Simple Guide to High Risk-Reward Setups Using Market Context
Hey whats up traders.
In this post we are going to look at high risk-reward trades. And I want to keep it simple, because most people overcomplicate this.
A high R:R trade is usually nothing more than this:
You trade a lower timeframe reversal that happens inside the higher timeframe trend.
Thats it. You are not guessing tops and bottoms. You are not trying to be clever. You are just aligning context from a higher timeframe, then using a lower timeframe shift to get a clean entry. Why its not easy to take such a trades because it require skill which you can gain only by practicing - Patience.
EURAUD
We will break down step-by-step this setup. At first it can look complicated but you will find out that we just need to understand market context and we just logically extend the target of what we are doing every time 1. Define the HTF trend
Define the trend by checking where the price is respecting level and where is potential liquidity where the market is heading - Equal lows often gives a clue. We are bearish
2. Measure last swing with the Fibo
drop you fib to the last swing and measure 50% of it as we can see on the picture below.
If we are bearish you do not trade below a 50% pullback. You are looking to trade above the 50% the highs ( liquidity). There you also want to find a key level. Described above is most important part of trading. It's called Market context. We want to trade our Pattern in that right moment. And here is where many traders make mistakes, they are entering their patterns every time when it occurs without applying right market context.
Market context helps us to filter out low probability trades.
3. Pattern with right context
At this moment when price is tapping in to the liquidity above