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Order Flow Bootcamp Day 4: The "Sniper Scopes" (DOM, Heatmap, and Footprint) — Transcript

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0:00So, so far we've talked about the basics
0:01of order flow. We've talked about
0:03auction market theory and we've talked
0:05about the volume profile. So, from this
0:07point, this is where we're going to
0:08start jumping into what I like to call
0:10the sniper scopes. And this is going to
0:13allow you, or these tools, I should say,
0:15are going to allow you to actually read
0:18the order flow intraday. And these are
0:20the tools you're going to be watching
0:22whenever price starts trading at a key
0:25level of interest. That's why I call
0:26these the sniper scopes because this is
0:29how you're going to really view what's
0:30happening behind the candlestick. The
0:32tools that I'm going to talk about
0:34today. We're going to start with the
0:35depth of market. We're going to go to
0:37the heat map after that. And from the
0:40heat map, I'll talk about the CVD as
0:42well because mine is included with the
0:43heat map. And then finally, we're going
0:45to talk about footprint charts a little
0:47more. Let's just get right into it. So,
0:49so this right here is a software called
0:51Bookmap. This is what the depth of
0:52market looks like if I just play. And
0:54this is what the depth of market looks
0:56like on Bookmap. So before I go too much
0:59into all these tools, I just want to say
1:02it does not matter which platform you're
1:04using. Whatever data feed you have, it's
1:07going to show you the same exact data.
1:09So just keep that in mind. You might
1:11have, you know, there's people that like
1:12Jigsaw DOMs, there's people that like
1:14Quantau. Um,
1:17it does not matter the platform.
1:19whatever data feed you have, all of the
1:22platforms are going to show the same
1:24data from whatever data feed you're
1:26looking at. So, just keep that in mind.
1:27Talk about the DOM a little bit. So, so
1:29this is a replay from today's session,
1:30August 21st,
1:32and this is what the DOM looks like. So,
1:34if you guys remember, I briefly did walk
1:36over the DOM in the orderflow basics
1:38video, but we're just going to rewalk
1:40over it one more time real quick so you
1:44are able to grasp it if you didn't the
1:47first time. So there are a couple main
1:49components of the DOM and we can just
1:51start off with probably the most
1:53important components of it off rip. So
1:57so the first thing is you have the bid
1:59and the ask. So see this column right
2:00here the bid and the red column the ask.
2:03This is what is called the book. So on
2:07the book you have resting orders or
2:09passive liquidity limit orders. That is
2:12what is resting on the book. So see how
2:15you know we have 100 lots at 398
2:18and you know there's not really any
2:19significant bids too much. These are all
2:22just resting limit orders. Okay. And
2:24then in between the bid and the ask you
2:27you have the recent bid trades and the
2:29recent ask trades. So these are just
2:30completed transactions that have
2:32occurred at these recent prices.
2:36So, one thing I'll mention again to you
2:38guys if you didn't remember is that
2:40every single transaction that occurs in
2:43the market, it is a aggressive order
2:46taking liquidity from a passive order.
2:48So, let me just pause this. So, we're
2:50trading at 8975 right here. You can see
2:53that
2:55in this recent ass column, we see a
2:58green box with 93 with the number 93 on
3:01it. This number right here means that
3:02there were 93 contracts taken from the
3:06ask by aggressive market buy orders. So
3:10aggressive buyers are taking liquidity
3:13from these passive orders. Every single
3:15time there's an aggressive buyer, it is
3:17never an aggressive participant
3:19transacting with another aggressive
3:21participant or it's never two passive
3:23participants transacting. Never. It is
3:26always aggressive taking liquidity from
3:29the from the passive orders. So on this
3:32right side, these are all the aggressive
3:34buy orders that have recently traded. On
3:36the left side, these are all the
3:39aggressive sell orders that have taken
3:41liquidity from the bid. Sellers take
3:45liquidity from the bid. Buyers take
3:47liquidity from the ask. It's how it
3:50works for every single transaction in
3:52the market. Now to the right of these
3:54prices here you guys can see the VPD
3:56section or the VPD column. This is the
4:00difference in aggressive transactions
4:02that have taken place at these prices.
