FOREX

RCM Global Forex Learning Series

The Stop-Hunt Cycle Strategy

A structured course on weekly cycles, session timing, liquidity sweeps, confirmation and disciplined risk management.

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Follow all 15 lessons in order, covering weekly structure, market-maker moves, session timing, candlesticks, trap moves, moving averages, pivots and TDI.

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The Stop-Hunt Cycle Strategy

Purpose: A practical, rules-based lesson built from the available Market Makers Boot Camp recordings (Parts 1–4, 6–7, 9–10 and 12–18).

Important: This is educational material, not financial advice or a promise of profit. The recordings describe price action using a “market-maker” narrative. In this lesson, that narrative is treated as a chart-reading model—not proof that one dealer controls the whole market. The observable ideas are liquidity sweeps, session ranges, failed breakouts, consolidation, momentum and mean reversion.

What the student will learn

By the end of the series, a student should be able to:

  1. Mark the high and low of the week and identify a possible peak-formation high or low.
  2. Count a typical three-level or roughly three-day directional cycle.
  3. Map the Asian range and the London/New York session changeovers.
  4. Distinguish a stop-hunt or liquidity sweep from a genuine continuation.
  5. Wait for an M/W second leg, hammer, railroad-track or vector rejection before entering.
  6. Use moving averages, pivots and TDI only as confirmation—not as the reason for a trade.
  7. Size every trade from a predetermined account-risk limit.

Course structure

Lesson 1 — Weekly structure and peak formations

  • Start with the 4-hour chart; use the daily chart for additional context.
  • Mark the first eight hours of the trading week and the prior week’s high and low.
  • A peak-formation low is a weekly extreme followed by a W-type rejection and movement away from the low.
  • A peak-formation high is a weekly extreme followed by an M-type rejection and movement away from the high.
  • Once an extreme is established, the recordings look for movement away from it over the next two to three sessions.
  • The core rule from Part 1 is: identify the count, wait for the stop-hunt, then trade in the directional cycle.

Lesson 2 — The three-level cycle

  • Level 1: the anchor or reversal area; an aggressive move can begin here.
  • Level 2: continuation; price is moving away from the weekly extreme.
  • Level 3: mature or exhausted movement; aggressive “trend acceleration” can trap late traders before reversal or correction.
  • Three levels do not always equal exactly three calendar days. Consolidation can pause the count.
  • Level 3 can become Level 1 of the next cycle after a confirmed reversal.

Lesson 3 — Daily session map

  • Draw the Asian-session high, low and midpoint.
  • The recordings prefer an Asian range under roughly 50 pips. A range near 75 pips or more is considered over-expanded and is usually avoided.
  • Around a major session opening, watch for a false move beyond the Asian high or low.
  • The teaching examples often show a sweep of approximately 25–50 pips, sometimes completed in three pushes or “swipes.” This is an observation from the recordings, not a universal fixed distance.
  • Session times must be converted to the chart’s timezone and adjusted for daylight-saving changes. Never copy a clock time without confirming its timezone.

Lesson 4 — Stop-hunts, vectors and traps

A valid liquidity-sweep setup should show context plus rejection:

  1. Price reaches an important extreme: Asian high/low, weekly peak, prior high/low or mature Level 3.
  2. Price trades beyond the obvious level, attracting breakout orders and triggering stops.
  3. A strong vector/momentum candle may extend the move.
  4. Price fails to hold outside the level and closes back inside or forms a clear rejection.
  5. A second leg may retest or slightly exceed the first extreme, creating an M or W.

A fast candle by itself is not a signal. It becomes useful only when location, timing, cycle and rejection agree.

Lesson 5 — Candles as a map

  • A candle records where price reached and where it closed; the wick is evidence that the extreme traded.
  • Useful confirmation patterns in the recordings include hammers, inverted hammers, railroad tracks, pins and strong vector candles.
  • Do not trade a named candle pattern in isolation.
  • The stronger setup is a rejection candle at a mapped extreme after a liquidity sweep.
  • The recordings describe many M/W structures as developing over 30–90 minutes, sometimes up to two hours.

