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🔴 Live (ES) Order Book Scalping with Commenting | DOM Trading & High-Frequency Order Flow Strategy — Transcript

by The Stoic (Futures) Trader · 2,797 words · 550 segments · language en · Watch on YouTube

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0:01Good day, ladies and gentlemen.
0:05Welcome to another live scalping video.
0:10Today is Friday in the 17th of April
0:16and it's 10 minutes past 2:00 p.m.
0:21European time.
0:23And I'm looking back at my beloved
0:27E-mini S&P.
0:30Yes, I love the ES.
0:33>> [snorts]
0:33>> So, I noticed that there's not much
0:37volatility going on
0:39during this
0:41London session.
0:42>> [music]
0:42>> Um so, yeah, I decided to
0:47hopefully
0:49also comment
0:52you know, my thought process
0:56whenever possible
0:58while
0:59catching a few ticks here and there,
1:02hopefully.
1:04So, let's keep cracking.
1:09Right. So, on the left side, we have the
1:13E-mini S&P and here on the right side,
1:16we have the micro E-mini S&P.
1:19Um pure for correlation purposes, right?
1:24And
1:25while I'm at it, let me clean up the
1:27DOMs. Just a second and also center
1:30them.
1:31So, we have a fresh start.
1:37Right. So, currently the price is
1:40trading here at the four level.
1:43We do see some
1:45attacks here. I'm
1:47trying I'm going to try to catch a
1:52position, buy position.
1:55Right. Here we go.
2:00Okay, and this could now act as my
2:02protection point.
2:13And [music] there you go.
2:15The first target hit.
2:18And here at the top um it's very
2:21important to keep an eye on things
2:22because yes, we can have a breakout
2:25obviously.
2:26But also buyers who bought lower can
2:29provide liquidity as their exits for
2:33new buyers.
2:35Um
2:35yeah, and we definitely see some
2:37determination of the buyers.
2:40They push through
2:43uh or clip through these prices um very
2:46easily.
2:48But
2:49now they are having a little bit more
2:51difficulty.
2:53Most buyers probably are getting out.
2:58Now, if the buyers should remain in
3:00control, the price should rotate back
3:03higher.
3:04And it should not pass this year uh
3:08price level at five.
3:11Now, we do see that the buyers are
3:13indeed currently still controlling the
3:15price, so
3:18let me try to catch another position as
3:21soon as I notice any kind of
3:25weakness from the sellers.
3:27But we have to be cautious because I
3:30already start to see some little bit of
3:33absorption from the sellers.
3:35Right?
3:36And usually the character of the E-mini
3:40is S&P is, you know, if price breaks
3:44through the daily high,
3:46um
3:47it generally rotates back a little bit,
3:50and that can be due to the fact that
3:53yes, buyers are stepping out. So, other
3:57buyers who were planning to take
3:59positions here, they bail [music] out as
4:02well.
4:03So, they pull out their limit orders and
4:06the price [music] tends to then rotate
4:08lower.
4:10Uh continue lower, right?
4:12Um so,
4:15that's one of the things we have to keep
4:17in mind whenever trading the E-minis
4:19S&P.
4:22Uh-huh.
4:24Now, we do see a big order here, so
4:27price may try to get there to test if
4:31whether they was orders are real or not,
4:33but in the meantime it continue down
4:35[music]
4:36while sellers took over control, right?
4:39When we look at added horizontally, uh
4:4168 versus 8, 14 versus 8, 40 versus 5,
4:45[music]
4:46but also we see that diagonally they
4:50were getting more aggressive, [music]
4:52right? So, not only they took over
4:53control horizontally over a specific
4:56price level, but they also became the
4:59aggressors in the process, uh which is
5:01important.
5:03Um because if the buyers indeed
5:07uh notice that okay,
5:09um
5:11sellers may defend the highs,
5:14they will not try to attack the sellers,
5:18right?
5:19Uh they will first test it, they will
5:21test the liquidity, but if they notice
5:23that okay,
5:25there is no pulling, but rather uh you
5:29know, refreshing orders like it is
5:31happening here,
5:32um you know, then
5:35yeah.
5:37Let me try to catch another position
5:39here
5:40because oh,
5:41that's a pity that I missed it
5:44while I was
5:47focusing
5:48on
5:51the numbers.
5:57Let me see if I can catch a few ticks
6:00back.
6:02A rotation to the upside.
