Friday, Feb 7th 2025
In this post, I’ll break down the setup, the trade execution, and why understanding multi-time frame confluence can significantly improve your trading accuracy.
Market Context – NFP & Initial Reaction
Today was a major economic event with the Non-Farm Payrolls (NFP) report coming in below expectations. Surprisingly, the market had a muted response during pre-market hours, but everything changed once the cash session opened at 9:30 AM EST.
Immediately after the open, the market rallied into our predefined Supply Zone and, as expected, rejected hard, leading to a strong sell-off. We capitalized on this move, catching multiple short trades from the supply zone inside our Discord community.
Identifying the Next Trade – Demand Zone & RSI Divergence
As price approached our 30-minute Demand Zone we noticed a classic market maker trick:
Click Here To Learn about Zones
📌 Price bounced right before the demand zone – This is a common practice where price reverses slightly ahead of key levels to trap liquidity from the opposite side.
At this point, I alerted our Discord members on what to look for next and also posted on X, sharing the plan with followers. (Screenshots of my alerts can be found below.)
Here’s the key insight: When price bounces before a demand zone, it’s crucial to check the RSI on a lower time frame than the actual zone. In this case, we used the 10-minute chart (why 10-minute and not any other time frame? That’s something we teach in our mentorship program 😉).
RSI Divergence & Trade Execution
The RSI positioning on the 10-minute chart gave us a clear indication:
✅ On the next price low, RSI was likely to make a higher low, creating a bullish divergence – a strong signal that momentum was shifting upwards.
Once this divergence was confirmed right into our demand zone, we executed the trade based on our specific entry criteria.
📈 Target? The opposing 10-minute supply zone, because we always target the supply/demand level on the time frame we spot the divergence on.
Exit Strategy – Locking Gains at the Right Time
When trading short-term options, it’s crucial to lock in gains before or at targets since short-term premiums decay fast. Today’s exit had two strong confirmations:
1️⃣ 10-minute supply zone (our trade target)
2️⃣ IB Low level for today’s cash session
As expected, right after our exit, the price fell back to the lows again.
Key Takeaways from Today’s Trade
- Multi-Time frame Trading works! The 30-min demand zone and 10-min RSI divergence played out perfectly.
- Always anticipate liquidity grabs. Market makers will often push price just before key zones to create traps.
- RSI divergence on lower time frames can confirm reversals. If used correctly, this can provide high-probability trade setups.
- Know your exit before you enter. Especially for short-term options, because opposing supply zones will cause a reaction and premiums can decay fast.
Learn & Trade with Us
If you want to master setups like these, check out the Free Education section where I break down the exact strategies we use daily. Want to take it further? Our mentorship program dives deep into concepts like why we use the 10-minute chart in this scenario and how to spot these moves consistently.
11:48am When I started preparing Discord members for 6075.
Below was the post on X at 11:53am EST.
Note when price broke under LOD (Low of Day) RSI did not continue lower, rather it made higher low and created bullish divergence.
Target hit also shared on X
💬 Drop a comment also check out the X post for screenshots of this setup in real-time!