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Forex Trading Bootcamp Day 5 - Imbalance, Liquidity and Indicator Based Strategies

1. The document discusses key concepts in forex trading including balanced price action, imbalance price action, identifying imbalances, and why imbalances are significant in forex markets. 2. It also covers liquidity concepts like liquidity pools which are places where buy/sell liquidity exists, and how price seeks liquidity through stops hunts and liquidity sweeps. 3. Finally, it discusses how to combine different techniques like identifying order blocks and supply and demand zones with indicators and tools involving fibonacci, moving averages, volume profiles to improve trade entries, exits and risk management.

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7K views46 pages

Forex Trading Bootcamp Day 5 - Imbalance, Liquidity and Indicator Based Strategies

1. The document discusses key concepts in forex trading including balanced price action, imbalance price action, identifying imbalances, and why imbalances are significant in forex markets. 2. It also covers liquidity concepts like liquidity pools which are places where buy/sell liquidity exists, and how price seeks liquidity through stops hunts and liquidity sweeps. 3. Finally, it discusses how to combine different techniques like identifying order blocks and supply and demand zones with indicators and tools involving fibonacci, moving averages, volume profiles to improve trade entries, exits and risk management.

Uploaded by

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We take content rights seriously. If you suspect this is your content, claim it here.
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FOREX TRADING

BOOTCAMP

BOOTCAMP
UNDERSTANDING
IMBALANCES
BALANCED PRICE ACTION

What is Balanced?

In Supply and Demand, every buyer need to have a Seller similarly


every Seller need a buyer to complete the trader. This is applicable to
any markets in the world.
When every seller have buyer and every buyer have seller, we can
assume that prices will be unchanged or within certain range.
This unchanged price is sometimes called as balanced price or
Equilibrium prices.
BALANCED PRICE ACTION
In Contraction phase / range market, prices will be unchanged or
within certain range
Both buyers and sellers have equal opportunity or equally presented in
contraction phase, that’s why prices are in a particular range.
Both buyers and sellers have equal opportunity or equally presented in
contraction phase, that’s why prices are in a particular range.
This range market is called a Balanced / Balanced Price Action
IMBALANCE PRICE ACTION (IPA)

When Buyers didn’t have Sellers or Sellers didn’t have Buyers then we
can call this market create Imbalance
Generally imbalance are caused when Market Maker or Smart Money
buys or sells their position in the market with huge orders leaving
behind no supply or demands
Impulsive moves should contains Imbalances, when you trade Order
block or S&D zones, if imbalances there near OB’s or S&D Zones,
then the block considered as valid one
IMBALANCE PRICE ACTION (IPA)
HOW TO IDENTIFY
THE IMBALANCE
IDENTIFYING THE IMBALANCE
In an Uptrend, price makes impulsive moves, mostly buyers
present in up move, we need to understand that the impulsive up
move might also have some sellers
Similarly, in a downtrend, price makes impulsive moves, mostly
sellers present in down move, we need to understand that the
impulsive down move might also have some buyers
Every candle has both Buyers and Sellers, to find the Imbalance,
a trader need to understand how candle moves and where the
buyer and seller presented inside the candle
IDENTIFYING THE IMBALANCE
In a Bullish Candle: Buyers presented inside the body of the
candle, and sellers presented inside the wick of the candle
In a Bearish Candle: Sellers presented inside the body of the
candle, and buyers presented inside the wick of the candle
IDENTIFYING THE IMBALANCE
WHY IMBALANCE IS
SIGNIFICANT IN
FOREX
WHY IMBALANCE IS SIGNIFICANT IN
FOREX
Imbalanced price action is most significant not only in Forex but
also in any market
Imbalances sometimes called as GAPs (Gap Up and Gap down),
in markets price needs to fill the imbalance area, only then it can
be considered as effective price action or Balanced Price Action.
Say Market Maker place huge buy orders, they need people to
sell their positions only then their Buy order will be completed, so
it is understandable that price will eventually fill the imbalance
from there it might get reacted
WHY IMBALANCE IS SIGNIFICANT IN FOREX
HOW TO COMBINE
IMBALANCE WITH
S&D / OB
HOW TO COMBINE IMBALANCE WITH S&D / OB
When you draw Point of Interest / S&D/OB in chart, you need to ensure
the OB / SnD have imbalances inside your zone or near the zone. Price
should have reasons to come down or come up, imbalance is the one of
the reason.
LIQUIDITY
CONCEPTS
WHAT IS LIQUIDITY?

