H2 ODB Long,
M15 Entry,
M15 Entry Win,
Overnight Session,
Playbook ,
Trade Of The Day ,
Turtle Soup,
Key Takeaways
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Timeframe Correlation: Observations indicate a strong correlation between the 15-minute (M15) entries and 2-hour (H2) orderblock (ODB) management. This correlation suggests that the M15 chart’s reaction to the H2 ODB is a crucial factor in identifying high-probability trades.
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Orderblock Validity: When an orderblock is invalidated on a timeframe, it's essential to monitor higher timeframes for potential setups. This is due to the possibility that the trade setup might be occurring on a higher timeframe despite a shorter timeframe's signal.
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Timeframe Adjustments: If any timeframe closes above or below a key orderblock level, the trade setup should be reassessed on the next higher timeframe. For instance, a close below an orderblock on M2, M5, and M15 charts might still be valid if the 15-minute chart shows a wick hold.
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Secondary Trade Opportunities: The secondary setup observed with the 1-hour wick hold of the 4-hour ODB suggests that multiple timeframe correlations can offer high-risk reward opportunities.
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Data Collection: Gathering data on how different timeframes correlate with each other is crucial. The correlation between M15 entries and H2 trends should be tracked, as it often results in high-probability trades.
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Market Context: The context of market liquidity and orderblock validity can change based on broader market trends and news events. Adjusting trade decisions based on new data or shifts in market sentiment is essential.
Lessons Learned
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Importance of Multi-Timeframe Analysis: Monitoring multiple timeframes is vital. A setup might appear invalid on lower timeframes but could still be valid on higher timeframes.
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Dynamic Orderblock Management: Orderblocks should not be considered completely invalid if they are breached on lower timeframes. Higher timeframes may still offer valid setups.
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Adaptability: Trade strategies should be adaptable to changing market conditions and data releases. Staying flexible with your approach can improve the accuracy of your entries.
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Liquidity and Timeframes: Higher timeframes' liquidity levels should be compared with lower timeframes. In some cases, lower timeframes might have liquidity levels that are above those of higher timeframes.
Things Done Right
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Effective Use of Higher Timeframes: Using the H2 ODB and observing its interaction with the M15 chart provided a successful entry strategy.
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Recognizing Data Impact: Noting the impact of news releases and adjusting the trading thesis accordingly led to recognizing the bullish sentiment during the 9:30 session.
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Entry Timing: The entry based on the M5 chart's reaction after the data drop and subsequent movement was accurate, confirming the trade setup.
Things Done Wrong
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Inconsistent Timeframe Monitoring: Initially, not consistently monitoring higher timeframes might have caused missed opportunities or incorrect trade assessments.
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Overlooking Liquidity Levels: The observation about the M5 ODB being above higher timeframe levels was not initially incorporated into the trading strategy, possibly leading to confusion about orderblock validity.
New Rules Learned
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Canceling Orderblocks: If a timeframe closes above or below a key orderblock level, cancel the orderblock for that timeframe and switch to the next higher timeframe for reassessment.
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Data and Market Sentiment: Adjust trading decisions based on new data and market sentiment. If a significant market move occurs, reassess the previous trade thesis.
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Timeframe Validity: If an orderblock is invalidated on lower timeframes, validate it on higher timeframes before discarding it entirely.
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Entry Confirmation: Always look for confirmation from the timeframe you are trading on, but also consider the interaction with higher timeframes for confirmation.
Key Intention
To enhance trading accuracy, the intention is to focus on:
- Gathering Data: Systematically collect data on timeframe correlations, especially between M15 entries and H2 trends.
- Adaptive Strategy: Develop a more flexible strategy that accounts for multiple timeframe interactions and market context shifts.
- Orderblock Management: Refine the process for determining when an orderblock is invalidated and ensure thorough monitoring across all relevant timeframes.
Key Takeaway: The session appeared bullish because no supply zones were identified near the Line In The Sand (LIS) across multiple timeframes. Specifically, while the M1 order block entry was above the LIS and the M5 supply zone was utilized, higher timeframes (M15, M30, H1, H2, H4, H6, H12) lacked any significant supply areas near the LIS. This absence of supply zones suggested a high probability of the LIS being breached, indicating a potential reversal in the intraday trend bias.
