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The Complete Auction Resolution Guide — Transcript

by Christopher Creamer | Orderflow Trader · 46,152 words · 7,000 segments · language en · Watch on YouTube

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0:00I've been involved in the markets now
0:01for about 6 years, but specifically
0:03trading futures for almost 4 years now.
0:06And honestly, my early years trying to
0:08trade futures was brutal. I blew through
0:11hundreds of evaluations and challenges
0:14before I ever got my first payout. And I
0:17dug myself into a pretty deep hole
0:19buying challenge after challenge after
0:21challenge, not really understanding what
0:23I was doing. But it's not because I
0:26didn't care or it's not because I wasn't
0:28studying or I wasn't putting in the
0:31hours. I was obsessed with trading. It's
0:33the only thing I would think about. But
0:35I was constantly being distracted by
0:37noise. New indicators, new strategies,
0:40new concepts, new gurus, new signal
0:43rooms, new systems. And I was chasing
0:46certainty in a market that doesn't
0:48actually provide certainty. And like
0:50most traders, I thought the answer was
0:52just finding that right setup or finding
0:54the one setup that has this amazing win
0:57rate and I'll just do it every single
0:58day. And I thought if I could find the
1:00perfect strategy, that everything would
1:02finally just like click. But eventually,
1:06what I realized was that the problem
1:08wasn't that I lacked setups. The problem
1:12was that I fundamentally misunderstood
1:14what the market actually was. Because
1:17the market is not just a collection of
1:19candlestick patterns. It's not random
1:21movement. And it's not an indicator
1:24game. The market is an auction. It is a
1:27live negotiation every day between
1:30buyers and sellers. Price moves because
1:33liquidity is being accessed, because
1:36participants are becoming aggressive,
1:38because large players need
1:40counterparties to execute size. And once
1:43I started to understand the mechanics
1:45behind the auction, everything changed
1:48in my trading. I stopped obsessing over
1:50predicting every move or trying to force
1:53trades in dead environments, and I
1:55stopped reacting emotionally to every
1:59single candle and I just started
2:01focusing on what actually matters.
2:03Context, liquidity, participation,
2:06acceptance, imbalance, and most
2:09importantly, execution quality. And that
2:12is when I finally started finding
2:13consistency and it didn't happen
2:15overnight and it did not happen
2:17instantly, but slowly things started
2:20changing. My process became cleaner, my
2:23execution improved, and I tightened the
2:25back end and I stopped taking random C
2:28game trades. I stopped forcing action
2:31every single session and I built an
2:33actual system around how I operated. And
2:36eventually that led to consistency in my
2:38trading, consistent payouts, 20K months,
2:4030K months, or just five figures in
2:43payouts consistently. But honestly, the
2:45biggest shift wasn't even the money. It
2:47was understanding why the market
2:49actually moved in the first place. Most
2:52retail traders completely misunderstand
2:54markets. They might think that support
2:56and resistance alone is what moves price
2:58or indicators alone is what moves price
3:01or they think in terms of candlestick
3:03patterns [music] or that aggression
3:05alone automatically means direction. But
3:08aggression alone doesn't actually move
3:10price, acceptance is what moves price.
3:12You can have aggressive buyers slam the
3:15ask at highs and price can still
3:17collapse and you can have aggressive
3:19sellers hitting the bids into lows and
3:22price immediately reverses. And
3:24something to note is that order flow
3:26alone is not an edge. It's also not even
3:29a strategy. Order flow is just data,
3:32that's all it is. But the edge comes
3:35from understanding what that data means
3:38within context and that's really what
3:40auction resolution became for me. Not
3:43necessarily a signal service or some
3:46type of holy grail setup, but it's a
3:48framework for understanding when the
3:50market is balanced, imbalanced, when
3:53participation actually matters, and when
3:56[music] conditions are statistically
3:58worth participating in. Most traders
4:01will actually lose money because they
4:03are forcing trades in an environment
4:06where their edge or no real edge exists.
4:09They trade chop. They trade low volume
4:11or low volatility. They might take
4:13trades randomly in the middle of a
4:15range, or they are reacting to price
4:18emotionally rather than structurally.
4:21And yes, you do need an edge, but a lot
4:23of traders don't even fail because of
4:26their edge or their strategy. They fail
4:29because they can't survive themselves
4:31because you can have an edge, but if you
4:33don't properly execute the edge, then
4:36the edge is useless. That's where you're
4:38overtrading or revenge trading or
4:40breaking risk rules or even forcing
4:43action just because you're bored. Or
4:46even just trying to come into every
4:48single day and force making money every
4:51session or every time you get on the
4:53charts. And I know that because I lived
4:56it. I did it for years, and I lost money
4:59doing that constantly. And that's why
5:01the framework that I have now is not
5:03just about entries or setups. It's about
5:07survivability because if you cannot
5:09survive variance, then nothing else
5:13matters. So, throughout this video, I'm
5:15going to break down how I actually think
5:17about the markets, how I build context,
5:19how I map liquidity, how I identify
5:22imbalance, how I use footprint and order
5:25flow for confirmation, or think about
5:27volatility or sessions, and how I avoid
5:31low quality environments. And I'm going
5:33to tell you how I structure decisions
5:37under live pressure. This is not about
5:39predicting every move that the market's
5:42going to make. It's about learning how
5:43to think structurally rather than
5:45emotionally because once you understand
5:48the auction underneath price, you stop
5:51reacting to noise and you start
5:53understanding why the market is actually
5:55moving in the first place. So, I am
5:57going to go over the idea of how it is I
6:02look at the market. Now, just before we
6:04get started, the way that I trade is
6:06basically using auction market theory
6:09and I'm using order flow and I have some
6:11things that I use that's slightly
6:13different than your typical auction
6:14market theory trading or order flow
6:16trading. Now, just to make it kind of
6:18clear, what exactly am I trading? Well,
6:20I'm trading typically Nasdaq futures or
6:23gold futures. And the platforms that I'm
6:25using is ATAS for order flow analysis,
6:28deep charts for order flow analysis and
6:30execution, and then I'm using
6:31TradingView for when I'm charting and
6:34I'm looking at Tanuki Trade for gamma
6:36exposure or GEX analysis. Now, the
6:39framework that I use is very similar to
6:41every other order flow trader out there
6:43where you're typically looking at
6:44environment and context and then you're
6:46trying to identify location and then
6:49you're considering the path to location
6:51and you're using order flow for
6:52confirmation. When it comes to
6:54environment and context, the basic idea
6:57for auction market theory is that we are
7:00constantly cycling from balance to
7:03imbalance to balance to imbalance to
7:05balance to imbalance.
7:07And I'm paying attention to where the
7:09market stay or where the market is
7:11balanced or when it's imbalanced. And
7:14I'm also looking at very basic market
7:16structure. Is the market going up? Is
7:18the market going sideways? Is the market
7:21going down? It's real basic market
7:23structure. I'm literally looking at
7:25higher highs, higher lows, lower highs,
7:27lower lows and I'm looking at it on a
7:294-hour, a 1-hour, a 15-minute and a
7:315-minute structure. In terms of
7:33additional environment or context, I'm
7:36paying attention to what it looks like
7:39in terms of gamma. Are we sitting in a
7:41positive gamma environment? Are we
7:43sitting in a negative gamma environment?
7:45Are we sitting right in between the
7:47gamma flip level or where are we in
7:49relation to major levels on a gamma map
7:52or a gamma profile? So, the process is
7:54pretty basic. I'm understanding market
7:56state. Are we currently balanced or are
7:58we imbalanced? Are we bullish, bearish,
8:01or are we consolidating sideways? And
8:03then are we sitting in a positive gamma
8:05environment, a negative gamma
8:06environment, or are we somewhere in the
8:08middle around the gamma flip level or
8:10what to Nuki trades categorizes as or
8:13labels as the HVL. And I'm
8:15understanding, in terms of the bigger
8:17picture, where we're at and what are we
8:19doing? And that's just the very basics
8:21of understanding the environment and
8:23understanding context. Now, the thing
8:26that I look for next is I'm looking for
8:28location. So, how do I actually
8:30determine location? Well, typically what
8:32I'm doing is I'm taking a range where we
8:34have an established swing low and swing
8:36high, and I'm marking out a volume
8:39profile. Now, when I'm doing a fixed
8:41volume profile, I'm just marking out
8:43from where the swing low was to
8:45basically where the swing high was and
8:47the price action that's happening in
8:49between it. Now, the idea for me is that
8:52I am only considering to buy in discount
8:55when we're bullish, I'm looking to sell
8:57in premium when we're bearish. And the
9:00way that I view discount and premium is
9:02I'm looking at it in relation to the
9:04active range and where value area is
9:06typically sitting. So, in this example
9:08here, if we take this swing low, this
9:11swing high, and we are marking out the
9:14value area for this location, we have
9:17value area sitting here, POC sitting
9:20here, you have value area high, value
9:23area low, and the POC. Now, what I
9:26typically do is I will draw from the
9:28same swing points that are establishing
9:29this range is I'm going to draw a
9:32Fibonacci retracement tool. Now, I know
9:34people have a lot to say about Fibonacci
9:36retracement tools. You know, it is what
9:39it is. I use them. They work for me. So,
9:41this is part of my framework. So, what
9:43I'm looking at is I have levels on my
9:45Fibonacci retracement, that is the
9:480.705, the 0.788, and the 0.886.
9:53And what I'm looking for is I'm using
9:55this area for discount that is below
9:58value area. So, if we are bullish, then
10:01anything below value area, I'm looking
10:03for basically a failed auction lower
10:06into discount for us to then continue
10:08the trend to the upside if we're
10:10bullish. And vice versa would go for if
10:12we're bearish. So, if we were in a
10:14downwards environment or we're trending
10:18to the downside and I draw out a fixed
10:20range profile, let's say, and it has
10:23value area sitting here and here. And if
10:25I were to draw my fib and it creates my
10:27level sitting here, then I'm waiting for
10:29price to try and break out of value area
10:31high to then fail in my zone with the
10:35fibs. And then I'm looking for us to
10:37continue that momentum to the downside.
10:40I'm using the fibs in relation to value
10:42area to look for location where I would
10:44like to enter into a trade. But just
10:46because we enter into this location
10:48doesn't mean that I'm automatically
10:49going to take a trade. It's just a
10:51location reference for me. Something
10:53else that I'm looking at when it comes
10:55to location is I'm looking at gamma
10:57exposure or gamma levels. And
10:59specifically, I'm looking at not only
11:01the environment, but also the levels
11:03themselves. I'm looking at the call
11:05wall, the gamma flip level or HVL, and
11:09the put wall. So, let's say we're
11:10looking at the call wall. I am watching
11:12the call wall, and when price is
11:14approaching it, I'm paying attention to
11:16footprint to understand if we are going
11:18to accept above this level or if we are
11:21going to reject. And of course, in terms
11:22of location, I'm understanding where
11:24resting liquidity is actually
11:25clustering. Resting liquidity and how
11:28it's actually being visualized to me is
11:30I'm looking at it on a heat map and or
11:32I'm looking at it on the DOM expressed
11:34as levels. One thing to note is that
11:37resting liquidity is going to be resting
11:40limit orders. Stop orders are not going
11:42to show up on your heat map because they
11:44are held server-side. So, when they
11:45actually do get executed, they get
11:47executed as market orders. So, these are
11:50limit orders that we're seeing on here.
11:52And also, this visualization of
11:55liquidity is not all of the liquidity
11:57because you also have iceberg orders,
12:00you have dark pools, and you have things
12:02that aren't going to be represented on
12:05this heat map at a first glance, or that
12:07we're going to be able to see on here.
12:08But, I do want to understand where that
12:11resting liquidity is actually
12:13clustering. Typically, we may see a
12:14cluster around psychological levels,
12:17such as round numbers, or we may see a
12:19cluster around highs or lows. And also,
12:22there's resting liquidity that just sits
12:23within the book all throughout the
12:25chart. Now, once I determine location,
12:28we understand the environment, if we're
12:30balanced or imbalanced, we understand if
12:32we're going up, sideways, or down, and
12:35we understand the volatility environment
12:37or the gamma exposure environment that
12:39we're in, and we're trying to identify
12:41location. We want to buy in discount, we
12:43want to sell in premium. I'm using fixed
12:45range volume profiles with fib
12:47retracements. I'm looking at gamma
12:49levels, and I'm understanding where
12:51resting liquidity is clustering. Once I
12:53understand potentially where I'm looking
12:55to take a trade, I do need to take into
12:57account path. Now, what do I mean by
13:00path? What I mean by path is how a daily
13:04candle itself is actually going to form
13:07over the three sessions. Now, I
13:08understand there's more sessions, you
13:10can break it down, but the way that I
13:12look at it is I typically will look at
13:14it in terms of Asia session, London
13:17session, and then New York session. I'll
13:20go further into sessions a little later
13:22on, but the idea is is I'm trying to
13:25understand how the daily candle is
13:26actually going to play out. In the event
13:28that we have a daily candle, well,
13:30typically a daily candle will open, a
13:32wick might get made on either side
13:34before we actually go and resolve the
13:36true direction of the market or where
13:38the day's actually trying to go. And
13:40what I'm also doing is I'm using an
13:42indicator that I have that I created
13:44that was based off of historical data
13:47with specifically NQ that's just telling
13:50me on average how far we're deviating
13:53above Asia high and Asia low. And the
13:55purpose of it is basically to look at
13:57this in terms of one big daily candle.
13:59So, here we have the daily candle
14:01essentially opening or very close to
14:03where it opens. Price then goes to form
14:05the wick to the upside before we end up
14:07coming all the way down. So, I'm using
14:10sessions and I'm understanding Asia
14:12session, London session, and I'm paying
14:14attention to how the overnight formed in
14:17relation to the rest of the context, the
14:19rest of the environment, and location to
14:22understand how might New York play out
14:25AM session because I'm typically only
14:27trading the AM session or the first hour
14:29and 30 minutes of market open anyways.
14:31Now, once we actually understand path
14:35and we understood location and we
14:37understand environment and context, the
14:40last thing left if we already know what
14:43we're expecting to happen, then we're
14:45just looking for confirmation. And when
14:47I'm looking at a footprint chart, this
14:49is where I'm looking for my
14:50confirmation. So, on my footprint
14:52charts, I'm going to have the bid and
14:55the ask in a footprint candle. So, it's
14:57the bid by ask footprint candle. I have
14:59a volume profile inside of it. I'm
15:01trying to see where participation is
15:03building and I'm looking at all of this
15:05in terms of effort versus result in
15:08location that aligns with the bias in
15:11the context. And I'm using things such
15:14as big trades or I'm looking at delta
15:17and volume and I'm looking at
15:19participation and the outcome of that
15:21participation. If I see sellers
15:24positioning themselves in an area and
15:25we're coming back to retest that area,
15:28are sellers going to defend or are we
15:30going to push back through it? And so,
15:33I'm using order flow as my confirmation
15:36layer to actually enter the trades. So,
15:39once we have that, then we have our
15:42environment and context. We're seeing if
15:44we're balanced, imbalanced, and we're
15:47watching a cycle in between the two of
15:49them. I'm looking at if we're bullish,
15:51bearish, or consolidating. I'm
15:52understanding the environment in terms
15:53of gamma that we're in. I'm looking for
15:56location in terms of value area and
15:58these fib levels. And I'm looking at
16:01gamma levels, as well as where the
16:03resting liquidity is actually
16:05clustering.
16:06I'm understanding the path of the day
16:08for what a daily candle might actually
16:10end up doing for the session, at least
16:12during New York session. And I'm using
16:14what the overnight did to form a better
16:16idea on what I think New York session is
16:19going to do. Now, once we have all of
16:21that, now I'm dropping down to my
16:22footprint charts and I'm looking for
16:24confirmation or I'm looking at effort
16:26versus result in location to play out
16:28what I was already anticipating for the
16:30morning. Now that we have a basic idea
16:33of that, I went over that relatively
16:35quickly and there's a lot of gaps that
16:37need to be filled in terms of
16:39information. Let's go a little deeper
16:42into all four of these parts of my
16:45framework: environment and context,
16:47location, path, and confirmation.
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17:27match. Now, let's get back into the
17:28video.
17:30Let me show you something that has
17:31probably happened to you before. Right
17:33here, we have a very clear resistance
17:35level. Price pushes into it once, comes
17:38back to retest it. This is what traders
17:41would call a double top. Now, when a
17:43trader, especially maybe a breakout
17:45trader, might see this type of setup,
17:47the explanation is pretty simple. The
17:49idea would be that if price comes up and
17:51breaks this level, the market should
17:54move higher. And it should probably take
17:56out at least this high. I mean, that's
17:58what breakout traders are probably
18:00thinking. So, they're sitting here
18:02waiting exactly for that to happen. Now,
18:04as price moves up,
18:06we get the break. We start breaking past
18:08the level.
18:11Now, at this point, breakout traders may
18:13be entering into this trade to have a
18:15continuation for us to push higher, to
18:18at least take these highs and maybe
18:19continue momentum further up. The
18:22pattern looks clean, the breakout looks
18:24legitimate, we're picking up some speed,
18:26it looks like, but instead of
18:28continuation,
18:31the breakout fails.
18:32We never take the highs, we never
18:34continue higher, and price essentially
18:35immediately reverses. And suddenly, all
18:39of those traders who try to enter in on
18:40the breakout right here are trapped. So,
18:43I guess the question would be, if the
18:45pattern was correct and if the breakout
18:47was real, why did it fail?
18:50Because patterns don't move markets.
18:53Participation does. And this is the
18:55mistake that a lot of traders make when
18:57they're learning how to trade. They
18:58treat patterns like they cause price to
19:00move, but patterns are just shapes, and
19:02they're just descriptions of what price
19:04already did. They don't tell you who's
19:06actually participating in the market.
19:09And to understand that, we need to talk
19:11about how markets actually function. So,
19:13before we go any further, we need to
19:15understand something that's fundamental.
19:18The market isn't just a chart, it's not
19:20just candlesticks on a canvas, it is an
19:22auction. And if you don't understand how
19:24auctions work, it's very easy to
19:27misinterpret what you're seeing on the
19:28chart. So, a lot of traders approach
19:30trading with the idea of basically
19:32pattern preference trading or trading
19:34patterns that they see, whether that
19:36might be double tops, head and
19:37shoulders, trend lines, whatever it
19:40might be. Now, most traders think that
19:43patterns move markets,
19:45they don't. Participation moves markets.
19:47And so, almost every trader, they start
19:49the same way, right? Breakouts, support
19:51flips, head and shoulders, trend lines,
19:53and you start applying them. You learn
19:55these patterns and you try to apply them
19:57in your trading. And the logic feels
19:59solid and the chart seems to confirm it
20:01when you go back and you back test it,
20:03maybe, and you find a setup that might
20:05check every single box, and you take the
20:07trade and it still fails. So, you find
20:09another one, same result. The pattern
20:11looked right, the entry looked clean,
20:13but the trade didn't actually work. So,
20:15this isn't necessarily like a
20:18discipline problem or a timing issue.
20:20This is a structural problem with how
20:22the trade was actually built. The setup
20:24is based on a shape on a screen, not on
20:27what was actually happening inside the
20:28market at that moment. And that gap
20:31between what the chart shows you and
20:32what is actually driving prices is where
20:34most trading accounts quietly bleed out.
20:36And so, the question worth sitting with
20:38is simple.
20:39If the pattern was correct and we trade
20:41patterns, why did the trade fail? The
20:44answer changes how you think about every
20:45chart you look at from this point
20:47forward. So, the idea is this, right?
20:51Pattern trading feels like it should
20:53work. It makes sense, it's intuitive.
20:55That's exactly why it's so hard to see
20:57the flaw. Now, the standard path in
20:59trading and what most videos online are
21:02going to show you or trying tell you is
21:04that people are looking for pattern
21:06recognition, head and shoulders,
21:08breakouts, things like that for value
21:10gaps, trend lines, all those. Now,
21:13these are tools that every new trader
21:15actually learns first. It's like the
21:16first videos that you'll find if you go
21:18on YouTube and you start looking up
21:20trading. And the logic behind them makes
21:23sense. It feels airtight because when
21:25the pattern appears, then the idea or
21:27the assumption is that price should
21:28follow. It makes sense, and that's what
21:31makes it so convincing. Now, this
21:33creates something called pattern
21:35preference trading. The trader is going
21:37to trust the pattern, and they're going
21:38to assume that the market is going to
21:40respect it. But, the market has no
21:42awareness of this pattern. The pattern
21:44is a description of what already
21:46happened on the chart. It's not a
21:47mechanism that actually is going to
21:49cause price to move. The gap between how
21:51logical it feels and how the market
21:53actually works is where most losses
21:56might come from. So, if the pattern
21:58appears, price should move. Well, that's
22:01the assumption that most retail traders
22:03take, and it causes losses. And it's
22:06wrong at a structural level. It's not
22:09about patterns. A lot of traders will
22:11follow this exact belief model. A
22:14pattern appears on the chart. They
22:16assume that it means the pattern is
22:18going to predict the direction, and that
22:20price should follow that. But, we're
22:22missing actual market participation, and
22:25that's the missing element. It's the
22:27only element that actually determines
22:29price direction. Cuz without it, the
22:32pattern is just going to be a shape on a
22:34screen. Now, we have to think about this
22:36in terms of cause and effect. The
22:39problem isn't that patterns exist.
22:42They exist. The problem is that traders
22:45believe patterns cause price movement. A
22:47breakout pattern does not cause price to
22:50move. Buying causes the breakout. This
22:53reversal is not a subtle distinction. It
22:55changes how you read every chart, every
22:57setup, and every failure. And the
22:58mistake is confusing description with
23:00causation. So, when traders interpret
23:03patterns as a signal of what the
23:04market's going to do, they're going to
23:06treat it as an effect as if it were a
23:08cause. The chart tells you what
23:10happened, but it has no predictive power
23:12on its own though.
23:13Now, look at two examples here, okay?
23:16Now, look at how the same price movement
23:17is explained under each of these models.
23:19We have what most traders believe. A
23:21breakout pattern appears, pattern causes
23:24buying, and price rises. Now, what's
23:26actually happening is aggressive buyers
23:28are lifting offers, available liquidity
23:31is being consumed, and price rises. The
23:33pattern appears after the buying, not
23:35before it. And trading the pattern as
23:37the signal is meaning that you're
23:39reacting to an effect and calling it a
23:41cause. So, what actually moves the
23:43markets then? Because if patterns don't
23:45move price, then what does? Well,
23:47markets are moving when participants are
23:49transacting aggressively. That's it.
23:51It's not when a pattern is going to
23:52complete. It's not when a level is being
23:54touched. Price changes direction when
23:56one side of the market, either buyers or
23:59sellers, is willing to cross the spread
24:01and take the liquidity with enough
24:03urgency to overwhelm the other side. And
24:05understanding that single idea is the
24:07foundation for everything that follows.
24:11The market is not a chart necessarily.
24:13It is an auction. And once you start
24:16reading it that way, the entire picture
24:18is going to change. So, the idea of
24:20markets being an auction, it is a
24:22continuous two-sided auction between
24:24buyers and sellers. So, every tick is a
24:26negotiation on price. Buyers and sellers
24:29compete to transact, and price moves in
24:31the direction of whoever is willing to
24:33be more aggressive. There are two
24:35distinct types of participants in this
24:37process. So, if we look at the diagram
24:39below that shows these two roles, we're
24:42going to understand the difference
24:44between them, and understanding it is
24:46essential. So, the first type of
24:47participant is going to be an initiative
24:50trader. This is someone who moves price.
24:53They need to transact. Meaning that they
24:56are going to lift offers to buy and
24:58they're going to hit bids to sell and
25:00they're willing to accept worse prices
25:03to get filled and their urgency is the
25:05market moving. Now, the other type of
25:07trader that we have are responsive
25:09traders. These are the types of traders
25:11that are providing liquidity at price
25:13extremes. So, they're selling into
25:15buying, they're buying into selling, and
25:17they're fading price when it's moved too
25:18far. Their presence stops or reverses
25:21moves and price movement is determined
25:24entirely by which side overwhelms the
25:27other and no pattern is going to decide
25:30this. Only actual orders in the market
25:32decide this. So, initiative buyers are
25:35the people creating the move. Responsive
25:38sellers are the people absorbing it and
25:40every trade you take, you need to know
25:42which side you're aligned with and
25:44whether that side is winning. And the
25:45way that we think about this or we
25:47should be thinking about this is effort
25:49versus result. Aggression alone doesn't
25:52necessarily move markets. Unabsorbed
25:55aggression does and this is the moment
25:58where most traders misread the market.
26:00You might see heavy volume and assume
26:02the move is real, but the heavy buying
26:04does not guarantee that price is going
26:06to go up. What matters is whether buying
26:08is being absorbed by something on the
26:10other side. Now, the two scenarios that
26:13I'm about to show below are going to
26:15look identical on a standard chart and
26:17only the relationship between the effort
26:19and the result reveals what's actually
26:21happening. In scenario A, where we have
26:24buyers in control, okay? We have heavy
26:26buying pressure that enters. The offers
26:29are being lifted consistently and price
26:31is advancing with each trade. So, that
26:33effort or that aggression is being
26:35rewarded with price movement. In
26:37scenario B, there is an absorption
26:39warning. We have heavy buying pressure
26:41that enters the market. We have large
26:43volume prints and price is barely
26:45moving. It's stalling or it's getting
26:48ready to rotate potentially. Now, that
26:51means that something on the other side
26:54is absorbing and a reversal could be
26:56likely. Now, it's not guaranteed because
26:59just because absorption is happening
27:01doesn't necessarily mean that a reversal
27:03is going to follow, but it is something
27:05that we need to think about. Now, when
27:07heavy buying fails to move price, it's
27:10informative and we need to take note of
27:12it because something large is on the
27:14other side of every single one of those
27:15trades. The buyers are pressing in and
27:18they're getting trapped. They're running
27:19their head essentially into a wall. Now,
27:22this is exactly the difference between
27:25reading effort and reading result. On a
27:27normal candlestick chart, both scenarios
27:31can produce an identical looking candle
27:33and only order flow tools are going to
27:35reveal which one actually happened. Now,
27:38where does order flow actually fit into
27:40this? Candlesticks, they're going to
27:42show us what happened, but order flow is
27:44going to show how it happened and who is
27:46actually behind it. And candlestick
27:47charts, they show the outcomes of the
27:50trades, but they hide the process that
27:51created it and that process is
27:53incredibly important because you can see
27:55a green candle, but was that buying
27:57actually aggressive? Was it distributed?
28:00Did it move price cleanly? Did it stall?
28:02And order flow tools are going to open
28:04that up so that we can see what's going
28:06on. And we notice how much information
28:09is absent from a standard chart compared
28:12to what order flow reveals at that same
28:14price level. So, if we were to take an
28:16example where we compare normal
28:17candlestick chart to a footprint or
28:19order flow chart,
28:21on a normal candlestick chart, we all
28:23know what they look like. They have
28:24open, high, low, close. It's the result
28:26of the period. There's no
28:29uh participation data. There's no
28:31absorption signals. It's just showing
28:33the scoreboard essentially between
28:35buyers and sellers. On a footprint
28:37candle or an order flow chart, we see
28:40the bid and ask volume at every price
28:42level. There's tick by tick transaction
28:44data and there's delta, which is
28:47aggressive buyer versus seller volume,
28:49stacked imbalances, absorption clusters,
28:51and we see the game that's actually
28:53being played. The core question is, is
28:56aggression being rewarded with price
28:58movement? If yes, follow it. If no, the
29:01opposing side is absorbing it, and that
29:03falls back to that thing that we said
29:05earlier about effort versus result. And
29:08location matters, okay? Because
29:11patterns and and levels, they're not
29:13useless. They just don't do what you
29:15think they do.
29:17Location is incredibly important when it
29:19comes to trading because it's going to
29:20tell you where something might happen.
29:22So, order flow essentially is telling us
29:25if it's actually happening. You need
29:27both. I don't just like only use order
29:29flow. I don't really believe that either
29:32alone is sufficient, but we use location
29:35context as tools. So, you can still use
29:37things like support and resistance or
29:38VWAP or higher time frame levels or any
29:41of these other things that you may use
29:42to build context around a trade, and the
29:44sequence below is going to show how
29:47location and confirmation work together
29:49to produce a valid trade context. The
29:51first step in this, when we're
29:53approaching the markets, is we need to
29:55identify location. Now, this can be
29:58whatever you want to use for location.
30:00Prior highs,
30:02prior lows, resistance zones, supply,
30:04demand areas, whatever, okay? The next
30:06thing that we do is once price actually
30:08enters into that location, we start
30:10observing order flow. Are buyers lifting
30:13into that level? Is absorption forming?
