Smart Money Concepts + Macro Economics + Price Action/Naked Forex = My Strategy

Why no indicators? Almost all indicators are lagging, meaning they are giving the data AFTER it has happened. What we’re doing is anticipating the direction of the market BEFORE it moves and only entering trades after multiple layers of confirmation are locked in. No positions are taken impulsively and there is always a clear entry and exit for each trade.

SMC & Macro are used to determine where "smart money" (institutional money) is flowing. In Risk-On environments I know smart money is more open and in Risk-Off environments smart money is looking to play it safe and it flows to CHF, JPY, and Gold.

Price Action helps paint a more detailed picture of order flow so support and resistance levels can be established. Daily and 4-hour candles show where institutional order blocks are and where price is likely to be respected. The one-hour and 15-minute candles are used to draw in trendlines to determine good areas for entries.

Wait for candles to close and for patterns to set up for confirmation then enter trades and hold them for 15-40+ pips depending on market conditions.

Trading at the opening of a session provides enough liquidity to move price to our expected targets. Trading out of session times typically doesn’t provide for enough volume and patterns don’t play out as smoothly as they do when in-session.

This process will normally take 15 minutes of prep before session open and trades will be closed in minutes or held for up to 4+ hours if the expected volume isn’t there.

I’m normally looking for a 1:2 risk reward ratio and risk a max of 6% per session. I typically open no more than 3 trades per session. This allows me to spread my risk and get a better sense of current market dynamics as trades unfold. Just 1 trade makes me want more and anything over 3 is too hard to manage. So trading 1 - 3 pairs is best for me. It has been proven over and over again that if I just let go to the intended targets and don’t micro-manage, then they will hit their targets. I try to take a hands-off approach as much as I can once trades are in and only move my profit targets with a trailing-stop if market conditions allow, other than that I’ll lock in profits at the appropriate levels.

Basic Trading Checklist

Identify Market Structure: Determine whether the currency pair is Bullish (price going up), Bearish (price going down).
Analyze Price Action: Look for key support and resistance levels, trends, and candlestick patterns that may indicate potential price movements.
Select Entry and Exit Points: Define your entry price, stop-loss level, and target profit levels based on your analysis.
Use Technical Analysis: Use TA to assess momentum and confirm your trade setup.
Check Market News and Events: Be aware of upcoming economic reports or news events that could impact the market. *We typically won’t trade around news events.
Assess Risk-Reward Ratio: Ensure your potential reward justifies the risk you’re taking, typically aiming for at least a 2:1 ratio.
Review Position Sizing: Determine the appropriate position size based on your risk management rules, ensuring that no single trade risks more than a small percentage of your trading capital.
Place Your Trade: Journal your trade, including entry, exit, and reasoning behind the trade.
Monitor the Trade: Once the trade is placed, keep an eye on market conditions and be prepared to adjust your strategy if necessary.

Use the Daily chart to establish Market Type and establish momentum & direction of the market, then mark key support & resistance areas. (Orange Line)

Use the 4HR chart to “predict” where the candles will close and which patterns will play out and establish final targets (Purple Line)

Use the 1HR to identify patterns and entries - draw trend lines on the 1HR timeframes (Yellow Line)

Your strategy will be to look at the Daily chart (every candle represents a full Day) to establish market momentum and overall direction.

You’ll then drop down to the 4hr chart (Every candle represents a 4hr period) to predict and determine how the 4hr candle will close.

Then drop down to the 1HR chart (each candle represents a 1hr period) to place your entries.

WAIT FOR CONFIRMATION

In day trading, "waiting for confirmations" refers to holding off on entering a trade until specific signals or conditions validate the setup, reducing the risk of falling for “fake-outs” or false moves by institutions to trick impatient retail-traders. Traders use confirmations to ensure a higher probability of success by waiting for evidence that the market is truly moving in their anticipated direction. Here's what it typically means:

Price Action Confirmation: Waiting for the price to behave in a way that supports the trade idea.
Example: If you're eyeing a breakout above a resistance level, you might wait for the price to close above that level on a key time frame (e.g., a 5-minute or 15-minute candle) rather than jumping in at the first touch.
For a trend reversal, you might wait for a candlestick pattern (like a bullish engulfing or pin bar) to form at a support or resistance level.
Support/Resistance Confirmation: Ensuring the price respects a key level before acting.
Example: If you’re trading a bounce off support, you might wait for the price to test the level multiple times or form a higher low before entering.
For breakouts, you might wait for a retest of the broken level (now acting as support or resistance) to confirm the breakout isn’t a fakeout.
Volume Confirmation: High trading volume often validates a price move.
Example: A breakout with low volume might be unreliable, so traders wait for a surge in volume to confirm strong market participation. Low volume would be better for trading a range not a breakout.
Time Frame Confirmation: Checking alignment across multiple time frames.
Example: If you’re trading on a 5-minute chart, you might wait for the setup to align with a higher time frame (like the 1-hour chart) to confirm the trend direction.
News or Catalyst Confirmation: For fundamental-driven traders, waiting for a news event or catalyst (like economic data or a speech) to align with the technical setup before entering.
Why Wait for Confirmations?

