1. Break of Structure (CH) Confirms Shift in Market Direction
The chart highlights Change of Character (CH), indicating a shift from bullish to bearish market structure. This signifies the end of the retracement and sets up the conditions for a possible short entry.
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2. Supply Zone / Order Block (OB) is the Entry Trigger
Price retraces into a marked Order Block (OB) (red zone), which is a supply zone where institutional traders are likely to re-enter the market. This OB acts as a precise entry point for a sell position.
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3. Target Based on Prior Liquidity Sweep or Market Structure
The final target is set at a significant low, often where liquidity is resting. This aligns with Smart Money logic, targeting zones where stop losses of retail traders are typically placed.
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