I Finally Revealed My Entire Trading Strategy (For Free)

This is a full smart money concepts trading course with a trading strategy step by step. I'm going to cover everything that you're seeing on screen now, including the exact strategy that I was using when I caught this short position on Euro USD in the New York session. So, stay tuned for every piece of the trading strategy, every concept used explained in great detail, and at the end we'll cover this trade using that strategy step by step. So, first things first, I want to start with market structure. Market structure is the entire foundation for everything that I build on. And the reason for that is because market structure done correctly [music] and repeatably is what gives you the understanding of the direction of price. Now, you get the direction of price right, and that's 50% of your job as a trader done already. And so, it's very, very important. I can't stress the importance of a real mechanical way to map market structure. So, we're going to first start with the basics, which is how to map the trend. Now, for most of you, this is probably a very simple concept, so we'll go through it quickly. So, at any point in time, price can either be in an uptrend, which is bullish, or it can be in a downtrend, which is bearish. In an uptrend, you will see that swing prices are creating higher highs and higher lows. We have a low, a high, a higher low because this low here is higher than the previous low, and then a break of structure, and a higher high because this high here is higher than the previous high. And that is what gives you an uptrend. In an uptrend, your number one priority is to buy. It's that simple. So, every time that we create a break of structure, when we put this higher high in, and we begin trading back, your job as a trader is to literally just catch the higher low, or just after the higher low has been created, and then you just want to trade to the higher high. That's it. It literally is that simple, and I'm going to show you how to do that in greater depth as we go on. This is just statistics. There is a higher likelihood that when we have a bullish breaker structure, that we will have another bullish breaker structure after that. It's just probability. The same for a downtrend. In a downtrend, the only difference is we have a high, we have a low, and we have a lower high. So, we have a high that is lower than the previous high. Then we have a breaker structure and a lower low. Simply put, a low that is lower than the previous low. And so on and so forth. Lower high, lower low, lower high, lower low. At this point, what you're expecting is that price will come back like this, give you confirmation, go from here. This is where you want to be selling price. And this is where you want to be closing your trade. And this is the entire premise of what my strategy and my core trading philosophy is all about. This is what makes the money. So, if we go back here to the market in which this trade was executed in, and we just take that fundamental principle that we just looked at, the first thing is market structure. So, we want to identify the swing points. You can see here we had a swing high, a swing low, and a swing high. Now, why are these the swing points? These are the external pieces of price before a reversal. So, you can see price pushes up, we reach this level, and then we start coming back. Price hits a low and then pushes back up to the high. So, these are the external swing points. Then we have internal, which we'll talk about later on, and many people get this wrong all the time, and that's why they don't know how to use market structure. But, I also have a solution for that also. So, these are the external swing points. Now, what you can see here, we're bullish, we shift bearish. So, we have a swing low, a swing high. Your job, as I told you, if this is a higher high, but this is now a lower low, your job is to wait for the lower high and trade to make a new lower low. The exact same as what we just covered. Now, I need to talk to you about the difference between a change of character versus break of structure. Again, simple stuff, but we're going to get more and more advanced as we go. So, if you already know this stuff, don't worry, the advanced stuff is coming as well. And if you're new to this, well, this is the perfect place to start. So, change of character versus break of structure. What's the difference? You probably heard these terms all the time. Well, let's look at break of structure. We've already covered this a little bit, but a break of structure, simply put, is a continuation of trend. It is when you're trending in a direction and you continue in that direction. So, you see all of these levels are break of structures. Why? Because you see here we have a low, a higher high, we pull back, and we go higher again. So, we break previous structure, break of structure. Then we pull back, we go higher high, we pull back, we go higher high, break of structure, break of structure. They are simply the trend continuing in its direction. At this point, you would probably expect price to come back and go again and give you another break of structure. At this point, this would be your new swing low, and this would be your new swing high. So, a break of structure is simply a continuation in trend. A change of character is the reversal of trend. When we surpass this old high, that is a break of structure. Then we pull back, higher high again, break of structure, and then we go lower low. So, we go from higher high to lower low because this low is lower than the previous low. So, this is a change in trend, or commonly referred to as a change of character. It's very simple. Imagine this, there are two characters at any point in price. There is a bull and there is a bear. A bull is a bullish market indicating higher prices, a bear is a bearish market indicating lower prices. So, a change of character is when the market shifts from being in one character into the other character, from bullish to bearish, or from bearish to bullish. It's that simple, there's There's complicated about it. So, you can see here we're bullish, higher high. And then we change character because we take out the swing low that is responsible for taking out the previous swing high, change of character. From there, you see we put in a lower low, a lower high, and a lower low. So, now we are continuing that bearish trend. That is why this is a break of structure. So, now I want to ask you, what's this? Is this a change of character or is this a break of structure? If you've been taking notes and you understand what I'm saying, then you would have guessed change of character. And if you said change of character, you are absolutely correct. Why? Because we're shifting from lower low, bearish, to higher high, which is now bullish. Okay, now if we do this and then this, what is this? Again, if