30:16What's happening? And then, once the
30:18participation is actually confirmed and
30:20that initiative activity is showing up
30:22and aggression is being rewarded, then
30:25we have valid trade context cuz now we
30:27have location plus confirmed
30:28participation. That's going to equal or
30:30give us a reason to actually engage with
30:33the market. And location without
30:36participation is not a trade. The level
30:39exists. We're watching it. But, if no
30:42one shows up to act on it, then there's
30:43nothing to trade against. Now,
30:45understanding this should change the way
30:47that you might see the market because
30:49when the mental model is right, you stop
30:52asking broken questions. The questions a
30:54trader asks reveals the model they're
30:57running. A pattern-based thinking
30:59generates questions that can't be
31:01answered by like observing the market.
31:03But, auction-based thinking generates
31:05questions that are directly observable
31:07in real-time. If we were to look at this
31:09below,
31:11what are some pattern-based questions?
31:12Well, those are things like, is this
31:14pattern bullish? Should this breakout
31:16hold? Why did my setup fail? Which
31:18pattern is most reliable? Is this
31:20support strong enough? Now, if we think
31:23about this in the terms of auction-based
31:25questions, we're thinking about it more
31:27so in the sense of who is being
31:29aggressive right now. Is that aggression
31:30moving price? Is the effort giving the
31:33result that we are looking for
31:34essentially? And is liquidity absorbing
31:37that pressure? Is initiative or
31:39responsive activity winning in this
31:41scenario? And these are not necessarily
31:44philosophical questions. They are
31:46observable in real-time with the right
31:48tools. And so, that is what makes this
31:51framework operational rather than
31:53theoretical. The market didn't fill your
31:55pattern, your pattern didn't describe
31:57the market. And so, if we come to the
31:59realization that patterns are not the
32:01answer, then what should the process
32:03actually look like? If we look at this
32:05side-by-side comparison of a retail
32:07model and auction-based approach, it's
32:10the same chart, but it's an entirely
32:12different process. Now, a retail model,
32:15we might be sitting here looking at the
32:17charts and we're waiting for a pattern.
32:18We see the pattern. We enter the trade.
32:20On an auction-based approach, we're
32:22reading market context. We're
32:24identifying location first, and once
32:26price reaches that location, we're
32:28observing the participation. And then,
32:30we're only going to execute if all
32:32layers align. So, what are we doing?
32:34We're identifying market context, right?
32:36What kind of auction is happening? Are
32:38we in a range? Is price in balance? Is
32:41it directional? Is it imbalance or
32:43balance? We're identifying important
32:45locations, key levels, value areas,
32:47previous highs or lows, premium or
32:49discount, or whatever else you define as
32:52an important location. Once we're
32:54observing that participation, we're
32:56looking for confirmation. Who is
32:58aggressive at this level? Is that
32:59aggression actually moving price? And is
33:02absorption forming or not? And once we
33:05identify all three prior layers, we can
33:08execute based on confirmed activity.
33:10Now, context alone is not enough, and
33:13location alone is not enough. We do need
33:15confirmation. So, the retail model or
33:18pattern preference trading basically
33:20skips the first three steps like
33:22entirely, and that's not a minor
33:24inefficiency. It means entering trades
33:27without understanding what kind of
33:28auction is actually occurring, or
33:30without knowing where resolution is
33:33likely, and without any confirmation
33:36that participation's actually present.
33:38So, the edge in this framework isn't a
33:39pattern, it's the sequence. And the
33:42biggest change isn't just like opening
33:43up an order flow chart or using the
33:46right tools, it's just the perspective
33:48of it. Everything above comes down to
33:50one transition in thinking. You stop
33:52looking at charts as collections of
33:54patterns and trying to pattern
33:56preference trade, and you start reading
33:58them as records of auction activity. And
34:00patterns become descriptions, but
34:03participation is what's going to be the
34:04actual signal. The question changes from
34:07what does this shape predict to who is
34:09transacting here, and are they winning?
34:11And that shift is the shift that we need
34:13to have, patterns to auctions. And once
34:16it happens, the way you read every chart
34:19or every level and every trade changes
34:22permanently. So, the summary of this and
34:25what this means for how you trade is
34:28essentially this. Patterns describe
34:30structure, not cause, And they appear
34:33after the participation, not before it.
34:36They are effects, not signals.
34:39Markets are continuous two-sided
34:40auctions. They move based on which side,
34:43initiative or responsive, is more
34:45aggressive. And aggression must be
34:48unabsorbed, essentially, to move price.
34:51And we have to think effort versus
34:53result. Is the move being rewarded? Is
34:56that effort being rewarded with price
34:58movement? If not, somebody is absorbing
35:01it. And order flow or order flow charts
35:04are going to reveal the process, not
35:05just the result. Who is aggressive,
35:07where is liquidity sitting, and whether
35:09that aggression is actually working. And
35:11the layer of the framework goes context,
35:14location, participation, and then trade.
35:16Every layer of that framework must
35:18confirm before you engage. And that is
35:22the sequence of the edge. And if you
35:24want to understand markets at a deeper
35:26level, you have to stop thinking about
35:28charts as patterns. You need to start
35:31thinking about them as auctions. So, the
35:33next time that you see something like
35:35this, don't just ask whether this
35:37pattern is clean or not, this double top
35:40is clean or not. We need to ask a
35:42different question. Who is actually
35:43participating in the market right now?
35:45Because markets don't move because a
35:47pattern appeared on a chart. They move
35:49when traders are willing to transact at
35:51worse prices. And when that
35:53participation isn't there, even the
35:55cleanest setup in the world can fail.
35:58So, what you're really trying to learn
36:00as a trader is not necessarily patterns,
36:02but it's the auction and how it actually
36:04moves. Is price being accepted above
36:06these highs? Are we going to continue
36:08higher? Or is the move essentially
36:10getting absorbed? And that difference
36:12separates guessing between actually
36:14reading the market. So, in this video,
36:16I'm going to break down what order flow
36:18actually is. When we're looking at
36:21charts like this, where we can see
36:23what's happening inside the candles, and
36:25why it matters, and why relying on
36:27candlesticks alone is one of the biggest
36:29limitations that most traders never fix.
36:32So, if you've been trading for any
36:33amount of time, you probably already
36:35know support and resistance, patterns,
36:38breakouts, trend lines, and yet you
36:40might still be inconsistent. Now, you
36:43might catch good trades sometimes, but
36:45under pressure things fall apart. And
36:47it's really important to know as a
36:49trader on what's actually moving price.
36:51Most traders are making decisions based
36:54on the appearance of price and not the
36:56mechanics that are actually pushing it
36:58behind the scenes, behind the
37:00candlesticks themselves. And that is the
37:03gap. So, at the core of order flow or
37:07auction mechanics, we're viewing the
37:09market as an auction. And now, every
37:12single tick is a transaction on a chart.
37:15It's a transaction between buyers and
37:17sellers. And there are two types of
37:19participants in this market. There are
37:21aggressive participants, and then there
37:23are passive participants. Aggressive
37:26traders use market orders. So, this is
37:28where you're entering, clicking buy
37:29market or sell market, and you're
37:31getting filled at the next available
37:33price. When you're doing this, you're
37:35crossing the spread and you're forcing
37:36trades to happen immediately. Now,
37:39passive traders are traders who are
37:41using limit orders. They sit in the book
37:43or they sit at certain levels, they
37:45place a limit order or stop order, and
37:47they're waiting to actually get filled.
37:49Now, price is only going to move when
37:52aggressive orders enter the market and
37:55overwhelm the available resting
37:57liquidity on the other side. That's it.
38:01The market does not move by passive
38:02orders. Someone needs to be there to
38:05take the initiative to cross the spread
38:07to attempt to move price. And that is
38:09the entire engine behind price movement.
38:12Now, here's the problem. Candlesticks
38:14alone don't show any of that. What they
38:17show you is they show you four things.
38:19They show are the open,
38:21the close, the high,
38:24and the low of a single candle. That's
38:26it. But, what they don't show you inside
38:29of this candle is they don't show you
38:30who was aggressive, where size actually
38:33came in in this candle, and whether
38:34buyers actually succeeded, or whether
38:36they got absorbed or trapped. A bullish
38:39candle doesn't necessarily mean that
38:41buyers are in control. It means price
38:43closed higher, and there's a difference
38:45to that. Because, like let's say in this
38:47candle, you can have aggressive buying,
38:49or there was aggressive buying at the
38:50extremes of this candle, we can make an
38:52assumption, but price couldn't continue
38:54higher. And if you can't see what's
38:56happening in real time, you're reacting
38:59to something that's already finished.
39:00Now, order flow is the layer that shows
39:03you what's happening underneath the
39:05candle. Instead of just seeing the
39:08result, right? You're seeing the
39:10interaction between the buyers and the
39:11sellers. So, inside of every footprint
39:14candle, we can see the bid and the ask,
39:17the volume at the bid and the ask. We
39:18can see delta. We can see where trades
39:21were actually executed, and where
39:23participation showed up. Now, instead of
39:25just guessing what happened inside of
39:26this candle, we can actually see it. We
39:29can see where buyers were aggressive,
39:32where sellers stepped in, where price
39:34potentially stalled, or where it
39:37accelerated, right? And when we use
39:40order flow, all order flow is is just
39:42data, okay? We're not using order flow
39:45necessarily to predict the market. It's
39:48just about reading what's happening in
39:50real time. And the most important thing
39:52about order flow, and the way that I use
39:54order flow, is a single concept. And
39:56this concept really changes everything,
39:59and it's the concept of effort versus
40:01result. Just because there is aggressive
40:04buying, right? It doesn't mean that
40:07price
40:08has to go up, or that price will go up.
40:10And just because there is aggressive
40:12selling, doesn't mean that price is
40:14going to go down, or has to go down.
40:17What matters is how the market responds
40:20to that effort that we're seeing on
40:22order flow, on footprint candles.
40:25Because if buyers are aggressive, let's
40:27say in this candle that I showed you on
40:29the normal candlestick chart, if buyers
40:30are aggressive here and price isn't
40:33successfully moving higher, well, then
40:35that is information. This is potentially
40:37absorption. And if we were to go down
40:39here and take a look, if we see sellers
40:42being aggressive or aggressive selling
40:44in this area, in this entire area, we
40:47see sellers trying to be aggressive and
40:48push price lower, and price isn't
40:51actually moving lower or they're not
40:52being successful with their effort, then
40:54it's essentially the same thing. Now, on
40:57the flip side, if we were to go look at
40:59a move, right, and we see that effort is
41:02moving price significantly, that can
41:05tell us that there's little to no
41:06resistance by the other side or the
41:08other party or sellers in this case. And
41:10this creates imbalance, and you can see
41:13the stacked imbalances of buyers over
41:15sellers inside of the candles with these
41:17bold numbers that I have on my chart.
41:19But, there's other ways that you can
41:20view it depending on how you set up your
41:21footprint chart. But, this is the
41:23difference between reading the market
41:26and just reacting to it. Now, this is
41:29important because this is where most
41:31people actually get it wrong. Order flow
41:33itself is not the strategy, okay? It
41:37does not give you trades necessarily by
41:40itself just because you have more data.
41:42The way that I use it is I use it as a
41:45confirmation layer. And I still need
41:48context, location, and structure. Order
41:52flow is just telling me is what I'm
41:55expecting actually happening right now,
41:57and it confirms whether the market is
41:59accepting or rejecting a level. And
42:02without that, you're essentially just
42:04guessing, but with it, you're reading
42:05real information. Let me turn this off
42:08for a second. Let me show you an
42:09example, okay? Now, let's say you're
42:11looking at a normal chart, a normal
42:13candlestick chart, and let's say you
42:15trade support and resistance. And so,
42:17here we had previous resistance that now
42:20you may consider, oh, this becomes new
42:23support. Maybe that's the way that you
42:24trade. Let's just say for example, okay?
42:27Now, when we actually go and look at
42:29footprint and what actually happened
42:31here at the execution level of the
42:33auction, well, what do we see? We see
42:36sellers pushing back into this level or
42:39this area or previous resistance that is
42:42now being used as support. And on a
42:44candlestick chart, you may just see us
42:45moving into this area. Maybe it's
42:47choppy, maybe we're kind of whiplashing
42:49back and forth. But on the footprint,
42:52they are failing to push price lower,
42:53and we are also seeing the other side or
42:55the counterparty of buyers begin to step
42:58in in this area as well. We're seeing
43:00large volume being transacted at these
43:02lows, and price is failing to continue
43:05lower. This is telling us that sellers
43:08are aggressive here, but they're getting
43:10absorbed by passive buyers. And
43:13understanding that or reading it that
43:15way is completely different or different
43:17information than if you're to just be
43:19looking at, like, let's say a box on
43:21your chart and candlesticks wicking into
43:23a level. And when we get this type of
43:25confirmation that, yes, this level is
43:27valid, and we can confirm that by using
43:29order flow, well, then that is the edge.
43:31At the end of the day though, it's not
43:33that candlesticks are wrong. I'm not
43:35telling you that you need order flow,
43:37okay? But candlesticks alone, they are
43:40incomplete. And if you're really serious
43:42about improving your trading or
43:44improving your existing strategy, then
43:47you do need to know what's actually
43:50happening underneath the chart,
43:52underneath these candlesticks. And if
43:54you want to see how I actually apply it
43:56in real time, I break it down daily and
43:59I build a full framework around this.
44:01Now, I don't necessarily trade support
44:03and resistance, but I'm just giving you
44:05guys an example, right, based off of
44:07what I'm looking at on the chart, but
44:08this is the basics to order flow. We are
44:11just looking at the market in terms of
44:14an auction. We're looking at the
44:15interaction between passive and
44:18aggressive orders, and we're thinking in
44:21terms of effort versus result. And in
44:24the rest of my videos, I go about how
44:27I'm actually applying this with the
44:28framework that I use in the framework
44:30that I trade, but the purpose of this
44:32video is just explaining the difference
44:35between only using candlesticks and
44:37incorporating the actual mechanics
44:40beneath it through order flow and
44:43understanding the interaction between
44:45buyers and sellers, because that's
44:46what's actually moving price. Price is
44:49not moving necessarily because of a
44:52pattern. It's moving because of the
44:53interaction between buyers and sellers,
44:57passive and aggressive participants in
44:59the market. All right, so first, I want
45:01to start off with what is footprint,
45:04right? So, trading with footprint is
45:07essentially trading with order flow. So,
45:09why would someone want to use a
45:11footprint chart? It tells you the
45:13real-time battle between buyers and
45:15sellers at each price level, and it's
45:17allowing you to see who's in control,
45:18you know, where liquidity might be
45:20hiding, and where trades are actually
45:22happening. So, it can give you an edge
45:23that maybe a traditional candlestick
45:25might not be able to offer you. So, I
45:28want to go over what it actually looks
45:29like. So, on the left, we have our
45:31normal candlestick. You have the body,
45:34the wicks. You have the open, and you
45:36have the close.
45:38Well, a footprint candlestick is
45:39essentially the same thing, but you're
45:41seeing what's happening within that
45:43candlestick. We still have the body of
45:45the candle, the wick, the open, the
45:47close, but we also have numbers here.
45:51And I know what you might be thinking,
45:53"Oh my gosh, there's all these numbers
45:54right here. How can I even read this?
45:56The market's moving so fast."
45:59Calm down. Don't worry about it. It's
46:01not that complicated and luckily for you
46:05with the blessing of technology,
46:07you don't have to read all these
46:08numbers. There's ways that we can
46:10utilize these candlesticks without
46:12having to look at all the numbers.
46:14Realistically, we can use it to make
46:17better decisions in our trading. So, the
46:19type of footprint candlestick that I
46:21use, and there's plenty of different
46:23candlesticks you can actually use when
46:24it comes to footprint. I personally like
46:26to use the bid and ask ladder for my
46:28trading. And what is that? So, on the
46:31left side we have the bid and on the
46:33right side we have the ask. What exactly
46:35does the bid represent? Well, the bid
46:38represents where limit buy orders were
46:40sitting or where aggressive sellers
46:42executed their orders. The ask on the
46:44other hand represents where limit sell
46:46orders were sitting or where aggressive
46:49buyers executed their orders. So, just
46:51so that you have a little bit of a
46:53better understanding of the bid and the
46:55ask, the bid is the highest price where
46:58buyers are willing to pay. And the ask
47:00is the lowest price where sellers are
47:01willing to actually accept. So, how does
47:04price move? In trading, you have two
47:07different types of orders.
47:08You have a limit order
47:10and you have a market order.
47:12A limit order is just a passive order.
47:15It's where it could either be where you
47:17set where you want to enter the trade.
47:18It could be your stop loss. It could be
47:20your take profit. That is a limit order.
47:24On the other hand, we have market
47:25orders. Market orders are where you are
47:27executing at market. It's an aggressive
47:29order. You're just clicking the buy or
47:31sell button, essentially.
47:33So, theoretically, if there were only
47:36passive limit orders and no aggressive
47:38market orders, price would not move. Why
47:41is that? Well, limit orders just sit
47:44there. They don't actually cause trades.
47:46They just offer liquidity. So, trades
47:49only happen when a market order crosses
47:52the spread
47:53and hits a resting limit order.
47:56And price only moves when those market
47:58orders consume available liquidity at a
48:01given level.
48:02So, to give you a visual understanding
48:04of what this actually looks like,
48:07I made a very simple representation of
48:09the DOM. And if you don't know what the
48:10DOM is, it's the depth of market. This
48:13is not a footprint candle. This is level
48:15two data where it's called the depth of
48:17market. And you have the bid and you
48:19have the ask. In this representation of
48:22the DOM, we have 20 orders sitting on
48:24the bid. Means 20 people are looking to
48:28set a buy order right here at 19,986.
48:32On the ask, we have 15 orders looking to
48:36sell at 19,987.
48:39If no market orders enter the market,
48:42price is not going to move. A market
48:45order is an order where you buy or sell
48:48immediately. It's at the next available
48:50price. You're essentially telling the
48:52market, "I want in now. I don't care
48:55what the price is. Just fill me on my
48:57order." And so, what that looks like is
48:59let's say
49:00we're sitting here at price, right? And
49:03you're looking for a buy. Well, if you
49:06enter in at market, it's going to fill
49:09your order at the next best available
49:11price, which in this case is 19,987.
49:14So, you will be filled on your buy right
49:16here. On the other hand, if you were
49:18looking for a sell and you executed a
49:20market order at sell, it is going to
49:22execute that market order at the next
49:25best available price. And in this case,
49:27based off the example, that's 19,986.
49:31So, your sell order would get executed
49:33here. Now that we have a basic
49:34understanding of the bid and the ask and
49:36what a limit order is and what a market
49:38order is and the difference between a
49:40passive order and a aggressive order,
49:43we want to then take a look at the
49:44anatomy of a footprint candle. On a
49:46footprint candle, we have a couple
49:47different things. Um the first thing
49:50that I want to talk about, being that
49:52this is a bid ask ladder is we have bid
49:54ask volume. So, what is bid ask volume?
49:57So, on the left, we have volume sold at
50:00bid. Means aggressive sellers.
50:03On the right, we have volume bought at
50:06the ask. This means aggressive buyers.
50:08This is executed volume. These are not
50:11pending orders. This is not like the
50:13DOM. This is showing us what has already
50:15happened. One thing that we want to look
50:17for when we are looking at footprint
50:20charts is we want to take into account
50:21delta. And what is delta? Delta is
50:24basically buy volume on the ask
50:26subtracted by sell volume at the bid.
50:30And so, if it's a positive number, it's
50:32a positive delta.
50:34Means that there was buyer aggression.
50:35If it's a negative delta or a negative
50:37number, it means that there was seller
50:39aggression. Now, you're not actually
50:41going to have to subtract and add these
50:43numbers real time. Luckily for you, like
50:46I mentioned earlier,
50:47there is a delta indicator that will
50:49just show you what the delta is for the
50:51candle. So, you only have to look at one
50:52number. You don't have to
50:55pay attention to all the different
50:56numbers and add and subtract them. But
50:58in this example, we have a positive
51:01delta of 1,875.
51:04And how do we come to that? Well, we
51:06take the buy volume at the ask. If we
51:08add up all of these numbers here on the
51:10right side at the ask for the buy
51:12volume, it comes out to 5,375
51:15executed orders on the ask. If we look
51:18at the left side, we look at the sell
51:20volume on the bid, it comes out to 3,500
51:24orders executed on the bid. So, if you
51:27take the buy volume and you subtract it
51:29by the sell volume, in this case, 5,375
51:33minus 3,500,
51:36that is how you get the positive delta
51:38of 1,875.
51:41You don't have to add or subtract these
51:43numbers in real time. Don't worry about
51:45it. We'll take a look at some charts
51:47later and I'll show you why you don't
51:48need to do that. Um but just a side
51:50note, you can also tell the total volume
51:52of the candle by seeing all the orders
51:55executed in the candle. So, in this case
51:57it's 8,875
51:59cuz we added the ask and we added the
52:01bid together and that's where we get the
52:03volume for the candle in total. The last
52:05thing that I want to talk about for a
52:08footprint candle is we have something
52:10called imbalances. Now, this is going to
52:12be a lot easier to show you once we
52:14actually hop on the real chart. Just so
52:16you understand what an imbalance really
52:17is, an imbalance basically occurs when
52:20there's a large difference or skew
52:23between buying and selling at a
52:25particular level. So, whether [music]
52:27there was three times as many buyers
52:30than sellers or four times as many
52:31buyers than sellers at a certain level,
52:34that is called an imbalance. One thing
52:36that you need to know is [music] you
52:38need to know that when you're reading a
52:40footprint chart and you're looking for
52:42imbalances, you are not reading it
52:45horizontally. We are not comparing 110
52:48>> [music]
52:48>> to 11. We are actually reading footprint
52:50charts diagonally. So, we are comparing
52:53zero on the bid to 122 on the ask. 12 on
52:56the ask to 312 on the bid. You don't
52:59have to really pay attention, like I
53:01said, to all these numbers here. The way
53:03that these trading platforms are set up
53:06with footprint charts is it makes
53:08understanding this information very
53:11simple and very easy to understand and
53:13we're about to take a look at that once
53:15we get into the actual footprint chart.
53:17So, let's go ahead and hop on the charts
53:19right now so you can get a better
53:20understanding of what exactly it is that
53:22we are looking at. All right, so here we
53:24are on the charts now. We are looking at
53:26the 1-minute on MNQ. [music] As you can
53:30see, we have our normal candlesticks.
53:32This is what everyone sees typically
53:34when they open up a chart. Now, the
53:36difference between this is you can zoom
53:39in
53:40and now we have our footprint chart. So,
53:42this is happening real time. The market
53:44is currently open and it's about lunch
53:46time right now, uh Pacific Standard. So,
53:48there's about a couple hours left in the
53:49market, but I want to talk about
53:51everything we just explained. [music]
53:52So, here we have our 1-minute
53:54candlesticks. You see all the numbers in
53:56here and you see that we have the bid
53:59and the ask. Just a little bit of a
54:01refresher, if we are watching this
54:04candle right here that's happening right
54:06[music] now. We have the bid and the
54:09ask. When orders are getting executed
54:11here on the bid, those are aggressive
54:14sellers executing their sell orders.
54:16When orders are getting filled here on
54:18the ask, it is aggressive buyers filling
54:21[music] their buy orders. So, I've added
54:24something to my chart where it shows me
54:25the delta
54:27and it shows me the volume. So, in this
54:28case, if you subtracted the ask volume
54:31versus the bid volume, you would have
54:33gotten a negative delta, which is why
54:35this is a red candle. In this case, as
54:37you see buyers push price up, we have a
54:40positive delta. Buyers are pushing price
54:42further up. The higher that price is
54:44moving, the more orders are getting
54:46filled on the ask, the more that buyers
54:48are stepping in and filling their orders
54:50at the next available price on the ask.
54:53So, if you're in a red candle like this
54:55candle right here, you're going to be
54:56seeing sellers hitting the bid. If
54:58you're in a bullish candle, you're going
55:00to be seeing buyers hitting the ask. So,
55:03something I wanted to bring up and I
55:06wanted to wait till we were looking at
55:07the actual charts are imbalances. And as
55:11you've noticed, some of these numbers
55:13are highlighted. And so, what does that
55:15mean? It means that there was an
55:17imbalance between buyers and sellers at
55:19that particular price level. I currently
55:22have it with a filter on, so it's only
55:25going to show me when there was four
55:27times as many buyers or sellers at a
55:29particular level in price. And the
55:32reason why I do that is because I only
55:33want to see strong price imbalances. So,
55:36like let's take a look at 42 and 31 here
55:39that are highlighted. It means that
55:40there was a 400% or more imbalance
55:43between buyers and sellers. And you can
55:45use that to make a decision when buyers
55:47are stepping in and they want to push
55:49price up or when sellers are stepping in
55:51and they want to push price. There is
55:52something called a stacked imbalance.
55:55And it means when price is stacking
55:57these imbalances back-to-back. So, I
56:00actually have an indicator here. It's
56:01called stacked imbalances. We'll turn it
56:04on and we'll go look for a stacked
56:06imbalance. So, if we go over here on the
56:08chart, we have a stacked imbalance. Now,
56:11what does that mean? It means that
56:13buyers were hitting the ask
56:14aggressively, way more aggressive than
56:17sellers were present here in this
56:19candle. And so, what ends up happening
56:21is it cause it causes a stacked
56:22imbalance. When you see a stacked
56:24imbalance form, it typically shows that
56:27there is a lot of pressure towards one
56:30side. Another thing about stacked
56:32imbalances is they can sometimes be used
56:35as support or resistance levels. Or
56:38sometimes price might want to come back
56:40and test those levels. But that's for
56:41another video. But this is the basics of
56:43footprint charts. It may look
56:45overwhelming at first. Yes, there is a
56:48learning curve, but I promise you, if
56:50this is something that you find
56:52interesting, if you like seeing what's
56:55happening behind the candle, footprint
56:57is a tool that can give you an edge that
57:00normal candlesticks can't. And when
57:02you're reading these over time, after
57:05watching some more of these videos, I
57:07will explain what you can look for in
57:09order to enter a trade. Now, of course,
57:11you need a strategy. You need to be able
57:13to identify key levels. And then you
57:16watch footprint at those key levels.
57:18[music] You look for where buyers are
57:19getting absorbed, where buyers are
57:20getting exhausted, or sellers are
57:22getting absorbed, or sellers are getting
57:24exhausted. [music] You look for delta to
57:26flip from red to green, and you look for
57:28volume to pick up or drop off. And
57:31that's how you can help yourself make
57:33decisions to take better trades, to
57:35avoid noise, and to have more precise
57:39entries when it comes to trading. When I
57:41first started trading, before I was
57:43getting consistent payouts, I had an
57:45entry model, and anytime I saw that
57:47entry model, I was just immediately
57:49taking the trade, and I was getting
57:50absolutely cooked. And I thought it was
57:52the strategy, I thought maybe the
57:54strategy doesn't work, so I went to
57:55different strategies. But what I didn't
57:57understand is that context matters more
58:00than any signal or entry signal that you
58:03may have. Now, most traders think that
58:06their edge is their entry model. But, in
58:08reality, the edge starts before the
58:11setup even appears. So, most traders
58:13lose because they treat every condition
58:15like it's the same market, but we have
58:17different environments, we have
58:19different regimes, and that's something
58:20that we need to take into account. So,
58:22professionals define edge as environment
58:24plus location plus participation plus
58:27execution. Signals do not create the
58:30edge, the filters before the signals
58:33actually create the edge.
58:35And so, what is edge?
58:37Well, edge is just positive expectancy
58:40over a large sample.
58:41So, if you want to know the actual
58:43formula for it, it's win rate times the
58:45average win minus the loss rate times
58:48the average loss.
58:49And the edge is going to degrade when
58:51the win rate drops, when the
58:53follow-through decreases, when loss
58:55frequency increases, and when chop
58:57increases variance.
58:59So, environment is going to directly
59:01impact expectancy, and the same setup
59:03performs different across regimes. And
59:06so, the way that a lot of traders like
59:08to look at it is they just want to know
59:09the entry model. What's the entry model?
59:11How do you enter a trade? And so, they
59:13look for that signal, then they try and
59:15justify it, and then they enter, and
59:17then they manage damage.
59:19The correct way that we should be
59:21looking at this or approaching the
59:22market is first you classify the
59:25environment, then you identify location,
59:28and then you confirm participation, and
59:30then you execute. The signal comes last,
59:33not first.
