as price may go into their direction but drop & stop out.

The sentiment we would be focusing on, are pairs with an 80/20 split.

SUMMARY

1. Check market direction on the Daily.

2. Check for supply zones on the 4H which have broken market structure.
3. Depending on how big the zone is on the 4H you can refine it on the 1H.
4. Check 1H for a good rejection candle.
5. Check 15M & 30M for a lot of wick rejections.
6. Wait for 3 pin formation on 15M.

If you struggle to go long, you can flip the charts to view it as if it’s going down. ALT + I

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