I often see traders jumping in at the first sign of an SFP. For those trading HTF SFP's here is something you can do to increase your chances of success instead of getting chopped up trying to catch the top.
A THREAD 👇
A THREAD 👇
Below you'll see an example of price moving through a HTF key swing high (left) and on the right you'll see what happens on the LTF when one fails.
Believe it or not, the LTF structure is most important when trying to trade HTF SFP's.
Believe it or not, the LTF structure is most important when trying to trade HTF SFP's.
Here you'll see what happens when we get a SFP that works.
As you can see in this example, the area that lead to the move through the level failed to hold. Whereas in the example above it held and those who shorted aggressively have now taken a loss.
As you can see in this example, the area that lead to the move through the level failed to hold. Whereas in the example above it held and those who shorted aggressively have now taken a loss.
Something you can do is watch what is happening on the LTF in terms of the structure. Pay attention to the structure low that lead to the break above the key swing high.
If you see price not reacting too well at that area it can be a sign of weakness as shown below.
If you see price not reacting too well at that area it can be a sign of weakness as shown below.
Once you see that area break down you can confidently enter the market. Where you place your SL is different for each scenario and down to how you trade.
The important thing to take from this is that rather than try to sell the top, be patient and wait for LTF structure to fail.
The important thing to take from this is that rather than try to sell the top, be patient and wait for LTF structure to fail.
There are other tools you can use such as divergences and watching the footprint to add confluence to the set-up. Context is key.
Scalpers will catch more of these but if you're swing trading you're more likely to get chopped up as you're looking to play the bigger move.
Scalpers will catch more of these but if you're swing trading you're more likely to get chopped up as you're looking to play the bigger move.
I've also found this to work best when in line with the flow of the market (for obvious reasons) rather than trying to catch a HTF bottom.
But if you do have other tools you use to catch reversals then this could be a nice addition to your execution of SFP's.
Study LTF PA 🤝
But if you do have other tools you use to catch reversals then this could be a nice addition to your execution of SFP's.
Study LTF PA 🤝
Showing you the recent high in #BTC as an example with the footprint as confluence.
Even with all this information i've shared here, you'll still struggle to execute unless you watch the market every single day.
It's easier to do things in hindsight. Actually executing these trades takes a lot of patience and high concentration. Most importantly, chart time.
It's easier to do things in hindsight. Actually executing these trades takes a lot of patience and high concentration. Most importantly, chart time.
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