6:05Well, at least I got one position right
6:07with four contracts, which is good. And
6:10let me exit here with one tick for the
6:12other four contracts.
6:15>> [cough]
6:16[clears throat]
6:17>> That's nice. Okay, let me try to catch
6:20another short
6:22if the buyers
6:25Okay, we do see a big order appearing
6:28suddenly at the 575 level
6:32and it disappeared. So, it's probably
6:34spoofing.
6:37And
6:44Okay.
6:46Now, I was also asked a couple of times
6:49why I don't use any
6:52um
6:53stop loss or, you know, uh
6:57emergency stop.
6:59Well, that's definitely a good question,
7:01but my answer to that will be
7:05um
7:06if I notice that the strategy that I had
7:10in mind is not going to play out, I will
7:13exit, right? Either at break even or
7:15perhaps one, two, in this case three
7:17ticks loss.
7:18>> [music]
7:19>> Um
7:21so
7:24my exits are basically based on
7:27information, right? I don't place a stop
7:30loss here and wait,
7:33you know, till price reaches it, right?
7:35Like a hard stop loss, um you can call
7:38it.
7:39Um if I do see
7:42sudden changes happening here,
7:45then I will exit
7:48manually instead of waiting for price to
7:50reach it and stop me out with more
7:52ticks, right?
7:54Now, so far, I do see that the sellers
7:58were able to protect [music] this low
8:00volume node,
8:01which is good. Uh let's see if the
8:05buyers
8:07are I mean sellers um
8:11Yeah, they are definitely getting weaker
8:14at their attacks, right?
8:16So, I should be cautious at this point.
8:18They are also becoming more aggressive.
8:21So, let's see. Okay, now the sellers
8:23step back in.
8:25Right? That is very nice to see. Gives
8:27me the confidence to hold on to my
8:29position a little bit longer,
8:31but I notice that currently the price is
8:34ticking back and forth
8:37around this here 50 uh
8:39I mean five level, right?
8:42Um
8:44So, that's why I moved my take profit
8:48from four ticks [music] to two ticks. We
8:50also have some unfinished business here,
8:53uh unfinished auction.
8:56Um yeah, let me get out
8:59or at least try to.
9:03And if the price
9:08There you go. Oh.
9:11Now, I got a better entry
9:14back, so I basically suffered
9:16two tick loss.
9:18Now, again, and this area is very
9:20crucial.
9:22Uh we noticed a weak attack from the
9:24buyers.
9:26Now, they are getting a little bit more
9:28aggressive, but we do see some
9:30uh refreshing happening at the current
9:32ask level.
9:34So, even though the buyers are the
9:36aggressive participants currently.
9:39Uh the sellers leave nothing behind.
9:42Now,
9:43this small absorption here is important,
9:47uh but absorption on itself does not
9:50mean anything.
9:51Uh because
9:53if the buyers keep attacking and the
9:54sellers only defend themselves without
9:57this happening, right? Back ticking or
9:59attacking back, then it can probably
10:02motivate buyers to even take more market
10:05orders or attack more aggressively.
10:07[music]
10:07Right? So,
10:10um
10:11but if the sellers are only defending
10:14themselves, right? Um
10:17>> [music]
10:17>> without
10:19um you know,
10:20testing the bids, then it could indicate
10:24uh for buyers that, "Okay, yes, the
10:27sellers are determined to defend it.
10:30They are absorbing us, and then now they
10:33uh gradually start to test our levels."
10:36If buyers who, let's say, entered
10:39earlier here, they are now forced to
10:41exit, right?
10:43Uh that will also
10:45uh favor the sell side for a small
10:48rotation back. And also buyers,
10:50obviously, who had entered here after
10:52the price ticked up uh and then, you
10:55know, immediately uh ticked back down.
10:57So, those buyers who had entered here
11:00will probably exit around these levels.
11:03Um so, we have then 1 2 3 4 levels,
11:07which will support the idea for a uh
11:09sell at those areas
11:12uh because not only sellers will, you
11:14know, um attack the buyers, but the
11:16buyers will puke out, which will also
11:19help to drive the price down.
11:22Now, we are back at this current level
11:25again, five, which seems to be um where
11:28price finds itself uh at its happiest,
11:32currently, right?
11:34Um
11:38Let's see though if the price
11:42Now, if the sellers line up here, I will
11:45try to take a short position because I
11:48see already
11:50a smaller attack in comparison with the
11:52previous one,
11:54right? Plus, if I can enter here, then
11:57this level could act as my protection
12:00points, meaning that if [music] the
12:02price tends to rotate higher, I can
12:04decide to get out
12:06with either one or two tick loss.
