LAF Strategy: Look Above and Fail

LAF is the short-side mirror of the LBF — the same trap, sprung above the range instead of below it. Price pokes above a level everyone is watching, finds no real business up there, and comes back in. This page is the short playbook: what qualifies, the exact trigger, and what proves the idea wrong.

What actually happens on an LAF

Price probes above a reference level — prior-day high, overnight high, the top of the balance zone. Breakout buyers chase, expecting continuation. If there is nothing up there, the probe finds no follow-through, sellers reload the offer at the level, and price snaps back inside the range. The chased breakout buyers are trapped, and their exits accelerate the move back down.

Remember who runs this market: sellers control price. Buyers are never in control — they only get what sellers allow. An LAF is sellers demonstrating exactly that at a public level.

What qualifies as a valid LAF

A clearly defined level everyone can see: prior-day high, overnight high, or the top of balance.
A probe above it lasting only a few minutes — an extended stay above is acceptance, not a probe.
Volume on the probe that does not build. Building volume above the level = real demand, no short.
Offers refreshing at the level as price stalls — supply actively defending the line.
A balanced session. In a one-way trend day, a push above the high is continuation, and shorts get run over.
A 2-minute close back below the level — the failure confirmed.

The mechanics

Entry trigger: short the first 2-minute close back below the level after the probe. Aggressive version: short the intrabar loss of the level — only with a clean volume tell.
Stop: hard disaster stop 2-3 ticks above the probe high. Probe high more than ~10 ticks away on ES means the setup is too wide — skip it.
Target 1: session VWAP. Scale one third there, mechanically.
Target 2: the lower edge of the balance zone. This is where the multi-R lives.
Risk sizing: 1% of account maximum. Stop ticks × tick value × contracts equals that number or less, rounded down.
Exit read: the runner comes off when the down-move exhausts — bids stop stepping down, down-pushes get smaller while volume rises, and price stops extending. The flow is the exit, not a trailing stop.
Invalidation: price reclaims the level and holds above it with building volume. The failure failed — cover at market, do not wait for the stop.

Where LAF goes wrong

Shorting the probe. If you are short while price is still above the level, you are betting against a breakout with no evidence. Wait for the close back inside.
Shorting a trend day. LAF is a balance setup. If every extension is being accepted, the probe above the high is the trend continuing, not failing.
Fading real demand. Probe on building volume with offers being lifted and not refreshing — that is consumption of supply, the opposite of a failure. Stand down.

The mirror image

The long-side version is the LBF — Look Below and Fail. Both live inside the LBF/LAF framework, and VWAP is the first target on every LAF — see VWAP Trading Strategy.

Common questions

What is the LAF (Look Above and Fail) strategy?

LAF is the short-side mirror of LBF: price probes above a well-known level (prior-day high, overnight high, top of the balance zone), finds no real demand there, offers reload, and price comes back inside. You short the reclaim back below the level, stop above the probe high, first target session VWAP, second target the lower balance edge.

How do you confirm an LAF short?

Wait for the failure, never short the probe. A valid LAF shows a brief push above the level with volume that does not build, offers refreshing at the level, then a 2-minute close back below it. That close is the entry trigger. Building volume above the level means acceptance — breakout continuation — and shorts get run over.

Where is the stop on an LAF trade?

A hard disaster stop 2-3 ticks above the probe high. If the probe high is more than roughly 10 ticks away on ES, the trade is too wide for a 1% risk budget and you skip it. Sellers control price — when they cannot hold the level back, you are wrong and the stop says so.

When does LAF not work?

In a one-way uptrend. LAF is a balance-market setup. When the session is trending and price accepts at every extension, a push above a prior high is continuation, not failure. Check the day type before shorting anything.

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