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Imbalance

Closing Auctions: How Order Imbalances Shape Market Prices█ The Final 15 Minutes: How Closing Auctions Determine Market Pricing Every trading day ends with one of the most crucial events in financial markets — the closing auction. While many traders focus on intraday price movements, understanding the dynamics of closing auctions can provide valuable insights and profitable trading opportunities. █ What Are Closing Auctions? Closing auctions are special trading sessions held at the end of the day across major and minor exchanges worldwide. They determine the official closing price of securities based on Market-on-Close (MOC) and Limit-on-Close (LOC) orders submitted before the market officially closes. These auctions are essential because institutions, index funds, and ETFs use the closing price for portfolio valuation, index tracking, and arbitrage strategies. In recent years, closing auction volumes have surged, now accounting for about 11% of total daily trading volume. █ Why Have Closing Auctions Grown in Importance? The increasing popularity of Exchange-Traded Funds (ETFs) is one major factor behind the growth of closing auctions. ETFs must ensure their prices align with the net asset value (NAV) of their holdings, and arbitrageurs use the closing auction to correct price imbalances. Additionally, large institutional investors prefer closing auctions to execute substantial trades with minimal market impact. These factors have led to a rise in order imbalances — where buy and sell orders significantly diverge — during the closing session. █ How Do Order Imbalances Affect Prices? Studies have found that stocks with large order imbalances tend to experience price distortions in the last 15 minutes of trading. Stocks with high buy imbalances typically outperform those with high sell imbalances during this period. However, about 83% of this price impact reverses over the next three to five days, suggesting a short-term trading opportunity. ⚪ Example: At 3:55 PM, the exchange releases imbalance data: Buy Imbalance: +500,000 shares (demand is high) Sell Imbalance: -200,000 shares (supply is lower) Since there are more buy orders than sell orders, buyers are forced to increase their bid prices to get filled. As a result, the price moves up sharply, reflecting the strong demand. This is exactly what we see in the chart—the buy-side midpoint jumps higher than the sell-side midpoint drops, confirming a buy-heavy imbalance in the closing auction. █ A Profitable Trading Strategy Based on Order Imbalances Based on historical data, traders can exploit these patterns using two different strategies: ⚪ Momentum Strategy (Short-Term): Buy stocks with the largest buy-side imbalances and short stocks with the largest sell-side imbalances 15 minutes before the market close. Close positions at the market close. ⚪ Reversal Strategy (Over Multiple Days): Do the opposite—short stocks with the highest buy imbalances and go long on stocks with the highest sell imbalances at the close, holding positions for about five days. Backtests of this strategy show that the momentum approach can yield approximately 32 basis points per trade, translating to an annualized return of 80% when executed systematically. However, traders must account for transaction costs and slippage. █ Real-World Example: NYSE Closing Auction Data for AAP (02/20/2025) To better understand how closing auction imbalances impact price movements, let's analyze the NYSE imbalance data for AAP on February 20, 2025. The data provides three key insights: Imbalance Trends: At 15:55 and 15:56, AAP had significant sell imbalances (-40,849 and -40,718, respectively). However, this shifted at 15:57, showing a smaller sell imbalance (-13,023), followed by a net buy imbalance at 15:58 (+11,403) and 15:59 (+6,764). The final imbalance before dissemination was -34,286. Paired Quantity Increase: The paired quantity, representing executed trades, consistently increased from 258,135 at 15:55 to 311,382 by the final dissemination, indicating heightened auction activity as the market prepared to close. Impact on Clearing Price: AAP's price began at $42.17 but surged to $44.66 by 