This is a 'Trade Of The Day' setup for August 8th trading day. One of them is the A+ Long setup from the overnight session, and the next is the in session (9:30) trade setup which I traded.
From doing this writeup, I am noticing a couple key takeaways from the trade of the day setup. And that is a different way to interpret this orderblocks.
For one, there has most certainly been a correlation between the M15 entry and the H2 bar for management correlations. Not only from a trend shift and price action entry perspective. but now I am also noticing it here on this screenshot and trading overview. And the perfect entry for the price action reaction off of the H2 ODB (Orderblock) was a 15 minute chart reaction. This is a correlation in this current market context that has been happening over and over again.
Another thing that I am noticing about these orderblocks, is that when I have a specific hard level for an orderblock. I must immediately cancel any timeframe bar that closes below or above my key orderblock level. (If it closes above the level for shorts) (if it closes below the level for longs). The moment that any of those timeframes close below or above my orderblock, I must make a shift to the next highest timeframe and continuously monitor the reaction, because the setup could be taking place on a higher timeframe, and because I havent monitored this in the past, I could likely be missing other timeframe entry models.
(For Example) I usually trade the 2 minute, and 5 minute chart for my entries. But this specific trade setup, took place on the 15 minute chart, and I usually dont monitor for 15 minute entries (only sometimes). But the 2 minute chart closed below this specific H2 orderblock, as well as the 5 minute, as well as the 1 minute etc. But when analyzing the 15 minute chart, the bar wicked off of the H2 orderblock (signaling a hold), turtle souped the prior day low, had a bearish to bullish variation entry model above the prior bar highs, created a slight 15 minute fair value gap, and experienced virtually zero drawdown upon entry, stops at the premarket low (H2 Orderblock & Pre Market Low) for a continuation trend higher throughout the overnight session, into the 9:30 trading session, until it eventually engulfed the entire prior days price action. This specific entry provided massive risk to reward opportunity, all because of the next standard higher timeframe chart signaled a wick hold, when the shorter timeframes suggested a break and close below the level. When we get multiple contributing factors to a high probability trading entry with multiple confluences, our chances of success become greater, as well as our expected value on the trade.
There was also a secondary trade entry opportunity off of the 1 hour wick hold of the 4 hour ODB, as all timeframes up to the 30 minute chart closed below the H4 ODB key level. So between the M15 hold of the H2 ODB, and the H1 hold of the H4 ODB, I am noticing a correlation for a timeframe entry, with a factor of around 4-8 lower for a high risk reward entry.
I will make in a key intention to focus on gathering data for all of the timeframes and how they correlate with eachother. Because again, I am noticing a very high correlation between the 15 minute chart entry models and the 2 hour chart trends. Usually, from what I have noticed, when the first 15 minute chart entry is presented, it usually provides for 1 trading decision (1 trade on the day) and when managed with the 2 hour chart, the trend usually stays intact for the duration of the trading day, without any of the prior 2 hour bar lows being breached. Now, im sure that this is subject to change as market contexts change, so I think it will also be smart to start gathering the data on price action entry model timeframes in play, and trend timeframes in play for trade management once entered.
The reason I only marked the H4 and H2 orderblocks is because the H12 and H6 orderblocks were already (USED), meaning their liquidity has already been tapped into.
Also, when analyzing this chart, I am also aware that from the major market bottom at 17346, there are still multiple timeframes such as H1, M30, M15 & M1 that have not been tapped into. But there is one timeframe that has been used, which is the M5 ODB. This is quite an interesting observation, because the M5 liquidty and timeframe is ABOVE the higher timeframe untapped liquidity such as the H1/M30 and M15 timeframe charts. Usually, when looking for a long entry off of a demand orderblock rather than supply, the lower the timeframe you go, the lower the price of the orderblock should be, because the shorter timeframe suggests a higher risk to reward entry model, yet in this case, the M5 ODB was above the higher timeframes, and the liquidity below the M5 chart was never even tested. (I need to make a note of this observation to see if this is a recurring theme with orderblock setups) (or have chatgpt make it a rule). I am still unsure fully of the timeframe correlations between the lower timeframes, and other notes and journaling sessions in the past have suggested that I should just wait for the same timeframe correlations for entry. (For example) If I am approaching an M15 orderblock, to wait for an M15 price action reaction off of this orderblock would usually suggest confirmation for an entry. But I am going to have to backtest that data vs the data that suggests that just because an orderblock is closed through on shorter timeframes, does not necessarily mean that the orderblock level is invalid, it may simply suggest that the setup is taking place on a higher timeframe. I must figure this out to know the higher probability entry model.
