Smart-money traders buy below prior swing lows, not above them. Retail traders mistake bounces for momentum and sell into higher prices, which the market uses to build liquidity. Wait for price to revisit the low zone before entering a long position.
I will never look to take longs above the lows, only below. In this example here, if now I want to look to take buys back up, I will have to look for buys below these lows. Smart money, concept or structure traders will look at this as like a boss. Now the market, what tends to happen is as we trade back up to the upside, it'll create some sort of internal lows. And finally, when we approach these areas, again, false reaction. Exactly. So what? I understand that since we have taken out these lows, 1, 2, 3, retail looks at that as a momentum shift and they're looking to sell up. Here, the market tends to come up and respect these areas again to induce sellers to build liquidity above these highs. If the reaction comes around, perfect. I'm looking to take a buy entry right here and then all the way back up into the eyes.
