i use smart money for trading and sometimes when i took a sl i dont know if its part of the strategy or i did a mistake somewhere so i dont do it in future .can someone help me pls
for example i found out my poi in 4h with an ob that made a fvg too
then i went to 15 min timeframe and waited for a lower low for short
Welcome to BabyPips and here is some feedback for you. We’ll step through this from the top down.
- Even if you use 2 timeframes such as H4 and M15, you still should zoom out and get a lay of the land on the H4. The H4 is clearly in an uptrend.
Price is leaving from a demand zone (or imbalance above demand) in an existing uptrend so it’s likely bullish.
The price action at the demand zone indicates rejection from going lower and a willingness to go higher.
Supply is failing and Demand is in control
Look at what is happening on the M15 with the understanding of where price is coming from on the H4 and the dominant trend on the H4. Demand is control on both time frames. Supply is failing to violate demand zones.
Those are some but not all of the reasons why I wouldn’t consider your sell setup to be high probability.
About “order blocks” (supply and demand) and fair value gaps (imbalance) POIs
All POIs are not created equal. Many POIs fail and having imbalance next to a supply or demand zone doesn’t necessarily make it stronger. What may appear as a fair value gap on a higher time frame is often a DBD supply or RBR demand zone on a lower time frame. You have to be very discriminating in choosing your POIs.
If you are in a bullish market, you should only be looking for demand zones or bullish order blocks.
I didn’t make these for this post but I think it applies to your M15 CHoCH:
thx for answering .
you said in 4h if i zoom out i see a clear uptrend and you are right but in recent time we are making lower low and lower high so i thought we are in a downtrend.
The way that came to my mind to solve this problem is that i should look at daily time frame so i can understand the trend and i switch to 4h timeframe and find some poi base on ob with a fvg that are in discount zone and i wait for a choch in 15 min timeframe in one of the poi that i marked out before.
what do you think about this?
do you have any suggestion for me how to fix this mistake?
I assume you use the popular 2 timeframe model of H4 for analysis and setup and M15 for entry and confirmation.
I was offering a simple way of zooming out to see the big picture without adding another timeframe to your analysis. You can always look at as many timeframes as needed, it doesn’t cost anything.
Getting the direction bias right is crucial but easily corrected.
Keep in mind that you are using a M15 CHoCH to identify a H4 reversal point. There can be a lot of noise on the M15 before the H4 CHoCH happens, so be very selective in which highs or lows being broken qualify as a CHoCH.
I require at least 2 highs or lows to be broken as CHoCH confirmation.
if i dont bother you i have another question .
what you do suggest for target levels.
i mean i know people saying for long position ,you can keep it until last high but how we can know that price gonna make new hh so we will stay with it?
Not knowing for sure is why it’s trading, not money printing. If targeting beyond the market structure range, there should be a reason for price to go there such as an unmitigated zone, resting liquidity, unfulfilled imbalance, etc. within the overall context
I don’t target beyond the market range, but that is a personal preference based on information gathered from backtesting.
So I’m targeting 3 fib levels on the higher time frame as TPs. My RR would be borderline doing this alone, really nothing to write home about. The great RR comes from scaling down to my entry time frame to get a sniper entry with a small stop loss while targeting one of the 3 fib levels from the higher time frame.
This is 1 year worth of data on the Daily time frame:
This is 1 year worth of data on a zoomed out 4 Hour time frame:
Not much of a difference. You get the same information without changing time frames.
Thank you very much for your time. Can I ask you in the future if I have any questions?
Tagging me is fine. Good questions benefit everyone.
Wow that’s amazing and your responses were super detailed too! Rare to see here!
hi.i have a question .an order block must have what conditions to be a strong and valid one for you?
for example in here we had a clear bos and i marked out the trading range and until price is above this range, we are in uptrend so i found my order block that is in discount level.
this order block caused an imbalance and also our bos .
so price came in it, maked about 2 trigger for us in 15 min but actully never moved up .
Before going into your order block. This post may be helpful:
First let’s zoom out and look at the big picture:
4 Hour Zoomed Out:
I would be looking for sells based on the existing downtrend. I would require more Change of Character confirmation before looking to buy in this case. Your bullish order block or demand zone has a very tough fight on it’s hands to turn price around here. This is like trying to pick the bottom or catch a falling knife.
Follow the Supply and Demand Zones and see which is in control. They will likely stay in control until they have a reason not to be such as collision with a higher time frame Demand zone.
Now look at which zones did what:
This may be the answer to your question, one of the criteria I use for zone validation are the following:
- valid demand zones should violate the opposing supply zone
- valid supply zones should violate the opposing demand zone
If price is in a downtrend demand zone or bullish order blocks need to have additional confirmation before assuming a reversal is going to happen. If price is telling you that it is bearish, believe it until it tells you otherwise.
hello .hope u doing well.
i have a question.
imagine we found an OB that suits all our Conditions.
what must be happen that then we say, ok this OB is no longer usable for us?(expect price reaches last high/low with first touches)
If I understand what you’re asking, it sounds like you are referring to an order block being mitigated already and not being reliable for additional retests.
Think about it like this, your floor doesn’t get stronger by hitting (testing) it with a sledge hammer as you destroy the structural integrity of the floor. Pending orders and traders willing to enter at a level are the structural integrity of Support & Resistance and Supply & Demand. This is why untested Supply & Demand works best and why every Support & Resistance level is eventually broken.
hello .hope u doing well
I am confused about market structure.
in here we have usdjpy
i dont know if we have retracements in the box that i marked, for makring new range
I wouldn’t consider anything in the box to be substantial enough to be considered a retracement.