you said break of structure, you are correct because now we are continuing trend. We shifted bullish and we're continuing bullish. Now we're in the break of structure territory. So, if we look at again this trade recap and we have a little look at what happens here, we can see that we have a high in here, a low in here, and then a higher high. So, we're bullish. So, we're going to mark out in here our break of structure. At that point, this is the swing high and this is the swing low. And the way to determine what the low is, it's the lowest point that price reached before a break of structure. So, let's use that logic. So, here we have a break of structure. Here we break structure and you can literally just take a box from the high up until we break structure and bring it down as far as it needs to go. And the lowest point inside this box is going to be your swing low. It's that simple. So, this in here is our swing low. So, now we know that's our swing low, it's the lowest point. That becomes our swing low, this becomes our swing high. If you can't see the right side of the screen. So, imagine now you can't see anything that is highlighted in this gray box. You can't see it. What would you be expecting? You would be expecting that we've just had a break of structure, we're coming back, we're going up. You're thinking now that we're going to continue higher, and you would be correct in thinking that. That's completely fine. In this instance, we try, we fail, and instead we break the lows, and we give a change of character. We shift from being bullish to now being bearish. And we can label this as a change of character. And if we go in now just before or just as this trade is being executed, this is what price looks like. So, now you can see we have a break of structure, and now we have a change of character. Now, where is our swing low? Where is our swing high? Our swing high is up here, and our swing low is down here. So, that is our structure range. So, now you can take a box from here to here, and this is internal structure. So, based off of what we've just been through, what are you now expecting price to do? If we just go back again to this diagram, after we have a change of character, what happens? Price puts in a low, comes back, and goes lower. What's going on here? Change of character, price puts in a low, it's coming back. Now, what are you expecting? You're expecting a lower low, a break of structure. And so, that is the primary premise of this trade, which is why I tell you market structure is monumental when it comes to the trading strategies that I develop. The final piece of market structure for this video and for this course is understanding internal versus external structure. This is a little bit more on the advanced side, but probably the most important part, because this is the part that if you don't get this correct, nothing else matters. And trust me, I see enough traders get this incorrect time and time again. So, what is the difference between, say, swing structure, which is outlined here in grey, and internal structure? Everything in green is internal structure. And I see so many people trying to trade internal structure or not trading swing structure and so on and so forth. And it's a costly costly mistake as I will show you again with the trade example. So the primary difference is this and it's very simple. Internal structure is what it says it is. It is inside and swing structure is outside. So internal structure is what happens inside of a price leg and the swing structure is the actual structure. So it's important that we use swing structure to determine our bias. When we're looking at, let's say, this for example, these are swing structure points. When we're looking for example at this, these are swing structure points. Inside of this price action, it's very likely that you might see this. And when you do see this, it's very important that you don't try and trade these little points because this is all internal. So very similar to what I just shown you, internal structure can be found inside of the price leg. Okay, but how do we determine that? So first of all, you must map your swing structure, which is your external swing points, right? So we have a low down here. Is this the external? No. Is this the external? No. Is this the external? No. Is this the external? Yes, because this is a swing where we actually have a significant pullback. And again, is this the swing low? No. Is this the swing low? No. Is this the swing low? Yes. Why? Because this is the lowest point that price reached before we broke structure. So let's say hypothetically, if price come in here and then did this, this would be the swing structure cuz now we would have new structure, but it didn't. The lowest point is here. Therefore, that is the swing structure. So now you have your swing low. It's the level that creates the significance. So again, is this a swing high? No. Is this a swing high? No. Is this a swing high? Yes. Why? Because we have a meaningful reaction from this low. And then we have the highs and then we have the lows. And so it's very very simple. There's nothing really too complex about it, but it's something that so many traders get confused. And something that honestly at the beginning of my trading career, when I was trying to master market structure, it ruined me completely. In fact, it ruined me to the point where I scrapped everything that I thought I knew about market structure. And my only question I had to myself was how can I really know what's real and what's fake. I don't want to listen to what everybody else has to say. I want to build my own. And so I did. I went away and I tested years of price action trying all different variations for my definitions of highs and lows, internal and external, swing and internal. And eventually, I created them and I created the rules. And in fact, I have taken the rules that I've built, that I've collected over the years, and I put them into an indicator. And I'm going to be honest with you, I did it selfishly for myself because it makes my trading so much easier. For example, if I just toggle this right now, it's going to show me my points. This break of structure that we marked out is already a break of structure on my indicator. This change of character is already a change of character in here. This is the swing low. And this is the swing high. So I don't need to mark it out. It does it for me. Again, selfishly I created it for myself because I was so sick and tired of getting market structure wrong. But now what I want to do is I want to look at this and I want to have a look at what the internal structure is versus the external structure. So again, I'm going to hide this for now. We can see that this was a swing high. So, if this is a swing high, we're going to take the box and we're going to draw it up until it gets broken. So, until we've broken out