59:34And confirmation does not override
59:37context. So, how do we classify
59:39environments? What type of environments
59:41are there in the market? Well, there's
59:42three primary market environments. The
59:45first one is initiative expansion, the
59:47second one is balance rotation, and the
59:50third one is low participation or
59:52compression. Or what some people may
59:53consider chop.
59:55Now, all trading conditions basically
59:58fall into one of these three states.
1:00:00So, your model most likely does not
1:00:03perform equally across all three
1:00:06environments. So, what is initiative
1:00:09expansion? Initiative expansion is a
1:00:11directional auction where price is
1:00:13discovering value. These are things like
1:00:15trending days or where we see price
1:00:18essentially have higher time frame
1:00:20alignment, the breaks are going to hold
1:00:22and extend, pullbacks actually resolve,
1:00:25and there's acceptance outside prior
1:00:26range, and there's also follow-through
1:00:28after imbalance. And so, in an
1:00:31initiative expansion, the best type of
1:00:33models for this type of environment are
1:00:35going to be continuation models. They're
1:00:37going to perform best. And you can use
1:00:39reversal models, but they're going to
1:00:41require extreme location.
1:00:43In this type of environment, you have
1:00:45lower chop, you have cleaner
1:00:47invalidation, and you're going to have
1:00:49clear directional bias. Now, what is a
1:00:51balance rotation? Well, a balance
1:00:53rotation is essentially where we're in a
1:00:55range. It's where you have two-sided
1:00:57auction around an established value. So,
1:00:59some observable characteristics of this
1:01:02are going to be repeated rejection at
1:01:04the extremes, mean reversion behavior,
1:01:07and where breakouts or breakdowns fail,
1:01:09and there's going to be overlapping
1:01:10structure and both sides are active,
1:01:13meaning both buyers and sellers are
1:01:14active in this area. The best type of
1:01:17model fit for this is going to be the
1:01:19reversal at extremes. Continuation
1:01:22models are going to degrade in this type
1:01:24of environment because there's more
1:01:26false breakouts. So, you're typically
1:01:28going to see higher whipsaw, smaller
1:01:30average extension, and more false
1:01:33breakouts. Now, what is low
1:01:35participation or compression? This is
1:01:37essentially chop. This is essentially
1:01:39where there's insufficient participation
1:01:42to produce sustained auction outcomes.
1:01:45So, some things that we might notice in
1:01:47environment that is low participation or
1:01:49compression is there's tight overlapping
1:01:52candles, there's multiple micro
1:01:54breakouts that fail, and then there's
1:01:56imbalances without continuation, the
1:01:59tape may even be slow, liquidity may be
1:02:01thin, and there's no acceptance outside
1:02:04of structure.
1:02:05And in this type of environment, most
1:02:08models will actually degrade, and edge
1:02:10is statistically reduced because there's
1:02:13high noise, there's poor follow-through,
1:02:15and there's going to be frequent stop
1:02:17outs. Now, I trade order flow. So, order
1:02:19flow is an amplifier, but it measures
1:02:22participation. It does not create
1:02:24participation, and so in expansion, it's
1:02:27going to confirm direction. In rotation,
1:02:30it shows that two-sided activity or the
1:02:33activity between buyers and sellers, and
1:02:35in compression, we're going to see
1:02:37events occur without any sustained
1:02:39movement. But, order flow reliability
1:02:41decreases
1:02:43in compression when participation is
1:02:45low, when the follow-through is just
1:02:47totally absent, and when the auction is
1:02:50balanced, at least for the way that I
1:02:51trade it. Now, the common mistake that
1:02:53people might make
1:02:55is they may say that they entered a
1:02:57trade because they saw a stacked
1:02:58imbalance or they saw absorption happen
1:03:01or they saw a delta flip. And the
1:03:03assumption is that the signal guarantees
1:03:06follow-through, but in reality, signals
1:03:09represent short-term activity,
1:03:11and the follow-through requires
1:03:13structural alignment. So, a a signal in
1:03:16a misaligned environment has lower
1:03:18probability of extension or lower
1:03:20probability of working out. So, then how
1:03:22do we think about these environments?
1:03:25Well, we're going to go over something
1:03:26called the model environment fit matrix.
1:03:29We're going to talk about continuation
1:03:30models, reversal models, and scalping
1:03:32models. In a continuation model, like I
1:03:35mentioned earlier, it's going to be
1:03:37strong in initiative expansion. Why?
1:03:40Because the directional auction is going
1:03:42to actually provide us the
1:03:43follow-through needed for a continuation
1:03:45model. Pullbacks are going to resolve
1:03:47rather than reverse. There's going to be
1:03:49acceptance that supports the
1:03:51continuation, and risk can actually be
1:03:53defined under structure. So, the edge
1:03:56driver for this is going to be sustained
1:03:58participation and structural alignment.
1:04:01Now, the continuation models are weak in
1:04:03balanced rotation,
1:04:05and the reason why is because breakouts
1:04:08will frequently fail. You're going to
1:04:10have two-sided activity that limits that
1:04:12extension for a continuation,
1:04:15and you're going to have mean reversion
1:04:16tendencies that reduce follow-through.
1:04:19And lastly, trend logic conflicts with
1:04:21range logic.
1:04:22So, the edge degradation is the win rate
1:04:25drops due to failed continuation
1:04:27attempts. So, if we notice that we're in
1:04:29a balanced rotation, we may want to
1:04:31reconsider trying to take a continuation
1:04:33model.
1:04:34Now, a continuation model is going to be
1:04:37poor in compression because there's no
1:04:39sustained displacement. We need
1:04:41displacement for a continuation model,
1:04:44and there's going to be micro breakouts
1:04:46that repeatedly fail. The follow-through
1:04:48is going to absolutely collapse, and
1:04:50targets rarely get hit before reversion.
1:04:54So, if you're trading a continuation
1:04:56model in compression, you're going to
1:04:59have frequent small stop outs with
1:05:01limited expansion potential just due to
1:05:03the environment that we're currently in.
1:05:06Now, for a reversal model, it's a bit
1:05:08different. So, it is selective in
1:05:11initiative expansion. The reason why is
1:05:13because initiative pressure is
1:05:15dominating. So, most countertrend
1:05:18signals are absorbed and reversals
1:05:21require exhaustion plus failure of
1:05:24continuation.
1:05:26So, a reversal model in initiative
1:05:28expansion is really only going to be
1:05:30valid when there's higher timeframe
1:05:32extremes that we can watch and there's
1:05:34extended moves relative to the session
1:05:37and there's clear acceptance failure.
1:05:40So, the edge driver for this is auction
1:05:42failure. It's not just a footprint
1:05:44signal. It's not just a signal, we're
1:05:45watching the auction.
1:05:47Now, a reversal model is going to be
1:05:49strong in a balanced rotation at
1:05:51extremes.
1:05:53Why? Because auction rotates around
1:05:55value. So, the extremes often reject and
1:05:58there's liquidity pools sitting at range
1:06:00highs and lows.
1:06:02The mean reversion tendencies are
1:06:04structurally supported that are going to
1:06:06help with reversal models. So, two-sided
1:06:09participa- pation is going to create
1:06:11those opportunities to fade. But again,
1:06:13in compression it is weak because the
1:06:15extremes are poorly defined. The breaks
1:06:18are going to lack commitment, rejections
1:06:20lack displacement, and noise overwhelms
1:06:22structure. So, again, even in
1:06:25compression when you're using a reversal
1:06:27model, there's going to be frequent
1:06:29small reversals that do not extend. If
1:06:31we decide that we want to have a
1:06:33scalping or micro model,
1:06:35then the way that we have to understand
1:06:37this is a little bit different because
1:06:39in a scalping or micro model, it's
1:06:42moderate in initiative expansion. And
1:06:44the reason why is because the trend
1:06:47provides directional bias. There's micro
1:06:49pullbacks that offer continuation
1:06:51entries and there's going to be short
1:06:53bursts of momentum that do exist. So,
1:06:57the only limitation with this is that
1:06:59late entries do get punished if we're
1:07:01chasing.
1:07:03And it's also going to be moderate in
1:07:05balanced rotation because both sides are
1:07:08tradeable at extremes, the micro mean
1:07:11reversion exists, and smaller targets
1:07:14will fit the range conditions. But, the
1:07:16limitation to this is that
1:07:18the profit ceiling is capped by the
1:07:20range width.
1:07:21If you're scalping or doing a micro
1:07:24model,
1:07:25it's highly sensitive to compression
1:07:28or low participation.
1:07:30And some characteristics of compression,
1:07:32again, are just overlapping structure,
1:07:35reduced range expansion, there's going
1:07:37to be failed micro breakouts, there's
1:07:39inconsistent follow-through, and thin or
1:07:42erratic liquidity.
1:07:43And it actually affects scalpers the
1:07:46most, because scalping relies on small
1:07:49bursts of displacement. And compression
1:07:52reduces displacement magnitude. And if
1:07:55your average win is going to shrink
1:07:57faster than stop size,
1:07:59then that's going to cause a problem.
1:08:02Signal frequency stays high, but
1:08:04expectancy erodes rapidly, because
1:08:07mathematically, if we're in a
1:08:08compression, if your average win drops
1:08:11from five points to three points if
1:08:14you're scalping, but your stop remains
1:08:16four points, then your expectancy is
1:08:18going to collapse, and even if the win
1:08:20rate remains similar. So, compression
1:08:23does not necessarily eliminate signals
1:08:26for scalping or micro models, but it's
1:08:28just going to degrade the payoff
1:08:30efficiency. So, if you have a high trade
1:08:33frequency, but you have low
1:08:35displacement, it's going to basically
1:08:37give you death by friction.
1:08:40So, the point is just that no strategy
1:08:42is regime agnostic,
1:08:45and model performance is entirely
1:08:48environment-dependent.
1:08:50And if you do not classify environment,
1:08:52then you are unknowingly changing your
1:08:54expectancy curve.
1:08:57And so, knowing this, then we have to
1:08:59understand that there are times that we
1:09:02should trade and there are times that we
1:09:04are we should not be trading and not
1:09:07trading is part of the edge. Not trading
1:09:11is a position. And so, structural no
1:09:14trade conditions
1:09:16are going to be things like multiple
1:09:19consecutive failed breakouts or
1:09:21overlapping structure with no expansion,
1:09:23repeated return to value, no higher time
1:09:26frame alignment, no clean location,
1:09:28inability to define continuation path.
1:09:31And so, when two or three of these
1:09:33things occur, expectancy is degraded.
1:09:36So, passing on these types of
1:09:38environments are going to preserve our
1:09:41capital distribution.
1:09:43So then, what is the decision tree that
1:09:45we have to really consider when we're
1:09:47trading and we're watching the market?
1:09:49Well, the first step is that we have to
1:09:52think what environment are we currently
1:09:54watching? What environment is present?
1:09:57Now, does my model fit this environment?
1:10:00And is there meaningful location for me
1:10:02to execute in this environment? And
1:10:06lastly, is par- participation aligned
1:10:08with structure?
1:10:10If the answer to any of these questions
1:10:12is no, then you pass.
1:10:15You just don't trade it because even if
1:10:18you see your signal, you do not trade
1:10:20it. Your entry model or whatever, you do
1:10:22not trade it. Why? Because execution is
1:10:26conditional and our participation in the
1:10:29market is going to be optional, but our
1:10:31risk exposure is controlled. We want our
1:10:34risk exposure to be controlled.
1:10:36And so, when you're having a strategy,
1:10:40your edge includes invalidation
1:10:42conditions. Your edge is going to
1:10:44include when you should and should not
1:10:46trade and you need to define when your
1:10:50edge works or when your model works,
1:10:52when it degrades and when it is inactive
1:10:55or you shouldn't even be trading it
1:10:57regardless of if you see an entry signal
1:10:59on your chart. Because if you can't
1:11:02define when your model is inactive or
1:11:05when you shouldn't be trading it, then
1:11:08you don't have an edge. You have a
1:11:09pattern preference.
1:11:11And what professionals do is they
1:11:13increase aggression only in aligned
1:11:17environments, and they're actually going
1:11:18to reduce their exposure in misaligned
1:11:21ones. And the final principle is
1:11:23essentially just signals and entry
1:11:26models are execution tools. Environment
1:11:29is the filter, and the filters are going
1:11:32to protect our expectancy, and they're
1:11:34going to protect us on our equity curve.
1:11:38And not trading is not hesitation, it's
1:11:41just statistical preservation. It is a
1:11:44position. It is part of the edge, and so
1:11:46we need to constantly
1:11:48think and remind ourselves that there
1:11:51are times where statistically our model
1:11:55or whatever we're trading may not be in
1:11:57the right environment. And if it's not
1:11:59in the right environment for us to try
1:12:01and execute that model, then we pass. We
1:12:04save ourselves money lost or a headache
1:12:06or you trying to get out of drawdown,
1:12:09because edge is not frequency, it's
1:12:12conditional participation. So, our
1:12:14participation in the market needs to be
1:12:17conditional. Only when things align,
1:12:19only when the environment aligns with
1:12:21what we're trying to do, only when our
1:12:23model, whether it's continuation or
1:12:26reversal, makes sense for what we're
1:12:28trying to do. Because often times, let's
1:12:31just say you have a reversal model that
1:12:34you're trying to force on the market
1:12:37while we're in initiative expansion, and
1:12:39you just keep going short when the
1:12:41market is pumping, then you're going to
1:12:44get absolutely destroyed, and vice
1:12:46versa. Now,
1:12:47like we went over, reversal models do
1:12:49work sometimes in initiative expansion,
1:12:52but you have to be selective with it and
1:12:55it requires extreme location or
1:12:56understanding on the higher time frame
1:12:59extremes where that location may be for
1:13:02us to try and attempt
1:13:04a reversal model.
1:13:06And the same goes for if we're range
1:13:08bound for the day and you keep trying to
1:13:11trade a continuation model. Let's say
1:13:12your model is you trade breakouts of the
1:13:14range and every single time the market
1:13:17goes to break out of a range, you enter
1:13:20a trade for a continuation and we snap
1:13:22back into the range and you lost going
1:13:24short, then you lost going long, and
1:13:26then you lost going short, and the next
1:13:28thing you know, your account's gone.
1:13:30So,
1:13:31the whole purpose
1:13:33is
1:13:34if you have an entry model and it works
1:13:36for you, great. But just understand that
1:13:39we have different market environments
1:13:42and realistically, your model probably
1:13:45isn't going to work the same in all of
1:13:47the market environments. So, we need to
1:13:49be selective on when we do decide to
1:13:50participate
1:13:52and our our decision tree needs to be in
1:13:55the correct order so that we save
1:13:57ourselves from
1:13:59losing money that we didn't need to
1:14:01lose.
1:14:02We're going to talk about premium and
1:14:03discount today through auction market
1:14:05theory. Now, some context is I know that
1:14:08most traders are actually going to
1:14:09recognize premium and discount through
1:14:11ICT content and that
1:14:13that it basically made it popular as a
1:14:15concept. I get it. In this video, I'm
1:14:18not
1:14:19here to debate who invented it or taught
1:14:22it. I'm just going to explain
1:14:24essentially what it represents and we're
1:14:26going to view it through auction theory
1:14:28and order flow, and then I'm going to
1:14:29talk about some tools that I use and how
1:14:32I actually use it on a day-to-day basis,
1:14:34and then we'll take a look at the charts
1:14:36so you can get a better idea on how I
1:14:38use it in my trading and maybe it can
1:14:39help you. So, the auction market theory
1:14:41foundation
1:14:43the idea is essentially this. Markets
1:14:46are auctions. So, what is the market's
1:14:49job? Well, the market's job is to
1:14:50facilitate trade, to discover value, and
1:14:53then to incentivize participation when
1:14:55imbalance occurs. So, price moves to
1:14:58essentially solve imbalance. Really in
1:15:01the market, we have two major
1:15:05states of the market. We have a balanced
1:15:07market and we have an imbalanced market.
1:15:10So, what is a balanced market? Well,
1:15:12balanced markets are essentially where
1:15:14you see price with an established high
1:15:16and established low and we're
1:15:17essentially rotating in between uh the
1:15:20mean. It's where we have an agreement on
1:15:22value, where we have that rotational
1:15:24behavior, and then you'll often notice
1:15:26that there is large accumulation of
1:15:28volume in these areas.
1:15:30Now, an imbalance is different than a
1:15:32balance in the sense where there is a
1:15:35disagreement on price.
1:15:37Either there are more buyers than
1:15:39sellers or there are more sellers than
1:15:40buyers. They are not equal. They do not
1:15:42agree on price and that is what actually
1:15:44causes price to move or displace.
1:15:47So, in imbalances, we have directional
1:15:49movement and then often times price is
1:15:51then searching for liquidity. Now,
1:15:53premium and discount only make sense
1:15:57once a balance exists, once there is an
1:15:59established range. So, what is actually
1:16:02an established range? Well, an
1:16:04established range is going to form when
1:16:06value is accepted, when the extremes of
1:16:08that range are defended, and then volume
1:16:10builds near the middle. So, this range
1:16:12becomes reference for relative value.
1:16:14What you can look for to make things
1:16:16easy are significant swing points. I'm
1:16:18not talking about every little single
1:16:20swing point on the market when you're
1:16:22looking um and it is slightly relative
1:16:25to time frame as well. Um but in this
1:16:27case, if we were to open up this chart,
1:16:29this is a 5-minute chart on NQ, and
1:16:32where are the most significant swing
1:16:34points
1:16:35um for us to establish the range? Well,
1:16:38it's going to be this swing low and this
1:16:40swing high. So, we mark out the high of
1:16:42the range, the low of the range, and
1:16:43then we have the middle of the range,
1:16:45and then this now becomes price trading
1:16:48within the range.
1:16:49Within the high, within the low. Now,
1:16:52when we're talking about ranges, we need
1:16:53to talk about value and fair value.
1:16:57A lot of traders may be familiar with
1:16:58this.
1:16:59Um it's expressed through volume
1:17:01profiles.
1:17:03Now, value, the way to understand this
1:17:05within the range, is this is where
1:17:06business was actually conducted. So,
1:17:09this is going to show up as POC, you
1:17:11know, the value area. We have value area
1:17:14high and value area low.
1:17:16And then we have composite distribution
1:17:18throughout this area. So, value is not
1:17:21an opinion. Um it is volume. So, we can
1:17:24notice where the value area is just by
1:17:27throwing on a volume profile. That's
1:17:28probably the easiest way to do it. Now,
1:17:31we need to define where's premium and
1:17:33discount. Because we know where the
1:17:35value area is at. Well, where's premium
1:17:37and discount? Once the range is defined
1:17:39and we have the value area.
1:17:41Now, anything above value is going to be
1:17:43premium.
1:17:44And anything below value is going to be
1:17:46discount. Now, we do have a 50% of value
1:17:50area. And why does this exist? Well, the
1:17:5350% level is going to approximate
1:17:55balance. It's going to represent mean
1:17:57reversion tendencies where price is
1:17:59going to rotate between here.
1:18:01And it's often going to align with value
1:18:03metrics. So, this concept itself really
1:18:07exists across
1:18:08Wyckoff, auction theory, market and
1:18:11volume profile, and of course, ICT
1:18:13concepts.
1:18:14Now, you don't necessarily need the
1:18:16volume profile. You can still identify
1:18:19premium and discount without a volume
1:18:20profile, but it just helps us establish
1:18:22where the value area is. Now, something
1:18:24that's important to note is premium and
1:18:27discount is context. Premium and
1:18:29discount is not a buy signal. It is not
1:18:32a sell signal, and it is not a
1:18:33prediction of price.
1:18:35It is just a location filter. We just
1:18:37have to understand where are we on the
1:18:40charts, where are we relative to value.
1:18:43And it's it can be used basically as a
1:18:45risk compression tool. If I want the
1:18:48best risk to reward
1:18:50for a trade, I should be looking for
1:18:52longs in discount and shorts in premium.
1:18:55And it's a way to avoid chasing price.
1:18:57In order flow, there is responsive and
1:19:00initiative order flow. So, in discount,
1:19:03what we're looking for is we're looking
1:19:05for responsive buyers. We're looking for
1:19:07sellers to get absorbed, for sellers to
1:19:09fail a continuation, or for pressure or
1:19:12delta flips to bring it back into the
1:19:14range or to the equilibrium or even back
1:19:16into premium. In premium,
1:19:19we're essentially looking for the same
1:19:21thing on the other side. We're looking
1:19:22for responsive sellers. We're looking
1:19:24for offer stacking or buyers making
1:19:27failed breakouts or trapped initiative
1:19:29buyers. So, what is that? That's
1:19:30basically where we're in the premium of
1:19:33an area and buyers are stepping in
1:19:35trying to push price higher and they
1:19:36fail. Now, those buyers become trapped
1:19:39and then we can potentially turn around.
1:19:41The way that I use discount and premium
1:19:44is I use fibs. Now, I use the Fibonacci
1:19:47retracement tool.
1:19:49And it's how I define premium and
1:19:52discount. Everyone has different levels.
1:19:55You know, some people have different
1:19:56levels than me. That's fine.
1:19:58The levels that I personally use on my
1:20:00range fib is the 0.5,
1:20:04the 0.6 to
1:20:06the 705,
1:20:07788, the 886, and the 1.1. Now, the
1:20:12logic behind this is that the 0.5 or the
1:20:15middle line or the equilibrium, whatever
1:20:17you want to call it, that's going to
1:20:19mark the transition between premium and
1:20:21discount territory. Now, what I'm really
1:20:24focusing on when I am looking at these
1:20:26fibs is I'm focusing on the area between
1:20:29the 705 to the 886.
1:20:32This is really the sweet spot for me.
1:20:34This is where I like to focus on
1:20:35reversals or look for responsive
1:20:37behavior as long as the higher time
1:20:39frame context is going to align. If I'm
1:20:41just drawing out range fibs everywhere
1:20:44and totally ignoring higher time frame
1:20:46context,
1:20:47then it does not matter. We need to
1:20:49understand on a daily, on a 4-hour,
1:20:52weekly, monthly, whatever higher time
1:20:54frames, we just have to understand where
1:20:57is price going on a higher time frame.
1:21:00If, for example, we look at the daily,
1:21:03the 4-hour, the 1-hour, and they are all
1:21:05bearish. Okay, then we are more likely
1:21:08to be looking on a smaller time frame
1:21:11for areas in premium of ranges to
1:21:15continue that bearish momentum further
1:21:18down. You wouldn't necessarily be
1:21:20bearish on higher time frames and then
1:21:22be looking for looking for discount all
1:21:24the time trying to just buy every single
1:21:26discount. You're just going to get
1:21:27wrecked because you're ignoring higher
1:21:29time frame context, essentially. One of
1:21:32the most important rules though when it
1:21:33comes to these fib levels is the 886 is
1:21:36one of the most important levels for me,
1:21:37and the reason why is because
1:21:39if price actually closes beyond the 886
1:21:42level, I essentially treat that range or
1:21:45that area as invalidated, and a touch of
1:21:48the 1.1, which is past the swing high or
1:21:51past the swing low, is likely at that
1:21:53point because
1:21:55at that point, I'm essentially expecting
1:21:57a continuation of momentum, and I'm not
1:22:00looking for a reversal anymore. So,
1:22:02these levels are just defining location.
1:22:04These are not entries. This doesn't mean
1:22:06that you draw a fib out on your chart,
1:22:08and then anytime price touches into a
1:22:10705 or 788 or an 886, that you're just
1:22:14going to enter there. So, let's say that
1:22:17we have our value area, we have our
1:22:19premium, and we have our discount.
1:22:22Well, typically, what will usually
1:22:24happen is the 705 to the 886 will either
1:22:28be in premium or discount.
1:22:30Now, if we draw it from swing low to
1:22:31swing high, we have our zone here in
1:22:34discount. This area between
1:22:36705 and 886. If we go from swing high to
1:22:40swing low, now we have our range here
1:22:43where we have 705 to 886 and it's
1:22:45sitting in premium. Even without the
1:22:47volume profile, we can still do the same
1:22:49thing and we get our areas. So, then it
1:22:52makes it a little bit smaller. We're
1:22:53looking in this area as premium. We're
1:22:55looking in this area as discount. So, if
1:22:58you ever look at my charts and you see
1:22:59fibs like this on my chart, now usually
1:23:02I don't draw out all the rest of this
1:23:03stuff. This is just to explain it, but
1:23:06I'll usually only draw the fibs. When I
1:23:08draw the fibs, I usually don't draw fibs
1:23:11on both sides.
1:23:13And the reason why is because I usually
1:23:14have a bias on which way we're going.
1:23:16So, if my bias is bearish,
1:23:18let's say in this scenario,
1:23:20we had a large drop.
1:23:22My idea for how the market is going to
1:23:24react off of that is we're going to
1:23:26rebalance higher before we continue our
1:23:28move down. Then I probably wouldn't be
1:23:30drawing a discount zone. I'd probably
1:23:32only go from swing high to swing low.
1:23:35And then I'd be looking for premium at
1:23:36another entry or swing high to swing
1:23:38low, looking for premium at another
1:23:40entry to go lower. When you do see them
1:23:42on my chart, if I ever post it in like
1:23:44my daily outlooks or you see it when I'm
1:23:46live trading or whatever, um it's not
1:23:48very often where I'm going to be drawing
1:23:51them on both sides unless we have been
1:23:52ranging for a very long time and we're
1:23:54kind of in the middle of a larger time
1:23:56frame um consolidation area. But more
1:23:59often than not, when I'm drawing it on
1:24:01like a 5-minute time frame or a
1:24:0315-minute time frame, I'm usually just
1:24:05drawing one side cuz I don't want to
1:24:07confuse myself. Now, there is something
1:24:09else that I actually use when locating
1:24:13where I where am I actually looking for
1:24:15trades in premium or in discount. And
1:24:19the reason for that, before I tell you
1:24:20what it is, is just because sometimes if
1:24:23the range is large enough, the area
1:24:25between the 705 and the 886 can it could
1:24:29be massive. Like it could be 100 points,
1:24:32200 points, it can be huge. And so, we
1:24:35can't just like give ourselves 100 point
1:24:38area. We We got to try and narrow it
1:24:41down a little bit and focus in a little
1:24:43bit. And so, what I use for that is I
1:24:45use something called the Dark Pool
1:24:47Decoder. It's an indicator that I have
1:24:50and it essentially will draw out a zone
1:24:53inside of premium or discount. So, the
1:24:56purpose of it is just to find a focus
1:24:58zone inside of that 705 to 886 region.
1:25:02And then it narrows the attention when
1:25:04we're looking at location or where that
1:25:07responsive order flow or initiative
1:25:09order flow should happen and we're
1:25:10looking in a smaller area. So, the way
1:25:14that I actually use it is I will and
1:25:16this is the Dark Pool Decoder. The way
1:25:18that I actually use it is I will mark
1:25:20out a swing low to a swing high
1:25:23and it will fall in between 886 and 705.
1:25:27Let's say we're somewhere over here on
1:25:29price. I notice that we are now
1:25:31establishing a range. We've put in a
1:25:33significant swing low and a significant
1:25:35swing high. Well, I'm going to mark out
1:25:37my fib. I'm going to understand where
1:25:39value area is at and then I'm going to
1:25:41use this to draw out a zone. Now, you
1:25:44don't need this, but I love it, so I use
1:25:46it. And what I'm looking at is I'm
1:25:49looking at this zone. Now, this zone
1:25:50technically has three levels to it. The
1:25:52first level is level one, this is level
1:25:55two, and this is level three. I'm
1:25:57looking for reaction out of the out of
1:25:59this zone at any of the three levels. If
1:26:02price ends up closing through this zone
1:26:05on the time frame I'm looking at,
1:26:06usually like a 5 or 15 minute or
1:26:08sometimes a 1 hour,
1:26:10if price closes on the other side of the
1:26:12zone, it's invalidated. I'm no longer
1:26:14looking for a reversal. I'm shifting
1:26:17expectations towards a continuation
1:26:19lower past the zone, but I'm just trying
1:26:22to see if this area is going to hold if
1:26:25this is my bias. Now, what I mentioned
1:26:27earlier is if my idea of price is for us
1:26:32to make a large move down,
1:26:35rebalance some of this move before we
1:26:37actually continue and make a new low,
1:26:39then I probably wouldn't be using it
1:26:41here.
1:26:43Because why would I be looking for longs
1:26:45when my bias is bearish?
1:26:48So then in a true scenario, what I would
1:26:50normally do is
1:26:52once we put in that significant swing
1:26:54high,
1:26:55and we put in a significant swing low,
1:26:58and I may draw it even if it gets down
1:27:00here, and then if it doesn't reach in,
1:27:01we make a new low, then I will extend
1:27:03it. Now, what happens is
1:27:05now we have an area of premium where we
1:27:08can be watching as location reference to
1:27:12understand where might be a good idea to
1:27:14take shorts.
