This is a continuation of sorts of my educational article that received an "Editor's Pick" from TradingView and a large number of positive reactions from this amazing trading community. However, unlike that post, this is a trade idea that outlines clear entry conditions for when the price reaches a relevant manipulation zone and shows a reversal reaction. If you don't want to get into the details and trace the entire chain of events through which large capital brought the price to its current levels, feel free to skip the intro and go straight to the 4H chart with the long setup conditions.
To better understand the logic of "smart money," let's revisit the Gold daily timeframe from my educational article:
We will approach this analysis like detectives, following the facts and footprints in the style of Sherlock Holmes and Hercule Poirot.
So, let's begin our investigation. On the daily structure, we see a clear order flow confirming the intention of large capital to lead the price in continuation of the uptrend. After the latest impulse that began on February 28th and ended on April 3rd, the price corrected and mitigated the DEMAND1 manipulation zone. The "Whale" refueled with liquidity, eliminated some competitors, closed its losing short positions used for the manipulation, and gained energy for the next impulse that set a new ATH. The correction that mitigated the DEMAND1 zone was nothing other than the next manipulation, also in the form of a DEMAND zone, within which there is a still-valid daily order block. How can we assert that DEMAND 2 is a manipulation and not just a correction?
Firstly, the sharp nature of the move swept liquidity from the March 21st low. Secondly, the sharp upward impulse accompanied by a series of FVGs showed the Whale's true intention. And thirdly, the reversal from this DEMAND 2 zone, combined with the 61.8% Fib retracement level, resulted in the formation of the next manipulation in the form of the OB 1 order block. Further, we see the continuation of the order flow on this daily structure; the price reacts to OB1, forming another order block, OB2. The impulse from OB2 sweeps liquidity from the May 6th high. Many might have expected a continuation of the impulse and a new ATH instead of a sweep of this high, but as often happens when too many participants pile into one direction, the price sharply reverses and liquidates their positions. This intense decline after sweeping the high looked something like a local trend change from bullish to bearish, but the sharp recovery after sweeping the liquidity from the June 9th low and forming a new order block, OB 3, finally revealed what was really happening: it turned out to be a range. It's impossible to identify a range until it is fully formed. A range is another type of manipulation where internal and external liquidity is swept from both sides. In our case, there was first a deviation above (Deviation 1 on the chart), then a deviation below (Deviation 2), after which the price swept some internal liquidity and got stuck exactly in the middle of the range.
And finally, after all our investigations and deductions, we can say with absolute certainty, practically with 100% confidence divided by two, that ABSOLUTELY NO ONE KNOWS where the price will go from the current levels. Because the center of a range is a state of complete uncertainty. Moreover, I dare to suggest that even the Whales don't know where the price will go right now. They certainly have enormous funds to sharply move prices at the right moments to capture liquidity and conduct manipulations. At other times, they can nudge the market to create a trend and direct it like a chain reaction of falling dominoes. But the entire market is much larger, and if its sentiment changes drastically due to external factors, smart money won't waste its resources fighting it. Their goal is to make more money, nothing personal. Why else is the price stuck in the middle right now? Inflation data is coming out soon, which could push the price in an unpredictable direction. The Whales will wait to use this news-driven impulse to their advantage.
So, what have we concluded from this investigation? Was it all in vain since we can't even say with 51% probability where the price will go next? Of course not. We simply need to wait for the price to reach an area where the probability of it moving in a certain direction is significantly higher than 50% — that's all you need to be profitable in the long run. This probability will never be close to 100% because we don't know what's really happening in the depths of the market. Are the Whales accumulating positions in this range now, or are they selling off at high prices after the ATH? Unless you are one of the few direct participants in large capital, you can't know this. Moreover, you don't need to know it to make a consistent profit in the market. It is enough for us to predict the next move of smart money with high probability at certain moments, join their movement, and take our profit. It's like a weather forecast: the further from the current date, the lower the probability of it being accurate. It's the same with the market; a completely unpredictable combination of factors, news, and hidden internal processes can lead the price on a unique path, but always accompanied by smart money. It doesn't matter where the gold market goes next, whether to a new ATH or down to the next correction level. When the Whale reveals itself again by leaving a trail in the form of a manipulation, we can lie in wait near it and join its next move. Why is it generally a good idea to enter from manipulation zones? You are essentially stepping onto a field where the Whale has already cleared the liquidity, and it has returned to that place for other business — to close its losing positions. That is, a mitigated manipulation zone is a safer place to enter the market; there's a much lower chance the Whale will absorb your position. Right now, we have such a manipulation in the form of the OB 4 order block, and we can switch to the 4H timeframe to look at a potential entry zone in more detail.