15:58, aligning with buy imbalances. However, the price slightly retraced to $44.34 at final dissemination, reinforcing the tendency for short-term reversals after strong closing auction moves. This example highlights how traders can monitor closing auction imbalance data to anticipate price behavior in the final minutes of trading. For a more interactive exploration, check out the NYSE’s Closing Auction Imbalance Analysis Tool. █ What Does This Mean for Retail Traders? Pay Attention to the Closing Session: Many traders overlook the last 15 minutes of the market, but this period offers crucial insights into order flows and institutional activity. Watch for Order Imbalances: Exchanges like the NYSE release imbalance data at 3:45 PM, giving traders a window to react before the market close. Avoid Chasing Closing Prices: Since price reversals are common, buying into a strong closing auction rally may lead to short-term losses. Use Data & Tools to Your Advantage: Platforms like Polygon.io provide real-time and historical imbalance data, which can enhance trading decisions. █ Key Takeaways Closing auctions play a crucial role in determining end-of-day prices, affecting institutional strategies and index valuations. Order imbalances in the last 15 minutes of trading can create short-term price distortions, often reversing in the following days. Traders can capitalize on these imbalances using either a short-term momentum strategy or a multi-day reversal strategy. Understanding and leveraging closing auction dynamics can provide a significant trading edge. Closing auctions are more than just an end-of-day formality—they reveal important market sentiment and provide trading opportunities. Whether you are a day trader looking to capitalize on short-term price movements or a swing trader seeking to exploit reversals, understanding the role of order imbalances in closing auctions can give you an edge in the market. By incorporating these insights into your strategy, you can navigate the complexities of the market more effectively and make more informed trading decisions. ----------------- Disclaimer The content provided in my scripts, indicators, ideas, algorithms, and systems is for educational and informational purposes only. It does not constitute financial advice, investment recommendations, or a solicitation to buy or sell any financial instruments. I will not accept liability for any loss or damage, including without limitation any loss of profit, which may arise directly or indirectly from the use of or reliance on such information. All investments involve risk, and the past performance of a security, industry, sector, market, financial product, trading strategy, backtest, or individual's trading does not guarantee future results or returns. Investors are fully responsible for any investment decisions they make. Such decisions should be based solely on an evaluation of their financial circumstances, investment objectives, risk tolerance, and liquidity needs.
OANDA:NAS100USDEducation
by Zeiierman
1
Trading EURUSD and AUDUSD | Judas Swing Strategy 18/02/2025The previous trading week wrapped up on a profitable note, delivering solid gains. We had the opportunity to take four trades on GBPUSD, NZDUSD, and AUDUSD, while EURUSD was the only pair that didn’t present any setups. Out of these four trades, three were winners, and only one resulted in a loss, allowing us to close the week with a 5% return. With such strong results, we were eager to see what opportunities this trading week would bring. By Tuesday, we had already taken two trades, and in this post, we’ll walk you through how they played out At 08:55 EST, both EURUSD and AUDUSD experienced a liquidity sweep, clearing out liquidity resting at the lows of their respective zones. This sweep on the lows directed our focus toward potential buying opportunities for the session on both pairs After patiently waiting, all our trade entry requirements aligned for both currency pairs, giving us the green light to execute. If you're wondering what our entry criteria are, here’s our checklist: 1. Break of structure to the upside 2. A Fair Value Gap (FVG) must be formed 3. Price must retrace into the FVG We don’t take trades unless