1:27:15And it's even better when it's above
1:27:17previous swing highs. It's above this
1:27:19swing high, or if it's above this swing
1:27:21high, we're watching this area to see if
1:27:24sellers are going to essentially defend
1:27:26this, and buyers are going to fail to
1:27:28break out, and we are in premium, it's a
1:27:31good area to look for shorts if our bias
1:27:33is to continue lower to take the lows.
1:27:36One thing is that this tool itself does
1:27:39not predict price, okay? The point of
1:27:41this is not to predict price, the point
1:27:43of the fibs is not to predict price.
1:27:45It's just to help with structure
1:27:47expectations. It's just to help with how
1:27:50far do I think are we going to dig back
1:27:52into this move before we continue.
1:27:55Something else that I actually use when
1:27:57it comes to premium and discount is I
1:27:59use a volume profile. What does a volume
1:28:02profile do for premium and discount?
1:28:05Well, it does a a couple different
1:28:06things. One is it mainly adds
1:28:09confirmation. So,
1:28:11on a volume profile, when you're
1:28:12determining premium and discount from an
1:28:14established range, it's going to show
1:28:16you acceptance at value, rejections at
1:28:19extremes, and failed auctions. So, in
1:28:21high volume areas, we're going to see
1:28:23agreement or consolidation or even some
1:28:26chop. And then in low volume areas, we
1:28:28can see rejection or even fast movement
1:28:31straight through it. So, this just
1:28:33strengthens the premium and discount
1:28:35context because the way that I'm
1:28:37actually using this is every time we
1:28:40have an established range, the value
1:28:42area is going to be where the most
1:28:44volume's at. And and more often than
1:28:47not, in that area where the most volume
1:28:49is at, you're going to find it's
1:28:51basically in the middle of the range.
1:28:53Once we start getting out of the value
1:28:54area, so if you can't see it, this
1:28:56middle line is basically the POC. This
1:28:58is value area high, and this is value
1:29:00area low. So, if above value area is
1:29:03premium and below value area is
1:29:05discount,
1:29:07then something that I'm looking at is
1:29:09I'm looking at low volume nodes. We have
1:29:11a low volume node here. We have a low
1:29:13volume node here. So, what happens in
1:29:16this low volume node? Well, we bounce
1:29:19off of value area low, we extend past it
1:29:21into the low volume area, and then we
1:29:24pump back up. Same thing happens up
1:29:26here. We bounce off of value area high,
1:29:30and then we come up into the low volume
1:29:32node, and we can't get past it, and we
1:29:33end up rejecting back down. You can use
1:29:36like this type of volume profile because
1:29:38you can still see the low volume node
1:29:40here, and then, you know, volume drops
1:29:43off here, but I don't like using these
1:29:45big blocky ones. Uh it's a lot easier to
1:29:47identify low volume nodes when you're
1:29:50using like a normal volume profile, not
1:29:52a shitty TradingView one. But,
1:29:54this is good for for essentially
1:29:56determining value area high and value
1:29:58area low. So, why does this matter for
1:30:02order flow traders? Well, order flow
1:30:04essentially is just going to tell you
1:30:06who is active, who's defending, who's
1:30:08trapped, and then premium and discount
1:30:10is going to tell us where to narrow our
1:30:12focus. It's going to improve location in
1:30:15terms of
1:30:17making a trade, and then it's going to
1:30:19reduce overtrading. I mean, there's
1:30:20plenty of times where if you don't
1:30:23understand location, you can have a
1:30:25great entry, you can have the right idea
1:30:27on where we're actually going to in
1:30:29terms of draw next, but you just get
1:30:32stopped out or you entered a little too
1:30:34early or whatever.
1:30:37Understanding location when it comes to
1:30:39where you should actually be taking the
1:30:41trade is going to help tremendously.
1:30:45It's going to help you pick the right
1:30:46times. It's going to help you avoid
1:30:48overtrading. We realistically don't want
1:30:50to be trading the middle of a range.
1:30:53We want to be trading the extremes.
1:30:55Now, if you use order flow and premium
1:30:57and discount together, then it's going
1:30:59to create cleaner execution, and you're
1:31:01going to understand where we actually
1:31:03are in relation to value. Now, when
1:31:05people use premium and discount, there
1:31:08are common misapplications and there's
1:31:11common misunderstandings. One of them is
1:31:14you just draw a bunch of fibs all over
1:31:16the place or you mark out premium and
1:31:18discount all over the place because you
1:31:21have so many different time frames, you
1:31:22have all this different you can
1:31:24mark out established ranges all over the
1:31:26place. And then what happens is people
1:31:28will just like blindly buy discount and
1:31:30they'll blindly sell premium, but
1:31:33they're ignoring close beyond and
1:31:35validation levels. They're treating fibs
1:31:37or other zones they may have in premium
1:31:39or discount as predictive. These are
1:31:41context errors. They're not strategy
1:31:44failures. You just need to understand
1:31:47that if you're using premium and
1:31:49discount, it must be used with context
1:31:52of higher time frame alignment.
1:31:54Essentially, where are we going? You
1:31:56can't just mark out a 1-minute range on
1:31:59a 1-minute time like you can't go on a
1:32:011-minute time frame, mark out a range,
1:32:04and then we look bullish on a 1-minute
1:32:06time frame, so you're going to be buying
1:32:09up the the discount on a 1-minute time
1:32:12frame range when all of the other time
1:32:15frames 5, 15, 1-hour, 4-hour, daily,
1:32:18we're all obviously going lower. The
1:32:20draw is lower. Why are you going to be
1:32:22buying 1-minute discounts? Doesn't make
1:32:24any sense. So, just make sure if you're
1:32:27drawing premium and discount, you zoom
1:32:30out a little bit. You zoom out first.
1:32:32You do top-down analysis to understand
1:32:34where it is that we are actually going
1:32:37before you start just blindly buying or
1:32:39selling premium or discount. So, the
1:32:41final takeaway before we hop on the
1:32:43charts is just that
1:32:45premium and discount is auction logic.
1:32:48It is relative value, and it's just
1:32:50awareness of location.
1:32:52And it works best, at least for me, when
1:32:54it's combined with consistent
1:32:56measurement, meaning that you are
1:32:58drawing and determining premium and
1:33:01discount the same way every time. And if
1:33:04you combine it with volume, and then
1:33:06once we actually enter into those areas,
1:33:08if you use order flow as confirmation
1:33:10for the actual entries of the trades,
1:33:12and just understanding what it
1:33:14represents is going to make execution
1:33:17like way simpler. All right, so let's
1:33:19say that today This is today, by the
1:33:22way. So, it's currently uh February 3rd,
1:33:252026.
1:33:27This is actually a perfect example of
1:33:30premium and discount. Why? Because here
1:33:33we are
1:33:34in this range on a higher time frame.
1:33:37We're bouncing back and forth, okay?
1:33:39We go from discount to premium to
1:33:41discount to premium. Now, Sunday opens
1:33:44up, we push further into discount.
1:33:46Now, the idea is is that we're going to
1:33:48come back to the equilibrium, and we're
1:33:49going to push into premium. Now, if our
1:33:52bias is bearish, then what are we going
1:33:54to do? Well, we're going to take a
1:33:56significant swing high and a significant
1:33:58swing low, which is going to be the top
1:34:00and the bottom.
1:34:02We're going to extend it to the right
1:34:04for where price is going to basically
1:34:06print.
1:34:08And we're going to understand that we
1:34:10are watching this area.
1:34:13We're essentially watching this area,
1:34:14okay? I'm going to change this to
1:34:16orange, so it's easier to see.
1:34:18If price were to get past the 886 in
1:34:21this scenario where we're pumping, then
1:34:24we're probably going to come up here and
1:34:26hit the 1.1. What I'll do then, if you
1:34:28ever see my other charts, you may see
1:34:30boxes on it and not know where they're
1:34:32coming from. Well, this is where it's
1:34:33coming from. If we were to take the
1:34:35swing high
1:34:36to the swing low,
1:34:38and we now create a zone.
1:34:40Well, in this zone, this is essentially
1:34:43where in premium I'm looking for us to
1:34:46potentially turn around if my bias is
1:34:48that we're going to go lower. So, this
1:34:50morning, specifically, when we were
1:34:53opening up, I knew that we were here,
1:34:55and I knew that we made this large move
1:34:57up.
1:34:58So, what was my bias for the day? Well,
1:35:00it was to go lower. Now, my bias would
1:35:04have flipped if we got above this area
1:35:05and this area. Then I would have started
1:35:07looking for price to potentially go
1:35:09higher. Now, time out. Let's say, "Oh,
1:35:12well, you already know what happened
1:35:14this day. You just cherry-picked this
1:35:15shit." Okay, fine. But, this happens
1:35:18every single day, and I'm going to prove
1:35:20it to you right now. So, let's say
1:35:23Let's do this. Let's go to replay mode.
1:35:25On replay mode, let's go back to a
1:35:27random day. Let's go to November 20th at
1:35:29midnight, okay?
1:35:31Here we are in November.
1:35:34What does it look like here? Well, it
1:35:35looks like we probably are going to go
1:35:37lower. Why? Because we have
1:35:41price coming up. We now make a lower
1:35:43high, lower high, lower high. It's
1:35:46I would I would be looking for us to
1:35:48basically come lower to take these lows.
1:35:50Okay? So, that is on a 1-hour time
1:35:52frame, what I'd be looking at. This
1:35:54would be the draw. So, let's determine
1:35:56where should we actually be looking for
1:35:58a trade. So, in this scenario, where is
1:36:01our range? Well, I would be going from
1:36:03this significant swing high here to this
1:36:06swing low here. I'm going to extend this
1:36:08out.
1:36:09We're already a little bit in premium,
1:36:11but we want it to go further into
1:36:13premium.
1:36:14And then what I'll also do is I'll just
1:36:15take this.
1:36:17I'm going to mark out the swing high,
1:36:18swing low.
1:36:20We're going to draw our box.
1:36:22And we're going to put it right here.
1:36:25And this is the location that I'm going
1:36:27to be looking for to go short. And when
1:36:30we do go short, where are we going to
1:36:32target?
1:36:33Well, we'll target right here. Let's
1:36:35play it out and let's see what happens.
1:36:37Now, in the event what cuz I don't know
1:36:40what's going to happen. I just
1:36:42chose a random day. In the event that we
1:36:44move up here
1:36:46and then we get past the top of this
1:36:49zone and we get past 886, I'm no longer
1:36:52looking for us to go lower. I'm then
1:36:54looking for us to go higher and I'm
1:36:55shifting my expectation to a bullish
1:36:57bias.
1:36:58What I'm looking for though is once we
1:37:00get in here, I'd be watching order flow
1:37:02to determine whether or not we're going
1:37:04to turn around.
1:37:06Now, sometimes we may never actually get
1:37:08up into the zone. Now, in this case,
1:37:11it played out kind of quickly.
1:37:13What did we do? Well,
1:37:15we came into premium
1:37:17in the 0.62.
1:37:19We came into our zone at the first level
1:37:21and we dropped. Now, you might be saying
1:37:23to yourself, "Well, Thrax, you knew what
1:37:25was going to happen that day." Well, no,
1:37:27I didn't, but just to prove a point,
1:37:30I'mma do it again.
1:37:31It literally happens every day. This is
1:37:33how I frame
1:37:34This is how I frame my bias for
1:37:36direction
1:37:37besides using just normal market
1:37:39structure because my bias at this point
1:37:41was that we were going lower. This is an
1:37:43obvious bear trend. Lower highs and
1:37:45lower lows. You don't have to be a
1:37:46genius to figure that one out, but
1:37:49this is how I frame my ideas every
1:37:52single morning. Now, we're doing on a
1:37:541-hour time frame, but it's how I frame
1:37:56ideas every morning on where I should
1:37:58actually be looking to take a trade. So,
1:38:00you know what? Let's drop down to a
1:38:0115-minute time frame.
1:38:03And let's go choose a new day.
1:38:06We'll go back to October. We'll go to
1:38:10I don't know. October No, it's a
1:38:12Saturday.
1:38:13We'll go to Tuesday, October 14th. Okay,
1:38:17[snorts] so here we are.
1:38:18Before we even start the day,
1:38:20and usually I draw these in the morning
1:38:22after London and Asia have already been
1:38:24established, but I'm just going to show
1:38:26you what happens basically all the time.
1:38:27Let's just say that we take this swing
1:38:29low to swing high, okay?
1:38:31Let's move it to the right.
1:38:33So, we know what's going to happen
1:38:35the next day.
1:38:37We're going to be watching this area
1:38:38here.
1:38:39Standard We'll make it uh
1:38:42orange, so it's easy to see. So, let me
1:38:44just draw it from
1:38:46right here
1:38:47to right here.
1:38:49So, in this scenario, I'm looking at
1:38:52this area, okay? And then let's turn
1:38:55this off. So,
1:38:57heading into this day, if I were to be
1:38:59bullish, which I didn't even do any type
1:39:01of Let's go look for a second. Okay.
1:39:05Well, in my mind, yes, we did have this
1:39:08drop lower, but
1:39:10just for the sake of the video, let's
1:39:11just play out what happens in this area.
1:39:13Now, we can totally just be coming down
1:39:15way further than this, but
1:39:17I'm just going to uh play it out. So,
1:39:19let's say we start playing out the
1:39:2115-minute. I'm not looking to take a
1:39:22long at all until we get into this area.
1:39:28Okay. So, what happened right here?
1:39:32Here we are in our established range. We
1:39:34have
1:39:36We have the high, and we have the low.
1:39:39Now, I would also show you what it looks
1:39:41like on a volume profile, but I can't
1:39:43really do that right now cuz we're just
1:39:45on TradingView and their volume profile
1:39:46kind of sucks. We're just going to talk
1:39:48about the fibs and the and the zones,
1:39:50but what what I would be doing in this
1:39:53scenario is we have the low and the
1:39:55high. So, what happens? If we are
1:39:59bullish, we think that price is going to
1:40:01potentially come and fill this gap,
1:40:04which is a what? A new week opening gap,
1:40:07and then potentially bounce and come
1:40:09back up, then where are we looking?
1:40:10We're looking in this area to take a
1:40:12long
1:40:13or this area to take a long. If price
1:40:16gets below this box or below this 886,
1:40:19then at that point I would imagine that
1:40:22we're just going to continue to the 1.1.
1:40:24So, as price comes into here, we're on a
1:40:2715-minute time frame. If I'm watching
1:40:30this at 6:45, which is 15 minutes after
1:40:33open,
1:40:35and I'm watching this happen,
1:40:37what am I looking at? Well, I'm looking
1:40:39at order flow. I'm seeing what's
1:40:40happening in this candle right here. I'm
1:40:43seeing what's happening when we got to
1:40:44these lows, and I'm seeing what this
1:40:46next candle is going to do. Now, this is
1:40:48giving me context for location on where
1:40:50I should actually be looking to take a
1:40:52long position. We're in discount. We're
1:40:54in the area that I'm looking for. We
1:40:56touched into the 705, and now we can say
1:41:00the location is here. Let's look for
1:41:01confirmation to take it higher. Now, if
1:41:03you did that, well,
1:41:05great. You got a long, and you probably
1:41:08made some money. Now, in the event that
1:41:10we came down here, we did a little
1:41:12bounce,
1:41:13I mean, you would be watching on order
1:41:14flow for confirmation. Again, you're not
1:41:16just going to take random trades because
1:41:18they're in this area. This is just
1:41:20giving you an idea for context, okay?
1:41:24And again, people are going to say like
1:41:27"Oh, you're cherry-picking these." I'm
1:41:28literally picking random days. It
1:41:30happens like every day. I do this every
1:41:32morning to determine where do I think
1:41:34we're going. And just so that you know
1:41:36I'm basically not full of Well,
1:41:39let's start marking some of these out.
1:41:41Okay? So let's say that we go from this
1:41:44swing low right here.
1:41:48Say we go from this swing low right here
1:41:50to this swing high. Well, where are we
1:41:52going to drop on this box? I don't know,
1:41:54right there. Boom. Okay, let's draw out
1:41:56a fib.
1:41:58We go from here to here. Where are we?
1:42:00Where did we touch? The 705. Okay, well,
1:42:03if that's not random enough for you,
1:42:05let's go look for a different one.
1:42:07Let's look at this one. Okay?
1:42:09Here we are. We have our range right
1:42:10here.
1:42:11From here, this swing low to this swing
1:42:13high. Where do we touch into the 705 and
1:42:15788? We're bullish. Our our bias is
1:42:18bullish. Okay, well, what's going to
1:42:20happen when we go from swing low to
1:42:22swing high?
1:42:24It it it literally happens all the time.
1:42:27And this is a great way, as long as your
1:42:30bias is correct,
1:42:32this
1:42:33is a great way to determine
1:42:36a good location to look for your
1:42:38reversals. A good location where you
1:42:41should actually be looking for
1:42:43the trend to then continue on that
1:42:45pullback.
1:42:46Now again, you don't need this tool.
1:42:49It's great. It'll help you out, sure.
1:42:50But let's just imagine we don't have it.
1:42:52Okay?
1:42:55Now let's say that we're just looking at
1:42:57this. Well, then we're just going to be
1:42:59looking at this. This area. That's it.
1:43:02Happens all the time. So the downside,
1:43:04too. The point of this video is just to
1:43:07have you understand how I actually use
1:43:10premium and discount. I'm using it as a
1:43:13location filter to understand where it
1:43:15is that I should actually be looking to
1:43:16take trades. Just go with the higher
1:43:18time frame bias, find your discount
1:43:20areas, find your premium areas, and then
1:43:23just understand where you should
1:43:25actually be taking the trade.
1:43:27If you do that, then you use order flow
1:43:28as confirmation to actually take entries
1:43:31on smaller time frames,
1:43:34you're going to
1:43:35find that it really helps. In this
1:43:37video, I'm going to be going over an
1:43:39indicator I've been working on for
1:43:41pretty long time. So, this is the NQ
1:43:45volatility range indicator. It's the NQ
1:43:47It's called NQ volatility range. Now,
1:43:50this indicator is specifically only for
1:43:53NQ.
1:43:54The reason why is because this indicator
1:43:58is essentially taking statistical data
1:44:01and then creating
1:44:03zones or areas that we watch based off
1:44:06of
1:44:078 years of NQ data that I ran. I
1:44:10basically created like a script to
1:44:12determine how far away does price
1:44:14typically deviate above Asia session or
1:44:17below Asia session on a given day, but
1:44:19it's only for NQ. So, I had like 8 years
1:44:22of open high low close data. I ran some
1:44:25tests, um and then this indicator was
1:44:28basically born. So, we're going to go
1:44:31over the purpose and the logic and then
1:44:33the proper use of it. And then we're
1:44:35also going to talk about a little bit
1:44:38about how I use sessions a little bit
1:44:39cuz this is this is the whole point of
1:44:42the indicator really comes down to how I
1:44:45actually determine kind of what I'm
1:44:47expecting to happen on a daily profile
1:44:49or what's going to happen during New
1:44:51York session. And that all comes down to
1:44:54a daily candle. So, daily range
1:44:57expansion, right? So, most traders, they
1:44:59might treat volatility as random or most
1:45:03indicators might have,
1:45:05you know, fixed levels that are
1:45:06projected and they ignore regime
1:45:08changes, they ignore volatility changes,
1:45:11and they're just posting static uh
1:45:13levels. And sometimes traders might
1:45:15enter too early because they don't
1:45:17understand where expansion statistically
1:45:19will get exhausted, and then Asia
1:45:21session is often ignored despite
1:45:24anchoring the daily auction.
1:45:26So, what do we typically see in a daily
1:45:28candle? Well,
1:45:30usually what makes up a daily candle?
1:45:33Sessions. Now, the way that I think
1:45:35about it is that we have Asia, London,
1:45:37and New York. You can say that there is
1:45:40also CBDR. There's different Asia
1:45:42sessions that open. There's different
1:45:44sessions that open throughout here. You
1:45:46can have New York AM, lunch, New York
1:45:48PM.
1:45:50Um but realistically, if this is a daily
1:45:52candle here on the right side and we
1:45:54have the open, the high, the low, and
1:45:56the close,
1:45:57what usually makes up a daily candle,
1:46:00just to keep things simple, is Asia,
1:46:02London, and New York. What is the
1:46:03indicator doing? Well, the indicator is
1:46:06basically marking out our Asia session.
1:46:09And then it's creating levels above and
1:46:11below Asia session for what the
1:46:13statistical averages are
1:46:16on how far away we're going to expand
1:46:18lower or expand higher from Asia high or
1:46:21Asia low. So, when we have the indicator
1:46:24here, we have Asia session, we have Asia
1:46:27high,
1:46:28Asia low.
1:46:29There's also the middle of Asia or the
1:46:32equilibrium of the range. Then we have
1:46:34quarters, quarter one, quarter two.
1:46:37This is basically 25%
1:46:39or 75%. Now, the goal is to basically
1:46:43understand where
1:46:45might this daily candle wick get
1:46:47created. So, we have these different
1:46:50zones. We'll go into them, but if you
1:46:52just kind of look at this picture, we
1:46:54expanded above into one of our zones. We
1:46:57reversed down and then the move got
1:46:59exhausted in this other zone. Now,
1:47:02that's great. I mean, could have been
1:47:04cherry-picked, it was cherry-picked, but
1:47:06this is just trying to give you an
1:47:07example of of how this is going to look
1:47:10when it works properly. Now, we do need
1:47:13to understand though that
1:47:15since this is based on statistical
1:47:17averages, that there are days that are
1:47:20outliers to the data. So, if on average
1:47:22a daily candle moves, you know, let's
1:47:24just say 400 points or 350 points,
1:47:28we can have days during that time where
1:47:31a daily candle, some catalyst might
1:47:33happen, and it moves like 1,000 points
1:47:36for the daily range. Then obviously, on
1:47:38the outlier days like that, the outliers
1:47:41to the data,
1:47:43um the way that this is used is
1:47:45different because this is calculating
1:47:47basically the averages. On average, on a
1:47:49normal type of volatility day, where are
1:47:52we typically looking for price to
1:47:54basically expand, get exhausted, and
1:47:56potentially turn around?
1:47:58It's not predicting direction, okay?
1:48:01It's just defining statistically
1:48:03meaningful
1:48:05locations relative to Asia high and Asia
1:48:08low or Asia session in general.
1:48:10Now, why do we use Asia session?
1:48:13Well, I use the Asia session as the
1:48:16daily auction anchor because it usually
1:48:18is going to align with roughly the open
1:48:21of the daily candle in most most cases.
1:48:25And Asia session establishes the initial
1:48:28balance of the day. There are days where
1:48:30we expand during Asia session, you know,
1:48:32sometimes on Sundays or whatever, but
1:48:35Asia creates the range, and then London
1:48:38and New York act as expansion and
1:48:40distribution phases
1:48:42during the day.
1:48:43And then over years of data,
1:48:45price consistently reacts relative to
1:48:48Asia high and Asia low. So, that's why I
1:48:50use Asia session as the daily auction
1:48:53anchor. It's just an observed
1:48:54statistical behavior just across
1:48:56thousands of sessions when I ran the
1:48:58data, and I created a script to
1:49:00basically determine this information.
1:49:03So, sessions are a really big thing when
1:49:06it comes to how I set up my day for
1:49:09trading. I allow Asia session to form. I
1:49:12see what London and Asia did prior to
1:49:15New York open to then get an idea on
1:49:17what I believe New York open is going to
1:49:19do. If you're ever in the Discord and
1:49:22you see my daily outlooks and you know,
1:49:24I'm drawing things out and you're
1:49:25thinking to yourself, why is he drawing
1:49:27this out? It's because I'm looking at
1:49:29this. I am looking at Asia session and
1:49:31London session and then I'm trying to
1:49:33determine what is the most probable
1:49:35thing for New York to do when New York
1:49:37opens up. So, that comes into a session
1:49:41rotation model basically. So, how the
1:49:44three sessions typically will interact
1:49:46with each other.
1:49:48Like we mentioned earlier, Asia session
1:49:50will typically define the balance in the
1:49:51range and then London can often create
1:49:54the daily wick or it can just be a
1:49:56manipulation away from Asia's range and
1:49:59then New York often resolves the true
1:50:01directional move or is the continuation.
1:50:04So, keep in mind, these are
1:50:07these two images are different days.
1:50:09Now, the model looks the same. We have
1:50:11Asia session here. We have Asia session
1:50:13here. London deviates below before New
1:50:16York takes it back up. There are days
1:50:19where we have Asia, London, and New York
1:50:22all moving in the same direction without
1:50:24any of the highs getting taken
1:50:26or
1:50:27any of the lows getting taken. And there
1:50:29are also days where the the sessions
1:50:31just go sideways. We have Asia, London,
1:50:34and New York. So, this is not going to
1:50:37happen every day. We're not trading
1:50:39certainty. We're just trading
1:50:41statistical tendencies on where this
1:50:43might actually go. So, what is the
1:50:45indicator actually doing? Well, the
1:50:47indicator is locking in Asia session.
1:50:50It's locking in the highs and the lows
1:50:52at the close.
1:50:53And then it's using the daily average
1:50:56true range to define expected
1:50:58volatility.
1:50:59So, up here on the indicator, right now
1:51:02this indicator is using ATR value of 20.
1:51:06And so, if the daily range, let's say
1:51:08from a 20 ATR, is 278 points, well then
1:51:13it's has a mathematical calculation to
1:51:15determine the up projections and the
1:51:17down projections for these zones. They
1:51:20are not symmetrical.
1:51:22They are asymmetrical because the data
1:51:24shows that when price deviates below
1:51:26Asia and deviates above Asia, they are
1:51:28not the same. One is larger than the
1:51:30other and that's really important and
1:51:32that's part of the reason why this
1:51:33indicator to me is pretty cool because
1:51:36somebody can sit here and basically
1:51:38define Asia session and then they draw a
1:51:41fib going up and a fib going down.
1:51:44I actually have an indicator like that.
1:51:46It's called session range projections.
1:51:48Um but there's no statistical data
1:51:51backing that. So I think this one is a
1:51:53lot more accurate and that's kind of
1:51:55where this idea came from in the
1:51:56beginning.
1:51:58So the zones print after Asia session is
1:52:01established, but they do not repaint
1:52:03during the session. So the moment that
1:52:05the session closes, these levels here
1:52:07are going to print and they're going to
1:52:09stay there the rest of the day.
1:52:11Then the next day
1:52:13it will recalculate based off of what
1:52:15the ATR is now and then it's going to
1:52:18repaint the zones and send them out on
1:52:21your chart basically and they are going
1:52:23to stay there the whole day. So it's a
1:52:24rolling calculation that is going to
1:52:26adjust to volatility as the market
1:52:29regime changes or vol- volatility
1:52:31basically contracts or expands as the
1:52:34week moves forward, as the month moves
1:52:36forward, so you never really have to
1:52:37change it. It's it's adjusting it
1:52:39automatically itself every day. Now,
1:52:42where did I where did I get the
1:52:44statistical foundation for this?
1:52:47So like I mentioned earlier, I did
1:52:49download like it was like 15 years of
1:52:53open high low close data on a bunch of
1:52:55different time frames for Nasdaq and
1:52:57then I focused more so on as
1:52:59volatility's been building, you know, in
1:53:01the more recent years for the Nasdaq as
1:53:04more money's involved. It measures the
1:53:06average expansion beyond Asia high and
1:53:08low. And it's using volatility
1:53:10normalization to stay relevant across
1:53:13regimes. So, that's what I was
1:53:14mentioning earlier. So, it's going to
1:53:16prevent erratic behavior through change
1:53:18clamping. So, it's a rolling
1:53:20calculation. They are not arbitrary fib
1:53:23levels. These are volatility adjusted
1:53:25statistical reference areas. So, there
1:53:27are different zones here and they have
1:53:29different names for them and I'm going
1:53:30to go over that right now. So, typically
1:53:33there's, you know, five levels here. We
1:53:35have level one.
1:53:37We have AVR minus. AVR, AVR plus, and
1:53:41then we have a max level.
1:53:43What AVR stands for is it basically just
1:53:45stands for average volatility range.
1:53:47So, the way that we use these or the way
1:53:49that we understand them
1:53:51is [clears throat] that
1:53:53>> [snorts]
1:53:53>> when price deviates away from Asia
1:53:55session, the first place it's going to
1:53:57touch or the initial expansion area is
1:53:59going to be level one.
