Key high/low: Key highs/ lows are points from where a price following a trend reverses or starts ranging. Ex: Price is in an uptrend (higher highs and lows). Forms a high then starts ranging for a month. Ex: Similar pattern, just inverted. The key low is the starting point of the ranging structure. Spotting the Pattern: Spotting the Swing failure Pattern is simple. Bearish example: 1) Price forms a key high or resistance. You can use candle bodies as well as highs. 2) Candle after that tries to move above the high but fails to get above and end up closing below. 3) Confirmation of the pattern is after candle closes. I prefer to wait for confirmation of the sweep candle to take the short. Bullish example: 1) Price forms a key low or support. You can use candle bodies as well as

2) Candles after that try to move below the low but fail to get below and end up closing above. 3) Confirmation of the pattern is after candle closes. I prefer to wait for confirmation of the sweep candle to take the long and then add to the position if the low is swept/tested again. Execution: Not every sweep of a high/low is an SFP. Use the notes on liquidity. Ask yourself, where would a retail trader place stops or be baited to take a position. You need to understand how retail trades and go against that. Entry: On close of the candle that sweeps the high/low. 2nd entry (optional): Candle after the sweep closes belowith above the high/low as well. SL: Level of the wick of the sweep candle. Place order or manual SL on a close above/below the wick. Target: 1) Last swing lowith high 2) Range high/low Example 1:

Example 2: The second entry might confuse you so lets start with an already discussed example: The second entry is also valid even if you miss the initial SFP. It provides higher conviction that sellers have no real strength and bids absorbed all orders pushing price below the low.

Common Mistakes: Not every lowith high has liquidity resting belowith above them. As such, SFPs will occur everywhere if you look hard enough. The trick is to practice as much as possible before implementation. Ask yourself all the time, is the setup obvious or are you pushing it? Were there be stops resting below this low? Were breakout traders baited in longing on price moving above this high? Heres a couple of tips you can follow to increase accuracy when trading SFPs: Read the section on key highs again. Make sure you mark out the right highs. Also, dojis usually signal uncertainty in the market, its better to steer clear of them when trading SFPs. Dont rush your setups. Let Price develop and be as patient as possible. Its alright to get one trade a week if you have a high success rate. Dont have a twitchy trigger finger. You need to be calculated and execute at the right moment to be a trader.