how's it going traders i hope everybody's having a great day and in this video i'll be showing
you guys five steps a step-by-step guide on how i take confirmation trades in 2022 so getting
started with step one we have locating the zones on the higher time frame and plus the higher time
frame plus one so first of all you need to locate the higher time frame areas of supply and demand
and you can use my zones by becoming a youtube or patreon member where basically you get all of my
zones on a daily basis and you can actually just use my zones if you're unsure of which zones to
use in order to trade confirmation so check that out links are in the description you can do that
or you can always you know do your own zones and do your own strategy that's always fine as well
and you want price to be reacting off of higher time frame supply or demand if price is inside a
higher time frame plus one zone as well that is a bonus and if you see here these are the time
frames to trade so i'm not going to go over every single one but you can see on this graph here we
have the entry time frame and then if you just go to the right you can see that we have the higher
time frame which you should be using to look for confirmation and then we have the higher time
frame plus one so i'm not going to read everything but you guys can just use this chart screenshot it
if you want or write it down it's all good to me so next what you want to do is to set alerts
at those higher time frame zones so you can be alerted when to start looking for confirmation
and i know that this isn't a huge deal but it is very important to automate your strategy as much
as you can so let's look at an example of how i would go about doing this if you come to a
weekly chart and by the way for this video i will be using the weekly to four hour entry time frame
combination so the four hour will be my entry time frame and the weekly time frame will be my
higher time frame where i look for confirmation in so how i would go about doing this is if we have
our weekly zone right here which is our higher time frame zone you should be setting an alert
right before that zone so you are alerted and what you need to do is just hit this plus icon over
here a little bit before the zone and click add alert for oil and as you can see a little orange
icon here shows up i don't know if you guys can see that but that is how you get alerted so that's
it's a very important to automate your strategy so now when price is inside of there this is when you
start to actually look for confirmation so that now we will go to step two all right so step two
look for confirmation on the lower time frame like i was mentioning before so we use trend
lines to see when candle breaks above or below a trend line for confirmation of that momentum shift
and you want to see candles breaking above below the trend line to confirm that momentum has
actually started to shift so if we actually come to a gbp jpy chart here on the weekly time frame
as you can see here the weekly is your higher time frame so we have the weekly zone and it
was contacted right here so if you had an alert set right here you would have been you would have
known to actually go down to your entry time frame which is the four hour chart and look at this here
so right away i noticed as price came down into this weekly area of demand as you can see price
came up and then down and we actually contacted the demand right here the first thing that i
noticed was this trend line right here like this so we had a very clean beautiful looking trend
line and we actually had that removed let's say you were looking for a confirmation here
and you know that weekly demand is in control now you're looking for a momentum shift here on the
four hour chart well we had a very very clear zone right here on the four hour chart if you look that
is the zone that was responsible for removing that trend line so that could have been your
entry rate there and i will get in more detail in a bit second we want to use opposing zones
being removed for confirmation of momentum shifting in the direction you want to trade
so when an opposing supply demand area is removed that is usually a good indication that momentum is
shifting zones removed plus the trend line removed equals high odd setup so what i'm trying to say is
that when you get both removed the trend line plus the zone that is usually a higher odds situation
and in this example here on the pound yen the reason i like this example is because it actually
gave us both in this situation we had a four hour supply zone right here that actually this supply
zone was not removed it was just the trend line but if you look this trade worked out anyways but
if this supply zone was removed as well by peeking above it then this would have been an even higher
odd setup but obviously this all worked out just okay so but there are examples of times where
it will remove a trend line and a supply zone and that is usually a very good indication that
momentum is shifting but there's nothing wrong with just using one or the other now if we come
over to an oil chart on a four hour chart as you can see here let me switch to a weekly chart
we had the weekly zone being contacted right there so we hop down to a four hour chart and this is
a great example of no trend line being removed because there was no ability to draw a trend line
but just a supply zone removed so we had a supply zone right here let me change this
we also had another supply zone right here as well so if you look price came in reacted off of our
weekly area of demand we had our alert set right here price came up broke this supply zone and
this supply zone so two is actually better than one but one is technically all you need
so what did we get we have we had a beautiful trading opportunity right here and this is
actually a zone i pointed out in one of my last weekly forex forecasts so that is the another
great thing about watching those forecast videos i do those every single friday so we had a four