all three conditions are met—no exceptions. Even if two out of three align, we stay on the sidelines. This disciplined approach helps us focus only on high-probability setups, increasing our edge in the market After execution, EURUSD wasted no time, hitting our take profit in just 1 hour and 25 minutes. AUDUSD had barely reached 1R within the same timeframe, signaling that this trade would require more patience. We were completely fine with this because we always risk only what we can afford to lose, which helps us stay detached from the outcome—win or lose. Plus, with EURUSD already securing a 2% gain, even a 1% loss on AUDUSD wouldn’t significantly impact our overall performance. Now, it’s just a matter of staying patient and letting the trade play out. This trade truly tested our patience. After a period of consolidation, it finally moved in our favor, allowing us to lock in a 2% gain after 15 hours and 15 minutes. Our total gain for the day reached 4%, making the session a solid success
by CleoFinance
Trading AUDUSD and NZDUSD | Judas Swing Strategy 12/02/2025Last week was a slow one for the Judas Swing strategy, as we didn’t get any trades on the four currency pairs we trade (GBPUSD, AUDUSD, EURUSD, NZDUSD). We stayed disciplined and didn’t deviate from our plan and avoided chasing trades that didn’t align with our checklist. To reach a point in your trading journey where you no longer chase trades is a significant milestone traders need to take note of. It helps prevent overtrading and unnecessary losses outside your system. After that slow week, we were eager to see what opportunities this week would bring. By Wednesday, two promising setups emerged on AUDUSD and NZDUSD. Now, let’s walk you through how these trades played out We usually get to our trading desk 5 minutes before our trading session begins. By 08:30 EST, our trading session had started, and we were on the lookout for potential opportunities. By 09:00 EST, we saw a sweep of liquidity at the lows of both NZDUSD and AUDUSD, this was our signal to start watching for potential buying setups. But before we take any buy positions we need wait for these conditions to be met: 1. Break of structure to the buy side 2. A Fair Value Gap (FVG) must be left behind 3. Price must retrace into the FVG Until all three conditions align, no trade is taken. Even if two out of three are met, we stay on the sidelines. Following this plan ensures we only take high-probability setups. At this stage, we were waiting for price to break structure to the upside our key confirmation to enter the trades. After waiting patiently, all the conditions on our checklist aligned, giving us the green light to execute while managing our risk. We risk 1% per trade with a target reward of 2%, meaning our total risk across both trades was 2%, with an expected return of 4%. Sticking to this structured approach ensures we maintain consistency and discipline in our trading These trades felt like the kind of sniper entries most traders dream of, minimal to no drawdown, with price moving directly to our targets. NZDUSD hit our target at 0.56292 in just 55 minutes, and AUDUSD mirrored this precision, reaching 0.62647 in the same timeframe. Given their strong correlation, it’s no surprise that both pairs moved in sync, reinforcing the power of well-planned setups. Our patience paid off, as these trades delivered a solid 4% return.
by CleoFinance
Update: EUR/USD Downward Movement to Continue?In my previous analysis, I highlighted the potential for bearish continuation, targeting the sell-side liquidity (SSL) below. As anticipated, the price respected the retracement into the Daily FVG and Fibonacci zones, sweeping liquidity by taking out the highs. This reaction confirmed bearish intent. On the lower timeframes, a clear entry opportunity emerged, and the pair has since moved lower, heading toward the anticipated SSL target. The bearish structure remains intact, with the next key area of interest around the liquidity pool below. This setup took a week to deliver an entry, but the rewards were definitely worth the wait! This goes to show that patience is essential in trading—there’s absolutely no need to trade every day to succeed. Trade safe!
