Liquidity Sweep, Trendline Break, Order-Block Mitigation. Why three is the magic number, and how to choose yours.
Why “more setups” is a lie
Trading literature loves to sell pattern libraries — fifty candlestick formations, twenty harmonic patterns, a chapter for each. Mostly noise. The professional trader I most respect runs three setups. The one I respect second-most runs two. There is a reason: every additional setup multiplies the discretion required to execute, and discretion is where retail traders bleed.
Setup 1 — Liquidity Sweep
Price runs the prior swing high or low, takes out resting stops, then reverses. The classic stop hunt. We trade this because it has a clean invalidation: if price closes through the swept level on the higher timeframe, the setup is dead — and you are out. No discretion, no debate.
Setup 2 — Trendline Break + Retest
Established trendline breaks on a strong-bodied candle, price retests the broken line and rejects. The retest is non-negotiable — without it, the trade is a guess. Stop sits on the other side of the retest wick.
Setup 3 — Order-Block Mitigation
Price returns to the last unmitigated origin candle of a strong move. Best on indices and BTC. Requires multi-timeframe alignment — daily bias, 4H structure, 15m trigger. The slowest of the three to fire, and the highest hit-rate when it does.
How to pick yours
Most students will not run all three for the first six months. Start with one, master it across 100 logged trades, then add the second. Adding a setup before you have earned it is the fastest way to dilute the one you already had.