There is a setup I use as an example that is easy for backtesting. The main timeframe is H4. Due to that, you may find it once or twice per week per asset often. It will often give you RRRs of about 1:3-1:5 minimum. I normally get RRRs of 1:10 or 1:20 with these kinds of setups, because I have my own recipes of course. I mean with this that the thing is worth backtesting it. Other people that trade using analogue techniques get these 1:10-1:100 setup ranges consistently.
This is the setup:
- A red candle is created on H4.
- A green candle or series of green candles move away from it and break an H4 high.
- Price eventually comes back to the H4 OB for the first time.
- The first time price touches any part of your H4 OB, you switch to M5 (5 minutes).
- You observe that price does not break below the orderblock during all the setup lifetime.
- You wait for break in market structure and sms (smart-money shift) on M5.
- Buy the SMS or the orderblocks that will be created as price expands.
- Move to BE you SL as you break the first M5 swing to protect the trade.
- Take partials wisely.
Here is the diagram, the work to find examples and practice is yours. No spoon feeding requests please
I promise if you do not get an outstanding backtests here you are not going to learn to trade ever in your entire life, because this setup is so good that it is unvelievable.
As any PA technique it is interesting because you can extend and develop it to suit yourself and improve it once you have practiced time enough to understand what are you doing and to have a right perception of the charts.
Remember that selling short is ok but it is more risky than buying, because by buying you have a potential finite loss vs an infinite gain while shorting, the potential gain is finite and the potential loss is infinite. Keep this in mind.