Lesson 6 — Trend and moving averages

The recordings use 5, 13, 50, 200 and 800 exponential moving averages (EMAs).

  • The 5/13 pair helps show short-term momentum.
  • The 50/200 pair helps organize the broader intraday trend.
  • The 800 EMA provides long-horizon context.
  • Widely separated averages with price extended away from them can show momentum, but at a mature Level 3 they can also warn that traders are chasing late.
  • Price returning to the averages can be normal mean reversion.
  • Moving averages confirm structure; they do not override a failed sweep or wrong cycle count.

Lesson 7 — Pivots and projected range

  • Use pivots as possible destination or reaction zones, not guaranteed turning points.
  • The recordings associate M3/M4 with possible upper-range objectives and M1/M2 with possible lower-range objectives.
  • A projected move between pivot zones is more useful when it agrees with the cycle, session map and available daily range.
  • After several directional days, a fresh daily pivot projection can be misleading if the cycle is ready to reverse.

Lesson 8 — TDI confirmation

  • TDI is used as supporting evidence after price structure is visible.
  • Tight volatility bands suggest consolidation/accumulation.
  • A “shark fin” occurs when the RSI line pushes outside a band and returns inside.
  • Divergence can strengthen a mature M/W rejection.
  • Indicator confirmation must never replace the price-based invalidation level.
  • The recordings do not provide enough reliable evidence in the sampled sections to prescribe one universal TDI setting, so this lesson intentionally does not invent one.

Lesson 9 — Risk and trade management

  • Decide account risk, stop distance and position size before entry.
  • The recordings demonstrate a 2% risk and 2:1 reward example. For a learning plan, use a more conservative 0.5% risk per trade, with 1% as an absolute ceiling until a large sample of verified results exists.
  • Stop after two losses in one day or after reaching a 1% daily loss.
  • Do not widen a stop to rescue a losing trade.
  • Avoid holding a short-term setup through the weekend or a major scheduled news release unless that risk was explicitly tested.
  • Use a demo account for at least 30–50 documented trades before considering live capital.

The RCM Stop-Hunt Cycle Strategy

Market and charts

  • Liquid major forex pairs with consistently tight spreads.
  • 4-hour chart: weekly extreme and directional cycle.
  • 15-minute chart: setup and entry.
  • 1-hour chart: optional alignment check.

Long setup

Take a long only when every mandatory condition is present:

  1. Bias: A peak-formation low is visible, or price is in Level 1/2 rising away from a confirmed low. Avoid buying a mature Level 3 rise.
  2. Range: Mark the Asian high/low/midpoint. Prefer a compact Asian range; avoid a visibly over-expanded range.
  3. Location: Price sweeps below the Asian low, prior session low or another obvious liquidity level.
  4. Failure: Price closes back above the swept level or clearly rejects it.
  5. Structure: A W/second leg, hammer, railroad tracks or equivalent bullish rejection completes.
  6. Confirmation: At least one of the following agrees: TDI shark-fin return/divergence, 5/13 momentum turn, reclaim of the EMA zone, or a pivot/range objective above.
  7. Entry: Enter on the close of the confirmation candle or on a controlled retest. Do not enter during the initial spike.

Short setup

Reverse the long rules:

  1. A peak-formation high is visible, or price is in Level 1/2 falling away from a confirmed high.
  2. Price sweeps above the Asian high, prior session high or another obvious liquidity level.
  3. Price closes back below the swept level.
  4. An M/second leg, inverted hammer, railroad tracks or bearish rejection completes.
  5. Confirmation agrees with the bearish structure.
  6. Enter only after the rejection closes or on a controlled retest.

Stop-loss

  • For a long, place the stop beyond the lowest point of the completed sweep/W, plus a small spread/volatility buffer.
  • For a short, place it beyond the highest point of the completed sweep/M, plus a buffer.
  • If the required stop makes the position too large for the risk limit, reduce position size. If the broker’s minimum size is still too large, skip the trade.

