Transcription
Most traders lose money, and it's not because their strategy is wrong. It's because they're taking B setups and convincing themselves it's A plus. I'm breaking down the exact checklist I use before risking a single dollar. If it doesn't tick every box, I don't take it. If it ticks these boxes here, it may not come often, but this is a super high probability trade. So, let's get straight into it.
Step one is always the trend. So, when I go on my 5 to 15-minute time frame, I simply say, "Are we more likely to push higher or are we more likely to push lower?" And it's pretty simple. You just look at highs and lows in the recent price leg. I don't need to shift all the way back and worry about these highs and these lows. Literally, just this recent price leg, what do we have? Well, we have a low, a high, a lower low, a lower high, a lower low, a lower high, a lower low. But, it's fair to say, really, given this current context, that I should be taking shorts over buys.
If we have a scenario like this, okay, you need not to touch a buy. That's where a lot of people also struggle. I mean, look, this is clear consolidation. We're making highs, breaking lows, breaking highs, breaking lows. Do not trade this. Have the discipline to only trade a clear trend such as this price action here. If you don't have a trend, you're starting your trade with a loss.
Now, when I'm looking for zones, I can mark this area here, or I can mark this area here, or I could even mark this area here, because every time we break structure, we have the possibility of drawing a new zone. So, how do I find the high probability ones? This is where I can jump up a time frame to my hourly, and I'm looking for valid highs on the hourly. And that is simply a swing high such as this candle here. I mark the highest bullish candle next to it, make sure we close below it. Beautiful. Now, I can mark this low to this high of that candle.
If I drop back to the 5-minute time frame, okay, and we have a clean six tap like we do here, this is a high probability zone, okay? Our hourly highs and lows are higher time or lower time frame high probability zones, just like our 5-minute highs and lows are going to be high probability zones on the 1-minute, for example, okay? So, because this is an hourly high and price is in a downtrend, if we think about it from a structural perspective, every time we have a high, price should respect this high, move lower, respect this high, and move lower. So, if we draw these higher time frame highs, okay, we can expect price to respect them and do what? Start to push lower. So, this would be a good POI for price to come into and push lower.
So, when we go back to that hourly time frame, we said that, okay, this was an hourly high, swing high, bullish candle we closed below, drop down. So, this would be make sense in a downtrend for price to, again, respect a high and push to make a new low. Now, of course, we need to make sure there is a clean six-tap. So, the first is a break of structure, perfect, which makes our protected high up here. Obviously, we need liquidity. You can see we tapped back into this zone here and made a lower low. Super important, this tap back needs to make a lower low. Perfect. So, now we have a clean six-tap model based off this zone here, drawn like this. 1, 2, 3, 4, 5.
Now, some people ask, is this liquidity or is this my protected high? This is my protected high and I look for price to break this and start looking for shorts. I'm going to get cooked because price is going to go in a downtrend and uptrend. So, when I draw my zone, my previous zone, how much of it did we mitigate? We mitigated less than 50%. So, general rule is I can still use this as a sweep for price to trade into and push lower. Now, we have a valid downtrend and a valid six-tap inside an hourly high, which means that this six-tap zone is high probability, things are stacking in our favor.
Now, we can look for one more thing that will really boost our odds. If we look at the video I posted this year like a couple days ago, where it's going from the 15-minute to 1-minute, we can find a good spot to review reversals with a 15-minute failed to close. So, if I look at swing highs on this 15-minute, we have this high up here and we have this high up here. So, if we sweep this liquidity, which we need price to do, right? We need price to sweep this liquidity before rejecting, or come up and sweep this liquidity and give us a failed to close, that would be a great sign of a potential reversal lower.
So, as we play price out, the first thing I'm waiting for is always to find the sweep. Now, okay, we swept this, closed above, but we swept this and we failed to close above. So, now if we look at this trade, let's write down why this is an amazing trade. We're trading in direction of the trend. We have an hourly valid high, which correlates to a great lower time frame six-tap zone and we have a 15-minute failed to close. Like, it's just super nice that these are going to become a great trade.
And the last thing, as always, is just confirmation. You don't just want to blindly enter, you still need that confirmation. So, what exactly is that confirmation? Well, as we sweep this, we get a failed to close, we're looking for price that this is now going to be the lower high that's going to give us a lower low. Pretty simple. What can we find? So, we just wait, okay? You don't force anything, you wait. What do we notice? Price is currently being held by this 5-minute inversion. So, so this 5-minute fair value gap. If price fails to push higher from this fair value gap and actually closes below, perfect, we can take this as a sign of rejection from our POI. Stop loss always at the high and target towards the low. You play that out. Boom. And of course, as we know price smashes TP.
As you can see, these are the exact trade exact trade I called out just a couple days ago for that exact same reason. The exact same entry failed to close as you can see 4-minute fair value gap entry. I'm in and boom TP hit. So, if you run your setups to these exact same filters, you're going to be taking good trades.
If you want access to the premiums, you can see all my trades live streamed with me daily and get daily breakdowns. The link's in the description below. Want to apply for the one-on-one mentorship where I will hold your hand all the way to guaranteed profitability. The link's in the description below. Apart from that, thank you for watching as always. Appreciate the likes, comments, and subscribes and I'll catch you in the next one.