This is the 2nd video in the First Time Back (FTB) video series which provides a detailed look at why an FTB works from an order-flow perspective and how to determine entries and stop placement. I also discuss what Forex pairs I trade, the time-frames I trade them on and the trading sessions I avoid and why.
A summary of the key points from each section is detailed below.
Advanced logic behind an FTB setup – Order-Flow Dynamics
- Knowledge of general market participants and the order-flow they represent (order-flow dynamics) tells us why an FTB setup works so well.
- This knowledge also tells us why we want price to move with good momentum into our FTB entry area.
- Knowledge of how price should move and why provides us with useful information when it comes to trade management.
- This is a professional mindset approach and has other general price action applications.
Determining Entries and Stops
- Place entries at the ‘first possible place price could find supply / demand’.
- Stops are placed beyond logical decision points (see this video for an overview of finding decision points).
- We do no expect price to make deep retraces into an SD zone or significant movements beyond an SR zone on an FTB.
- Stops are always placed based with long term profit potential / expectancy in mind and not win-rate. The latter is the mindset of a typical novice trader.
Pairs, Time Frames and Time of Day
- Any forex pair or asset class – reasoning behind an FTB setup (order-flow dynamics) is transferable to any liquid asset class.
- Bear in mind liquidity and spread (as cost of trade) when considering what to trade and what TF to look for setups.
- Be cautious during low liquidity trading sessions (as an FTB setup is order-flow and thus liquidity based).
The 3rd and final part in this series will discuss:
- Trade exits and trade management.
- Other objective considerations.
- Trade Examples.