EU: Trade breakdown from Thursday. Have you seen my signal?
Let's see how you can capitalize on potential price moves, and how I have executed on this EU move (forecasted here publicly btw, see previous post).
The first and most important thing is our higher timeframe bias, and the higher time frame draw on liquidity.
In the previous post I've marked out the 4h potential areas. The 4h areas came from the daily timeframe (It is hard to imagine so I advise you to look up EUs Daily chart) What I saw on the daily is a huge fair value gap, a bearish one downside. It origins from a consolidation so it brings more weight. We frame our direction around that momentum move. If price is printing gaps like that, and the following daily candle is a consolidation candle, meaning its close is higher than the momentum candles low, it is highly possible that we will sting up to the gap. When this consolidation candle printed, and validated the creation of the daily fair value gap, I looked for potential draws on liquidity, either up and down.
Which draws on liquidity is the nearest? If price is seeking for lower prices, where can it go lower from?
Price has to offer fair value. It has to give a chance for each participants of the market. It has to be efficient. So I always anticipate a move up into inefficient areas/ranges of price, if we have this kind of price action.
So overall we have a bearish bias, based on the higher timeframe. We have two draws on liquidity. One is a move up into the daily gap to offer chance for buyers to their job. Two is a decline lower, to continue the bearish momentum. Now we can go lower in timeframes.
In the 4h chart we can mark up more refined areas of interest. In the form of a 4h gap to be exact. And nooow finally it's on the chart!! What we saw from midnight open up to 4:30 am is a clear AMD setup (NYC time).
Accumulation - Manipulation - Distribution
This next section is really important guys.
We can see price accumulating orders below our point of interest. This is a KEY momentum! We had marked up the 4h gap before, from where we anticipate a decline. When we see this kind of price action during Asian range (consolidation below a higher timeframe key level), we want to see a sharp move up, deeper into the key level, soaking up the orders accumulated during Asian session. If that has happened, the next thing we would want to see is a sharp move out of it, to the opposite direction. A move with big momentum, creating bearish fair value gaps and disrespecting bullish ones, created before. That is the sign, that we indeed offered fair value on the higher timeframe and took liquidity on the lower timeframe.
That is what we need, that is what we want to see
The move upside during London session, will be the upper wick of a bearish daily candle. That is the place where we want to sell. Or at least we try to sell the wick, if we get the conformations. And a quick side note here, do not fomo in on the displacement leg lower (Which is kinda what I did with the first 4 lot position). It's not a mistake, but with patience and fearless execution we could get waaay better entries and waay better RR trades. Anyway, at least I managed to scale in one more time on the retracement. You can see that this trade recap on the chart is the hindsight/best case scenario/best possible execution kind of thing. This is not for fooling you guys. This is for you and me to learn from our mistakes. Even if the position made a decent profit, with studying the execution we can improve and learn so much. During live trading, emotions are inevitable. The only thing that helps overcome the difficulties caused by emotions is a strict trading plan, back by data and experience like this. So when you know you are in an emotional state and you fear that you would do something stupid out of a thin air just because of the state of mind you are in, you can reach for your plan to guide through. I'm still improving and I always will. That's the way it goes, and I'm in love with this process. Okay enough rant, sorry!
Where were we? 15m displacement lower right? Thats the sign when I place my finger to the trigger. I pull up my fibonacci tool, and measure 50% of that displacement leg lower, from the Asian liquidity raid. I look for premium arrays, from where price can go lower. It's kinda funny how fractal price action is, because if you think about it, that is what we looked for on the higher timeframe too. Anyways! In this setup, there were two nice entries. One is at the breaker block (which is on the chart) and the other is at the 15m balanced price range. That is the purple dashed line. We do not want to see price closing inside of that range (above the dashed line). If it seeks for lower prices, than there is no point for closing inside an area, where both buy and sell side were offered. So that became my invalidation point. Once I see a candle closing inside that, I cut my trade in a loss. I do not even allow my stops to do it's job. I cut my loss early. In that scenario my understand of reading order flow is saying that something is not matching up with this bearish move. I do not want to have open risk for a bearish move on something, that is showing signs of bullishness. But as we can see price just wicked above and that is okay. Candle closure is universal price, wicks are just broker things. "...the bodies tell the story, wicks are doing the damage". as the GOAT once said.
So! Entry on the 50% retracement or above, from any premium array basically. The lower it is, the more probable you get filled. The higher it is, the less chance you can catch the move.
The next thing is, that you have to trust in your trade when it supports your understanding of order flow. You have to realize when a trade is in your favour or when it's disrespecting your direction. You have to have clear rules of how you manage trades. Mine here, was mainly managed by 15m order flow of EU and 1h order flow of DXY. Closing 4 lots "early" was because we hit a 1h premium array (fvg) on the DXY chart. We could have seen a deep retracement from there. As we say "pay the trader at speed bumps". Do we say that tho? I like it... I should say that more often. (Oh and the picture of the execution is Budapest time, not NewYork)
I closed out the majority of my position during that long consolidation phase, cause do not like to hold big positions after 10:30 or 12:00 (NYC). I've left a 1.5 lot runner for the rest of the week in case it rips to the downside, but eventually it stopped out at breakeven.
Am I unhappy, cause I could have made 3 times that if I do a full-pull? No not really, there were a bunch of things that I've learnt, and that's the real value. And it could easily went for my stops at any time. So I'm more than okay with this position.
Please let me know if you could find any value in this. It is more like my chaotic journal shared publicly. It's kinda all over the place I know, but I'm busyyyy man.