of this high in here, we don't know what the low is going to be. Because again, let's say you can't see this, right? Anything in blue you cannot see. So, do we know that this is the swing low yet? No, because price could just come lower and then go. And at that point, the swing low would be down here. So, you will only ever know a swing low in a bullish trend after the break of structure. You will only ever know the swing high after you've broke structure, created a high, and had a pullback. So, anything that is inside of this swing structure is internal. So, you have a high, a low, a lower high, a lower low, a lower high, a lower low. So, internal structure is bearish. Imagine you're trying to sell price in here because of the internal structure is bearish. You're going to just get wiped out because the real move is bullish because we are bullish. So, if I again just toggle my indicator for a second just so I can show you this. And in fact, if I come in here and I show the internal price levels, you can see in here very faintly, but what do you see? You see internal swing low, internal lower high, internal lower low, internal lower high, internal lower low. So, these are internal structure points. We don't want to trade these levels. You try to trade the internal swing high here and you get ruined. Again, if we just look to the right, you can see internal low, internal high, internal breaker of structure, internal low, internal high, internal breaker of structure, internal change of character, internal change of character. This is why we don't trade internal because a lot of the times you might end up getting this choppy internal price action and it throws you off. And so, the external swing structure is what has the most consistency. That's what you want to use for your trend because again, a lot of the times this internal structure is often times so small that if you try to trade it, it will ruin you. And the main reason that I developed the concept of internal structure is to create the separation between the two so that it's very clear what I should be following and what I should not be following when it comes to framing trade ideas. For example, we break structure here, where are you going to try and sell? It's just so small that there's nowhere to sell. And again, in here we internally change character and then we change character again on the sell side. And so, it's really important if there's anything that you can take away from the market structure segment, it's please don't use internal structure to frame your trend ideas for the day because it won't work well for you. I've tested so much data, and that is what I have found to be true. So, just to recap here, this is the right at the level that we take the trade. So, the internal structure is bullish, right? We have an internal swing high, internal low, internal high. So, we're bullish, right? And this will end up being the low when we break and close above this high, which we don't in this instance. But, the internal is bullish. If you were trying to trade the internal structure, well, you would get crushed. And you would only realize that we were internally bearish here, because the swing structure, higher high, swing low, is bearish. Market structure, this is the little dashboard that I created. 15-minute bearish, 4-hour bearish. We are definitely expecting lower prices. I guarantee you many people are looking at this and trying to trade long when New York session opens, and they're just going to get ruined. So, that's a summary of market structure. We have truly how to map the trend and the importance of the trend, because the trend is our foundation for which direction we trade. And being on the right side of the market is half the problem. You can have the best entry concepts, the best liquidity ideas, the best order blocks and fair value gap ideas, but none of that matters if you're on the wrong side of the market, because none of it will hold. On the flip side, you may not have the best entry model, but if you're consistently buying when the market is going to go higher and you're selling when the market is going to go lower, you're going to eventually be right and make money and get in at the right time. Obviously, there's ways to improve the accuracy, there's ways to increase the odds that it's more consistent, but the fundamental premise is that the best traders trade in alignment with the market's flow of money. And that's obvious when you think about it. But, theoretically obvious and practically achievable are two different things. So, that wraps us up for market structure. If you would like this document and the expanded upon version that we are building out as we go, I'll leave a link down below, you can get it obviously completely for free. So, moving now onto liquidity. Liquidity is a very controversial topic in the trading space. Some people think liquidity is something, some other people think it's something completely different. And I'll give you my perspective on it. Liquidity is a very simple concept. It is just money in the market. And the market likes money. That is the entire objective of the market. It is to fill orders. But, little random highs and lows don't necessarily equal a large amount of liquidity. In fact, if you look at a price chart right now, and you look at this, there is liquidity everywhere. Liquidity is just orders sitting in the market, both passive and aggressive. So, it's everywhere. Every single price level that you see, there is liquidity. So, let's just get that clear right now. However, there are definitely some areas in a chart that have a lot of liquidity sitting in, more than other areas, for example. And those are like magnets. These specific levels of liquidity are what pull price toward them. And if you know those specific levels, it can help you massively when it comes to understanding where you should stay out of the market, because your area of interest or your trade idea is sitting in and around an area of liquidity that is likely to be traded into. Or, for me, my personal favorite, where to target. That's the big thing. If I know that price is pulling towards a certain direction, then I can use that to my advantage when I'm in a trade to allow price to run to that level before I close it. And so, that's what I'm going to discuss with you here today. And the two core important and really kind of high-level levels of liquidity come in two parts. The first one is session liquidity. And the second one is previous day's high and low, and previous week's high and low. So, we'll start here with session liquidity, because this is probably my most common, especially for intraday setups. You see here three different boxes and again these are boxes that I personally built into my SMC engine, my own indicator, instead of just having to manually mark them every single day. So I have my Asia session, my London session, and