Liquidity simply means Money, in markets money presented in the


form of Orders
Every advance orders placed by retailers and other big players at
particular price levels is called as Liquidity
Forex Market algorithm is designed based on Liquidity seeking
approach, price moves towards where ever the liquidity is
presented
Price will always seek for Liquidity this process of seeking liquidity
is called as Stop Hunt, Retail Trap, Liquidity Sweep and Liquidity
Grab
LIQUIDITY
POOLS
LIQUIDITY POOLS

Liquidity Pools are nothing but the places where liquidity is


presented in market
Two types of Liquidity presented in markets, i.e. Buy Stops
Liquidity (BSL) and Sell Stops Liquidity (SSL)
1. When BSL is taken market reverse to downside/ bearish
2. When SSL is taken market reverse to upside/bullish
LIQUIDITY POOLS

BSL & SSL can be


1. Every Candle Highs and Low
2. Every Swing Highs and Swing Lows
3. Double Tops / Bottoms
4. Equal Highs and Equal Lows (Range Market)
5. Session Highs and Session Lows ( Asian, London & New York)
6. Daily, Weekly, Monthly Highs and Lows
LIQUIDITY POOLS
LIQUIDITY POOLS
HOW TO COMBINE
LIQUIDITY WITH
OB’S/ S&D ZONES
WHAT IS STOP LOSS?

We use these 2 strategies to combine to trade OB & S&D


Zones
AMD ( Accumulation, Manipulation and Distribution)
SH+BOS+RTO
AMD –
ACCUMULATION,
MANIPULATION AND
DISTRIBUTION
AMD – ACCUMULATION, MANIPULATION AND
DISTRIBUTION
Accumulation: it’s a Ranging market which occurs in Down Trend
Manipulation: it a process of taking Stops Orders or Stop Hunt
Distribution: it’s a Ranging market which occurs in Up trend
AMD – ACCUMULATION, MANIPULATION AND
DISTRIBUTION
STOP HUNT, BREAK OF
STRUCTURE AND
RETURNED TO ORDER
BLOCKS ( SH+BOS+RTO)
STOP HUNT, BREAK OF STRUCTURE AND
RETURNED TO ORDER BLOCKS ( SH+BOS+RTO)
STOP HUNT, BREAK OF STRUCTURE AND
RETURNED TO ORDER BLOCKS ( SH+BOS+RTO)
COMBINE
INDICATORS &
TOOLS WITH SMC
FIXED RANGE VOLUME PROFILE
ON BALANCE VOLUME WITH EMA
On Balance Volume is Volume based indicator we will be
combining volume with price in the form of EMA to take buy or
sell decision
RELATIVE VIGOR
INDEX – RVI
RELATIVE VIGOR INDEX – RVI
RVI is crossover based indicator, you can taken entries and exit based on
lines crossing over at your SnD or OB level
BASE LINE
INDICATORS
BASE LINE INDICATORS

Base Line indicators are applied on Charts, we will be buying


or selling if price is above or below Base lines
Moving Averages – EMA or HMA
Kijunsen Line
SSL Channel indicator
KIJUN SEN
SSL CHANNEL INDICATOR
FIBONACCI
RETRACEMENT
TOOL
FIBONACCI RETRACEMENT TOOL
Fibonacci Retracement is the basic tool indentify the retracement
level from there buy or sell can be initiated.
In Fibonacci we have Golden levels or ratios are there and it is
understandable that at these level price get reacted
Fibonacci levels will be drawn from Swing Low to Swing High for
Buy and drawn from Swing High to Swing Lows for Sell
Generally Fibonacci combined with 14EMA, 50EMA and 200 EMA
and entries will be taken either 0.618 or 0.705 or 0.786, these
three considered as Golden ratios
We can take trade only in Trending Markets
FIBONACCI RETRACEMENT TOOL
ENTRIES, STOP
LOSSES AND
TARGET
ENTRIES, STOP LOSSES AND TARGET
When we trade based on Indicators its is understandable that these
indicators may fail due or gives you late signal to its Lagging nature
that is the reason we are not trading indicators alone…
If you are entering market based on indicator, then you should
place your stop losses based on SMC (at O% level of OB / S&D
Zones)
You can use the ATR indicator to understand the how much
stoploss can be placed
Target you should always aim for 100 to 200 points
ASSIGNMENT
MARK EQUAL HIGHS AND LOWS AT M15
CHART OF XAUUSD
MARK IMBALANCE IN DAILY CHART OF
EURUSD
MARK STOP HUNT IN GBPUSD M30
PLOT OBV AND CORRELATE ENTRY
WITH S&D ZONE AT H1 – AUDUSD
PLOT RVI AND HMA AND CORRELATE
WITH S&D ZONE AT H4 OF NZDUSD
THANK
YOU

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