4:05So at this same price level at 638975
4:10there were 43 more aggressive buyers
4:14transacting than there were sellers. And
4:18if we come to the left side now, you can
4:20see the volume profile buy and the
4:21volume profile sell columns right here.
4:25450 aggressive market orders hit the ask
4:28at this price. 407 aggressive market
4:32cells hit the bid at this price. So the
4:34delta measures the difference in
4:37aggression or the difference in
4:39completed transactions at these prices.
4:42Delta has nothing to do with the passive
4:44orders. The delta only shows you the
4:47difference in aggressive or completed
4:50transactions at the price. So just keep
4:53that in mind. Some people get that
4:54confused. To the right of the delta, we
4:56have another volume profile. And this is
4:59just going to be the volume profile on
5:02the session for regular trading hours.
5:04So once again, the volume profile is
5:06just showing you the total number of
5:08completed transactions at these prices.
5:11Once again, these numbers have nothing
5:14to do with passive liquidity other than
5:17the fact that aggressive participants
5:19were taking liquidity from the limit
5:22order. So, it's literally just completed
5:24transactions.
5:25So, if we were to come over here and add
5:28up the volume profile buy and the volume
5:31profile sell at this 8975 level, 407 +
5:36450 is 857. That is how many contracts
5:40were traded at this price. Okay. So,
5:42boom. That is pretty much what you're
5:44looking at when you are watching a DOM.
5:47Now, once again, what are we using these
5:50tools for? We're using these tools to
5:52see where participants want to transact
5:55at, where they don't want to transact
5:57at, where participants are going to get
6:00caught off sides. meaning maybe there
6:02was a ton of aggression at a certain
6:04price but price failed to move higher or
6:08maybe there was a ton of aggression to
6:10the downside but price failed to move
6:11lower. I'm going to show you guys an
6:13example of that from today's session
6:16later on probably in a few minutes here.
6:18So just keep that in mind. That is what
6:20we're looking at for for literally every
6:22single one of these tools. We're
6:24primarily just gauging the auction in
6:27the sense of the relationship between
6:29aggressive and passive participants.
6:31That is all we're doing with every
6:33single one of these tools. It's the
6:34same. We're looking for the same stuff
6:37in each of these tools. Now, some people
6:39are going to say, "Oh, there's no edge
6:40in the DOM." And that's really mainly
6:42just for like hyper scalping if you're
6:44taking really quick scalps, like ticks
6:47of of profit. I have no comment on that.
6:49I'm not even going to go there. But
6:51that's not how I use it. the the main
6:53way that I personally use the depth of
6:55market is I am primarily just watching
6:58the delta and the profile and I will
7:02sometimes I put less emphasis on passive
7:04orders but the reason why I don't look
7:06at the passive liquidity on the actual
7:09depth of market is because I use a heat
7:11map. So this is what a heat map looks
7:12like. Once again this is a software
7:14called bookmap. If you guys are
7:16interested in bookmap I got a discount
7:18link in my description. uh feel free to
7:20check that out. But this is what a heat
7:23map is. And once again, you guys can see
7:25a heat map on many different platforms.
7:27Bookmap is my platform of choice. I'm
7:30pretty sure you can get a heat map built
7:32on Sierra Chart. There's many different
7:34platforms where you can get a heat map.
7:37It's all going to be the same data. It's
7:39all going to show you the same thing.
7:41Bookmap is just my favorite heat map on
7:43the market. So that's why I use it
7:45obviously. So, a heat map is literally
7:48just a depth of market represented in a
7:51different manner. So, I'm going to pull
7:53this depth of market up here and slide
7:54it to the right. And I'm going to
7:56actually throw myself in the top left
7:58here and shrink myself. So, so like I
8:01was saying though, the heat map is going
8:03to show you everything that's happening
8:05on a depth of market in a different way.
