Right levels for trading
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In the previous 2 articles I wrote, I shared with you the edges I use. If you have not read them yet, I recommend you start by reading them. Today we will look at some price movements in the past together and I will explain when to care about the price, when to ignore the price, what to look for in the lower time frame if we have a htf price target about the price, how to determine our trading targets and when to exit the position before the target. I think it will be a long and effective article. We will discuss all these issues one by one in a complex way by talking about sample price movements.
Example 1
First of all, consolidation zones, also known as supply and demand, can be used in many different ways. I know that many articles and trainings have been shared about this before, so I will not tell you about supply and demand. I will show you how I interpret the price in my own way. First of all, if you are looking for trade setups on the 4h chart, you definitely need to find liquidity and interest areas on the daily and weekly charts. So what do these mean? how do i find it? First of all, in places where there is no liquidity, the price usually makes rapid and unexpected movements. You can generally trade these movements with trend follower trade setups and in the lower time frame, but I generally wait for the price to calm down and at least a clean range on the 1h or 4h chart. These ranges generally occur in S/D (I will use it as supply/demand abbreviation) regions or swing high/low levels. There are 3 different range movements: waiting consolidation ranges before the continuation of the downward or upward trend, range regions where a reversal movement will occur after a long decline/rise, and boring range regions where horizontal price movements accumulate. You should generally look for the first two, and these two range movements occur at the S/D and swing high/low levels. Let’s leave aside how to find the easy swing low and high levels for later, let’s talk about how you can detect S/D zones first. First of all, since institutional traders care about weekly and daily charts the most, I recommend that you look for the S/D zones on the charts on daily and weekly charts. But this is valid if you are trading using 4h and 1h time frame. If you are trading using lower TF, you should determine your S/D according to your own TF. For example, if you are trading at 1h or below, 4h and 1h S/D levels may be suitable for you. So why did I set these levels in Solana? In fact, S/D levels are the consolidation zone where the price passes before moving rapidly. Generally, in this region, big hands arrange their limit orders in pieces in order to move the price in the direction they want, and in order to fill these limit orders, they enter into a reverse transaction in the perp section and try to get the price to fill the limit orders. After filling enough orders, the perp process is stopped, a gap is created in the ledger and the price moves quickly in the desired direction. These levels are of great importance for big hands because when the price reaches this region again, they fill other orders that they could not fill or they start to be interested in the price again. This is valid for both supply and demand, so consolidation zones before the big movement on the daily charts are important and as I said, the price usually returns to this level.
As you can see, these consolidation movements (Demand) usually include down moves and the rise begins with the end of this down move. The reason for this decrease occurs when big hands try to fill their limit orders.
The opposite is also true for the supply region.
Now that we have briefly explained what supply and demand are, do not forget why we are looking here. Range movements on the 4h chart usually occur around these areas and since I trade range movements, I expect the price to test these areas. Another important issue is that you need to mark the S/D levels of the price that have never been tested. The return of the price to previously tested areas may have an effect, but it will be weak. I like to trade range movements in untested supply and demand regions to reduce the risk as much as possible.
Let’s examine together what the price does when it tests this demand. First of all, I am not one of those who buy at the first test of the demand zone. I wait for a range to form in this region and this takes some time. The price will go up and down and you will think you missed the price movement, but there will be dozens of altcoins and dozens of price movements. There is no point in taking multiple risks and increasing your risk instead of taking guaranteed trades. I only put my money into trades with guaranteed targets and clean invalidations. The price forms a clean range after receiving the first bounce and you can see from the price reactions that it respects this. Afterwards, there is a downward movement from the mid range to the range low level, and then the range breaks upward with a sudden rise. Here you can say that in this downward consolidation, big hands filled their limit orders and the price increased rapidly for this reason, so we will wait for the price to test this demand before rising with the range break and demand occurring. If not, we move on to the next trade. If not, we will not try to enter from anywhere else. Also, as you can see, this demand region contains both the mid range and the inefficiency left behind as the price movement moves up very quickly, so pullbacks to this region contain the necessary reasons for long. Invalidation, instead of making downward wicks to this demand zone, if it spends 3–5 candles in this zone, it will be a direct breakeven or the closest exit or the bottom part of this demand zone. If there are still limit orders, there should be a quick response when the price tests demand. If it does not get a reaction quickly, exit, if it breaks through the demand, exit the trade. This will tell us that the limit orders have been removed and we will be wrong in the trade.