Short
by jp7fx
1
EUR/USD Downward Movement to Continue?The EUR/USD pair continues to show bearish potential on the daily timeframe. While Friday's high could be taken as part of a retracement, the overall trend remains bearish. There is a potential move toward the sell-side liquidity (SSL) below, aligning with unmitigated imbalance zones and market structure. Watch for price reaction in and around the Daily FVG level and the Fibonacci retracement zones for a potential bearish setup on the lower timeframes. Trade Safe ;)
Short
by jp7fx
1
Silver Bullet Strategy EURUSD AUDUSD | 03/12/2024Trading the Silver Bullet strategy was tough yesterday. While many may only discuss the wins associated with their trading strategies, we encountered some losses yesterday. We entered two trades on two major currency pairs (EURUSD, AUDUSD) and aim to walk you through what happened during our trading session using the Silver Bullet strategy. At 10:00 EST, we began scouting for potential trading setups, as this marks the beginning of the Silver Bullet window, which concludes at 11:00 EST. By 10:20 EST, a Fair Value Gap (FVG) had formed on the EURUSD currency pair, presenting us with a sell bias and directing our attention to potential selling opportunities in EURUSD for the current trading session. Upon reviewing AUDUSD, we observed that an FVG had also formed at 10:20 EST, further indicating a sell bias for the currency pair. Once we establish a bias, we typically wait for a retracement into the formed FVG and only execute the trade after the candle that enters the FVG has closed. This step is crucial on our checklist because our backtesting revealed scenarios where the candle entering the FVG could proceed to hit the stop loss. This check helps us avoid entering trades under such conditions. Meanwhile, those who use limit orders may find themselves at a disadvantage in these situations. After a 20-minute wait following the formation of the FVG, we identified a trade on EURUSD that satisfied all the criteria on our checklist, and without hesitation, we proceeded to execute the trade. In this trade, since the high of candle number 1 from the entry price is approximately 7 pips, which does not satisfy the minimum stop loss requirement, we adjust it to a 10 pips stop loss, our minimum threshold. This rule ensures the trade has sufficient room to fluctuate. Immediately after executing the EURUSD trade, we identified another opportunity with AUDUSD that met all the criteria on our checklist. As it fulfilled the necessary requirements, we proceeded without hesitation to execute the trade. Please be aware that we risk 1% of our trading account on each trade. This level of risk is acceptable for us, as it's an amount we're comfortable with potentially losing, thus preventing emotional attachment to the trades. Ten minutes after initiating a sell position on EURUSD, our trade reached the stop loss, resulting in a 1% loss for the day. Consequently, we are left with our sell position on AUDUSD. After incurring a loss on EURUSD, we examined the AUDUSD position and found that this trade was also facing a drawdown. Did we experience any emotions upon realizing we might lose 2% that day? No, because we had already accepted the risk and were prepared for any outcome, whether it was a win or a loss. We were aware that the strategy's win rate was around 48%, indicating that losses are a part of the process. However, with a positive risk-to-reward ratio, our wins are expected to outweigh the losses. While awaiting the outcome of the AUDUSD trade, we noticed a setup on USDCAD where a Fair Value Gap (FVG) had formed. However, upon closer inspection, we realized it materialized exactly at 11:00 EST. This timing meant we couldn't engage in the trade, as our checklist mandates that trades must be executed before 11:00 EST, thus invalidating this setup. It's important to note our discipline here; despite the temptation, we didn't enter another trade out of revenge. Instead, we let it pass because it failed to meet certain criteria on our checklist. Discipline is a crucial quality of a successful trader and should never be underestimated. Upon reviewing the AUDUSD trade once more, we observed that it was no longer in a drawdown; instead, the trade had returned to our entry price. Consequently, there was no action required other than to allow the trade to proceed as it will After being in the trade for an hour and 10 minutes, the AUDUSD position hit the stop loss, putting us down 2% for the day. Indeed, we took two losses and it's likely we'll face more, as that is the nature of trading. It's normal to encounter multiple losses throughout your trading career, and it's crucial not to let them discourage you. Ensure that any strategy you use has been thoroughly backtested and has the data to support its long-term profitability. Also, make certain that your wins consistently exceed your losses, so that during a losing streak, just a few wins can compensate for the losses.
Education
by CleoFinance
1
EUR/CHF Trade Setup1️⃣ Market Context: EUR/CHF recently tapped into a supply zone between 0.9330–0.9335, where sellers showed clear dominance. The current structure suggests a bearish bias as the price begins to reject this zone, indicating a potential downside move. 2️⃣ Liquidity Grab: The move above 0.9330 likely cleared liquidity from previous highs, trapping buyers and providing fuel for a bearish continuation. This strengthens the short bias. 3️⃣ Supply Zone: The rejection from the supply zone highlights this area as a high-probability region for initiating short trades. It aligns with a previous imbalance and liquidity pocket. 4️⃣ Volume Confirmation: The Volume Profile indicates significant activity near 0.9330, where price has struggled to break higher. This confirms strong sell-side interest at these levels. 5️⃣ Fibonacci Confluence: This zone also aligns with the premium retracement area from a larger downtrend, adding confluence for a potential reversal. 6️⃣ Trade Idea: Looking for a short position targeting the next demand zone around 0.9300. This is where significant buy-side interest previously emerged. Entry: Around 0.9330 Target: 0.9300 Stop Loss: Above 0.9345 This setup leverages clear technical confluences, including supply rejection, liquidity grabs, and strong volume areas.