my New York session. Asia is in blue, London is in green, and New York is in orange. So what you'll find is that each session of the day will take an area of price from another session. It happens pretty much every day and sometimes what I'll show you right now is we'll take one side and then flip and take the other side completely. So the two core ones really are Asia and London. New York is less about liquidity and more about the move, the catalyst of price into that area of liquidity. So we'll start with Asia. Asia high, Asia low. Asia can be represented in this blue box right here. Now very typically speaking there are a couple of different variations that you'll see on any given day. So we'll take Asia session and we'll just imagine it in a range because for the most part Asia usually is consolidating inside of a range. There's lower levels of volume and there's lower transactions being placed and so it's usually more range bound. Typically one of the most common variations of the Asia sweep is London opens, takes one side of Asia, and then the rest of the day continues to the other side of Asia. And this could go in both the sell side so we take the bearish version, we take the lows, and then we run and take the highs. The other variation is in fact we take the highs and then we run and take the lows. This is the most common variation. This is something that you'll see time and time again. In fact, we'll literally look at practical examples right now. Again, none of this is cherry picked. This is an exact trade example from literally just a couple of days ago, the 2nd of June as I'm recording this and today is Thursday, June 4th. So let's take a look at that. We'll just go over the last, I don't know, a week or so as well for price action and we'll just kind of have a look at it. So Asia session on Monday the 1st of June, heading into Tuesday. It's New York time. So, this is 1 day. So, what happens in this 1 day? That's what we want to focus on. What happens is Asia session is sitting here. London session opens, we take the highs, and by the end of the day, right? The day isn't finished yet. By the end of the day, we've also taken the lows. So, we have Asia, we take highs, and then we take lows. Okay, we'll look at the day before. Asia low and Asia high. London takes Asia high, New York takes Asia low. Okay, let's look a different example. Asia high, Asia low. We take Asia low, and then we come again, London takes Asia low. And the day isn't finished until 5:00 p.m. here. So, by the time the day is finished, we've taken both Asia low and Asia high. Okay, let's look at a different example. Here, you can see this is a very subtle one, but Asia low in here gets taken, and then the rest of the day trades the other side. So, this isn't just some theoretical idea of what could work. No, this is practical. You can go and pull up your chart right now and apply this indicator or mark it out yourself manually, and you will see the interaction between Asia session. So, Asia session is the first area of session liquidity. Typically speaking, most days will take both sides of Asia, unless Asia's in a very specific level of price. So, that's the first one. And for me, my London setup The setup we're covering today is the New York setup, but the London setup is usually Asia range, London opens. If we're bearish, we wait for Asia high to get taken. And then we wait for confirmation, and we trade to the swing low. If we're bullish, it's the opposite. We wait for Asia low, and then we trade. So, if we know Again, just think about this for a second. If we know that it's very likely that both sides of Asia will get taken in this day. And let's say we are bearish, and London opens, and we haven't yet taken Asia high. But logically, we know that there's a good probability that both sides are going to get taken. Do you think it's smart to try to sell before the Asia high is taken? Think about it. Of course it doesn't make sense. So, logically, you would wait for Asia high to get taken and then look at trade ideas to take the lows. That's all this is. It's It's not rocket science. It's actually very simple stuff. With a London session, you don't always expect both sides to be taken. It really depends on where price is. We'll take this for an example. So, here we are bullish. London low is down here. New York session opens up here near the swing high. So, when you have London that has taken Asia and had a bullish reaction, it's a lot less likely to expect the London low to be taken in New York. In fact, it's usually the Asia ranges like this in a bullish day, London sweeps the lows, and then New York completes the move. That is typically the objective. London will sweep the lows, and New York will be the catalyst to continue forward. Generally speaking, it doesn't always mean it's the case. You can also have the opposite though, where you have London high and London low gets targeted. So, what we want to do is if we're framing a trade idea and you have London highs in this level and New York is opening up in here and you haven't had any significant move from this level and we're bearish. Typically speaking, we would want to wait for London high to get taken and then London low to get taken. All these session levels are is a reason for price to go there. That's it. So, again, we're going to walk through some practical examples. In this case, you can see the London highs get taken and then London lows get taken. In the next day, you can see only London low and New York is the catalyst for the move. And by the way, I shorted in this London session. In this day, we can see New York is very low volume that happens. So, there's no real volume, so it's a pretty void day. Again, you can see in this instance, the driving force is bullish, New York session moves towards bullish. In this instance, you can see London is a little bit lower on volume. That's another thing as well. If you have very large London move, then you might not take it both sides of London. If you have a small consolidated London move, typically you'll take both sides. So, this is a small-sided session. We take the lows, we run, we take the highs. Let's go to the next day. London low, London high, we take the highs in New York session, we sell off, we take the lows. In this instance, you can see price is heavily trending. Not even Asia high gets taken out. So, you also wouldn't be expected London high gets taken in a session like this, either. Again, you can see here, we take the highs of London and we sell off, we take the lows of London already. So, we take the lows first, then we come and take the highs. A little bit less both sides taken than Asia, for example, but still a catalyst for the move. And so, that is what we determine as session liquidity. It is simply just the highs and lows of session. I don't want to just say that to you, "Oh, it's just a high and low." No, I want you to