1:54:01Level one has two parts to it. It is
1:54:03this gray zone you see here, but then
1:54:04there is a red area in the gray zone.
1:54:07It's basically like the OTE of level
1:54:10one. Usually London will be the first to
1:54:13reach this area because after London
1:54:16attacks Asia highs or Asia lows, once it
1:54:19opens up, it's going to expand into
1:54:21level one.
1:54:22AVR minus is this dotted line here.
1:54:25Now, on days where we're not really
1:54:27moving or expanding in a directional
1:54:29manner, we're typically going to stay
1:54:31within AVR minus. We're going to stay
1:54:33between this dotted line and this dotted
1:54:35line.
1:54:37This area right here, AVR, is the
1:54:39average expected expansion right here.
1:54:42So, this is the average expansion that
1:54:44we would usually see
1:54:46um when price will deviate away from
1:54:48Asia session. Now, AVR plus is just the
1:54:52extended expansion. So, if we do have a
1:54:54big move that day, we'll likely reach
1:54:57AVR plus and then we would be looking in
1:54:58this location for potential exhaustion
1:55:01or for price to start turning around,
1:55:03depending on context, depending on
1:55:04higher time frame structure, and the
1:55:06higher time frame draw, things like
1:55:08that. And then the max level is
1:55:10statistically stretched territory. So,
1:55:13price realistically should not get past
1:55:16this area. And if it does get past this
1:55:18area, then
1:55:21something happened that day. It's an
1:55:23outlier to the data.
1:55:25It's very rare that price does get past
1:55:27this area, and when it does, it's
1:55:29usually a massive day, a really big
1:55:31move. It's like if the ATR or the ADR is
1:55:35typically about
1:55:37uh you know, 300 to 400 points, we'll
1:55:40say, and then we have a day where it's
1:55:42like a 600 or 700 point candle or an 800
1:55:45point candle, then yes, we will expand
1:55:47past the max. But, again, we're basing
1:55:50this off of statistics, we're basing it
1:55:52off of averages, and when you're basing
1:55:53it off of that, there are outliers to
1:55:55the data, and sometimes price does
1:55:57expand past the max, but
1:56:00it's not very often.
1:56:02Now, when you use this indicator,
1:56:04though, context is a non-negotiable.
1:56:07This is not like a uh a trade signal.
1:56:10You you're not going to just like watch
1:56:11price enter a zone, and then just
1:56:13blindly take a trade like a reversal if
1:56:15it enters a zone. That's not the
1:56:17intention of this indicator, that's not
1:56:19what I was intending it to be used for,
1:56:21so you should not be using it that way.
1:56:24It requires context, it requires
1:56:26directional bias, and that directional
1:56:28bias has to come from things like higher
1:56:30time frame market structure, and just
1:56:32understanding the market environment,
1:56:34and the zones are to be used as location
1:56:37and exhaustion areas that we'd be
1:56:39potentially watching for. These are not
1:56:41entries.
1:56:43Even though you might see the zones and
1:56:45they look like, oh, it's going to bounce
1:56:47from this zone or whatever, it's just
1:56:48supposed to be used as a confluence. So,
1:56:51for example, let's say on a day like
1:56:54this where your bias is short, okay? New
1:56:58York opens, your bias is short. That
1:57:01doesn't necessarily mean you should be
1:57:02buying every single zone. You're short.
1:57:06Your bias is short. Why are you going to
1:57:07be buying against your bias? Just
1:57:09because it hit a zone. That doesn't make
1:57:11any sense. And that's not how this is
1:57:13supposed to be used. So, you don't have
1:57:14to trade the price action based off of
1:57:17this indicator, and you shouldn't be
1:57:18trading price action based off of this
1:57:20indicator just because price touched a
1:57:22zone. So, what is this indicator and
1:57:24what is it not? This is really
1:57:26important. This indicator is a
1:57:28volatility-based location framework that
1:57:30we can use basically as a confluence
1:57:33tool.
1:57:34As long as we're using context with it.
1:57:36It's just a way to quantify Asia
1:57:38relative expansion in a statistically
1:57:42meaningful mat- matter, basically. What
1:57:45it's not is it's not a signal generator
1:57:47or prediction tool, and it's not a
1:57:49replacement for execution skill. Don't
1:57:51get this indicator and then just start
1:57:53blindly taking trades because it's in
1:57:55the zone. That's not how it's really
1:57:57supposed to work. That's not why I made
1:57:59the indicator, and that's not even how I
1:58:00use it anyways. So, I'm going to go to
1:58:03the charts, and we're going to take a
1:58:04look at how it should actually be used
1:58:07and how it should not be used,
1:58:08basically. All right, so here we are on
1:58:10the charts. We have our indicator here,
1:58:13indicator here, indicator here. The way
1:58:16you should be thinking about this is
1:58:18this is a daily candle.
1:58:20This is a daily candle. And this is a
1:58:23daily candle. So, within these daily
1:58:25candles, we have Asia, London, and New
1:58:27York. Asia, London, and New York. Asia,
1:58:30London, and New York. So, Asia is going
1:58:33to basically be
1:58:35uh the blue box, London is the red box,
1:58:37and then we have the gray box as New
1:58:39York. In this daily candle that we have,
1:58:42we're trying to basically determine how
1:58:43far away above and below Asia session is
1:58:46price likely going to move before
1:58:48turning around and returning to Asia
1:58:50session.
1:58:51And so, the idea is is that typically
1:58:53what happens, and it doesn't happen
1:58:55every day, but typically what happens is
1:58:57if price deviates away from Asia
1:58:59session, sometime throughout the day, it
1:59:02is likely, or often times it does happen
1:59:06where we return back to Asia's range.
1:59:08Whether we come back to the highs, the
1:59:10lows, or we come back to the
1:59:11equilibrium, or one of the quarters. So,
1:59:15the idea is is that first, before we
1:59:17even use this indicator like at all, we
1:59:20have to determine what our bias is for
1:59:22the day. So, if on a daily bias, we wake
1:59:27up on this day here,
1:59:30if on a daily bias, we wake up on this
1:59:32day here,
1:59:33and we think that price is going to
1:59:35basically continue higher,
1:59:38then we're not going to be looking at
1:59:40these areas here, or this area here, or
1:59:43this area here,
1:59:45to try and take a sell. Okay? Now, if we
1:59:47thought, okay, here's Asia session,
1:59:50here's London lows, London lows and Asia
1:59:52lows haven't been taken out, we're at
1:59:55least coming and taking out London lows
1:59:57when New York opens up.
1:59:59If our bias is short, then this is where
2:00:01we're going to potentially use these
2:00:04areas, if that makes sense.
2:00:06And if we are short, if our bias is
2:00:08short, then if price comes down into
2:00:10this area, this area, or this area,
2:00:13we're not going to be taking a long.
2:00:15Why? Because that's going against our
2:00:18daily bias. Why the would we take a
2:00:20long position just because a box is
2:00:22here,
2:00:23um if our bias is short? You just
2:00:26wouldn't do that. So, what happens on
2:00:28this day, right? Well, Asia session gets
2:00:30created, we have the high and the low.
2:00:32Price deviates away above Asia into
2:00:35level one, comes down a little bit, but
2:00:37then continues into the AVR minus.
2:00:40Now, price
2:00:42kind of
2:00:43gets a little bit exhausted at AVR
2:00:45minus. It doesn't want to continue
2:00:47higher yet, but then we have New York
2:00:49open. When New York opens, we push
2:00:52through here and then we start to kind
2:00:53of stall in this area. So, the way that
2:00:56I would be using this is if I wanted to
2:00:58see us go lower and I thought that this
2:01:00move going up was basically
2:01:04Then what I'm going to be looking for is
2:01:05now that we are in this area, I'm going
2:01:08to be using my other parts of my
2:01:10strategy such as order flow or if we
2:01:13have levels here to the left or whatever
2:01:15it may be to determine whether or not I
2:01:17should actually be taking a trade in
2:01:19this area.
2:01:21But I'm not just going to blindly enter
2:01:24as price gets into here.
2:01:26There's always the chance that we may
2:01:27just like stall here for a bit and then
2:01:29push higher into this zone, right? And
2:01:31then again, I'd be looking in this area
2:01:33to see what price is actually going to
2:01:35do.
2:01:35Now, in this case, we did expand into
2:01:38the AVR, price stalled out, we turned
2:01:40around, and we came back to Asia's
2:01:42range. We took London lows.
2:01:45At that point, I would basically be done
2:01:46trading.
2:01:48Now, what happened on this day? Well,
2:01:50Asia got created. We have the high, we
2:01:53have the low, we have the EQ and the
2:01:55levels in the middle.
2:01:57The first thing that happens is London
2:01:59session opens up. We end up attacking
2:02:01Asia lows and we go right into level
2:02:04one. Now, level one, we bounce up.
2:02:08We kind of mess around, New York opens,
2:02:10we come down, we stay within AVR minus,
2:02:13we stay within AVR minus, we bounce back
2:02:15up, and we basically consolidate. We
2:02:18stay in between these levels.
2:02:20Now,
2:02:21if we ever have a day where we basically
2:02:23consolidate, then on those days, it is
2:02:26likely that we stay within
2:02:28AVR minus to AVR minus.
2:02:31Let's say the next day opens up and here
2:02:34we are with this day, Asia session opens
2:02:37up, it creates its range, we now have
2:02:39the high, we We have the low.
2:02:41Well, in this scenario here, let's say
2:02:43that our daily bias was based off of
2:02:46higher time frames. We believe price
2:02:48should be going higher. So, what are we
2:02:50going to be looking for? Well, we're
2:02:52going to be watching these lows.
2:02:54We're going to see if price wants to
2:02:56come out, sweep the lows, and then start
2:02:58to head higher. Okay? So, let's say if
2:03:00that was going to be our bias on the
2:03:02day, we wanted to see previous daily
2:03:04lows get taken out, and then we wanted
2:03:06to look for a rejection or a bounce to
2:03:09take us higher towards
2:03:11a higher time frame draw on liquidity if
2:03:14it was sitting somewhere up here, and
2:03:15that's where we were looking at and what
2:03:17was in our head when we're looking at
2:03:19higher time frame structure. So, as
2:03:22London session opens up, it pushes down
2:03:24past level one. It pushes past AVR
2:03:27minus, and it comes into AVR.
2:03:30It begins to consolidate. It doesn't get
2:03:33past AVR, and it turns around. Now, it
2:03:37comes back to Asia session before New
2:03:39York open. New York then opens up, and
2:03:43we begin to push. Now, in a situation
2:03:45like this, if our bias on the day was to
2:03:48go long, and our bias on the day was
2:03:50that price was targeting some type of
2:03:52higher time frame draw up here,
2:03:55then just because price is pushing into
2:03:58level one to the upside or AVR to the
2:04:00upside or AVR plus to the upside, it
2:04:03doesn't mean that we're going to sell
2:04:05there. Why? Because why would we be
2:04:08selling against what we believe is to be
2:04:10happening if we think there's a draw up
2:04:12here, and we think price on a higher
2:04:14time frame is coming higher
2:04:17after a sweep of liquidity, why are we
2:04:19going to short it? We wouldn't.
2:04:22Now, what you can do though, because
2:04:23these are still statistical averages on
2:04:26how far away we might actually expand
2:04:28past Asia highs,
2:04:30we can be watching these these areas for
2:04:32the move to the upside to basically
2:04:34fizzle out or get exhausted. So, as we
2:04:37push higher, we push through level one
2:04:39with a lot of pressure to the upside. We
2:04:42come into AVR, there's really still
2:04:45pressure going to the upside. Now, AVR
2:04:48here,
2:04:49this AVR, not AVR minus, but the normal
2:04:52AVR,
2:04:53we see price kind of slow down a little
2:04:55bit. It is lunch, but eventually it
2:04:58pushes above it. So, the next area that
2:05:00we're I'm looking at is going to be AVR
2:05:01plus. Now, AVR plus gets hit. We have
2:05:06price up here. This doesn't mean I'm
2:05:07going to take a short, but it means that
2:05:10this is statistically a meaningful
2:05:13location in terms of a of an expansion
2:05:15move where it may get exhausted. And we
2:05:18are at the end of the day here towards
2:05:20the last hour of the market. So, this
2:05:23may be a good area to take profit, if
2:05:26that's if that makes sense. That's kind
2:05:29of how I use this indicator.
2:05:31I'm using it just as confluence for
2:05:34reference of location on how far away
2:05:37below or above Asia session are we
2:05:39typically going to deviate away before
2:05:42potentially turning around. I do not
2:05:45make trades just because it touches a
2:05:47zone. I do not make trades cuz it
2:05:49touches that zone or that zone. I just
2:05:51understand where we are in relation to
2:05:54Asia session.
2:05:56I understand the location, and then I
2:05:58understand the higher time frame on
2:06:00where we should actually be moving, in
2:06:03my opinion, so that I can use this as
2:06:06context to build trade ideas.
2:06:09And that's how this was intended to be
2:06:10used. So, if you're going to use it, you
2:06:13need to use it with context. You need to
2:06:15use it with a little bit of discretion.
2:06:17This is not built for trade signals.
2:06:21Now, if you do use it the correct way,
2:06:23and you understand
2:06:26that this is basically just a helper to
2:06:29understand location,
2:06:32then it can be powerful. I think so.
2:06:35I think it would this is a great
2:06:37indicator for me
2:06:39and I use it all the time. I've been
2:06:41using it every day
2:06:43and it's really helped me out with my
2:06:44trading.
2:06:45Now, this is a private indicator. I'm
2:06:48not selling it to you guys. I'm not
2:06:50doing I'm not trying to sell it. You can
2:06:53get this indicator for free. I'm going
2:06:55to give you this guy I'm going to give
2:06:56you this indicator for free.
2:06:58You can just check the link in the
2:06:59description and then you can claim
2:07:01access to it. You do need to be a part
2:07:04of our community though, but I guess
2:07:06what? The community is also free.
2:07:09This is just something I'm providing to
2:07:11our Discord community as something that
2:07:14is going to potentially help out and if
2:07:16you find it useful and if you figure out
2:07:18a good way to use it, great. If you have
2:07:20feedback or things that you think should
2:07:23be changed on it,
2:07:24let me know. I'll hear you out. And then
2:07:29that's basically it. The last thing here
2:07:31is just the table up here. This is just
2:07:33keeping track. So, it's telling you what
2:07:35the ATR is using. It's using an ATR of
2:07:3720.
2:07:39It's telling you what the up projection
2:07:40and down projection is.
2:07:42The only thing that you should be
2:07:43changing in this indicator at all when
2:07:45it comes to the settings, by the way,
2:07:47is the time zone and the ATR length and
2:07:50then just the way that it looks.
2:07:53That is it.
2:07:54If
2:07:55market conditions change just recently,
2:07:58something happened, tariffs came out,
2:07:59whatever, then yeah, we can lower the
2:08:01ATR length so that we can basically
2:08:05have zones that are more relevant to
2:08:08recent price action because we're going
2:08:11ATR off of a daily candle. So, if we're
2:08:12doing a length of 20,
2:08:14it's looking at the past 20 candles
2:08:16basically. So,
2:08:1820 days is a lot of time. A lot of
2:08:19things can happen in 20 days.
2:08:21If something happened 5 days ago, then
2:08:24and we want more
2:08:25uh recent zones, then we can lower this.
2:08:28My recommendation to you is to keep this
2:08:31at 20. I think it's a good idea to keep
2:08:33it at 20. I've been testing it on 20.
2:08:35It's been working on 20.
2:08:38It's been working in as intended on a 20
2:08:40value. So, just keep it there.
2:08:43And if you want access to this
2:08:44indicator, check the link in the
2:08:46description. This is free. Gamma
2:08:48exposure or GEX levels are one of the
2:08:51most important context layers in my
2:08:54stack when it comes to trading futures
2:08:56every single day. And I've had some
2:08:58people ask me how I use gamma, how I use
2:09:00these GEX levels when it comes to
2:09:02trading futures. And so, that's the
2:09:04purpose of this video today. I'm going
2:09:05to talk about what it is, how I use it,
2:09:08and how you can actually understand what
2:09:10it is that we're looking at, and why
2:09:11does it actually matter. Gamma exposure
2:09:14and GEX, they're not It's not
2:09:16necessarily a a crystal ball, okay? The
2:09:20levels that are printed are not
2:09:22necessarily places where you're just
2:09:23looking for bounces or rejections off of
2:09:26them. But, it is a powerful tool in the
2:09:29sense that it can set up proper
2:09:31expectations for the day, and
2:09:33potentially adjust the way that we head
2:09:35into the morning, and we go into the
2:09:37session looking for trades. So, in this
2:09:39video, we're going to just be going over
2:09:40what it is, and how dealer hedging
2:09:43shapes compression or expansion and key
2:09:45intraday levels that we should be
2:09:47watching for. But, it's not replacing
2:09:50structure or order flow or location or
2:09:53confirmation. It's just a context layer
2:09:55for NQ or Nasdaq futures or ES ES
2:09:59futures, where we understand the options
2:10:03driven positioning of market makers and
2:10:06dealers. So, first of all, let's talk
2:10:08about why we should even care about
2:10:11gamma. Why we should even consider it.
2:10:14Now, when a lot of traders trade
2:10:16futures, they're never really
2:10:18considering options or the options book.
2:10:21But, that is a blind spot, not because
2:10:23options predict price, but because
2:10:27dealer hedging can matter around certain
2:10:29concentrations. So, if you treat the
2:10:31listed options complex as someone else's
2:10:34game, you're essentially flying blind on
2:10:36one of the forces that routinely shapes
2:10:39behavior around dense strikes. So, when
2:10:43large options interest clusters near
2:10:45spot, market makers may hedge in the
2:10:48underlying and related products, being
2:10:51futures. So, for Nasdaq-related risk,
2:10:54that can show up in behavior you read on
2:10:57NQ futures or MNQ futures, even when the
2:11:00flow originated in listed options or
2:11:04let's just say QQQ or NDX. So, we have
2:11:07two ways that we can watch the same
2:11:09session when we're trading futures. We
2:11:11can look at futures only. You're looking
2:11:12at candles, structure only, or we can
2:11:15also add options context to it. So,
2:11:17we're looking at the same tape and
2:11:20basically a dealer strike map. So, we're
2:11:22using it in terms of context for added
2:11:25confluence to understand what's actually
2:11:27happening in the broader market. Now,
2:11:29gamma is context. It's not a trade
2:11:32signal. It does not replace the rest of
2:11:34the system that you're trading. It just
2:11:36helps classify the environment and know
2:11:39where responses could be likely. So,
2:11:42when I take a look at gamma in the
2:11:43morning, I use gamma to ask very simple
2:11:46questions, right? Is today a day where
2:11:49two-way chop and pinning around a strike
2:11:52or more plausible or where expansion and
2:11:55cleaner directional trade is more
2:11:57plausible? Then, once I understand that,
2:12:00I still need to confirm it with
2:12:02structure and order flow in the rest of
2:12:04my system. So, let's talk about what
2:12:07gamma actually is. I'm going to try and
2:12:10put it in the most plain English
2:12:12version. And just so you guys know, when
2:12:14we go over some of this information,
2:12:17Once we Once you start understanding
2:12:19options, right? If you don't already
2:12:21understand it, it does go pretty far
2:12:23into depth. It's not only about gamma,
2:12:26it's also about the different Greeks as
2:12:27well, such as charm or vanna or these
2:12:30different things. But, for this video,
2:12:32we're going to try and keep it as basic
2:12:33as possible. I'm making this video under
2:12:35the assumption that you're a futures
2:12:37trader and you don't really understand
2:12:39options. And so, we're not going to go
2:12:41into a full options full guide, okay?
2:12:44We're just going to talk about gamma and
2:12:46the basics of it and what you may need
2:12:48to know in order to try and use gamma
2:12:51data or GEX levels in your intraday
2:12:53trading for futures. Technically, gamma
2:12:56is the rate of change of delta. It's how
2:12:58fast an option's sensitivity to the
2:13:00underlying moves as price moves. So,
2:13:04in trader language, this is basically
2:13:07the closer price gets to a meaningful
2:13:09near-the-money options concentrations,
2:13:12especially where short-dated exposure is
2:13:14heavy, the more dealer hedging
2:13:16adjustments can matter. So, dense open
2:13:20interest by itself is not gamma.
2:13:23You care where delta sensitivity is
2:13:25actually relevant. And you're not trying
2:13:28to necessarily like pass a quant exam,
2:13:31you're just tracking where the machinery
2:13:33of hedging is more likely to engage. We
2:13:35don't necessarily need to understand all
2:13:39of the Greeks as of right now, or that's
2:13:40not the purpose of this video. We just
2:13:42need to think about how might hedging
2:13:44interact with price as we approach or
2:13:47leave those areas. So, how does hedging
2:13:50actually work and why does it matter for
2:13:54futures?
2:13:55Well, we have to think about it like
2:13:56this. When a customer on the stock
2:14:00exchange goes to buy or sell options,
2:14:03someone needs to take the other side.
2:14:05The market needs to be liquid. Now,
2:14:07market makers will warehouse that risk
2:14:10and hedge so that their book stays
2:14:12within limits. The purpose of market
2:14:16makers or dealers is they're trying to
2:14:18stay directionally neutral. They're not
2:14:20in the game necessarily of predicting
2:14:23direction. So, they need to stay
2:14:25directionally neutral. And how do they
2:14:27do that? Well, they do that by hedging.
2:14:29And when they do it by hedging, then
2:14:30they typically will hedge in the
2:14:32underlying assets, such as the futures
2:14:35market being one of them, but there's
2:14:36more of them. So, hedging can use the
2:14:39underlying cash, index components, ETFs,
2:14:41and futures, among other tools. And
2:14:44futures being only one key avenue,
2:14:47right? Especially relevant if we're
2:14:50looking at QQQ or NDX, and then we're
2:14:53trading NQ. So, the idea of this is like
2:14:56a very simplified hedging flow is a
2:14:58customer or or somebody on the option
2:15:02market buys a call, okay? The dealer or
2:15:06the market maker
2:15:07takes the other side of that position.
2:15:10And now they have directional exposure
2:15:12that they need to manage because they're
2:15:14not in the game of being directionally
2:15:16exposed to the market. So, what do they
2:15:19do? Well, they hedge in the underlying.
2:15:21They hedge in futures. Dealers don't all
2:15:24hedge the same way at the same time. Net
2:15:27positioning is an aggregate story. So,
2:15:29we have to treat it as probabilistic
2:15:31pressure, not necessarily a guaranteed
2:15:33path. So, when it comes to gamma or gex,
2:15:37there are two main environments. We have
2:15:40positive gamma, and we have negative
2:15:42gamma. Now, this matters because it
2:15:45changes how hedging tends to interact
2:15:47with movement on average, not every
2:15:50tick, okay? We use it to classify what
2:15:53kind of day that we're more likely to be
2:15:55in, not to necessarily cherry-pick an
2:15:58exact trade from a Greek label. Now,
2:16:00positive gamma often is where hedging
2:16:03can dampen moves. Think about it as
2:16:05suppressing momentum in a way, because
2:16:08dealers may buy dips or they sell rips
2:16:11in a way that absorbs volatility and
2:16:13price can feel pinned and we can have
2:16:15mean reverting tendencies or even chop
2:16:18around strong strikes. Now, that doesn't
2:16:20mean that trends can't occur. They can
2:16:22still occur. Nothing is necessarily
2:16:25forbidden, but
2:16:27it's just more likely due to the way
2:16:29that dealers are hedging against price
2:16:31movement, we're leaning more towards
2:16:34compression or rotation rather than
2:16:36faster expansion. Now, in a negative
2:16:39gamma environment, often what happens is
2:16:42hedging can actually amplify moves and
2:16:45the adjustments may chase direction. So,
2:16:47expansions in this scenario can feel
2:16:50cleaner or more unstable where ranges
2:16:52can break with less stickiness. So, if
2:16:55we are in a positive gamma environments,
2:16:58then oftentimes dealers are going to be
2:17:02hedging against price movement. So, we
2:17:03may see rotational behavior or
2:17:06compression. And in negative gamma
2:17:08environments,
2:17:10that hedging behavior can add to the
2:17:12impulse moves. It can make the moves
2:17:14faster. It can make expansion more
2:17:16likely. Now, we use it as expectations
2:17:21or how we can potentially set the
2:17:23expectations for the day or the session
2:17:25for the environment that we're actually
2:17:27in. It's not necessarily to predict
2:17:29every single candle. So, then what is
2:17:31compression versus expansion
2:17:33environments? Well, intraday, I care
2:17:35less about labeling the perfect regime
2:17:38and more about the session that I'm
2:17:40likely going to be navigating. So, the
2:17:43way that I think about it is in
2:17:44compression, we have a tighter range. We
2:17:47have two-way trade. There's more chop.
2:17:49There's rotation and it's balanced. In
2:17:52an expansion, this is where we have
2:17:54clear directional travel where we have
2:17:57trends or the impulse tends to actually
2:17:59move and be more usable. So, when we're
2:18:01looking at gamma and we're looking at
2:18:03the environment that we're in, we're
2:18:06using it to inform us what we
2:18:09potentially need to prepare for, but
2:18:12entries still have to come from our
2:18:14process. The way that I use gamma is I'm
2:18:19using it as a context layer in my full
2:18:22stack of my system and it typically
2:18:24comes at the beginning of the day.
2:18:26Understanding what environment we're in,
2:18:28understanding the structure of the
2:18:30dealer positioning on what is friendly.
2:18:34Are we more leaning towards an expansion
2:18:37day or is the market structured in a way
2:18:39that's more friendly or favorable
2:18:40towards expansion or is it more
2:18:43favorable towards compression? So, gamma
2:18:45just helps me frame whether I should
2:18:47expect more range behavior and mean
2:18:49reversion around certain levels or key
2:18:51areas or if we're going to have a
2:18:54session with a greater potential for
2:18:56directional expansion, but it doesn't
2:18:58tell me which specific setup to run. It
2:19:01just sets the day class that I'm trying
2:19:04to prepare for. The actual trade that
2:19:06we're taking is not solely based off of
2:19:09a gamma level or or a positive node or
2:19:12negative node on a gamma profile. The
2:19:15actual trade needs location, response,
2:19:19and in my system order flow
2:19:21confirmation. Now, I do want to talk
2:19:23about dead gamma
2:19:25versus active gamma. Now, this isn't uh
2:19:28by the way like professional options
2:19:31vocabulary, but I do need to talk about
2:19:33this because a level on a chart or a
2:19:36gamma level is not automatically a live
2:19:39wire. Dead gamma is a strike that is on
2:19:43the board. We see it, but it's not
2:19:45backed by meaningful interest or session
2:19:47relevance and price can drift through
2:19:49these levels with little participation.
2:19:51So, if we see thin open interest or
2:19:53volume at that node, we have have take
2:19:55that into account. Now, active gamma is
2:19:58a strike that we treat as live when
2:20:01we're looking at these levels because it
2:20:03could be a meaningful gamma node that
2:20:05has real interest at that strike on the
2:20:08table. So, we see volume there. We see
2:20:10open interest or however the platform
2:20:12actually shows it and then we're
2:20:14watching for a potential reaction or
2:20:17two-way trade or decision as price is
2:20:19beginning to interact with this level.
2:20:21Not only after a clean reject or
2:20:24absorption or stall. So, those behaviors
2:20:28are examples of confirmation, not the
2:20:29full definition of what it means to be
2:20:32active. So, this is where many gamma
2:20:34failed me stories come from. You're
2:20:36chasing a printed line with no size
2:20:38behind it or you're mistaking active for
2:20:40already proved itself instead of
2:20:42thinking in terms of this is worth
2:20:44monitoring closely. So, when we're
2:20:47looking at the gamma table, which we're
2:20:49going to go over later, when you're
2:20:50looking at it and then you identify a
2:20:53node with interest together, we take
2:20:56that into account. A strike with a gamma
2:20:59tag but dead volume can still behave
2:21:01like noise and a node with real size is
2:21:04usually what deserves your attention
2:21:06first. And the map or the the gex table
2:21:10narrows where to look, but live reading
2:21:12once we actually get to those areas is
2:21:14telling us what the auction is actually
2:21:17doing there. Now, there are some key
2:21:19levels that we look at. It's not the
2:21:22only ones that we look at, but they are
2:21:24the key levels that we need to look at
2:21:26when considering gamma or gex. The
2:21:29labels that you may see might vary by
2:21:32the tool that you're using or the
2:21:33platform that you're using. These are
2:21:35the ideas that I actually use. Now, they
2:21:37always come with context and you can
2:21:39never just use these as an automatic
2:21:42support or resistance. Now, what we see
2:21:46on a gex chart or a gamma table is we
2:21:50will see typically a call wall or some
2:21:53places call it a call resistance. And
2:21:55what this is is a major upside call
2:21:58reference. Now, we also have the gamma
2:22:00flip or the HVL, depending on whatever
2:22:03platform you're using and what they like
2:22:04to call it. Now, this is basically where
2:22:07we are shifting from positive to
2:22:09negative territory in terms of gamma,
2:22:12and it's where regime or behavior may
2:22:15actually shift. And then to the
2:22:16downside, we have put wall or put
2:22:18support, depending on what platform
2:22:21you're using. And this is a major
2:22:22downside put reference. Now, the labels
2:22:27may change, but this is the logic to it.
