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How to Chart and Make Money — Transcript

by Shabby Shabs · 9,261 words · 1,258 segments · language en · Watch on YouTube

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0:02Okay, let's go through how to win.
0:06This will be a quieter session than
0:08usual because my wife is asleep and I
0:10won't get as angry as I usually do. But
0:12let's start from the basics.
0:15What I'm going to do is actually get rid
0:17of everything on this chart, including
0:18my own indicator, so you can better
0:21understand how I see the world and why
0:23it matters.
0:25Let's go through the basics.
0:29Most people view the market as top down.
0:32I don't view it as top down and I'll
0:34tell you why in a second. But most
0:36people look at it top down. Look at as
0:38index, sector, and stock.
0:43So, usually what people say is that the
0:46index is moving down. The sectors within
0:48them like XLF or healthcare or whatever
0:50it is within the S&P 500 is also going
0:53to move down. And then individual stocks
0:55within that sector will move down. So we
0:58can see we had a 5% drop yesterday on
1:00the S&P 500 and you can go look at XLF
1:04and you see that it also had a move down
1:07right this is a measure move down of 3%.
1:09So it fell less than the broader index
1:12and you go look at GPM than that you'll
1:14see that it also fell down yesterday by
1:16about 6%. So this fell more than the
1:20sector itself compared to what the S&P
1:23500 did and what the sector did on its
1:26own. Right? So S&P 500 was up down about
1:28four and a half%.
1:31So that's how most people view the
1:33world. I don't view it that way. And the
1:36reason I don't view it that way, let me
1:37just find my note. I don't even know
1:39where I put it. It's probably up here
1:41somewhere. There we go. Is because I've
1:44seen flow that's contradictory to this
1:46entire thing. What I view the world as
1:49and why I've been successful at what I
1:51do is I view it bottom up.
1:54I think the options get repriced or they
1:57get rebalanced. So, I'll put that down.
2:03Then the stock itself moves,
2:06then the sector moves, and then the
2:10actual index itself moves. That's how I
2:12view it. I'll show you evidence for this
2:14in a second.
2:16The reason I like to do it this way is
2:18because you can't fundamentally change
2:19how this market works. And the
2:22algorithms themselves are always
2:24repricing the options, the stock or the
2:26index or the sector from the bottom
2:29upside. Fundamentally, the way that this
2:32works is money moves
2:35on the underlying asset. In this case,
2:37it's the actual option, not even the
2:39sector or the stock. Then the change
2:42happens. So if you think about it, money
2:44hits the tape,
2:48then the tape moves,
2:52then what happens is the stock sector
2:57index moves, and finally your king
3:00nodes/open
3:01interest moves on that. This is how I
3:05view the world, and it's worked out
3:06really well for me. The reason I like to
3:09do it this way is because it helps me
3:11better understand where price will go
3:13next. Right? And I'll show you evidence
3:16for this. Whenever I say, "Hey, they
3:18closed puts or they closed calls."
3:20That's exactly what we're getting. So,
3:22closed puts.
3:28Let me just find where I set this so you
3:30can better see. Uh,
3:35they sold puts, right? 2:33 p.m. At
3:391:40, I got these calls that ran 10 and
3:41something percent, call it a day, and
3:43we're profitable.
3:46And I really like doing it that way
3:48because it's just how markets work and
3:50how these algorithms are programmed in
3:52the first place. They'll do the
3:53rebalancing constantly, right? And the
3:56way that I know they're doing the
3:57rebalancing or selling tape or what the
4:00move might be is by looking at the
4:02options volume and the contract around
4:04that. So before I even get into the
4:06charts here, I'll let me show you
4:07exactly how this works,
4:10I'll take a second to load and then
4:12we'll get into it. And these are raw and
4:15edited for a reason is because I'm lazy
4:18as hell. But the other reason is because
4:22I want you to just understand the raw
4:23thoughts and how I process this
4:25information. So let's go look at these
4:26puts, right? This is for today. This is
4:28zero DTE. Market's not even open. It's
4:31almost 5:00 a.m. here, but um you know,
4:34I see volume. So, yesterday I saw a lot
4:37of volume on the downside here on the
4:387205 puts. I'm just picking a random one
4:41for example. Now, this has 117 contracts
4:44and then you they clearly bought them at
4:46uh what was it? Nine bucks and then sold
4:49basically half that volume. You can see
4:51117 then 51 there when it was up by like
4:5420 30% whatever it is. And then finally,
4:56you have net almost net zero volume here
4:59at the entire day until the end of the
5:00day. You got three people buying these
5:02contracts. Now, to me, this is not a
5:05whale. This shouldn't really be taken
5:07seriously. If anything, this means that
5:09there's a bunch of retail investors that
5:10are buying these puts right now on the
5:13downside. It's not sufficient evidence
5:15for me to actually take this seriously.
5:17What I do take seriously is when I see
5:19these big prints, especially when they
5:20come into pre-market. For example, this
5:22came in 7550 even before the market was
5:25open. They bought at $30. It ran to
5:28$155, right? So there it is. That's uh
5:32more than 100x returns right there.
5:34Right? So I saw the volume on that well
5:36before market open. Granted, it wasn't a
5:38lot. It was 175 contracts. Then market
5:41open, we got a spike here of 710. And
5:44then finally, when it started breaking
5:46towards the upside or the downside
5:47rather, we got 1.49K four 9k blocks on
5:51this particular contract. So I can
5:53clearly see from this evidence at the
5:55very least that they moved the money
5:58before the market started crashing right
6:00before it started going down. And if I
6:03go back to the chart and we look at the
6:04S&P
6:07and look at on the 15-minute because
6:08that's what I use and that's what I'm
6:10comfortable with at open to this move
6:13down took about uh 2 hours and I was
6:15calling for a 2-hour pullback anyways
6:17and then we didn't really get a bounce
6:19at 11:30 I was expecting it just
6:21continued selling and that's fine but
6:23even on the 5minute you can clear
6:25clearly see it on the day that the money
6:27was moving well towards the downside
6:30before the market open and they had
6:31consistent buying on this particular
6:33contract until it finally started
6:34breaking when the market opened. Right?
