Day Trading: Where to Take Profit

Introduction

• Discussion about taking profits in day trading
• Building blocks and strategy should be known by now
• Focus will be on where to take profit
• Stop losses will be covered tomorrow

Taking Profits

• Taking profits should be simple
• Take profit at building blocks
• Key areas: liquidity sweeps, order blocks, fair value gaps

Example: Short Position

• Enter short on liquidity sweep
• First take profit at the order block area
• Additional take profit at the liquidity area
• Use fair value gaps to set take profits

Time Frames and Execution

• Scale up one higher time frame from execution time frame
• First take profit usually at the one higher time frame liquidity draw
• Examples: Enter on 5-minute chart, scale to 15-minute for first draw on liquidity

Setting Multiple Take Profits

• Recommended to set 3-4 take profits
• Example: First take profit at one higher time frame, rest based on building blocks

Example Scenarios

Scenario 1: 4-Hour Chart

• Enter on a fair value gap
• Set first take profit around one-to-one risk/reward
• Identify draw on liquidity and order blocks for subsequent take profits

Scenario 2: Forex Example

• Liquidity sweep, break of structure
• Imbalance and order blocks as take profit points

Building Blocks as Price Magnets

• High-confluence areas: liquidity voids, fair value gaps, order blocks
• Use these to set take profit zones

Real Trade Example

• 5-minute entry based on structure and order block
• Take profit at 5-minute order block
• Additional take profits at 15-minute fair value gap

Summary

• Set take profits using building blocks
• Use time frames efficiently
• Focus on high-probability areas
• Use market structure to guide take profits

Next Lesson

• Will cover stop losses tomorrow