About this video

• Video Title: Mechanical IFVG Trading Strategy That Makes Me Over $100K/Month
• Channel: DodgysDD
• Speakers: (No speaker names provided in the transcript)
• Duration: 00:06:51

Overview

This video explains a mechanical trading strategy called IFVG, designed to achieve a high win rate by understanding market movements. The presenter details the strategy's components, including liquidity sweeps, bearish for rally gaps, entry and exit points, stop-loss placement, and target setting. It also emphasizes the importance of discipline, specifically limiting trades to two per day, as a key factor in long-term profitability.

Key takeaways

• The IFVG trading strategy aims for an 80% win rate by focusing on how the market actually moves.
• A crucial rule for success is taking no more than two trades per day, which can improve win rates.
• The strategy relies on identifying liquidity sweeps (sweeping a low) and then looking for a specific entry pattern.
• A key entry pattern is a "bearish for rally gap" that sweeps liquidity, characterized by a strong bearish candle followed by a strong bullish candle that closes back over it, resembling a "V" shape.
• Entries are typically taken on the close of the candle, rather than waiting for a retracement, to ensure participation in the move, though this may sacrifice some Risk/Reward ratio.
• Stop losses are generally placed above the IFVG or based on the close below the pattern, with the option to move the stop to break-even once a certain internal high is hit to protect capital.
• Targets are set at the next obvious high or low, or at points of trendline liquidity.
• The strategy is described as mechanical but can become more discretionary with experience.
• Discipline, specifically adhering to the two-trades-a-day rule, is presented as more critical to profitability than the strategy itself.

Here's a step-by-step breakdown of the IFVG trading strategy as described in the video:

Core Principle: Understand market structure and liquidity to identify high-probability entries, combined with strict discipline.

Key Strategy Components:

1. Liquidity Sweep:

   • Look for the market to sweep a significant low (a "manipulation leg" or higher time frame low). This indicates that stop losses below this low have likely been triggered, creating liquidity.

2. Entry Signal (Bearish for Rally Gap - IFVG):

   • After the liquidity sweep, identify a "bearish for rally gap." This is characterized by:
     • A strong bearish candle.
     • Followed immediately by a strong bullish candle that closes back over the high of the bearish candle.
   • This pattern should be visually obvious, often resembling the letter "V."

3. Entry Execution:

   • Enter the trade on the close of the bullish candle that confirms the IFVG pattern.
   • Note: The speaker prefers this to entering on a retracement, even if it means potentially sacrificing some Risk/Reward (R), to ensure getting into the trade.

4. Stop Loss:

   • Initial Stop: Generally placed just below the low of the IFVG pattern or the low that was swept.
   • Break-Even Management: Once the trade moves favorably, shift the stop loss to break-even. The speaker specifically mentions moving the stop to break-even when a certain internal high is hit (for a long trade). This is a protective measure against the trade reversing significantly.

5. Targets:

   • First Target (TP1): The next obvious high (for a long trade) or low (for a short trade).
   • Subsequent Targets (TP2+): Look for further liquidity points, such as trendline liquidity or other significant highs/lows.

6. Discipline (Crucial Rule):

   • Limit Trades: Strictly adhere to taking a maximum of two trades per day. This is emphasized as paramount for consistent profitability, regardless of how "good" the setup looks.

Summary Workflow:

1. Identify Liquidity Sweep: Wait for the market to take out a recent low.
2. Look for IFVG: Spot the bullish candle closing back over the preceding bearish candle.
3. Enter on Close: Place your entry order at the close of the confirming bullish candle.
4. Set Initial Stop: Place stop below the pattern's low or swept low.
5. Manage Stop: Move to break-even once an internal high is reached.
6. Set Targets: Aim for the next obvious high/low and subsequent liquidity pools.
7. Abide by Discipline: Take no more than two trades daily. If you miss opportunities or take two trades, stop trading for the day.