The “Sharp Turn” Entry Model

Summary

This video explains how to use sharp turns in trading for maximizing profits. It covers five key steps, beginning with establishing a market bias and identifying fair value gaps. It then delves into time frame alignment, emphasizing the importance of context areas and understanding sharp turns in relation to price movement. The video distinguishes between good and bad sharp turns, explaining their role in trapping liquidity and revealing market intentions. Advanced techniques for entry, stop loss placement, and take-profit strategies are also discussed, providing viewers with a comprehensive guide to leveraging sharp turn trading models effectively.

Takeaways

• 📈 Sharp turns are key market patterns that can be leveraged for high-probability trade entries.
• 🕒 Time frame alignment is crucial: confirm setups on smaller time frames while considering higher time frame context.
• ⚡ Fair Value Gaps (FVGs) are essential markers for identifying potential reversals and trade opportunities.
• 🔄 Order flow transitions help confirm whether the market is continuing or reversing its direction.
• 🎯 Trade entries should ideally align with context areas, which are zones showing prior market respect for highs/lows.
• 🛑 Stop losses often need to be slightly larger to allow higher time frame movements to play out effectively.
• 💹 Targeting a 1:2 risk-to-reward ratio is recommended, especially within defined weekly or higher time frame contexts.
• 🧠 Experience improves trade recognition: over time, traders can spot sharp turns and breakaway gaps more reliably.
• 📊 Advanced traders can let trades run longer when conditions align, even if such opportunities are rare.
• 🚀 Utilizing the sharp turn trading model allows traders to capitalize on sudden market reversals efficiently.
• 🔗 Supplementary resources, like live team enrollments, can provide additional guidance and support for applying this strategy.

Q & A

What is the importance of identifying the bias before entering a trade?

Identifying the market bias (bullish or bearish) helps you align your trades with the overall market direction, ensuring that your trade has a higher probability of success. Without understanding the bias, you might end up trading against the market trend.

What is a Fair Value Gap (FVG) and why is it important?

A Fair Value Gap is a space between two candlesticks where price moves too quickly, creating a gap that has not been filled. It is important because these gaps often represent areas where price is likely to return, offering potential entry points for trades.

How do you align different timeframes when trading sharp turns?

Timeframe alignment involves confirming your market bias and entry with multiple timeframes. For example, if you're trading a sharp turn on a 1-hour chart, you want to check the higher timeframe (e.g., 4-hour or daily) to confirm that the trend is valid and the entry fits within the broader context.

What is a breakaway gap and how does it impact entry strategy?

A breakaway gap is a gap that occurs when price moves significantly away from a previous consolidation or fair value gap. It indicates a strong market move and can provide an excellent entry point for trades, as it suggests that the market is likely to continue in the direction of the gap.

Why is it recommended to use a larger stop loss for certain entries?

Using a larger stop loss allows you to give the trade more room to breathe and enables the higher timeframe trend to play out. It can prevent premature stop-outs and provide more flexibility for the trade to develop as expected.

What is a sharp turn in trading and how do you recognize it?

A sharp turn refers to a rapid change in market direction, often characterized by a fair value gap or other price action signals. It is recognized when price quickly reverses or accelerates after a consolidation, usually indicating a shift in market sentiment.

How do you determine if a fair value gap will lead to a valid entry?

A valid entry occurs when the fair value gap aligns with the overall market bias, and there is confirmation from the higher timeframe or other technical indicators, such as order flow. A gap alone isn’t enough; you need supporting evidence that the market is likely to continue in your desired direction.

What is the significance of covering the lows when setting a stop loss?

Covering the lows means setting your stop loss just below the recent swing low or key price level to avoid being stopped out by normal market fluctuations. It helps protect against false breakouts and ensures that the trade has a better chance of success.

How does the 1:2 risk/reward ratio work in this strategy?

The 1:2 risk/reward ratio means that for every dollar you're willing to risk on the trade, you aim to make two dollars in profit. It helps to ensure that even if some trades fail, the winning trades will more than cover the losses.

What role does experience play in recognizing and capitalizing on sharp turn setups?

Experience allows traders to recognize sharp turns more easily and confidently. As you gain knowledge and familiarity with price action patterns, you can spot these opportunities faster and manage trades more effectively, including knowing when to let trades run for larger profits.