hour zone right here that worked very very nice so this is just an example of when zones removed
are a great indication of momentum shifting and look at that trade it would have been absolutely
beautiful all right step three we need to validate the profit margin plus structure for the stop loss
so we need to locate higher time frame opposing zones for the profit margin now you can use my
higher time frame zones or you can find your you find to see if there's enough profit margin for
you to take the trade um i don't really know what i was writing there but you usually want at least
three to one profit margin more is obviously better you don't really want to have you know
only one-to-one profit margin available you usually want more than what you want to take
so we need to locate the zone and the structure where you can place your stop-loss under for
protection before placing a trade make sure you have a clear stop-loss placement combined with
enough profit margin of where that stop-loss is at and i will show you in a minute how i do that
and you can also place two entries where one entry is immediately after getting confirmation and the
second entry at the zone or structure you're using for your stop loss placement so let's look at an
example of how i would do this so back to the pound yen trade here like i always say we reacted
off of our weekly area of demand we come down to a four hour chart we had our zone right here so
your entry could have been essentially right up here right this red candle right here i know it
might be hard to see as soon as this green candle closes you could have entered this trade with
your stop loss below this structure this is the structure that i'm referring to of where your stop
loss is going to be so now if we come to a weekly chart here to look for profit margin which is
extremely important and this is actually i didn't take this exact trade but i was in pound yen and i
did a trade review on that so there wasn't really an opposing zone here to look for a profit margin
but we had essentially a weekly selling area right up here so if we come down to a four hour chart
and we see this four hour zone right here could probably tighten it up just a bit
and we take our wrist reward tool if you would have entered at the top of this red candle with
your stop below here something like that there's no there's no you know science to this just you
know tuck it underneath here a little wider is not that bad if we calculate the profit margin
here well it didn't really give us the profit margin that we needed if to enter in this specific
situation so this would have been no trade based on that but if you remember i said you can place
two entries where you could have entered there so let me actually get my tool out to show you guys
so you could have entered right where i just said at that red zone at that red candle and
you could have actually entered rate at this zone right here so you could have had an entry there
and there which would have given you an average entry of about halfway through
there so let's take a look at that situation so if we have our stop loss under here like this
and our profit margin up to here well now we have a risk to reward ratio of 3.35 to 1. so
that is a situation where that profit margin is okay so you would have actually had to take
you know two entries in this specific trade or you could have obviously just taken one down here like
that which actually gives a six to one but then you run the risk of not getting involved in the
trade so hopefully that makes sense and like i said if you guys have any questions at all just
please let me know in the comments down below i have no problem going over anything that you
guys have questions about now let's go over to oil and take a look at oil we had our four hour
zone right here so now we have to validate the profit margin before taking the trade well oil
is a little bit of a weird situation there's not really a zone right here but just to be safe you
could draw a zone something like this and that is how i would be gauging my profit margin obviously
if there was a clear zone up here then we would draw that but you pretty much want to just do that
and calculate your profit margin compared to this line right here or if you're really really bullish
you could also just say that the high is the profit margin which is a little more risky
but technically for all of your take profits it is somewhat in play where you think that
all prices are going to go to all-time highs and if you look at the long-term trend you
can really see that it's very possible to get up there so we have our higher time frame zone now
we go down to the entry time frame which is the four-hour chart so this could have been a time
where you could have entered at the break of this supply zone right here and what you could
have done is place as price was about to break it you could have just placed a buy order here
but the problem with that is that there was no structure here yet so what you would have
had to done had to have done was enter rate a little bit higher let me mark it out on a chart
this candle right here would have been an indication that we had a supply zone right here
and you could have entered as soon as that candle closed essentially with your stop loss under here
so let's take a look at the profit margin that that was offering us so if we entered right
here with a stop loss right around here this is clearly a profitable trade to take where it's
three to one and what you would do is it would be i believe it is a buy stop setup where you just
place a limit order uh above here as that candle breaks or you could have even have waited for this
zone to break and it would have been something look it would have looked something like this
right but there in this situation it's not really giving us the profit margin but that's okay
you can still enter there and then also enter at right here like this and then your average entry
