Power of Two System

"Power of Two" is a strategy designed for traders with limited time or those frustrated with low strike rates. This strategy focuses on two currency pairs (EUR/USD and GBP/USD) and uses two time frames (4-hour and 15-minute) for analysis. It relies on two indicators: fractal highs and lows for directional bias, and a Kill Zone indicator to identify trading opportunities during London and New York sessions.

The strategy follows a simple entry model and avoids excessive complexity. By analyzing fractal highs and lows (*) on the 4-hour chart, traders can determine potential reversals or follow-throughs (*). If a recent fractal high is breached with No Follow-Through, it suggests a reversal, while two successive body candle closes indicates a Strong Follow Through. The 15-minute chart is used for entry, with a focus on selling from premium prices and buying from discount prices (*) during London and New York sessions.

Traders set alerts and wait for the Kill Zone (*) to occur, avoiding constant monitoring. When the conditions align, such as a fractal low sweep during the Kill Zone, a buy stop order is placed with a stop loss at the high or low of the trigger candle and a target of three times the risk taken. Traders let the trade play out without actively managing it.

The strategy offers flexibility for those with full-time jobs, as it only requires attention during specific sessions and eliminates the need for constant chart monitoring. Traders can set alerts and go about their day until a trade setup is triggered. The strategy's simplicity and routine make it suitable for traders looking to optimize their trading process while minimizing emotional decision-making.

(*) The Williams Fractal indicator aims to detect reversal points through highs and lows. It’s known as being one of the first indicators to use fractals and bring it into the trading mainstream. Generally, the indicator is formed by five candlesticks or bars on the price chart and it’s shown with an up or down arrow to signal its high or low status

(*) Non Follow Through - Price wicks through fractal high or low / Price closes above high or low, then closes back in the other direction across the fractal high or low.
(*) Strong Follow Through - Price creates two consecutive candle closes above or below the fractal indicating strong continuation ahead

(*) Use a tool on your charting platform, like "Fibonacci Levels" or "Date Range" to measure the total range between the most recent fractal high and low. The middle of this area is considered the "EQ, or Equilibrium". The area above the EQ is considered premium and the area below the EQ is considered discount. Traders will only look for shorts when price is in premium and longs when price is in discount.

(*) Introduced by forex trader Inner Circle Trader, the Killzones represent different time intervals where there is high volatility and coincide with market pre-openings. The Killzones are designed to help traders identify high-probability zones for price action trades in a certain direction, and they have gained popularity among traders.


Simplified NFT Long Example:
(4H) Wick sweeps recent fractal low creating a Non-Follow Through
Draw arange from new low and previous recent fractal high
(15M) Wait for price to create a fractal low liquidity sweep, in discount, during NY or London KillZone.
Follow Entry, SL, and TP rules

Simplified SFT Long Example
(H4) Two consecutive bullish candle closes above recent fractal high creating a Strong Follow Through
Draw a range from the new high high and previous recent fractal low
(15M) Wait for price to create a liquidity sweep on the most recent fractal high. Premium/Discount doesn't matter with SFT's.
Follow Entry, SL, and TP rules

Entry is set to the high of the candle that swept the fractal low.
Stop Loss is set the area of best protection. If there's no good levels around your area of entry you can use the low of the trigger candle with pip cushion instead.
Take profit is 1:3 with stop loss, and on NFT's you must fit the entire 1:3 trade within the range. Strong Follow Through's your full 1:3 trade does not have to fit within the range.

KillZones: Trading Session Indicator - Set it to just show NY and London Sessions. You can manually set the time as well: NY KillZone from 8:00 to 10:00. London KillZone is from 3:00 to 6:00. You can also manually just watch for these times with no indicator.


Williams Fractal:


1. Download and unzip the archive to the MQL4 folder of the terminal;
2. Restart the terminal and run the indicator;
3. Allow import of DLLs.
This Sessions indicator is free and works without any restrictions.

FAQs:
Q:What if I entered a trade and a KillZone ends?
A: Trades are valid as long you enter during NY or London session

Q:What if price breaches H4 fractal range on the 15 minute setup time frame?
A: When price interacts with the high/low fractal range you can adjust the range. But you should reevaluate and make sure the H4 fractals have not yet changed.

Q: When price breaches fractal high or low, do we draw our range from the new high or low that breached it?
A: Yes, on the 4 Hour bias timeframe, the range will start from the top/bottom of the wick, while the other side of the range remains the same.

TIPS:

Link to timestamped video where trader explains the strategy:




H4 Bias - Price closed above recent fractal high and next bar closed bearish. This creates a NFT to the upside which is a bearish bias.


M15 Entry - Price stayed inside of this range for a few days before generating a nice setup. Also shows a sweep extension. Inside premium, inside KZ.

different brokers can generate different fractals. so even though OUR fractals don't align, it doesn't matter. Your trading is based off your broker and chart. SO sometimes we can't compare setups (rare as they're the same most of the time)

IGNORE POST #2 IT’S WRONG

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(trade taken in premium above EQ)

One thing that really draws me to this strategy is the 1:3 RR. The clear and concise rules. And the fundamental logic behind the trade. When most traders think the market is going one direction, we see it differently, taking advantage of shorts in Premium areas, and longs in Discounted areas.