8:07So once again, if you don't remember
8:09from the last video,
8:12all of these lines that you're seeing,
8:13these are just passive orders that are
8:15resting in the book. And you can't see
8:17them on the depth of market yet because
8:19prices are not loaded in or the book is
8:22not loaded in for those prices since
8:23they're too far away. But whenever we
8:26traded near like if we were started
8:28trading at 81 for example and this is
8:31actually where the example I'm going to
8:32show you guys in a few minutes here is
8:35but whenever we trade down here you're
8:38going to see passive orders fill in on
8:41the or it's going to show up on the book
8:42right here on depth of market like a
8:45super large buyer in this case or a
8:47pretty sizable bid at 380. You'll see it
8:49pop up. It's just another way of
8:51visualizing the depth of market. Now all
8:53of these bubbles, these are completed
8:55transactions that have taken place at
8:58these prices. So the the bubbles are
9:01essentially like the recent bid, recent
9:03ask. So whenever you see a bubble, this
9:06is a market order taking liquidity from
9:08a passive order. So at this high right
9:10here, you can see 341
9:14aggressive buyers took liquidity from
9:17passive sellers at this price right
9:18here. And something interesting about
9:20this case right here is price didn't
9:22move up. Right? You can see even though
9:23there was 340 aggressive buyers here,
9:26price didn't want to move up. And it's
9:29not surprising that that caused a
9:30reversal after some selling step in. And
9:33we're going to go into all of these
9:35concepts and all of these real
9:38applications later on in the series. And
9:41uh I got a few I got one example at
9:43least for you right now. But later on in
9:46the series, I'm going to show you guys
9:47how to use these tools in actual trades
9:49and everything. So, don't worry about
9:51that. Just remember, bubbles, aggressive
9:53transactions, all of these lines right
9:55here are just passive orders that are
9:57resting in the book. That is what the
9:59heat map shows you. On the right side of
10:02the screen here, I have a volume
10:03profile. Once again, these are split
10:05between buy and pro uh buy and sell
10:08profiles. This is all customizable. Most
10:11of the stuff is very customizable, so
10:12you can make it how you want it. Looking
10:14at the bottom of the screen here, this
10:16is called the CVD. This is the
10:18cumulative volume delta. What the CVD
10:21shows you is it shows you the difference
10:23in aggressive transactions that have
10:26taken place in the market. So, if I zoom
10:28back, if I zoom back in on this example
10:30right here around the 396s,
10:33remember how I was saying that there are
10:35actually there's a good amount of
10:37aggressive buy contracts traded here,
10:39but the price did not move up, right?
10:41And if you look at the CVD here, see
10:44this jump in the CVD where we make a new
10:47high on the CVD, but the price did not
10:50make a new high. This would just be a
10:53divergence. And in other words, what
10:55this is showing you is that it's showing
10:57you there's aggression in here, but
10:59despite this aggression, the market's
11:01not moving higher. And if I zoom in even
11:04further, you're going to see that this
11:05actually was a large seller transacting
11:08at this price that you honestly would
11:11have had pretty you you would have had
11:13to been pretty zoomed in to even see it.
11:15It kind of sneaks right by you. But
11:17that's also why I have the absorption
11:18indicator on for the most part. So if
11:20there's any contracts like if there's
11:23any limit orders that sneak in the book
11:25like damn near at market at the market
11:27price, it's kind of hard to see them
11:29especially if they're bigger like this.
11:31So, like sometimes that can happen. And
11:33one thing that I haven't mentioned yet
11:34is that all of these passive orders,
11:37every single passive order in the
11:39market, these can be pulled at any time.
11:41These do not have any they don't have to
11:43transact. Like we could we could come up
11:46here for this example sake, like we
11:48could come up here to these orders at
11:50398 and these could just completely
11:52disappear without ever transacting.
