Trading Strategy 2026

What are the four pillars of the order flow strategy?

1. Potential for orders to be filled (Liquidity Sweep)

2. Confirmation that orders with filled (Change in order flow)

3. Continuation of the new trend (Continuation Confluences Equilibrium or FVG)

4. Exit at liquidation points (Draws at liquidity targets)

What is a draw on liquidity

A price level where resting orders are concentrated. Price is attracted to these levels because they represent unfilled institutional orders. Ex: Previous day high/low, session highs/lows, hours swing points, unfilled FVGs

What is a Fair Value Gap(FVG)?

A 3 candle stick pattern where the wick of candle one and 3 do not overlap. creating price imbalance price tends to return to these areas to fill orders that were not transacted during the rapid move

What is equilibrium in order flow trading?

the 50% retracement level of a recent impulse move. institutional traders often add to positions at equilibrium, making it a high probability continuation zone.

what is a change in order flow (COF)

When the current market structure breaks, signaling the new institutional orders have shifted direction. Confirmed by either a break of structure or inverse fair value gap.

What is a break of structure (BOS)?

Price breaking decisively beyond a recent significant swing point in the direction of a new trend.

a bearish BOS breaks below a recent swing low

a bullish breaks above a recent swing high

What is an Inverse Fair Value Gap

When a previous respected FVG (Acting as support or resistance) is breached and price trades through it. This confirms the old order has been invalidated and the new direction is likely to continue

what is SMT Divergence?

When two correlated indices (MES and MNQ) sow different behavior at a key level. one sweeps high/low while the other fails to. this signals that the sweeping index absorbed the available order and a reversal is likely.

in a bearish SMT setup, which index do you trade and why?

Trade the index that did NOT sweep the high (the weaker index, e.g. MES). it already had enough sell orders to prevent a new high without needing to take out buy-side liquidity, making the bearish case stronger there.

What must happen BEFORE you enter a trade at a continuation confluence?

You need confirmation that price is rejecting the confluence zone- either a close of a candle stick in your trade direction, or on the lower timeframe, a BOS back in your trade direction after touching the confluence

Why do we NOT enter the moment price touches a continuation confluence?

Because price cold continue straight through the confluence. Waiting for confirmation (A close in the trade direction) protects against entering a continuation of the trend you’re fading.

What is a correct stop loss placement for a short entry at equilibrium?

Above the swing the swing high that forms the top of the equilibrium range. the level that if breach, would invalidate the continuation thesis.

Name the three take profit targets in order of priority

TP!: Nearest significant draw of liquidity (Ex., London session low).

TP2: next significant draw at liquidity (Ex previous day low). TP3: Furthest higher timeframe draw(Ex., 4-hr swing low or daily FVG)

For swing trading, What timeframe shows the higher-timeframe trend?

Daily and weekly charts. Equivalent of 4-hour chart in day trading.

Markey offers no clean setup?

None of the four pillars are aligned. the bias is unclear, no significant liquidity has been swept, or no confirmation of order flow change has appeared. the correct action is to NOT trade