2:22:30A call wall is often a major upside
2:22:34options concentration. It may act as a
2:22:36magnet or friction for continuation or a
2:22:40place where upside cost more in hedging
2:22:43terms. And we watch in this area for
2:22:46failed continuation versus acceptance
2:22:49through this level. Now, a put wall, it
2:22:52may attract tests or dip flows or
2:22:55hedging activity there, but again,
2:22:57response confirms. We're not just
2:22:59blindly taking trades or trying to take
2:23:02a bounce off of a label that's called a
2:23:05call resistance or a put support or a
2:23:07call wall or put wall. And then the
2:23:08gamma flip or the high volume line or
2:23:11the HVL, it's a line where the
2:23:13volatility regime may shift and behavior
2:23:16can change character, for example, from
2:23:19stickier to more unstable or hedging
2:23:21against the flow with the flow or vice
2:23:24versa. And we treat it as a probable
2:23:25regime boundary. It's not a single
2:23:27switch that decides the day alone. And
2:23:31so, we use these walls as reference
2:23:33zones. The market can punch through, it
2:23:36can back test, or it can ignore them if
2:23:38other forces dominate. And your job is
2:23:41to trade what happens, not using them as
2:23:45a crystal ball or a fairy tale of a
2:23:48level. And so we look at them in terms
2:23:51of decision zones versus reaction zones.
2:23:54Reaction versus decision is not a pair
2:23:58of predefined zone types you stamp on
2:24:01the chart. It's behavior that we observe
2:24:04as price begins to actually interact
2:24:05with these levels. So a clean, fast
2:24:09interaction versus an auction that has
2:24:11to work that area before we actually
2:24:14resolve. You can't necessarily know in
2:24:18advance whether the next test will be a
2:24:21reaction style or decision style. How
2:24:24price trades the level in real time,
2:24:28participation, pace, follow-through,
2:24:31that is what actually sorts it. Now,
2:24:33execution stays order flow and footprint
2:24:36first in my system. This frame only
2:24:39tells me what kind of read we may be
2:24:42managing. Now, there are things that can
2:24:45stack or context that can actually stack
2:24:47at a level. Price side context and
2:24:49options side loading both matter. And
2:24:52the more that overlap, the higher odds
2:24:54of auction style work. It's still not a
2:24:55guarantee though. A stacked level can
2:24:58still resolve as a clean reaction if the
2:25:00tape is going to allow for it. So the
2:25:02platform that you're using, it may have
2:25:05several derivative metrics that are
2:25:07lining up at one strike or zone. So for
2:25:10example, you may see a call wall that
2:25:13also has the highest absolute gamma or
2:25:15the heaviest call open interest or the
2:25:17heaviest put volume or the largest net
2:25:19put or call flow. And the words or the
2:25:23labels may vary by the vendor that
2:25:25you're using or the platform that you're
2:25:27using, but when those stack together,
2:25:30they become stacked levels. And that is
2:25:33heavier options side context and it
2:25:35raises the likelihood of decision style
2:25:38behavior the same way as the diagram. It
2:25:41doesn't dictate the outcome. We still
2:25:44have to confirm it with order flow. Now,
2:25:46reaction zones or reaction behaviors is
2:25:49where we're looking at clean response at
2:25:51the test, a quick rejection,
2:25:53straightforward continuation, or
2:25:54acceptance without the market needing a
2:25:56long auction to decide. The read is
2:25:59often faster and you still confirm it
2:26:02with order flow. A decision zone is
2:26:05where we have decision behavior in
2:26:07auction style work where we may have
2:26:09two-way trade, chop, multiple tests,
2:26:12absorption before the market commits to
2:26:15continuation or failure at that level
2:26:17and you recognize it while it unfolds,
2:26:20not by declaring the level necessarily
2:26:23in advance. So, we keep a simple mental
2:26:26model when we start approaching these
2:26:28levels, right? We are looking at
2:26:31reaction. It's lighter, faster read, or
2:26:34decision. It's stacked and there's
2:26:36slower resolution, but then we're always
2:26:38looking at what the outcome is and what
2:26:41price is actually doing once it gets to
2:26:43this level. Now, when gamma, structure,
2:26:46and liquidity overlap, the odds of
2:26:49decision style auction behavior go up.
2:26:52They do not go to certainty. So, we
2:26:55trade the response that we actually get,
2:26:58not necessarily a stack that you hoped
2:27:01for. So, then how do I actually use
2:27:03gamma in my trading? Before we go look
2:27:05at an actual gamma table or gamma levels
2:27:07on the chart and how I would read that,
2:27:10let's talk about how I actually use it.
2:27:11Now, I use gamma as an environmental
2:27:15filter and a location map. So, it does
2:27:19not trigger entries for me. Just because
2:27:22we touch into a gamma level, it does not
2:27:24trigger an entry, but it narrows where
2:27:26the auction may matter and what regime
2:27:29I'm potentially preparing for. So, the
2:27:31first thing that I do is I classify the
2:27:33session. Are we in positive environment?
2:27:36Are we in a negative environment, and do
2:27:38we have more compression or pinning
2:27:40risk, or do we have more expansion
2:27:42potential? And then I'm marking where
2:27:45dealer dynamics are more likely to
2:27:47matter. At the walls, at the flip lines,
2:27:49or dense strikes. And then we frame
2:27:52behavior. So, are we looking at mean
2:27:55reversion tendencies or breakout
2:27:57tendencies, and what is more likely
2:27:59probabilistically? And then we decide
2:28:01where to pay attention. So, I'm not
2:28:03flat-footed at obvious interaction
2:28:05zones. So, the footprint and the tape
2:28:08confirm or veto that map. And if gamma
2:28:11says one thing and order flow says
2:28:13another, well, then order flow wins. I
2:28:15don't argue with the tape to try and
2:28:17save a level or a line on the chart.
2:28:20Execution stays the same. Location and
2:28:22response first. Gamma tells me what
2:28:25response is more likely to count. So,
2:28:27gamma is going to suggest, but order
2:28:30flow in my system always is the one that
2:28:32decides. So, we look at the dealer map.
2:28:35We see price at location, then we look
2:28:37at footprint. In my stack, gamma sits
2:28:40above execution and confirmation. It's
2:28:43context. So, the way that I typically
2:28:45view the market in the morning is I'm
2:28:46first looking at higher time frame
2:28:48structure. I'm building my bias, I'm
2:28:50building my road map, and I'm looking at
2:28:52session context and location. And then
2:28:55I'm looking at gamma. I'm understanding
2:28:56the environment that we're in. I'm using
2:28:58it as context. And then only as we
2:29:00approach levels
2:29:03and areas where I was already looking to
2:29:06sit up in my chair and start paying
2:29:07attention to footprint, do I start
2:29:10looking at order flow and footprint
2:29:11confirmation. Order flow is the final
2:29:14confirmation layer in my system. Gamma
2:29:17tells me where the conversation is more
2:29:19likely to get interesting, where I
2:29:22should start paying attention more. The
2:29:23tape tells me whether the market agrees.
2:29:26Now, there are a lot of common mistakes
2:29:28that actually happen when people are
2:29:30using gamma. And one of the biggest ones
2:29:34that I see is that a lot of traders like
2:29:36to trade gamma levels like automatic
2:29:39support or resistance,
2:29:41but that's not necessarily the way that
2:29:43we should be viewing this and you can't
2:29:45necessarily be treating every strike
2:29:47cluster equally without a session read.
2:29:50And then you have to understand dead
2:29:53prints because if you're just looking at
2:29:56big gamma nodes and we just run right
2:29:59through it, well, the auction never
2:30:01engaged there and you need to take that
2:30:03into account and you can't have gamma
2:30:06override the rest of your system,
2:30:09override price action, location, and
2:30:11footprint. So, the bottom line to this
2:30:14is that the way that I use gamma is I
2:30:17use it as a lens. When the lens and the
2:30:19tape disagree, then I trade the tape,
2:30:22but we're using gamma as context and
2:30:24what am I likely to be preparing for for
2:30:27the morning heading into a New York
2:30:29session for regular trading hours. So,
2:30:31I'm going to show you guys what I use.
2:30:33What I use is a platform called Tanuki
2:30:35Trade. But before we do that, I do just
2:30:38want to mention that gamma exposure
2:30:40helps futures traders understand where
2:30:43dealer hedging may matter and whether
2:30:45the day is more likely to compress or
2:30:48expand, but it only works as a context
2:30:52layer alongside the rest of the stuff,
2:30:55structure, session location, and order
2:30:57flow, at least for my system. And this
2:31:00deck is built to match that reality,
2:31:02practical, probabilistic, and
2:31:05subordinate to how price actually
2:31:07trades. So, here we are on Tanuki Trade.
2:31:11Now, Tanuki Trade, the way that I look
2:31:13at this is I'm looking at it on two
2:31:15visual representations. The first one is
2:31:17the table or the GEX live table and this
2:31:20is showing us the profile of where
2:31:22positive gamma is sitting, where
2:31:24negative gamma is sitting, and there are
2:31:25labels here that are showing us the
2:31:28absolute gex, the net volume per level.
2:31:32And these are important to note. And
2:31:34then you're also seeing when we zoom in
2:31:37that we have C1, which is the call wall,
2:31:40P1, which is the put wall, and then
2:31:42there's the HVL or the gamma flip level.
2:31:45Now, why is that the gamma flip level?
2:31:46Because we're going from positive
2:31:48environment to negative environment,
2:31:50right? And so this is where that's
2:31:52technically happening. Now, the other
2:31:54view that I look at is I look at it on
2:31:56the actual chart. Now, gamma is changing
2:32:00throughout the day. Dealer positioning
2:32:02is changing throughout the day. So, it's
2:32:05hard for me to show this to you without
2:32:07having some type of backtesting, but the
2:32:10good thing is is that in the Discord, I
2:32:13send out basically like the daily
2:32:17outlooks for gamma. And I'm about to
2:32:18show it to you and I'm going to explain
2:32:20the reasoning behind why I'm sending
2:32:22these things and how I'm actually
2:32:23reading it. Now, before I do that, I
2:32:25just want to explain something, okay?
2:32:27So, I have this pulled up
2:32:31throughout the day and I'm watching
2:32:32these levels. And you can see when
2:32:35levels have stacked confluences on them.
2:32:37So, if we have C2, which is the second
2:32:41biggest call side gamma wall, and we
2:32:44also have the most absolute gex here,
2:32:47the highest call open interest, the
2:32:50highest put volume, and the highest
2:32:53positive net deck strike, well, this
2:32:55becomes a stacked level. Now, with
2:32:58Tanuki Trade, you can actually click on
2:33:00these and it'll read this to you on the
2:33:02side. Now, it's hard for you guys to
2:33:04kind of see this right now, but
2:33:05basically what this saying what this is
2:33:07saying is that there's confluence here
2:33:09at this level. Five levels are
2:33:11converging and so the strike is
2:33:13reflecting heavy exposure concentration
2:33:16and it may function as a reaction zone
2:33:18within the current options structure.
2:33:20And it's showing us what we have here.
2:33:22And this is important, and I think this
2:33:24is a great way to view these levels, and
2:33:27that's why This is why I love this
2:33:29platform so much and why I pay for it
2:33:31because it makes it easy. It makes it
2:33:34easy for me, right? So, let me go and
2:33:36show you guys how I'm actually viewing
2:33:39this on the day. Now, let's take Let's
2:33:42take yesterday or Friday as an example.
2:33:45Now, this is market open, okay? So, what
2:33:49did we do during market open? We
2:33:51compressed.
2:33:52Now, if you didn't know what was
2:33:55happening and what the environment that
2:33:58we're potentially in, you could have
2:34:00made the assumption that we were going
2:34:02to make an expansion this day, that we
2:34:04could have ran up to maybe a 4-hour draw
2:34:09to that to the to the upside, right?
2:34:10Maybe this was your draw for the day, or
2:34:12maybe you wanted to see us come down and
2:34:14rebalance this area, or even target
2:34:16these lows. And once market opens and we
2:34:20start pinning back and forth, you're
2:34:22wondering why. Like, why are we doing
2:34:24this and not actually making a move? Why
2:34:26are we going back and forth? Well, let
2:34:28me show you something, and let me show
2:34:30you how I approached this day and how I
2:34:32was actually anticipating this type of
2:34:34behavior before the market ever even
2:34:37opened. And if you can understand that,
2:34:39then you can frame your decisions during
2:34:42the day
2:34:43ahead of time to understand what is more
2:34:46likely and what is less likely to
2:34:47actually happen. So, in the outlook for
2:34:51Friday, this is what I said for QQQ and
2:34:54NQ, I said, "We're currently trading in
2:34:57a positive gamma environment."
2:35:00This is where we were opening up for the
2:35:02day. Here we are in a positive gamma
2:35:05environment. Now, we have the gamma flip
2:35:07level here. We have the put wall down
2:35:10here, and we have the call wall up here.
2:35:12Now, the call wall up here is stacked,
2:35:15meaning that we have multiple
2:35:17confluences here. We have the net call
2:35:19open interest, we have call open
2:35:21interest, we have absolute gex, too. And
2:35:24it's stacked here at the call wall, or
2:35:26where you have the largest positive
2:35:28gamma node. Now, the idea was is that my
2:35:32baseline expectation for Friday morning.
2:35:35Now, I understand it's not a guarantee,
2:35:36but the baseline expectation for Friday
2:35:39morning was that we were either going to
2:35:40see that it was likely that we were
2:35:43going to see compression or controlled
2:35:45price reaction rather than a clean
2:35:46expansion for the morning. Now, I did
2:35:49note that price is pushing higher into a
2:35:51stack decision zone, right? That's that
2:35:5424 450 area or the call wall. Now, this
2:35:59area is just where I'm going to be
2:36:02watching, right? I'm watching this area
2:36:04to see if we're going to have acceptance
2:36:06past it or above it, or if we're going
2:36:09to have absorption there. Now, if buyers
2:36:11start pushing into this area and they
2:36:14don't have any type of result for their
2:36:16effort, then we can see a potential
2:36:18rejection. If we end up actually getting
2:36:20acceptance above it, then that opens the
2:36:22door for delayed expansion. So, let's go
2:36:26and mark out that level on the chart, 25
2:36:28450, right? So, here's where that level
2:36:31actually was on the chart for the
2:36:33morning. Now, it wasn't the only level
2:36:35because we also had another level. We
2:36:37had the second call wall, which
2:36:40actually adjusted later to being the
2:36:42call wall as the day progressed because
2:36:45dealer positioning is changing
2:36:46throughout the day, and where is that
2:36:48sitting? Well, it's sitting right here
2:36:50at 25 360. So, let's go mark that out.
2:36:54So, as the day began to pre- progress,
2:36:56okay? We had CPI on Friday. We push up.
2:37:00We come back down. We begin to compress
2:37:02towards market open. Now, am I surprised
2:37:05that we are compressing in a positive
2:37:06gamma environment? No. That was the
2:37:09baseline expectation for this day. So,
2:37:12I'm watching this level as it later
2:37:14changes to becoming the call wall, and I
2:37:17understand that being in a positive
2:37:19environment that dealers are hedging
2:37:21against price movement. Every time price
2:37:23moves up, dealers are selling. Every
2:37:25time price moves down, dealers are
2:37:27buying, and it's causing this
2:37:29suppression for momentum and volatility,
2:37:32and I understand that we're in that
2:37:33environment. So, understanding that I'm
2:37:36in that environment, does that
2:37:37necessarily mean that I'm going to just
2:37:41be taking bounces off of this level? No.
2:37:44Now, if you did, you can make the
2:37:46argument that you would have made some
2:37:48good trades, right? Because this level
2:37:49existed here. You could have taken the
2:37:51bounce off of it here, the bounce off of
2:37:53it here, but that's not necessarily how
2:37:56I use these levels. I just understand
2:37:58that if we are in a situation like this,
2:38:00and the environment is telling me that
2:38:03we're likely to compress or rotate for
2:38:06this day, then I'm going to be less
2:38:08likely to try and take breakout trades.
2:38:11I'm going to be more suspicious
2:38:14of false moves, of false breakouts. And
2:38:19that idea is coming from understanding
2:38:22the environment. And that's why it's
2:38:25being used as a context layer in my
2:38:27system. And so, I can go into the day
2:38:30today with the idea that we have the
2:38:32baseline expectation before price ever
2:38:34started doing this, before we ever
2:38:36started compressing like this.
2:38:38You probably had a lot of traders this
2:38:41day that were trading
2:38:43and trying to take breakouts. They saw
2:38:45effort, they tried to go long here,
2:38:47maybe they tried to go short here, maybe
2:38:48they tried to go long here.
2:38:50And they're trying to trade the breakout
2:38:52of this compression, but if you were
2:38:54using gamma and understanding the
2:38:57environment that we we were in, and
2:38:59understanding that we weren't really in
2:39:01a friendly environment for breakouts or
2:39:04expansion in the first place,
2:39:06then you can filter those
2:39:09subpar decisions out of your trading
2:39:11day. I understood that we're in this
2:39:14type of environment. I understood that
2:39:17because of that environment, well, we
2:39:19need to be careful about taking
2:39:20breakouts. And rather, we may lean more
2:39:23towards trades that we can have
2:39:25rotational behavior. And so, what was
2:39:28the trade that I actually took on
2:39:29Friday?
2:39:30It wasn't a breakout. It wasn't this
2:39:32breakout. It wasn't this breakout
2:39:34attempt.
2:39:35Once we popped up above this area, and I
2:39:38was looking to see whether or not we
2:39:40were going to accept prices higher, and
2:39:43then continue our way up here.
2:39:45And the first thing that happened after
2:39:47we got above this area is we slammed
2:39:49back down.
2:39:50Well, what is that telling me? When I'm
2:39:52watching the footprint, what is that
2:39:53telling me? It's telling me that we
2:39:55failed to accept higher prices above
2:39:58this level. And knowing that we're in a
2:40:00positive gamma environment, and that we
2:40:03are likely to have mean reversion
2:40:04behavior,
2:40:05and that's the baseline expectation, not
2:40:07a guarantee, but the baseline
2:40:08expectation, well, then I go short. Why?
2:40:11Because that's the environment that
2:40:12we're in. It's likely that we're going
2:40:13to rotate. So, instead of taking the the
2:40:17long, and trying to chase a breakout in
2:40:19an environment that's not friendly
2:40:21towards breakouts in the first place, we
2:40:22go for the mean reversion. We go for the
2:40:24rotation. We go for the rejection or the
2:40:26fake breakout and the slam back down
2:40:28into this area. And so, I took short
2:40:30here after I saw this candle come down,
2:40:32and I got out pretty quickly. Now, why
2:40:34did I get out quickly? Why didn't I hold
2:40:36this trade and take it all the way down
2:40:38here?
2:40:39Well, because I understand that if we
2:40:43are in a compression environment, we're
2:40:46in a positive gamma environment, that
2:40:49I'm more inclined to take profits
2:40:51quicker. I'm more inclined to be
2:40:53prepared to trail my stop. Now, we can
2:40:56run. Now, we made a pretty good move,
2:40:58right? We made a pretty good move. We
2:41:00went all the way down for like 150
2:41:01points. I didn't catch the whole thing.
2:41:03I'm sure a lot of people did, but the
2:41:06reason why I took profits quickly is
2:41:08because when we're in this type of
2:41:09environment, I'm more inclined to take
2:41:11profits quickly if I know that dealers
2:41:13are hedging against price movement. If
2:41:15we're in a negative gamma environment
2:41:16where dealers are hedging with that
2:41:18movement, then I may be more inclined to
2:41:20actually hold that trade, let it
2:41:21breathe, and let it run just because of
2:41:24the environment being
2:41:27structured in a way that's more
2:41:29favorable towards expansion, so you can
2:41:31let those run. Now, let me show you an
2:41:33example of negative gamma. Now, I can't
2:41:35go back on Tanuki trade, but what I can
2:41:38do is I can show you an environment that
2:41:39we were actually in. So,
2:41:41let's take this day for example, okay?
2:41:45On this day,
2:41:47if we're looking at QQQ, this is where
2:41:50price was opening in this yellow dotted
2:41:51line. Now, what do we notice about this
2:41:53area? Well, we notice that we are in a
2:41:56negative gamma environment. So, heading
2:41:58into the day,
2:42:00I understand that we are in a negative
2:42:02gamma environment, and this is shifting
2:42:04my expectation towards expansion and
2:42:07directional movement rather than just a
2:42:09chop. And so, when I'm looking at this
2:42:12day, well, I'm more inclined to look for
2:42:16an expansion. Now, just because we're in
2:42:18a negative gamma environment, I do not
2:42:21want you guys to think just like, oh, go
2:42:23short or positive gamma because it's
2:42:25green, go long. That's not how we view
2:42:27this. I just understand that being in a
2:42:29negative gamma environment, it's more
2:42:31favorable or friendly towards an
2:42:32expansion. So, what actually happens
2:42:34this day, right? What day is this? This
2:42:36is April 7th. Now, this is what I wanted
2:42:38price to do. I wanted price to pop up
2:42:40and then expand down and have that
2:42:41expansion happen rather quickly because
2:42:44we have that hedging with price
2:42:47movement, which could accelerate the
2:42:48move or the impulse. So, let's go back
2:42:50to April 7th, and let's take a look at
2:42:52what actually happened this day. So,
2:42:54this is the day, and what do we see that
2:42:56we do? Well, we open up, this is the
2:42:59market open, we push up into this area
2:43:01that I wanted us to push up into. Let me
2:43:03show it to you side by side, okay? We
2:43:05push up into the area that I was looking
2:43:08for us to push up into. It this just had
2:43:10to do with the rest of my framework, and
2:43:12we have that move down. Now, when we
2:43:14have this move down, I'm more likely to
2:43:17hold this type of trade towards the
2:43:18targets. Now, where were the targets for
2:43:20this day? Well, it was here. This was
2:43:22the ultimate target for the day.
2:43:24And I understand that we're in an
2:43:26environment that is allowing us to
2:43:30potentially have that baseline
2:43:32expectation of an expansion in a cleaner
2:43:34directional move. And so, what do we get
2:43:36in this scenario? We're in a negative
2:43:37gamma environment, we have targets to
2:43:40the downside, we're in an environment
2:43:42where dealers are hedging with the move,
2:43:43so we can expect expansion rather than
2:43:46chop. And so, when we see this trade, we
2:43:49can take it with momentum. We have speed
2:43:51coming down here. As we're making our
2:43:53way down here, this is happening rather
2:43:55quickly. We drop basically 200 points in
2:43:5715 minutes, okay? So,
2:44:01the the takeaway from this, because
2:44:04people always ask me how I'm using
2:44:06gamma, and a lot of traders are looking
2:44:08at put walls and call walls just as
2:44:11automatic rejection zones. But that's
2:44:13not how I'm actually treating these. I'm
2:44:14just using it as an environment filter
2:44:17to understand what's more likely for the
2:44:18day. Are we going to compress? Are we
2:44:21going to expand? And it's not a
2:44:23guarantee, but it's setting the baseline
2:44:25expectation. There are a lot of gamma
2:44:27platforms and, you know, things that you
2:44:29can use out there on the internet. to
2:44:31use this one. Why? Because I love the
2:44:34interface of it. I think it's super
2:44:35useful. I love to see this information
2:44:38and see where the stack levels are, and
2:44:41it makes it easy for me.
2:44:43Now, there are other platforms, but this
2:44:45is just personally the one that I use.
2:44:47You can go and do your own research. You
2:44:49can use the ones that you want to use.
2:44:51But if you do want to use Tanuki Trade,
2:44:53then click the link in the description
2:44:55below, use code never flat, and then you
2:44:59can get a free trial and you can test it
2:45:01out and see how it works for you and
2:45:03your trading. Just don't view this as
2:45:06automatic levels where you're just going
2:45:08to take rejections just blindly. That's
2:45:12not really how you should be using this.
2:45:14Although it may work that way sometimes,
2:45:16that's not really how you should be
2:45:18viewing this. We should just be using
2:45:19this mainly to understand what type of
2:45:22environment that we're in, understand
2:45:23key levels when it comes to options
2:45:25data, and how dealers may actually be
2:45:28behaving once price is moving around at
2:45:31market open, regular trading hours, and
2:45:33what that type of behavior might be. Is
2:45:35it against price? Is it with price? And
2:45:36what is that allowing price to actually
2:45:38do? And then we use our system or
2:45:39whatever strategy you trade
2:45:41to actually make normal decisions. But
2:45:44we're using this as an environmental
2:45:46filter and a location map. Okay?
2:45:50So,
2:45:51this is just a basic overview. I know
2:45:53kind of went into depth, but this is a
2:45:55basic overview of gamma and using it for
2:45:58futures trading. Now, it goes way deeper
2:46:00than this because you then have to take
2:46:02into account the other Greeks. If we're
2:46:04talking about options data and options,
2:46:07you can't just only look at gamma at the
2:46:09end of the day. There's also things like
2:46:11that influence that such as charm or
2:46:13vanna or
2:46:15the different Greeks. Now, that's not
2:46:17the purpose of this video, but my point
2:46:19is is that it doesn't stop here. This is
2:46:21just a brief overview of how I'm using
2:46:24gamma in my trading. So, now that we've
2:46:26talked a little bit about location and
2:46:28context before it actually comes to
2:46:30order flow, I do want to start talking
2:46:33about some order flow concepts and how
2:46:35we can actually read footprint charts
2:46:37and maybe some common mistakes that new
2:46:39traders who are trying to learn order
2:46:41flow may actually make when they're
2:46:43beginning their journey in terms of
2:46:46reading order flow or using order flow
2:46:48cell charts. And the first thing that I
2:46:50want to talk about is delta because it's
2:46:53probably one of the most misunderstood
2:46:55order flow concepts by beginners. In the
2:46:58market, aggression and effectiveness are
2:47:01not the same thing. Delta in order flow
2:47:04measures aggression and price movement
2:47:06is going to measure effectiveness. And
2:47:08if you don't understand the difference,
2:47:10then delta is going to end up costing
2:47:12you a lot of money.
2:47:13Delta is one of the most, in my opinion,
2:47:16misunderstood tools in order flow and
2:47:18it's not because it's wrong, but it's
2:47:21because most traders confuse aggression
2:47:23with control. So, I'm going to try and
2:47:26explain delta and how I view it.
2:47:29Everyone talks about delta, a lot of
2:47:30people use it, some people use it
2:47:32correctly, and other people
2:47:35um are kind of confused on what delta
2:47:36actually is. Now, the traders that
2:47:39misunderstand delta, you're going to
2:47:41make mistakes um making decisions based
2:47:44off of delta because the most the most
2:47:47important thing that you have to
2:47:48understand when it comes to delta is
2:47:51that it's measuring aggressive
2:47:53participation and participation
2:47:56does not necessarily equal control.
2:47:59In case you don't really know what delta
2:48:01is, if you're not familiar with it well,
2:48:04delta is the difference between
2:48:06aggressive buyers and aggressive
2:48:08sellers. So, if this is a footprint
2:48:09candle, you have volume on the bid and
2:48:12volume at the ask and essentially you
2:48:14take the buy volume at ask and the sell
2:48:16volume at bid
2:48:18and you subtract them and then you get a
2:48:20delta. It's going to be a positive
2:48:21number, it's going to be a negative
2:48:22number.
2:48:23What it's measuring is it's measuring
2:48:25who is crossing the spread and how much
2:48:27aggression actually occurred. Um but
2:48:30it's not measuring
2:48:32who's positioned, who has inventory
2:48:34advantage,
2:48:36the higher time frame context, which is
2:48:38incredibly important, and then future
2:48:40direction. It's not measuring that.
2:48:42Delta is just the evidence of initiative
2:48:45activity. So, it's not evidence of
2:48:47structural control. It's just showing us
2:48:50who is aggressive. Are buyers crossing
2:48:52the spread and lifting the offer? Are
2:48:54sellers crossing the spread and hitting
2:48:55the bid? And we can use that information
2:48:59to make decisions, but we need to
2:49:00understand
2:49:02what it is, how it's measured, and how
2:49:04we can actually use it. Now, there is a
2:49:06difference between participation and
2:49:09dominance, and it is time frame
2:49:11dependent. So,
2:49:13aggression does not automatically equal
2:49:15control. Participation is who is
2:49:18initiating the trades, and then
2:49:20dominance is who is successfully moving
2:49:22price.
