R8 STRATEGY - Copy 1
R8 STRATEGY - Copy 1
CONTENT
1. LIQUIDITY
2. MARKET STRUCTURE
8. TRADING RANGE
LIQUIDITY
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This topic is the most important part of this strategy. The forex market is the most liquid market in
the world, with a daily volume of $6.6 trillion.
Liquidity is what drives the market. So it’s an absolute necessity that we understand where large
amounts of liquidity is resting in the market as this is what makes this strategy so powerful and so
consistent. Let’s go through it one by one.
LIQUIDITY TYPES
This is the second purpose of the 3 Candle Formation, so we have it for how we see market Structure
and also we have it for Liquidity.
Above every Swing High that has not yet been broken, there will be Buy Side Liquidity resting above
in the form of Buy Stops. Traders will place these Buy Stops above Swing Highs in the hope that once
price breaks above, it will go higher and higher but what will usually end up happening is the market
will reverse after triggering those buy stops, leaving those traders stuck in drawdown or a hit stop
loss.
Below every Swing Low that has not yet been broken, there will be Sell Side Liquidity resting below
in the form of Sell Stops. Traders will place these Sell Stops below Swing Lows in the hope that once
price breaks below, it will go lower and lower but what will usually end up happening is the market
will reverse after triggering those sell stops, leaving those traders stuck in drawdown or a hit stop
loss. When price does this, we call it a “Stop Hunt”.
The next form of liquidity we will go through are Equal Highs & Equal Lows. Just like the Swing Highs
and Swing Lows we just went through, traders place Buy Stops above Equal Highs and Sell Stops
below Equal Lows.
The reason why so much liquidity builds up in these areas of Price Action, is because traders see
those Equal Highs and Equal Lows as a form of Support or Resistance, so if price breaks through
these areas, they once again expect the market to keep going up, in the case of price breaking above
Equal Highs or keep going down in the case of price breaking below Equal Lows. Once again it’s often
the contrary that happens.
The other reason there is a lot of liquidity in these areas of Price Action is because traders will also
try to Sell from Equal Highs and Buy from Equal Lows, thinking they are a strong area of Support &
Resistance. So when price breaks through, they are hitting all the stop losses as well. Before we
show some chart examples, let’s go through a diagram to show what valid Equal Highs / Equal Lows
are and what isn’t valid.
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1. EQUAL HIGHS: BUYSIDE LIQUIDITY STOP HUNT
3 Candle Formation
This is what we shall use to read our structure
As you can see in the diagram, Candle #2 is the Highest Candle of the 3 for a Swing High and the
Lowest Candle of the 3 for a Swing Low. Now that you have a basic understanding of what they look
like, let’s take a look at some real chart examples!
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What is a trading Range?
A Trading Range is a concept we use to understand where we currently are in the market and is how
we properly view Market Structure.
We view Market Structure in Ranges and you will see at the end of this lesson just how clear Market
Structure becomes. There is a phenomenon that consistently repeats which we call “The Range
Cycle”, this gives us an edge. If we understand where we are in the cycle, we can approach the
market with a high level of accuracy and understanding of our directional bias.
Understanding the Trading Range is key. The Trading Range consists of multiple different pieces that
will eventually be blended all together to create it. So we are going to break it down into what I call
“The Core Elements” of a Trading Range
Now that you understand how to identify a Bullish & Bearish QM, you will be able to identify the
beginning and end of a Trading Range. In this next section we are going to go through what those
Bullish & Bearish QM’s represent in a Trading Range. Strong Highs & Weak Lows At the beginning of
a Bearish Trading Range, we are going to see a Strong High, otherwise known as a Bearish QM. At
the end of a Bearish Trading Range, we are going to see a Weak Low, otherwise known as a Bullish
QM. That Weak Low formation or “Opposite QM” is going to let us know that our Bearish Trading
Range has been confirmed. Let’s see an example of what that looks like
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Strong Lows & Weak Highs At the beginning of a Bullish Trading Range, we are going to see a Strong
Low, otherwise known as a Bullish QM. At the end of a Bearish Trading Range, we are going to see a
Weak High, otherwise known as a Bullish QM. That Weak High formation or “Opposite QM” is going
to let us know that our Bullish Trading Range has been confirmed. Let’s see an example of what that
looks like
The way we apply the Fibonacci to our Trading Range is by measuring it from the High and Low of the Range. The
50% is known as “Equilibrium”. Above the 50% are Premium Prices (Expensive) and Below the 50% is known as
Discount Prices (Cheap). So in a Bearish Trading Range, we only want to sell in Premium Prices. Selling in a
Discount is not high probable. In a Bullish Trading Range, we only want to buy in Discount Prices. Buying in a
Premium is not high probable. Let’s see what that looks like when the Premium & Discount is applied to our
range
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The Range Cycle
We have now covered the Basic Core Elements of a Trading Range. The QM’s, which represent either a Strong
High & Weak Low or a Strong Low & Weak High, the External Range Liquidity, which are the External Points of
the range, especially the Weak High / Weak Low since those are the targets to create a new High or new Low,
Internal Range Liquidity which are the Highs / Lows inside of the Range and lastly the Premium & Discount to
know which area of the Range we are looking to Buy or Sell from. I have taught you all of them piece by piece
and now it’s time to blend them all together and take advantage of what we call the Trading Range Cycle. The
Trading Range Cycle is simply the process of price seeking Internal Range Liquidity to then Target External Range
Liquidity and then from External Liquidity back to seeking Internal Range Liquidity and so on. That’s the cycle
VARIATION 1 LOGIC
In Variation 1, there are Buy/Sell stop orders above/below the red annotated IRL (internal range
liquidity). The market then triggers those pending orders and reverses, leaving those traders in loss.