Well, the demand zone is a very large level. Where exactly will the price reach, we will start to open long positions? I generally spread my limit orders throughout the region in setups that I am very confident about. If I have time to watch the price, I wait for the first candle to be tested and look at its form. If it has a downward wick, I start longing with market buy orders at the next candle opening. Another indicator will be Fibonacci. A lot of explanation needs to be made about Fibonacci, but there are 2 levels you need to know. 61.8 and 78.6. If the demand zone is within 78.6, I usually wait patiently for the price to come here and start longing the market. If demand includes both the 61.8 and 78.6 regions, I fill my positions by placing limit orders between these two regions. But if you have the opportunity to watch the price, watch the closing of the 1h 2 candle (considering that you are trading on the 4h chart). If you are not sure at all, wait for the 4h candle. As you can see, the price here makes a perfect touch to the 78.6 level and closes with 2 side downward wicks of the 4h candles, which is very good for me and increases my confidence in this trade. However, if the price had closed the first 2 candles within this weak and indecisive zone, I would probably exit the trade as quickly as possible. Another reassuring move is that the price closes the candle above the swing high of the demand zone and reclaims it. Here you can see how strong the last candle close was and this tells me that the price wants to go up. Another thing you should keep in mind is that if you are right in a trade, you should expect the price to react quickly. If the price moves against you, there is a problem, or if it does not move at all, there is a problem. Zone entries are something that fast movers can catch, the price will not wait for slow movers. If the price lingers in your entry zone longer than it should, reconsider that trade setup or exit the trade. It is always better to exit the trade with minor injuries than to stop. Remember, this is not a matter of pride, it is a matter of making money. So always watch the price after entering the transaction, if it does not make the movements you want in a short time, leave it and move on to the next one.
We have seen how to determine an entry, but how do we determine a target? This is an issue you need to determine before entering the trade. If you do not have a target or a liquidity zone, you should be very careful when entering a trade, no matter how perfect the setup is. If there is no liquidity that will move the price up and attract it like a magnet when you enter long, this trade will fail before reaching its target. That’s why I first set a target and then okay, I know the price will come here, but how will it come? The question of what the future will be like is to look at the setups. You should find the most suitable entry within the setups, as I explained above. As you can see, the maximum target here will be the supply level in the upper region. It would be foolish to set a target above this, but you do not need to wait for this zone to finish the trade. As long as the price does not make bearish movements on the way, move the trade to the main target, but if it makes bearish movements and it does not seem to follow the plan, immediately take your profit and step aside and wait for a new entry. That target will always be there, but if you still hope long when you see something very sharp, you are just a gambler. This target may seem very guaranteed 24 hours ago, but it is not clear what will be guaranteed 24 hours later. In this market, everything can change quickly and you need to adapt to it. There is no point in ignoring obvious signs and stopping just because you have set a target. The aim here is to make as much money as possible, not to be flattered when you reach your goals. This is not hunting for birds, no matter how clean the target is, you need to change and adapt to the environment as the price movement changes.
