Lesson 23: Building Your First Trading Strategy

Part of Module 6: Advanced Strategy & Smart Money Concepts

Introduction: Creating Your Recipe for Success

You have now learned all the individual ingredients of a professional trading approach. A trading strategy is the recipe that tells you exactly how to combine these ingredients in a precise, repeatable way to achieve a consistent outcome.

Analogy: The Professional Chef. A professional chef doesn't just throw random ingredients in a pan. They follow a tested, written recipe to create the same high-quality dish every single time. Your trading strategy is your recipe.

The Confluence Checklist: Your Pre-Trade Briefing

The best way to build a strategy is to create a simple checklist that you must verify before ever clicking "buy" or "sell." Here is a powerful checklist based on the concepts we've learned.

1. High-Timeframe Analysis (The "Story")

  • What is the overall Market Structure on the 4-hour or Daily chart?
  • Where are the major Supply and Demand zones?
  • Is the price in a Premium (sell area) or Discount (buy area)?

2. Low-Timeframe Analysis (The "Setup")

  • Has price pulled back to our high-timeframe zone of interest (e.g., a H4 Order Block)?
  • Has price grabbed liquidity?
  • Can we see a confirming Change of Character (CHOCH) on the 15-minute chart?

3. The Entry, Risk & Exit Plan

  • What is my precise Entry Trigger (e.g., a retest of an M15 Order Block or FVG)?
  • Where is my Stop Loss placed?
  • Where is my Take Profit target?
  • Is my Risk-to-Reward Ratio at least 1:2?
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