Swing Failure Patterns (SFP) occur when price action attempts to swing above or below a price area of significance, but fails to do so and can either reverse the trend or provide a setup to trade a bounce with a good risk to reward ratio.
We recognised, using statistics, that the initial SFP will be taken out the majority of the time, which lead to the creation of Swing Failure Pattern 2.0.
There is a 52% probability that after a Swing Failure Pattern price will take out the last high before that SFP was formed before continuing down.
Collecting statistics as these will greatly increase your odds of success.
Here you will learn the criteria for the improved Swing Failure Pattern 2.0 and the importance of collecting statistics.
Time Stamps
0:27 - UTILITY
- There is a 52% probability that after a Swing Failure Pattern price will take out the last high before that SFP was formed, before continuing down in price.
- Understanding this information is key to trading Swing Failure Patterns going forward.
- Provides a TP target, or a reversal trade entry if confluence.
- The reason there is such a high probability of a reaction at this last low after a Swing Failure Pattern, is because many traders that long the breakout will use this low as a stop loss. If that low is taken shorts would open thinking it was a fake out.
- Basically, it is a high liquidity level for low time frame scalp traders.
2:40 - IMPLEMENTATION
- After we take the Swing Failure Pattern trade, we will look to the last low/high made before that Swing Failure Pattern.
- Price has a 64% probability to find a reaction at that level.
- Price has a 52% probability to reverse from last high before the Swing Failure Pattern and take out the Swing Failure Pattern low during a bear market.
- Price has a 26% probability to reverse from last low and take out the Swing Failure Pattern high during a bear market.
- These statistics are only on BTC during 2022.
4:56 - PRACTICAL EXAMPLE
6:22 - TIPS AND TRICKS
- This is 100% a tactic best for LTF scalp traders.
- Can be used on HTF, but is preferred on LTF scalping.
- If we take the reversal trade after taking the low before the new pivot made, wait for either the long or short to get stopped out and keep that trade running for a potential swing trade.
SFP 2.0