The Chart patterns i will cover today, with the rules to follow to ensure the highest probability of success, are patterns that i personally take and if you are a beginner i suggest you back test then before apply them to your live trading.
An FTR or Failed To Return, is a candle pattern in trading. What this pattern shows is that as price is in an up/down trend, price will push back and collect orders (causing a candle close of the opposite direction) before continuing the current trend. Bullish
This is a Bullish FTR drawn with lines, not candles, essentially what this is a small pull back in price to collect orders to trap sellers and gather more buyers before continuing up.
This is an FTR on a live chart, as you can see we had 3 bullish candles in a row, then a small red candle (the FTR candle) and after we continued the push up. How to enter on this candle pattern is very simple, wait for a close of the next candle ABOVE the FTR candle and then ride the momentum to the next zone. With a Stop Loss BELOW the wick of the FTR candle.
A Bearish FTR is simple the opposite of the bullish FTR, price is in a downtrend and has a single candle pull back that serves as a liquidity grab (order grab). And After results in a continuation of the downward move.
Above we have an example of a Bearish FTR on a candle chart. What you can see is that we where in bearish momentum, created an FTR to collect orders and then furthered the push to the downside. Entering on this would be just like the Bullish, We would seek entries after the bearish candle engulfing the FTR candle with a stop loss ABOVE the FTR candle.
A FTB or a First Time Back, is essentially a move BACK to an FTR that was formed. What this is is a manipulation play that is created by the market makers to trap people in the wrong direction orders, and then continue price back in the overall momentum.
- Stick with the trend
- Price Must Create a Single FTR candle
- Price Must Pull Far away from the FTR candle before coming back (10+ pips)
- On the Retest, the Candle MUST close inside the FTR zone, and the next close OUT of the zone.
- If price moves away from FTR, then consolidates before coming back=INVALID.
- Use TF 15m+
- Place Stop Loss Below/Above FTR candle (including wick)
- If on the FTR retest the candle Closes PAST the FTR zone=INVALID.
As you can see here, the left was an FTR and price then proceeded to push away from that but later (usually a few hours) price came back and Retested that zone before rejecting and continuing the initial move.
Here is a bullish FTB, which just simply means that we where in a bullish trend and created it. This is a A- not an A+ set up. Still very good. So what we see here is an uptrend, then an FTR ( i drew zone in) then we pushed away from that zone (25 pips) which is perfect. Then over the next 1h we pulled back and had a bearish candle close directly in the zone, and the next candle was a bullish outside of the zone, which is where we take entries. On this set up a stop loss around 8 pips and a TP at the zone in which we initially moved from is how i would approach this trade.
A Bearish FTB is the reverse of the bullish, price is in a downward momentum and creates an FTR to collect orders to continue the move. Then price finds a support (usually a minor) and pulls back to the FTR and when it rejects we look for sells back to that minor support zone.
This was a very good setup. Price Created a very nice FTR, we pushed far away (25 pips) pulled back to the FTR and closed inside the zone. Then we had a bearish engulfing, after that candle we look for entries. With our stop loss above the FTR zone (12 pips) and our Take profit at the initial reversal (25 pips). Note: after the initial target is hit, feel free to let one position run.
A RBR or Rally Base Rally is a simple concept. Price is in bullish momentum, pushes up and then creates a short consolidation or Base period, and after that base period is over (the base period is when we are collecting orders to fuel the next push) we get our second rally stage. Bullish
Here, as you can see we are in bullish momentum, we have a bullish Rally, We then find a base while collecting more orders. Then we break out of the base zone and continue to phase 2 of the rally stage.
Here is a live example of Rally Base Rally. As you can see we had a strong bullish push, then had a base. This base was actually creating Higher Highs and Higher Lows, better allowing us to know we will continue into the second rally phase. On a RBR set up, when looking for entries. If i am not already in entries prior to the base, we will wait for the base to break and start the second rally phase, and place our stop loss below the lowest part of the Base phase and look to take profit at the next zone.
A DBD is simple a reverse RBR, this is when price is in a bearish momentum and tanks, then we find a base (which is price collecting orders) before then continuing the bearish momentum.
Here is a live example of a DBD, price was in south momentum, created a base and then furthered the tanking. Looking for entries here, first you could look at the green arrow. Price was exhausting and entering after the bearish candle could have been valid. OR you could have entered after the blue candle, which is the candle that broke out of the consolidation box.
Now Watch This Video I made to further help your understanding of FTR and FTB 🙂
IF YOU HAVE ANY QUESTIONS, COMMENT OR CONTACT ME! @ATEENTRADER ON ALL SOCIAL MEDIAS
MAKE SURE TO SHARE AND SUBSCRIBE IF YOU THINK THIS CAN HELP SOMEONE!!