Here you will see that the price quickly rises above the range high after the purchase and moves towards the target. When you trade, you want to see higher highs and higher lows on the chart, but as you can see, the price makes confused candles after the first swing high rejection and then the second swing high rejection comes. Here I can still say that the price is bullish, there are only small consolidations before going to the target, but the first swing low break should give the first signal for us. Here the higher low structure is broken and if you look at the candle that makes this swing low break, it leaves ineffiecny behind. I would not consider exiting the long position immediately after this market structure is broken. If you are going to take profit from your long position, you should think as if you are going to go short, so when you think about where you would short to get out of long, the neckline and supply region are the regions where you will enter short after the market structure break. You will either play safe and take profit here, or you will take a risk and wait for the price to fall below the first swing low again and definitely close your position. If you are not good at these issues, improve yourself by watching past prices. If you cannot, I always recommend ema50. It is always the best and simplest tactic to take profit when the price closes the candle below EMA50.
Example 2
So how could we approach the short entry here? It didn’t look very clear on the 4h chart, but when you go down to the 1h chart, things are even clearer. I told you that when entering a new position, the price should always be in the swing high/low zone or the supply/demand zone. When you look here, you may think that neither of them exist, but when you look at the setups in Ever 4h, neither of them are visible, but as I said, each time frame will have its own supply and demand regions and swing low/highs. If you are only trading according to the 4h chart, of course you cannot catch this short position, but if you are trading according to the 1h chart, you would have difficulty catching the previous long position. Now when you go down to the 1h chart, look at the small consolidation uptrend zone on the right side in the down move. Did you notice that the two swing highs were formed in the consolidation / supply zones that occurred in the decline. From where? I told you why. And did you see that supply 2 did not even react at all on the second test? I told you this too. Always trade in untested supply and demand zones. Don’t trust the already tested ones because they have already done their job. Now, if you were someone trading on the 1h chart, you need to catch this short entry. What did I tell you, look for entries only in important supply and demand areas. When the price reaches the first supply 2 zone, you need to watch the price carefully. You need to look for range or market structure. There is nothing in the first supply 2 (I am talking according to the 1h chart, of course there may be a range of 5m or 15m). So there is no point in looking for a trade here. Then, when the price reaches the supply 1 region, you see how it ranges, right? What does this mean? Our job now is to look for trade entries. Not every supply and demand will give you a trade entry. If you look for a trade in every supply and demand (you should call if the price creates a range), you will get very tired and lose money. You must have priorities and constraints.
1 Where should I look for trade?
swing low and swing high levels, supply/demand zones
2 What should I see for trade entry in this region?
range movement
What will be my target if I find 3 trade entries?
next swing low/high or supply/demand zones
4th, you must decide on your trade entry. If you skip the first 3 steps and are just looking for trade entries, you will never succeed.
The price reacted in the supply 2 region, but no range formation occurred. In the supply 1 region, the price reacted again and a range formation occurred. Since the range formation has occurred, we need to look for a trade entry here. As you can see, a market structure break occurs after the price receives both range high and range low liquidity. That is, the price cannot protect the previous higher low and falls below it. This increases the potential for trend reversal to occur. After the range low liquidity is taken, it would be a suitable entry for us if the price comes to retest the supply and inefficiency area it left behind.
You can also add another edge, Fibonacci. We mentioned in the previous article that the price reached the optimal entry, that is, between 61.8 and 78.6, and the fact that 78.6 was in the supply zone was confirmation for us, so finding and executing the entry became very easy after the market structure change. So what is the target in this trade? the previous swing low or a bullish structure that may occur before that.
Look how price went down to swing low level. You can say but it was old demand area did we target it? No, our target was swing low don’t forget it is already tested we dont have any edge from that old demand level. When price hits the target what was it? SWING LOW? what is that mean? you should watch price again, Will the price create a range in this swing low region? If so, what will be the target? the previous untested daily supply and the swing high that started this decline. Since our goals and objectives are clear, there is nothing left but to wait for the range formation. If you learn this lesson well, you will learn what to do in each swing low/high demand supply region. And you will understand that you should not look for a trade at every swing low/high level and that you should only focus on those that create ranges.