Short
by Safaric
7
Trading EURUSD this week | Judas Swing Strategy 25-27/11/2024The Judas Swing strategy has recently seen a surge in activity. After experiencing a week of losses, it rebounded last week with a 1% gain. This week appears promising, as a setup emerged on Monday, positioning us to take advantage of the opportunity that presented itself After observing a sweep of liquidity at the high of the trading zone, we shifted our focus to look for potential selling opportunities. However, to capitalize on a clear setup, we require a break of structure to the sell side. This price leg must create a Fair Value Gap (FVG), and a retracement into this FVG will assist us in securing an entry point for the trade. At 10:30 EST, all the criteria on our entry checklist were met, allowing us to proceed with the trade. Upon entering this trade, we experienced minimal drawdown, which is the ideal scenario every trader seeks. Sniper entries are highly coveted, but it's important to recognize that they won't occur with every trade. Therefore, it's essential for traders to allow their trades sufficient space to fluctuate and to place their stop-loss at a point where, if triggered, it signifies the invalidation of the trade setup We were in this trade for just 1 hour and 15 minutes, and with only a 1% risk, it yielded a 2% return for the day On Tuesday, we returned to scout for trading setups, but unfortunately, none emerged that matched the Judas swing strategy, so we took no action. Notice what we did? Nothing. And why? Because no trade setup fulfilled the criteria on our checklist, and we didn't force any trades. Whenever a trade doesn't meet your checklist requirements, avoid forcing a trade. The likelihood of regretting that decision is high, and even if a forced trade happens to win, it means you're developing a bad habit that could haunt you later on We showed up on Wednesday to scout for trades again and late in the session a setup started forming. We got a sell bias early but getting a confirmation for sell trade took forever to form, but when we got that confirmation we didn't hesitate to take this trade. We entered a sell for this trade setting our Stop loss at 1.05788 and our TP at 1.05383 After executing the trade, the subsequent bullish candle, which was a bullish marubozu, went straight to our stop loss and then reversed in our intended direction. However, since our stop loss was triggered, it marked the end of our trading day. According to our rules, we do not re-enter the trade. We accept the 1% loss with dignity and prepare to trade another day. This loss means that we are now only 1% in profit on EURUSD for the trading period from November 25th to 27th.
