# Enhanced SMC + Support/Resistance + Price Action Strategy

This refined strategy maintains the core principles of the original approach while adding specific
execution guidelines, optimizing the multi-timeframe analysis process, and implementing more precise
entry/exit rules. The strategy continues to combine Supply and Market Structure (SMC) with
Support/Resistance and Price Action for high-probability trading setups.

## 1. Strategy Overview

The enhanced strategy involves:

- **Streamlined Multi-timeframe Analysis**: Focus on three key timeframes (Daily, 4H, and 15min) to
reduce analysis paralysis

- **Prioritized Market Structure**: Emphasizing Break of Structure (BOS) and Change of Character
(CHoCH) for trend confirmation

- **Premium Zones**: Identifying and trading only from high-quality Order Blocks and FVGs with
institutional footprint

- **Precision Entry Rules**: Clear, objective criteria for entry based on specific price action patterns

- **Risk-Optimized Position Management**: Advanced risk management with scaled take-profit levels

## 2. Multi-Timeframe Analysis Framework

### 2.1. Higher Timeframe Analysis (Daily)

- **Market Bias Determination**: Identify higher timeframe trend by analyzing:

- At least two consecutive higher highs and higher lows for uptrend

- At least two consecutive lower highs and lower lows for downtrend

- **Key Level Identification**: Mark only the 3-5 most significant zones where:

- Price has reacted multiple times (minimum 2-3 reactions)

- Strong impulsive moves have originated from the zone

- Volume increased significantly at the zone

### 2.2. Medium Timeframe Analysis (4H)

- **Premium Zone Refinement**: On the 4H chart, look specifically for:

- **Mitigation Blocks**: Order blocks that haven't been fully mitigated (tapped into but not broken)

- **Fresh Fair Value Gaps**: FVGs that haven't been filled and are less than 7 days old

- **Break of Structure Confirmation**: Clear BOS that aligns with the Daily trend direction

- **Liquidity Identification**: Mark areas of stop loss liquidity (swing highs/lows with multiple wicks)

### 2.3. Lower Timeframe Analysis (15min)

- **Entry Zone Precision**: Wait for price to reach the identified 4H zones, then look for:

- **CHoCH confirmation**: A clear change of character in price behavior

- **Entry Trigger Patterns**: Specific candlestick formations (see Section 5.1)

- **Volume Confirmation**: Increase in volume during pattern formation

## 3. Premium Zone Identification

### 3.1. High-Quality Support and Resistance

- **Multi-Touch Zones**: Prioritize zones that have been tested multiple times with clear reactions

- **Untapped Levels**: Fresh zones that haven't been tested recently carry more weight

- **Institutional Footprints**: Look for zones with:

- Sharp price rejection

- Volume surge

- Time-based confirmation (zones active during London/NY sessions)

### 3.2. Order Block Classification System

Categorize Order Blocks by quality:

- **Premium OB**: Last candle before strong momentum move with high volume

- **Standard OB**: Last candle before moderate momentum move

- **Weak OB**: Last candle before small momentum move

Only trade Premium and Standard OBs for higher probability.

### 3.3. Fair Value Gap Quality Assessment

- **Premium FVG**: Gap size of at least 5-10 pips (currency-dependent) with strong momentum after

- **Standard FVG**: Moderate gap with decent momentum after

- **Weak FVG**: Small gap with minimal momentum

Only trade Premium FVGs for higher probability setups.

## 4. Market Structure (SMC) Advanced Guidelines

### 4.1. Break of Structure (BOS) Confirmation

A valid BOS must include:

- Break of at least one significant swing high/low

- Momentum (candle body at least 2x the average of the previous 5 candles)

- Follow-through (next 1-2 candles continue in the direction of the break)

### 4.2. Change of Character (CHoCH) Validation

A valid CHoCH must show:

- Clear shift in price behavior after a BOS

- Price makes higher low after bullish BOS or lower high after bearish BOS

- Volume profile confirms the character change

### 4.3. Institutional Order Flow

- **Liquidity Engineering**: Identify potential stop hunts before reversals

- **Smart Money Movement**: Look for quick sweeps of liquidity followed by strong reversals

- **Consolidation Before Continuation**: Identify re-accumulation/distribution patterns

## 5. Precise Entry Strategies

### 5.1. Specific Entry Trigger Patterns

- **Bullish Setups**:

- Engulfing candle with body at least 1.5x the previous candle

- Inside bar followed by breakout candle

- Three pushes into support (triple tap)

- Bullish divergence on RSI (14)

- **Bearish Setups**:

- Engulfing candle with body at least 1.5x the previous candle

- Inside bar followed by breakout candle

- Three pushes into resistance (triple tap)

- Bearish divergence on RSI (14)

### 5.2. Advanced Chart Pattern Recognition

Focus on these high-probability formations:

- **Reversal Patterns**:

- Head and Shoulders / Inverse Head and Shoulders with clear volume profile

- Double Top/Bottom with decreasing volume on second touch

- Broadening Wedge with increasing volatility

- **Continuation Patterns**:

- Bull/Bear Flags with decreasing volume during consolidation

- Ascending/Descending Triangles with appropriate volume characteristics

- Rectangle consolidations with clear support/resistance tests

## 6. Optimized Risk and Position Management

### 6.1. Precise Stop Loss Placement

- Place stops beyond the:

- Local swing high/low plus 5-10 pips (volatility-adjusted)

- Opposite side of the entry Order Block/FVG

- Previous structure that should not be violated if the setup is valid

### 6.2. Multi-Tiered Take Profit Strategy

Implement a 3-part position management approach:

- **TP1 (33% of position)**: 1:1 Risk:Reward ratio

- **TP2 (33% of position)**: Next significant structure level (typically 1.5-2.5 R:R)

- **TP3 (34% of position)**: Trailing stop at 1.5 ATR after reaching TP2

### 6.3. Position Sizing Rules

- Risk no more than 1-2% of account on any single trade

- Scale position size based on setup quality:

- Premium setups (all criteria met): Full position size

- Standard setups (most criteria met): 75% of standard position size

- Marginal setups: Avoid trading

## 7. Execution Process Checklist

1. Daily Chart Analysis:

- Determine overall market bias (uptrend, downtrend, or ranging)

- Mark 3-5 key support/resistance zones

- Identify major liquidity areas

2. 4H Chart Analysis:

- Confirm market structure aligned with Daily bias

- Identify Premium Order Blocks and FVGs near key zones

- Validate with Break of Structure confirmations

3. 15min Chart Entry Setup:

- Wait for price to approach Premium Zone (OB/FVG at support/resistance)

- Confirm CHoCH on 15min timeframe

- Wait for specific entry trigger pattern (Section 5.1)

- Verify volume confirmation

4. Trade Execution:

- Enter only when ALL criteria are met

- Place stop loss according to Section 6.1 guidelines

- Set multi-tiered take profit targets

- Document trade setup for later review

5. Trade Management:

- Move stop to break-even after TP1 is reached

- Implement trailing stop on final portion

- Review all trades weekly to identify improvement areas

## 8. Performance Optimization

### 8.1. Setup Quality Assessment

Rate each potential setup before execution:

- **A+ Setup**: All criteria met with perfect alignment across timeframes

- **A Setup**: All major criteria met with strong alignment

- **B Setup**: Most criteria met with decent alignment

- **C Setup**: Some criteria met with questionable alignment

Only take A+ and A setups. Observe B setups without trading. Avoid C setups entirely.
### 8.2. Trade Journal Requirements

For each trade, document:

- Screenshots of setup across all timeframes

- Entry reason with specific criteria met

- Risk:Reward calculation

- Outcome and post-trade analysis

- Emotional state before, during, and after trade

### 8.3. Continuous Improvement Process

- Review journal weekly to identify patterns in winning/losing trades

- Adjust strategy parameters based on performance data

- Backtest refinements before implementing in live trading

## 9. Psychology and Discipline Framework

- Implement a pre-trade checklist to avoid impulsive decisions

- Use visualization techniques before trading sessions

- Practice detachment from outcomes through meditation

- Establish clear daily/weekly/monthly goals that aren't solely profit-based

- Take regular breaks to maintain mental clarity

## 10. Conclusion

This enhanced strategy builds upon the solid foundation of the original approach while adding specific,
actionable criteria for each component. By implementing the refined guidelines for zone identification,
entry confirmation, and position management, traders should experience improved probability of
success and reduced emotional decision-making.
The key differentiator in this enhanced approach is the focus on premium zones with institutional
footprints, precise entry triggers, and the multi-tiered position management system. Patience remains
essential—waiting for only the highest quality setups that meet all criteria across multiple timeframes.