FTB in forex refers to the first time back of price to the Previous FTR zone to pick pending orders from the FTR zone.
It is a perfect supply and demand trading concept and a repetitive pattern. When an FTR zone forms, the price always comes back to that zone, and this process is known as first time back or FTB in technical forex analysis.
How to identify FTB in forex?
To detect FTB on the price chart, you should learn to draw FTR zones. Because FTB is the second step after the FTR zone formation, let me explain the FTR concept in simple terms.
FTR or fail to return in forex trading refers to the phenomenon in which price retraces after the break of a critical key level, and then it continues its previous trend in the direction of the breakout.
In bullish FTR, the FTR zone forms after the resistance level break, while in the case of bearish FTR, the zone forms after the break of the support zone.
I hope this image will clear the concept of FTR. If you want to learn FTR trading in detail, read this article here.
As we know, the FTR zone contains the pending orders of institutions, and institutions bring the price back to the zone to fill their pending orders. This process of bringing back the price to the fresh FTR zone is called FTB in price action.
Look at the image below to understand this concept.
Tip: Due to liquidity issues, banks or big institutions cannot fill all orders at once. To overcome the liquidity issue, they turn a single big order into many small orders. Our focus is to find the zone containing pending orders, and then we will trade with the institutions.
Types of FTB in forex trading
FTB is a simple price pattern, but other patterns like FTB2, FTB3, FTB4, etc., can also form depending on the market situation.
During the first time back of price to FTR zone, a simple FTB pattern form
But when the price comes back to touch the FTR zone after the FTB pattern, this return will be termed FTB2.
After FTB2, the third touch of the price to the FTR zone will be FTB3. This process will continue until the market breaks that FTR zone.
What does the FTB pattern tell traders in forex?
FTB pattern in forex tells traders that market makers have filled their pending orders, and now the price will make a new trend.
For example, after forming a bullish FTR, Banks and big traders will prefer to place pending buy limit orders at the FTR zone because they want to make a new bullish trend. So, when the price comes back for the first time, buy orders open, and the price moves up impulsively. Big institutions always make the big impulsive waves of price. Retail traders cannot move the trillion-dollar market.
Sometimes the market cannot start a trend after touching the FTR zone, and then the price comes back again to the price to fill the remaining pending orders of institutions. It is also termed FTB2 in price action.
How to trade FTB in forex?
This is very simple to trade, but you cannot trade it without other technical tools because it does not tell us about the take profit levels.
When bullish FTR forms, open buy limit orders 2 to 3 pips above the zone and place stop-loss below. During the FTB process, the pending buy orders will be filled. So, you’re now trading with institutions or big traders.
When a bearish FTR forms, open sell limit orders 2 to 3 pips below the zone and place a stop-loss above the zone. During the first time back, these orders will be filled.
FTB Trading Strategy Example
Here is an example of the first time back on the forex live chart below this heading. In this method, we first draw a valid FTR zone at a major key level. The key level increases the winning probability of the FTR zone. So after zone formation, the price came back for the first time to the FTR zone and bounced from it indicating the filling of institutional pending orders.
Due to lack of demand, the price again came back to the zone and this time it is called FTB2 and the price filled the remaining pending orders of institutions. Then along bullish trend started. This bullish trend indicates the presence of orders of big banks and institutions.
So by using FTR and FTB methods, we were able to find out the footprints of big traders successfully.
The Bottom line
Price action is the method to trade with institutions. We always try to find out the pending orders of big banks and institutional traders to trade with them. That’s why we use technical analysis strategies, and FTB is one of the patterns that tell the footprints of market makers.
It is not easy to trade with institutions but experience matters. If you spare some time to backtest this pattern properly, you will be able to pick the best FTB patterns on the price chart. And this comes only with screen time and practice.