FTR in forex refers to fail to return. An important price action term used to do technical analysis of currency pairs in forex. Simply its mean, price broke an important level but failed to return from that level. It is called FTR fail to return. Read the full article, at the end we will tell you about strong FTR zones
Usually, after breaking strong levels, price gives a bigger pull back because of a large number of sellers or buyers at that level which is under consideration of many traders. But instead of a large pullback, price gives a minor retracement on the break of strong level and continue its move. This is the psychology of FTR in forex. means fail to return. As trick plays here so it becomes an important level.
If Price breaks a strong resistance level and after minor retracement, gives a strong bullish move then it will form a bullish FTR zone.
Remember, the minor retracement after breakout must form a drop base rally pattern. If you don’t know about, drop base rally, I have explained below
If Price breaks a strong support level and after minor retracement, gives a strong bearish move then it will form a bearish FTR pattern in forex.
Remember, the minor retracement after breakout of support level must form a rally base drop pattern.
How to draw FTR zone in forex
To draw FTR zone, the base zone is the perfect place to pick an exact pinpoint entry. When FTR forms then a supply and demand pattern also forms within it. Simple high and low of the base will form a zone.
FTB (first time back) in forex
FTB refers to the retest of the last made FTR zone by the price in forex. When a fresh FTR zone (untouched) forms then price come back to pick orders from this zone and then progress further. This is called as FTB in forex.
Let’s talk about some Important supply and demand patterns which will help you to identify a strong FTR zone. I believe in the fact that makes some sense to me.
There are four supply and demand patterns
- Rally base rally
- Rally base drop
- Drop base rally
- Drop base drop
Rally base rally
The same is the case of rally base rally. After an impulsive move, the price will form a ranging structure and then again an impulsive move. Simply Strong impulsive move then ranging pattern and then again impulsive move.
We will call the ranging structure of the price as a base. The impulsive move will be bullish because we are talking about rally base rally.
Drop base drop
Drop base drop in forex refers to the strong bearish impulsive move then a ranging structure in price and then again strong bearish move.
In simple words or in the higher timeframe, we can say a drop base drop as a Big bearish candle then a base candle, and then again a big bearish candle.
To learn more about supply and demand in forex visit this link.
Rally base drop
Rally base drop refers to the pattern of bullish impulsive move then a ranging structure in price and then bearish impulsive move.
I will not complicate thing but I will try to make things clear for you. Look at the image below.
Drop base rally
Drop base rally refers to the pattern of bearish impulsive move then a ranging structure in price and then bullish impulsive move.
Follow the simple formula
Big bearish candle + base candle + big bullish candle
One more important thing for newbies. if you will go to a lower timeframe, one big candle will convert into a number of candlesticks showing an impulsive move. Base candlestick will convert into a ranging structure. This is a multi-timeframe analysis. Learn more from our blog.
FTR strategy in forex
This strategy will make you able to find out strong FTR zones in forex.
- The first step is to look for a strong zone. To detect a strong zone, I use the simple Fibonacci tool in the case of FTR.
- The second step is to look for a previous swing high.
- Both Fibonacci 50 level and previous swing high must be at the same level.
- FTR zone must be fresh
Now draw FTR zone. The high and low of FTR zone can also work as a zone but to increase risk-reward and pick a zero-float entry then draw zone only on the base of the FTR pattern.
Stop loss will be some pips below or above the FTR zone. Entry will be on FTB (first time back).
This was a simple strategy, and it has a high winning probability. You can use the FTR pattern in your strategy to optimize the strategy.
I hope you will like this Article. For any Questions Comment below, also share by below links. Use Tradingview for technical analysis instead of mt4.
Note: All the viewpoints here are according to the rules of technical analysis and for educational purposes only. we are not responsible for any type of loss in forex trading.