How to Trade Synthetic Indices | PDF

 How to Trade Synthetic Indices 

A Winning Trading Strategy for Synthetic Indices

Any strategy can work on synthetic indices, whether Price Action or Smart Money Concept. Therefore, it's important to practice the knowledge you have acquired online and blend it to what works for you.

In this section, I will show you an example of how I spot my set ups and confirmations.

Rule[s]

● Always trade with trends (follow the trend as it's easy to spot setups).

● Do multi-timeframe analysis to find your setups and confirmation.

Order Block Trading Strategy

Order Block, otherwise abbreviated as OB, is a zone identified by a candle, where it is believed that banks and large institutions have accumulated their orders. 
So, OB can be a down candle before the move up or up candle before the move down.

When trading OBs, it’s important to consider the location of the OB you want to trade. Not all
OBs are tradable.

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Some of the common factors you can consider for high probability OB includes;

• ● Trend (Order Flow)
• ● Imbalance
• ● Support & Resistance
• ● Flip Zone
• ● Supply & Demand
• ● Significant Support & Resistance Level etc
• ● Market Structure Break
• ● Manipulation
• ● Liquidity Raid (Stops Hunt)

Order block trading strategy is a popular approach used by forex traders to identify potential market reversals and trade entries. The strategy relies on identifying key levels of support and resistance in the market based on price action and order flow analysis.

Here are the steps involved in the order block trading strategy:

Identify key levels of support and resistance: Traders begin by identifying levels on the price chart where significant buying or selling pressure has occurred. These levels can be identified through technical analysis tools such as horizontal support and resistance lines, trend lines, or Fibonacci retracements.

Look for order blocks: Once the key levels of support and resistance have been identified, traders then look for areas on the chart where significant buying or selling orders have clustered. These clusters are known as "order blocks" and represent areas of significant market liquidity.

Wait for price to reach an order block: Traders wait for price to reach an identified order block, and then watch for signs of price rejection. This may include bearish or bullish candlestick patterns, such as pin bars or engulfing candles, that suggest a shift in momentum.

Enter a trade: If the trader sees a clear signal of a market reversal, they will enter a trade in the direction of the new trend. This could involve going long if a bullish reversal is indicated, or short if a bearish reversal is indicated. Stop-loss and take-profit levels should be set at appropriate levels to manage risk and maximize potential profits.

The order block trading strategy is based on the idea that significant trading activity occurs at key levels of support and resistance, and that market participants are likely to enter trades around these levels. By identifying order blocks and looking for signs of price rejection, traders can potentially profit from market reversals and take advantage of strong trends. As with any trading strategy, proper risk management and discipline are essential to success.