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My trading strategies : Trade against the trapped trader!STRAT 11 : Basic premise As price continues in a trend, more and more traders keep piling into the same direction, hoping that the trend will continue and they will make money. However, at some point, the trend sharply reverses, breaking the market structure in opposite direction and trapping a whole bunch of retail traders in the direction of trend which just got reversed. We create a zone which identifies these trapped traders and then patiently wait for them to exit, and trade with limit orders in the direction of their exit. You can add additional confirmation signals from DXY's directions for the instruments which are highly correlated to DXY (EURUSD, USDCHF, etc)
COINBASE:BTCUSDEducation
by makuchaku
3
How to draw a trade zone for false breakout / liquidity hunt?Once you spot a location to trade from (be it a liquidity hunt, or a false breakout + market structure break) - that's only half of the job. The next most important step is to draw a correct zone which gives you a safe and reliable way to enter and define your risk. I've always found that drawing zones which help you define your entry & risk is an art, more so than science. And this doesn't work for me - because if it's not driven by a process, I'm bound to make mistakes in this important step. Hence, I wanted it to be more defined - to the level that it could be given to a programmer who could code it. Primary method of drawing the zone 1) Find the candle that generated the signal 2) Draw a rectangle into left side of price on the signal candle (green rectangle) For SHORT signal => 3) Draw (yellow) zone using the highest + last UP candle which exited this rectangle For LONG signal => 3) Draw (yellow) zone using the lowest + last DOWN candle which exited this rectangle 4) If the candle right after signal candle does not test this zone, then trade this zone as a signal - ELSE - look for the secondary way of drawing the zone Secondary method of drawing the zone 1) Find the signal candle and look left of it For SHORT signal => 2) Draw zone using last UP candle which broke an HH pivot For LONG signal => 2) Draw zone using last DOWN candle which broke an LL pivot 3) Discard the zone if price revisited that zone before giving the signal There are many reasons why these zones work (if your overall trade is correct) - These will be the candles which are guaranteed to be engulfed by the signal making candle - If these are institutional trades, most likely it's here where they set the fakeout trap. Hence, when price comes back to these zones, they have no need to take prices beyond your stop loss as there's no more liquidity there - If these are those amateur folks who were trading the breakout, this is where the smartest of them bought/sold and will be the first in line to exit If you have feedback on how to improve this zone drawing process, please leave your feedback in the comments below. Cheers!
Education
by makuchaku
Easiest Set up for high probability trades. GBPAUD +50 pipsMorning everyone here is a beautiful example of a 50 pip trade on GBPAUD during the London session. The pound has been dropping over the course of the week, so when it comes to Wednesday ( mid-week ) we can look for the midweek reversal inline with the market maker cycle. combined with round and quarter levels you can see the zones in which the market is trading. In Asia, we see a big shift into the upper zone. Trapping short traders. London dropped to pick up spending and stops before giving us a classic W formation. For entry, wait for the neck to be broken and set your stop loss for -20 pips ( Unless its GJ then the stop is 25 pips ) Why GBP pairs? well, they have the largest ADR, meaning its most likely we can catch the 50 pips a day. Very simple and very effective strategy, trade inline with the whales and market makers, avoid the traps and watch your trading improve exponentially. Feel free to leave a comment. Davie.
Education
by davieovermeer