Once that High/Low has been taken out, many traders will believe the trend is changing since Price
created a new HH or new LL, when all it is, is a stop hunt. So they will attempt to trade in the wrong
direction and get stopped out
VARIATION 2
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VARIATION 2 LOGIC
For Variation 2, it’s pretty much the same as I explained earlier just that for it it doesnt have internal
range liquidity. Price will engineer liquidity and that liquidity will have Buy/Sell Stops resting
above/below it, this is the area annotated in red. The market will then tap into that HTF POI and
then reverse, leaving them in loss. Those unaware of where Price is coming from will attempt to
continue trading in the direction it has been creating the liquidity in, and it will take out those
traders stop losses. So once again they take out both sides of the market before going in their
intended direction
VARIATION 1 EXAMPLES
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VARIATION 2
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Point Of Interest
In this lesson, we are going to cover Point of Interest, or POI for short. A POI is a Price Level where we can expect
the market to give a reaction from, an area where we can expect a setup to form and can also be where we can
potentially execute a trade. The main issue people have with POI’s is that there can be so many of them visible on
the chart and the majority of people don’t know which POI to choose. That’s why we must have some rules
behind the way we select them, to ensure we give ourselves the highest odds possible. Let’s go through some of
those rules
1. A High Probability POI must be selected from the Higher Timeframes, the HTF is king and will always be king.
This is the main reason why people can’t choose a POI, because they spend their time looking for it on the Lower
Timeframes and end up having too many options, which is not an ideal method for long term profitability.
2. A High Probability POI must have liquidity resting above it if you are looking to Buy, and below it if you are
looking to sell. This gives the market a REASON to tag into your POI and it also gives the market a REASON to
reverse from your POI.
4. A High Probability POI is the closest POI to the liquidity. In the topic of Liquidity, you can see how quick they
can cause those manipulations, so it’s most likely they will be very quick to reverse. So if your POI is not the
closest one, it’s likely you will miss the move.
Orderblock
The first type of POI we will go through is the Orderblock. We have the Bullish Orderblock and the Bearish
Orderblock.
A Bullish Orderblock is the last down Candle/Candles before the up move. I say candles as plural because the
same consecutive colour candles are just one solid candle on the HTF.
A Bearish Orderblock is the last up Candle/Candles before the down move. I say candles as plural because the
same consecutive colour candles are just one solid candle on the HTF. For an Orderblock to be valid for us, it
MUST take out Liquidity. This gives it purpose.
You can mark out the entire candle if you like, however the majority of the volume is in the body so for me
personally I mark it starting from the body. Just do be aware that there will be times where it doesn’t tap the
body. So it’s personal preference. Let’s take a look at an example of a Bullish & Bearish Orderblock on the charts
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BEARISH ORDERBLOCK
BULLISH ORDERBLOCK
Imbalance Fill
The third type of POI is the Imbalance Fill. First let’s go over what an imbalance is. When price has not been
delivered fairly between buyers and sellers, the market will become one sided which ends up leaving an
imbalance in price. The way we can identify an Imbalance is the gap in the middle of 3 Candles. So between
Candle 1 and 3 there will be a gap where the Candle #1 and Candle #3 do not touch. If they touch then there is
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no imbalance. Let’s look at a quick diagram so you can see what I am describing.
