Introduction
Fail To Return (FTR) and First Time Back (FTB) are technical analysis techniques used in forex trading. These techniques involve identifying patterns in price action. These techniques can provide insight into potential market movements. Understanding and identifying FTR and FTB patterns can be helpful for traders making informed decisions about when to enter and exit trades.
Bullish FTR and What is it?
A Bullish FTR pattern occurs when the price of a currency pair rallies to a new high but then fails to sustain that rally and drops back down. This pattern can be seen as a bullish opportunity, as it may indicate that the market is ready for a continued uptrend. To identify a Bullish FTR pattern, traders should look for a rally to a new high followed by a drop back down to a previous support level.
Bearish FTR and What is it?
A Bearish FTR pattern is the opposite of a Bullish FTR. It occurs when the price of a currency pair drops to a new low but then fails to sustain that drop and rallies back up. This pattern can be seen as a bearish opportunity, as it may indicate that the market is ready for a continued downtrend. To identify a Bearish FTR pattern, traders should look for a drop to a new low followed by a rally back up to a previous resistance level.
How To Draw FTR Zone In Forex?
To draw FTR zones in forex, traders can use charting tools such as trend lines, horizontal support, and resistance levels. These tools can help traders identify key levels where the market may experience failure to return. It’s important to note that FTR zones are not always precise The traders should use them in conjunction with other technical indicators and analysis techniques.
FTB (First Time Back) In Forex
First Time Back (FTB) is a technical analysis technique that involves identifying the first time a price moves back to a key level after breaking out of a range or trend. This can be seen as a potential trade opportunity, as it may indicate that the market is ready to continue in the direction of the breakout. To identify an FTB pattern, traders should look for a price breakout followed by a return to the key level.
The Four Supply And Demand Patterns
a. Rally Base Rally: A Rally Base Rally (RBR) pattern occurs when the price of a currency pair rallies to a new high, drops back down to a support level, and then rallies back up again. This pattern can be seen as a bullish opportunity, as it may indicate that the market is ready for a continued uptrend.
b. Rally Base Drop: This pattern occurs when there is a rally, followed by a base, and then a drop. This indicates that there is a shift in supply and demand, with sellers taking control. To trade this pattern, traders can enter a short position at the top of the rally and set a stop loss above the base. The profit target can be set at the previous base or at a level where there is likely to be resistance.
c. Drop Base Rally: This pattern is the opposite of the Rally Base Drop, with a drop followed by a base and then a rally. This indicates that there is a shift in supply and demand, with buyers taking control. To trade this pattern, traders can enter a long position at the bottom of the drop and set a stop loss below the base. The profit target can be set at the previous base or at a level where there is likely to be resistance.
d. Drop Base Drop: This pattern occurs when there is a drop, followed by a base, and then another drop. This indicates that there is a continued shift in supply and demand, with sellers maintaining control. To trade this pattern, traders can enter a short position at the top of the first drop and set a stop loss above the base. The profit target can be set at the second drop or at a level where there is likely to be resistance.
FTR Strategy in Forex
There are a few key steps to follow when using the FTR strategy in forex trading:
- Identify the FTR zone: Look for the previous high or low in the market and draw a horizontal line at that level. This is the FTR zone.
- Wait for the market to return to the FTR zone: This can be done by watching for price action to approach the FTR zone or by using technical indicators such as moving averages or the relative strength index (RSI).
- Enter the trade: Once the market has returned to the FTR zone, traders can enter a long or short position, depending on the direction of the trade. A stop loss should be placed outside of the FTR zone to protect against potential losses.
- Set a profit target: Traders can set a profit target at a previous high or low or at a level where there is likely to be resistance.
It’s important to note that the FTR strategy is not foolproof, and traders should use it in conjunction with other technical analysis techniques and risk management strategies.
Conclusion
The FTR and FTB forex strategies can be powerful tools for identifying potential trade opportunities in the market. By using these techniques, traders can effectively identify key support and resistance levels and enter trades with a higher probability of success. It’s important to remember that no trading strategy is foolproof, and traders should always use risk management techniques to protect against potential losses.
