Mammon’s 3-TR Strategy Guide 📈

The hidden problem…

Most traders don’t have a clear system or a clean set of rules they need to follow before getting
into a trade.

The result of this is that these traders take all kinds of different setups and trade randomly
without really knowing what they are doing.

One trade might be based on an RSI divergence, another on a support-to-resistance flip, and
another on an imbalance.

This leads to feelings of confusion in the market, as opportunities seem to be everywhere, and
any trading signal can be found if looked for.

Range trading - A clear solution ✅

With range trading, you have clear, defined levels to work with - a range high and a range low.

From there, you can combine it with the three-tap pattern, and you get an exact framework of
what you're looking for to enter a trade.

Since markets are ranging 80% of the time and are only trending 20% of the time you can
identify ranges on all timeframes and on all assets, giving you trade opportunities all the time.

This reduces the “if i had done this or that” feeling and eliminates emotions so that you can
execute like a robot.

What exactly even is a range?

It's when price moves sideways between two levels: the range high and the range low.

This differs from a trending market, where prices rise/fall with new lows and highs. In a range,
prices simply fluctuate between the range high and low, staying within these limits..

Here’s a clear example of a range below ⬇️

What is the “three-tap” concept?
The three tap pattern is a price action concept rooted in market manipulation and liquidity grabs.

It is used by smart money to manipulate the price action in such a way that they can fill their
orders on behalf of smaller players that get trapped by the “third” tap.

These three tap patterns often happen within ranges, making people think that price is breaking
out.

This causes many traders to get into break-out positions while the big players use that liquidity
to reverse price to the other side of the range.

Here’s how to identify it 🎯

It involves price sweeping the range high or low two times before a significant reversal occurs.

Tap 1 - The initial test of the range high / low, marking the boundaries of the range.

Tap 2 - Second sweep of the range high / low to trap early traders.

Tap 3 - The final sweep - This is where most traders are anticipating a break-out causing
them to open fresh positions.

These are used by big players to fill their own orders and reverse price to the other side
of the range.
Increasing the probability of success 📈
Correctly identifying the range ✔️
Keep in mind that you should not force a range, if price is clearly trending it doesn’t make
sense to force a range. For a range to be valid you need to have clean sideways price
action.

Observe the three taps ✔️

After marking the initial range high and low, always wait for the second sweep of either
level, before focusing on identifying the third tap.

Proper entry confirmation ✔️

After the second low gets swept again, you can suspect a third tap.

However, a single sweep is not enough to confirm this.

You need to see the price return to its previous range and a break of structure (BOS) to
confirm your entry.

Additionally, you can use RSI divergences as extra confirmation for the third tap.
 Stop-loss and Take-profit placement ✔️
We aim to keep our emotions out of the picture by using a clean framework, so we
always set pre-defined levels for our stop-loss and take-profit.

Stop-loss - We always put the stop-loss above or below the third tap. Price should not
revisit that level if it’s a valid three tap setup.

Take-profit - The main target of the three tap setup is always the opposite side of the
range.

Though it’s often smart to take profits in partials, for example at the POC, VA high/low or
at strong SnD zones.

But to keep it simple we stick to the main objective for now which is the opposite side of
the range.

Let’s dive into a 3-TR Example!

Example - SUI Chart

Two setups here - First at the range highs giving a short back to the range lows.

And the second one, a long setup riding it back to the range highs and far beyond.
🎁 Wanna see the 3-TR Setups in Real-time?

🔗 Here’s a link to join MAD for FREE - MAD Trading Discord 📈

Now let’s break the setups down…

1) Short Setup

We see price is coming out of an uptrend and marks the first high from where price starts
to retrace which marks both the initial range high and initial range low (numbers 1).

This setup isn't the most clean. It's too violent to call it a clean range. But, I wanted to
mention it to show the three drives pattern. It's clearly visible in this example.

After both the high and the low are formed we can see that price is sweeping the initial
range high in which we have our second tap, and a potential three tap setup in play

To confirm it, we have to wait for another sweep, putting in the third tap, and a market
structure break to confirm the model and give us the entry model.

And what do we see? After the second tap price makes a little retracement before going
for a new high which marks the third tap, and while doing so the RSI is showing a
bearish divergence which gives added confluence to the setup.

Now we only have to wait for price to get back in the former range and give a market
structure break back to bearish to give the entry confirmation.

I have marked out the moment where the break of structure happened and from there
the setup is valid. Now we put the stoploss above the third tap high and aim for the
range lows.

2) Long Setup

After the second sweep, there's a bounce, but the price eventually returns to make
another low, forming the third tap.

We also see a nice confluence here, with the bullish RSI divergence adding more
evidence that the setup will play out.

However, we still need to wait for the market structure to turn bullish before we can enter.

Once the market structure breaks to the upside we can enter and do the same trick - put
the stop-loss below the third tap and aim for the opposite side of the range.

Made by Mammon - @D_DTRADING on X. Enjoy!