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Disciplined Trading

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Chapter 5 · Part Two

HTF Bias Determination

Where is the draw on liquidity? Get this wrong and even a perfect setup fails.

About 9 minutes

Getting the draw wrong is the fastest way to lose money with this model. If your bias does not match where price is actually heading, even a textbook setup will fail.

This is the single biggest difference between profitable and unprofitable traders. Before the session, open your two-hour NQ chart and answer one question: where is the draw on liquidity?

Bearish bias checklist

  • Failure to seek highs. Price tried to go higher but failed to take the previous high
  • Sell-side untaken below. Clear lows below that have not been swept
  • Price is in premium. Currently in the upper half of the HTF range
  • HTF FVG below. An unfilled fair value gap below current price
  • HTF order flow bearish. Lower highs and lower lows on the 2H

Bullish bias checklist

  • Failure to seek lows. Price tried to go lower but failed
  • Buy-side untaken above. Clear highs above that have not been swept
  • Price is in discount. Currently in the lower half of the HTF range
  • HTF FVG above. An unfilled fair value gap above current price
  • HTF order flow bullish. Higher highs and higher lows on the 2H

When there is no clear bias

Sometimes price is trapped between ERL above and ERL below. In that case, FTSL and FTSH become your tiebreakers. You can also wait for one pool to be taken, then trade the reversal toward the other. If price fails to reverse or displaces into larger internals, it is likely continuing toward the next pool.

On mixed days you do not rank a primary setup. You mark both sides and you trade whichever prints first. The trader is not a forecaster. The trader reacts.

Multi-timeframe FVG alignment

Having multiple FVGs align at the same spot across timeframes is incredibly powerful. Lower timeframes can be noisy, but when a 1H FVG aligns with a 15m or 5m FVG, it reinforces your bias and filters out weak setups. The best multi-timeframe fair value zones are found at previous structure.

Check yourself

Pre-session you count two bearish confirmations and nothing bullish. What is your bias?

Before you move on

  • You have written down BULL, BEAR or NONE before the open
  • You counted at least three confirmations, or you wrote NONE
  • You know which ERL you expect to be taken today

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