12:09So,
12:12I do see aggressive tag from the sellers
12:14here.
12:15Yeah, so my initial position obviously
12:18did not get filled. That's why I took a
12:21little bit more aggressive entry,
12:24which, you know, definitely paid out.
12:28Um
12:30And now we are currently at the edge of
12:33the volume profile here.
12:35So, either if the momentum continues,
12:39it can play out as an as she goes
12:41straight, right? And usually,
12:43if the sellers keep attacking the buyers
12:46and the buyers pull out, right? Uh this
12:49year area with low volume nodes should
12:52be
12:53uh passed very quickly to the downside,
12:56at least until price reaches here.
12:59But we do see a little bit of absorption
13:01going on. But again, absorption on
13:04itself does not mean anything, right? If
13:06the buyers only are defending
13:09the attack of the sellers, then [music]
13:11it can motivate sellers to keep attack.
13:13But if the buyers are defending and
13:16gradually
13:18um back tick, right? To test [music] the
13:22ask levels to see if there are indeed
13:25sellers
13:26still holding their or pulling out after
13:29one or perhaps a few contracts are
13:32printed.
13:33Um then
13:35yeah, you know, then it could scare off
13:37the sellers, right?
13:39Um
13:44Let's see. Yeah, so the price dipped
13:45indeed until here.
13:48We saw a little bit of absorption.
13:51Now, let me try to
13:55catch a quick scalp here
13:58because I do see some unfinished auction
14:00here. And we do see that the buyers are
14:04definitely stepping in.
14:06Right? So, I think my positions will not
14:09be filled cuz the buyers currently are
14:13not only controlling price, but also the
14:16aggressors as in lifting the offer very
14:19easily.
14:20Now, here's another thing. Now that the
14:23buyers have reached this price level
14:25here at 325
14:28and if the volume profile thickens here,
14:31right? So, now the buyers are testing
14:33the sellers, right?
14:36And the sellers now are reloading.
14:38Exactly my point.
14:40Um and if the sellers now attack this
14:43year price level with [music] let's say
14:45one contract which just did or happened.
14:49Ooh, now that was a
14:51Okay, what do we have here?
14:54Something definitely happened, guys.
14:57Let me quickly check if there is any
15:00kind of news.
15:02So, it's
15:0414:25
15:05currently. Nope, no news.
15:11Uh-huh.
15:12Now, let's see if
15:14>> [snorts]
15:17>> these limit orders will thin out or not.
15:21Well, this could mean one of two things,
15:23I guess, right? Either
15:26you know, algorithmic trading took over
15:30or
15:31some, you know, institutional players
15:34entered the markets and
15:37yeah, now it's become pretty much
15:39untradable, right? So,
15:42it's a shame, but nevertheless, I've
15:44managed to generate about uh well,
15:47exactly $800 in profit so far.
15:51And during these times, I should call
15:56it, right? When
15:58this is happening, obviously, either
16:01algorithmic trading takes over
16:04the order book becomes chaotic
16:06um
16:07nearly impossible to read, right? The
16:10actual order flow.
16:12Um or, like I said, if a big
16:16player like institutional money
16:19uh banks uh stepped in and, you know,
16:24trading
16:26each other, basically, it is
16:29well, uh not wise, but uh advisable, I
16:33guess you can call it, just to [music]
16:36uh sit back
16:37and let them do their thing
16:40and hopefully
16:43at some [music] point
16:45the
16:47volatility
16:48>> [music]
16:48>> will reach some equilibrium
16:55and becomes yet again
16:57readable
16:59for us to utilize the order flow.
17:03The intent of, you know,
17:06traders instead of
17:08algos
17:12which is very hard to catch up with.
17:27>> So, the uh
17:29while the velocity just picked up,
17:33right? Uh perhaps I can try to explain a
17:36few things and
17:38by the end of that um
17:40hopefully the velocity
17:43uh
17:44you know,
17:46has become a more neutral.
17:49So, um
17:50yeah, the micro e-mini S&P can also uh
17:55be a helping hand.
17:58Um
18:00and what do I mean by that? Because
18:03yeah, we can also
18:05see here, for example, that
18:08sellers after a few levels of weak
18:11attack become very aggressive.
