This Day Trading Tip Will 10x Your Results (Top Down Analysis)

topd down analysis an incredible concept where we use the high time frames the medium time frames and the low time frames and we line them all up together to get the highest probability highest accuracy and highest reward trades possible but there's one big problem that I want to address and that is that many day Traders believe because they're only going to be in their trades for a few minutes or a few hours that top down analysis is not relevant and they don't need to be looking at those higher time frames now in this video I want to show you that that couldn't be further from the truth and if you start to focus on the top down process as a day trader even if you're trading the five or 15 minute time frames you're going to have better results and better performance in your trading because you'll get higher accuracy positions less losses and bigger wins as well so with that said let me teach you a top down analysis process for day trading all right so here we're looking at a chart this is a 5 minute chart on this chart we can see pretty much a fat load of nothing this Market isn't really telling us anything and if we were trying to trade this from low time frame day trading perspective we're going to have a lot of difficulty finding a position because realistically the market isn't doing or telling us anything so instead of just looking at this in confusion and gambling a few trades as people do what we can do instead is jump up to the higher time frames and analyze from the top down and for day trading opportunities where you're trading anything from the 5 to the 15 minute time frame I still recommend that you start on The Daily so if we go to the Daily time frame here on EUR USD we immediately get get a better idea of what is going on so the market right now from this daily perspective is somewhat downtrending this downtrend has pushed past this low here and this low here also formed equal lows we've got one two three equal lows which creates liquidity now beneath that we have an imbalance an imbalance is an open price range this entire candle would be classified as an imbalance but the market did come quite the way through it without quite filling it so realistically the imbalance that we have here is the area between the line we've just drawn and this demand zone so that is our imbalance now immediately we've picked up on a few different pointers that we wouldn't have seen from a lower time frame perspective alone we have liquidity 1 two 3 equal lows being swept and we have a demand Zone through an imbalance and the imbalance is now filled the demand Zone which is this last candle before the impulse has now been retested so now that we've had this sweep of liquidity now that we've traded into this demand what does that tell us well that tells us that there could be opportunity here for us to take the market higher so even though that lower time frame 5 to 15 Minute Market is just a complete mess we've got an idea immediately just from looking at the daily if we've seen sweep of liquidity fill of imbalance retest of demand that could lead us into a bounce in this market now if we also consider the trending structure although this phase that we just discussed is indeed bearish the larger phase of price action here being from this low onwards is actually pretty bullish we have continual higher highs and higher lows and we've now identified that this bearish trend has actually just been an pullback inside of the large upward move how do we know that because the break that's taken place here is not a clean break it's not a break of significant structure it's actually leading out to look like a sweep of liquidity and a fill of imbalance with that said we could then anticipate a continuation of further upside now we are day trading I haven't forgot that which means that we're not really going to be looking to take this trade all the way through to a considerably higher level we are instead focused on shorter term moves which means we want to take a trade that's going to be a few hours long with the opportunity to potentially stretch out into something larger if the opportunity arises so we don't need to stay up here on the daily but we've got a really nice idea as to what could happen now if we then follow the top down process by going down to the 4-Hour time frame we will get a clear indication as to where we could start to Target four positions so taking a look at this Market from a four perspective we see two equal lows one two just there swept and we can see that the market is now rejecting that lower pricing which is indicated by this Wick that we're seeing coming up here now this doesn't confirm anything yet but it is a good indication that we could be going through with that reversal that we've just discussed but one of the biggest things the 4H hour will allow us to do is refine our targets so if we had the idea that the daily might potentially be turning bullish well now we can look for a refined Target opportunities the first Target we have in mind would be this Supply Zone just here this is the supply it's a very messy one but basically because of the imbalance that we've got running up here that open price range we'd anticipate that generally the market will at least make its movements up towards this point okay so there's a nice solid Target for us but above that we can see we have this swing high that could also be another potential Target and a huge open imbalance into this area here so the imbalance once again is this open price range and now we are provided with a few Supply zones so to Mark Supply I used the last candle before the impulse just here this is the last candle before the impulse down and we would do the same here but it's a bit of a mess so I'm actually going to draw it from the top of the wig down we are ideally using this last candle before the impulse but we should also account for that choppy news driven movement so just by looking at the daily in the 4 Hour that little range that we saw is no longer a complete mess instead we have a pretty solid idea that the market could Bounce from here and we have some pretty solid targets that we can use for number one day trading number two extending some of these day trades out into intra week positions so trades that we hold for a few days instead of just a few hours or minutes these intra week positions and being able to turn your day trades into intra week positions is where a lot of the profit potential is maximized in your trading I've taken positions before where I've entered with the plan of taking a 1 to four and then ended up holding for a 1 to 30 plus now by no means are these common this is a once every year or once every 2ear scenario but these things can happen and this is where they are born from doing top down analysis okay so now we can go down to the hourly time frame if we want to and what we can do here is just refine some of these areas the imbalance that we just drew now leads us up towards this point so we can remove this as a Target and extend that Target even further into this point here if we were to get the sweep and yes I know on the 4 Hour we just saw it did push down lower we would then be looking for continuation opportunities up towards this point this would be our day trading format and then we could potentially extend it even further into intra week positions to tackle some of those larger areas we discussed so now let's go down to that day trading time frame I'm going to focus on the 15 minute this is a good day trading time frame you can go to the five you can go to the one but your results will be cleaner on the 15 minute because that is where the opportunities are going to be safer and more accurate the higher the time frame the more accurate the signals the market gives us so we've turned an absolute mess that we looked at initially on these lower time frames into a fully fledged fully viable trading opportunity we identified these equal lows we identified the possibility of Bounce from this demand we identified some targets and now we can actually start to day trade this so after Asia session we saw the market move down we've seen that sweep of liquidity under here and now we can use these lower time frames to actually day trade our way into larger opportunities okay so here we have seen the market sweep this low we've seen many bullish rejections coming in bullish rejections indicated by this collection of Wicks Wix show rejected prices so what we're seeing here is equal lows swept and then we're seeing the market pushing back up we're seeing a big influx of buying taking place here because the Market's failing to close anything lower than this level really okay so because of this we know buyers are coming into the market on the 15 minute here we've also seen this shift in the structure this is some internal structure on this larger movement but for day trading opportunities we can work with this internal structure so what we've now seen is sweep of liquidity bullish momentum coming in shift in the internal structure that is over this point at the highest and then also some of these smaller points as well and what we could do from this point is just follow out our usual plan so for me that's going to be looking for demand zones to buy from I like to buy from demand and self from Supply I don't really get into markets in any other way so for me sweep of liquidity shift in the internal structure this would be the demand Zone that we could look to buy from so what we have now is no longer just a choppy but also opportunity to turn this into a significant trade now another thing is with day trading let's say we wanted to Target this high for a sweep because this is the only target we could identify on those lower time frames our risk reward is not going to be so good okay the risk reward on this position would be 2. 1 that's not great for me I want to be taking more than 2. 1 on the trades I take generally I want to take a 2.