Example 3
The price dropped to the swing low level with our previous short and it was a very enjoyable trade. I am not counting the 4 items again now, but since the swing low region has been tested, we are looking for a range. Is there a range? Yes. Then we determine our target areas. the previous swing high and the untested supply level at the top. So what will our entry be? First, we expect the price to create demand around the mid range and range low region. As you can see, a demand occurs in the range low region and the price suddenly starts to rise. Since the liquidity of the range low region has already been taken, a retest to the range low region and this demand region is the best region to take a long position. If you place Fibonacci, you will see that it is between 78.6 and 61.8. What you need to know about Fibonacci here is that instead of pulling from the lowest price you see, you need to pull from the bottom of the demand zone, which is the beginning of the upward movement, to the top where this movement ends, to get the most accurate result. Then see how the price reacts quickly from the entry zone, this supports our trade for us.
When the price reaches our first target zone, we definitely need to take profit because, as you can see, a new reversal can occur at any time. So what was it that made us quit trading completely? ema50. Look at how it continues its downtrend by making a bearish retest after falling below ema50. Never enter a trade when the price is below em50. ema50 and 200 are two very important indicators for me in trend following.
So what is the short entry for us in this swing high?
Answer me? I am waiting…
Of course NOTHING.
Because the price just rejected and changed direction, there is no range movement. Please remember the rules.
Example 4
So what is the entry in the upward movement after this downward movement?
again nothing. Sometimes the edge I teach will cause you to watch some price movements, but this is a system that I use and really get results from. Nobody teaches you systems, everyone sells you training under the name of what is easy market structure, what is supply/demand, and they rewrite the things they learned from others. The important thing is to offer a working system. This is the 3rd system I’ve taught you and I’m really happy with it.
But couldn’t we really find an entry in this last upward movement? In my tactic, if you trade at 1h, you would not find it, but if we go back to the original 4h tf, you will notice that we made 3 trades in a really clean and large range, and you will realize that all these events are for the formation of a huge range. So let’s count the steps.
Look for range movement where swing low liquidity is taken. Yes, swing low liquidity has now been taken and a clean range has been created.
Set your goals. There is still an untested daily supply level waiting for us at the top.
Range high and low liquidity have been taken and the price is testing range low for the 3rd time. This is a possible 3 touch setup. So again, if you look at the right time frame, we have all the reasons to find an entry. That’s why I always go from the monthly chart to the 1h chart before preparing our trading setups and I recommend this to everyone. so you see the overall picture more clearly.
Here there is a structure that tests range low again after a clean range and range low liquidity is taken. Generally this is called 3 touch setup. It is a very low risk trading setup. The range low liquidity below has already been taken and the daily untested supply zone still remains above. Therefore, you can make a trade as big as 9R with a clean invalidation level, but when trading at 4h tf, never exit the trade because of the bearish structures at 15m. If you are trading on 4h, watch the price on 1h but still look for bearish indicators on 4h.
and then what happens? It is falling to the new untested demand zone. I am sure that if you learn this price movement thoroughly, it will give you a new edge. Learning where to trade will save you from many mistakes and wrong trades. There is no need to look for trade in regions without liquidity.
We have seen that you need to look for trades at swing low/high levels and demand/supply zones, that a range movement must occur while looking for a trade, and when leaving this range, big hands leave traces behind them and you must find these traces. In fact, you can be very successful by using range and ema50, but I recommend you spend some time and examine all the graphs in 4 hours, gradually taking them back one by one. Determine supply demands, draw swing low highs and analyze what the price is doing in those areas. This way you will improve more.
Example 5
Another example for a 3 tap setup. As you can see, the price is making a big range move around the supply zone, which started the main decline. After taking both the range high and range low liquidity of this range, there is no longer anything that requires it to stay within this range, so the important lesson I will give you here is generally if the price takes the liquidity of the last level and then retests the other direction, it will most likely continue its movement to the side of the last liquidity area. . Of course, there may be different types of this, but both the rejections that the price receives from the supply region and the swing low liquidity below are a large enough magnet to pull the price down. Therefore, in 3 tap setups, the risk is very clear and invalidation is very clear. As you can see, the price moves downwards rapidly after making 3 touches to the high level of the range. Let’s not forget that he made the consolidation movement again in the swing low region.