The example to the right is not an imbalance. As you can see there is no gap between the 1st and 3rd candles.
The price was fairly delivered.
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Now that you understand the Imbalance, you can now understand what I mean by an Imbalance Fill. To put it
simply, an Imbalance Fill is when the market returns to an Imbalance and completely fills the gap. So in a Bearish
example, the imbalance would be considered filled once Price taps the Low of Candle #1. Vice versa for a Bullish
Imbalance, the imbalance would be considered filled once Price taps the High of Candle #1. So Candle #1 would
be the Candle we use as a POI. Now let’s see some chart examples
Unmitigated Wick
The fifth and final POI is the Unmitigated Wick. The explanation for this POI is pretty straight forward. It is a Wick
that has not yet been tapped into yet. One key point to remember about the Unmitigated Wick is that price can
use the Open and the 50% of the Wick. So if price has tapped into the open, the 50% can still be used.Something
about this POI is that this unmitigated wick MUST be the middle candle of the 3 candle formation of the swing
high or swing low. Let’s jump straight into the chart examples as this POI is quite simple.
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If we are in day light savings time add one hour ahead to each one of these
ASIA SESSION
Unless you are Trading Asia Pairs, the main purpose of the Asia Session is to build context for the day. There is
nothing inherently wrong with Trading the Asia Session with a non Asian Pair, but the probabilities and volatility
are going to be much higher in London / New York Session. So for us, the most logical decision will be to wait
until Asia Session ends to build up context. That will be our main reason for marking up the Asia Session. This
session is also known as the GUIDE for an Intra-Day Trader. So it is going to be of great use to us
3 CANDLE FORMATION
You might be wondering... why are we going over the 3 Candle Formation yet again, surely there’s not much else
to it, but you’re about to see just how important this one basic topic really is.
It’s now time to understand what exactly a 3 Candle Formation is, now that we have reached the topic of the
Fractal Nature.
A 3 Candle Formation is actually a QM when broken down onto a lower timeframe. This is why the 3 Candle
Formations work as Swing Points and Structure!
A Swing Low is a Bullish QM when viewed on a Lower Timeframe and a Swing High is a Bearish QM when viewed
on a Lower timeframe. This also works the opposite way, if you see a QM then it means it’s a 3 Candle Formation
on a Higher Timeframe.
Revelation
So why is this so important to know about the 3 Candle Formations? let’s connect the dots here. 3 Candle
Formations = Swing Points / Structure, Liquidity & QM’s
All of that blended together, forms a Trading Range. That means Trading Ranges are fractal. And if we use POI’s
and Order flow in combination with Trading Ranges, then that means they are fractal too. The idea when creating
this course was to build it like a house. One brick at a time until the house is complete and to make it so
everything ties together like the cement that holds it all in place. Every single thing we have talked about is fractal
and never ending. No matter the timeframe, you will see everything that has been taught so far. The 3 Candle
Formation is such a simple concept, but now you can see just how deep that one little candle formation goes.
Understanding this means we are able to take this strategy to the next level.
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PUTTING IT ALL TOGETHER
FINALLY!
This is the long awaited topic how do we get in to actually trade and get entries.
But then we shall have to approaches one that uses top down and one that doesn't
APPROACH 1
First approach is going to be a direct approach and again not very high win rate (it’s win rate is 70%-75%) since it
doesn’t have confirmation
It’s for the lazy guys or just the ones that don’t want to stress over too much confluences
And it’s the simplest
1:3R should be your target on this
1:4R Maximum
First of all you need to know this
Each HTF has it own respective internal timeframe and if we have a swing high and swing low on a htf seletced
then on the internal timeframe of that higher timeframe we must have bearish qm,bullish qm and internal range
liquidity for it to be valid.
HIGHER TIME FRAME INTERNAL TIME FRAME
DAILY H4
H4 H1
H1 M15
M15 M5
M5 M1
STEP BY STEP
1. Spot your swing high and swing low on your selected HTF of your choice
2. Drop down to the internal timeframe of that HTF and look for a BULLISH QM and BEARISH QM,also
make sure there is internal range liquidity between both Qms, thats what makes a valid range
3. After all those are present go back to the HTF and check for one of the POIs we talked about in the
previous pages, should be either; unmitigated wick, or unmitigated orderblock, or an imbalance fill also
keep in mind some ranges can have 2 POIs but choose the POI that is closest to the liquidity
4. When the POI on the HTF has been secured, go back to the internal timeframe and refine that POI to
something smaller, when you go to that timeframe still make sure there is a refinable POI on that
timeframe that i have talked about (unmitigated wick, or unmitigated orderblock, or an imbalance fill)it
must not necessarily be the same POI on the HTF but as long as it makes sense as a POI in the refinery. If
there is no refinable POI dont take the trade.