6:36So that's how I feed the world and it's
6:38worked out really well for me.
6:41You can use these tools by the way. It's
6:43built into my broker on Weeble and you
6:45can just go look at the volume and the
6:46contracts yourself. There's no secrets
6:48here. Although I do worry that uh the
6:51more I reveal this information, the more
6:53the algorithm itself will change. So
6:55today, what I see is there's,
6:59you know, at uh 6:10 or not 6, 4:10 p.m.
7:03yesterday, they bought 1,000 blocks,
7:051,000 contracts of the 7,600 calls for
7:08today, right? So this is right after
7:10market closed. They're buying them at uh
7:12around $2. They're underwater right now.
7:15Maybe this goes back up. I don't know.
7:17But there's been not a lot of sells on
7:19this particular contract. So it gives me
7:21hope today that we get a move up. I can
7:24also go look at some of the contracts
7:26that are further out the money. Someone
7:27got blown up here. Someone got
7:28liquidated of uh what is it? Almost
7:321,000 contracts for the 7605 calls. They
7:36got blown out of it at uh basically the
7:38same time they spot the the 7,600 calls,
7:41right? So, I see at least there's some
7:43hope for a move up because that's right
7:45now some of the biggest volume on the
7:47upside and I don't see as much downside
7:49contract volume right now. So, at least
7:51it gives me a bias or gives me a frame
7:53of reference for where my target targets
7:56are for the day. Now, granted, we don't
7:58have to get the 7,600 for these folks to
8:00be profitable, these whales to be
8:01profitable, but it gives me a direction
8:03at the very least, right? And if I go
8:06scroll to the contracts here, we see
8:08suspicious prints. Whenever I see some
8:10semblance of like more than 100 blocks,
8:12200 blocks, there's 292 on the 7580
8:15calls for today. 7560. And again,
8:18market's not open right now. So these
8:19are coming from after hours or after the
8:22market closed yesterday. And the biggest
8:24suspicious print that I see is on the
8:257600. Now this could be part of a spread
8:27right now. I don't know. We no one will
8:29know with 100% certainty that this is
8:31not a spread until we see this play out.
8:33Right? I go look at the downside volume.
8:36So let's go compare. Let's say the
8:377290s.
8:39Uh let's see what that does. Right? So
8:41we have 433 but you almost have the same
8:44amount of cells. So not taking that
8:45seriously. You have some [snorts] volume
8:48here, 255, but again, you have similar
8:50amount of cells, so I'm not taking it
8:51seriously. And let's just go look at the
8:547200 putts just for kicks. You have some
8:57volume here, but not a lot of sells. So
9:00maybe that's a hedge, maybe a spread. I
9:02have no clue, right? I can't tell you
9:04what's going to happen until we open and
9:06I get to observe how the tape is moving
9:08and what the charts doing before I
9:10actually get into what I want to play
9:12for that day or for that hour, whatever
9:14it is. Now we can get into the charts.
9:16The fun part, at least for me, now that
9:18we've gone over how I view the world,
9:20how I've seen evidence that money moves
9:22first before the stock or the index
9:24itself moves. And then from there, we
9:26can figure out when and what to take and
9:28how to take it. Cuz to me, my incentive
9:31here is aligned. So I make sure that you
9:33understand how to play this for yourself
9:35and you are profitable so we can work
9:38better as a society. That's really what
9:39I'm in it for. I do not care about
9:41nodes, don't care about charting, don't
9:44care about what happens to the S&P 500.
9:46It goes up, goes down, we'll make money.
9:49I'll actually go to the SPY chart
9:51because it's actually easier to see. And
9:52I walk through this uh with a number of
9:55people in the past, but I just wanted to
9:57be on the same page for how we chart or
9:59at least how I chart. You can do what
10:01you're comfortable with.
10:02Let's just go back to a random day. I'm
10:04not even going to look at what happened
10:06recently. Let's just go find something
10:07from Let's do the 2008 crash. How about
10:09that? That that sounds fun. So, what I
10:12always do is start on the daily. And the
10:14reason I start on the daily is to better
10:15understand where people are positioned,
10:17where there's going to be liquidity.
10:19Right? Now, there's multiple schools of
10:22thoughts here. You can use things like
10:23RSI, you can use like MACD, you can use
10:26buy side liquidity, you can use ICT,
10:27whatever you want, but I'm a very simple
10:30trader at the end of the day. [snorts]
10:32The simpler your trading strategy is,
10:34frankly, the better and the more
10:35repeatable it is. So you can apply to
10:38other stocks and assets and tickers and
10:40ETFs, whatever the the asset is. At the
10:42end of the day, you can come up with a
10:44system for yourself. And if it's an
10:47asset that's controlled by Wall Street,
10:49I guarantee you that the algorithm has
10:51not changed in 50, 60 years, maybe even
10:54longer than that. And if it's an asset
10:56that's been controlled or is getting
10:58controlled by some of these market
10:59makers, they're going to have incentives
11:01to punish both sides, right? So we
11:04understand that that's their goal is to
11:06extract every single dollar from
11:07whatever happens with retail and their
11:10goal is to maximize profits and they
11:12don't care about draw down. They'll be
11:14in a position for like I don't know
11:18sometimes the entire day withstanding a
11:20draw down of 80% on a $10 billion spread
11:23and they're comfortable with that kind
11:24of draw down to come out the end end of
11:26the day with $20 billion or $30 billion
11:28or what whatever it is, right? Sometimes
11:30it's hundreds of million dollars,
11:31sometimes it's thousands of dollars. Who
11:33knows? But fundamentally, the way that
11:35these algorithms work, I realize through
11:37pattern recognition, and I'm not the
11:38smart smartest pullup in the room, but I
11:41have a very good idea of how these
11:43patterns form, and I've got to observe
11:45them from the last uh year and a half of
11:48trading.