understand it. I want you to see it in action. And the logic is actually quite simple. You see, when the market needs liquidity to fulfill orders, that's how it works. When there's a large market participant, like smart money, and they want to put a big order in, they need liquidity. So, how it works is, let's say this is price right now, and let's say there are some passive buyers sitting here. Let's say smart money want to put a really big order in, and this is price right now. If they put all their order in, price will just do this. It will just fall very low. So, what they typically like to do is they'll go and search for liquidity first. So, in here, we have London highs. Now, all of the traders that have shorted this move, typically their stop losses are going to be in this level. Additionally, you have all the breakout traders. There are lots of different traders that when you take out a high, they indicate that price is going to trade higher, and so they try to buy at the break of this high. Or, smart money need those buyers to sell, because for every seller, there must be a buyer. And so, smart money want there to be buyers in here, so they can sell to those buyers, get their orders filled, and not move to price too aggressively. So, that's why price will go there if it makes sense to do so. And it will move to other levels because it seeks liquidity, very simply put. Now, what happens is when you have one side of the market very dominant, which is getting a little bit ahead of ourselves now, I'll come back to this in more detail later, but when one side of the market is very dominant in pushing price lower, this is what we call inefficient pricing because one side is overly dominant, which means that there are so many more active sellers at this level, and that's why price is pushing lower because when price is going lower, it simply means that there's so many sellers that they're now looking for buyers, and all of the buyers are lower and lower and lower and lower in price. That's why price goes lower and lower and lower and lower because you cannot sell here if there isn't a buyer. So, there's a thousand sell contracts that want to be executed at market, and there's only 10 buy contracts right now, and 10 down here, and 50 down here, and 100 down here. Price will have to go, I'll take all of those, then I'll take those, then I'll take those, then those, then those, then those, then those, and all of a sudden price is down here. That's just how the market works. That's session liquidity. And then we have previous day's high and previous day's low, which is quite literally simple. In fact, you don't even need an indicator to do this, you just open the daily time frame. I prefer personally having it in my indicator, that's why I put it there because I don't sit on the daily time frame really ever. I might check the daily time frame for like 60 seconds a day. So, I like to see visually the levels instead of having to go to the daily time frame, but you can just open the daily time frame and literally just find the highest point of a day and the lowest point of a day of the previous day. So, this is the current day. Highest point, lowest point. That's your previous day's high and your previous day's low. And again, if you're bearish, price is very likely to trade to the previous day's low. I ran this test as well over 10 years of data I collected on this idea with the help of some of the quants that work on the team as well, and we tested 10 years of data. If we get a bearish close below the previous day's low, there's a 75% likelihood that the next day will trade to the previous day's low. Just think about that for a second. That's 75% likelihood. So, it's a very high probability. And think about it. When you're in a bearish market, there has to be a logical target that you can aim for. Otherwise, you're just hoping that price continues going lower. And what better than the previous day's low? So, when price opens, it comes up and it trades lower. Each of these bearish days, price hits the previous day's low. You can see we have a bearish close in here. And so, I'm expecting that price will hit this previous day's low. Cuz it's either going to hit the high or the low at some point. And if we're overall bearish, then I put it as a higher probability that we hit the low than we hit the high. So, it's a good target. That's all this is. All liquidity is primarily for me is a great target to look for of when price is going to go to and when you can get out of the position. So, we come out to 15-minute, you can see that we're bearish. Clearly, the daily bias is bearish. All of the time frames are bearish. The obvious location for price is previous day's low. In the flip side, if we were bullish, if we come into this day, I'll actually I remember taking shorts on this day as well. This why it's perfect example because when it works, it works really well. So, if you look at price, what do we have? Previous day's low is untouched. And we are 15-minute bearish. So, we're bearish. We're expecting lower prices. We know previous day's low hasn't been hit. The daily bias is bearish. So, we're expecting that price is going to trade lower. But we need a target. And this previous day's low is like a magnet. Just literally begging for price to come to that level. And so, if you are taking a trade, for example, you guys remember we are bearish Asia session high for session. So, we don't try and sell before it, we sell after it. Then we take it, then we get confirmation. Now we can sell. Okay, now you're in a sell position. Where do you take your profit? Here? Here? Like how do you determine that? For me, a large part of that is liquidity. And a large part of that is previous day's low. The same thing you can do more scalable as well on a weekly time frame, for example. So, previous week's high, previous week's low. If I'm going to be honest with you, I do use previous week's high and low less than the daily because I'm an intraday trader. I do use the weekly high and weekly low if we have a very aggressive sentiment. If price is very trending, then I might use previous week's low. For example, in this instance, we're super bearish. You can kind of see it. So, previous week's low could be a good target. And you see previous week's low gets hit straight away. In fact, we held partials to previous week's low. So, to recap on the session liquidity in real-life scenario with the trading strategy that we're using and the trade we executed, we've gone for everything. We are bearish. Previous day's low has not been taken. So, we are expecting there's a good chance that that's our target. So, when we get in the trade eventually, a great target we have also Asia low that hasn't been taken. We know there's a good chance that it's going to get taken. And we know there's a good chance that you're going to get taken. So, this is something that people