2:49:23And price is only going to move when
2:49:25aggressive flow overcomes available
2:49:27liquidity. However, control is time
2:49:30frame dependent. So, short-term
2:49:32initiative can dominate locally, like on
2:49:35a lower time frame,
2:49:37but higher time frame liquidity can
2:49:39absorb and reverse. So, delta is showing
2:49:42who is pressing and who is aggressive,
2:49:44but the response to that or the price
2:49:46response is going to show whether that
2:49:48pressure was actually effective.
2:49:51So, you can have
2:49:53higher time frame liquidity that absorbs
2:49:55initiative dominance on a shorter term
2:49:58basis or a lower time frame. Now, what
2:50:00happens when we actually, let's say,
2:50:02push up with positive delta into highs?
2:50:05Well, it's context dependent because
2:50:08let's say that here are the prior highs.
2:50:10Okay? And we're watching delta, we're
2:50:12watching order flow, we're looking at
2:50:15the DOM, we're seeing where resting
2:50:16liquidity is sitting.
2:50:18At the highs, you might typically see
2:50:20breakout buyers entering into a trade or
2:50:23stop orders getting triggered for
2:50:25traders who put their stop loss right on
2:50:26the other side of that high, or even
2:50:28momentum traders who are chasing. Now,
2:50:32all of this is going to produce strong
2:50:34positive delta.
2:50:36Now, just because there is strong
2:50:38positive delta does not mean that
2:50:40inherently buyers are in control and
2:50:42we're supposed to be going higher.
2:50:44Because if price fails to extend
2:50:47meaningfully after this imbalance, then
2:50:50it's going to suggest that aggressive
2:50:51buying encountered sufficient resting
2:50:54supply. So, let's say that we have large
2:50:57resting supply or large resting orders
2:50:59here
2:51:00and buyers push into it. The orders are
2:51:03absorbing all of that aggression. Now,
2:51:06one thing to note though is that failure
2:51:08to extend does not necessarily guarantee
2:51:10a reversal. It's just showing us that
2:51:12aggression alone,
2:51:14from the buyers in this case,
2:51:16may not be enough. And what we need is
2:51:19acceptance to follow after the
2:51:21imbalance.
2:51:24And the same goes essentially for
2:51:26negative delta. Now, negative delta does
2:51:29not necessarily ensure downside
2:51:32continuation.
2:51:33So, large negative delta
2:51:36means that sellers were aggressive. It
2:51:38does not mean that sellers achieved
2:51:40dominance.
2:51:42If price cannot continue lower, let's
2:51:44say this is the scenario and we're
2:51:46heading into a support, if price cannot
2:51:49continue lower despite the sustained
2:51:51selling and the large negative delta,
2:51:53then that is going to indicate that
2:51:55potentially absorption is happening by
2:51:57passive buyers. But again, however,
2:52:00absorption can actually serve two
2:52:02purposes.
2:52:03Those two purposes are position building
2:52:06before reversal
2:52:08or inventory transfer before an actual
2:52:10continuation.
2:52:12Price response after absorption
2:52:14determines which one of these two it's
2:52:16going to be
2:52:17and that's going to help us make a
2:52:18decision on a trade. Now,
2:52:20delta is here to reveal effort, but
2:52:24price progression following that effort
2:52:27is going to reveal the outcome. Now,
2:52:30people talk a lot about delta flips, and
2:52:32I use Delta flips, too, but
2:52:35some people need to understand that
2:52:38Delta flips only matter with structure
2:52:41and then response because
2:52:43a Delta flip is really only meaningful
2:52:46when it occurs at a structural
2:52:47inflection point and it follows failed
2:52:50initiative pressure and it produces a
2:52:54measurable change in price behavior. So,
2:52:57let's say Delta flipping inside of
2:52:59balance or consolidation or chop,
2:53:02whatever you want to call it, without
2:53:04structural context is essentially noise.
2:53:07But, it's important to clarify that
2:53:10Delta or a Delta flip alone is not
2:53:13necessarily a signal. It's just evidence
2:53:16of shifting aggression, and it must be
2:53:18validated by price response. So, let's
2:53:22say that we are looking at price coming
2:53:24up into a key level. We have
2:53:27positive Delta as we come up, and then
2:53:30once we reach this key level, we now
2:53:32have a Delta flip.
2:53:33You see Delta go from positive and a
2:53:36meaningful change to a negative Delta.
2:53:38Sellers absorbed buyer aggression, and
2:53:41then we essentially flip and create a
2:53:43sustained move down. The response shift
2:53:46is what we're looking for. The structure
2:53:48is the first thing that builds the
2:53:49context, but a Delta flip without
2:53:52structure or
2:53:55failed initiative or response shift is
2:53:57like
2:53:58um and I'm sure it depending on what
2:54:00time frame you're on, too. If you go
2:54:02look at I don't know, like if you're on
2:54:03a 1-minute time frame, you'll probably
2:54:05see Delta flips all over the place.
2:54:07Well,
2:54:08I'm sure if you tried to take all of
2:54:10those Delta flips on a 1-minute time
2:54:12frame as a signal, you're going to get
2:54:14absolutely destroyed.
2:54:16And the reason why is because we just
2:54:18need to understand that if we are going
2:54:20to use a Delta flip as context,
2:54:22then we need it with structure, and we
2:54:25need it with failed initiative and then
2:54:28the actual response shift after with a
2:54:30sustained move. How can price respond to
2:54:33an aggressive imbalance? There's three
2:54:35main ways. There is acceptance. Now,
2:54:37this is where you essentially have range
2:54:39expansion or continuation and there is
2:54:42follow through in the same direction.
2:54:44And this just means that the aggression
2:54:46is effective. So, price is moving. Then
2:54:49there is absorption. So, this is where
2:54:51we do have positive delta and when we
2:54:54start to stall, we still have positive
2:54:56delta, but there's little to no range
2:54:58expansion and then price can potentially
2:55:00stall or even rotate or reverse. And
2:55:04what this is essentially meaning is that
2:55:06aggression is present, but it's not
2:55:08producing any type of continuation. It's
2:55:10not effective. Now, the third way is a
2:55:13pause before continuation. So, you could
2:55:17have a strong imbalance, large delta
2:55:21and then you have a brief stall or
2:55:23pause.
2:55:24And then we continue and the move
2:55:26resumes. And this just is basically
2:55:29meaning that aggression pauses and then
2:55:31regains control. One of the most
2:55:33important things
2:55:35to mention is that
2:55:36absorption does not automatically imply
2:55:39that there is going to be a reversal.
2:55:42It's just indicating interaction between
2:55:44aggressive and passive liquidity.
2:55:47There's a lot of times where I talk to
2:55:51order flow traders who maybe don't
2:55:53really understand absorption and they
2:55:57think that anytime they identify any
2:55:59type of absorption going on between
2:56:01aggressive and passive liquidity,
2:56:02they're just assuming automatically like
2:56:04it's a reversal.
2:56:06Well,
2:56:07no, because there could be absorption
2:56:09and then a continuation after. It was
2:56:11just pause before continuation. So, it's
2:56:15important to understand the market
2:56:18conditions that we're in because they're
2:56:19going to define the interpretation of
2:56:21how we see certain things when it comes
2:56:23to Delta.
2:56:24So, for example, in strong initiative
2:56:27environments or like let's just say a
2:56:28trending day,
2:56:30there's going to be directional
2:56:31conviction,
2:56:32then opposing liquidity, and Delta
2:56:35expansion is going to confirm
2:56:36continuation. So, we're just going to
2:56:38continue to go. Delta continues to
2:56:40remain largely positive,
2:56:43and it's kind of one-sided trade. Now,
2:56:46in balance conditions or what is
2:56:49consolidation or range day or what
2:56:51people might call chop,
2:56:53um you have two-sided trade. Now, in
2:56:55two-sided trade, usually what happens is
2:56:58we will have repeated rotation between
2:57:00highs and lows. We'll have breakouts
2:57:02that fail, breakdowns that fail, and
2:57:05then aggression is going to fade inside
2:57:08of the range. And you're going to have
2:57:09Delta flips all over the place. Now,
2:57:12using Delta in a situation like this is
2:57:15probably not as effective as using Delta
2:57:18in a different type of situation or
2:57:20different different type of environment.
2:57:23And it's not that Delta is inconsistent,
2:57:25it's just that market conditions change.
2:57:28And Delta just needs to be interpreted
2:57:30relative to the environment that we're
2:57:32viewing it in.
2:57:33So, there is aggression,
2:57:36and then there is effectiveness.
2:57:38And the purpose of this video is just so
2:57:41that when if you're using Delta,
2:57:43aggression is who crossed the spread,
2:57:45who is pressing.
2:57:46Effectiveness is whether price actually
2:57:48progressed or not.
2:57:50If there is aggressive flow that does
2:57:52not produce range expansion,
2:57:55then dominance is not confirmed.
2:57:58And Delta is not predictive, it is
2:58:00contextual evidence within the auction.
2:58:03All it is is it's just showing the
2:58:05effort, but price is going to show the
2:58:07result. And your edge or our edge is
2:58:10going to come from understanding the
2:58:12difference. This is a very overview
2:58:16of
2:58:17Delta.
2:58:19The main purpose of this video is just
2:58:21to understand I mean, you might hear
2:58:23traders who say like
2:58:25oh, look at the Delta. Look who's in
2:58:27control. I mean, it's not it's not that
2:58:29that's wrong, but it's just it's
2:58:31incomplete.
2:58:32So, we just need to understand that
2:58:34participation is not control.
2:58:37And we can use Delta. It's a great tool
2:58:40if you use it correctly. But, we just
2:58:43need to understand what it is measuring
2:58:45and what it is not measuring. So, let's
2:58:47talk about absorption. Most traders can
2:58:50completely misunderstand absorption.
2:58:53They might see aggressive buying or
2:58:54selling on the footprint and immediately
2:58:56assume that price has to continue, but
2:58:58aggression alone does not move price.
2:59:00The real question is, did that
2:59:02aggression actually produce result or
2:59:05produce price progression? Because
2:59:07sometimes the market can absorb massive
2:59:09buying or selling pressure and the
2:59:11market can barely move at all. And
2:59:12understanding that difference is one of
2:59:14the most important concepts in order
2:59:16flow trading or the concept of effort
2:59:18versus result. So, in this video, I'm
2:59:21going to break down what absorption
2:59:22actually is, how it works mechanically,
2:59:25and how it differs from exhaustion
2:59:27because sometimes traders get them
2:59:28confused. But most importantly, I'm
2:59:31going to talk about when absorption
2:59:33actually matters and when it could
2:59:35potentially just be noise. I think it is
2:59:37important to make a video about
2:59:39absorption because it's probably the
2:59:40first thing that many traders actually
2:59:42learn when they're first getting into
2:59:43order flow trading. And it's important
2:59:45to really understand absorption and how
2:59:48we need to be viewing it or looking at
2:59:50it when we're trying to use it for
2:59:52information or informational value when
2:59:55it comes to our trading. So, the first
2:59:58thing we need to understand is what
3:00:00absorption actually is and what it
3:00:03really means because at the most basic
3:00:05level, absorption is effort without
3:00:08result. And that's the key concept. You
3:00:10have aggressive market participants
3:00:12coming into the market, but price fails
3:00:14to continue in the direction of that
3:00:16aggression. For example, let's say that
3:00:19buyers are aggressively lifting the
3:00:21offer, and we have positive delta
3:00:23expanding, and there's heavy trading
3:00:25volume, but price can't continue higher.
3:00:28That can suggest that passive sellers
3:00:30are absorbing that buying pressure, and
3:00:32the opposite is true for sellers hitting
3:00:34the bid and the passive buyers. Now, one
3:00:37important thing, absorption itself is
3:00:39not some magical thing or this entry
3:00:43signal alone that you should just be
3:00:45blindly fading or taking a trade because
3:00:48you're witnessing it happening, because
3:00:50absorption does not automatically
3:00:52guarantee a reversal. There can be pause
3:00:55before continuation. All it means is is
3:00:58that the aggressive side is no longer
3:01:00being rewarded for their aggression at
3:01:02that moment in time. But, to truly
3:01:04understand absorption, we have to
3:01:06understand aggressive and passive
3:01:08participants. You need to understand the
3:01:11difference between aggressive and
3:01:12passive participants because aggressive
3:01:14participants are traders who are using
3:01:16market orders. They're crossing the
3:01:18spread because they want to get in
3:01:20immediately. It's when you click buy
3:01:21market or sell market. That aggression
3:01:23is what you're seeing on the footprint
3:01:25through delta or imbalances and executed
3:01:28volume. Passive participants are a
3:01:30little bit different. That's what you
3:01:31might see on like a heat map or on the
3:01:33DOM. They're sitting with resting limit
3:01:36orders, and they're providing the
3:01:38liquidity to the market. And absorption
3:01:40happens when those passive participants
3:01:43are willing to absorb aggressive
3:01:44pressure without allowing price to
3:01:46continue meaningfully. Now, obviously
3:01:49not all liquidity is visible. There can
3:01:51be hidden liquidity, there can be
3:01:53iceberg orders, and there can be things
3:01:55that are happening behind the scenes.
3:01:57But, what matters to us as traders is
3:02:00the result, and that's the entire idea
3:02:03behind effort versus result. So, when
3:02:05we're thinking about effort versus
3:02:07result, this is probably the most
3:02:09important section of this entire video.
3:02:12And a lot of traders focus only on
3:02:14effort. They look at big delta, big
3:02:17volume, big imbalances, but they
3:02:19completely ignore the result. If buyers
3:02:21are extremely aggressive and price
3:02:24explodes higher, then that's initiative
3:02:26continuation. There was result for that
3:02:29effort. But, if buyers are aggressive
3:02:31and volume expands or delta expands and
3:02:33price still can't and continue, that's
3:02:36very different information that we have
3:02:37to take note of because that can be
3:02:39suggesting absorption. When you have
3:02:41high effort and very low result. And
3:02:43this is where the idea of acceptance
3:02:45becomes important. Aggression alone does
3:02:48not move price sustainably. Price needs
3:02:52acceptance. The market needs to actually
3:02:54auction higher and higher and hold
3:02:56higher. If it can't, then that's
3:02:58information. So, when we're looking at
3:03:00things in terms of effort versus result,
3:03:02we're looking at how hard someone tried
3:03:05and what they got for it. And we're
3:03:06understanding that relationship. So, in
3:03:08the event where there is low effort, but
3:03:10there is a high result, there could be
3:03:12thin liquidity sitting there. There was
3:03:14a book sweep or price move easily
3:03:15because there was nothing in the way.
3:03:17Now, if we're seeing high effort, but
3:03:19we're also having high result, then
3:03:21we're looking at initiative continuation
3:03:23where the aggression is actually being
3:03:25rewarded and pressure is being converted
3:03:27into directional movement. Now, when it
3:03:30comes to exhaustion, if we're looking at
3:03:32low effort and low result, where we
3:03:35don't have any real participation, the
3:03:37auction is simply just running out of
3:03:39steam or running out of fuel, then we
3:03:41can be witnessing exhaustion. But, what
3:03:43we're focusing on here today is high
3:03:45effort with little to no result, and
3:03:47that is absorption. You're seeing real
3:03:49pressure meeting passive liquidity, and
3:03:51someone is actively defending the level.
3:03:53So, if we were to be looking at
3:03:55continuation versus absorption, you
3:03:58would see aggression, you You see
3:04:00displacement and acceptance in a
3:04:02continuation. In the event of
3:04:03absorption, you would have that same
3:04:05aggression, but we would begin to stall
3:04:07and potentially even reject, and you
3:04:09would watch the pressure actually flip.
3:04:10Now, I do I do want to take some time
3:04:13and talk about exhaustion versus
3:04:15absorption because this is another area
3:04:17where traders confuse them with each
3:04:19other constantly. Absorption and
3:04:21exhaustion are not the same thing.
3:04:23Absorption means aggression is still
3:04:25present, but someone on the other side
3:04:28is actively absorbing all of that
3:04:30aggression. Exhaustion's actually
3:04:32different. Exhaustion is when
3:04:34participation itself starts to actually
3:04:36dry up. So, the move stalls because
3:04:38traders stop pushing, not necessarily
3:04:41because a passive participant is
3:04:43defending the level aggressively. So,
3:04:45absorption usually involves heavy
3:04:49participation, heavy interaction, and
3:04:51effort without continuation. Exhaustion
3:04:54usually involves declining
3:04:56participation, less aggression, and the
3:04:59move simply ran out of fuel. Kind of
3:05:01what we mentioned earlier. But, it is
3:05:03important to note the difference between
3:05:04the two. And so, when we're looking for
3:05:06absorption, volume is a very big thing.
3:05:08We need to see a lot of participation,
3:05:10but just no result for that
3:05:12participation. So, we're going to take a
3:05:13look at the charts in a second, but I
3:05:15just want to talk about how absorption
3:05:17actually appears on the footprint. We
3:05:18have to look at volume delta and price
3:05:21behavior, and we have to look for all of
3:05:24them together. Now, what you'll
3:05:25typically see in terms of absorption is
3:05:28you'll see heavy volume at a level,
3:05:30aggressive imbalances into the level,
3:05:32and price fails to expand. The reason
3:05:34why I have the POC in the candles, if
3:05:37you've ever watched how I trade, is
3:05:38because I'm looking to see where the POC
3:05:41is in relation to
3:05:43the candle and the body. Meaning that if
3:05:46the POC remains near the rejection area
3:05:48or high up in the wick, well, that's
3:05:50important information. I'm looking at
3:05:52strong positive or negative delta, and
3:05:54I'm watching for repeated attempts to
3:05:56actually push through a key area, and if
3:05:58wicks are forming at this area, and
3:06:01we're not getting that continuation or
3:06:02that acceptance above the level, and if
3:06:05the next candle then fails to continue,
3:06:08then at that point, we can be witnessing
3:06:10absorption. We have to read the
3:06:12relationship between pressure and
3:06:14outcome. Now, this is really important.
3:06:17This is extremely important because
3:06:19absorption alone is not a trade signal.
3:06:23Why? Because absorption happens
3:06:26constantly throughout the chart. Even if
3:06:28you drop to like a 1-minute or whatever,
3:06:30if you try to trade every instance of
3:06:32absorption that you see, you're going to
3:06:34get destroyed. And a lot of the times,
3:06:37especially when we're chopping, you're
3:06:38going to see absorption happening at
3:06:40both ends, right? So, location matters,
3:06:43and location determines whether that
3:06:46absorption
3:06:48holds weight in how we should be viewing
3:06:50it, and if we should be using it to take
3:06:52a trade, right? We look at things like
3:06:55did it happen at a prior high? Are we
3:06:57seeing absorption at a liquidity sweep
3:06:59or a higher time frame level or a
3:07:01session extreme or a gamma level? Or did
3:07:04it happen randomly in the middle of a
3:07:06balance? Because absorption in the
3:07:09middle of noise usually means nothing.
3:07:12It's usually just noise. But absorption
3:07:14at meaningful location after initiative
3:07:17activity expands into the level, that
3:07:20becomes information that's worth paying
3:07:22attention to. So, location location
3:07:25location is extremely important when
3:07:27we're watching for absorption, when
3:07:29we're watching for effort versus result.
3:07:31Now, like I said though, you know, when
3:07:34it comes to absorption, it doesn't
3:07:36guarantee a reversal. But why can
3:07:38absorption actually lead to a reversal?
3:07:41Absorption matters because it creates
3:07:43trapped participants, and trapped
3:07:45participants can fuel the move in the
3:07:47opposite direction. So, let's say for
3:07:49example that we we a breakout attempt.
3:07:51We have aggressive buyers chasing it and
3:07:53passive sellers are absorbing all of
3:07:55that buying aggression. There's no
3:07:57acceptance above the level and late
3:08:00buyers are now trapped. They got in at
3:08:02the worst time possible and when the
3:08:04pressure flips lower, it may fuel the
3:08:06move in the opposite direction if they
3:08:08have to get out of their position
3:08:09because what do buyers need to do to get
3:08:11out of a position? Well, they need to
3:08:13sell and that ends up potentially
3:08:15fueling the move in the opposite
3:08:16direction. Now, just because we see
3:08:18absorption though, it doesn't mean that
3:08:20it's automatically going to be a
3:08:22reversal. So, we need to talk about what
3:08:23confirmation looks like after
3:08:25absorption. This is where newer order
3:08:28flow traders really mess up because they
3:08:31see absorption and then they immediately
3:08:33try and fade the move. But, absorption
3:08:35itself is not the signal. Absorption is
3:08:38evidence. The confirmation is actually
3:08:40what comes after that absorption. Did
3:08:42the continuation fail? Did pressure
3:08:44actually begin to shift and did the
3:08:46breakout fail to gain acceptance? We're
3:08:48looking at things like delta. Did delta
3:08:51flip? Did sellers begin stepping in more
3:08:53aggressively after buyers stalled? And
3:08:55that sequence of events matters because
3:08:58absorption without confirmation can
3:09:00still lead to continuation. We can have
3:09:03pause before continuation. Strong
3:09:05initiative activity can still reassert
3:09:07itself and continue through the level.
3:09:09So, this is why it's really important
3:09:11that you you see absorption, sure, but
3:09:14you shouldn't just automatically fade it
3:09:17and try and take a reversal. You still
3:09:18need confirmation because there are a
3:09:21lot of times if you're looking at
3:09:22absorption that you can be watching
3:09:24absorption happen or a stall at a level
3:09:27before that initiative activity
3:09:29reengages and we push through that level
3:09:31with acceptance. So, just remember,
3:09:34absorption can still fail. It's not some
3:09:36magical thing. It's just information
3:09:38that we're watching and we have to wait
3:09:40for confirmation because again, strong
3:09:43initiative activity can reassert itself
3:09:45and continue through the level. So, the
3:09:48way that we think about this in terms of
3:09:50a decision tree when we're watching the
3:09:52charts, we're watching order flow, is
3:09:54did price reach a meaningful location?
3:09:57If yes, then did aggression fail to
3:09:59produce a result? Did we see a lot of
3:10:01aggression heading into this level and
3:10:03we failed to actually continue with
3:10:05price progression? Then we need pressure
3:10:07to flip. If it did, then the trade idea
3:10:09is valid. If we see aggression failing
3:10:12to produce result, but we aren't seeing
3:10:14that pressure flip, then we have to wait
3:10:17because we don't want to try and step in
3:10:19front of a move that can potentially
3:10:22continue. Just because absorption is
3:10:24showing up on the chart does not mean
3:10:26that we're going to reverse. It's so
3:10:28important. I I I can't stress it enough
3:10:30because I see a lot of order flow
3:10:32traders who just look for absorption.
3:10:33Oh, I see it, reversal.
3:10:35You shouldn't be doing that. You really
3:10:36shouldn't. And location is incredibly
3:10:38important because if this occurs in the
3:10:41middle of chop or balance with no
3:10:42meaningful location, the correct
3:10:44decision is usually just to sit out of
3:10:46it until we actually go a certain
3:10:48direction or get out of that area. Now,
3:10:50let's take a look at a real example on
3:10:52the chart because this is where the
3:10:53concept usually clicks for people,
3:10:55right? I know that we're just going over
3:10:56this on this thing I created, but when
3:10:59we go on the charts right now, I want
3:11:00you to pay attention to the relationship
3:11:02between aggression coming into a level,
3:11:04the actual result that the aggression
3:11:06produced, and then what happened after
3:11:08that continuation failed because the
3:11:10important thing here is not predicting a
3:11:13reversal, it's recognizing when the
3:11:15market is no longer rewarding aggressive
3:11:17participation. Now, let's take a look at
3:11:19what this actually looks like on a real
3:11:22footprint chart. So, here we're pushing
3:11:23into the highs and you can already see
3:11:25aggressive buyers coming in on the way
3:11:27up. We have initiative buying, we have
3:11:29positive delta, and we have
3:11:31participation that's expanding into this
3:11:33level or into this high. Now, this is
3:11:36where newer order flow traders or
3:11:38footprint traders usually make the
3:11:39mistake where they see aggressive buying
3:11:42and they automatically assume
3:11:44continuation. But remember, aggression
3:11:46alone is not enough. Price still needs
3:11:48acceptance above this level if this is
3:11:50the level that we're watching. So, look
3:11:52what actually happens here. We break
3:11:54above the level briefly and volume
3:11:56trades at the highs. The POC of this
3:11:58candle is sitting up here, meaning that
3:12:00there was a lot of transactions that
3:12:01were actually concentrated here at the
3:12:03highs. So, this tells us that real
3:12:06business traded up here and real
3:12:07participation actually happened. But
3:12:10what matters is the result. Even with
3:12:12all of that buying aggression, price
3:12:13fails to continue higher. The breakout
3:12:16can't gain acceptance, and then look at
3:12:19this candle here. We have this red
3:12:21candle that actually has a positive
3:12:23delta. Now, it's only positive 15 if you
3:12:26can see this on the chart, but
3:12:27regardless, it's still a positive delta
3:12:29with a bearish candle. And this is an
3:12:32important concept because if you only
3:12:34focused on delta, you'd be thinking that
3:12:36buyers were still in control because we
3:12:37have a positive delta, or it would have
3:12:40been positive as this candle was
3:12:41actually forming, right? Because if the
3:12:43POC is sitting up here, then if we were
3:12:45to go in a replay mode and you're
3:12:47watching this candle push up, you would
3:12:48have seen the candle have high amounts
3:12:50of positive delta. We would have been
3:12:52stalling up here before the candle
3:12:54flipped bearish towards the end of the
3:12:56candle. The result of this aggression
3:12:58from buyers is telling us a different
3:13:01story. Buyers are still being
3:13:03aggressive, but they're no longer being
3:13:05rewarded for that aggression. And that's
3:13:07the key idea behind absorption. Now,
3:13:09after we actually stall up here and
3:13:11buyers are aggressively trying to push
3:13:13price higher and not being successful in
3:13:16terms of outcome, we begin to see
3:13:18sellers step in aggressively. You start
3:13:20seeing imbalances hitting the bid, and
3:13:22it's coming back in the opposite
3:13:24direction. The absorption itself wasn't
3:13:26necessarily the trade signal. The
3:13:28absorption was the evidence that the
3:13:30breakout was failing. The confirmation
3:13:32came after. We had the failed
3:13:34continuation, the inability to actually
3:13:36hold above the level, and then the
3:13:38pressure begin to shift back lower. And
3:13:40that's why context matters so much. If
3:13:42this happened in the middle of chop and
3:13:44not at these highs or if we were looking
3:13:45for a liquidity sweep, if we were
3:13:47watching the DOM and we saw levels
3:13:48stacked up here in terms of orders on
3:13:50the book, it's important to note. But if
3:13:53it's in the middle of the chop, I
3:13:54probably wouldn't care. But because it
3:13:56happened into the highs at meaningful
3:13:58location after initiative buying
3:14:00expanded into a level, it becomes
3:14:02information that's actually worth paying
3:14:04attention to. Now, if you were to have
3:14:07an entry model, which I have entry
3:14:09models for absorption, but if you have
3:14:12an entry model, then where would you be
3:14:13placing your stop loss? Well, you would
3:14:15probably be placing it on the other side
3:14:16of where the absorption actually
3:14:18occurred. And you'd be targeting
3:14:19whatever you're targeting, right? So, we
3:14:21have buyers push in, buyers get
3:14:23absorbed, they fail to continue higher,
3:14:25pressure flips, we start making our way
3:14:26back down. Now, this is just one
3:14:28example. It's actually not even a a
3:14:30perfect example. It's just from recent
3:14:33price action as I scrolled back to try
3:14:35and find a example on the chart for you
3:14:37guys. But the idea remains the same. The
3:14:41real edge in this is not spotting
3:14:43absorption. The edge is knowing when the
3:14:46absorption actually matters and where
3:14:48it's happening and whether the market
3:14:50confirmed that the aggression has
3:14:52actually failed. We're not using
3:14:54footprint to try and predict what the
3:14:56market's going to do. We We're looking
3:14:58at footprint charts to reveal the
3:15:00interaction between aggression,
3:15:02liquidity, and acceptance. So, effort
3:15:04shows the intent, but result shows the
3:15:07truth, and we can use the concept of
3:15:09aggression or effort versus result or
3:15:12outcome. And we can use that to
3:15:14potentially take trades.