I also have to define when an orderblock is completely canceled, and It could be that if any timeframe such as the same timeframe or higher closes above or below a key orderblock, than that orderblock is cancelled.
I noted an example of a bearish H2 orderblock on the same chart that wasnt tapped into when the market was squeezing higher, and the price action reaction is on the M15 timeframe, and it clearly fails. Mutiple times. This would have given many short signals had we taken the exact same approach, so clearly, this entry model only works under specific market contexts. And by the time it reached this bearish H2 orderblock setup, the line in the sand was already breached on the H12 chart at the 18298 level, which suggests that the daily trend for the day was clearly UP. And the draw on liquidity was targeting the prior day high from the trend shift, because it was the next H12 and daily draw on liquidity higher, therefor invalidating this orderblock setup, and suggesting that all of the levels would be blown through.
Whats most difficult about catching the H2 orderblock setup from the overnight session, was because at this point, the draw on liquidity appeared lower. We had displacement short from the 5D 5M MONTH VWAP, suggesting the next target had a draw on liquidity lower, and the line in the sand was not yet breached, suggesting a move lower. Im actually not sure I would have been able to catch this trade up, because it goes against all of the things I just listed for the bearish H2 orderblock. Whos to say that that trade shouldnt have worked for bears, when it worked for bulls prior? Very difficult analysis overall.
Another indication that the session would likely be bullish, is because when I tried to find a supply areas around the Line In The Sand, I was unable to find any on any timeframes. The M1 orderblock entry provided, was above the LIS. The M5 supply was used. And the M15/ M30/H1/H2/H4/H6 and H12, did NOT have any supply areas to derive from that Line In The Sand, this acted as a clear indication that the Line In The Sand would likely be breached, and intraday trend bias would flip.
(THE 9:30 TRADING SESSION)
During the session that I traded, there were multiple data drops. An 8:30AM drop, a 10AM drop, and a 10:30AM drop. From the moment the jobs report came out, there was a massive rally to the upside, and I had marked the open print from the moment that data was released. Suggesting that, if that low was never breached, then there was likely no reason I should take a short trade, because there was likely a confirmed market sentiment shift towards the upside, rather than the downside.
I think thats a noteworthy point because, during this trading session, the macro draw on liquidity was still suggesting lower prices, and I figured they would be reached in the overnight, but again, there was a bid caught, that turtle souped the prior day low, and held which was what we discussed earlier. But I remember thinking to myself before I went to sleep, that the draw on liquidity appeared to be lower, and that if the market did happen to catch a bid, I should likely reverse my thesis from bearish to bullish in the morning, because I didnt see any reason why that draw on liquidity shouldnt have been reached. So between the overnight bid hold, and the release of the premarket data that spiked up, and was never retested or breached, the long side was clearly the play.
I saw a setup on the 5 minute chart from the 9:30 open, that closed below the 21 ema, and immediately closed back above on the next 5 minute candle, I had a strong gut feeling that was the entry long of the day, and what do you know? thats exactly what it was. The bearish to bullish variation on the M5 chart, stops at the LOD, never breaching the data drop. At this point, from the start of the 9:30 open, the H6, H4, H2 & H1 trends were all trending higher, and as clearly stated in my journal in prior journaling sessions, if the H6 trend reverses against the H12 LIS (Line in the sand) then there is a high possibility that there will be a reversal on the daily candle, and the daily bias and macro trend. The line in the sand also provided a pretty solid long entry opportunity, even as the trend higher was on the overextended side.
