Like a predator stalking its prey, the market often moves with a clear objective. For GBPCAD, the primary target is now the massive pool of liquidity resting below the Previous Month's Low. This isn't a random drop; it's a calculated hunt. This analysis lays out the plan to join the reversal after the hunt is complete.
The price of GBPCAD is approaching a large pool of liquidity in the form of the Previous Month's Low (PML), with the May 5th low located just below it. There is a high probability that this liquidity will be swept in the near future, because with only a few days left until the end of the month, the PML will no longer act as such a strong magnet for the price as it does now.
The capture of this liquidity would be accompanied by the mitigation of a daily order block in conjunction with a daily FVG. This confluence of factors could act as strong support for a potential price bounce, with a minimum target of a liquidity sweep of the Previous Week's High (PWH).
SETUP CONDITIONS
The condition for the long setup to form would be a sharp downside liquidity sweep with a candle wick, which mitigates the upper part of the daily order block, followed by the start of a bullish order flow on a lower timeframe .
► Invalidation: Invalidation of the long scenario would be a daily candle body closing below the May 5th low, or a sharp drop to the middle of the daily order block.
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The principles and conditions for forming the manipulation zones I show in this trade idea are detailed in my educational publication, which was chosen by TradingView for the "Editor's Picks" category and received a huge amount of positive feedback from this insightful trading community. To better understand the logic I've used here and the general principles of price movement in most markets from the perspective of institutional capital, I highly recommend checking out this guide if you haven't already. 👇
P.S. This is not a prediction of the exact price direction. It is a description of high-probability setup that become valid only if specific conditions are met when the price reaches the marked POI. If the conditions are not met, the setup are invalid. No setup has a 100% success rate, so if you decide to use this trade idea, always apply a stop-loss and proper risk management. Trade smart.
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The price of GBPCAD is approaching a large pool of liquidity in the form of the Previous Month's Low (PML), with the May 5th low located just below it. There is a high probability that this liquidity will be swept in the near future, because with only a few days left until the end of the month, the PML will no longer act as such a strong magnet for the price as it does now.
The capture of this liquidity would be accompanied by the mitigation of a daily order block in conjunction with a daily FVG. This confluence of factors could act as strong support for a potential price bounce, with a minimum target of a liquidity sweep of the Previous Week's High (PWH).
SETUP CONDITIONS
The condition for the long setup to form would be a sharp downside liquidity sweep with a candle wick, which mitigates the upper part of the daily order block, followed by the start of a bullish order flow on a lower timeframe .
► Invalidation: Invalidation of the long scenario would be a daily candle body closing below the May 5th low, or a sharp drop to the middle of the daily order block.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
The principles and conditions for forming the manipulation zones I show in this trade idea are detailed in my educational publication, which was chosen by TradingView for the "Editor's Picks" category and received a huge amount of positive feedback from this insightful trading community. To better understand the logic I've used here and the general principles of price movement in most markets from the perspective of institutional capital, I highly recommend checking out this guide if you haven't already. 👇
P.S. This is not a prediction of the exact price direction. It is a description of high-probability setup that become valid only if specific conditions are met when the price reaches the marked POI. If the conditions are not met, the setup are invalid. No setup has a 100% success rate, so if you decide to use this trade idea, always apply a stop-loss and proper risk management. Trade smart.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
If you found this analysis helpful, support it with a Boost! 🚀
Have a question or your own view on this idea? Share it in the comments. 💬
► Follow me on TradingView to get real-time updates on THIS idea (entry, targets & live trade management) and not to miss my next detailed breakdown.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Note
UPDATE: GBPCADThe liquidity from the PML and the May 5th low has been captured, and the daily order block has been mitigated. However, the price fell just short of reaching the FVG. I was expecting a deeper liquidity sweep, as the probability of the potential long working out would have been significantly higher, but we work with what the market gives us.
To determine a potential entry point under these conditions, let's switch to the 1-hour timeframe. After the mitigation of the daily order block, a 1H order block was formed. If the price mitigates this OB, especially before sweeping the Asian session high, I will consider opening a long position upon a price reaction and entry confirmation on a lower timeframe.
The targets, in this case, will be slightly more modest than in the original idea, because a 1H supply order block has also formed above, from which the price could continue its bearish move. (Essentially, a short could be considered from there.) For now, I'm waiting for developments on this pair.
If this lower 1H order block is broken, the price will likely at least rebalance the daily FVG. We would then need to see how deep the price pushes into the daily order block and how today's daily candle closes. A setup might still form tomorrow if it doesn't happen today.
Trade active
The price mitigated the 1H order block and showed a reversal reaction. The Asian session low was also swept in the process, while its high remains intact, which is an additional plus and an incentive for a bullish move.On the lower timeframe, a bullish order flow has begun, which provided the final confirmation for entry. The stop loss is placed below the low of the candle wick that mitigated the order block.
Trade closed: stop reached
After all, the fact that the price did not quite reach the FVG during the mitigation of the daily order block and the liquidity sweep did weaken the setup. Ultimately, it didn't play out, and the price went to rebalance the FVG immediately.However, I believe the attempt was still valid because the other confirmations for entry were present. No setup is ever perfect; there will always be some factors against an entry. It seemed more probable that the price would first bounce to the upper order block and then continue its bearish move to the FVG.
Overall, this is a standard work situation. There's nothing to worry about with any justified setup when it's protected by a stop-loss.
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.