4H CHART - SETUP CONDITIONS
So, we already know the general context: the price is inside a range. After the second deviation, it has already reacted to the order block formed after it, and we are waiting for the mitigation of the next one, OB 4, which will serve as a pivot point for a potential setup. A reversal from this order block will confirm the order flow for the price to move at least to the upper boundary of the range. The presence of a manipulation zone alone is not enough to open a position; additional confirming conditions are always needed. As one such condition here, we can take the combination of mitigation with one of the Fibonacci retracement levels — 61.8% or 78.6%. Upon reaching each level, the price must hold (not be broken by the bodies of 1-4H candles) and show a reversal reaction. The final confirmation for entry will be an LTF confirm in the form of a break of structure (BOS) or the beginning of order flow on a lower timeframe. An important part of the context is that important US inflation news is coming out soon, and positions should not be opened right before it or for some time after (at least an hour).
Invalidation of the long scenario would be a break below the 78.6% level and OB 4.
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~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
To better understand the logic of "smart money," let's revisit the Gold daily timeframe from my educational article:
We will approach this analysis like detectives, following the facts and footprints in the style of Sherlock Holmes and Hercule Poirot.
So, let's begin our investigation. On the daily structure, we see a clear order flow confirming the intention of large capital to lead the price in continuation of the uptrend. After the latest impulse that began on February 28th and ended on April 3rd, the price corrected and mitigated the DEMAND1 manipulation zone. The "Whale" refueled with liquidity, eliminated some competitors, closed its losing short positions used for the manipulation, and gained energy for the next impulse that set a new ATH. The correction that mitigated the DEMAND1 zone was nothing other than the next manipulation, also in the form of a DEMAND zone, within which there is a still-valid daily order block. How can we assert that DEMAND 2 is a manipulation and not just a correction?
Firstly, the sharp nature of the move swept liquidity from the March 21st low. Secondly, the sharp upward impulse accompanied by a series of FVGs showed the Whale's true intention. And thirdly, the reversal from this DEMAND 2 zone, combined with the 61.8% Fib retracement level, resulted in the formation of the next manipulation in the form of the OB 1 order block. Further, we see the continuation of the order flow on this daily structure; the price reacts to OB1, forming another order block, OB2. The impulse from OB2 sweeps liquidity from the May 6th high. Many might have expected a continuation of the impulse and a new ATH instead of a sweep of this high, but as often happens when too many participants pile into one direction, the price sharply reverses and liquidates their positions. This intense decline after sweeping the high looked something like a local trend change from bullish to bearish, but the sharp recovery after sweeping the liquidity from the June 9th low and forming a new order block, OB 3, finally revealed what was really happening: it turned out to be a range. It's impossible to identify a range until it is fully formed. A range is another type of manipulation where internal and external liquidity is swept from both sides. In our case, there was first a deviation above (Deviation 1 on the chart), then a deviation below (Deviation 2), after which the price swept some internal liquidity and got stuck exactly in the middle of the range.
And finally, after all our investigations and deductions, we can say with absolute certainty, practically with 100% confidence divided by two, that ABSOLUTELY NO ONE KNOWS where the price will go from the current levels. Because the center of a range is a state of complete uncertainty. Moreover, I dare to suggest that even the Whales don't know where the price will go right now. They certainly have enormous funds to sharply move prices at the right moments to capture liquidity and conduct manipulations. At other times, they can nudge the market to create a trend and direct it like a chain reaction of falling dominoes. But the entire market is much larger, and if its sentiment changes drastically due to external factors, smart money won't waste its resources fighting it. Their goal is to make more money, nothing personal. Why else is the price stuck in the middle right now? Inflation data is coming out soon, which could push the price in an unpredictable direction. The Whales will wait to use this news-driven impulse to their advantage.