by CleoFinance
EURGBP BUY SETUPKey Observations: Liquidity Zone (Confirmation): The highlighted liquidity area represents a critical zone for confirmation. I need the market to grab this liquidity before validating my long entry setup. Demand Zone: The area around 0.83172 acts as a significant demand zone. This is where buyers have previously stepped in, and I anticipate bullish momentum to emerge again. Key Level at 0.83350: This is an important reaction zone, which could act as the first target for the trade or a consolidation point. Imbalance Fill: The market is currently filling an imbalance (highlighted zone). I’ll monitor for bullish price action once this imbalance is mitigated. Fibonacci Confluence (Premium Zone): My demand zone aligns with a Fibonacci retracement level in my premium area, adding confluence to the long trade setup. Demand in Volume Profile: This demand zone also aligns with a high-volume area in the volume profile, suggesting strong interest from buyers, making this an ideal entry point. Trade Idea: Bullish Bias: Entry Area: Around 0.83172 (demand zone). Target Levels: TP1: 0.83350 (key level). TP2: 0.83650 (higher liquidity zone). Stop Loss: Below 0.83050, to protect against demand zone failure. Risk Management: Maintain a risk-to-reward ratio of at least 1:2. Wait for the liquidity grab and signs of bullish momentum (e.g., bullish engulfing candle or strong rejection wick) at the demand zone before entering. Volume, liquidity grabs, and Fibonacci align perfectly in my EUR/GBP long setup. Do you see the same bullish potential, or do you expect a bearish breakdown? Let’s discuss below!👇
Long
by Safaric
Trading EURUSD | Judas Swing Strategy 19/11/2024The Judas Swing strategy experienced a downturn for the first time in several weeks. After consistently delivering good returns, its streak ended last week. It was a slow week, yielding just one trade despite checking four currency pairs for potential trading setups. Unfortunately, the trade on EURUSD ended with a loss. So this week we wanted to see if things will turn around taking us into winning ways again with the strategy. On Tuesday, we observed a setup on EURUSD that piqued our interest. There was a sweep of liquidity at the zone's high at 1.05964, which shifted our focus to looking for selling opportunities during this trading session. Shortly after, a break of structure to the sell side occurred, indicating the need to wait for a retrace into the created FVG for an entry point. Our entry price was at 1.05894 SL: 1.05944 TP: 1.05694 Shortly after initiating the trade, we experienced a drawdown of approximately 6 pips. However, having set our stop loss (SL) at 10 pips, the trade had sufficient room to fluctuate. This underscores the crucial lesson of avoiding overly tight stop losses. To understand this better, one should dedicate time to backtesting, which assists in determining the optimal invalidation point for one's trading strategy. After 50 minutes in this trade, our patience was rewarded with a 2% gain on our trading account, from a trade where we risked only 1%
by CleoFinance
Trading NZDUSD | Judas Swing Strategy 05/11/2024Last week concluded with a 3% gain using the Judas Swing strategy, which yielded three trades in total: two on EURUSD and one on NZDUSD. The EURUSD trades resulted in one win and one loss, while the NZDUSD trade closed with a win. These results have set the stage for a thrilling week ahead in the markets, and we can't wait to see what unfolds! As usual, we arrived at the trading desk at 8:25 EST to delineate our trading zones. Once these zones have been marked we need to wait for the high or low of this zone to be swept, this step is essential to help us get a bias for the trading session. After 40 minutes, the liquidity at the high of the zone was swept, indicating that we should look for potential selling opportunities in this session. While we may lean toward a sell this session, we hold back from entering until we see a clear structure break on the sell side. During this shift, price should create a Fair Value Gap, giving us an optimal entry point to step into the trade. After an hour's wait, we finally got a Break of Structure on the sell side, which also resulted in a Fair Value Gap being created. To fulfill all the entry criteria on our checklist, we must wait for price to retrace into the Fair Value Gap that has formed, and we can only execute the trade once the candlestick has closed. After 10 minutes a candle entered the Fair Value Gap, indicating that upon its closure, we may proceed with executing the trade. By risking just 1% of our account for a potential 2% gain, we reduce emotional attachment, knowing the loss is manageable, while positioning ourselves for greater rewards. Shortly after entering, the trade went into a drawdown; however, since we had risked an amount we were comfortable with losing, the current state of the trade did not move us. Upon reviewing the position after some time, we noticed that the trade had started moving in our favor, although it hadn't moved much from the entry price. Given the average trade duration of around 11 hours for the strategy, there’s no rush, we simply need to wait for the setup to deliver as expected. While the trade didn't reach our desired outcome and we took a 1% loss after the stop loss was hit, we remained unaffected because we were fully prepared for this potential outcome.
