How to Trade the Daily Retracement Setup

TL;DR

Identify the market’s main move between the 9:30 open and roughly 10:30, then watch for a retracement toward the break-even area of the optimal entry. The setup uses liquidity sweeps and structure breaks on the 15-minute and 5-minute time frames, with price potentially returning to the identified area before continuing in the direction of the main move.

Transcript

this is a trading strategy that happens lowkey every single day and I made a full in-depth YouTube video on it so if you guys want to watch that just watch my new trading strategy Seek and Destroy go watch that but in this video I'll give you guys a brief summary so every single day we know the market makes its main overall move within like from Ma... Read More

Key Insights

• The strategy is based on a main market move that typically develops between the 9:30 market open and approximately 10:30, followed by a retracement that may return toward the break-even point for the identified optimal entry.
• The retracement is expected to seek the break-even area associated with the optimal entry more often than not, creating a possible opportunity to participate when price revisits the area before resuming the main directional move.
• The 15-minute and 5-minute charts are the primary time frames used for this approach. The 15-minute chart helps identify the structure break, while both time frames form the trader’s main framework for examining the setup.
• A liquidity sweep is part of the example’s setup sequence. Price first swept liquidity and then broke market structure on the 15-minute time frame, providing the conditions used to identify the possible optimal entry area.
• The structure-break candle defines the proposed optimal entry area in the example. After the 15-minute structure break occurred, the trader marked that candle’s area and watched for price to retrace back toward it.
• The example’s main overall move was downward. After sweeping liquidity and breaking structure, price retraced upward to the previously identified area before continuing downward in line with the initial directional move.
• The setup can appear later than the usual morning window. The example occurred somewhat later in the day, but the trader still treated it as valid because price completed the expected return to the area and continuation.
• The strategy is presented as a frequently recurring market pattern. Its central sequence is a main move, a retracement toward the optimal entry’s break-even area, and a continuation in the direction of the original move.

Questions & Answers

Q: How do you trade the daily retracement setup?

First identify the market’s main overall move, which the trader says generally occurs from the 9:30 open until around 10:30. Next, look for a liquidity sweep and a structure break on the 15-minute time frame. Mark the area of the structure-break candle, then watch for price to retrace toward that optimal entry area before potentially continuing with the main move.

Q: When does the market usually make its main move?

The trader states that the market usually makes its main overall move between the 9:30 market open and approximately 10:30. The strategy uses that initial move as directional context. Once it has developed, attention shifts to a possible retracement that may seek the break-even point of the optimal entry before price continues in the original direction.

Q: Which time frames are used for the retracement strategy?

The strategy primarily uses the 15-minute and 5-minute time frames. In the example, the 15-minute chart is specifically used to identify a break of market structure after liquidity has been swept. The trader then uses the resulting area as a reference for an optimal entry if price retraces back toward it before continuing its main directional move.

Q: How is the optimal entry area identified?

The optimal entry area is associated with the candle where market structure breaks on the 15-minute time frame. In the downward example, price first swept liquidity and then broke structure. The trader marked the area around that structure-break candle and observed that price later retraced upward to it before continuing downward with the earlier overall move.

Q: What role does a liquidity sweep play in the setup?

A liquidity sweep appears before the structure break in the example and helps establish the setup’s sequence. The trader observes price taking liquidity, then waits for a 15-minute break of structure. That break identifies the area used for the proposed optimal entry, which becomes relevant if price retraces to it and then resumes the main directional move.

Q: What happens after price breaks market structure?

After market structure breaks on the 15-minute chart, the candle associated with the break becomes the reference area for the optimal entry. The trader then watches for a retracement. In the example, price returned upward to that marked area and subsequently continued downward, following the direction of the main overall move established earlier in the session.

Q: Can the retracement setup occur later in the day?

Yes. The trader notes that the illustrated example happened a little later in the day than the usual period associated with the main move. Even so, the same pattern appeared: price made a downward move, swept liquidity, broke 15-minute structure, returned to the identified entry area, and then continued downward in the direction of the original move.

Q: Why is the break-even area important in this strategy?

The break-even area matters because the trader says the retracement often seeks the break-even point associated with the optimal entry. This return provides the central opportunity described by the strategy. Rather than focusing only on the initial directional move, the trader waits for price to revisit the identified area before watching for continuation in the direction of that move.

Summary & Key Takeaways

• The strategy begins by identifying the market’s main overall move, which the trader says generally develops from the 9:30 market open until around 10:30. After that move, the trader watches for a retracement that may seek the break-even point associated with the optimal entry before price resumes its earlier direction.

• The example shows a main move downward after price swept liquidity and broke structure on the 15-minute time frame. The optimal entry area was identified from the candle where that structure break occurred. Price later returned to this area and then continued downward, matching the proposed retracement and continuation pattern.

• The trader primarily uses the 15-minute and 5-minute time frames to find this setup. Although the example occurred later in the day than expected, it still illustrated the same sequence: a main directional move, a liquidity sweep, a structure break, a return to the entry area, and continuation downward.