Transcription
What's up everybody? Hope you're all doing well.
Bit of a change of scenery here. Back in UK for a couple weeks. Well, one more week. Uh, so the mic might be slightly worse. Just bear with me. The quality is still super high of the education content. So, it's all good.
This video is going to be about zones, how I find super accurate, the best places to trade from, most importantly, what makes them high probability. And a lot a lot of people have been asking, yo, what makes a valid high? What makes a valid low? This video will go into a bit more depth of that. So, no more talking. Let's get straight to it.
All right. So, perfect. So, we're going to go this through this step by step. The first thing we need is to see a trend slash breaker structure. So, price is pushing higher, want to see a break structure to the upside. Price pushing lower, we want to see a break structure to the downside. That is the first step.
So by looking at this chart here, I can see that price is trending higher, which means I want to look for longs. So where is my trading range? Where is my break structure? Well, my current highest pro price or level, whatever you want to say on the chart is this high here. Okay, but this high here, it did not what? It did not close above this high here. So technically, this isn't my highest high. This is my highest bullish candle close. So I want to find what low gave me this high. Not what low gave me this high because this high came from this low. But this isn't a strong low because it never closed. Okay. Break structure always need to be closed. So because this hasn't closed above this. No candle was closed above this. This is technically my highest candle. Now I want to find what low did this candle come from? This low came from where? this candle here. So now I have my trading range already. I'm looking for buys. I'm looking for buys above this low and I'm looking for price to take out this high. Really candle close above. So boom, first step done.
Now we've done that, we can move on to the second step, which is finding a valid high slash a valid low. How do we do that? A valid high in case it say is another fancy word for a supply zone. A valid low is just a demand zone. Put it that simply. If we're buying, we're only looking for demand. If we are selling, we are only looking for supply.
So, back to this original example, we know we're buying because we're in an uptrend. That means I'm only looking for demand. So, if I'm only looking for demand, it means I'm looking for a valid low. What is a valid low? This is what we're going to get into. So first step is it needs to be a swing low. There's only two steps. First up for a valid low, find a swing low. Can I see that this candle here is a swing low because its lowest point is lower than the one to the left of it and lower than the one to the right of it. Simple swing low. You should know what a swing low is. If not, it's pretty simple. So three candle pattern. It's lower its lowest point includes wick doesn't have to be body is lower than the one to the left of it. and lower to the one to the right of it. So this candle it lowest point is here is lower than the candle to the right of it lowest point and lower than the candle to the left of it low point. So this is a swing low.
Now doesn't matter what color candle that swing low is. It can be bullish, it can be bearish. But when we're looking for the next step, we need to find the lowest bearish candle. Once you have found the swing low, okay, start from the swing low and look to the left of it. So anything to the right of this swing low becomes irrelevant. We are only focusing on this side and beyond right to the left of this candle including this candle. What is the lowest bearish candle? Well, in this scenario the lowest bearish candle is also this candle here because it has closed below the previous bearish candle. So, if it didn't close below the previous bearish candle and we had this, then this wouldn't be the lowest bearish candle because it didn't close below this. This would be the lowest bearish candle in this situation. We'll get more into that at the valid high because this closed below, right? As you can see, what did price do? It came and it closed below. This is my lowest bearish candle. So, I have my swing low and I have my lowest bearish candle. The last step is a close above this candle we just found. So now that we established that this is the lowest bearish candle, I need price to close above it. Boom. There we go. We have closed above it. This now validates this as a valid low. We have to wait for the close first. This So if we do this, this isn't yet a valid low. Only once we close above it, boom, this validates it as a low. Now I can draw a zone from here to here. Okay, this is my valid low. This is my area of demand. This is where I can I can expect expect price I got a cold to tap into here and then push higher. Boom.
Now we want to make sure that this valid low is actually good. Right? So there's certain criterias that we look to follow. The next step is we want it to be unmititigated. Okay. And we want it to have some sort of liquidity resting below or above. Above it if it's a demand, below it if it's a supply. But first of all, what do I mean by unmititigated? Well, if we go back to the example here, if price has done this now, we have formed a valid low. But if price then wicks all the way back down into it, okay, before then pushing back up out of it, this zone, right, I'll make it clear. This low here, it's become mitigated. There's no more orders left in it because we left the area of demand and I like to keep 50% as mitigated. So this dash line here we came we touched 50% we filled in all those orders the leftover demands that got filled and then we used it to push higher. This to me demand zone is done. Okay it's not fresh anymore. So then if I'm looking for a retracement into here again to push price higher, it's not high probability because this already happened. I want to get involved while it's fresh. I don't want to get involved while it's mitigated.
And now the final step is we want it to have a well we want it to contain some sort of liquidity because we always want to enter after a liquidity sweep so the liquidity sweep. So again going back to this example here, if I draw this valid low from here to here, right, the tap into your zone that pushes price higher, we'll get into that. Basically, this becomes my liquidity. So once price comes, it's a bit dark, but you know what I mean. Once price comes, I'm expecting it to sweep this, we get a liquidity sweep, and then I can start looking for my hopefully that makes sense. Let me get on to the chart now and show you this example.