overlook. People overlook, where should I take my profits? Where should I close my trade? They think it's all about the direction. They think it's all about the entry model. But, the truth is is you can't have one without the other if you want to have a complete trading strategy that has the best results possible. You need to think about everything. Direction location confirmation exits, everything. We can trade the exact same trade, right? We take the same trade for the same reasons. But, you might have a completely different target to me. That can completely change our trade. You might have a two risk reward just because you like the idea of it, one to two. I might have Asia low and previous day's low as my risk reward. And that might be a five R and eight R, which it is, by the way. So, if I close half at eight, half at five, I'm going to get 6.5. And you're going to get two. So, I risked $1,000, I made $6,500. You risked $1,000, you made $2,000. But, we took the same trade based on the same idea. The only thing different is targets. Logical targets, not feelings, not fixed random numbers, not getting scared because price starts coming back, so I'm just going to close it because it's blue or green. Real targets with real data proven to work. That's for me what liquidity is all about. I don't really like the idea of all these like random little 1-minute time frame equal lows and the brokers and prop firms hunting your stop losses. I don't really think it works that way. Yes, I do think that those large institutions need liquidity and sometimes that liquidity might be an area where your stop loss is. It doesn't mean they're out here actively hunting your 1-minute time frame equal lows or your, you know, so-called other variations. So, we have a great foundation now for market structure which the direction of price. We have a great foundation for liquidity which is understanding targets and things of that nature. We have a decent foundation on the trading strategy as well because we're going through the live trade example whilst we tie everything together. I don't want to give you concepts. I want to show you how they work. We're going to go more in-depth on this just shortly, but it's going to be very simple. The final thing is going to be your order blocks and fair value gaps, right? Again, something that's spoken about a lot. It's very simple. I look at things like this. Price is in balance right now. When you see a range in price like this, it means that this is fair value. Very simple. And big money likes to transact at fair value. Why? Like I told you before, if big money has big money, they want to put big money in the market, they need stable trading conditions because they're trading with big volume. So, they need a lot of other market participants so that they can transact at that level. If you have a very aggressive market and then big money also steps in at the same time, price is just going to go absolutely parabolic. And that's not what they want. What they want is the best order they can get. They need to fill, you know, 10 billion pounds worth of GBP USD this week and their target price that they've been set in that institution is, you know, 1.15727. So, they need to figure out now how they get that order in the market without moving price too much so that they can't get the rest of their money filled because they get in paid to fill that transaction. That is how this world works. So, you think this is good market conditions for them to try and buy? Of course, it's not. They need this stable, slow market condition where they can just put in a little bit, a little bit, a little bit, a little bit and chip away at their big order. So, this is balance. Now, depending on what happens from here and depending on the direction of price overall, this is going to either give you a supply or a demand zone. So, this idea in of itself isn't that valuable, but when you pair it with market structure and liquidity, it becomes unstoppable. So, you have balance. And then, eventually, in this area, you're seeing sellers pushing price lower, buyers pushing price higher, sellers low, buyers, sellers, buyers. So, it's fair value. Lots of transactions, fair value. That's what a range in price is, especially in a high-volume time period. Then, when you see an expansion out of that level, that is price leaving fair value and becoming imbalanced. Why is it imbalanced? It's imbalanced because one side of the market is heavily dominating the order book. That means there is a lot more aggressive buyers in this instance than passive sellers are willing to sell at this level. So, I want you to imagine just a very simple idea. Let's say price is here. And let's say two people want to buy at this level. But, there's only one seller. Only one of them can fill that order. That's it. So, one will get their order and they're happy, but one of them is left with no fill on their order. Now, I want you to put that on steroids because when price moves like this, how many people wanted to buy, had a target to buy, but weren't able to buy? A lot. And that's the simple logic of what a demand zone is or what a supply zone is. That means that when price comes back after that expansion, which typically it does, because it tries to find balance again, when price comes back and if price comes back, it simply means there is demand already expected to be at that level. It's literally that simple. And so that's why a lot of the times you see these levels get respected when we come back because the demand already existed. And as long as the trend is overall bullish, when price comes back to the demand level, there's a decent likelihood that we're going to continue going in that direction. And so that's what it is. And again, the same is true on the flip side. If it was supply as an example, let's say you're ranging and then you get this aggressive sell-off. There's so many sellers that were willing to sell and wanted to sell but couldn't sell because there wasn't enough buyers. If they wanted to sell up here, then they're no longer willing to sell down here and lower and lower and lower. So what do they do? They wait and they say to themselves, if price comes back, I'll execute my sell order and if it doesn't, then I will have missed the move. And so when price comes back, there are a lot of eagerly keen sellers who wanted to get in before but couldn't get in and they're now willing to get in again. That's the entire premise of what a quote-unquote order block is or a supply zone or demand zone or whatever you want to call it. The actual mechanics and the reason it's called order block is because it's an area of price that could be blocked by orders or have blocks of orders in it because they are unfinished. That's it. There's no magic sauce. That's it. So what does this look like? How does it transpire? Well, we're going to take a look at a few examples. And it's