Have you ever heard the term FLOR thrown around by your fellow trader friends, but not sure if they know what they’re even talking about? If you’re new to trading supply and demand concepts, this one is one of the fundamentals to finding intraday reversals in the market. 

A concept coined by one of our long-term coaches, Trickey, this concept will help you avoid getting caught up on every ChoCh or change of character you see in the market. Try trading every ChoCh and you’re inevitably going to blow your account. If only trading were that simple and easy…

What Is a FLOR in Forex Trading?

A FLOR stands for First Level of Respect, it also sounds like the word floor, which is fitting because it usually denotes a demand level that has respected a previously defined low (usually the lowest point in a bearish to bullish reversal); or a supply level that has respected a previously defined high (usually the highest point in a bullish to bearish reversal).

This price action concept helps us avoid making the mistake of just entering at every shift in orderflow, or ChoCh by making us wait until we get some confirmation that demand (buyers) are taking control in a bearish to bullish scenario, or that supply (sellers) are taking control in a bullish to bearish scenario.

The Origin of the FLOR: Wycoff Schematics

So is the FLOR a new concept? Technically it isn’t, but we can argue that the FLOR is a much simpler and distilled version of the wide array of terms that Wycoff used in his schematics. In the context of Wycoff, which this is loosely based on, the FLOR is usually a level that re-tests the “Spring” in an accumulation (bearish to bullish reversal), or a “UTAD, aka upthrust after distribution” in a distribution (bullish to bearish reversal). wd

While it’s not at all necessary to understand Wycoff schematics, we’re going to include a couple of diagrams here just for educational purposes, however, we find these confuse new traders with their sheer complexity rather than helping them.

How To Trade The FLOR

Now we can finally get to the juicy part that you’ve all been waiting for. How the hell do we trade the FLOR? Well, the answer is a bit more involved than just entering off of the FLOR everytime you spot one in the market. There are things to consider like market structure, orderflow, structural liquidity, (inducement), what POI you’re in, among other things.

We’re going to give you the absolute basics of how you can implement the FLOR in your trading within your execution timeframe, but if you want to get down into the nitty-gritty of the Phantom Trading strategy, we suggest joining and understanding how the FLOR works as a piece within the larger puzzle of our trading system.

Rather than entering at the FLOR, we actually suggest entering after a FLOR has been established and price has continued to push away from it. To find the FLOR, all you need to do is look for the nearest level of supply or demand to be violated, and look at the level that caused that break. Then from there you can look for a level to trade off of now that there has been a clearly established shift in orderflow.

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Robert Castillo
@coldwaterfx
FX Trader & Analyst
Writer & Editor

Rob is a funded trader from Toronto, Canada, and has been trading currencies, commodities, stocks, and cryptocurrencies for over 7 years. Outside of trading, he enjoys making music, boxing, and riding motorcycles.