So based on those steps, boom, we have our trend, we have our break structure. Now within here, okay, within this low to this high, do I have any areas of demand for price to retrace into and then continue higher? Well, let's see what counts as my areas of demand. My valid lows, which is just a swing low, okay? And then a candle close above. So this isn't a swing low. This isn't. This isn't. This isn't. The first swing low is actually our protected low down here. Beautiful. Now, is it the lowest bearish candle? Well, let's just rewind it. Let's see. So, now we've established as a swing low. Is it the lowest bearish? Well, to the left of it, we have this bearish candle here. Did we close below this? This low is three. As you can see here, this low is 3.906. This close is 3.906. So, this actually isn't my lowest bearish candle. Let's go to this candle now. Right, we just keep going one to the left. Is this candle contained within another candle? Yes, you can already see that this candle did not close below this bearish candle. I don't care about bullish candles now. Purely focus on bearish candles. So now this candle here, okay, watch this as many times as you need to, but this candle here is now my lowest bearish candle. So only once price closes above that, boom, we now have a valid low. So I can draw my zone from this high to this low. This becomes my valid low. This is my area of demand. So when we play price out back to where we were right let's just say even well where was it to be exact it was here going back to this leg we've had the trend we have the break structure we have the value level the next step is what unmititigated look at this zone since we left it has price yet come and returned to this 50% area it has not so this zone mitigated unmititigated it is unmititigated We can still use it. If price had done this and then pushed higher, I can't use this. It's not fresh. All the orders are taken. But because we haven't done that, you can see this 50% line. This dash line is still that hasn't been touched. Barely touched the zone. Perfect. Second step, liquidity. Do we have any liquidity within here? Look at this beautiful liquidity resting within here because we broke the zone, came back in, pushed higher. A lot of people have their stop loss at this low here at the support level here. If I drop down to a lower time frame, you can see it more clearly. Turn off this, right? Look at that. We broke it. We tapped back into it. Pushed higher. We have all this liquidity here. So, we have a fresh zone as you can see on this time frame as well. is unmititigated right as a return. We have liquidity. So when I draw my six taps, I know now that this is a high probability six tap area to use. So as price comes and trades back into it. Boom. Look at that. 50% of that. And what did it do? Respected 50%. Made a new high. This is a perfect A+ zone. Look at that trade. Absolutely beautiful.
So now let's go to the reverse and let's look at a uh opposing play. So again trend and a breaker structure. I can clearly see here on my higher time frame here which I just used the 15 minute time frame for my intraday trading price is trending lower and we have a break structure to the downside here. So now what do I need now? Where's my high that I'm using? Well, I'm trading my ranges from this high to this low. Okay. I'm looking for shorts within here. Boom. Where can I find a area of supply? My valid high, which is the next step. Valid high. Right. So, we've got the trend break structure. Now, we need a valid high. And then we can look for something unmitigated and liquidity. What makes a valid high? Well, it's the same. What's the opposite? It's a swing high. Boom. And then a close below the highest bullish. So again, anything to the right of your swing high or your swing low becomes irrelevant. You look to the left and you look for the highest bullish. In this example, the swing high can be any color, but we just need to find the highest bullish candle. Now, is this the highest bullish candle? We start from the swing high. No. Why? Because it did not close above this highest bullish candle. We go back to this first example here. It's the same reason. We're not using this high because it never closed above this bullish candle's high. So, this is my highest bullish candle. So, when I go back to this here, right, this never closed above this. So, this is my highest bullish candle. So, I need price to close below that point. Okay? Below the lowest point of that candle. It's exactly the same as a valid low, just the opposite. I'm not looking for a close below this. This isn't a valid high because this isn't my highest bullish. This is my highest bullish. So, once we come and we close below that, boom, I can draw my valid high from this low to this high and then expect price to retrace into it and continue higher.
Now, let's go to the chart and explain it. So, we're looking for a short between this high and this low. Where's my point of interest? Where's my high probability areas? My valid highs. So, first thing I need is a swing high. Isn't a swing high. This isn't a swing high. Boom. This is a swing high. Now, including this candle to the left of it. What's the highest bullish candle? Well, this is the only bullish candle. So, this is my highest bullish candle. Did we close below it? Boom. Yes, we did. So, this comes my first potential area. I'm looking for a sell. We keep going to the left now. See if we have any more. Next swing high is this candle here. What is the highest bullish candle? The highest bullish candle is also this candle. Did we close below it? Yes. Okay. So, now this becomes an area. Now this is super super a great example why. So let's focus purely on this one here. What did we notice? What makes it good now? Liquidity and unmititigated. Can you see we left it we tapped 50%. And then we dumped lower. So this now is mitigated already. It doesn't become any use for us because I've said that 50% has been filled. If I drop down to a lower time frame, you can see that we've come out of this area. We've broken out of this. We've returned. We filled in all of this supply 50% and then we dumped. So why am I now looking for price to come back into here and in return when it's already done that? So this isn't a good area to use anymore. It doesn't fit my criteria. So what do I do? I delete this here and I simply focus on this one here. Now, do we have any liquidity? You can see this is completely unmit again. Again, if I drop down to the lower time frame since we left this area, boom, we have not come to fill in the supply yet. So, this is a lot higher probability. Now, what is my liquidity? Where did we first leave it? And that can include a wick. It's we left it here. We then tapped back and we continued lower. This is my annual strategy. So this tap back that made the lower low becomes my liquidity. So now that fits all the steps. If price comes to sweep this, boom, look at that. 50%. I'm expecting it to hold and what? Deliver me that low low. Not in this area. had to be this specific area because we knew that this wasn't a good zone anymore because it was mitigated. If we're going to reject, it's going to be from this area. Look at that beautiful, beautiful trade.
So, awesome. I'm sure and I hope a lot of you found value in this. If you did, I appreciate any likes, appreciate any subscribes. If you have any questions, feel free to drop them in the comment section below. If you do want to join the premium discord, see me live stream my trading every single day, see the trades I'm taking, learn my entire trading strategy, get access to me so I can actually answer your questions as needed, then just the link for that is in the description below. Apart from that, appreciate your time as always and I'll catch you on the next.