CASE STUDY #1 GBPUSD

CASE STUDY #1 GBPUSD

CASE STUDY #1 GBPUSD

Above is a H1 screenshot of the GBPUSD chart. In this case study, we will be dissecting
the bullish move from the labelled m30 POI, up to 1.42200. From a structural standpoint,
this trade/move is not di cult to predict; we are in a bullish market, creating higher highs
and higher lows. For us traders, that means every time a new high is made, our job is to
patiently wait for price to return to a discount before buying again. In this particular
example, however, this could have caught traders out.

This is because uninformed traders would’ve decided to draw their price range from the
very rst higher low on the chart above, all the way to higher high, and expected price to
deliver a discount of that range. Although the identi cation of that parent price range isn’t
incorrect, the expectation of price to come to a discount of that price range is. This is
because, as labelled on the screenshot, the lower half of that entire leg is balanced - there
are no ine ciencies for price to return to.

Remember, retracements have a purpose - to ll imbalances and deliver price fairly. Since
there are no imbalances within that grey box, it isn’t wise to include that in the parent
price leg. Instead, if we consider the start of the impulsive price action as the bottom of
our price range, things make a lot more sense. The start of the impulsive move leads to a
break of structure to the upside as well as imbalances within the discount end of the
range. This allows us to mark out or m30 POI as shown and expect a bullish reaction.

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CASE STUDY #1 GBPUSD

Above is an m1 screenshot of the GBPUSD chart at the m30 POI that was identi ed on
the higher time frame. The price action in this screenshot is a perfect example of a ‘non-
textbook’ accumulation.

Too often, uninformed and impatient traders expect easy to see schematics playing out.
Although this does happen, it is imperative to understand the logic behind the schematics
of accumulation and distribution rather than what they look like in exemplary diagrams.
Above, we can see that at times price looks choppy and unreadable, but it all follows the
same logic as we are all aware of.

After asian consolidation, we see a move up giving us a break of structure to the upside.
This informs us of the markets intention to deliver higher prices. As mentioned previously,
now we have to wait for price to return to a discount end of this range.

In doing so, price purges the trend line liquidity that was created as part of the bullish
BOS, and comes down to create further liquidity in the form of equal lows. Traders with a
more advanced and aggressive approach would’ve spotted a 15s OB sat right below the
engineered liquidity which proved to be a perfect entry candle as shown above.

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CASE STUDY #1 GBPUSD

For the majority of us who do trade no lower than the m1 chart, there are always
opportunities for trades too. Above is an m2 screenshot which will prove just that.

Once price started moving up, it presented us with a violation of bearish order ow by
blowing through a bearish OB. This further informs us of the markets intention. In this
case, the more aggressive trader that understands the behaviour of the pair and knows
that a deep retracement is unlikely, will consider the price range that is shown above,
taking the most recent low that lead to bearish invalidation rather than the entire leg.

For this trader, price would’ve returned to a discount into a m2 entry candle as shown,
giving a nice entry within the accumulation range that would’ve carried price all the way to
the target.

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