How to Sharpen your Approach to Trading?

EnclaveFX Ltd
Feb 15, 2023

The reason why many traders who use strategies like SMC, ICT, and Wyckoff are not profitable is that they are looking for shortcuts and are not willing to put in the effort to truly and understand the markets. Many people want to have fun and be entertained, but trading requires a lot of hard work and discipline.

One of the problems is that many traders are taught low-quality information by mentors who do not have a track record of success. These mentors only teach a few concepts about price action, which is not enough to be successful in the markets. To be a successful SMC or Wyckoff trader, it's essential to learn properly and backtest with clean data.

To truly understand the institutional market structure, traders need to know more than just identifying higher highs and higher lows. For example, when a market is bullish and the price returns to a daily imbalanced bar, it is also a liquidity purge. If the order flow is bullish, it's better to see lower timeframe lows being raided, as banks will pair their longs with retail shorts to lower their risk when providing liquidity.

To become a successful trader, you need to focus on several key areas:

  • Where the money is?
  • What your trading range is?
  • What the price is doing right now?
  • Where they are in Drawdown?
  • Identity major key High and Low in other words, Trading Range. (Higher Timeframe for Bias).
  • Identify Bullish divergence or Bearish divergence (great sign of reversal, usually clear external low liquidity, and external high liquidity).
  • Identify Premium.
  • Identify Discounts.
  • Identify Internal Liquidity which is of two types: minor IRL and major IRL.
  • Identify Imbalances (IPA).

In summary, to be a successful trader, you need to put in the hard work, learn from high-quality sources, and focus on key areas to understand the markets. This requires discipline, patience, and a willingness to learn from successes and failures.