Knowing the four trading styles is the foundation. The real skill is executing the correct setup in the right market condition. A position trader uses weekly charts and months of patience. A scalper uses 5-minute charts and reacts in seconds. Understanding HOW to structure each trade type — with defined entries, stops, and targets — is what separates theory from execution.
Position/Swing: identify HTF trend → find key S/R level or Sr flip → wait for retest → confirm with buyer candle → set entry, stop, target
Day Trade: identify daily trend for bias → find Sr flip on 1H/4H → enter on retest of flip with trigger confirmation
Scalp: identify range (DBS + SSR) → enter at range low on first sign of buyers → stop below swing low → exit at SSR
Use TradingView's trade setup tool to define entry, stop, and target visually before every trade
Trailing stops lock in profit as the trade moves in your favor — essential for swing and position trades
Always define Entry, Stop Loss (invalidation), and Target BEFORE entering any position
Lesson
Setting Up Each Trade Type
The setup process is consistent across all styles — identify structure, find your level, define your risk. The variables are timeframe, holding period, and target distance. Master the setup process and apply it across any timeframe or asset.
Position/Swing Setup: (1) Identify HTF trend (bullish = HH+HL) → (2) Find key S/R or Sr flip on daily/weekly → (3) Wait for price to return to that level → (4) Look for buyer confirmation candle (long lower wick, bullish engulfing) → (5) Set entry, stop below swing low, and target at next Sr breakdown level
Day/Swing Setup: identify daily trend and Sr flips → enter on retest of Sr flip with bullish trigger confirmation → use trailing stops to lock in profit as trade moves
Scalp Setup: range-bound market identified → enter at DBS on first sign of buyers → stop below swing low (invalidation) → exit at SSR zone
Trailing Stops: move stop loss into profit as price creates new Sr flip levels → locks in gains while letting the trend continue
Your trading style defines your bias window — always identify the higher timeframe trend first
Never force a trade that does not fit your predefined style criteria — discipline separates consistent traders from gamblers
Check Yourself
Price is in a confirmed daily uptrend (Higher Highs + Higher Lows). It has pulled back to a prior resistance level that was broken two weeks ago. A candle touching that level has a long lower wick. What is the correct trade setup action?
● Enter long at the Sr flip retest — stop below swing low, target next resistance
● Short the retest — price is weakening back to the breakout origin
● Wait — more candles are needed before the level can be considered valid
Answer it (with a live chart) in the interactive lesson.
Liquidity Theory · Learn · Analyze · Trade together Educational content only — trading involves substantial risk and most beginners lose money. Nothing here is financial advice.