11:54That's known as spoofing or just pulling
11:57from the book. So, just keep that in
11:59mind. That's why I really don't place
12:01too much emphasis on passive orders
12:04unless they've transacted because
12:06there's really no way of knowing if they
12:08really have the intention to transact or
12:11not. There's unless they transact,
12:13you'll never know if they're going to or
12:14not. That's something about the limit
12:16orders. That's why I don't place too
12:18much emphasis on limit orders personally
12:21and that's just how I've learned to do
12:22it. But sometimes they can definitely
12:26have they definitely have some degree of
12:28relevancy. Absolutely. It just depends
12:30on the situation and the price and all
12:33of that. So, we'll get into that more
12:35later on in the series. And like I said,
12:36I'm going to show you guys actual
12:38examples of trades and setups where
12:40where you'll use these sniper scopes,
12:43I'll call them, to actually confirm an
12:45idea or take a trade. So, just don't
12:47worry about that. But, I'm going to keep
12:48saying it over and over in this video.
12:51Every single one of these tools, we are
12:53just using them to see the relationship
12:56between passive participants and
12:58aggressive participants. To sum it all
13:00up for you guys, we're looking for we're
13:03looking for participants to get caught
13:04off sides most of the time and to be put
13:07in pain to capitalize on their pain. Cuz
13:10whenever there's pain, there's gain. And
13:12like in this case with these buyers up
13:14here, if there's 350 lots, that's a huge
13:17transaction. That's a ton of money that
13:19if this is an institution or something,
13:21they're not going to hold this thing all
13:23day long. They're not going to hold this
13:24thing into a negative to a certain
13:27point. So, what they're going to do is
13:28whenever they get put underwater,
13:30they're going to start dumping it off
13:31and they're not going to want to hold it
13:32into a loss. So, that just causes a
13:36reversal or it's going to cause a move
13:38to the opposite side of whatever if
13:40they're buyers or sellers getting caught
13:42off sides is what they would call it.
13:44We're looking for people getting put in
13:45pain. We're looking for significant
13:47effort and no reward. Meaning, we're
13:50looking for a lot of volume trying to
13:51move price up or move price down and
13:54price is not rewarding them. Price is
13:57not moving up or down in the way that
13:59they're trying to move it. And whenever
14:01that happens, you can bet on them
14:03dumping the position and causing a
14:05reversal or starting a reversal. So,
14:07it's the same thing. These are all going
14:09to be different tools and it can seem
14:11very overwhelming and confusing at
14:13first, but that is really all you're
14:15doing. You're looking for areas where
14:18significant volume traded and you're
14:20looking for areas where there's
14:22significant effort and no reward. It's
14:24the simplest way I can explain it to you
14:27guys. So, let me just skip to an example
14:30from this session and I can talk you
14:32guys through that. So, we actually had a
14:34demand zone today right around 378. So,
14:37I'm going to mark this out.
14:40378. There was a 1 hour demand zone that
14:42formed yesterday, right? So, if I skip
14:44ahead here,
14:48all right, I skipped a little quick, but
14:50you can already see here, right? Right
14:53at this 380 level, you can see all these
14:55large aggressive sellers trying to move
14:58price down, right? It's pretty pretty
15:01blatant whenever you zoom out and you
15:03just see giant red bubbles. So you're
15:05these are aggressive sellers taking
15:08liquidity from the bit. But what you're
15:10going to notice is despite all of this
15:12selling right here, price isn't moving
15:14down very much, right? And there's
15:16actually some more that's going to come
15:18in. So if I just let this play on 4x
15:20speed, if I remember correctly, this
15:21happens pretty quick. I'm going to slow
15:23it down to 2x. But
15:25over to the right side of the screen,
15:27look at this delta. This sticks out like
15:29a sore thumb, right?
15:32Sticks out like a sore thumb. And look
15:34at that. If I pause it now, it's -1,400.
15:38And if I zoom in on the heat map, you
15:39can see there's a bid here. The bid
15:41fills, another bid. So, this would be a
15:43rebid. Bid fills again. And there's a
15:46ton of selling
15:48taking liquidity from these bids.
