HTF level + LTF confirmation pattern
Apply the HTF-level-plus-LTF-confirmation pattern to a worked entry.
Lesson path
Technical Analysis + Price Action
Multi-Timeframe Analysis
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Apply the HTF-level-plus-LTF-confirmation pattern to a worked entry.
Pick the spot. See the proof.
This lesson formalizes the entry pattern you have already started to see. Two ingredients. Ingredient one: an HTF level. That can be a Daily support, a Daily resistance, a prior 4H swing high or low, or a major round number that has produced reactions before. Ingredient two: an LTF confirmation. That is a candle pattern on the 15m or 5m that shows buyers (or sellers) actually appeared at the level.
Neither ingredient is enough alone. A level without confirmation is a guess — you do not know if buyers will show up this time. A confirmation candle without an HTF level is random — there are 96 fifteen-minute candles in a day, and many will look bullish for no reason. The combination is the edge.
Worked example with $500 starting capital. Daily on EUR/USD bias is up. You identified a 4H support at 1.0800. Price arrives at 1.0800 and starts to trade sideways. You drop to the 15m. After 45 minutes of chop, a strong bullish engulfing candle prints right off the level. That is the confirmation. You enter at the close of the engulfing. Stop sits 15 pips below the level at 1.0785. With $500 capital and a 2% risk rule, you risk $10 — that means about 0.067 lots (a micro-position). Target is the prior Daily swing high. Risk is finite, location is meaningful, timing is signaled by the candle.
Confirmation candles to look for: bullish or bearish engulfing, a clean rejection wick (also called a pin bar), or a small-range candle followed by a strong move in your direction (sometimes called a break of inside bar). Pick one or two patterns you can read at a glance. You do not need ten.
Recap: HTF level + LTF confirmation. Two ingredients. Neither alone. Wait for both, every time.
Knowledge check
Answer before moving on.
1. Why is an LTF confirmation candle on its own not a setup?
2. On a $500 account using a 2% risk rule, how much can you risk on one trade?
3. Which of these is a usable LTF confirmation?
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