Using Floating Zones to Identify Profitable Trading Opportunities

Quick note: Apologies for the lack of videos lately. I've had some technical issues with my software and computers, which made recording rather challenging. This article is based on a recent video where I used different software for the demonstrations.

Understanding Market Maker Activity Through Floating Zones

Trading can sometimes feel like navigating a maze blindfolded. But what if you had a map that showed you exactly where the professional traders-the market makers—are positioning themselves?

That's precisely what I want to reinforce today: how to use floating zones to ensure you're trading in the right part of a market move. This concept is fundamental to understanding the market maker's business model and how they generate their profits.

When to Stay Out and When to Enter

Let me break this down simply:

When you see a market moving up and down through the floating zone's centre line, it's often a market you don't want to be in. The direction isn't defined yet.

The real opportunity comes when the market makes a decisive move away from the centre line. This is what we're looking for—clear definition.

For instance, if you've set up your centre line and the market is currently below it, you're looking for weakness—a downward move. When the market breaks down through this line and enters the lower half of the floating zone, treat this first area as a test. It's as if the market is testing sentiment, in this case, testing for weakness.

Reading the Market's Intentions

What happens next is crucial. If the market continues downward to create a pressure point, then briefly rises before breaking down again—that's your signal.

The sell order you want to place should be under this second test point. Why? Because if the market breaks down below this point while still in the lower part of the floating zone, it's highly likely to maintain this downward momentum.

I remember trading the GBPJPY last month using the PAT indicator (my proprietary indicator that I cover extensively in my trader training). The pattern was textbook—price broke below the centre line, tested back up, then continued its downward trajectory exactly as the floating zone analysis suggested. The PAT indicator confirmed this with its unique signal pattern that my students learn to recognise.

The Same Principle for Bullish Moves

The exact same principle applies in reverse for bullish moves:

When your line is set up and the market moves above the floating zone, watch how it probes upward to test the upper part of the zone. If it establishes a pressure point and then breaks higher again, that's your continuation signal.

In these situations, the market makers have often already positioned themselves for the move, and you're essentially following their lead—a strategy I emphasise heavily in my professional trader training programme.

Real Trading Application

Just last Tuesday, I spotted this exact situation on the AUDUSD chart. The market had broken above the centre line, tested back to it without crossing below, then surged upward. My students who followed this approach (and the PAT indicator confirmation) caught a lovely 80-pip move.

The floating zone approach isn't just theory—it's how professional traders read market maker activity. It's about understanding who's really moving the market and positioning yourself accordingly.

A Quick Personal Update

I'm heading off to Spain in about two weeks and will be living there for a couple of months before travelling to Australia. The long flights can be exhausting (I never seem to master the art of sleeping on planes, even lying flat out!),

Feel free to continue sending your chart analyses, emails, and questions. My mentorship and trader training programmes will continue without interruption. If anything, the Spanish timezone might actually make me more available to my European students!

Next Steps for Your Trading

If you're struggling to consistently identify these floating zone opportunities, it might be time to consider professional trader training. My mentorship programme includes personal guidance on using the PAT indicator to confirm these setups, along with direct feedback on your trades.

Remember, the difference between amateur and professional traders often isn't intelligence—it's training and proper tools. The market makers have their business model; successful traders need theirs.

Until next time, happy trading!