Introduction to BFX Strategy: Institutional Order Flow

Allen Matshalaga, C.E.O of the AVFX Trading HUB company.

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Updated: Jan, 2024

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The BFX strategy is a trading approach that focuses on identifying price reversals by observing breakouts and retracements at key support and resistance levels. It incorporates Institutional order flow which refers to the buying and selling of securities by large financial institutions such as hedge funds, mutual funds, and pension funds.

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What is the Break and Retest Strategy?

Answer

The Break and Retest Strategy is a trading approach used to identify potential price reversals. It involves waiting for a price level to break, then retesting it before entering a trade. Traders look for a previous support-turned-resistance or resistance-turned-support level. When price breaks through, it retraces to test that level, and traders enter trades based on confirmation of the retest. This strategy aims to capitalize on market momentum shifts, offering traders a defined entry point with reduced risk.

BFX Trading

BFX Strategy is based on ICT Institutional order flows which is a concept that allows traders to trade like the banks.

Before we move any further, one needs to know what moves the market. I am talking about the major moves not the minor moves made by the retail traders.

By retail traders, we are talking about you and me and other small investors in the forex market. So, from today you will be taught how not to fall for price manipulation or traps set by huge financial institutions also known as the market makers.

These financial institutions can place a trade of about 2 Billion dollars we can look at when Warren Buffet lost 2 billion on one trade in 2014.

Allen Matshalaga
Author

BFX Strategy Chart

Institutional Order Flow is a concept we use to analyse the market structure and the environment of the asset class we elect to speculate in. Before we lean on the tenants of “traditional Technical Analysis, we first must determine who would benefit from such a move in Price?

We will be covering some of those concepts that were employed by Michael in this book and how I personally use them to be profitable in trading. What you are going to learn here might shock you or unsettle you. It might also shock your treasured opinions on how the market places trades in what appears to be a “free market” I make no apologies for telling you the truth and how it plays out daily on the market.

Key Takeaways:

Institutional order flow involves buying and selling of securities by large financial institutions.
These institutions have substantial trading power and impact the financial markets through liquidity and price movements.
Understanding institutional order flow can give insight into market trends and aid in investment decision-making.

BFX Strategy Order Block

Right now, embrace yourself as I am not promising miracles but consistency what is needed is nothing but discipline. In the forex industry what is needed is nothing more but being consistent. When you are a consistent trader you take away greed and fear because you will know what you are doing, and you will not fear losing nor will you be greedy and end up blowing your account.

With good risk management skills you are in the right path. Now get close to your charts and start practicing on a demo account, you can later upgrade to a real account. Download the full pdf, read and master it. It will change your trading journey forever.

Conclusion

In conclusion, the BFX strategy is a trading approach designed to capitalize on potential price reversals by observing breakouts and retracements at key support and resistance levels. It provides traders with a structured entry point and risk management, enhancing the probability of successful trades. Like any trading strategy, it requires careful analysis, risk assessment, and consistent execution to achieve desired results. Traders should adapt and refine the BFX strategy to fit their specific trading goals and market conditions.

Frequently Asked Questions

How does the BFX strategy work?

The strategy involves monitoring price levels where support becomes resistance (or vice versa). When price breaks through one of these levels and then retests it, traders consider entering trades based on confirmation of the retest.
What are the key components of the BFX strategy?

Key components include identifying significant support and resistance levels, waiting for the price to break through them, and then seeking confirmation through retests before entering trades.
Is the BFX strategy suitable for day trading or swing trading?

The strategy can be adapted for both day trading and swing trading, depending on the trader’s time frame and objectives.
How can I identify support and resistance levels for the BFX strategy?

Traders typically use technical analysis tools, such as trendlines, pivot points, moving averages, and historical price data, to identify significant support and resistance levels.
Are there specific chart patterns used in the BFX strategy?

While not required, traders often combine chart patterns like flags, triangles, and head and shoulders with the BFX strategy to increase trade confluence.