Many traders get lost in the noise of market structure. What if you only needed **ONE robust setup**?
The **2022 Model** (a highly tested execution model based on SMC principles) relies on a simple 3-step logic: **Purge (Liquidity) → Revert (Shift) → Rebalance (Entry).** This guide provides the blueprint to execute this strategy with precision.
SVG 1: The 2022 Model Bearish Execution Flow (Sweep → Shift → Retrace)
1. The Logic: Purge, Revert, Rebalance
The 2022 Model is based on core institutional market mechanics:
- **Purge (Sweep):** The market moves aggressively to take out stops (Liquidity Sweep).
- **Revert (Shift):** Once liquidity is taken, Smart Money reverses the price aggressively (**Displacement**). This structural break is the **Market Structure Shift (MSS)**.
- **Rebalance (FVG):** The aggressive move leaves a price inefficiency (**Fair Value Gap** - FVG). Smart Money returns to fill this FVG before continuing the direction.
2. The Execution Checklist
The setup must form during a specific context for high probability.
A. Time (Kill Zone)
The setup requires volatility. Stick to liquid hours: **New York AM Session** (approx. 08:30 AM – 11:00 AM NY Local Time).
B. The Execution Steps (Bearish Setup)
- **The Raid (Liquidity Purge):** Price rallies up and takes out an old **Short-Term High** (STH). *Crucially, wait for the sweep to complete.*
- **The Shift (MSS):** Wait for price to reverse and break a **Short-Term Low** (STL) with a strong, energetic candle (**Displacement**). This confirms the shift.
- **The Gap (FVG):** Look for the displacement leg that caused the shift. There must be a **Clear Fair Value Gap** created. (No FVG = No Trade).
- **The Entry:** Place a Sell Limit at the open of the FVG.
SVG 2: Valid vs. Invalid 2022 Model Setup
3. Risk Management and Exit Strategy
This model is highly robust, but it requires disciplined risk control and strategic exit management to maintain positive expectancy.
- **Stop Loss:** Place your SL structurally above the **Swing High** that initiated the displacement (The high that took the liquidity).
- **Fixed Risk:** Risk **1%** of capital per trade. Use the Risk & Reward Calculator to validate your setup's potential.
Exit Management (Partial Close)
To protect profits and remove risk quickly:
- **Take Profit 1 (50%):** Take 50% profit at the first internal Low (Short Term Low). **Immediately move SL to Breakeven.**
- **The Runner (50%):** Leave the remaining 50% to target the **External Range Liquidity** (The far Swing Low).
SVG 3: Exit Management and Partial Close Strategy (Risk Control)
4. Troubleshooting and Discipline
If you keep losing with this model, check these common errors, which violate the **risk management** context:
- **Trading Against the HTF:** You tried to Sell a M5 setup when the H4 Trend is bullish. The HTF bias must be aligned.
- **Bad Timing:** You traded during a low-volatility session (e.g., Asian Session). The model needs **Displacement** (volatility).
- **No Displacement:** Price "crawled" down instead of "crashing" down. If the move is slow, the institutional conviction is missing.
Final Thoughts
The 2022 Model is powerful because it is **Repeatable** and based on the fundamental search for liquidity. Master this one setup. Ignore everything else. You don't need to be a "Jack of all trades." You need to be a **specialist**.
Align your execution with the **Risk Management** principles outlined here to ensure longevity in the market. Monitor market volatility and flow via the Realtime Market Dashboard.