18:13And then, instead of breaking out below
18:17this year price level at 775,
18:21uh buyers stepped in, absorbed, and then
18:24gradually started to attack, which
18:27probably scared off some sellers here,
18:29right? So, and we can see that
18:32um these price levels were basically
18:35cleared with just 16 15 contracts. So,
18:40they bought here, got here, and then
18:43probably got out. That's why we saw
18:47uh some numbers printed here. [music]
18:49And perhaps other sellers were still in
18:52it, right? Are now
18:56looking for areas here, probably, to get
18:59out
19:00to benefit from that entire move,
19:03because they know that, okay, if you
19:05know, price ticks a few ticks uh higher,
19:09let's say above this year 12 level,
19:11right? Uh
19:14you know,
19:15breakout traders, buyers may also want
19:18to
19:19benefit from that potential breakout.
19:21That's the ideal area for those sellers
19:24who
19:25uh buyers who bought here to exit their
19:28positions to uh you know,
19:30uh provide liquidity for those breakout
19:33traders here who are looking for entry
19:35while they exit. So, those buyers then
19:38eventually become
19:40uh trapped. And that's [music] why, you
19:42know, uh if the price takes back a few
19:44ticks lower here,
19:46um it is very likely that uh the buyer
19:49who got out here [music]
19:51and the
19:52uh you know, buyers who entered realize
19:55they are wrong, they also exit and that
19:58will also, you know, rotate the price
20:00back lower.
20:02So, those are the liquidity games or you
20:06know, uh how game theory optimal is uh
20:10applied in most cases.
20:13Now, on the
20:16micro, we see a large order
20:19uh at the high at 15.
20:22Um
20:23we don't see
20:24any outstanding
20:26number here while it's definitely bigger
20:30than the numbers below it.
20:32Um this one though definitely stands
20:34out, so
20:35should be interesting to see if that is
20:38a real order. Yeah. It was [music] real,
20:41but look at it how determined the buyers
20:44are still willing to attack the sellers,
20:47right?
20:48And the sellers, yeah, they
20:51back tick one, but the buyers
20:53tick up two. The sellers back tick one,
20:56the buyers tick up
20:58Well, there you go, right? Um eventually
21:01after the high is taken out,
21:04um at some point, [music]
21:07you know,
21:08um, it may come back to the pre-breakout
21:10[music] area, which will provide us an
21:13opportunity for a potential fade trade.
21:17Now, let me try to catch a position
21:19here.
21:20There you go. I just got filled.
21:25Now, earlier, uh, we already had a
21:28breakout, right? To the upside. This is
21:31the second one.
21:32So, at some point, yeah, uh, it's uh,
21:36likely that the price may rotate back a
21:40little bit.
21:42And especially if there are, you know,
21:44unfinished auctions like this one.
21:48Now, we do notice that at this point
21:51that the follow-through of the buyers
21:53is not any, uh,
21:56at the same pace as it was previously,
21:59right? So, yes, do they still do attack
22:02very aggressively. Now, let me exit my
22:04position just in case.
22:07And as soon as I see a opening or a weak
22:11Yep.
22:12There you go.
22:16Okay.
22:22Now, this area
22:24we can see after price broke that 15
22:26level.
22:28Um, now there is obviously a battle
22:30going on, right? Between those buyers
22:33and sellers because we we see the volume
22:35profile [music] thickening.
22:38Um, so, yeah.
22:40There you go. Another profitable trade,
22:42right?
22:44Uh,
22:45meanwhile, I'm also at, um, 22
22:48minutes-ish into the video.
22:51Um, so, let's not extend this.
22:57Because I think all the necessary
23:00[music] information, while I was trying
23:03to keep up with uh,
23:05the price action, [music]
23:06right?
23:07The speed.
23:08I think I did a pretty neat job at that.
23:11And if not, if you guys still have
23:14questions whatsoever,
23:18don't hesitate to ask them below in the
23:21comment section. I'm more than happy
23:24to reply to them
23:26>> [music]
23:26>> as I always do.
23:28Um so,
23:30yeah, at this [music] point, I will just
23:33end the session for the time being.
23:36Have a look later
23:38and and see if there is, you know, some
23:42good action going on so I can continue
23:44the session
23:45in phases or stages, right?
23:49And if not, I will just call it a day.
23:51Definitely not bad, $1,200 in about 20
23:55minutes made.
23:57Um
23:58and I hope you guys
24:00found some
24:01value in the video.
24:04Right, I will catch you guys in the next
24:06video. Until then,
24:09stay blessed.

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