USDJPY = Win. Finally? I have shit winrate, but at least this trade is "logical", and has followed the trading plan lol.
TRADING SPECS:
BIAS = DOWNTREND
NARRATIVE = 4HR BEARISH PD ARRAY(S/R FLIP+FVG)
CONTEXT = RESPECTED PREMIUM ARRAY + A Wave
ENTRY = SELL STOP ORDER @ A WAVE LOW (RUN ON LIQUIDITY). Nearly got SL'd. OPTIMAL ENTRY WOULD HAVE BEEN THE BEARISH FVG AFTER THE "4HR PREMIUM ARRAY REBALANCE" INSIDE CONTEXT AREA. THERE WAS A SHARP TURN IN THERE SOMEWHERE BUT I DIDN'T WAIT FOR THAT.
RISK MANAGEMENT = N/A(?) JUST LET TRADE PLAY OUT. BUT SL WAS INSIDE THE ORDERFLOW LEG(?)
Here's how it went:
1. Assessed Day Bias - price was downtrending. checked orderflow and candle science for this shit
2. Assessed Current Price "Intention" - price only does two things: seek liquidity, and rebalance fair value.
When I plotted my Key Levels, price was at a point where it was just done seeking liquidity(support + poc was swept) and it was reversing.
I see an S/R Flip + FVG area. If price goes here, that means price has rebalanced fair value.. so, logic dictates that it will reverse again to SEEK LIQUIDITY.
When I came back to this chart again, price has already rebalanced fair value, has respected the S/R Flip + FVG, and has started reversing down.
3. Picked Out a Target - I picked out something realistic. Here is where indicators/tools come in.
Instead of using my confluence mix(POC+FVG+OTE pd array) as entry points,
"I just used it as a target since... price has already rebalanced fair value at the higher TF, and it's already going down, so it's probably going to seek liquidity on the other side. It's most probable target before price may or may not do something else is the FVG+POC+OTE AREA."
My choice of liquidity category was the Previous Day Session nPOC. Along with the FVG and OTE, it was a strong "magnet", especially considering that price has finished seeking buy side liquidity and therefore the price's next target are the liquidities below.
Wow, this makes so much sense to me now.
Price always intend to bounce from opposite liquidities, from higher timeframe to lower timeframe... so...
4. Waited for PA that will Deliver Towards Target - I think my entry here was sloppy, the weakest part of this trade. But it made sense, and it still worked anyway.
I just found a sting candle down(the A wave) after tapping the (S/R Flip+FVG).. I set a sell stop limit on the exact low of that candle.
LOGIC was, if price pushed down below that sting, especially with a strong fvg, it would validate the RESPECT of the (SR FLIP+FVG), and it would continue going down(an invalidation of a long continuation idea)... probably to, again, seek liquidity below.
Reason why I think my entry was sloppy, is because I did not validate the trade idea first. I didn't wait for that sting candle to get "run on(liquidity)" first. I think in order to validate it, I would have waited for the sting to become a run on liquidity area first, and then a second bearish fvg candle close to confirm downtrend. It would have been too late and the profit would have been too small at that point.
5. Put SL at the Orderflow Leg Swing High - If price was really not intending to continue going up, it wouldn't have gone here, which it didn't. I nearly got stopped out, like the other trades I had on sunday and monday.
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Here's the pattern that I keep seeing though, when price makes a valid HIGH(like in this case, the SRFLIP+FVG rebalance), price will attempt to go here atleast twice with a WICK, but will still make lower highs. Usually, those second and third wicks will form as if it's going to take the liquidities at those wicks, but it will just take out the CANDLE BODY HIGHS... So take note of these next time.
When price sweeps a higher timeframe FVG/LIQUIDITY, mark out the candle body closes as TARGET LIQUIDITIES, not the wicks. If a downtrend is valid, it will only take out the body close liquidities. I will make a diagram to help make this make sense lmfao.
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I feel like a mad scientist at this point... endlessly trying to see the actual logic in the market. Not the probabilities of patterns playing out, but the CAUSES and EFFECTS.
I think I'm close to finding the pattern within the pattern... or the message hidden in the patterns(Arcane reference, anyone?).
But I think the two things I have found thanks to Arjo is...
"Price only does two things: 1. Seeking Liquidity 2. Rebalancing Fair Value
and Higher TF = Rebalancing Fair Value <-> Lower TF = Seeking Liquidity"
and
"The Higher the Timeframe, The Stronger the Timeframe"
Like... the market isn't random. I think these two things are the core principles of trading.
Because with these two ideas, you don't need a strategy. You need to UNDERSTAND this. And the strategy can be adapted to whatever you see on the chart.
You open EURUSD, and you see that price is on a downtrend, and it has recently rebalanced the bearish fair value gap on the 4HR? You know what price will do next. It will continue going down to seek liquidity below. So, with that information, what will you look for? How will you enter? Where will you set your entry point, your stoploss, and where is your target?
You open USDCAD, and you see that price is on an uptrend, it has already rebalanced fair value below, has made a bullish choch+FVG, and has respected that choch+FVG on a lower timeframe. You know it will seek buy side liquidity next. So how will you enter? Where will you place your stoploss? Where's your exit?
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Now, if only I can translate this knowledge into actual consistency in trading, I can finally make money.
But I guess doing the journal is great. I'm consistently at the 25-30% winrate. So with this understanding.. Maybe I can slowly push that winrate up over time.
I think mechanically, the trade entries i had a year ago and now was the same(choch+POC+FVG+OTE), but now I have the understanding of why it may work or why it won't work, and when do I apply it so I increase the odds of winning. So that's something.
Before, I didn't know why it did or did not work. But now, I know.
I can use this info moving forward to increase my odds.
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OH WAIT YEAH, IF I KNOW WHAT THE MARKET DOES AND WHY IT DOES WHAT IT DOES, THEN I WILL BE ABLE TO REFINE MY ENTRIES, BECAUSE NOW I KNOW WHY AND HOW I'M MAKING MY MISTAKES. HELL YEAH.
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I'm just not sure about whether I can stick to one entry strategy now, or if I should, or I won't trade something that looks doable under my principles... because I've studied everything, and it makes sense now. lmfao.
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if people are reading this(up to this point lol that was a long ash read), then thank you. Reply with your thoughts if ever.
Alright thanks bye
