Transcription
Most traders spend years jumping between strategies, indicators, setups looking for the one thing that's finally going to make them consistent. And I was the same. The answer for me wasn't a new strategy. It was narrowing it down to two simple entry models and executing them well so I didn't need anything else. And in this video, I'm going to break them both down completely. The lower time frame change of character, which is my primary confirmation model, and a higher time frame inverse fair value gap. I'm going to show you exactly why I use each one and exactly when to use one and when to use the other. And of course, I'm going to break down in real life trade examples. So if you've ever wondered why your entries are inconsistent, even though your zones work well, well this video is exactly for you.
Before I get into the models, I want to explain why exactly confirmation matters. So you have your perfect setup and price reaches into your demand zone here. Now you have two choices. You can either immediately enter after the sweep or I stop loss below, target the higher high, which is where most retail traders go wrong, or you can wait for a specific confirmation to prove to you that the market does actually want to bounce from here. And if you enter here and it goes to your stop loss and then for example, it rips up, this doesn't mean that this is a bad zone. It means your timing was off. You didn't wait for that confirmation.
So before I do absolutely anything, I need to make sure my higher time frame is perfect. And what does that look like? Well that looks like my classic six tap model. So you need to know your higher time frame trend. For example, my five minute trend, I can see we are clearly bullish. Nice. I need to find my zone. Here we have a clean break of structure. All right, giving me a clean zone here. And a high up here. Now where do we have liquidity? Between here and here? It is this nice low here that made the higher high. And this you can see is a nice fresh area of demand we've left. So when I mark out my six taps, I can see we have a 1 2 3 4 5. A clear trend ticked. Okay. A clear liquidity ticked. A clear area of demand ticked. Perfect. Everything is lining up, but I need to know can I enter from this zone or am I going to get stopped out? So we wait until price sweeps that liquidity. Boom. And now we can look for a possible entry.
So let's talk about my favorite one first because structure is always my favorite, which is that lower time frame shift in structure. What does that look like? Well in the uptrend in our higher time frame, we are bullish expecting price to put in a higher low. So this is just a simple pullback. However, on the lower time frame, this will be a shift in structure. So we need the lower time frame to shift structure again and then we know that when both time frames are aligned, this is the higher time frame expansion. This is when we need to get in. The five minute the higher time frame has always remained bullish, which is why we're looking for buys. The lower time frame has turned bearish. When higher time frame is bullish, lower time frame is bearish, that tells us we're pulling back. When higher time frame is bullish, lower time frame is bullish, that knows we're expanding. So obviously we want to catch the what? The expansion back up in this uptrend.
So let's go down to the lower time frame and let's see what structure is looking like. Well I can see structure here is printing a low, a high, a lower low, a lower high, a lower low, a lower high. So what does that mean? I need a shift in structure here. Obviously, in my demand zone, we're getting a shift of structure in my demand zone. This is going to become high probability trade. I cannot enter unless we get a candle close above that high. Let's see. And small tiny zones do not count. Too many people make this mistake. This here is not structure. This is low high low. Okay. We don't include small tiny structures low high low high low low. It needs to be a decent low high low. Ignore the small ones. Save yourself a lot of money. So let's see if we get that candle close. Boom. There we go. There's the close. This is the confirmation I need to see. Perfect confirmation that this area of demand is now working. So what do I do? I look to set my long position. All right, in this area here. Stop loss below. We're going to keep it simple. We're just going to go for a simple 1 to 1.5 over these examples cuz that's exactly what I do. We'll play price out. Comes back into this zone. Tags you in. And smashes TP.
So let's review that quickly. Higher time frame is in an uptrend. Okay. Comes back in to this demand zone here after sweeping liquidity. This is my protected low. This is my range high. So higher time frame is in an uptrend until this low breaks. Lower time frame, okay, is in a downtrend. So lower time frame is in a downtrend, it tells us the higher time frame is pulling back. When the lower time frame takes this high and expands higher, it tells us that what? The higher time frame is expanding back up to this high and we can catch those longs. That is why I put my stop loss. Okay. We go back to the one minute time frame. I put my stop loss below this one minute low. I don't need to use it across this zone here because I'm expecting now on the higher time frame this to be the higher low to give me the higher high. That means if I'm expecting this to be the higher low, we should not go lower than this low here. Okay. All the way down here when I can limit it to down here.
Now what happens when we have a fantastic zone like this but price comes straight down. There's absolutely zero structure to go off. Everything is lined up beautifully on the higher time frame. On the lower time frame, we have no protected high. We have no protected low. Do I just completely ignore the trade or can I look for option two? The inverse fair value gap. And this is a trade I took live today using this exact entry confirmation. So structure is always my favorite because it's the most reliable. However, we can't be fussy. The market does what the market wants to do. So as always, I need my perfect setup. There we have a beautiful break structure, a clear uptrend, and a nice liquidity point here with what? Our area of demand resting just here. So again, am I going to enter blindly here going for that? You could. You wouldn't know if it's going to be trash. So let's get our clean six tap on the higher time frame and only only when we have the higher time frame set up, we can start looking for an entry. So boom. We have swept that liquidity. We have come into my demand zone. So my first step as always is going into that lower time frame and looking for structure. Do I have any protected high in this instant here? No, it is simply a leg down. So I know that okay, this zone is still good. The higher time frame set up is good, but what can I use to tell me that we want to push higher? Then we go back to my five minute time frame and let's see if we can form a fair value gap. What do we see here? A nice fair value gap. Let's see what price does. Price reverses it nicely.
So let's talk about what we have done here. We have come into our higher time frame demand zone. We have swept liquidity. We've come into an area we expect some price to bounce from, this demand zone. And we've inverse that fair value gap. I don't need to overcomplicate it now. I don't need to maybe look for this or maybe look for something else. I trust the higher time frame. I trust this setup, which means now I can look for my entry, okay? Again, stop loss below and go for that one to 1.5. I can even see here, okay, nice. We form and let's say we get tagged in anyways, but we form a bullish fair value gap in return. If we play it out. Okay, nice. Next candle smashed take profit. Exact same setup, but cuz I didn't have lower time frame structure, I looked for a higher time frame fair value gap. Just as simple.
Here's what I want you to take from this video. You don't need 10 different confirmation models. You need one or two that you completely understand and know you can execute under pressure. The traders I work one-on-one with, they already know what a fair value gap is. They already know what a change of character looks like. But the inconsistency is between knowing a concept and actually executing it correctly in real time. In my mentorship, I sit with you. I go over your exact entries, your exact charts so we can find the exact problem and the specific fix for that. Cuz the gap between where you want to be and where you are now isn't knowledge, it's application. So if you do want to apply for that or you also want to apply for the premium Discord where you can watch me live stream, etc., the link for both of those are in the description below. So if you did like this video, as always, appreciate any likes, any subscribes, any videos you want me to do, just drop them in the comment section below. I'm happy to help. Any questions, drop them in the comment section below. Apart from that, appreciate your time as always and I'll catch you in the next one.