You currently filter like this:
✔ Only take buys in discount ✔ Only take sells in premium ✔ Avoid mid-range setups ✔ Follow MSS/SMS structure shifts This works in normal markets , but fails in high-momentum trends , because:
In strong trends, price does NOT return to discount. It keeps delivering:
50% retracements SMA retests Fair Value Gap + SMA reactions Continuations inside premium / discount This is normal .
If you wait for deep discount → you miss the entire move.
✅ HOW SMA 100/200 SOLVES THIS The SMAs give you a dynamic trend discount level instead of a fixed structural discount.
➤ On strong trends, the SMAs act as: Dynamic support / resistance Trend continuation zones Momentum filters Validation that a premium continuation is valid This means:
Even if price is in structural premium,if it’s above SMA 100 and 200 → it is still discounted relative to trend momentum.
🔥 THE SYSTEM YOU SHOULD USE Here’s the framework:
1️⃣ Multi-Timeframe Trend Confirmation Using SMA 100/200 On Daily or 4H :
Bullish Trend if Price is above SMA100 SMA100 is above SMA200 Both SMAs sloping upward Price often bounces from them 📌 This tells you:Premium at 1H/4H is not real premium — it’s momentum premium. You can buy it.
2️⃣ Trend Continuation Zones on 1H/4H When trend is strongly up:
Valid 1H / 4H buy zones SMA100 SMA200 FVG that aligns with an SMA Breaker / flip zone sitting on an SMA A shallow retracement (38.2–50%) instead of deep discount These become your alternative “discount” in strong trends.
3️⃣ NEW ENTRY RULES (SOLVES YOUR PROBLEM) ✔ Rule A: If trend is strong → take the continuation even in premium Criteria for strong trend:
Above SMA100 & SMA200 SMAs aligned and sloping No close below SMA100 in last 10–20 candles When this occurs:
You DO NOT need structural discount.
Entry style: Breaker blocks FVG alignments Retests near SMA100 Momentum MSS/SMS on 15m This is exactly the trades you are missing.
✔ Rule B: Mid-range setups become valid when supported by SMA100/200 Your previous rule:
“Avoid mid-range trades”
This is correct but only when trend is weak.
In strong momentum: Mid-range = trend continuation zone
So instead of avoiding mid-range, you filter it like this:
Mid-range trade is valid if: Price is ABOVE SMA100/200 It shows bullish MSS/SMS It forms a continuation pattern (FVG/Breaker/CHoCH) It aligns with trend momentum ✔ Rule C: Only require premium/discount when trend is weak When SMAs are:
Flat Entangled Price chopping above/below them… Only buy discount → only sell premium. This avoids range chop.
🔥 Example Workflow For You You’re on 4H: Determine trend using SMA100/200 → Strong bullish trend?
Ignore structural premium Look for continuation signals at SMA100 Accept mid-range setups Target new HH Use 15m to refine entry You’re on 4H and SMAs are flat? → Follow your old rules strictly
🎯 CONCLUSION — HOW SMAs HELP YOU 🔵 They help you stop expecting deep discount in strong trends . 🔵 They allow you to take premium continuation trades without fear . 🔵 They validate mid-range setups that are normally unsafe . 🔵 They filter continuations from chop vs powerful legs . Your strategy becomes:
Weak trend → use premium/discount logic. Strong trend → use SMA100/200 dynamic pullback logic.
This is how pro traders catch continuation moves without missing them.
✅ CASE STUDY: CADJPY 4H — Why This Continuation Worked Even in Premium ⭐ Key Observations: Price is above SMA100 (orange) and SMA200 (red) Both SMAs are sloping upward Every retracement since mid-Nov has respected SMA100 or SMA200 Your “deep discount” zone is FAR below price But price did NOT return there Instead it used a shallow SMA100 retest + breaker + bullish FVG This created the strong rally you highlighted in green STRUCTURALLY this area is “premium”, but TREND-wise it is discounted This is EXACTLY where many traders miss entries.
🔍 STEP-BY-STEP BREAKDOWN OF THIS EXACT CONTINUATION TRADE 1️⃣ Trend Context (HTF) On 4H:
SMA100 above SMA200 Price above both Higher highs and higher lows Each correction gets shallower → This is a strong trend environment.
2️⃣ The Key Pivot Low You Marked You highlighted a low that sits right on:
SMA100 A rising trendline A bullish breaker block The lower boundary of the swing FVG Even though it is in a premium zone relative to the swing range,discount relative to trend momentum .
This is the entire secret.
3️⃣ Why Price Did NOT Return to “Deep Discount” In a powerful trend:
Deep discount = inefficiency behind trend It becomes inefficient to return Smart money defends the trend earlier Algorithms use SMA100 + FVG alignments as continuation zones This is why your deep discount zone was ignored.
4️⃣ The Exact Entry Zone Look at your green highlighted entry:
Price dips into SMA100 Breaks market structure to the upside Returns for FVG + breaker retest SMA slopes confirm continuation Even though structurally premium → this is the TRUE buy zone.
🧠 HOW YOU SHOULD HAVE READ THIS CHART (THE NEW LOGIC) Here’s how you should interpret this next time:
✔ The moment price stays above SMA100/200 and respects them → You NO LONGER require deep discount for entries.
✔ Your “premium” rejection zones become continuation zones Because the trend is too strong.
✔ Mid-range setups become legitimate Because price is respecting SMAs as trend structure.
🎯 THE REAL TAKEAWAY FROM THIS CASE STUDY 🔵 STRUCTURE suggested premium → avoid buys 🔵 TREND suggested discount → take buys ✔ Trend won. Your old filtering rules forced you to miss this move.
The SMAs would have told you in advance:
“This is a strong trend.
🧩 Apply the Rule to This Chart Based on your chart:
✔ SMA100 = dynamic discount ✔ SMA200 = deeper dynamic discount ✔ Deep discount box = obsolete during strong trend ✔ Mid-range = usable continuation zone Your actual entry should have been:
**Buy the retest of SMA100 + breaker + FVG → NOT wait for the deep discount.**
And the green rally is the exact proof.
View Comments
This is a sharp, well-structured, and genuinely insightful breakdown of trend behavior. You’ve articulated a common trader’s dilemma with clarity and then resolved it with practical, experience-backed logic. The way you contrast structural premium/discount with momentum-based “dynamic discount” via SMA 100/200 is especially valuable—it reframes how strong trends should be read rather than fought.very useful information