Well, poseidon, there is a 3 tap setup here too, but the price does not move as you say? Of course, not everything I say will work all the time. If I had won every trade without a stop, I would be a billionaire right now. But here you need to remember something that I taught you in this article? When you enter this trade, there is an indicator that requires you to exit the trade before there is a stop. so what is this? The time the price spends on the 3rd touch. If you look at the previous example, how the price reacts quickly and goes in the desired direction, but here the price spends days in this zone and as I told you, if you are right in a trade, you expect the price to react quickly. If it takes this long, you need to get out of this trade quickly.
Example 6
When we examine the new example, we see a large supply and a small demand zone that started this whole upward movement. We had 4 steps and let’s go through them all. The more repetitions and examples you see, the more you can find these examples on your own, study the trade entry zones on them, and then create your own edge. What I want to teach here is to look for your trades in the supply demand and swing low/high regions. Don’t waste your time elsewhere. It is up to you how you want to enter trade, whether you use my edges or other tactics that you think work better, but what you need to understand here is that there is no need to be in trade 24/7, just look for trade in smart places. Has there been a rejection from the supply area? Yes. So, does the price range here? Yes. So, if we are going to open a short transaction, what will be our targets within this range? The following is the swing low and demand zone. There is no reason for the price to rise above this supply at the moment, so the best bet would be down. Untested demand and supply regions always act as magnets. When you look at the range movement, range low liquidity has already been taken and range high with the supply being tested.
Afterwards, we see that the price moves in consolidation near the range high region for a while. It quickly leaves the consolidation movement and tests the range low region again, and the trace it leaves behind before leaving the range, re-tests that small supply region where the big hands fill the limit orders, and fills the remaining limit orders, and look at the reaction it gives quickly. It goes all the way to the target. Here you need to look for supply and demand within the range or edge that will give any trade entry. As you can see, Fibonacci also tests the mid range between 78.6 and 61.8, so the trade entry is verified in 3 different ways here.
Example 7
But sometimes you should not overlook other things when looking for a range. You can also capture very large trades with a very simple trend line. As you can see, the price is consolidating before breaking the trend and yes, this is the supply area before the decline. Afterwards, see how Ema50 remains above the entire rise, but the trend changes with its breakout and bearish retest. And all this happened after taking swing high liquidity. So, if you wait throughout the whole trend for the trend to break now or then, you will waste time. The trend breaks after getting the desired liquidity.
Example 8
Example 9
In this example, there is a target you have not seen before. ‘’poor highs’’ so what does this mean? I generally like to define swing highs as places where the price reacts hard and has a hard reversal. But sometimes, in the region where the price returns, close to each other descending hills occur and these are something that will literally make the price go up for the liquidity pool. As you can see, as the price approaches the low highs, it accelerates and moves towards higher targets. Poor highs are always a very good target and the price usually does not advance without clearing these highs. The same goes for poor lows. Here, after the price reaches the demand zone, it makes a range movement and first of all, range high liquidity is purchased. Afterwards, range low liquidity is taken and after retesting to the range low level, I can say that it is a good entry. There is no specific demand zone here, so you must find different trade entry triggers. As is the case here, if the price quickly moves away from here and returns again after I buy range high and range low liquidity, for me this is a retest and a good entry for the short. Fibonacci also supports this. Then watch the price move towards the poor high target.
I think this will be enough examples for this article. Thank you if you read this far. Now, to reinforce what you have learned, you will need to scan the daily and 4h charts of individual altcoins, mark the swing high low and demand/supply zones and examine their price reversals.
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