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Aaaa RTM FTR PDF
Aaaa RTM FTR PDF
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Topic: FTR
1. Introduction:
Before we can solve the PA puzzle and read it successfully, we need to be able to
understand the pieces that comprise this puzzle. After all, every building is made of
stone and brick blocks.
For all of us at RTM, the beauty of price action is as dazzling as the structure of the
Chartres Cathedral. The only difference is that instead of bricks and stones in real
buildings, here we have PRICE CAPS, FTR, DIAMONDS, QUASIMODOS,
FAKEOUTS, ENGULFS, etc. Nothing is more important than FTR and ENGULF
in the building blocks of price structure.
In this article, I am aiming to explain one of these two important pieces of price
structure –which is FTR. Together, we will explain how it works, where it can be
found, and what role it plays in price structure.
Before anyone can proceed to the next stages, FTR needs to be learned properly.
Please don’t make haste. Learning PA is an interesting journey; so enjoy it.
2. What is FTR?
So, what actually is FTR? FTR means “failure to return”.
Wait… who wants to return? Where do they want to return to? Why are they failing
in the first place?
These three important questions must be answered.
Everybody knows that when price approaches or breaks a certain barrier, one of two
things can happen as soon as the barrier breaks:
Either the price returns from under/over the barrier and moves in the opposite
direction of the break, or it fails to return and moves in the direction of the break. In
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the second scenario, a FTR is formed. This always happens, and identifying it is of
crucial importance. Why?
Well, a high buy/sell pressure exists in the supply/demand zone that can’t return after
the price breaks; therefore, it should continue on in the direction of the break.
Note 1: The buy/sell pressure always exists at the formation of the FTR left by the
price. Do you understand this concept?
So let’s take a look at FTR anatomy now.
In the following figures, you can see a diagram that refers to the different types of
FTR. Look at them carefully. They might seem a little different, but they are actually
completely similar in terms of structure.
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Note 2: In the following figure, the price drops in a freefall immediately after the
return to FTR. Everyone jumps happily into the trend. Why? Because it’s going to
go on and on… But beware, hunters are patiently waiting for FTR LVL, and you
should do that too.
Now open your trading platform in Forex tester and see how this works.
Minor S/R:
It’s extremely important to realize that the FTRs we observed in the three charts
above are not the only types of FTR. Moreover, each time the price breaks a minor
S/R, fails to return, and continues on track, a new FTR is formed.
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In real life, the chart is rarely as neat and organized as this diagram; however, you
can see the above principle in a real chart (a descending trend) as below.
Please don’t rush and observe this chart very carefully. I have not illustrated all the
FTRs; because in that case, the chart would be very messy. Open a chart in your
platform and plot all FTRs. Practice. Mark a swing H/L and see where engulf occurs.
Then, find the FTR and repeat this for the next H/L.
Remember that the purpose of this article is not to tell you that all FTRs are tradeable.
It is to teach you how to take FTRs into consideration and how to mark them. Let
me repeat: this is of utmost importance.
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Note 3:
FTR 1 is an excellent confirmation of a reversal. For more information on this, please
see my trading journal (post 304, page 13 – sweet FTRs).
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6. Conclusion:
In this article, I have tried to introduce to you one of the most important structures
of price action: FTR.
We have learned that FTRs are formed after the break of a price barrier. It is
extremely important to realize that FTRs are made in places where institutional
traders open or close their orders. This gives them ideal points to place their orders
or determine their goals. Even so, I emphasize that FTRs –on their own– are not
enough for trading. Engulfing is more important than any PA building block.
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Exercises:
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Next, someone alters the figure above to be demonstrated as the following figure.
Mr. LES_PUAL says in response:
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Dear friend, I see in your green circle that the original H (resistance) has been
broken. The red line is a price barrier. This barrier needs to be broken (engulf must
occur); on the other hand, there is no FTR after the break. These are all explained in
the article.
After that, Mr. LES_PUAL suggests to first specify all major FTRs in the chart. By
doing that, you may achieve the concept of SOURCE OF ENG easier.
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Another point to note is that a good FTR is not just a good entry point; but can also
count as an excellent exit point.
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Continuing with:
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DRSWING’s response:
Hello dear friend. FTR means failure to return to create a new H/L. In your example,
price has turned back to below the pink zone; but has failed to create a new L. Then,
it has entered your green zone and created a new H.
The next subject is the difference between FL (or Base Flag) and FTR. According
to HARRY and IF’s opinions, these two elements are the same and there is no
difference between them.
Following that:
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According to IF and Harry’s opinions, each FL is a FTR; but the opposite is not
necessarily true.
Regarding market dynamics, one of the casual traders says about ENG, FO: In my
opinion, if the previous SOURCE (which we call FTR on the chart) does not create
CAPS in its return, it is a FO. This is my opinion; but I have only been present in the
market for a short period of time.
Continuing:
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It is common that major traders always return to untested flags to fill the rest of their
orders; therefore, any untested flag can be a FTR. This is confirmed by IF.
Continuing:
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Next:
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Kanzler:
Is it important when a FTR engulfs another FTR or an S/D zone? I look at the
significance of that level and I see that the KEY LVL, SR FLIP is where we have an
Engulf in the entire Flag zone (above or below it). Note that whenever we have a
new Flag Limit (FTR), the previous one is broken. So I choose the FTR formed in
the big grey zone and I wait for the price to return to it.
The End
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