Reduces false signals: Markets can be noisy, and premature entries often lead to losses from reversals or traps.
Improves risk-reward: Confirmations help traders enter at better price levels with tighter stop-losses.
Increases confidence: Waiting for multiple signals to align boosts psychological discipline.

Example: Suppose you’re watching a pair approaching a key resistance level. Instead of buying the moment it hits your level you might wait for:

A strong bullish candle closing above the level.
Volume to spike on the breakout.
A 5-minute chart showing the price holding above the level on a retest.
*This multi-layered confirmation reduces the chance of buying into a false breakout.

My Strategy

Smart Money Concepts + Macro Economics + Price Action/Naked Forex = My Strategy

SMC & Macro are used to determine where "smart money" (institutional money) is flowing. In Risk-On environments I know smart money is more open and in Risk-Off environments smart money is looking to play it safe and it flows to CHF, JPY, and Gold.

Wait for candles to close and for patterns to set up for confirmation then enter trades and hold them for 15-40+ pips depending on market conditions.

Trading at the opening of a session provides enough liquidity to move price to our expected targets. Trading out of session times typically doesn’t provide for enough volume and patterns don’t play out as smoothly as they do when in-session.

This process will normally take 15 minutes of prep before session open and trades will be closed in minutes or held for up to 4+ hours if the expected volume isn’t there.

Basic Trading Checklist

Identify Market Structure: Determine whether the currency pair is Bullish (price going up), Bearish (price going down).

Analyze Price Action: Look for key support and resistance levels, trends, and candlestick patterns that may indicate potential price movements.

Select Entry and Exit Points: Define your entry price, stop-loss level, and target profit levels based on your analysis.

Use Technical Analysis: Use TA to assess momentum and confirm your trade setup.

Check Market News and Events: Be aware of upcoming economic reports or news events that could impact the market. *We typically won’t trade around news events.

Assess Risk-Reward Ratio: Ensure your potential reward justifies the risk you’re taking, typically aiming for at least a 2:1 ratio.

Review Position Sizing: Determine the appropriate position size based on your risk management rules, ensuring that no single trade risks more than a small percentage of your trading capital.

Place Your Trade: Journal your trade, including entry, exit, and reasoning behind the trade.

Monitor the Trade: Once the trade is placed, keep an eye on market conditions and be prepared to adjust your strategy if necessary.

Use the Daily chart to establish Market Type and establish momentum & direction of the market, then mark key support & resistance areas. (Orange Line)

Use the 4HR chart to “predict” where the candles will close and which patterns will play out and establish final targets (Purple Line)

Use the 1HR to identify patterns and entries - draw trend lines on the 1HR timeframes (Yellow Line)

Your strategy will be to look at the Daily chart (every candle represents a full Day) to establish market momentum and overall direction.

You’ll then drop down to the 4hr chart (Every candle represents a 4hr period) to predict and determine how the 4hr candle will close.

Then drop down to the 1HR chart (each candle represents a 1hr period) to place your entries.

WAIT FOR CONFIRMATION

Price Action Confirmation: Waiting for the price to behave in a way that supports the trade idea.

Example: If you're eyeing a breakout above a resistance level, you might wait for the price to close above that level on a key time frame (e.g., a 5-minute or 15-minute candle) rather than jumping in at the first touch.

For a trend reversal, you might wait for a candlestick pattern (like a bullish engulfing or pin bar) to form at a support or resistance level.

Support/Resistance Confirmation: Ensuring the price respects a key level before acting.

Example: If you’re trading a bounce off support, you might wait for the price to test the level multiple times or form a higher low before entering.

For breakouts, you might wait for a retest of the broken level (now acting as support or resistance) to confirm the breakout isn’t a fakeout.

Volume Confirmation: High trading volume often validates a price move.

Example: A breakout with low volume might be unreliable, so traders wait for a surge in volume to confirm strong market participation. Low volume would be better for trading a range not a breakout.

Time Frame Confirmation: Checking alignment across multiple time frames.

Example: If you’re trading on a 5-minute chart, you might wait for the setup to align with a higher time frame (like the 1-hour chart) to confirm the trend direction.

News or Catalyst Confirmation: For fundamental-driven traders, waiting for a news event or catalyst (like economic data or a speech) to align with the technical setup before entering.

Why Wait for Confirmations?

Reduces false signals: Markets can be noisy, and premature entries often lead to losses from reversals or traps.

Improves risk-reward: Confirmations help traders enter at better price levels with tighter stop-losses.

Increases confidence: Waiting for multiple signals to align boosts psychological discipline.

Example: Suppose you’re watching a pair approaching a key resistance level. Instead of buying the moment it hits your level you might wait for:

A strong bullish candle closing above the level.

Volume to spike on the breakout.

A 5-minute chart showing the price holding above the level on a retest.

*This multi-layered confirmation reduces the chance of buying into a false breakout.