Position-size formula

Money at risk = Account equity × Risk percentage
Position size = Money at risk ÷ (Stop distance in pips × Pip value per unit/lot)

Always confirm pip value in the account currency; it varies by pair and position size.

Profit management

Use one consistent model during testing:

  • First objective: Asian midpoint, session midpoint or nearest logical structure.
  • Main objective: 2R or the opposite side of the session range, whichever comes first.
  • Optional: take partial profit at 1R and trail the remainder behind completed 15-minute swings.
  • Exit early if price closes back through the entry structure and invalidates the rejection.
  • Time stop: if the setup remains trapped at the extreme and has not progressed within about two hours, close or reduce it rather than nursing the trade.

No-trade conditions

  • No clear 4-hour peak/cycle bias.
  • Asian range is already over-expanded.
  • Entry would chase the initial vector candle.
  • Sweep occurs in the middle of a range rather than at a meaningful extreme.
  • Reward to the next obstacle is below 2R.
  • Spread is abnormal or a major scheduled announcement is imminent.
  • Two losses have already occurred that day.
  • The trader cannot state the entry, stop, target and size before clicking.

Advanced setups (study only at first)

Safety trade

A visible stop-hunt back in the direction away from a confirmed weekly peak, commonly described in the recordings as occurring roughly 25–75 pips from the peak. This is safer only when the peak and directional cycle are already clear.

33/333 trade

The recordings describe an aggressive third-day/third-level push that attracts late trend followers before reversal. Treat this as an advanced exhaustion setup. Do not trade it until ordinary second-leg M/W setups have been tested successfully.

Straightaway continuation

Sometimes price leaves a level without a visible second-leg stop-hunt. The recordings call this a straight rise/drop or continuation. Beginners should skip it because the invalidation is less clear.

Pre-trade checklist

[ ] 4H weekly high/low and peak formation marked
[ ] Current level/day count identified
[ ] Asian high, low and midpoint marked
[ ] Session timezone and DST checked
[ ] Sweep occurred at a meaningful extreme
[ ] Price failed outside the level and closed back in
[ ] M/W second leg or rejection candle completed
[ ] Confirmation agrees; indicator is not the sole reason
[ ] Stop is beyond structural invalidation
[ ] Position size risks no more than 0.5% (1% ceiling)
[ ] At least 2R is available before the next obstacle
[ ] No imminent high-impact event or abnormal spread
[ ] Screenshot and journal plan prepared

Journal fields

  • Date, pair and session
  • 4H peak formation and cycle level
  • Asian range size
  • Liquidity level swept
  • Entry pattern and confirmation
  • Entry, stop, target, size and percentage risk
  • Maximum favorable/adverse excursion
  • Result in R, not only money
  • Screenshot before and after
  • Rule followed/broken and one lesson

Testing plan

  1. Backtest at least 100 historical examples across different pairs and volatility conditions.
  2. Record spread, slippage and scheduled news; do not test only perfect screenshots.
  3. Calculate win rate, average win/loss, expectancy and maximum drawdown.
  4. Forward-test 30–50 trades on demo with unchanged rules.
  5. Change only one rule at a time and restart the sample after a material change.
Expectancy (R per trade) =
(Win rate × Average win in R) − (Loss rate × Average loss in R)

A strategy is not validated merely because its chart story sounds convincing. It needs positive expectancy after costs on unseen data.

Risk notice and source gaps

  • Parts 5, 8 and 11 were not supplied; this lesson does not claim to reproduce them.
  • Audio was sampled across each supplied recording and cross-checked against chart frames; it is a synthesized course, not a verbatim transcript.
  • Leveraged OTC forex can cause rapid and substantial loss. The CFTC notes that leverage amplifies both gains and losses, customers trade against their dealer in OTC forex, and traders should verify dealer registration and disciplinary history.
  • Only use risk capital—money you can afford to lose completely.

Further reading:

RCM GLOBAL reminder: Education comes first. Test every rule on historical data and demo trading before risking capital.

1 comment:

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