Transcription
What is up my people? In today's video, we're going to talk about zones and where exactly within the zone we should look for our entry. I know when we have this break of structure here, okay, we're drawing our zones here, and this is perfectly correct.
Now, the main question a lot of people have is, where exactly within our zone are we going to bounce from? Are we going to bounce from the 30%, the 50%, the 70%? So, these lines are just 30, 50, 70%. Sometimes we come here and we bounce. Sometimes we come to here and we bounce. Sometimes we come all the way down. You may even wick the low and then we bounce. So, if we enter too early, we get stopped out. If we enter too late, we miss a move. So, how do we find the sweet spot?
But to help us, we want to focus on these three factors: displacement out of the zone, the points of interest within the zone, and the liquidity that we are likely to take out. So, I'd say these two are the most important, and then this is also an important factor, but just not as important as points of interest and liquidity.
And now I'll show you examples. So, we'll go with this example here. You can see we have a break of structure to the downside that gives us a bearish zone. So, where within this zone are we looking for sells? Okay, is price going to come reject at 30, reject at 50, reject at 70, even reject at all?
Well, the first step is displacement out of the zone. How far out of the zone have we displaced? You can see we haven't really gone that far. If we go all the way down, it needs so much energy to put on this lower high. If we go down to here, we can still expect a retracement fairly deep because we haven't displaced a lot.
The second step is points of interest. So, where within this zone do we have our S&Ds or origins, etc.? You can see we have this slight S&D here, okay, and we also have another supply area here in this up to down move. So, which one is more probable? I'll get into liquidity as well, okay, where do we have, where can we expect price to take out? You can see we have this swing high, this swing high, this swing high. I'd expect price to come take out all this liquidity as well.
So, going into where am I looking within this zone to take a trade? Am I first? My first thing is we've barely displaced, so I'm expecting a deeper retracement. What does that mean? That means I'm most likely not going to take this S&D here. I'd rather wait for price to come into this S&D. You can also see we have a lovely supply that we have not retraced into yet, and we have this liquidity to sweep. So, this would be a lower probability than waiting for price to come to tap into this. So, at least 50 to 70% of the zone, we can play this out, see how it goes. Nice.
So, we do decide to reject around 50% of the zone, and as you can see, it's this exact area here. So, about now, liquidity was how far we displaced where you're expecting price to go before continuing lower. We know that these trades, 30% and lower, isn't as probable.
Now we can go to a bullish example. We can see we broke structure to the upside here, giving us this bullish demand zone. Now, where within this bullish demand zone am I expecting a retracement into in order for price to continue higher? Well, first thing I see is we have displaced not a bad amount away from the zone. So, this would incline to me not so much of a retracement in. However, the most important things are the points of interest and liquidity.
And if we focus on this chart here, we can see, okay, where are our points of interest? Where are our demand zones within here? You can see we have this S&D here, and we have this origin here. This is origin, this is our S&D. So, that immediately removes this top half of the zone for me. I'm not expecting to take a trade in here because we have no reason to bounce.
Now, what liquidity am I expecting price to take? Well, we don't really have any liquidity here. The most obvious liquidity I can actually see are these equal lows. So, it makes sense that this is going to be the fuel that price uses to continue higher. So, that immediately gets rid of this S&D for me, gets rid of all this, really 50% of the zone. It only keeps the origin for me.
So, now if I'm taking a trade, I'm not going to get faked out looking for a fake flip here and then we get stopped out, and I look for a fake flip here and then we get stopped out. I know only if we sweep this and come into my origin, this is where I'm expecting price higher. So, using the displacement, points of interest, and liquidity in this example here, I can expect a deep retracement into the zone before continuing higher. Let's see how that works.
Delete all these drawings. Right, you can see we did get a deep retracement into this zone, respected our protected low, our low came to 50% of this origin, not S&D, and then continued higher. So, by that, you won't get faked out, especially here in these fake flips. We get fake flips and then we dump.
Hope this helped answer some questions you may have. If you do have any more, please drop any questions in the comments below. Learning this can definitely help improve your win rate even more. If you do want to join the premium Discord where I can give you a lot more one-on-one support and we can live stream our trading together every day, just click the link below. Apart from that, I appreciate you as always, and I'll catch you guys in the next video. Bye.