by CleoFinance
Trading GBPUSD | Judas Swing Strategy 15/10/2024Last week proved challenging for the Judas Swing strategy, with three consecutive losses and no wins, which heightened our anticipation for this week. Will we be able to break this losing streak? We'll soon find out. We typically arrive at our trading desks five minutes before the session starts to delineate our zones and settle into the trading rhythm. After delineating our zones, the next step is to wait for a sweep of a high or low of the trading zone, which will assist us in establishing our bias for the trading session. Forty-five minutes later, price swept the liquidity at the high, indicating that we should look for selling opportunities during this trading session. A few minutes after the high was swept, we observed a Break of Structure (BOS) on the sell side, which was encouraging as we avoid entering trades without analysis, even with a sell bias established for the session. Upon identifying the BOS, the next step is to find a Fair Value Gap (FVG) within the price leg that broke structure. The final step in the entry checklist is to wait for price to pull back into the Fair Value Gap (FVG) and to execute the trade only after the candle that enters the FVG has closed. Shortly after, a candle entered the FVG, indicating that we could execute our trade following the close of the candle. It's crucial to understand that by risking only 1% of our trading account for a potential 2% return, we minimize emotional attachment to the trades since we're only risking what we can afford to lose, and we stand to gain more than we risk. After executing the trade, we experienced a significant drawdown, which is a critical point for those who risk more than they can afford to lose. After a patient wait, the trade has turned around and begun to move in our favor, which is thrilling. However, we must still keep our composure as the objective has not yet been achieved According to our data, we can anticipate being in a position for an average of 11 hours, so the duration of this trade meeting our objective is not a concern; we simply need to remain patient for it to occur. After 15 hours and 20 minutes, our patience was rewarded when our take profit (TP) target was reached, resulting in a 2% gain on a trade where we risked 1%.
Education
by CleoFinance
Trading EURUSD | Judas Swing Strategy 05/09/2024At 08:25 EST, we were at our trading desk, eager for opportunities the trading session might offer. We began our session by marking out our trading zones. After an hour and a half, we observed a sweep of liquidity at the high of the zone, signaling potential selling opportunities in this trading session. Shortly after the liquidity sweep, there was a structural break to the downside, bolstering our confidence in the emerging setup. The next step was to wait for a retracement into the freshly formed Fair Value Gap (FVG). We have finally seen price trade back into the Fair Value Gap (FVG). After the closure of the candle that retraced into the FVG, we can execute our trade since all the criteria on our checklist for trade entry have been fulfilled. This trade experienced a drawdown for just five minutes before price began to move favorably in our anticipated direction. Patience is key as we await the trade's result. Whether it results in a win or a loss, we are prepared for either outcome since we have risked only 1% of our account, targeting a 2% return. Upon reviewing the position, we found it had returned to our entry point. At such a juncture, traders who have risked more than they can afford may panic. However, our comprehensive backtesting data on this strategy reinforces our confidence in the strategy, risk management approach and the importance of trusting the process. We were unlucky this time as the trade hit our stop loss and we lost 1% on this trade. The Judas Swing strategy is a simple strategy any trader can add to their arsenal. A trader simply needs to be present between 08:30 and 11:00 EST to look for trading setups. While not the "holy grail", this strategy boasts a win rate of approximately 50% and a risk-reward ratio of 1:2
Education
by CleoFinance
1
BEAM scalp - August scalping journey trade Nr. 6Another setup from the livestream is coming into play. Shorting some BEAM here at the retest of this range. Looking for the imbalances to be filled on the downside. Maybe even going under MDay-Mid but let's see. Important news later on so keep that in mind. Analysis of the Chart: Retest of the Range: The chart shows BEAMUSDT retesting a previously established range. This level acts as a potential resistance where the price might reverse. Break of Structure (BOS): Several Breaks of Structure (BOS) indicate where the market sentiment has shifted. These points are crucial in identifying the potential continuation or reversal of the trend. Imbalances and Fair Value Gaps (FVG): The price has created imbalances or Fair Value Gaps (FVG) on the way up. These gaps represent areas where the price moved quickly without much trading, often revisited by the price to achieve equilibrium.