So, what have we concluded from this investigation? Was it all in vain since we can't even say with 51% probability where the price will go next? Of course not. We simply need to wait for the price to reach an area where the probability of it moving in a certain direction is significantly higher than 50% — that's all you need to be profitable in the long run. This probability will never be close to 100% because we don't know what's really happening in the depths of the market. Are the Whales accumulating positions in this range now, or are they selling off at high prices after the ATH? Unless you are one of the few direct participants in large capital, you can't know this. Moreover, you don't need to know it to make a consistent profit in the market. It is enough for us to predict the next move of smart money with high probability at certain moments, join their movement, and take our profit. It's like a weather forecast: the further from the current date, the lower the probability of it being accurate. It's the same with the market; a completely unpredictable combination of factors, news, and hidden internal processes can lead the price on a unique path, but always accompanied by smart money. It doesn't matter where the gold market goes next, whether to a new ATH or down to the next correction level. When the Whale reveals itself again by leaving a trail in the form of a manipulation, we can lie in wait near it and join its next move. Why is it generally a good idea to enter from manipulation zones? You are essentially stepping onto a field where the Whale has already cleared the liquidity, and it has returned to that place for other business — to close its losing positions. That is, a mitigated manipulation zone is a safer place to enter the market; there's a much lower chance the Whale will absorb your position. Right now, we have such a manipulation in the form of the OB 4 order block, and we can switch to the 4H timeframe to look at a potential entry zone in more detail.
4H CHART - SETUP CONDITIONS
So, we already know the general context: the price is inside a range. After the second deviation, it has already reacted to the order block formed after it, and we are waiting for the mitigation of the next one, OB 4, which will serve as a pivot point for a potential setup. A reversal from this order block will confirm the order flow for the price to move at least to the upper boundary of the range. The presence of a manipulation zone alone is not enough to open a position; additional confirming conditions are always needed. As one such condition here, we can take the combination of mitigation with one of the Fibonacci retracement levels — 61.8% or 78.6%. Upon reaching each level, the price must hold (not be broken by the bodies of 1-4H candles) and show a reversal reaction. The final confirmation for entry will be an LTF confirm in the form of a break of structure (BOS) or the beginning of order flow on a lower timeframe. An important part of the context is that important US inflation news is coming out soon, and positions should not be opened right before it or for some time after (at least an hour).
Invalidation of the long scenario would be a break below the 78.6% level and OB 4.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
If you found this analysis helpful, support it with a Boost! 🚀
Have a question or your own view on this idea? Share it in the comments! I read every single one. 💬
► Follow me on TradingView for more educational content like this and to not miss my next detailed trade idea.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Note
The price of Gold has played out according to the first scenario. A reversal reaction occurred from the OB 4 order block in conjunction with the 61.8% Fib level. The mitigation of this order block was accompanied by a micro liquidity sweep of the low at the 3310.20 level, which, as I mentioned in the How "Whales" Manipulate Markets guide, strengthens the probability of the setup working out. The price did not go to the upper boundary of the range because internal liquidity had already been swept higher, forming the OB 5 order block which has, for now, halted the price movement. The second scenario, involving a reach to the 78.6% Fib level, is no longer relevant because, as I also pointed out in the guide, a manipulation zone is only valid until its first mitigation. Thus, OB 4 is no longer active and will not act as a high-probability reversal zone.So, what do the footprints of institutional capital show next? Besides the price remaining within the global daily range, another range has formed on the 4H structure. At the low of this new range, the "Whale" has left a trail of manipulation in the form of the OB 6 order block. The next long position can be considered upon the mitigation of this 4H order block (which also contains a 1H order block) at the lower boundary of the range. If there is a reversal reaction from this manipulation zone with confirmation on a lower timeframe, then I expect the price to move towards the upper boundary of the global range, based on the fact that Gold's order flow remains bullish (manipulations from below are being "respected" — price sees and reacts to them).
However, despite the bullish order flow, it's important to understand when working inside a global range that since there is no clear trend, the probability of trades working out is lower because any manipulation zone can act as liquidity. There is nothing to fear here; we simply wait for LTF confirmation before entering and always use stop-losses with an appropriate level of risk. We'll wait to see how events unfold next week.