15:50They're trying to move price down. And
15:51even once again, see how you can barely
15:53even see the bid. That's why I like to
15:55have the absorption indicator on bookmap
15:57that you get with global plus because
15:59sometimes these bids come in here at
16:02market price and they just sit there and
16:03they'll fill but you don't even see
16:05them. So like there are passive buyers
16:09at this price trying to buy these trying
16:11to buy all this aggression up. So at
16:13this price right here I mean we got
16:15negative 14,500 delta traded at 380
16:21tons of selling that is not moving price
16:23down. And once again, if I show you the
16:25CVD, check this out.
16:29CVD. This is where the first batch of
16:31large selling came in right here.
16:34Flattened out. Another huge order came
16:37in. See how it just goes straight down
16:39like that. Well, price is d price is
16:41pretty much the same, right? Price
16:42didn't really do that. Price is not
16:44following the CVD. So what this can so
16:48what you can infer from this activity is
16:50that there's a passive buyer scooping up
16:53all this aggression and another thing
16:56that I forgot to mention earlier is that
16:58passive participants don't necessarily
17:01have to appear in the book. So it's
17:03sometimes sometimes you're going to see
17:05a lot of aggression that's not moving
17:07price but there may not be limit orders
17:10that's absorbing the price. It might
17:12just you might be kind of confused.
17:14You'll look at it and you'll see a ton
17:16of aggression, but there's no limit
17:17orders and you're like, "What is what's
17:19going on here?" These institutions and
17:22these big players have ways of hiding
17:24their sides. So, they aren't appearing
17:27in the book because if they did show
17:29their yourself, if they showed how many
17:30contracts they wanted to fill in the
17:32book, most likely the market would never
17:34even try to fill them. So, these are
17:37tricks that are played in the in the
17:40market. But this is also why I'm saying
17:42sometimes passive liquidity can be a
17:46little tricky and that's why I don't
17:47place too much emphasis on it because
17:49they can pull, they don't have to
17:51transact. They could sit in the book and
17:52basically fake it. Like they want to
17:54transact and then as soon as price gets
17:56there they'll pull or they can not even
18:00appear. And there's certain things that
18:02can happen like iceberg orders. And
18:05there's there's ways that these
18:06institutions can hide their actual size.
18:08So, just keep that in mind. The best way
18:11of really gauging the market is by
18:14looking at the completed transactions. I
18:16don't have I'm going to have examples
18:17for you guys later in the series where
18:20I'll show you I'll show you examples
18:22where there's absorption, but there's
18:24not like limit orders that you can see
18:26in the book. It'll just be like a
18:28certain range of prices is not breaking
18:31despite aggressive volume coming in.
18:33Just keep that in mind. But let's just
18:35come back to this example real quick. So
18:38at in this particular example from today
18:40at this 380 level, it's pretty obvious
18:43like this is one of those things that
18:45smacks you in the face. This is what I
18:47would call anomalous behavior. So
18:49whenever you see something like this,
18:51this is where the best trade thesises
18:54come from anomalous activity. Stuff that
18:56smacks you in the face, stuff that is
18:58very blatantly suspicious in the market.
19:01So like you see this today. So you see
19:04this today, right? and you're like,
19:05"Okay, there's a ton of selling that's
19:07not moving price down." Yeah, we broke
19:09below it, but but if price gets above
19:11380, all of this aggressive selling is
19:14going to be put underwater.
19:16So, we got passive participants. We got
19:18passive buyers in this case absorbing
19:221,500 lots of aggressive sell orders.
19:27And keep in mind, this is happening in a
19:29demand zone. So, whenever I say you
19:32combine the order flow with other with
19:34other strategies, this is what I'm
19:36talking about. Like, we can now verify,
19:38all right, there's a ton of passive
19:39buyers in this demand zone, right? And
19:42we already know that there's a ton of
19:44selling that's in pain here. So, if I
19:46just let this play, I'm going to show
19:48you guys what happens.