5. If all that criteria has been met, take the trade without hesitation, SL above or below the swing point take
profit 1:3R or 1:4R
Lets get the illustration then move into the chart examples
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STEP 1
BULLISH ILLUSTRATION
BEARISH ILLUSTRATION
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STEP 2
BULLISH ILLUSTRATION
BEARISH ILLUSTRATION
So you can clearly see that a swing high on the HTF forms a bearish QM on the internal timeframe
and a swing low on the LTF forms a bullish QM on the internal timeframe.
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STEP 3
Now that we have gotten the range next is for the POI on the HTF
STEP 4
BULLISH EXAMPLE 1
STEP 1
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STEP 2
STEP 3
HTF POI
Here you can see we have 2 HTF POIs(unmitigated wick and imbalance fill) but remember we take
the POI closest to the liquidity and there we go we took the imb. Fill.
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STEP 4
STEP 1
STEP 2
ITF RANGE
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STEP 3
HTF POI
STEP 4
Qms where you are taking the entries from must completely be clean without any structural liquidity
within
VALID QM
INVALID QM
APPROACH 2
Preferably, unmitigated orderblock, unmitigated wick, and imbalance fill, pick them from anywhere
you see them as long as they are unmitigated and at swing highs and lows
POIs should be marked at HTF swing highs and swing lows only;
Daily
H4
H1
M15
Daily>h4
H4>h1
H1>m15
M15>5
After you get your POI at the swing highs or swing lows make sure you have a QM and a refinable
POI on the internal timeframe of that POI
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If it’s there, wait from price to come back to your POI then get a range on the lower timeframe
D1 POI> 4H INTERNAL QM> when price comes back to the POI, H1 Swing high swing low, m15 valid
range then entry
4H POI> 1H INTERNAL QM> when price comes back to the POI, m15 Swing high swing low, m5 valid
range then entry
1H POI> M15 INTERNAL QM> when price comes back to the POI, m5 Swing high swing low, m1 valid
range then entry
M15 POI> M5 INTERNAL QM> when price comes back to the POI, m5 Swing high swing low, m1 valid
range then entry
NB: its not necessary to get these trades only at the HTF POI but if you draw your FIBONACCI from
the high to the low before the retracement or the low to the high before the retracement. Sell any
range you get within the premium and buy any range you see in the discount after price hits the HTF
POI. You already know how to get ranges already
See the HTF POI thats unmitigated at a swing HIGH we marked it and waited for price to tap into it
Then also marked from the high to the low before the retracement started so we knew the premium
we had to sell from
This was H1 so according to our arrangement where do we get our Swing high swing low and range,
thats m5>m1
BULLISH EXAMPLE
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HTF POI WAS M15
SH SL TO BE ON M5 IN THE DISCOUNT
RANGE TO BE ON M1
Range was got on m1 since the swing high and low plus the poi was got from the m5
M1 RANGE
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FLIPPING ACCOUNTS
Now that we’ve seen some very basic examples from both a Diagram and a Chart, let’s now dive into how we can
implement this in our Trading Ranges to assist us with choosing a POI. Remember though that we cannot use
Order flow purely on its own
this is just one of the many pieces to this overall Strategy. We must combine everything together and we will
show you exactly how that is done by the end of this course
EXAMPLES OF ORDERFLOW
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STACKING
Now that we have covered the Fractal Nature of the market, we can now jump into one of the most lucrative
methods of trading, known as stacking or “scale ins”. This is where we take advantage of all the continuations
inside of the Trading Range, until the External Liquidity has been taken out. The Internal Structure or “Internal
Range Liquidity” we spoke about, are simply Trading Ranges that are on a LTF. We just need to use the same
exact logic, but on a LTF, and if you have the correct price leg, every strong low / strong high should hold until
the HTF Target has been met. Let’s see a quick diagram of what I mean and then we can get right into the chart
examples since we are using information we have already taught. We are just using it on lower timeframes to take
advantage of the fractal nature
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This may be the final topic, but it’s definitely not the end of the education.
I am your mentor but the market is your final mentor
Back test, forward test and most importantly don't jump from one strategy to another stick to one thing and
specialize
also learn form your mistakes and improve that way
BE DISCIPLINED
GOOD LUCK.