A frontrun occurs when a key level is slightly missed.
92% of the time, a frontrun is temporary and will be hit inside within 7 days.
The statistics that our Lead Analyst Daniel collected speak for themselves and will allow you to only take high probability trades.
If a frontrun occurs, it is important to note that this does NOT mean we can instantly take a reversal trade.
On the frontrun, reading the order flow is essential because it will reveal whether there are longs or shorts trapped.
If we do have many trapped traders, there is a higher probability we will have a bigger reaction and it will take longer before hitting the key level.
It is important to stay calm, collected and make informed decisions with zero emotions.
NOTE: These statistics were collected during the 2022 bear market.
Time Stamps
0:34 - UTILITY
- A ‘Frontrun’ is when you are looking to trade a level and that level is slightly not hit/missed; we say then the level was ‘Frontrun’.
- 92% of the time a frontrun of support is temporary and will be hit inside of the bear market within 7 days.
- 81% of the time a frontrun of resistance is temporary and will be hit inside of the bear market within 7 days.
- These statistics lead us to understand that a frontrun of a key level is very unlikely, and although it can take some time the level will eventually get hit statistically speaking.
- These statistics are run from ‘Key Levels’. A key level is a level with a lof confluence and resting liquidity.
2:05 - IMPLEMENTATION
- Price will frontrun a key level of support or resistance.
- Do not panic. There is a high probability the level will get hit, it just is gathering more traders and liquidity grabs first.
- For example, a key support gets frontrun, we should look to take a short trade of that bounce as there is a very high probability (92%) the key level will get hit.
3:02 - PRACTICAL EXAMPLE
10:02 - TIPS AND TRICKS
- On the frontrun check the order flow. Are there many trapped traders?
- If there are many trapped traders in the frontrun there is a higher probability the level will get a bigger reaction/larger bounce and take longer to hit the key level.
- Just because a level is frontrun does not mean instantly taking a reversal trade for it to get hit quickly. It can take time, so remain calm and plan out the next trade well. Always remember although the probabilities are high the key level will get hit within 7 days, it is not a guarantee.