11:49Now, I start on the daily, so it gives
11:51me a context, right? It gives me a
11:53better understanding of where there's
11:54going to be buyers and sellers if you
11:56want to think about it that way or
11:57support and resistance if you want to
11:58think about it that way. The way that I
12:00think about this is where are people
12:03going to be forced to react. And two
12:05things I've noticed is when there's
12:06relative equal highs and relative equal
12:09lows, that's when liquidity is rated
12:12before you go into the opposing
12:13direction. And if you see a big candle
12:16such as this with a large body and a
12:18small wick or sometimes even a long wick
12:21but a [snorts] large body, this area
12:23acts as interest. And I'll draw this up
12:26in a second, but I want you to better
12:27understand how I see the world before I
12:29start drawing these charts and the
12:32levels around them so you can take that
12:34knowledge and hopefully learn it and
12:35adapt it into your own systems. So this
12:38is 2007208.
12:40I was not trading back then because I
12:42was a wee little lad, you know, less
12:44than 15 years old. But um if I were to
12:48trade the 2008 market, the first thing I
12:51was looking for would be looking for are
12:53going to be relative equal highs and
12:54relative equal lows. Where has price
12:56reacted from in the past? So I see at
13:00least with my eyes that there's some
13:02semblance of liquidity down up here,
13:05some semblance of liquidity down here
13:06and again this on daily time frame. And
13:09this area is interesting because it's
13:10been rated before we go lower or higher.
13:13And this area has been interest to me
13:16because this has been a price that price
13:19this has been a level where price has
13:20rejected from multiple times, right? And
13:22again, these are raw and edit edited for
13:25a reason. So what I usually do is I just
13:27draw a line through that area. It
13:30doesn't have to be perfect. Nothing here
13:32has to be perfect because the algorithms
13:33themselves and how price behaves is not
13:35perfect. There's too many players in a
13:38system to get the bottom and the tops
13:39right perfectly. If someone claims to
13:42have called the bottom or the top
13:44correctly, I do not believe them because
13:46there's too many participants in the
13:48system. You actually make it a sniper
13:51perfect entry with zero draw down. It's
13:54rare, don't get me wrong, but the happen
13:56stance of that happens maybe once in a
13:58blue moon. It's like a one in 99% chance
14:01of happening. So I see that there's
14:04price here that's been rejecting from
14:06this level. And prior to this is an area
14:09of support, right? So we see some
14:10evidence that this area here at uh $75
14:15when the S&P was trading at in 2008,
14:192004 or whatever is interesting, right?
14:21So we see that it bounced from that
14:23level, came back, double tapped, went
14:25up, then acted as resistance. We never
14:27got around it and closed below it. Then
14:30we started going above it, etc., etc.,
14:32etc. And I'll draw other levels around
14:33this. Then we come back into and this is
14:36the same level from 2004 or 99 actually
14:38not even 2004. December 98. Nice. Then
14:41we undercut that level. Steep undercut.
14:43And then we went up. Double tap and go
14:46up. Double tap and go up. Right. So we
14:48see this level that for started forming
14:50around April 1999. Then became
14:54resistance in 2001. Then became
14:56resistance in 2002. Then became
14:58resistance in 2004. then became
15:01resistance in 2008, became support in
15:042009. Right? All I did was just draw a
15:08simple area, a simple line where prices
15:11reacted to. I didn't do anything crazy.
15:13Nothing here is a secret that I have.
15:16It's just how I understand how patterns
15:18work, right? So, at least I have one
15:20level or one point of reference for what
15:23price will do when it gets to this
15:24level. Does it flip that level and go to
15:26the next level or does it act as
15:28resistance and go down to the next
15:29level? Right? That's what I'm looking
15:30for. Now, since I'm on a daily still, I
15:33want to look at where has price reacted
15:35from above and below this. Right? So, at
15:36least I know a frame of reference. Now,
15:39to do this at alltime high is a bit of a
15:41different story. And I've covered that
15:42in other videos. So, I'm not going to go
15:43through it again. But what I'm going to
15:45do here is just better understand where
15:47price is reacting. Right? So, we see
15:49price is reacting at these levels. I'm
15:51going to mark that out. In some cases,
15:53there's a resistance. other cases. So,
15:55it was support, right? Support, support,
15:58support, resistance, resistance,
16:00resistance, and resistance. I'm going to
16:03do the same thing, and I'm going to mark
16:04out the high here, right? So, this is
16:07all-time highs in 2000. We'll come back,
16:11double tap, and go back up to another
16:12all-time high. So, I'm going to add a
16:14level there. And then we see there's
16:16going to be multiple levels below this
16:18as well, starting from this line that we
16:20created originally. So price has acted
16:22as resistance here and here and here and
16:24here. There's a couple of support areas
16:26there. So I want to take the mean of
16:27these, right? So I'm going to take the
16:29average of all these levels and just
16:31eyeball it. So I'm going to put a line
16:32there. Then what I'm also going to do is
16:35put a line here because there's
16:37resistance, right? Became support,
16:39became support. I'm going to add that
16:40there. And I'm going to add this here as
16:42well on the daily. Now I don't need to
16:44mark every level on this chart. I just
16:46need to mark it what I think is
16:47important. And again, it doesn't have to
16:49be perfect. Even these steep undercuts
16:52here, you can mark out if you wanted to,
16:54but I'm not going to do that because I
16:55only see two areas here that are
16:57interesting. So maybe what I'll do is
16:59I'll just have one line. I don't have to
17:00get all of them. So that's what I see on
17:01the daily. So imagine you're me in 2008,
17:04you know, that stock market has crashed
17:06or is crashing or it's on the way to
17:08crashing. I'm not even going to look at
17:10this data here. So let's ignore that for
17:12a second and just better understand if I
17:14was coming to this on a daily chart
17:15before this crash happened, what would I
17:17do, right?
17:18And so the next thing I usually do and
17:20we'll do this in another line. I'll put
17:22these uh what do they call horizontal
17:25rays is look at displacements.
17:27Displacements to me are a very good
17:29signal that a market maker with a lot of
17:32volume or maybe institution or fund or
17:35maybe thousands of retail investors I
17:37don't know have set up a lot of buy or
17:39sell volume in one candle. So this is a
17:41displacement right.
17:44Let's go find another example of
17:45displacement. That's a bearish
17:46displacement.
17:48Then we have other areas that are
17:49interesting, but I'm not going to go all
17:51the way back there. I'm just going to
17:52find the ones that are relevant for that
17:532008 period. So, I see that there's a
17:56displacement here that I should probably
17:58mark. And I'm going to take the middle
17:59of this, right? I don't care about the
18:01wicks because wicks are price rejection.
