Alchemist Strategy: Forex Trading Secrets for Consistent Profits || TRADE BREAKDOWN

Summary

In this video, the presenter explains their process for entering trades in a downtrend market using various technical analysis tools. They break down the strategy by analyzing different timeframes, including weekly, daily, and H4 charts, focusing on key concepts like breakouts, liquidity zones, and strong highs and lows. The presenter emphasizes the importance of identifying premium areas for entry, using SMT divergence, and considering quarterly theories for better predictions. The video provides a step-by-step guide on how to spot potential entry points and targets in a downtrend market.

Takeaways

• 😀 The market is currently in a downtrend, with the speaker targeting the low of a strong high area as their first target.
• 😀 Multi-timeframe analysis is essential: the speaker starts with the weekly chart, moves to the daily chart, and refines entries using smaller timeframes (H4, H1, M15).
• 😀 Liquidity zones play a crucial role in the strategy, with the speaker identifying liquidity through specific candlestick patterns and breakouts.
• 😀 The speaker prefers entries in premium areas (above the 50% retracement) after a pullback, rather than selling in discount areas.
• 😀 SMT (Smart Money Technique) Divergence is used for confirming entries, with the speaker looking for discrepancies between price action on different timeframes.
• 😀 Strong highs and breakouts are key to identifying downtrend continuation and possible entry points for sell trades.
• 😀 The strategy relies on a combination of price action, liquidity zones, and support/resistance levels to pinpoint precise entry locations.
• 😀 The speaker uses higher timeframes (like daily) for stronger confirmation and prefers to mark entries based on key candlestick formations.
• 😀 The speaker sets targets for trades at previous lows or liquidity areas, adjusting for market behavior and further breakouts.
• 😀 Understanding quarter theory (Q1, Q2, Q3) and session-specific behavior (e.g., London session) helps to anticipate potential market manipulation or accumulation patterns.

Q & A

What is the main focus of the video script?

The main focus of the video script is to explain the process of taking a trading entry in a downtrend market, including the strategies used for identifying entry points and the use of multiple time frames to confirm market conditions.

What type of market condition is being discussed in the video?

The market condition discussed in the video is a downtrend, where the market has already shown a significant price movement and is expected to continue its decline.

What is the first thing the presenter suggests before watching the video?

The presenter suggests that viewers subscribe to the channel, like the video, and share it with their friends to help them understand how the presenter identifies entries and the strategies used.

What role does the weekly time frame play in the strategy?

The weekly time frame is used to identify a break of structure and liquidity. The presenter mentions that a strong high is present, and this creates the potential for a pullback, which has already occurred, setting the stage for further downward movement.

How does the presenter use the daily time frame to plan their entry?

The presenter analyzes the daily time frame to spot a break of structure and a strong high, confirming a downtrend bias. This helps in identifying areas where price might retrace, indicating potential entry points.

What is the significance of identifying a strong high and strong low?

Identifying a strong high and strong low helps the presenter confirm the market's trend and structure. The strong high indicates resistance, and the strong low marks support, guiding entry decisions.

What is the importance of liquidity in the trading strategy?

Liquidity plays a crucial role in the strategy as it helps the presenter pinpoint areas where the market may have accumulated orders, indicating potential reversal points or further price movement. Liquidity is identified using a specific candle pattern of three candles, one of which is a high candle.

How does the presenter use the 50% retracement rule in their strategy?

The presenter mentions that after a pullback, the market usually retraces to around 50% of the previous move. The strategy suggests entering when the price reaches this retracement level, as it is often a premium zone where price can reverse or continue the trend.

What is the role of SMT Divergence in the trading decision?

SMT Divergence is used as an additional confirmation for entry. The presenter shows an example of price moving in opposite directions on two different instruments (silver and gold), which signals that a reversal or continued move is likely. This divergence helps to confirm the trade setup.

How does the presenter use the quarterly theory in their analysis?

The quarterly theory is mentioned as a way to add further confluence to the analysis. The presenter refers to the potential manipulation that might occur in specific quarters (like Q3 and Q4) and how it can impact the market during those times.