I really suggest watching the video, lots of great analysis.

4H NFT



15M Fractal Low Liquidity Sweep in NY Kill Zone in Discount w/ 1:3 RR
In this example we waited for price to close above high of sweep candle. However you shoulder enter at the touch of the high with a stop order

Really interesting thread, I have a 9-5 job so this one suits me thanks, subscribed.

Same! Thanks still learning. Latest video really revealing a lot more depth

So in his latest video he touched on two more concepts.

Strong Follow Throughs and Counter Trend Trading.

I will add these concepts to the main post soon

50-60% strike rate with 1:3 RR = PROFITABLE

I thought we have to take the HH of the Fractal siganl or the LL not in the middle right ? Just asking and still learning

which one you referring to

yes entry should be a stop order placed at the high or low of the fractal sweep on the 15M

I think in one of my showcase posts I took the trade at the close of the candle that crossed the high. This is technically wrong. Order should be triggered when price touches high or low

It's a lot more complicated than that, I know what you mean, at first look it seems like it may be a simple breakout strategy of the Fractals on 4-Hour, but...

You really need to watch the videos closely, somehow those Fractals give a trend bias, only then you can drop to the 15-Minutes chart, and...

Then you have only a 2-hour window of opportunity to recognize a trade setup and possible entry, so...

How hard can that be?



Perhaps FireScape can post charts from a computer instead of a phone on the weekend, marked up with exactly what to look for?

Correct! Yes, I've been at work and don't have access to a desktop there, so I do apologize for low quality mobile screen shots. Perhaps not worth even posting I guess. I'll definitely post some clear and concise charts very soon.

deleted low quality mobile charts, will update soon

I also have lots of updating on the main post to do after watching all his videos multiple times, lots of information in there

Here's an example of a Strong Follow Through as it's pretty different to the Non Follow Through Setups

For our bias, price closes below the recent 4H fractal low. There is not bias confirmation yet, so we have to wait for the following candle. Next candle is a bearish candle. The Follow Through is confirmed and this confirms a bearish bias.

Staying on the 4H the next thing we must do is identify our range and set up our Premium and Discounted zones (even though we dont use them in Follow Throughs..more below). Taking a tool that can measure the 50% level of a move, draw from the recent fractal swing high to the new low. This will become our range and trading parameters for the 15M entry time frame.


Switching to the 15M, we are only looking for shorts, because we have a Strong Follow Through to the down side. The difference with confirmed Strong Follow Throughs is that you can actually trade them anywhere within the range, and not just inside premium/discount, or premium in this case because we're shorting. So once we switch over to the 15M timeframe we can see a internal fractal sweep high happening immediately. You can see a bullish candle close above our fractal high, taking out buyside liquidity, and then you see on the following candle price cross below the low of the candle that would have triggered a stop entry, however we haven't switched from the 4H charts just yet. Even though we weren't able to catch that original stop order entry, price ended up staying right around the original entry price we are able to the short right before KZ ended. Scott talks a lot about not blindly setting your stop loss and try to protect it as much as possible with strong levels. If there's no good level around, use the current candle high/low but give a 2-3 pip cushion. So we set our stop loss and aim for 1:3 like we do every time. In a NFT, you're take profit from the 1:3 should be in the in the trading range. However in a Follow Through, the range doesn't apply as much, so just like we don't need to follow Premium/Discount, we also don't need to confirm our trade being within the range. But if the 4H fractal range is interacted with before our setup appears we do need to reevaluate. However it doesn't happen in this example. So right before London Killzone ends we enter for a 1:3 position and we easily win the trade. I scrolled back randomly and this was the first Follow Through Trade that appeared and it's tad odd how the timing of the entry worked, but don't get too concerned with that, as it still follows all the rules and is a valid entry.

Next setup is going to be a NFT..a Bullish close above recent fractal high, with a bearish close immediately after. What's interesting about this setup is we see an extended sweep, which changes your entry. I'm going to narrate this one a little less. Highlighting only the important parts.

We get a H4 bearish bias created from a Non Follow Through to the upside. Proceed to mark up your levels/zones


Switching to M15 we wait for London or NY KZ. As we wait for KZs, price moves into discount, this is okay as long as it comes back to premium during KZ. Right at the beginning of London KZ price closes above fractal high taking liquidity. We set a stop order at the low of the the candle that took liquidity and wait for price to close below for an entry. Price makes another move up and this creates an extended sweep, so we move our entry to the low of the extension candle. Price does it again, so we do the same thing. Finally price closes below the low of our extension candle and we enter with a stop order.

Inside KZ
Inside Premium
1:3 Trade stays within range

@ FireScape, can you please check the TV settings for Timezone because neither my TV or Metatrader charts have the same 4-Hour candles as per your charts

I use the standard 5 pm New York as the daily open and close.

Sure, this is what it is set to

If you're using TV, I've been using this In indicator with these settings to help easily spot Fractal breaks

Okay, I'll have a closer look, going out now, so catch you later, thanks