Boot Camp Day 30: Execution

Summary

In this video, the speaker dives into the key building blocks of sound trading: liquidity sweeps, break of structure, order blocks, fair value gaps, and equilibrium. The focus is on how to combine these elements for successful trade execution, explaining how each tool provides insights into the market's movement. The speaker emphasizes the importance of understanding market structure and confirms that proper trade execution, paired with emotional control, is essential for success. The session is filled with actionable insights and serves as a roadmap for traders to improve their strategy and discipline.

Takeaways

• 😀 Liquidity sweeps show the potential for orders to be filled when a high or low is taken out in the market.
• 😀 Break of structure confirms that orders were filled and signals a shift in market structure.
• 😀 Order blocks represent the price range where orders were filled, often after a liquidity sweep.
• 😀 Fair value gaps indicate a lack of liquidity within a price range, showing an imbalance with no counteracting orders.
• 😀 Equilibrium refers to finding a discounted price between the highs and lows in the market.
• 😀 The safest entry strategy combines liquidity sweep, break of structure, and order block to confirm orders were filled.
• 😀 If the risk-to-reward isn't favorable, you can wait for a retracement into an order block for a better entry.
• 😀 Fair value gaps can also be used to find entries, as they represent areas where liquidity was lacking in the opposite direction of your bias.
• 😀 The most confluence-based and safest strategy involves combining liquidity sweep, break of structure, order block, fair value gap, and equilibrium for optimal entries.
• 😀 Writing down all the building blocks (liquidity sweep, break of structure, order block, etc.) is essential for developing your execution plan and improving trading skills.

Q & A

What are the main building blocks discussed in the video?

The main building blocks discussed are liquidity sweep, break of structure, order block, fair value gaps, and equilibrium.

How does a liquidity sweep signal potential trade opportunities?

A liquidity sweep shows that orders have the potential to get filled by taking out a high or low. It indicates a shift in market structure but requires confirmation, typically through a break of structure.

What role does the break of structure play in confirming market movement?

A break of structure confirms that orders were filled, signaling a shift in market direction. For example, if a market was in an uptrend and then breaks to the downside, it confirms that orders were filled and the market may reverse.

What is an order block, and how does it help in trading decisions?

An order block is a price range where orders were previously filled, often leading to a significant market movement. It marks a region where market participants were actively engaged, providing a potential area for entry in future trades.

What do fair value gaps tell us about market behavior?

Fair value gaps are areas with a lack of liquidity, often seen as large candles with no counteracting orders. These gaps represent regions where there was little to no trading activity in the opposite direction of the market trend.

How does equilibrium fit into the overall strategy?

Equilibrium represents the discounted price range between the highs and lows of a market cycle. It helps identify optimal entry points by determining when the market is at a favorable price level, usually around the midpoint of a swing.

How can liquidity sweep and break of structure be used together for trading entries?

When a liquidity sweep is followed by a break of structure, it provides confirmation that orders were filled and that the market is likely to reverse direction. This combination can signal a strong entry point.

What if the risk-to-reward ratio is not favorable after a liquidity sweep and break of structure?

If the risk-to-reward ratio is unfavorable after a liquidity sweep and break of structure, traders can wait for a more optimal entry at an order block. This would give a better risk-to-reward setup and provide more confidence in the trade.

Can fair value gaps be used for entry even if the liquidity sweep and break of structure occurred earlier?

Yes, fair value gaps can be used for entry even if the liquidity sweep and break of structure occurred earlier. If a fair value gap forms after these events, it provides a new entry point where there was a lack of liquidity in the opposite direction of the current bias.

What is the most comprehensive entry strategy mentioned in the video?

The most comprehensive entry strategy involves a combination of liquidity sweep, break of structure, fair value gap or order block being filled, and equilibrium. This provides strong confluence, offering the most reliable entry with the least risk.