would probably be something like this and then your profit margin is completely there at least
three to one so that was another great example and as always you can always just enter at this
demand zone like this and get you know the most profit out of it and that would have been a 5.2 to
1 trade but like i said you often sometimes price does not pull back and you don't even get involved
in the trade so if you guys have any questions about these entries please let me know i might
have missed something and i do not mind getting back to you all right real quick don't forget to
like and subscribe and if you guys have any comments down below to leave me or any anything
at all just let me know in the comments down below and if you're new make sure to hit the subscribe
button and check out my tips playlist and always check out the youtube patreon membership for my
zones on to step four it's actually executing the trade so we make sure that there's enough that
there's the structure for the stop loss and enough profit margin we place a limit order or stop limit
order including your stop loss i pretty much already went over this but like i said you have
that buy limit order that you could do where you it's essentially like a breakout trade or you just
wait uh for your order to pull back and trigger and like i said you can use multiple entry points
so i'm not going to go over that again i think you guys understand that so you can enter right away
after confirmation or enter with two orders if you expect that pullback to the structured zone where
your stop loss would be so as i say here let's look at let's look at the example of a few entries
and we pretty much already did um it's pretty straightforward in my opinion if you guys aren't
understanding at all please just you know don't hesitate to ask and essentially here if you wanted
to trade the breakout of this supplies on here your buy limit would be here and your structure
would be that zone right here now let's say that all this didn't take place yet all of the this
demand zone here and this was the structure we were looking to trade well you could have put
your stop loss under here and entered above that trend line as price broke it and that you could
have taken profit up there so hopefully that makes sense that's executing the trade i know we kind of
already went over that in step three i'm just trying to make this video as fluid as possible
all right the last step which is step five is managing the position and this is very important
to do so we want to use opposing higher time frame zones to take off portions of your trade we want
to set alerts where you think price could turn around and look to trim your position you can take
profit all at once or look to have multiple take profits there's no right way to do it there's no
you know absolutes it's it's essentially you should be testing things out on yourself and and
see what happens and then form your own managing process or you can move your stop loss to break
even once you are in the green enough look to move your stop loss to at least break even or half risk
usually after taking your first profit off and you can also just continue to move your
stop loss in the green as price goes up so let's look at a few examples of what i'm talking about
we're going to take a look at oil here again let's say your average entry was here like we said and
your stop-loss is there well price is giving you it's about 3.7 it's a little more than i thought
above there well as price moved up you could have identified opposing areas of supply so if you come
to a four hour chart you can see a supply zone was right here and that you can actually see price
turned around from that supply zone so this could have been your first take profit right
here and you could have just went on to your app it all depends i'm not going to go over
you know specific details on how to take profit because my broker is probably different than yours
so what i do is i just go and i trim my position manually i just set an alert here and then take
off a portion of my position so you could have done that and as you can see would have been
actually pretty bright because price pulled back significantly so you could have also looked at
this zone right here and you could have taken a little bit of profit off there so you could
have taken off you know 25 percent right here and then maybe another 25 up here as well or you can
adjust these numbers as you want you could take 50 off and 50 off right or you could take full profit
up here there's no right or wrong like i said but the other option is to move your stop loss
up as price goes up so like i said if really quick if you do want to take profit up here and
that's your first take profit i highly suggest taking the profit off and then at least bumping
your stop loss up to break even so that it is a winning trade now if you want to do the method of
bumping your stop loss up which is a method that i actually apply sometimes we have a little bit of
a zone right here as you can see price reacted off this supply zone and came down and reacted
off that one so this is a great example of how you could have actually just put your stop loss
underneath this zone very well protected and you could have gotten the rest of this trade and
hopefully price keeps going up and then if there's a new zone formed up here you can actually just
take this stop loss and bump it up to here that is another option if you guys have any questions on
that please let me know so that is how i manage my positions and there's multiple ways to do it
like i said there's no right or wrong way it all depends on what you think and your own strategy
and your own testing so definitely test everything out yourself first before making any final
decisions and there's nothing wrong with trying new things out alright guys hopefully you guys
found this confirmation trading video helpful make sure to check out the links in the description and
i hope to see you guys around the discord group or on the weekly forex forecast all right take care