Putting Theory Into Practice
In the following article, I will show you how the concepts taught in the Ultimate Day Trading Program is applied into live market conditions.
This requires training your eye with many hours of practice and experience in the foreign exchange market. These things are second nature to me now! It's like Stephen Curry and his 3-point shooting muscle memory built through years of experience and practice.
Without further due, let's jump straight into the price study of GBPUSD where I will illustrate many of the concepts into a trade idea framed on the 28th March 2021. This study touches the majority of the concepts taught in our program. Click here to see the course outline.
The following Price Action goes back to May 2021.
First, let's talk about Market Structure. What I'm highlighting in the screenshot below is the Bullish Market Structure where we see price making a sequence of Higher Highs and Higher Lows. When looking at the Market Structure on the Higher Timeframes, the direction of the market is easily determined. $GBPUSD H4 Timeframe ►
Secondly, we want to scale down timeframes in order to have more information (from H4 to H1 timeframe). You may or may not know, the lower timeframes are used for execution in our trading approach. This allows us to pin point our execution.
Now that we've identified the overall direction of the market, we want to trade pro-trend as this is the most favourable condition to trade in. To do so, we would prefer to be involved in a Bullish Dealing Range. We can easily identify that by looking at our previous Daily candle (Thursday) on the lower timeframe (H1 in this case). We can infer that the previous daily impulse broke structure making a Bullish Break Of Structure (BOS). This lines up our Order Flow with the overall direction of the market.
Within the Bullish Dealing Range, we now want to identify areas where there was an Inefficient Delivery of Price. The reason behind that is because we know the Behaviour of Price at those areas. Price tends to Mitigate the price Imbalance before continuing in the direction that is intended.
$GBPUSD H1 Timeframe ►
Next, we want to scale down timeframes to get more information. This time from the H1 to the m15 timeframe. We're looking for a Point of Interest (POI) where there is a concentration of pre-existing orders where price will most likely be sensitive to. This is what we call a Supply and Demand Zone - Also knows as an Order Block (OB).
This POI will be our framework to our entry.
$GBPUSD m15 Timeframe ►
Finally, we're going to look for an entry based on our Confirmation Entry (CE) variation and narrow our focus to our Peak Session Times in order to benefit from the influx of volume in the forex market. To do so, it is ideal to scale down timeframes (in this case from m15 to m2 timeframe).
For a CE, we first need price to tap into our m15 POI, then we want our lowest timeframe to point in the same direction that we want to trade in (upward). In that case, we wait for either a minor or major BOS. Ideally, when creating a BOS, the impulse creates a newly created OB which will be the basis of our entry framework now. Notice, that again, there was price Imbalance to Mitigate before continuing in the intended direction.
Also, pay attention to the timing of price. The NYSE Open is one of our favoured Peak Session Times for us to execute on because this is where there is most volume in the financial market.
$GBPUSD m2 Timeframe ►
And just like that, you've reached 5x your risk in reward in roughly 2.5 hours and still going as we are writing this article.
Of course what you see here is in hindsight, however with practice, you will learn to catch these trade setups in live market conditions.
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