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Smart Money Concepts - Flip Patterns and Flip Zones
Jul 14, 2024
Smart Money Concepts - Flip Patterns and Flip Zones
Introduction
Episode topic: Advanced tutorial on Smart Money Concepts
Focus: Identification of flip patterns/zones for high probability trades
Importance of flip entry models in smart money strategies
Understanding Flip Patterns
Flip
: Market flipping direction, shift in market sentiment
Flip Entries
: Quick setups during market plummets or surges
Flip Pattern
: Price pattern indicating potential market direction shift
Transition from one trend to a reversal/change in sentiment
Divided into reversal and continuation patterns
Identifying Reversal Flip Patterns
Criteria for identification:
Price rejected from a higher timeframe supply zone
Retest of last demand zone
No new higher high; breaks through previously tested demand zone
Creation of a supply zone (flip zone)
Monitor flip zone for retest
Place limit order within flip zone
Comparison with Change of Character (CHOCH)
Flip pattern distinct but shares similarities with CHOCH
Flip pattern: Specific type of CHOCH with new structure creation
Trading the Flip Pattern
Aggressive Entry
Identify valid flip pattern
Highlight flip zone
Place sell limit order at lowest point of flip zone
Set stop loss above flip zone
Aim for next unmitigated demand zone as take profit target
Conservative Entry
Identify flip pattern on higher timeframe
Highlight flip zone from the wave that flipped demand zone
Zoom into lower timeframe for price return to flip zone
Confirm change of character in lower timeframe
Identify order block from CHOCH wave
Place sell limit order at lowest point of zone
Target unmitigated demand zone or current timeframe swing low
Continuation Flip Patterns
Supply to Demand Flip
Price transitions from a supply zone to a demand zone
Suggests sellers losing control, buyers taking over
Look for long positions after flip zone mitigation
Demand to Supply Flip
Price transitions from a demand zone to a supply zone
Suggests buyers losing control, sellers taking over
Look for short positions after flip zone mitigation
Rules for Valid Flip Patterns and Zones
Reversal from Supply/Demand Zone
: Price mitigates and reverses from higher timeframe supply/demand zone
Inefficiency
: Flip pattern should leave a significant inefficiency behind
Pullback Reaction
: Price must react and pull back before breaking supply/demand zone
Unmitigated Zones
: Flip zones are one-time use; not significant after initial mitigation
Example Analysis
Example for aggressive entry setup with euro-dollar pair
Identification of bullish and bearish scenarios
Use of higher and lower timeframes for precise entries
Emphasis on Backtesting
Importance of backtesting strategy 100 times before real use
Recommended tool: Trader Edge platform for backtesting
Conclusion
Summary of reversal and continuation flip patterns
Encouragement to stay updated and provide feedback for future topics
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Full transcript