A special welcome back to our valued supporters and members! Today, we’re not diving into a complex indicator or a new entry pattern. Instead, we’re focusing on a foundational mindset shift - a single, powerful question to ask yourself before you even think about placing a trade. This simple ritual can dramatically improve your market understanding and help you trade with the flow, not against it.
In the rush to find the next profitable setup, it’s easy to open our charts and immediately start hunting for signals, patterns, or indicator crossovers. We scan for that perfect entry, often driven by a desire for action or the fear of missing out. But what if the most crucial step happens before the hunt even begins?
Here’s one simple tip that can transform your chart analysis:
The next time you open your chart, before you look for a single trade, pause and ask yourself this critical question:
"Where has price just come from, and what is it trying to do next?"
This isn't just a philosophical musing; it’s a practical tool. This one question forces you to zoom out, to follow the market’s unfolding narrative - its structure - rather than being swayed by your immediate emotions or the allure of a fleeting pattern.
Why This Question is So Powerful for Traders
You understand that price movement isn’t random. It’s driven by order flow, liquidity objectives, and the intentions of larger market participants. Asking this question helps you tap into that understanding:
"Where has price just come from?" - Understanding Recent Intent & Liquidity:
Did it just sweep liquidity? Has price recently run above an old high (buy-side liquidity) or below an old low (sell-side liquidity)? If so, this "grab" might have fueled the next move. The "from" tells you what objective might have just been achieved.
Did it just mitigate an Order Block (OB) or fill an FVG? Has price reacted off a key institutional zone you've identified using our Smart Money Concepts? Knowing it came from a point of institutional interest gives context to its current trajectory.
Was there a clear Break of Structure (BoS) or Change of Character (CHoCH)? The immediate "from" could be a significant structural break, signaling a potential shift in order flow.
🏋🏻♂️ EXERCISE: Open your NinjaTrader 8 chart. Look at the last significant price swing. Verbally answer: Where did this swing originate from? Was it an OB? A liquidity sweep? An FVG fill? Write it down.
"What is it trying to do next?" - Identifying Current Objectives & Targets:
Is it targeting new liquidity? Based on the current structure and momentum, where is the next obvious pool of buy-side or sell-side liquidity that price might be drawn to? This becomes your potential target area.
Is it heading towards an unmitigated OB or FVG? Are there clear institutional "magnets" in its path that it seems to be aiming for?
Is it respecting current order flow? If a recent BoS indicated bullish intent, is price continuing to make higher highs and higher lows, suggesting it’s trying to continue that bullish order flow? Or is it failing to do so, hinting at a potential shift?
🔎 INSIGHT: When you see price making a series of higher highs and higher lows (a bullish structure), each new high that breaks a previous high is "what it’s trying to do." When it fails to break a previous high and instead breaks a previous low, that "trying to do" has shifted.
Connecting the Dots: Structure, Control, and Your Edge
When you consistently ask and answer this two-part question, you start to see the market's narrative unfold. You're no longer just looking at isolated candles or patterns; you're observing the ebb and flow of control between buyers and sellers as evidenced by market structure:
Breaking Old Highs (Bullish Control): When price successfully breaks above a previous significant swing high, it indicates buyers are in control and are "trying" to push prices higher, often seeking liquidity above that level.
Failing to Make New Highs / Breaking Old Lows (Bearish Control Emerges): If price rallies but fails to take out a previous high, and then subsequently breaks below a recent significant swing low, this is a strong indication that sellers are stepping in and "trying" to push prices lower. This is your classic Change of Character or shift in market structure.
Consolidation (Battle for Control): If price is ranging, failing to make decisive new highs or lows, it’s "trying" to decide who’s in control. This period often precedes a significant move once liquidity is engineered or a clear winner emerges.
This "narrative awareness" is where your true edge begins. Instead of reacting to lagging indicators or chasing breakouts blindly, you start to:
Anticipate potential turning points: By knowing where price came from (e.g., a major liquidity sweep) and seeing it approach a key OB, you can anticipate a reaction.
Filter out low-probability trades: If your trading idea goes against what the current structure suggests price is "trying to do," you have a strong reason to pause or avoid the trade.
Enter with higher conviction: When your trade idea aligns perfectly with the market’s narrative - where it came from and what it appears to be targeting next - your conviction naturally increases.
Making it a Habit:
Before Each Session: Start your trading day by asking this question on your primary trading instrument(s) and on a slightly higher timeframe for broader context.
Before Each Potential Trade: As you spot a potential setup, pause. Ask the question again in the context of that immediate setup. Does it align with the bigger picture narrative?
Journal Your Answers: Briefly note down your answers. Over time, you’ll see how accurately you're reading the market’s intent.
This simple pre-trade ritual isn't a magic bullet, but it's a powerful discipline. It anchors your analysis in the reality of market structure and institutional intent, moving you away from emotional decision-making and closer to trading in harmony with what the market is truly trying to achieve. This, in essence, is the foundation of trading with a Smart Money perspective.
Thank you for being a dedicated supporter! How do you currently assess the market’s narrative before looking for trades? Have you found that understanding "where it came from" helps you anticipate "where it’s going"? Share your thoughts and experiences in the comments below - this is a great topic for us to explore further together!
🚨 Risk Disclosures
⚠️ Risk Disclosure
Futures and forex trading involve substantial risk and are not suitable for every investor. An investor could potentially lose all or more than their initial investment. Only risk capital should be used for trading, meaning money that can be lost without jeopardizing one’s financial security or lifestyle. Past performance is not necessarily indicative of future results.
📊 Hypothetical Performance Disclosure
Hypothetical performance results have many inherent limitations. No representation is being made that any account will or is likely to achieve similar profits or losses as those shown. Hypothetical trading does not involve financial risk, and it cannot fully reflect the emotional and psychological factors of real trading.
Additional factors, such as market conditions, liquidity, and execution delays, may adversely affect trading results. It is important to understand that all trading involves risk, and no trading strategy or indicator can guarantee profits.
Trade responsibly!