Lesson 5: High Probability Swing Trade Setups in Bear Markets

Overview

• Focus on high probability swing trade setups in bear markets.
• Utilizes the PDA Ray matrix for reference in identifying trade setups.
• Applies to monthly, weekly, and daily charts for swing trading.

Key Concepts

• Premium Arrays: Used in identifying bearish trends across different time frames.
• Bearish Order Blocks: Serve as resistance levels.
• Liquidity Voids & Fair Value Gaps: Areas where price might resist or reverse.

Strategy

• All Time Frames Bearish:
  • Sell daily bearish premium arrays.
  • Look for old highs/lows, rejection blocks, bearish order blocks, etc.
• Mixed Time Frames:
  • Monthly bearish, weekly bearish, daily bullish: Sell at daily arrays nested in weekly.
  • Monthly bearish, weekly bullish, daily bullish: Sell at daily arrays nested in monthly.

Example Analysis: Euro Dollar

• Monthly Chart: Analyze 18 months of data, highlight premium PD arrays.
• Weekly Chart: Transpose monthly levels, delineate bearish order blocks.
• Daily Chart: Further refine levels, recognize resistance levels.

Practical Execution

• 4-Hour Chart: Execute trades based on refined levels from higher time frames.
• Identify potential bearish order blocks and mitigation blocks.

Evaluation of Trades

• Bearish Order Block Setups:
  • Identify and mark potential bearish order block levels.
  • Acknowledge potential stop-out scenarios and adjust positions accordingly.

Tips for Execution

• Focus on higher time frame levels (monthly, weekly) for stronger setups.
• Look for convergence of levels, as they indicate stronger resistance/support.
• Understand that larger time frames may require multiple passes for trade execution.

Conclusion

• Reinforce the importance of utilizing monthly, weekly, and daily levels in conjunction with 4-hour execution.
• Prepare for further lessons on swing trading models and strategies.