Short
by stromm
Trading NZDUSD | Judas Swing Strategy 06/08/2024Every trader relishes ending the trading week positively, and that was precisely our experience last week. The Judas Swing strategy produced two trades, one on EURUSD and the other on GBPUSD, both of which turned out being winners. This positive experience has heightened our excitement for the possibilities that this week may bring. As is customary, at 8:25 AM EST, we commenced the day by reviewing the essential items on our Judas Swing strategy checklist, which comprises: - Setting the timezone to New York time - Confirming we're on the 5-minute timeframe - Marking the trading period from 00:00 - 08:30 - Identifying the high and low of the zone After 25 minutes, there was a sweep of liquidity at the low of the zone, indicating we will be looking for potential buying opportunities this trading session. Following the liquidity sweep, there was a break of structure (BOS). Now, we simply need to wait for price to retrace into the fair value gap (FVG) that was created before entering a buy position. The subsequent candle entered the Fair Value Gap, indicating that upon its close, we could execute our trade as all the prerequisites for entry on our checklist were satisfied. This position barely experienced any drawdown, as it became profitable 25 minutes after executing the trade. We risked a mere 1% of our trading account, aiming for a 2% return from this trade. All that remained was to wait patiently, having already accepted the outcome of our trade, be it a win or a loss. Based on the data collected for NZDUSD, we anticipate an average trade duration of six hours and fifteen minutes. After 45 minutes, our Take Profit was triggered, and our patience paid off as we hit our target on NZDUSD, resulting in a 2% gain from a 1% risk on the trade.
by CleoFinance
Trading EURUSD | Judas Swing Strategy 30/07/2024Risk management ought to be a trader's closest ally, as the previous week demonstrated the practical significance of incorporating risk management into every trader's toolkit. Last week, we executed four trades; despite having only one win and three losses, we concluded the week with a mere 1% loss on our trading account. This has heightened our excitement for the opportunities that this week may present. As is customary, at 8:25 AM EST, we commenced the day by reviewing the essential items on our Judas Swing strategy checklist, which comprises: - Setting the timezone to New York time - Confirming we're on the 5-minute timeframe - Marking the trading period from 00:00 - 08:30 - Identifying the high and low of the zone The next 5 minute candle swept liquidity resting at the low of the zone, which meant our focus would be on identifying potential buying opportunities for the trading session. To increase the likelihood of success of our trades, we wait for a break of structure (BOS) towards the buy side. Once the BOS occurs, we anticipate price to retrace to the initial Fair Value Gap (FVG) created during the formation of the leg that broke the structure. We patiently waited for price to retrace into the created Fair Value Gap (FVG), and executed our trade upon the closing of the first candle that entered the FVG, as all the conditions on our checklist for trade execution were satisfied. Please note that our stop loss is set at the low of the price leg that broke structure, and we implement a minimum stop loss of 10 pips. The minimum stop loss value was not chosen randomly; it was determined through extensive backtesting. This allows trades sufficient space to fluctuate, avoiding premature stop-outs and trades later moving in our anticipated direction. After 15 minutes, a large bearish marubozu candle formed, which could have exited us from the trade if we had set our stop loss solely based on the low of the price leg that broke structure, without including a minimal stop loss in our checklist. By using that price leg, our stop loss would have been around 6 pips, whereas a 10 pip stop loss provides the trade with sufficient breathing room. We are aware that our strategy does not guarantee a 100% win rate but rather hovers around 50% on EURUSD, indicating that some losses were inevitable. To avoid becoming emotional over the position, we used only 1% of our trading account with the goal of achieving a 2% gain. Upon checking our position later, we observed that the position was a few pips away from hitting SL. We remained calm despite the drawdown we were experiencing and were prepared for any outcome of the trade. All that was left was to wait for either our stop loss or take profit to be triggered to determine the result of our trade. A few hours later, the trade began to move in our favor. After 13 hours, our Take Profit was triggered, and our patience paid off as we hit our target on EURUSD, resulting in a 2% gain from a 1% risk on the trade.
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by CleoFinance