A profitable forex Trading System is a must for a trader who wants to get consistent profits. Forex trading is a good option for you who want to have your own business. It is not as difficult as it seems. It’s a good business that you can start with less money. You can start it with only $100 and even can start a little $10 only with a cents account in HFM, EXNESS, and JUSTFOREXMARKETS. If you use the mini account. Furthermore, it is also less risky than the other business. At least, you will only lose everything in your account if your business collapses. But it will only happen if you have bad luck. You can avoid it if you have prepared yourself very well before starting your business. You need to learn about forex trading very well so you can choose a consistent forex trading system.
It is more profitable for you because you will have a chance to gain profit all the time. You may also consider easy forex. You probably question whether it is as easy as it is said.
Well, it depends on how you see it. If you have a strong commitment to this business, everything will be very easy for you. The easy forex is suitable for beginners. It is because they are user-friendly and very easy to use. You can use easy forex to trade any major currency. It is also possible for you to trade commodities such as gold and oil using this account.
Another profitable forex trading system is the scalping forex. For this kind of forex system, you need to ask it to your broker first. This is because not all brokers agree with this system. It’s better for you to trade with professional and regulated forex brokers on the right sidebar if you want to do scalping forex. One last note for you, if you are looking for the most profitable forex trading system, you need to find the one that has been by many and provide successful support to them. Combined trading strategy basics price action with this is one of our recommended trading systems.
Understanding market structure through accurate price action is crucial for effective trading, especially when utilizing higher timeframes such as H1 (hourly), H4 (four-hour), and daily charts. This approach allows traders to identify ongoing trends and make informed decisions aligned with the broader market context.
Importance of Reading Market Structure
Market Structure Basics
Market structure refers to the arrangement of price movements over time, characterized by peaks and troughs. Recognizing these formations helps traders determine whether the market is in an uptrend or downtrend. For instance, a series of higher highs and higher lows indicates an uptrend, while lower highs and lower lows signify a downtrend. Analyzing multiple timeframes enhances this understanding, as it provides a comprehensive view of market dynamics and helps avoid “analysis paralysis” by focusing on significant trends across different scales.
Price Action as a Tool
Price action serves as the fundamental basis for understanding market behavior. It reflects the psychological forces driving market movements, revealing how traders react to various price levels. By analyzing price action, traders can gain insights into market sentiment and potential future movements, making it a vital skill in technical analysis.
Integrating Smart Money Concepts
Incorporating smart money concepts into trading strategies further refines decision-making. Smart money refers to the actions of institutional investors who have significant influence over market movements. Key elements of this approach include:
- Order Blocks: Areas where large orders have previously caused price reversals, indicating potential support or resistance levels.
✅ GOOD ORDERBLOCK vs 🚫 BAD ORDERBLOCK
A good order block ✅ last down candle must sweep
🧹 the previous candle liquidity or wick for it to be valid 👍
because that signifies that a liquidity grab has occurred on lower timeframes 🔽
rather than consolidation > Which is a good ✅ confluence so you wait for a Bos, pullback, and execute 👍
- Fair Value Gaps: Price zones where there has been little trading activity, often leading to rapid price movements when revisited.
- Liquidity Grabs: Situations where prices are driven to specific levels to trigger stop-loss orders, allowing smart money to enter or exit positions at advantageous prices.
- Break of Structure (BoS): A change in the established trend direction, confirmed by the price breaking previous highs or lows.
- Change of Character (ChoCh): A shift in market behavior that signals a potential reversal or continuation of the trend.
Here is a tutorial on how to apply the smart money concept completely using the variables that have been explained including liquidity, ChoCh, and price action, and is done directly with a real account by Lewis Kelly.
Key liquidity levels are essential for traders utilizing the Smart Money Concept (SMC) trading strategy, as they help identify where significant market orders are likely to be placed. According to Lewis Kelly, understanding these levels involves recognizing where liquidity exists in the market, which can be derived from various psychological and technical factors.
Key Liquidity Levels
1. Stop-Loss Levels
Stop-loss orders represent a major source of liquidity. Traders often place these orders at common technical levels, such as recent highs or lows. By identifying where many traders might be setting their stop losses, traders can anticipate potential liquidity grabs when the market moves to trigger these stops.
2. Take-Profit Levels
Similar to stop-loss levels, take-profit orders are also concentrated at certain price points. These levels can act as resistance or support, depending on the market direction. Recognizing where traders are likely to take profits can provide insight into potential reversals or continuations in price movement.
3. Equal Highs and Lows
Areas where the price has previously reached equal highs or lows indicate significant liquidity. These points often attract traders looking to enter positions based on established patterns, making them critical for identifying potential reversal zones or breakout points.
4. Session-Specific Liquidity Zones
Different trading sessions (e.g., London, New York, Asia) exhibit unique liquidity characteristics. Understanding the typical behavior of these sessions helps traders pinpoint key liquidity levels that may influence price movements during those times.
5. Previous Day Highs and Lows
The highs and lows from the previous trading day often serve as psychological barriers for traders. These levels can act as magnets for price action and are frequently monitored by market participants, making them important liquidity zones.
Conclusion
By focusing on these key liquidity levels—stop-loss and take-profit zones, equal highs and lows, session-specific areas, and previous day highs/lows—traders can better align their strategies with market movements driven by institutional players. This understanding is crucial for executing trades effectively within the framework of smart money manipulation, allowing traders to capitalize on market dynamics rather than simply reacting to price changes.
Utilizing these parameters helps traders confirm entry positions and align their strategies with institutional activities, enhancing the likelihood of successful trades.
In summary, effectively reading market structure through correct price action on higher timeframes is essential for identifying trends and making informed trading decisions. By combining this analysis with smart money concepts—such as order blocks, fair value gaps, liquidity grabs, breaks of structure, and changes of character—traders can enhance their strategies and improve their chances of success in the dynamic forex market. This comprehensive approach not only aids in recognizing potential entry points but also fosters a deeper understanding of market psychology and behavior.
And learn more about smart money concept trading systems too as explained in this video below :
This is the way how and where to enter a trade using the Smart Money Concept!
