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Profitable Liquidity Based Trading (Install TradingView and MetaTrader 4)…
Profitable Liquidity Based Trading
(Install TradingView and MetaTrader 4)
Trends
Candlesticks
Charts
Charts
show price movement through
candlesticks
Google changing charts in tradingview
Bodies
Red body = price went down & price opens at the top of rectangle and closes at the bottom
Green body = means price went up & price opens at the bottom of rectangle and closes at the top
The rectangle is the
body
Wicks
The lines above and below the
body
Price moves here during the time represented by candlestick, but does not end up closing here
Timeframe
5m timeframe = Candlesticks represent 5 minutes price movement 1D timeframe = Candlesticks represent 1 day price movement etc, etc
Google changing timeframe in tradingview
Patterns
Most of these are utter bullshit:
Dogis
and
Hammers
are valid. Simply really long
wicks
on any candle, showing extreme but weak market pushes. Often shows
liquidity
being taken
Indecision in the market with a bias in wick direction
OFTEN LEADS TO REVERSAL
Find 10 examples of movement following
dogis
and hammers
NOT ENOUGH FOR TRADES
. Useful to know
Candlesticks are not valid until they close
Higher high, higher low or vice versa
Make and write a prediction for the weekly, daily, and today, then use the forecast tool to draft an imaginary trade. 1 or 2 stocks.
Regardless of candle color, the
highest or lowest wick
is the "low" or "high"
Break of Structure
Find 10 examples of true BOS, and 10 of fake BOS
Identify HTF (high time frame) trend (ex 4h), and wait for LTF (ex. 15m) reversal (BoS into HTF trend)
Candle
body closure
past a wick high or low which differs from current trend, often reversing the market
DO NOT TRADE AGAINST THE HTF TREND, TRADE WITH MOMENTUM
Identify trend
If in down trend watch the highs
Candle Closure above
most recent
high is a break of structure
If in uptrend watch the lows
Candle closure below
most recent
low is a break of structure
Step 2 in shift
Liquidity
Liquidity Sweep
Identify liquidity, and look for
confirmations
of a liquidity sweep (ex BoS) at that point to place trades
Lows passed in downtrend: Looking for upside Liquidity Sweep
Highs passed in uptrend: Looking for downside Liquidity Sweep
Identify 10 liquidity sweeps and how market responds, how could this make you more confident in a trade?
https://youtu.be/_Fkofoggjv4?si=8fau6Ep_sdZ9LN_f
Step 1 in shift
Prominent high or low before shifts in trend, an absolute MAGNET for price
Set
take profits
here
Application to our strategy is circled
Homework for noobs is rectangular
Risk management
1-3% account balance risk per trade, max of 3% risk a day
You're going to lose money in the beginning, you will not get rich quick.
You are paying to learn, don't repeat your mistakes, focus on learning the skill, and you will see profit
News
Check the news relevant to your pair(s) on Forexfactory.com
ALWAYS AVOID: CPI, PBI, FOMC, NFP/ANYTHING NON-FARM, MANY FOLDERS IN A DAY
Wait to trade until after red color news in your pair, and only if market does not respond
Look at "usual effect" and compare to actual vs forecast
XXX/USD: "Good for currency" (USD) stock goes down
Not reliable to trade on prediction alone
GBP/XXX: "Good for currency" stock goes up
Retracement
Order Block
Best entry behind LIQ/BOS
Market move in opposite direction prior to LIQ sweep (once per shift) which market often retraces to
Starts at beginning of trend change, ends at BOS
Fair Value Gap
Candle body area untouched by wicks. Price magnet, causes a later retracement before continuation (NOT REVERSALS)
A.) Use FVG's as confirmation of movement intent, not entries
Create fake trades based on FVGs in the market
B.) Scale to lower time frame (LTF) and look for shift of trend (BOS etc)
Market reverses in the middle of larger trend, and then continues along larger trend
Catch these for profitable entries
Equilibrium
Anything below 50% of a whole trend is discounted price for banks to retrace with (not entry, just confluence)
Ideal range for action, avoid "premiums" (the opposite )
Market pushes past previous high or low (liquidity) and then reverses (sweeps)
EVERY TIME FRAME
Look for 10 liquidity sweeps in any time frame