18:02But again, I'm on the daily. So, I'm
18:04just take the midpoint roughly of this
18:06line. And what I'm going to do is just
18:08drop a line there and say that's a
18:10displacement. That's good enough for me
18:11to better understand how price will
18:13behave. Now, what I've observed is that
18:17the S&P 500 has a long bias. ES has a
18:20long bias. So, more often than not,
18:22calls work out better than puts, right?
18:24Puts, you have to get the timing
18:25perfectly, otherwise they expire
18:27worthless, and generally they're more
18:28expensive because everyone's worried for
18:30a crash until the crash comes, then
18:32they're like, I should have bought puts.
18:33But here we are. So, we see that there's
18:36a displacement here and price usually
18:38above the 50% of the displacement. If we
18:40close above it or do an undercut or
18:42close above it, usually leads price
18:44higher. If you close below this, price
18:47usually goes lower. I'm not saying it
18:49works 100% on time, but the probability
18:51of that happening is more than 75%. I
18:54like the odds. So, we see here that we
18:57weren't closing above this displacement,
18:59came back down, tested it. The buyer
19:01said, whoever bought a lot of velocity
19:03here said, "Nope, we're going to have
19:05second thoughts." sold it, came back
19:06down, and we started undercutting this
19:08area. Then came back up, did a double
19:10tap three days in a row on that same
19:12displacement, and then started going up,
19:14right? And usually SPY and QQQ move up
19:18about 0.15 to 0.25%
19:22on average. So 0.15%,
19:250.25%,
19:27then you go up increments of 0.5%. then
19:30it goes up 1% then it goes up 1.5% then
19:32it goes up 2% or minus whatever it is
19:35right so this is my range and these
19:39ranges coincide with a lot of these
19:41levels that I keep drawing right one of
19:43the things I get a lot of questions for
19:45is like how do you get these multiund%
19:46wins right how do you have the balls to
19:49hold for that long I know my targets I
19:51know where the liquidity is I know what
19:53I'm looking at here so if I was trading
19:56back in 2008 you know when SPY was at 95
19:595 bucks. This is an area of interest to
20:02me and this is an area of interest to me
20:04when I'd be taking profit, right? So,
20:06I'd be buying calls around the middle of
20:07this displacement or maybe even lower
20:09than that. And my take profit is going
20:10to be somewhere around here. And that's
20:12how you can get those 230% wins. But
20:15I'll get into that in a little bit. I
20:16just want to show you how these
20:17displacements work and the levels work.
20:20So, the levels I marked out again, these
20:22are from 1999 or whatever it was. And we
20:24saw them act as resistance and support
20:26all through the early 2000s. So this is
20:29January 2008, right? I see a big bullish
20:31displacement that I know is going to be
20:34interesting to look at. Now, what
20:35happens in July 2008, that same
20:38displacement gets uppercut, right? We
20:41see a clear uppercut here that's not
20:43closing above this. You're not going a
20:44level above. You're likely to come back
20:46down to a level below. That's exactly
20:48what we got, right? And again, this is
20:50this this line that I drew was prior
20:53support, prior resistance, prior
20:55resistance, prior support, prior
20:58resistance. Right? So, I know with a lot
21:00of conviction that whenever price gets
21:03here and we don't close above it, you're
21:05likely coming back down to some area of
21:07liquidity. And there's a lot of other
21:09pockets here and a lot of other
21:10displacements. But generally, that's how
21:12I use the system that I built frankly
21:14for myself because I want to make it
21:16simple and repeatable, right? And I only
21:18mark out the bullish displacements. I
21:20never mark out any of the bearish ones
21:22because I don't care. ES itself, the S&P
21:25500 has a bullish bias. I don't want to
21:28fade the instrument that's designed with
21:30that bias in mind. And I'm not going to
21:32go mark out 20,000 different levels
21:34here. That's not what I'm after. All I
21:37care about is how price will react when
21:39it comes to a displacement or a level.
21:40And if it closes above it, you're likely
21:42going up one level or at least 0.15%
21:45above it. And if you're closing below
21:46it, you're coming back down at least
21:48minus0.15% or a level below it. Right?
21:51So we see that this this displacement
21:53here has acted now as resistance that
21:56we're not able to close above to like
21:58coming back down two levels. That's how
21:59it works. That's just fundamentally how
22:01it's programmed. And this example that
22:04I'm showing you from 2008 is the same
22:06way that the algorithm or these [snorts]
22:08market makers work right now. But let's
22:10just keep going with this 2008 market,
22:12right? I see a displacement there on the
22:15daily. And usually what I do is I come
22:16to the 4 hour and kind of try to do this
22:19exact same thing. So I got to go all the
22:20way back. This is 2025 still. Maybe it
22:24doesn't have data for 2008 here. Oh no,
22:27it only goes back to 23. Okay, I'm just
22:30going to go back to the daily here so I
22:31can show you better on 2008 what I would
22:33have done. Let's say I didn't have the 4
22:35hour or the 15 minute to look at the uh
22:38the displacement on the 4 hour or 15
22:40minutes. Let's go back to 2008 for a
22:42second where we were. What I'd be
22:45looking for here is we're now closing
22:47above this displacement on the daily,
22:49right? This one that we drew. We're
22:51likely coming back down and testing the
22:52area down here. So on the daily, I
22:54already have a bias established. I
22:56already know that I'm looking to short
22:57this entire market. We're short any
22:59rallies until we start closing above
23:00this on the daily. We never really got a
23:02full close above it. We got one little
23:03candle, but not enough volume or
23:06conviction for me to take calls. So I
23:08would have had a short bias going into
23:09this crash here in 2008. I would have
23:12shorted it all the way down to whatever
23:13the next level below is. In this case,
23:16there's uh we went down from this
23:18displacement 1 2 3 4 5 six levels. So
23:22this crash from this displacement, if I
23:24were to just measure it out, was about a
23:2740% correction, right? That's a lot.
