Lesson 7: High Probability Day Trade Setups

Key Concepts

• High Probability Trades: Depends on the higher time frame (daily/4-hour) direction.

Bullish Conditions

• Use Previous Day's Low to High for Retracement Entries.
• Use New York Session High: Targets for retracement entries.
• Cell Stop Rate: Accumulate long positions by focusing on the anticipated move from discount to premium.

Bearish Conditions

• Use Previous Day’s High to Low for Retracement Entries.
• Use New York Session Low: Focus on short positions from the anticipated move from premium to discount.

Analyzing Swings

• Identify previous day's high and low.
• Consider New York session's highest high and lowest low.
• Analyze London session high and low as it impacts New York trading.

Using Higher Time Frames for Day Trading

• Align lower time frames to higher time frames.
• Maintain a consistent framework for identifying high probability setups.
• Market analysis should lead to a probable trading direction based on higher time frame conditions.

Day Trading Objectives

• Determine where the next market direction is and the anticipated levels of profit.
• Conditions for entries include understanding ranges such as:
  • London to New York Ranges
  • Retracements and significant highs/lows

Buying Opportunities

• Best Season: Bullish periods ideally during Monday to Wednesday.
• Price Conditions: Confirm bullish setups utilizing discount PDRA.
• Key Time to Buy: Between 2 a.m. and 4 a.m. New York time.
• Execution Chart: Use 5 or 15-minute charts for trades.
• Buying Significance: Look for short-term lows from the previous NY session.

Conditions for Buy Trades

• Buy in fair value gaps and overlaps with bullish PD array below recent lows.
• Stop Loss Placement: Prior to making moves; set 10-30 pips under established limits based on market conditions.

Selling Opportunities

• Markets ideal for selling during bearish seasonal periods (Monday-Wednesday).
• Conditions: Identify premium PD arrays and their relationship to previous sessions.
• Short Time Frames: Execute trades on 5 or 15-minute charts.

Conditions for Short Trades

• Sell above the Asian range, monitoring for bearish order blocks and fair value gaps above previous session highs.
• Stop Loss Placement: Generally 30-40 pips above entry for safety net.

Managing Trades

• Scaling Out of Trades:
  • Take profits at main markers:
    • 20-30 pips
    • Previous day's high/low
    • Average daily range specifics
  • Look to scale out at key time intervals before major market shifts.

Final Thoughts

• Emphasis on the necessity of discipline and structured approach to trading; understanding and finding favorable setups.
• Importance of mapping out trades including entry points, and profit-taking strategies based on time and market conditions.
• Traders must adapt criteria to individual trades recognizing potentially unfulfilled criteria.