important to note that not all order blocks work, obviously. And the reason for this is because let's say again, same scenario. We have the range. Sellers push price lower. There's eager sellers who want to get filled in this level, right? But let's say the trend is, for example, bullish. So we break structure here. Trend is bullish. We range here. And then buyers step back into price in here. So we're bullish. So we might get into here and we might have a reaction. And then you'll get this. And how many times have you used an order block or a supply zone and then had a bit of a reaction and things look good and then boom, out of nowhere just run straight through your stop loss. That's because not all order blocks and supply zones or demand zones are going to work. It means temporary. So this is why it's important to have everything combined. Because now, if you have the direction of price as bullish, and then you have a demand zone at a level, and then you have liquidity, now you're tying everything together and you're building a high-probability core trading idea. But, if you're just trying to find a demand zone, right? Let's say price is bullish, and you find a supply zone in here, and price comes through, and you get there, and you're wondering why it didn't hold for long, it's because yes, it was an order block, and it did block orders, but buyers are in control overall. And so, eventually, buyers outweighed sellers, and price continued trading higher. These sellers still got their orders filled, but they were just on the wrong side of the market, and it happens to everyone. So, it's really important that I get that distinction in there. So, where are examples? Let's just look at some examples. You can see in here we have this kind of range and then a huge expansion. This means this is a demand zone. In this instance, it's also pro-trend. So, this is actually a really good area, but it's Asia locked. So, we come in, and what happens? We have a reaction. And then we come into another range, and then from this range we have the aggressive sell-off. So, this is the core point now where we are. So, this is basically your supply zone. But now, look at what we're pairing it with. We have a supply zone, which is an order block. If I go to a higher time frame, this is a 15-minute. If I go to a 1-hour or a 2-hour or 3-hour, it will look like what you guys refer to as the last up candle before a down move or the last move before a fair value gap. Look at it, it's the last up move before a down move. So, it is an order block, but many people are just trading order blocks as though they're some magic pattern in the market that automatically makes price do what you think it will do. No, it doesn't work like that. There are real mechanics behind why price does what it does. And when you know them, that's what takes you from someone who thinks they're a smart money trader, but it actually is just a retail pattern identifier versus someone who's really a smart money trader who understands what smart money is doing, and who is able to capitalize on those moves. And this is a core level for that exact thing. And so this is the prime level that we got involved in as well. So that's an order block. Final thing on here are fair value gaps. And you know fair value gaps as a pattern. Again, it is a pattern, but it's not just a pattern. It's more than a pattern. And when you understand it as more than a pattern, you'll understand why they exist and why they get filled. So what is a fair value gap? Simply put in your terms, what you think a fair value gap is or what you've been told, it's a three candle pattern. You have candle number one, candle number two, and candle number three. And in a fair value gap, you will see a gap between the high of candle three and the low of candle one. This is your fair value gap. They call it a fair value gap. They identify it like this. And that's true, but why? What is it? Let's break it down to its core like we've just done with everything else. Fair value gap. So there's a gap in fair value. So what we just discussed, when you have a range in price and then you have an aggressive push up and then you have another range of price. Now imagine this is a one-minute time frame. If you go to a 30-minute time frame, you'll have one candle, two candles, three candles, and there'll be a gap in here. And simply what it means is that price was in fair value, lots of transactions, one side of the market aggressively dominated the auction causing price to run extremely high to the point where buyers who wanted to get involved couldn't get involved because there wasn't the available liquidity for them to get involved. And now you have what we refer to as a fair value gap. And it's that simple. And what we know about fair value gaps, especially the ones that are selected correctly, is that price likes to rebalance these gaps. Maybe because the market likes liquidity. Maybe because the market knows that there's a lot of liquidity that wasn't filled in this level that still could get filled in this level. Maybe it's because it's out of balance. Maybe it's because the the makers weren't really able to get advantage on price here. Again, for a market maker like Citadel, they much prefer choppy range of price action because they don't take on any risk exposure. I know I'm getting advanced, so I'll keep it simple. That stuff doesn't matter, to be totally honest with you. What matters is what's happening in front of you in price. So, that is what we refer to as a fair value gap. So, now we've covered in quite good detail, I would say, market structure, which gives you clear direction, the side of the market you should be on, the direction you should trade, etc. Liquidity as areas to target in price, and then order blocks and fair value gaps. Order blocks and fair value gaps are typically what we will use to get into the market. So, now the final thing we have to do is tie everything together with the exact strategy, which is kind of what we've already been doing. I've been priming you and building you up ready for this. Now, what I'm going to do is I'm going to pull this back to here. I could do this manually, but I just like to use my indicator. It just makes everything right, and also removes the human error. Do you know how many times I've gotten some market and then spent like 15, 20 minutes trying to find the right highs and lows? Like, look at this price action. And even if you have rules for market structure, it's still easy to potentially make mistakes. And the thing is is if I've built a strategy, and it's built on specific rules, and those rules are what make the strategy what it is, and then I have the data on them. If I make a mistake, I'm no longer trading my strategy. I'm trading something else entirely. So, not only do I not want to spend all my time trying to understand this, I also don't want to risk the problem of human