The Rulebook
Fourteen rules per framework, thirteen of them required and one optional confluence. Every trade our members journal is graded against them, and Gavo checks what it can against real broker price data. Here it is in full, before you pay us anything.
Break this and the setup is not valid, however clean the rest of it looks.
Break this and the setup is materially weaker, but it can still be worth taking.
Break this and you lose an edge at the margin.
Thirteen rules, in the order you should be checking them: bias first, then structure, then execution, then the discipline that decides whether any of it survives contact with a live market.
Higher-Timeframe Bias
Mandatory before any entry. Get this wrong and nothing downstream matters.
HTF bias is established
InvalidatingDaily and/or 4H bias must be clearly established: either a confirmed BOS in the intended direction, or a clear trending structure (series of HH/HL for longs, LH/LL for shorts).
Aligned with the draw on liquidity
CoreThe trade must be in the direction of the HTF draw on liquidity. Identify where price is being engineered to run (EQH, EQL, PDH, PDL, weekly highs/lows) and only take setups that align with that draw.
Liquidity & Market Structure
Confirmation on the entry timeframe. This is where the setup earns the right to exist.
A liquidity pool was swept
CoreA liquidity pool must have been swept before entry: Asian session high/low, equal highs or equal lows (EQH/EQL), previous day high/low (PDH/PDL), or an obvious stop-hunt wick. This is the engine that powers the reversal.
Market structure shift confirmed
InvalidatingA market structure shift must be confirmed on the entry timeframe: either a Change of Character (CHoCH, the first opposing BOS after a sweep) or a full Break of Structure (BOS) confirming the new directional intent.
An unmitigated POI is respected
InvalidatingAn unmitigated Point of Interest (POI) must exist and be respected: a Fair Value Gap (FVG: the three-candle imbalance between candle 1 high and candle 3 low) or an Order Block (OB: the last opposing candle body before the BOS that caused the move).
Entry Execution & Risk
A correct read, executed badly, still loses money.
Clean retrace into the POI, not a chase
SupportingEntry must be a clean retrace into the POI, not a chase entry mid-move. Price should return to the FVG or OB and show a reaction (displacement or rejection candle) before entry.
Stop beyond the swept liquidity or OB extreme
CoreStop loss must be placed beyond the swept liquidity level or the extreme of the Order Block, not just behind a candle wick. The stop should be in a location that, if hit, invalidates the entire thesis.
Minimum 1:2 planned R:R
InvalidatingThe planned Risk-to-Reward ratio must be a minimum of 1:2 to the first target (TP1, usually the opposing liquidity or the opposite side of the range). Higher R:R setups (1:3, 1:4) targeting draw-on-liquidity are preferred.
Risk capped at 1%, standard is 0.5%
InvalidatingRisk per trade must not exceed 1% of account equity on a single idea. The Smile FX standard is 0.5% per trade.
Discipline & Process
The rules that separate a trader from someone with opinions about charts.
Taken inside a killzone
SupportingThe trade must be taken within a high-probability session window (killzone): London open (02:00–05:00 EST), New York open (08:30–11:00 EST), or the London close overlap. Avoid trading outside killzones without a compelling macro reason.
Pre-planned, not reactive
SupportingThe trade must be pre-planned: no revenge trades, no FOMO entries, no chasing a candle that already ran. The setup should have existed in the trader's notes before execution.
News calendar checked
SupportingA high-impact news calendar check must be completed. No entries within 15 minutes before or after a red-folder news event on the traded pair or correlated pair.
Fibonacci confluence at the POI
SupportingOptional. Where a Fibonacci retracement is drawn across the impulse leg, an entry sitting in the OTE band (62-79%) or on the 61.8%, 78.6% or 50% level is worth more than the same entry without it. This is confluence, not permission: it strengthens a setup that already passes, and repairs nothing on one that does not. Leave it unmarked when you have not drawn a Fibonacci, and it drops out of the count rather than counting against you.
How a trade is graded
Which rules broke, not how many. One invalidating break caps the grade regardless of the rest.
Thirteen rules built around one idea: a zone is only worth trading if it is fresh, it came from an impulsive move, and you are approaching it from the correct side.
Higher-Timeframe Bias
Mandatory before any entry. Trade with the trend, not against it.
HTF bias is established
InvalidatingDaily and/or 4H bias must be clearly established: a confirmed bullish or bearish trending structure. Trade with the trend, not against it.
Aligned with the HTF magnet
CoreThe trade must align with where price is likely being drawn to on the HTF. Identify the nearest opposing S&D zone or liquidity pool as the magnet.
Zone Quality
The foundation of every S&D trade. A weak zone fails no matter how well you execute.
The zone is fresh and untested
InvalidatingThe zone must be fresh and untested, meaning price has not revisited it since it was formed. A zone that has been tested once is weaker; a zone tested twice or more is nearly invalid. Fresh zones = maximum probability.
The origin move was impulsive
CoreThe origin move that created the zone must be strong and impulsive: a fast, directional move with large candles and minimal overlap. A slow, overlapping, choppy origin produces a weak zone that will likely fail.
Approached from the correct side
InvalidatingPrice must be approaching the zone from the correct side: demand zones must be approached from above (price dropping into demand); supply zones must be approached from below (price rallying into supply). Entering from the wrong side is a critical error.
Entry Execution & Risk
A correct read, executed badly, still loses money.
Patient retrace into the zone
SupportingEntry must be a patient retrace into the zone, not a chase entry mid-move. Wait for price to return to the proximal edge of the zone before entering.
Stop beyond the distal edge
CoreStop loss must be placed beyond the distal edge of the zone (the far boundary). A stop inside the zone is invalid, because if the zone is broken, the thesis is wrong.
Minimum 1:2 planned R:R
InvalidatingThe planned Risk-to-Reward ratio must be a minimum of 1:2 to the first target. The first target is typically the opposing zone or the opposing liquidity pool on the entry timeframe.
Risk capped at 1%, standard is 0.5%
InvalidatingRisk per trade must not exceed 1% of account equity. The Smile FX standard is 0.5% per trade.
Discipline & Process
The rules that separate a trader from someone with opinions about charts.
Taken inside a killzone
SupportingThe trade must be taken within a high-probability session window (killzone): London open (0800–1100 UTC) or New York open (1330–1600 UTC). S&D zones react most cleanly during institutional participation windows.
Pre-planned, not reactive
SupportingThe trade must be pre-planned: no revenge trades, no FOMO entries. The zone should have been identified and marked before price arrived.
News calendar checked
SupportingA high-impact news calendar check must be completed. No entries within 15 minutes before or after a red-folder news event on the traded pair or correlated pair.
Fibonacci confluence at the POI
SupportingOptional. Where a Fibonacci retracement is drawn across the impulse leg, an entry sitting in the OTE band (62-79%) or on the 61.8%, 78.6% or 50% level is worth more than the same entry without it. This is confluence, not permission: it strengthens a setup that already passes, and repairs nothing on one that does not. Leave it unmarked when you have not drawn a Fibonacci, and it drops out of the count rather than counting against you.
How a trade is graded
Which rules broke, not how many. One invalidating break caps the grade regardless of the rest.
Get graded against it
Journal a trade and Gavo reviews it against these rules, checking what it can against real broker price data.