23:29That's a lot of uh money kind of just
23:31evaporated. But eventually it held,
23:34right? It started holding this level at
23:36the very least. And my next target above
23:38this when it holds and doesn't close
23:40below this level is going to be at least
23:41one or two levels above this. So here
23:44when I see this close on the daily right
23:46uh right undercutting this level have a
23:49long bias towards at least one or two
23:51levels and that's exactly what we get.
23:52And again I didn't change any of these
23:53lines. I drew them out exactly on a
23:56daily. So we get up here we close above
23:59it. Don't get close to the second level
24:01above. Come back down. Double tap. Go
24:03back up. Reject. Come back down. Double
24:05tap. Uppercut. And then go back down.
24:06Right. So that's how it works. Now let's
24:09take a more recent example. So I'll
24:10reset this chart
24:13and and same thing. I'm just going to
24:14look at the levels. Right? So I'm going
24:15to look at levels sometimes all the way
24:17back to 2025 if I need to. And what I'm
24:20going to do here is just draw a simple
24:22line on these prior alltime highs. And
24:24what I'm also going to do is start
24:25marking out the displacements and some
24:27other areas that are interesting on the
24:29daily.
24:30So, let's go look at uh in this case,
24:32I'm going to go draw a line here because
24:34this is another all-time high. And I'm
24:37going to draw a line here because this
24:38is another all-time high. And I'm going
24:40to draw a line here because this is
24:42another all-time high. So, this is a
24:44daily chart that I see on the S&P 500
24:46that's more recent. And I'm again, I'm
24:48going to do the same thing. I'm going to
24:49go mark out high areas of interest that
24:52are interesting to me on the on the
24:53displacement side. I'm going to ignore
24:55the wick and just use the body of this
24:57candle. So, I'm going to put it right
24:58there, right in the middle of that uh
25:00displacement using the body only. Then,
25:02I'm going to do the same thing. And I'm
25:04going to put another displacement right
25:06there. And I'm going to do the same
25:08thing and put another displacement. I
25:09need to find an example of one. There we
25:11go. That is interesting enough for us to
25:13use. So, I have three displacements that
25:16I added for the entire 2026 trading
25:19period. Again, I'm doing this on a
25:21daily. I'm not using the 4 hour just
25:22yet. And usually what I do is I come
25:25back to the 4 hour and better understand
25:27where this liquidity, right? Where
25:28there's displacements.
25:30So this is the one that I marked out.
25:31Should probably lower a little bit
25:32because that's where it is. And then I
25:34want to look at other areas that are
25:36interesting. A lot of times if it
25:37overlaps with the daily, I have strong
25:39conviction that that area will get
25:41tested multiple times. So this is the
25:43August 4th rally, right? When we got a
25:4520x move to the upside, which is insane.
25:47This entire move here from open on the
25:50fourth till close was about a 2% rally.
25:53That's nice, right? That's how you can
25:54get those 20x wins because I know my
25:56targets. Now, [snorts] I did trade
25:58August 3rd and 4th and that's how you
26:00got saw me get those 20x wins that day.
26:03It's because I knew on the daily we have
26:05at a level above, right? I did that
26:07exact same thing just now. We had a
26:10level above that needed to be tested or
26:12at the very least I knew my targets,
26:13right? my target was 774
26:16and we got there on August 6 and then on
26:18the downside my target would have been
26:20755 and below that would have been this
26:21displacement at 751 right so here we are
26:25in August 2026
26:27and we get this massive rally so on the
26:294 hour all I did here right now is mark
26:31the the displacement that overlaps with
26:33the daily and we see the same pattern
26:35play out right come up to the top of a
26:38level reject come back down double tap
26:39go back uppercut come back down a level
26:42right so between the levels that I drew
26:44and the displacement levels that I drew,
26:46we know that price is forced to react
26:48within this zone, right? And I've gone
26:50over this a couple times, but usually
26:52what happens is when you get a big move
26:53like this, options and the price action
26:56around here will need to be repriced
26:58lower at least one or two levels, right?
27:00So, you know, if I was to not look at
27:03what happened after August 4th, I come
27:05into August 10th or whatever it is, I'm
27:07saying, "Hey, we keep sweeping this high
27:09over and over again, but we're really
27:10not closing two levels above this at
27:12779, 780, new alltime highs, right?
27:16You're likely going to come back down
27:17one two levels at the very least. 1055
27:19is kind of that next target, right? If
27:21you're not closing above this on the
27:22daily or the 4 hour, not fully at the
27:25very least, you're likely coming back to
27:26755 before it decides to reverse one two
27:29levels or close below that, you're going
27:31down two levels, right? So that's just
27:32how my brain works. And what do we see?
27:35We see the exact same thesis play out.
27:37You go down two levels to 75590.
27:41Then we come up, test one level. Now
27:43they don't have enough liquidity to go
27:44higher. So you got to come back down two
27:45levels. Boom. Right to the middle of
27:48that displacement on the 4 hour. Oh,
27:50coincidence, right? Then we have a nasty
27:52undercut. Then it starts closing above
27:55it and you go up two levels. One, two.
27:58Well, exactly what happened, right? Then
28:01we start closing above this. You double
28:03double tap, you go up two levels. So,
28:04what do we see? One, double tap. Two,
28:08double tap. There's your second level,
28:11right? Goes up two levels. [snorts] Goes
28:14down two levels. Goes up two levels.
28:18goes down two levels, goes up two
28:20levels, goes down what? One, two levels,
28:24three, four levels. Huh? Maybe there's a
28:27pattern and maybe there's a system
28:28around this. Right? So, that's all I
28:31did. I just marked out the relative
28:33equal highs, relative equal lows, prior
28:34to alltime highs, and 4hour and daily
28:37displacements. And here we are. Price
28:40moves between level to level. Right? We
28:42understand that now. Hopefully
28:45now going into today, November 6th, I
28:49actually have a bullish bias. I don't
28:50have a bearish bias. You know why?