error. And by the way, I have taken trades and then gone back and reviewed the trade and been like, "Oh, sugar. I accidentally missed this high." And I've done that quite a lot. And so, now I never will do that. So, I'm going to toggle my indicator because it's just what I would do. And also, for those of you who have probably had the idea and thought that something like this indicator would make their life easier and would also make them more accurate, more consistent, and everything else that it comes with it, um I'll also leave a link below. You can check out how you can get this indicator for yourself to use on your TradingView. But, let's have a look into it. So, we're bearish, right? Step number one in this trading strategy is, of course, direction. We're bearish. So, now we know that we are bearish, we only interested in looking for sales. Step number two, identify your liquidity. So, I notice that we have London highs in here. Again, as as we're opening up session in London, there's two things that come into mind. The first one is the fact that we have previous day's low, and we're bearish. So, this is my expectation. Previous day's low, Asia session low, they're untaken. So, I want to target them. And what I'll do here for session, I'll just do this so I don't have to do it myself. It will show me the lines of the session. So, we have Asia low, London low. So, now I have my liquidity. I have Asia low and previous day's low. So, I have my direction and I have my targets already set up. Now, what I need is location and confirmation. Notice here that the 1-minute time frame says that it's bullish. So, with this strategy, when the 15-minute time frame is bearish, we're putting a lower low, eventually we're going to have a pullback. As we know, according to the document, we're going to have, after a break of structure, we're going to have a pullback. After a break of structure, we're going to have a pullback in here. When this is happening on the 15-minute, the 1-minute time frame is going to be bullish. Because the 1-minute time frame inside of here, if we go there and look at it, look how big it is. It's this entire animal. Look at it. It's huge. So, the 1-minute is usually going to be bullish. What I do is I wait for the 1-minute to stop being bullish and to change to bearish. That's what enables me to know when it's time to go. So, we have direction, we have liquidity, we have location in the sense of two things. The first one is London high as liquidity. So, we're expecting price to go there, and we have this range, which is our bearish order block, or we'll call it our bearish supply zone. So, we have location, we have liquidity, we have direction. Now, we're just waiting for confirmation. So, when we break the highs like so, when we liquidate them, we're going to go to the one-minute time frame. And now we're just going to observe price. Now we're in our level, but we're still bullish. So this is our swing low on the one-minute time frame. So I do nothing. I wait for price to come and break this low. Now price has broken structure to the buy side. So we're still bullish, but now we have a new swing low on the one-minute time frame. So now I need to wait for price to break this low. And at this point I'm doing nothing. I'm just waiting for that to happen. Okay, a new break of structure. Now I'm waiting for price to take this low. Notice that we wick it, but there's no break of structure. That's because coded into this indicator, a wick below a low does not count as a break of structure or a change of character for me personally. That's my rules. That's what I've tested. So that doesn't count. Now we have our change of character. Now we have our confirmation. We have direction, which is our bias, which is bearish. We have targets already set and loaded. We have location, which is our bearish supply zone and our London high. And now we have confirmation, which is our lower time frame reversal. Now the one-minute is bearish with the 15. Now we can expect price to go because up until now buyers have been in control. Now sellers are in control. Now we need to get into price. And what do we use? We use the same concept that we used before. We use a fair value gap. So we enable fair value gaps and order block, right? Or supply zone, what I like to refer them to. So there's see here, there's two fair value gaps. There's one and there's two. The first one has already been filled. So this is an interesting. The second one is here. So that's interesting. But I'm interested in the supply zone. What is this? Please tell me, what is it? It is a range before an aggressive move. Remember we spoke about it, fair value imbalance. You will always see that with an a good order block, the right order block, there will be a fair value gap. Because that's the whole premise of what we just explained. So now I have the range and the fair value gap. So now I know where I can take this trade. And so I take it from here. And if I want to be cheeky, I could do this and use this as my stop loss. But I'm going to be honest with you and transparent with you. I could make this look like an incredible trade better than it was type thing. I could run it all the way to the lows and it would be a 1:25 risk reward. And that can happen sometimes, but I want to be honest with you. I want to be truthful with you. I want to show you the reality of my actual trading strategy, not just random stuff. I've tried using this like micro refined level, but I've noticed too many times that price can like just wick you and then go. So what I do with my rules is I like to cover the high. If I just cover the high, I know I'm protected. Because we can do this and my trade idea is still valid. So I like to cover the high and that's what I did and that's what I do and that's what I want to tell you as well. So that's my trade idea. And from there, we tag in and we have a great reaction and we start selling off. And if I just fast forward it because I know you spent a lot of time with me here today. We just fast forward it, we'll see how this actually plays out. Candle. You see we almost come in here. How many people will attempt to close the trade, but we don't do that. We follow our rules. We let the trade play out because that's the game. That's probabilities. And now you'll see my first target has been hit, which was Asia session low. So now we're going to go ahead and take half of our trade off the table, which is around 4.25. I like to fix it around 5R, but either or is fine. So now we've taken 50% off and we're literally just waiting for price to take out these previous day's low. And we'll see if it does that. In the meanwhile, again, if you want to grab this exact indicator, the exact indicator that I use, that I built myself, I'll leave a link for you in the description. And the next day in the London session, the full take profit was hit. Hope you enjoyed the video.