Wanted to go over a key topic I find important and that’s knowing when to cut your loses early on a systematic approach
Hard stops are in place to limit your loses and resolute around key levels
1.Long Example
2.Short Example
3.Conclusion
1. Long Example
When looking for longs it’s crucial to find formed demand levels/breakers above your key levels. Stop loss placements are around previous formed swing points.
Closes below key levels are signs of weakness and make for a manual exit.
Notes on the chart
3. Short Example
For shorts you want your key levels above your formed supply/resistance levels. Stop loss placements above previous swing points.
Notes on the chart
3. Conclusion
Knowing when to exit and taking a full stop are two different things.
As a trader you need to have both an Invalidation point and a manual exit point. Trade management as such limits your loses and keeps you untied to your running positions.
Hope this helps.
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Simple setup that you can easily use in any market. Takes the emphasis of using Ranges, Supply/Demand alongside what a three tap is
Small write up to cover:
- How to format ranges
- Demand/Supply
- Three tap importance
Lets get into it
Formatting ranges:
First thing is building the basis of a setup and you can't get a proper read without adding a range.
Building a range allows you to see short term/long term liquidity as price exhausts before re-continuing in a trend
Demand/Supply
Your demand/supply will usually be at the deviation of a range.
Take the last swing point that forms prior to the deviation as the area that price needs to MSB to confirm a shift and allow you to look for demand/supply
Price finally tagged this 2D Demand ideally would want us to take out that NPOC deeper into demand with a deviation set below range low before a potential PO3 plays out..
Knowing what a Supply/Demand (SD) is and knowing how to use them are different. Small writeup to provide clarity, to my perspective.
Small write up to cover:
- Improper use of SD
- Suggested Use of SD
- Conclusion
Improper use of SD, to my perspective.
Price always has an objective. When you have 2 swing points/liquidity pockets we are moving from one end to the other.
Mocking up SD levels between those 2 points will more then likely invalidate as price has decided it will engineer stops
Suggested use of SD levels, to my perspective.
Normally how I mark up SD areas are at the bottom of a range/bottom-top of liquidity points. As price taps demand/ runs a low we then move onto the next area of liquidity/supply invalidating all in-between.
Wanted to briefly cover instances when I see traders get trapped within different variations as price consolidates and breaks down and how to potentially avoid.
We know the standard SFP-
Price sweeps a level and reverts to the opposing side.
What If we fail to sweep but close below an SFP?
This is when breakout traders come in and are trapped hence the manipulation cycle.
Notes on the Diagram Chart:
Potential Entries:
PO3's play a vital role when price breaks a key swing point. As long as we leave an opposing high any close below is a high probability we trap first and then go for the high second
Breakers offer good entry points for a broken low once we shift above