5 of three or more so this would be a tricky one for me to kind of push myself to get into in fact it would go against my plan so I wouldn't get into it but because we've got that higher time frame narrative We Now understand the market could actually come all the way up to this point which obviously is going to dramatically improve the trade so now we have a 99. 7% potential trade on the cards we could potentially get into this and run it all the way up to this larger Target now this is where day trading can kind of intertwine with the higher time frame trading or the int week trading okay there is no reason realistically unless you are trading Futures to get out of the trade before the ends if you have a clear Target defined and the market is moving towards that Target you can hold trades longer you can still use your day trading methodology to get into the positions as we've done here but you have the opportunity to hold the trades out for larger targets okay so now let's see how this trade goes as you can see we come down we get a tap in we then have a push away now there's also a secondary opportunity formed here if you're a bit more conservative where we have the true break of structure the market comes up pulls down trades into this demand and then we get the push away we can put stops under the low as we would same Target that's all good so let's just jump it back to the initial just to keep it running through now we can see the market is pushing towards these highs and where this could be the target done for your day trade this would actually allow you to extend the profits further later into the day okay so let's take a look where the market gets to by the end of the day the end of the day for me is going to be classified as around 5:00 p. m.

UK time which is just where we are coming into here so at 5:00 pm. UK time that's the end of New York session the lower volume timing start here if you wanted to take your trades and all the profits on your trades then this would be where you'd be taking your profits which means instead of just taking the two position you could actually extend around a 4% position out of this Market just by using those Market timings and that top down analysis process that we've run through so far but this is where the real beauty of this top down process comes in now obviously first of all the real Beauty came in from the fact we turned this messy intelligible range into something that we could actually trade but past that it's the profit maximization that is so valuable because we know the market is likely to lead up towards these higher areas on the higher time frames we can use this intraday entry to extend our profits dramatically so let's say we wanted to be true to the day trading fashion and get out of half of our trade at this level we'd now be taking 2% profits from this movement up which is already good already a nice return but what we can now do is allow the trade to continue because we are still running 2% in profits as well now that we're at 4 R and because we have that higher time frame narrative our trades we're going to be a bit more confident holding them for the longer term so if we hold this trade we are now holding it through the night into the next day through London session and then into the next day's New York session we get a fill of that larger Target which would be 4. 5 or 4.

7% return on the other half of the trade turning this initial 2. 1 trade in into a potential 6. 7 or something like that okay in total so we get 2% profit taken here and around 4.

7 or so taken on the full fill of this move and all you actually had to do here was not close the trade until tomorrow you can close a bit make sure you've got your day trading profits locked in but because of the top down move we get to profit maximize and hold trades a little bit longer to let them get to those larger targets now as I said occasionally not often but sometimes you'll be able to turn a day trade into something massive ly significant if we take a look at the first initial Target that we looked at in this market The Higher One up here and we extend our targets up to this point for the second half of the position we've now turned a very small profit potential trade of 2. 10 into 22. 5% and obviously being a day trader it's likely that you want to take at least half the profit before the day is over so you've taken your 2% that still leaves open an opportunity to make 11.

25% here on this continuation through simply by not clicking the close button it's really that easy when you get into a market and you've got a solid narrative all you have to do is just not close the trade if you leave the trade running like this one here within just a matter of days or a week you can get significantly larger profits from your positions so this is where you benefit from using those day trading entries to get super refined stop losses and then using that higher time frame picture to actually nail huge targets Okay small stop large Target that's going to be some significant risk reward and that would have turned this position into a full potential trade of around 13. 5% or 13.