28:52Because price didn't close below this
28:54level, we would have gone down here. So
28:56my theory is that we're going to go up
28:58two levels. It doesn't have to happen
29:00today. But my theory is that because we
29:02had a such a steep, you know, 4%
29:04correction here, there's going to be a
29:06repricing for all this price action that
29:08goes higher. Now, it doesn't have to
29:10happen today, don't get me wrong. But in
29:12the next two, three trading days, I want
29:14to see a sweep of 742 on SPY, then 751,
29:18then maybe 755.90 if we get lucky. Hey,
29:21that area that we marked down in the
29:22past that was resistance, maybe it
29:24becomes support once again, right? It
29:26became support here, became support well
29:30above this, and acted as support and
29:32resistance at the same time down here.
29:36So daily gives me at least a context a
29:39clue that this entire move that happened
29:42yesterday on November 4th needs to be
29:45repriced higher, right? It hasn't closed
29:48below this otherwise we would have
29:49flushed all the way down to 716 probably
29:51and take care of this scam wick here and
29:54maybe take care of this gap at the same
29:56time. But since we didn't get there
29:58yesterday, maybe we got there today, I
29:59don't know. But I know with high
30:01conviction, high probability that it
30:03needs to be repriced to at least 75162
30:06at some point in time. It doesn't have
30:07to happen today. It could happen on
30:08Monday, could happen Tuesday, next week.
30:10I don't know. But I know that that's
30:12where the market is setting. And that
30:15higher probability setup because trading
30:16is all about probabilities. It's going
30:18to be buying calls because that's your
30:20better risk and reward. And my target,
30:22my take-profit for these calls is going
30:24to be around 751 on SPY. Now, if I'm
30:27buying calls here, every level above is
30:30about a 100% move. 100% move, 100% move,
30:33maybe 200% move because it's a bigger
30:34level, 100% move, 100% move, 100% move.
30:38Right? So, what I see here is I'm able,
30:41if we don't close below this and I get
30:43calls, my first exit or take profit is
30:46going to be at 742. And then my final
30:48take profit will be around here. Then
30:50I'll have free runners to go do whatever
30:52the hell they want. whether they go 10x,
30:5420x, 30x, don't care because at that
30:56point in time, it's free. And that's how
30:58I trade because it's a simple strategy
31:01that I can repeat on any asset. Doesn't
31:03matter if it's SPY, Q, SPX, Bitcoin,
31:05doesn't matter. It's all the same. And
31:07so that's how I get these multiund%
31:09moves and wins is because I I know where
31:12my levels are. I know where price will
31:14react. It'll react at 742. I'll react at
31:17751. I'll react at 75590
31:20763 then 773 then 779 and people with a
31:24lot more money than I have will have to
31:26make a decisions do they want to be in
31:28the market or do they want to be out of
31:29the market and we'll see evidence of
31:31that in the options flow itself before
31:33the actual underlying stock or asset or
31:35whatever it is moves.
31:37So that's how I understand the world and
31:39that's how has served me really well for
31:41the last uh year and a half of trading.
31:44Now on the 4 hour, even though it is a
31:46bear, a bit bearish, we're holding here,
31:48right? 4 hour says, hey, I don't want
31:51price to go below this just yet. Maybe
31:52it does eventually flush over or closing
31:55above this, you're likely to go up two
31:57levels at the very least on the 4 hour,
31:58maybe even the daily and 15 minutes. If
32:01we close above this, you're likely to go
32:02up two levels, right? On the 15 minutes,
32:05we're getting a back test right now
32:06because this is uh pre-market. You're
32:09getting a back test of this. I likely
32:11see an undercut. So I can visualize this
32:12this in my brain. I'll draw this out
32:14really quickly because I want to be
32:16mindful of time that price will come
32:18back down likely around here. Then it'll
32:21react either towards the upside or
32:23downside, I don't know, and go down
32:25either two levels or maybe even below
32:26this or go up two levels, right? And
32:30then you got to decide here, do they
32:32want to do an uppercut, come back down
32:33and back test, or do they want to go
32:35back up, right? There's so many
32:36different scenarios that we can draw
32:38here, but I just wanted to show you how
32:39this works on a new trading day that we
32:41have no data for. Right? So, I've marked
32:44out all my zones or all my different
32:46areas of interest through just drawing
32:48lines. And visually, what I can see is
32:51on the 4 hour and 15 minutes, we're
32:53holding here. You're likely coming back
32:55up at least two levels before deciding
32:56to go back down or close above this and
32:58go back up two levels, right? Sometimes
33:01what happens is you go up two levels,
33:02come back, back test one level, then go
33:04back up two. Or sometimes what happens
33:06is you go up one level, you back test
33:08one, then you go up two. Or what happens
33:10is you go up two levels, you back test
33:12one, then you go down two. Right? So I
33:14don't know. There's so many different
33:15scenarios that we can play out there.
33:17But what I usually observe is the volume
33:19on the contracts themselves before the
33:21market actually changes direction.
33:24Now that we have a bit more data because
33:25it's about 20 minutes into this this uh
33:27video, I'm going to go look at what the
33:30options are doing pre-market on November
33:326, right? So, I'm going to look at some
33:35contracts. I'm going to look at the 760
33:36calls for November 6. Nothing has hit
33:40the tape yet except for this 1.2K
33:43block or whatever it is. 1.5K block came
33:46in right around uh close yesterday,
33:49right? So, right before close came in,
33:50not a lot of volume that they sold more
33:52than they bought. So maybe we don't get
33:54to 760 today. I don't know. Let's go see
33:56755. Someone got liquidated. That's
33:58cool. Fine with me. Cheaper call for me.
34:01But hey, this is interesting. Someone
34:03bought uh 1,000 blocks. So 1,000
34:05contracts, the 754 for call for today.
34:08So maybe that's an area of interest.
34:10They also bought 3,000 contracts for the
34:13750 call for today. 50 bucks. Very
34:16cheap. Nice. I like that.
34:19They didn't buy anything else that I
34:20see. That's interesting at the very
34:22least.
34:23on 740 is nothing. So 750 is an area of
34:26interest to me. That would line up with
34:27that 750
34:30uh 09 or 751 area that that I marked
34:33out. Now let's go look at the puts,
34:35right? Let's go look at 7:30 puts. Do we
34:38have sufficient evidence? 1.5K block.
