1.
Trend Identification and Context
Before looking for a trade, you must identify the market direction.
Three Criteria: The strategy uses ChoCh (Change of Character), HL (Higher Low), and
BoS (Break of Structure) to define an uptrend or downtrend.
The Multi-Timeframe Process: You should look at the market through multiples of four
(e.g., 15-minute, 1-hour, and 4-hour charts) to determine if the lower-timeframe trend aligns
with the higher-timeframe trend.
UPTREND LONG
DOWNTREND SHORT
2. Identifying and Ranking Order Blocks (OB) and FGVs
Basic OB Criteria: An Order Block must show Imbalance (FVG), take a certain amount of
Time to form, and result in a BoS or ChoCh.
Time: The longer a range forms before a breakout, the stronger the zone is.
Magnitude: The strength of the move away from the OB and whether it creates
"Fair Value Gaps" (FVGs).
Mark the OBs and FGVs from D, 4h and 1h
3. The Execution (The Entry) (CAN USE 30 MIN, 15MIN,
10MIN, 5MIN AND 3MIN)
Once a high-quality OB or FGV is identified, you wait for price to return to it.
The Retrace: Wait for price to pull back to the topside of the OB or downside
Candlestick Confirmation: Do not enter blindly. You must identify one of four
specific reversal patterns:
1. Bullish Engulfing or bearish engulfing
2. Hammer (uptrend) and Hanging Man (downtrend)
3. Inverted Hammer
4. Choch
4. Risk and Trade Management
The strategy utilizes a two-step exit process to secure profits while leaving room for
larger moves.
Stop Loss (SL): Placed under the wick low of the Order Block or above the wick high of
Order Block
Take Profit 1 (TP1): SSL or BSL or swing highs and swing lows
Securing the Trade: Once TP1 is filled, the Stop Loss is raised to breakeven
5. OrderFlow (course)
Fair Value the price where both sides agree.
Balanced Market sideways
Imbalanced Market up or down.
Two concepts really important:
Value Area the range about 70% of trading took place.
POC (Point Of Control): the exact price level with the most volume, showing the markets fair price
for that period.
How trading really work behind the scenes
Market orders move price because they remove liquidity
Limit orders add liquidity because they wait in the Market.
Deep Market = many orders, stable prices.
Shallow Market few orders, quicker moves.
The problem with real-time OrderFlow
Spoofing fake orders. Created for trick other people, they cancel them before they fill
Iceberg orders big hidden orders that only show a small part. When that part gets filled, a new
part appears, hiding the true order size.
Layering placing fake orders at several levels to create the illusion of demand or supply.
FootPrint Chart (Volume FootPrint)
How much buying and selling happend inside each candle.
Delta difference between buy and sell volume. Positive: buyers in control. Negative: sellers in
control.
POC the price inside the candle where most trades happened.
Value Area about 70% of that candles total volume.
Imbalance one side trades about 3x more than the other, showing Strong pressure.
Stacked Imbalances several imbalances at nearby levels = stronger signal.
The image above shows where we can find a level o resistance using POC in FootPrint.
Absorption Price Moves opposite to the imbalance – a sign of potential reversal and weakness.
Initiation Price moves with the imbalance – a sign of continuation and strenght in the current
move.
Bullish Absorption selling imbalances appear, but price closes higher – buyers absorbed the
selling.
Bullish Initiation buying imbalances appear and price closes higher – buyers are attacking.
Bearish Absorption buying imbalances appear but price closes lower – sellers absorbed the
buying.
Bearish Initiation selling imbalances appear and price closes lower – sellers attacking.
Cumulative Volume Delta (CVD) Indicator by Lonesome
Price Up + CVD up = Strong, healthy move
Price Up + CVD down = weak move, possible trap.
Divergences:
Buying Exhaustion = price makes HIGHER HIGHS, CVD makes LOWER HIGHS
Selling Exhaustion = price makes LOWER LOWS, CVD makes HIGHER LOWS.
Volume Profile – Indicator Fixed Range Volume Profile
Volume traded at each price.
POC, Value Area.
High Volume nodes Magnets
Low Volume Nodes areas of rejection, price move through them quickly.
Volume Profile To Find Zones Worth of watching
FootPrint confirm absorption or agression.
CVD to see the bigger Picture.