Trading Magnets

We will look into magnet trades from various timeframes and I’ll explain my thought process on what I see on each setup. Magnets are great because they can be quick and easy pips once you develop an eye for exhaustion wicks and can see price struggling to push in a direction. I personally have had larger gains trading magnets because I struggle with patience and finding the push. I don’t like getting stuck in consolidation and I don’t know when the push would be. It’s easier for me to see a push and KNOW price at some point WILL exhaust/retrace/bounce/retest whatever. What goes up must come down, vice versa. Price moves in stages: push, retracement, or consolidation. So when you miss a push wait for retracement.

Before trade:

• 14ema, 50ema, 200ema
• UJ this is my pair
• Check news (best magnets often seen after strong push from news or after breakouts)
• Plot zones on H1/H4 (minor zones would need more confirmation to trade, but it depends)

Know what time it is and when higher timeframe candles are closing. Be wary of pushes. There is always a magnet setup after a push. The key is to differentiate between price rejecting zone and price consolidating to push up (especially at minor zones which often don’t hold as strong).

Magnet Setup: exhaustion + zone

• Price has to push to a zone
• Candles must be far enough from 14ema
• Exhaustion wicks on zone or candles pushing towards 14ema
• SL behind wick (by a few points/micropips)
• TP at or right below 14ema, if magnet setup follows the trend leave a position running if price breaks 14ema
• Best entries are after a candle closes rejecting the zone or waiting for the next candle to wick to get wicked entry

Confluences:

• If H1 candle closes at a zone, good chance next H1 will retrace at first
• If H1/H4 candles are about to close (within 5-20min) they will probably retrace after pushing
• If there’s a higher timeframe magnet setup, HODL
• 200ema supporting the zone you see price rejecting (HTF emas can also be used as entries for but require more chart time to understand how they work)
• Price retesting a broken zone

Cut trade when:

• Engulfing candles in opposite direction of your position (better seen on lower timeframe of your setup)
• When a few lower time frame candles fail to push in your direction

Sometimes there is very strong momentum that price won’t always hit the 14ema TP since magnets are counter trend. It’s sometimes safer to close before as price may just be retesting the ema to push down.

1. price has pushed to a zone
2. 1M candles far enough from ema
3. there is a huge exhaustion wick (I entered early because the 200ema on 15M lined up with a zone)
4. SL would be above the wick and TP right before touching 14ema to be safe

Usually at this time, around 11am-12pm we could see a reversal from the London close but momentum hasn’t died yet so price kept pushing up. This is why the 14ema retests are the safest TP.

1. price reached H1 zone
2. 1M and 5M candles are both far enough from ema (this is where higher timeframe confluence comes into play)
3. 2 exhaustion wicks on 1M seem good enough because the emas match up with the zone on higher timeframe
4. SL above wick TP at 14ema

Notice on the 1M how price breaks through the 14ema with strong bear candles, price is pushing for 5M magnet (higher timeframe confluence). If you were looking for the 5M magnet setup, waiting for the bearish candle to close before it dropped would still be a good entry as there is plenty of room for it to push to 14ema

1. price has pushed to a zone (confluence with H1 14ema and 5M 200ema)
2. 1M and 5M candles far enough from 14ema
3. the exhaustion here is tricky because it seems that the bearish candle closed engulfing the 1M hammer candle. This may seem scary, however, there are five 1M candles that closed without passing 106.493
4. also if we look on 5M we can see that the bullish candle created a wick down, there’s a good chance that the next 5M will wick down then go up because candles resemble each other in certain situations (this is key for good entries)
5. SL under wick TP at 1M 14ema if you want 2 pips or hold your balls and TP when price develops on 5M

H1 also close at a zone so this gives us good confluence to enter

This may scare people into exiting positions early, it has scared me as well and seems like an ema retest. But remember, higher timeframes prevail, the next 5M bullish candle wicked down and couldn’t push past the previous candle wick. Another opportunity to enter and stack.

1. price has pushed to a zone
2. 5M candle far enough from ema
3. huge exhaustion wick on 5M, so as annotated wait for next wick to enter (these entries are okay) 1M shows candles struggling to break lower
4. look at the heavy bearish momentum, price won’t always touch the 14ema, its always safer to close right before

Sometimes you can mix two setups, especially on higher timeframe movement

1. 15M timeframe shows a magnet setup from support
2. 5M shows rejection with clear push up
3. missed entries at the bottom so waited for 1M cross and for price to retest 14ema+zone

This is why it’s fun to stack and let some run, bonus pips.

Sometimes you can get burned pretty quickly. The ideal entry would have been for this 5M candle to close and for the next one to leave a wick to then push down. Got stopped on these first positions.

This is an example of one of my better trades where price exhausted following higher timeframe momentum. The entries aren’t wicked as this is something new I’ve started looking for.

Sometimes a setup looks really good but getting a bad entry is the difference between getting your desired profit or exiting with little to no profit

A wicked entry on the 5M would have been 4 pips if I was very precise. Price kept going.

This is a common accumulation pattern where price retest the 14ema+zone to break zone. I exited as the 1M candle was breaking the 14ema. Price hit a mini support and had a bullish engulfing, so trade was over.

Sometimes you can play ping pong.

I don’t trade news but look at these pips!