34:42Uh maybe maybe we go do an undercut
34:45before we go higher or maybe a new call
34:46day. I don't know. 1.25K 25k blocks, but
34:49you got a couple sells there as well on
34:51the 731 puts. 730 puts, more sells than
34:54buys,
34:56more sells than buys, then on all the
34:58downside except for the for some reason
35:00there's 3,000 blocks of the 725 puts,
35:04right? So, at least I know my range for
35:06today. I know that we're going to bounce
35:08between 725 on the downside and possibly
35:12750 to the upside, right? Because of the
35:14volume. So what I usually do is come
35:16back and just visually drop a line
35:19there. I don't have to do this uh every
35:21day because I can visualize myself. I
35:23can remember the numbers. But what I
35:26could do is say, hey, I know my downside
35:27target is going to be somewhere around
35:29720. So I'm just going to add a line
35:31there. And I know my upside target is
35:34going to be around 750. So I'm just
35:35going to add a line there.
35:38Let's do 750. It's very close to the
35:40other level that I have. Right? So to
35:42me, this is the range that we're playing
35:43in today. Right now, you could undercut
35:46and uppercut it. Don't get me wrong.
35:48What's the shortcut here for drawing
35:49that rectangle? There you go. This is
35:51the range that we're going to for the
35:52day. Now, don't get me wrong, it could
35:54we can get a sigma move like, you know,
35:57maybe we go up to all the way up to
35:58here. That's the range on the top and
36:01all the way down here. That's the range
36:02of the bottom side if you're doing that
36:03one or two sigma moves. But they're
36:06pretty rare. So, at least I know my
36:07target. On the upside, if price gets to
36:09750, it's going to be forced to react.
36:12Then it likely will come back down to
36:13the bottom of this and rebalance even
36:16lower than what we had yesterday and
36:19likely go down towards the 720 area. And
36:21maybe if we close below that, it goes
36:23down to 691. I don't know. Or maybe what
36:26happens, it goes to the top of this,
36:27they say, "Yep, we still want to be net
36:29buyers." And you go up to levels to 763.
36:31I have no clue what's going to happen,
36:32but roughly this is my range for today,
36:34right? I got 755 to the upside and
36:37roughly 716 to the downside if I really
36:39want to expand this. Right? So I know
36:41that this is my box before market even
36:43opens where price will gravitate
36:45towards. I know that we're going to come
36:47back and test this entire area at some
36:48point in time. If we close above it,
36:50you're likely going up to levels. We
36:52close below it, you're likely going down
36:53to levels, right? So if I see a price
36:56react at 735 and we close above this,
36:59you're likely coming back at least one
37:00level. close above it, you're likely
37:02coming back to the top at 750. Close up
37:05above that, you're going to go down, go
37:06up to 755. Close above that, 763, etc.
37:09Right? And same thing on the downside.
37:11You have all the levels there. So, now
37:14that I know my range, I can see if we
37:16close above this, my call target is
37:17here. My take profit is here. And then
37:19my last take profit and leaving runners
37:21is going to be around 750 on the upside.
37:23If we don't close above this, my I'm
37:25going to get puts and my first entry for
37:28taking profit is going to be here. Then
37:30I'm going to hold them until here. And
37:31each one of these will correspond with a
37:33100% 200% move when it's a thin level or
37:37when you know price is gravitating. I
37:39think this is a 0.15% move. Let's just
37:41go check. That's a 0.5% move. 0.6 to be
37:44exact. But there you go. Each 0.15 to
37:4725% move is 100% win. Anything above
37:51that is going to be 200 300% in 0.15%
37:54increments. Right? So this entire move
37:57will be a roughly 300% move down on a
38:00put contract. This move if we close
38:04above this will roughly be a 1% move and
38:07that's a 500% move to the upside or
38:09roughly right. I'm using approximates
38:11because I actually don't know what the
38:12exact calculation is but roughly that's
38:14what it is. So if I'm buying calls here,
38:16my take profits here and then my take
38:17profits here. If I'm buying puts here,
38:19my take profits here, take profits
38:20there, etc. So, I know with a lot of
38:23certainty that if this is my range and I
38:25know that that's where the dealers are
38:27positioned, you can use gamma tools, you
38:29can use heat maps, whatever gives you
38:31confluence. But just understand how to
38:32do it yourself before you start using
38:34other tools. Cuz I know if we're
38:37undercutting this area and closing above
38:38this, you're likely coming up to levels
38:40and that's how you can get the 300 500%
38:42moves. If we undercut here or uppercut
38:45here and then closed below this, you're
38:46likely coming back down to levels at
38:48this 500% move or whatever it is on the
38:50downside. Now, what I did, because I'm a
38:53genius, quote unquote, no, I'm not. I'm
38:56the dumbest person in the room. I'm
38:57going get rid of all the drawings. I'm
38:59going turn my indicator back on. This
39:01just does it automatically so I don't
39:02have to do that entire thing that I
39:04walked you through for the last half an
39:06hour every single day. So, yesterday I
39:09even called it out in the video. You can
39:10fact check me if you want.
39:13You can go back to the video that I
39:14posted uh what was it on Wednesday I
39:17think it was right at the end of this I
39:20said hey this entire move got rebalanced
39:23needs to be rebalanced towards the
39:24downside right so this is what I was
39:27going through I was like hey this entire
39:28thing we were upper cutting upper
39:29cutting not closing above you're likely
39:31coming back to the bottom of the range
39:32at 7635 I call this out even before that
39:36drop happened now what I see here is we
39:39have a displacement here through the
39:40indicator which is your upper target the
39:42average daily range for the upside and
39:44you're right now undercutting this
39:46displacement at 734 and you're sweeping
39:48liquidity at 736.
39:51You're likely coming back to test 754 at
39:54some point. Again, doesn't have to be
39:55today. I would like it to be today, but
39:56I don't know. And if you close above
39:58that, you're likely taking out the
40:00opening week at 759, 76, call it. Then
40:03you get to the lower ADR, the this was
40:05the range going into yesterday and we
40:07blew that out the water, right? And then
40:09you test 761 at some point. then 1065
40:11and 69 etc. Right? So I know if we're
40:14closing above this, you're likely coming
40:16back to the top of this range or some
40:18line above it. Right? And if you're
40:21closing below this, you're likely coming
40:22back down to some line below this.