19:50And I'm going to zoom out just a little
19:51bit.
19:54So, the next piece of the puzzle is what
19:57happens when price gets above 380.
20:00And you're going to see as soon as it
20:02gets above 380, it's going to take off.
20:04It is not going to even look back. Like,
20:06we didn't even get a pullback on this
20:08trade. And we didn't even get a pullback
20:10on this activity right here. It just
20:13went straight up. And where did the
20:14market open up at? The market opened up.
20:16So, the market opened up right around
20:18394. That would be kind of like the next
20:20level of interest I would have. I did
20:22not take this trade today, but someone I
20:24know did, and I saw this happen in real
20:27time. The only reason I didn't take it
20:28is because I didn't get a pullback to
20:30get long. Um, sometimes absorption
20:32setups can be like that where you're not
20:34always going to get a pullback. Depends
20:36on the situation and everything. And
20:38that was kind of what happened today.
20:39But like as soon as price trades above
20:42this 380, if you're not seeing
20:45responsive selling like you did, if
20:48you're not seeing selling trying to
20:49defend this 380 like it was earlier, you
20:52can put it on long and you can put your
20:54stop loss even below 380 once we're
20:56trading above it or maybe below the low
20:58or something. It's all kind of
21:01subjective to you. This is an example of
21:04sellers getting absorbed today. And we
21:06identified that by just looking at the
21:07heat map for one or if you were
21:10primarily looking at the depth of
21:12market. You're just going to see all
21:13this delta right here build up at 380.
21:16That was a really good example of these
21:18sellers getting trapped here in a demand
21:20level that we could verify by using
21:23orderflow tools. So now going on to the
21:26footprint chart. I'm going to show you
21:27guys I'm going to show you guys the same
21:29thing that happened
21:32at this price.
21:36So on the footprint chart, this is what
21:38it looks like. And I know this footprint
21:40chart looks a little bit different than
21:43a typical one you might be used to where
21:45the bid and the ask are on it. But the
21:48way I have my footprint start, uh, the
21:50way I have my footprint chart set up,
21:52this is basically a Smash Leo template
21:54that I kind of made my own. In the
21:56middle column here, this is just the
21:57total volume transacted. On the right
22:00column here, this is what the volume
22:01profile is for the footprint chart.
22:06On the left side here, this is the delta
22:09at these prices in the footprint chart.
22:12on the right side of the screen. This is
22:14a volume profile
22:16with the delta over top of the profile.
22:19Right?
22:21So, the same thing as always. I know I
22:23keep saying it, but all we're doing when
22:25we look at all these tools, every single
22:27one, is we're looking for places where
22:29we're looking for places where there's
22:30significant effort is not being
22:32rewarded. That's like the main thing.
22:33Just looking at the footprint chart, we
22:36could see
22:38tons of selling at 380 right here. This
22:40is the start of it. Tons of selling at
22:42380. And look at this negative delta
22:45candle at the bottom of the screen. So
22:47these candles right here, this is the
22:50delta per footprint chart. So instead of
22:53using like an actual number for the
22:55delta within a footprint, I just use a
22:57candlestick chart. Obviously a ton of
22:59negative delta. And the number is
23:01actually over here to the right. I just
23:02I really don't look at it too much
23:03unless it's super significant. So,
23:05you're just going to see like right
23:06here, there's negative,500 contracts in
23:10this footprint chart. There were 1,500
23:13more aggressive sellers than aggressive
23:16buyers. That's really all you need to
23:17know. So, next footprint, nothing really
23:20significant in this footprint. The
23:22following footprint, you can see now we
23:25got negative 8002 contracts traded at
23:28that 380 once again.
23:31So, I'm just looking at this activity
23:32and this is anomalous behavior. Like I
23:34said, this sticks out like a sore thumb.
