In practice
Before looking for an entry, traders using this approach ask where price is most likely to go next: an untouched high, an old low, or a gap left open on a higher timeframe. That destination sets the bias for the session.
Trades are then taken only in that direction, and the draw itself is the target. If no clear draw can be named, the answer is to stand aside.
What to watch for
The draw is an educated guess, and once it is reached it stops being a reason to hold. Fixing on one target and ignoring evidence that the market has changed its mind is the usual error.
Related terms
3 terms- BiasYour working assumption of direction, usually from the higher timeframe; you trade with it and update it when structure says so.
- Buy-side liquidityBSLBuy orders resting above highs: short sellers' stop-losses and breakout traders' buy stops.
- Fair value gapFVGA three-candle gap where candle 1's wick and candle 3's wick don't overlap, left by a fast move.