Okyyy be safe let me know if you have any questions, (or want more proof of this position lol). byyyyyy
The first and most important thing is our higher timeframe bias, and the higher time frame draw on liquidity.
In the previous post I've marked out the 4h potential areas. The 4h areas came from the daily timeframe (It is hard to imagine so I advise you to look up EUs Daily chart) What I saw on the daily is a huge fair value gap, a bearish one downside. It origins from a consolidation so it brings more weight. We frame our direction around that momentum move. If price is printing gaps like that, and the following daily candle is a consolidation candle, meaning its close is higher than the momentum candles low, it is highly possible that we will sting up to the gap. When this consolidation candle printed, and validated the creation of the daily fair value gap, I looked for potential draws on liquidity, either up and down.
Which draws on liquidity is the nearest? If price is seeking for lower prices, where can it go lower from?
Price has to offer fair value. It has to give a chance for each participants of the market. It has to be efficient. So I always anticipate a move up into inefficient areas/ranges of price, if we have this kind of price action.
So overall we have a bearish bias, based on the higher timeframe. We have two draws on liquidity. One is a move up into the daily gap to offer chance for buyers to their job. Two is a decline lower, to continue the bearish momentum. Now we can go lower in timeframes.
In the 4h chart we can mark up more refined areas of interest. In the form of a 4h gap to be exact. And nooow finally it's on the chart!! What we saw from midnight open up to 4:30 am is a clear AMD setup (NYC time).
Accumulation - Manipulation - Distribution
This next section is really important guys.
We can see price accumulating orders below our point of interest. This is a KEY momentum! We had marked up the 4h gap before, from where we anticipate a decline. When we see this kind of price action during Asian range (consolidation below a higher timeframe key level), we want to see a sharp move up, deeper into the key level, soaking up the orders accumulated during Asian session. If that has happened, the next thing we would want to see is a sharp move out of it, to the opposite direction. A move with big momentum, creating bearish fair value gaps and disrespecting bullish ones, created before. That is the sign, that we indeed offered fair value on the higher timeframe and took liquidity on the lower timeframe.
That is what we need, that is what we want to see
The move upside during London session, will be the upper wick of a bearish daily candle. That is the place where we want to sell. Or at least we try to sell the wick, if we get the conformations. And a quick side note here, do not fomo in on the displacement leg lower (Which is kinda what I did with the first 4 lot position). It's not a mistake, but with patience and fearless execution we could get waaay better entries and waay better RR trades. Anyway, at least I managed to scale in one more time on the retracement. You can see that this trade recap on the chart is the hindsight/best case scenario/best possible execution kind of thing. This is not for fooling you guys. This is for you and me to learn from our mistakes. Even if the position made a decent profit, with studying the execution we can improve and learn so much. During live trading, emotions are inevitable. The only thing that helps overcome the difficulties caused by emotions is a strict trading plan, back by data and experience like this. So when you know you are in an emotional state and you fear that you would do something stupid out of a thin air just because of the state of mind you are in, you can reach for your plan to guide through. I'm still improving and I always will. That's the way it goes, and I'm in love with this process. Okay enough rant, sorry!
Where were we? 15m displacement lower right? Thats the sign when I place my finger to the trigger. I pull up my fibonacci tool, and measure 50% of that displacement leg lower, from the Asian liquidity raid. I look for premium arrays, from where price can go lower. It's kinda funny how fractal price action is, because if you think about it, that is what we looked for on the higher timeframe too. Anyways! In this setup, there were two nice entries. One is at the breaker block (which is on the chart) and the other is at the 15m balanced price range. That is the purple dashed line. We do not want to see price closing inside of that range (above the dashed line). If it seeks for lower prices, than there is no point for closing inside an area, where both buy and sell side were offered. So that became my invalidation point. Once I see a candle closing inside that, I cut my trade in a loss. I do not even allow my stops to do it's job. I cut my loss early. In that scenario my understand of reading order flow is saying that something is not matching up with this bearish move. I do not want to have open risk for a bearish move on something, that is showing signs of bullishness. But as we can see price just wicked above and that is okay. Candle closure is universal price, wicks are just broker things. "...the bodies tell the story, wicks are doing the damage". as the GOAT once said.
So! Entry on the 50% retracement or above, from any premium array basically. The lower it is, the more probable you get filled. The higher it is, the less chance you can catch the move.
The next thing is, that you have to trust in your trade when it supports your understanding of order flow. You have to realize when a trade is in your favour or when it's disrespecting your direction. You have to have clear rules of how you manage trades. Mine here, was mainly managed by 15m order flow of EU and 1h order flow of DXY. Closing 4 lots "early" was because we hit a 1h premium array (fvg) on the DXY chart. We could have seen a deep retracement from there. As we say "pay the trader at speed bumps". Do we say that tho? I like it... I should say that more often. (Oh and the picture of the execution is Budapest time, not NewYork)
I closed out the majority of my position during that long consolidation phase, cause do not like to hold big positions after 10:30 or 12:00 (NYC). I've left a 1.5 lot runner for the rest of the week in case it rips to the downside, but eventually it stopped out at breakeven.
Am I unhappy, cause I could have made 3 times that if I do a full-pull? No not really, there were a bunch of things that I've learnt, and that's the real value. And it could easily went for my stops at any time. So I'm more than okay with this position.
Please let me know if you could find any value in this. It is more like my chaotic journal shared publicly. It's kinda all over the place I know, but I'm busyyyy man.
Okyyy be safe let me know if you have any questions, (or want more proof of this position lol). byyyyyy