23:37This is very blatant. This is not
23:39something you have to think about at
23:41all. Right? You see this and you're
23:42like, damn, there's 1700 delta at 380
23:46right now. Like, it's it requires
23:48literally no thought. If these guys get
23:50put underwater, if price trades above
23:52where they were selling at, they're
23:54going to start buying their positions
23:55back. That's exactly what happens. So
23:58typically what you want to do for
24:00absorption this is this happened very
24:02quickly today but typically what I do is
24:04I wait for the absorption to occur and
24:07then I wait for the opposing side to
24:09step in. So like in this case I would
24:11wait for buyers and that could be showed
24:13by a delta flip where you see buyers or
24:16you see aggressive buyers come in that
24:18turns the delta more positive and start
24:21filling offers above prices and
24:24potentially get in on a pullback. That's
24:26normally how I trade these and that's
24:27why I didn't get it today. But yeah, the
24:29footprint chart is essentially another
24:32version of looking at how transactions
24:35occurred within a certain uh within a
24:38certain period or within a certain
24:40within a certain range. Like one thing I
24:42also didn't mention in this video is
24:44these footprints are not timebased
24:46footprint. This is not a time based
24:47footprint chart. This is a volume bypric
24:50based chart. So, if you look at the
24:52bottom of the screen here, you can see
24:53all of my candles are different times.
24:56They're very sporadically. They're not
24:59equidistant. All of these candles form
25:01whenever price trades outside of a
25:04fivepoint range. That's how I like to
25:06have mine set up. Sometimes it looks
25:08cleaner than other times. Like right
25:09down here, it doesn't look as clean. If
25:11I would have had like a seven or eight
25:13point footprint chart, this would have
25:15looked a lot cleaner on a footprint
25:17chart. But that's also why you just use
25:18the delta from a session. And this is
25:20once again another thing you can get by
25:23looking at the depth of market in the
25:25delta uh in the delta column. Right? So
25:28we just seeative700 contracts traded at
25:3118 or at 380, excuse me. Bam. They get
25:34put underwater. It's a great example of
25:36sellers getting trapped and put
25:38underwater. Now I can show you guys
25:39another example on the session.
25:43This is a trade that I did take today
25:45and we basically retested where these
25:48passive buyers were at 1,700 and you can
25:51see that this supported price. So, we
25:53immediately bounced off that reclaimed
25:55the previous week's low
25:57and we come up here and as we're and as
25:59we're moving upwards, this is where you
26:02can start to see another shift in
26:03momentum up here. As soon as we get up
26:05to these 407s, 410s, what do you notice
26:08here? You can see positive delta,
26:11positive delta, positive delta. The most
26:14positive delta is obviously right here
26:16at 407. We got positive 1285.
26:21So we trade above this area. And you can
26:23see now we got
26:2670. Now we got 777 at 41075.
26:31This is basically where you're seeing
26:32buyers starting to get absorbed right
26:34here. We're waiting for sellers to step
26:36in. I did not take this trade, by the
26:37way.
26:38And you could have basically viewed this
26:40as sellers stepping in and taking
26:42control. So this is what it looks like
26:44on bookmap. This is where these buyers,
26:46this is where these buyers start getting
26:48trapped at. See this absorption
26:49indicator going off. And you can see all
26:52these passive orders, right? All of
26:54these aggressive buyers filling these
26:56passive orders right here. But they're
26:58not really able to move price up too
27:00high. Like look how look how strong that
27:03CVD divergence is. Here's the high on
27:06the CVD from this high. And this high is
27:09not too far above it, but this high is
27:12decently far above it. There's pretty
27:14much there's essentially like a thousand
27:16contracts caught off sides right here
27:18basically. So after you see this, the
27:20way I like to play them is I like to see
27:22sellers step in first and then look for
27:25a short opportunity.
27:28So you get some selling stepping in here
27:30and you know that sellers are in control
27:32when they start filling bids and price
27:34is remaining below the bids that filled.
27:38So like 404 we're filling 404s. Looks
27:42like 404 actually pulled right here. But
27:44there's some larger volume right here.