40:24That's as simple as I can make it.
40:26Right? So that's what I see on the
40:2715-minut. And this displacement
40:29indicator works on daily, 4 hour, 15
40:30minute, literally any time time frame
40:33you want and frankly any asset you want.
40:36So let's go look at Bitcoin. I'm not a
40:38Bitcoin trader, so I know nothing about
40:40this. All I'm doing is applying the same
40:42logic that I applied to to another
40:44chart. Right? So, we have a displacement
40:47doing this exact same thing. We have a
40:49displacement, exact same thing.
40:50Displacement, exact same thing.
40:52Displacement, exact same thing.
40:53Undercut, go higher. Don't close above
40:55Bitcoin
41:01is, yeah, you can draw like a what's it
41:04called? a downward trend line and
41:06eventually breaks out of it or breaks
41:07down from it. I don't know. Usually
41:09breaks out. But what I see is we're
41:11holding this area that is acting as
41:12support from this displacement. You're
41:14likely to go up. If that happens, then
41:18you heard it here first. All right.
41:21And that's what I'm going to leave
41:22today's session as. I'm sure I can go
41:24into a lot more detail and a lot more
41:26information around this, but
41:27fundamentally this is the system that I
41:29developed for myself and has worked out
41:31really well. And usually what I do is I
41:35can figure out where the price is going
41:37to go and price is going to move and I
41:39can get these multiund% wins so often
41:42it's kind of insane. And you can see a
41:44recap that I did from Monday. I'll
41:46actually do a recap on what happened on
41:47Monday. Um [clears throat] but that's I
41:50was able to get even a 400% win in the
41:53morning. Then a 30x% win uh right when
41:56we started dropping. Then a 20x% win,
41:58then a 300% win. Didn't win on this one.
42:02So, it's not foolproof by any means. At
42:03100% success rate and 200% on the the
42:06calls for MOC. Now, this was Monday 112.
42:10So, let's go see what I did. And we'll
42:11open up the S&P chart here so we can
42:13better understand it.
42:15I called the 7680s
42:18right around
42:23um what did I call it? I'm pretty sure I
42:27called it right at open. Yeah. 957,
42:29right? And the reason I did that, just
42:30let's just go see, right? I'm going to
42:32go back to the 15-minut time frame and
42:34let's go to Monday, November 2nd.
42:40Oh, missed that move up there. Right.
42:42Right. Okay. So, what I was doing on u
42:46Monday, November 2nd here, all I saw was
42:49that we were collecting above the
42:50displacement. And again, this is from
42:52the indicator. You could have done this
42:53yourself without the indicator if you
42:54wanted to. And there's a level here that
42:56got held. So, what I was looking for was
42:58a level two levels above this one, two
43:01to take profit. And that's that's
43:02exactly what I did. 7620s went in the
43:04money. Got them at 160. There's 100%
43:07win. And then got uh sold them all at
43:10640 or sorry, I had runners at that
43:12point time at 640. Took him about an
43:13hour to play out. So, called it at uh
43:1710:00 a.m. Not even an hour. Half an
43:19hour later, you know, here we are. So,
43:21this move here, if you measure it out,
43:23each bar is about 0.15%. Oh, that's the
43:27exact same thing I was telling you
43:28before, right? H weird.
43:31This move is 0.11%. A bit lower, but
43:34okay, we know where the targets are. And
43:36this move from the wick to the top is
43:38about 0.25%. Huh. Weird. Crazy how that
43:40works. And then this move from this
43:43bottom to the top here is about 0.3. So,
43:45we extended a little bit, right? Then
43:47usually what happens, you come back down
43:48to levels, right? So, then I got the
43:50puts that ran 20x. So, when did I alert
43:53those? Let's go find out.
43:587,600 PS. Uh-huh.
44:01At 10:36, I said 73 7600 PS at 185.
44:05Okay. So, let's see what happened at uh
44:0910:36 a.m. I closed my puts or closed my
44:11call, sorry. And I knew that we were not
44:13closing above this level fully cuz I
44:15would have seen a candle above and go
44:16tag 7670. We never got there. And I got
44:19puts. My target here was two levels
44:21below. So 7,600 was pretty good risk and
44:24reward. Didn't have to go in the money
44:25to be profitable. But what happened was
44:28I saw the rejection, right? Saw the
44:30rejection here. There's a displacement
44:31that's being uppercut. We're not closing
44:33above this now. Going to the level
44:34above. Should likely come back down at
44:36least two levels and two levels below
44:37this displacement. It's going to be one
44:39two. So at 7630 roughly, right? And so I
44:42got the 7,600 puts at 185. They expired
44:45in the money. Got a 30x return on those.
44:48We actually uh did a crazy thing here.
44:51We back tested this level at 7630
44:53roughly and then we said nope they
44:54didn't want to be buyers. Your next
44:55level down is going to be here at 7605
44:58right 7605. Then we uppercut that level
45:01right this entire level got uppercut.
45:03They said nope we don't want to be
45:04buyers. They sold it from this level and
45:07you're likely going back down two levels
45:09here at 7580. And that's exactly what we
45:11got. Right? 7600 puts from 185 20x that
45:15is185 * 20 $3,700. Crazy, right? So
45:21that's how this worked out and that's
45:22why I took those in the first place
45:24because I saw the rejection, saw the
45:26uppercut, not closing above, not going
45:27to the next level, you're coming back
45:29down to levels. Not closing above this,
45:31coming back down to levels. Not closing
45:32above this, coming back down to levels.
45:34Closing above this, going up to levels,
45:36closing above this, going to up levels,
45:38right? So that's how it works. It's not
45:40rocket science. It's not supposed to be.
45:42It's supposed to be a simple, repeatable
45:44process that you can repeat on any
45:46ticker. Right? And that's all I'm going
45:48to cover today. If anyone has questions,
45:50let me know. Actually, don't let me
45:51know. Do not talk to me. Don't message
45:53me. I could not care less. This is all
45:55educational content. Hopefully, it works
45:57and it helps you make money. And if it
45:59doesn't, leave a comment and I'll
46:01address it in the next video. See you.

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