How I Trade Continuations ONLY Using Liquidity

Understanding Continuation Trades in Forex

Introduction to Continuation Trades

• The speaker addresses a common issue among traders: difficulty in executing continuation trades after identifying reversals.

• The video aims to provide a step-by-step guide on using liquidity to frame continuation trades, focusing on the M15 time frame for structure and M1 for entry.

Key Concepts of Continuations

• Continuations are not strictly tied to trends; they can occur in both pro-trend and counter-trend scenarios based on liquidity control.

• A continuation model involves trading towards medium inducements (liquidity pools), while a reversal model is about trading away from them.

Analyzing Price Action

• The speaker highlights a specific price action sequence: break of structure (BOS) followed by price movement that builds liquidity.

• Price often pauses before inducing liquidity, which serves to trap more traders and create larger liquidity pools.

Identifying Points of Interest (POI)

• Wicks on candles tell a story; analyzing lower time frames can refine POIs significantly.

• Observing unmitigated M1 candles within the context of M15 wicks helps identify precise entry points.

Timing and Execution Strategy

• Inducement timing is crucial; ideal times for entering trades are at 00 or 30 minutes past the hour, particularly during key 15-minute candle openings.

• Recognizing weak lows can indicate potential smart money traps, enticing buyers into the market before price moves against them.

Final Steps in Trade Execution

• After identifying inducements, traders should look for confirmation through lower time frames before executing trades.

• Market execution should be timed with awareness of potential stop-loss levels based on previous demand zones.

Recap and Conclusion

• Successful trading hinges on understanding who controls the market through inducements and targeting subsequent liquidity pools effectively.

• Traders are encouraged to focus solely on liquidity dynamics when planning their strategies.