27:46Filling 404s staying at 404. Not trading
27:50above it. Then we got some more bids
27:51down here. 403 filling them not trading
27:54above it. So these are sellers. This is
27:56sellers taking control right here. So,
27:57this absorption reversal example is a
27:59little bit sloppy, but the whole idea
28:02behind a reversal and using these tools
28:04is we're looking for the momentum from
28:07the side that's winning to slow down or
28:10be taken over. Like the momentum slows
28:12down right here when buyers basically
28:14get stuffed, sellers absorb all these
28:16aggressive market orders. So after you
28:18get that slowdown in momentum or that
28:20halt in momentum after that happens, now
28:24we're looking for the other side to show
28:26interest and take control. That's what
28:28it's going to look like for every single
28:30absorption setup or every single
28:31reversal setup in general. It can either
28:34be momentum slowing down by absorption
28:36or exhaustion where they just completely
28:39lose
28:41control. Like in this case, you can see
28:42buyers exhausted up here at these highs.
28:45up here, buyers exhausted, then sellers
28:47start stepping in here heavily. That's
28:48what you need. It's always a two-step
28:50thing. It's absorption or exhaustion
28:52followed by the opposing side taking
28:55control. In this series, I'm going to
28:56show you a bunch of examples of
28:59different absorption reversals and even
29:01some continuation setups and how we can
29:05actually use these tools to better make
29:08decisions. This was a video giving you
29:09guys the general rundown. But if there's
29:11anything I want you to take away from
29:13this video, it's that every single one
29:16of these tools, we are using them to
29:18gauge the relationship between
29:20aggressive participants and passive
29:23participants. For every good reversal,
29:26you need to have passive participants
29:29and aggressive participants working
29:30together. That's how the tides turn. And
29:33before that even you need to have the
29:35side that's winning to lose steam, to
29:38lose momentum, to lose control. So like
29:40I said, more on that later, more on
29:42that. But that is the general rundown of
29:44all of these tools. It's all going to be
29:46the same data no matter what platform
29:48you use. The only way these softwares
29:51are going to show you different data is
29:53if you are using different data feeds.
29:55So like these are both on rhythmic for
29:57example. So let's just use let's just
29:59use this 410 for example. 41075. See how
30:02there's -777 contracts in the Delta.
30:07There's 777 on the Delta. If I pull up
30:11Sierra chart, completely different
30:12platform
30:14at this price. We're seeing 777
30:19on the Delta. So, don't worry about
30:20these showing you different data.
30:22Whatever data feed you're using, as long
30:24as it's the same data feed, it's going
30:25to be the same data. The only reason
30:27some other prices are a little bit
30:28different is because bookmap is only
30:30running up to 9:40 a.m. in this chart
30:33and my Sierra has been going all day
30:35long. So if you're wondering so if
30:37you're wondering what's up with this
30:381285 verse the,53 it's just because
30:41price actually did come up here later on
30:45and you'll see that change if I just
30:46played this out till the same time I had
30:49my Sierra. So, that's a general rundown
30:52of the sniper scopes, what I like to
30:55call them, and basically how you're
30:56going to view what's happening behind a
30:58candlestick chart. So, in the next few
30:59videos, I'm going to show you guys how
31:01to actually get key levels to where
31:03you're actually going to want to view
31:05the price action at cuz you're not just
31:07looking at the you're not just looking
31:09at the orderflow data all day without
31:11any reference points. You need to pair
31:14it with a location of interest or else
31:17it is not as significant. So, just keep
31:18that in mind. But the next few videos
31:20are going to be on how we can get key
31:22levels and all that stuff and then pair
31:23it with sniper scopes. So, if you guys
31:25haven't subscribed yet, make sure you
31:27subscribe. If you're liking this
31:28orderflow series, drop me a like, drop
31:30me a comment. Orderflow Discord is in
31:32the description and I'll catch you guys
31:33in the next

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