Trade closed: target reached
The price of Gold has broken out of the local 4H range without mitigating the OB 6 order block I showed in the last update, offering no reliable re-entry opportunity for those who missed the entry from the first scenario at the OB 4 order block after the liquidity sweep. A reaction occurred from the FVG located just above OB 6, but an entry from an FVG is far less reliable than one directly from a manipulation zone, especially when it occurs within a range rather than a trending move. (This OB 6 is no longer valid since the price mitigated the FVG near it + the swing structure has been updated).
The long setup in this trade idea has now fully played out. Gold has reached the target I initially expected if one of the two long scenarios were to form. As a reminder of what was written in the original July 12th idea:
... we are waiting for the mitigation of the next one, OB 4, which will serve as a pivot point for a potential setup. A reversal from this order block will confirm the order flow for the price to move at least to the upper boundary of the range...
How the price reaches the setup's target or the POI for its formation is completely irrelevant; it can happen immediately or through a local range, as in this case. But the most important thing is that the footprints of smart money in the form of manipulation zones show the true intentions of large capital. In this case, as I've mentioned, Gold had a clear bullish order flow on the daily structure. I believe we have a very good example of the practical application of the knowledge I laid out in the article, "How 'Whales' Manipulate Markets: A Trader's Guide to Succeed", in real-market conditions, we saw how to find good, high-probability setups based on understanding the logic of price formation in the context of market manipulations.
To conclude, I'll share my thoughts on the current situation with Gold. For this, let's switch back to the daily timeframe.
We can see that the price is attempting to break out of the global range, and this is a moment of uncertainty, just like being in the middle of it. There is now a significant probability that the price will continue its uptrend from current levels and sweep the nearest liquidity from the June 16th high, or even go on to create a new ATH. However, jumping on a moving train is always a bad idea. A foundational concept of smart money for safe long entries is for the price to be in the discount zone. It's better to wait for a correction into this zone after the price makes its next move and enter from the nearest valid manipulation zone.
To consider the next long setups, I will be waiting for a full breakout from the range to the upside. Confirmation of this would be a daily candle close above its upper boundary at the 3403 level, but that would be a completely different long idea. If the price returns into this global range, I will only consider long positions after a liquidity sweep of the May 29th low and a return into the range, which would constitute a second deviation below. But if that happens, it won't be in the near future.
The advantage of knowing the principles of price formation through large capital manipulation and having the skills to identify them is that you don't have to wait for an entry on just one asset. You can switch to any other where the price is already close to a potential reversal zone. And for this, you don't need to monitor every currency pair, index, or cryptocurrency. It's enough to correctly mark the zones of interest for smart money once and set up alerts in TradingView that will trigger when the price approaches a potential area for a high-probability setup to form.
Practice understanding the logic of the "whales" and identifying manipulation zones — this will give you a real edge over other market participants who almost always enter on a single principle: when the price goes up, they open longs; when it goes down, they open shorts, and ultimately, in most cases, they become liquidity for the big players. But the logic of trading alongside institutional capital always involves entering on a reversal move when the price reaches a point of interest (POI) and reacts to it. It is precisely where most do not expect an entry that you can see the next move of smart money and join it to realize your profitable trade.
Thank you all for your support. If you have any questions about this trade idea or the concept of trading from manipulations in general, don't hesitate to ask in the comments.
Note
UPDATE: GoldGold has practically confirmed its breakout from the global range it has been in since the beginning of June. The only thing that could prevent this is a complete engulfing of the bullish daily candle that broke the upper boundary of the range by a bearish candle, but I consider this an unlikely scenario.
Why? Look at how beautifully and clearly large capital is guiding the price with its manipulations, creating a bullish order flow that is clearly visible on the daily structure. The current powerful breakout from the range has left behind a daily FVG and was also conducted by the "Whale" through a manipulation in the form of an order block. If the price moves to mitigate it *without* first sweeping the liquidity from the June 16th high, the next move could be even more powerful and take out not only that high, but also create a new ATH. So, I will be watching carefully for the start of a correction.
No one knows what the real plans of large capital are or what global news could turn the market in an unexpected direction. Therefore, I only act based on the actual interaction of price with the POI zones. I don't try to predict where the price will go next; it could continue the trend and create a new ATH from current prices. But when and if it comes to this new manipulation zone and confirms a reversal reaction from it, the chances of the next long working out will once again be on our side, just as they were all the previous times.
After confirming the start of a correction, I will post a new trade idea. So, follow me if you haven't already to not miss the next trading opportunity.
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.