3:15:16All right. So, today I want to talk
3:15:18about volume profile and how I actually
3:15:20use it in my trading. Now, you may see
3:15:23that I use volume profiles over sessions
3:15:26or maybe even a fixed range volume
3:15:28profile, but I'm sure a lot of you guys
3:15:30see if you're especially watching me
3:15:32trade every day that I'm looking at
3:15:34volume profiles inside of every single
3:15:36candle. Every individual footprint
3:15:39candle on my chart has its own miniature
3:15:42volume profile. So, I want to talk about
3:15:45how I actually use it in my trading
3:15:46because there really three different
3:15:49ways that I use volume profile. I use it
3:15:52inside of every individual candle,
3:15:55I use it for the session profile for
3:15:58regular trading hours,
3:16:00and I use it as a fixed range inside of
3:16:02an expansion leg or clear structure.
3:16:05But, before we get into that, I do need
3:16:07to just clear up what a volume profile
3:16:10actually is. Now, a volume profile
3:16:14is a map of participation.
3:16:17So, it shows you where volume was
3:16:19transacted at each price level over a
3:16:21defined period of time. Now, in the
3:16:23context of auction market theory, it
3:16:26helps you see where
3:16:28the market accepted price and where it
3:16:31moved too quickly to build meaningful
3:16:33agreement. And that is really the core
3:16:35idea behind volume profile in general.
3:16:38Now, the market spends time and volume
3:16:40at prices where value is accepted, and
3:16:42it moves quickly through prices where
3:16:45there was less agreement on value. And
3:16:48that distinction matters because it
3:16:50tells you where the auction slowed down
3:16:53and where it did not. And inside my
3:16:55framework, the way that I use this is
3:16:58volume profile lives inside location and
3:17:01confirmation layers. It's helping me
3:17:03validate where price is located actually
3:17:06has structural meaning. It's not just a
3:17:09random number on the chart. It's an area
3:17:11where real business was done or an area
3:17:14where the market moved too quickly to
3:17:17really do much business at all. Now,
3:17:19inside of every volume profile, you're
3:17:22generally going to see the same, you
3:17:23know, three or four things. You have the
3:17:26point of control or the POC. Now, this
3:17:29is the price or the price level with the
3:17:32highest traded volume inside that
3:17:35profile, and it's one of the strongest
3:17:37references to where participation
3:17:40concentrated. You also have value area,
3:17:43so that's where you see value area high
3:17:45and value area low. Now, this is the
3:17:48range within a volume profile where
3:17:50you're roughly going to see, you know,
3:17:5270% of volume that was traded inside of
3:17:56that profile, and that gives you the
3:17:58accepted range for that profile or where
3:18:01most of the business was being
3:18:02conducted. And then you have high volume
3:18:05nodes and you have low volume nodes.
3:18:07Now, high volume node is an area of
3:18:09prior acceptance. This is where the
3:18:11market spent time doing business, and
3:18:14when price returns there, the market may
3:18:16slow down, it may rotate, or might spend
3:18:19time there again. It is essentially an
3:18:22area of agreement. And then you have low
3:18:25volume nodes, where this is essentially
3:18:28an area of thin participation. This is
3:18:31where the market moved quickly and
3:18:33didn't spend much time there doing
3:18:35business. And when price reenters a low
3:18:38volume node, it can either move through
3:18:40quickly if imbalance is continuing or it
3:18:43can react sharply if the move into it
3:18:45fails. The level itself is information,
3:18:47but it's not a guarantee. And that's an
3:18:50important distinction to make because a
3:18:53lot of traders look at low volume nodes
3:18:55like they automatically mean
3:18:56continuation, but that's not how I use
3:18:59them. A low volume node is a candidate
3:19:02for movement, where what price actually
3:19:05does there still depends on context and
3:19:07confirmation. Now, the first way that I
3:19:10use volume profile is inside every
3:19:14individual candle, right? Every single
3:19:16candle on my screen on a footprint
3:19:18chart, as you can see,
3:19:20has a miniature volume profile inside of
3:19:23it. What this is letting me see is it's
3:19:25letting me see where volume was
3:19:27distributed within this single candle.
3:19:29Now, it may be a 5-minute, may be a
3:19:3115-minute, sometimes I look at it on the
3:19:33hourly, but this is the most granular
3:19:36use of volume profile for me. And it's
3:19:39actually used majority majority of the
3:19:41time it's used at the execution level
3:19:44when it's inside of these 5-minute
3:19:45candles. Now, I'm not using these
3:19:48miniature volume profiles as a
3:19:50standalone signal to take a trade. I'm
3:19:52using it to refine execution once the
3:19:55broader setup is already there from the
3:19:57rest of my framework, right? What I'm
3:19:59really looking for here
3:20:02when I'm looking at volume profiles is
3:20:04I'm looking at effort versus result. If
3:20:07I see volume trading at a level, like
3:20:09let's say this candle where my mouse is
3:20:11right now, but price is not following
3:20:14through, it's not moving through it.
3:20:16Well, this could potentially be useful
3:20:18information because it could be
3:20:20absorption. Now, it tells me that there
3:20:23is aggressive participation, especially
3:20:25at the extremes of these candles, but
3:20:27it's not getting the result that it
3:20:30should be getting. Now, this doesn't
3:20:31automatically, when you see this, mean
3:20:33that there is a reversal coming. It just
3:20:36tells me that something is happening
3:20:38here at this level. And when I see that,
3:20:40then I watch the reaction. And I may And
3:20:42it has to be in location and the rest of
3:20:44everything else has to align, but I'm
3:20:46watching the reaction that follows it.
3:20:49And when I identify absorption, I'm
3:20:51looking for aggressive participation at
3:20:53the extremes of a candle, like in this
3:20:56case, with little to no result in that
3:20:58effort. High participation with little
3:21:01continuation, whether we stall or we
3:21:04reject. I mean, it's very different from
3:21:06just seeing volume and assuming
3:21:08something is bullish or bearish. And if
3:21:10the volume is not really there, then I'm
3:21:12less interested in calling it absorption
3:21:15because at that point it's more likely
3:21:18the a lack of participation or
3:21:20exhaustion rather than true absorption.
3:21:23So, volume is very important, and that's
3:21:25why it's in every single one of my
3:21:26candles. Now, another thing I look at
3:21:29inside of a footprint candle is low
3:21:31volume nodes. So, for example, if we
3:21:34were looking at this candle, we have a
3:21:35volume profile here. It may be hard to
3:21:37see because it's blue on black, but here
3:21:40is a low volume node here.
3:21:42And here is a low volume node here. If
3:21:45this is the in the way that I take
3:21:47trades, it usually requires two candles.
3:21:50Now, it requires the confirmation candle
3:21:52and the entry candle. I am looking,
3:21:55let's just say because I don't want to
3:21:57go back and like try and find some type
3:21:59of perfect example or whatever, but
3:22:01because there's low volume nodes here,
3:22:03let's just say we're identifying
3:22:05absorption that's happening, and we are
3:22:08getting the confirmation that we may be
3:22:10seeing a potential reversal. Now, after
3:22:13the confirmation candle closes, I am
3:22:15looking for the entry candle to
3:22:18immediately pull back into the
3:22:20confirmation candle. Immediately, so
3:22:22open up and immediately pull back. And
3:22:24I'm looking for it to pull back into
3:22:26these areas with low volume nodes. Now,
3:22:28if there are stacked imbalances in this
3:22:30area, which there aren't in this candle,
3:22:32but if there are stacked imbalances in
3:22:34this area, then it's even better. But
3:22:35I'm using these low volume nodes inside
3:22:38of the confirmation candles to refine my
3:22:40entry in my entry candles. But again,
3:22:43low volume nodes inside of a candle is
3:22:46not necessarily the signal. It's just
3:22:49where I can sometimes get cleaner
3:22:50execution inside of the larger setup
3:22:53that I'm trying to trade. Now, the
3:22:54second way that I use volume profiles is
3:22:57through session volume profiles. And I'm
3:23:00specifically looking at the regular
3:23:01trading hours or the RTH session of New
3:23:03York open when I'm trading Nasdaq. I'm
3:23:06usually keeping it on the 1-hour chart,
3:23:08and I'm looking at how the day is
3:23:10building and informing and building
3:23:12value in real time. I want to know where
3:23:15value area high is, where value area low
3:23:17is, and where the POC is sitting. And
3:23:19I'm looking inside of this profile for
3:23:21the day to understand where are there
3:23:24low volume nodes, and where are the
3:23:27areas where a lot of business was
3:23:28actually conducted, or where are the
3:23:30high volume nodes sitting within the
3:23:32broader auction for the day. This is
3:23:34essentially giving me a bird's-eye view
3:23:37of where the market is accepting price
3:23:39during the session. If price is rotating
3:23:42inside of value, like we were doing here
3:23:44for a moment, then that tells me that
3:23:46the market is temporarily balanced. If
3:23:49price is leaving value and getting
3:23:51accepted outside of it, that tells me
3:23:53that an imbalance may be developing, and
3:23:57it it's kind of easier to show you if
3:23:59we're watching this actually form
3:24:01throughout the day. Now, as this auction
3:24:04was actually forming today, well, value
3:24:06area started up here, but because of
3:24:09we're watching it kind of after the
3:24:10fact, after it's already done, well,
3:24:12now, after this large move, value area
3:24:15was distributed, and now we have the POC
3:24:17sitting down here, rather than it being
3:24:19up here where it was earlier in the
3:24:21session. But again, just because we
3:24:24touch into value area high, or just
3:24:27because we touch into value area low,
3:24:30it's not a signal. Or even just the POC,
3:24:32like a bounce off the POC, I'm not using
3:24:35it as a signal. The session POC is
3:24:37important because it's a valid reference
3:24:40to understand where the most amount of
3:24:42business was actually conducted during
3:24:43the session, but I'm not using it as
3:24:45some like guaranteed magnet, right? In
3:24:49balance conditions, price may rotate
3:24:51around it a lot. In trending conditions,
3:24:53price may ignore it completely, so I use
3:24:56it as reference. It's not necessarily a
3:24:57promise of anything. Now, the third way
3:25:00that I use volume profile is I'm using a
3:25:03fixed range volume profile. Now, how
3:25:05does that actually look? So, let's say
3:25:07we go back on this side of the chart and
3:25:09we want to see
3:25:11how the auction was actually developing
3:25:13within a specific expansion leg. Now,
3:25:15let's talk about from here to here
3:25:17towards the end of the day. Now, what
3:25:20I'll do sometimes is I will go here. I
3:25:22will draw a volume profile from swing
3:25:25high to swing low and extend it.
3:25:28And so, we get basically the same thing,
3:25:30but it's within a specific expansion leg
3:25:33or defined balance area or even a prior
3:25:36session range like London session or
3:25:39Asia session if I care to look at it.
3:25:42The reason I do this is because I am
3:25:44trying to isolate how volume was
3:25:48distributed over a specific leg or piece
3:25:51of structure. And usually I'm doing that
3:25:53over a clean expansion leg and I want to
3:25:56see where participation was thick and
3:25:58where participation was thin and and
3:26:00where the POC of that move is actually
3:26:02sitting. And this information can be
3:26:05useful as we watch price pull back into
3:26:07this move later on. So, the fixed range
3:26:10profile helps me frame location inside
3:26:13of structure. It narrows the zone, but
3:26:16it doesn't necessarily replace context.
3:26:19And that's really how I use these three
3:26:21methods together. The session profile
3:26:23sits in the broader context to
3:26:25understand how is the auction actually
3:26:27forming over the session that we're
3:26:29trading or the previous days as we move
3:26:31into previous day regular trading hour
3:26:34sessions and the volume profiles that
3:26:37have been built previously or
3:26:38historically. And the fixed range
3:26:41profile helps me narrow location in the
3:26:44sense of a structural zone. And then the
3:26:46footprint candle when I'm zooming in
3:26:49on these candles and I'm looking at the
3:26:51volume profile within each of these
3:26:53candles, it's helping me refine my
3:26:55execution once everything else is
3:26:58already in place. Now, there are a few
3:27:01mistakes that traders will make when it
3:27:04comes to using volume profiles. The
3:27:07first mistake is treating low volume
3:27:10nodes like this as like automatic
3:27:12entries. Just because price moved
3:27:15quickly through an area doesn't mean
3:27:17that it's necessarily going to do it
3:27:20again. Or it doesn't mean that, you
3:27:22know, we're going to just automatically
3:27:24bounce out of a low volume node. A low
3:27:27volume node should just be treated as a
3:27:30location candidate. That's it. Location
3:27:33candidate. Somewhere we're going to pay
3:27:35attention. It still needs context. It
3:27:38still needs location, and it still needs
3:27:40confirmation. And the second mistake is
3:27:42using the wrong profile for the wrong
3:27:44job. Just because, like, the session
3:27:47profile is not and I don't use it for
3:27:50micro execution. The footprint candle
3:27:53itself is not used for broader auction
3:27:55or market context. Each profile has a
3:27:59time frame role, right? And that's how
3:28:01they work together in my stack and how
3:28:03I'm actually using these. And the third
3:28:05mistake, which I see all the time when
3:28:07it comes to these types of candles like
3:28:08this or even just like session profiles,
3:28:11is that traders will like over obsess on
3:28:13the POC. The POC is a great reference.
3:28:16And don't get me wrong, I use the POC
3:28:18all the time. And it can matter a lot in
3:28:21absorption scenarios inside of these,
3:28:24you know,
3:28:25miniature volume profiles, and it can
3:28:27matter a lot in a balance condition
3:28:30in the broader context of the market.
3:28:32But let's say that during a trending
3:28:35environment, you know, price may never
3:28:37come back to it. So if you treat it like
3:28:39a guaranteed target, you're going to
3:28:42potentially misread this. So if I had to
3:28:45just summarize it simply because some
3:28:47people ask me like, "How am I using
3:28:49volume profile?" And I'm just trying to
3:28:50give a broad overview of what I'm
3:28:52actually looking at. Here's how I use
3:28:54volume profile. On the higher time frame
3:28:56in the session level, I'm using it for
3:28:58context. I want to know where value is
3:29:00actually sitting. I want to see where
3:29:02participation was being accepted and
3:29:05where the auction moved too quickly to
3:29:06actually build agreement. On the
3:29:08execution time frame,
3:29:10on these candles, I use it to read
3:29:12effort versus result and to refine where
3:29:15I want to execute once the setup is
3:29:17already there. Now, I may look for
3:29:20pullbacks into low volume nodes. I may
3:29:22look for pullbacks into the POC of the
3:29:25previous candle and as long as it aligns
3:29:27with the rest of my framework, then I
3:29:29take the trade. That's it. Volume
3:29:31profile
3:29:33is not a signal in isolation or a signal
3:29:37by itself. It's just a layer inside of
3:29:40the broader framework that I'm actually
3:29:43trading. There's a lot that actually
3:29:44comes before I'm looking at a volume
3:29:46profile. There's, you know, context in
3:29:48terms of market structure and bias and
3:29:50then understanding the environment we're
3:29:52in, looking at gamma, all these
3:29:54different things. But, these volume
3:29:56profiles are just helping me understand
3:29:58where the auction accepted price, where
3:30:01it didn't, and where the execution could
3:30:03potentially be cleaner. So, before the
3:30:05session, I'm looking at the prior
3:30:07session's POC, the value area, the low
3:30:10volume nodes, the high volume nodes, and
3:30:13during the session, I'm watching it
3:30:14build for this RTH session in real time.
3:30:17And at the execution level, I'm using
3:30:20these miniature volume profiles to
3:30:23refine the entry after context and
3:30:25confirmation are already in place. And
3:30:27that is how I use volume profile in a
3:30:30nutshell. I'm looking at value. I'm
3:30:31looking at acceptance. I'm looking at
3:30:33effort versus result. I'm understanding
3:30:35where the POC is at. I'm looking at
3:30:36value area, low volume nodes. I'm
3:30:38looking at high volume nodes.
3:30:40All right. So, let's do a daily outlook
3:30:43for May 18th, 2026 on Nasdaq. So, we
3:30:47came into discount overnight of the
3:30:50higher time frame range. We were able to
3:30:52hold discount and stay above the 29,000
3:30:54area or find a little bit of support
3:30:56here and be able to push our way up.
3:30:58Now, where we are currently at in terms
3:31:00of gamma is we're sitting right around
3:31:02the transitional area. So, right below
3:31:04HVL. Higher time frame in general is
3:31:07still bullish and we are watching us
3:31:10find a bit of support here heading into
3:31:12New York open. Now, the most key
3:31:14decision area for me today is going to
3:31:17be the HVL. Now, the HVL is sitting at
3:31:2029,270.
3:31:22Early on in the session, this is the
3:31:24most important level. If the buyers can
3:31:26push above and hold and break above the
3:31:28HVL and start entering our positive
3:31:30gamma territory, then the first real
3:31:33upside target becomes the call wall as
3:31:35well as Friday's New York session highs.
3:31:37In the event that we even break the call
3:31:39wall, then I will be expecting us to
3:31:41potentially have a delayed or slower
3:31:43grind up towards where the net call open
3:31:46interest, call open interest, and
3:31:47absolute open interest is actually
3:31:49sitting. But, for now, our eyes are set
3:31:51on the HVL. In the event that we do get
3:31:53above the HVL, I will be looking for a
3:31:55continuation higher towards Friday's New
3:31:58York session highs as well as where the
3:31:59call wall is currently sitting.
3:32:01If buyers fail to get above the HVL and
3:32:05fail to reclaim this level and we begin
3:32:06to rotate lower, then it is likely that
3:32:09we continue a downside rotation towards
3:32:12potentially P2 or even the put wall
3:32:15sitting here at 28,860.
3:32:18The game plan for this morning is
3:32:19actually pretty simple. We're really
3:32:21just going to be watching how the
3:32:23auction resolves around the HVL this
3:32:25morning. And we're going to be looking
3:32:27to see whether we're going to continue
3:32:28back up and continue the higher time
3:32:30frame trend being bullish heading our
3:32:32way back towards call wall or if we're
3:32:35going to rotate for a further drop lower
3:32:37down in this negative gamma territory.
3:32:39It's a very clean decision day today.
3:32:40We're going to be watching HVL. We're
3:32:42going to see how the auction actually
3:32:43plays out and we'll see how it goes.
3:32:46Right now, we're retesting the HVL. I
3:32:48think um we're seeing buyers try and
3:32:51reclaim the HVL, but they're failing.
3:32:52I'm going to go short right here.
3:32:57We're seeing a large trade come in. We
3:32:58have to hold this. We're approaching the
3:33:01put wall right now. This is current put
3:33:03wall sitting right here. So, we're
3:33:05looking at put wall being right here.
3:33:07It's bouncing back and forth, but
3:33:09there's a very large negative gamma node
3:33:11right here. So, if we can push down past
3:33:14this big trade, I'm going to be trailing
3:33:16my stop right below it.
3:33:18So, now we're currently approaching the
3:33:21put wall. If we can begin to push lower
3:33:24through these orders, just like that, I
3:33:26am going to have to trail my stop.
3:33:28Stop's going to be going right above the
3:33:30POC of this candle. We're looking for it
3:33:32to continue down.
3:33:37So, if we could break through this and
3:33:39break lower right now, I am going to be
3:33:41adding in and trailing a stop.
3:33:44I don't want to stop back up. I'm
3:33:45trailing my stop right above these large
3:33:47sellers.
3:33:54As long as we hold below this, we should
3:33:57There we go. Very large seller. We need
3:33:59us to continue, though. We can't have us
3:34:03reject these orders like this.
3:34:07All right. So, we hit trailing stop. We
3:34:09couldn't get past this area. We had a
3:34:10lot of selling pressure step in. So,
3:34:13right now, I'm currently watching this
3:34:15area right here. This is where the put
3:34:17wall used to be today before it ended up
3:34:20moving back down here again. There's a
3:34:21lot of uh negative gamma here as well as
3:34:24some volume. So, we're going to be
3:34:25watching to see if sellers want to
3:34:27defend their position. If we begin to
3:34:29see buyers start getting absorbed and we
3:34:30begin to rotate over, I am going to go
3:34:33short again. I'm going to go short right
3:34:34here. Stop loss is going to be right
3:34:36above these highs.
3:34:38And we got to be careful about this
3:34:40area. We're having sellers come in. We
3:34:43had buyers fail to push back up. We just
3:34:45need follow through from the sellers.
3:34:50If this order gets rejected, it is a
3:34:52pretty good sign for us to start moving
3:34:54lower. I'm going to have to trail stop a
3:34:55little bit.
3:35:01We had a massive amount of buyers step
3:35:03in here. They tried to step in here
3:35:04again. They failed, which is a good sign
3:35:06for this trade, but I do have to
3:35:09understand that they are present in this
3:35:10area, so
3:35:11we're going to trail stop.
3:35:17We're trailing stop as we're moving
3:35:18down. There is a chance we bounce back
3:35:20up hard here, so I'm
3:35:22moving the stop as we go.
3:35:24This is the most important area that we
3:35:26need to break right now. That sellers
3:35:27need to really push through hard.
3:35:29I'm going to trail stop even tighter.
3:35:31All right. We ended up getting out of
3:35:33that for 50 points. I don't want to see
3:35:35us bounce out of this area. We had
3:35:37buyers step in here once. We may
3:35:38continue down further, but
3:35:41I don't want to risk it right now.
3:35:43Volatility is very large. We can easily
3:35:45just start snapping back and forth in
3:35:46this area. Now, it may still work out
3:35:49and we may make our way all the way down
3:35:50here to P1, but this area right here is
3:35:55order flow wise, we had buyers step in
3:35:57here. Sellers got absorbed in this area.
3:35:59So, if it happened once, it could
3:36:00potentially happen again. So, I needed
3:36:02to trail stop pretty tightly and I'm
3:36:03happy we did because we could see this
3:36:05moving back up relatively quickly. So,
3:36:08at this point, we took two trades. It's
3:36:10two wins. We're going to wait a moment
3:36:13and we're going to see if there's
3:36:13anything else we can take. So, the first
3:36:16trade was for about 50 points, I
3:36:17believe. The second trade was also for
3:36:1950 points. So, it puts us up about 100
3:36:22points on the day. We're trading a live
3:36:23account, so we're using smaller size,
3:36:25but this is great volatility. There's a
3:36:26lot of opportunity here and we are in
3:36:28negative gamma territory, so there could
3:36:30potentially be more moves. I mean, we're
3:36:32seeing good volume right now, even this
3:36:34late in the day, which is pretty
3:36:35interesting. So, I am still watching
3:36:38this area, though. If we see buyers
3:36:41attempt to push up here again, we may
3:36:44and they fail, we may be forming a
3:36:46range, which this is a large enough
3:36:47range that we can actually play this.
3:36:49It's over 100 points.
3:36:51So, if we get a slight overextension and
3:36:53buyer failure, then we can try and take
3:36:55another short.
3:36:56All right, so what we're looking for is
3:36:58about 130. We're looking for us to come
3:37:00up to about 130 right now.
3:37:03All right, so if we begin to see buyers
3:37:07get absorbed, we're going to go short.
3:37:10All right, I'm going to go short right
3:37:12here. Little bit of a late entry, but we
3:37:14popped into 130 and we started seeing
3:37:16that rejection, so we're going to see if
3:37:18we can actually take it lower. And we're
3:37:21going to be targeting
3:37:23uh P1. See if we can make our push down
3:37:25at P1.
3:37:32All right, we're 25 points in profit. If
3:37:35it stops going to break even, as we
3:37:37begin to push lower back towards the
3:37:38bottom of this range, we are going to
3:37:40have to trail stop even tighter.
3:37:42We'll see if we can get the push here.
3:37:47All right, it came back up. There's a
3:37:49chance we continue, but we're we are
3:37:51compressing, so I do have to be kind of
3:37:53careful. We went about 25 points in
3:37:55profit and then snapped back, so we may
3:37:58call it a day there.
3:38:00We had us come into that 130 area we
3:38:02were watching for. We tried to see if we
3:38:05would have that push lower.
3:38:07We couldn't have the follow-through from
3:38:08the sellers. We're beginning to compress
3:38:10a little bit right here.
3:38:12I don't want to see us get pinned down
3:38:13here and begin to
3:38:15chop, essentially. The ATR is incredibly
3:38:17large. On a 5-minute, we have a 81-point
3:38:21ATR, which for trading my live account,
3:38:25um it's slightly dangerous to actually
3:38:27trade when the ATR is that large. I have
3:38:29to use really small size. So, I think
3:38:31what we're going to do is I'm going to
3:38:33just call it here. This idea may still
3:38:35work out, but it's all right. We took a
3:38:37short up here. We got out for about 50
3:38:40points. We were trying to target P1. We
3:38:42took another short right here. We got
3:38:44out for another 50 points. We were
3:38:45trying to target P1. And then we were
3:38:47trying to go short again right here. We
3:38:50got hit out at break even.
3:38:52Um there is a chance that we still drop
3:38:54down to P1, but we're green on the day
3:38:57on the live account. Don't really want
3:38:59to mess it up at this point. We're
3:39:01compressing. It's better if I just kind
3:39:02of call it a day and come back tomorrow.
3:39:04But just to recap, the idea today was
3:39:06very simple. We hold above HVL, then
3:39:08we're looking for us to make our way up
3:39:10here to the call wall. We held below
3:39:12HVL, then we were we were looking for us
3:39:14to make our way towards the put wall
3:39:16down here.
3:39:17When we came below HVL, we attempted to
3:39:20push back up and buyers failed. So, when
3:39:22we start rotating back over and sellers
3:39:23started step in, that's where we go
3:39:25short. We tried to target P1. We were
3:39:28getting some good momentum, and then P1
3:39:30then switched to this level, which we
3:39:32began to kind of find a little bit of
3:39:35support here. So, when it popped back
3:39:36up, it hit us out of our trailing stop.
3:39:39When we came up in the HVL again, we saw
3:39:41the exact same thing happen, but I
3:39:42didn't want to take this trade because
3:39:45there was a potential that we could have
3:39:47just done this, right? So,
3:39:50I wanted to wait for us to break where
3:39:53the put wall was temporarily. And once
3:39:56we actually did that, we pushed down, we
3:39:59try and push back up, buyers failed, we
3:40:01pushed down again, and this is where I
3:40:02went short. So,
3:40:05we tried it again right here. It may
3:40:07still work out, but we're compressing.
3:40:09It's better to call it a day.
3:40:11So, I'll catch you guys next time I
3:40:13trade. We caught about 100 points today.
3:40:15Peace. Okay, so this morning we are
3:40:18currently looking at a large move that
3:40:21happened overnight. We are in negative
3:40:23gamma territory. So, we dropped about
3:40:26470
3:40:28points from the overnight with not much
3:40:31structure, just a drop. We didn't see
3:40:34much of a pullback at all. Now, in terms
3:40:37of gamma, what I'm looking at here is we
3:40:39do have the put wall sitting here. We
3:40:42are in negative gamma territory, so the
3:40:44baseline expectations is more for faster
3:40:46directional moves while we are in this
3:40:49location, but I am paying attention to
3:40:51the put wall here sitting at 27,060.
3:40:54Now, in the event that we actually begin
3:40:56to accept below the put wall, I will be
3:40:59looking for us to fill the gap from the
3:41:02new day opening gap here down to
3:41:04potentially 26,944.
3:41:09We left this here from last week, and so
3:41:11I will be watching this to see if we
3:41:13actually make a move down here if we
3:41:14start accepting past the put wall. Now,
3:41:16in the event that we start moving back
3:41:18up, I will be looking for opportunities
3:41:21for us to turn back around and continue
3:41:24the selling pressure. Eyes are set here
3:41:26on what's going to happen at the put
3:41:28wall, whether we're going to get a full
3:41:30bounce off of it with true buying
3:41:31momentum coming back up, or if we're
3:41:33going to accept lower and go and fill
3:41:36the new day opening gap from last
3:41:37Friday. Because we're getting currently
3:41:39a bounce off of the put wall, I did
3:41:41enter in on a continuation long here
3:41:43looking for pre-market New York to
3:41:45create a little bit of structure and
3:41:47make our way up here. So, I'm trying to
3:41:49hit profit target right now. I'm
3:41:50trailing stop, and we're going to see if
3:41:53we can lock in profit target on this
3:41:55brand new Eval.
3:41:57>> Order filled.
3:41:58>> All right. So, we were able to hit
3:42:00profit target. We are getting that
3:42:02bounce off of the put wall. We're
3:42:04pushing up higher. Pre-market as the new
3:42:06hour opens, I'm going to be looking for
3:42:08us to put in some sort of high or create
3:42:10some type of structure, and then we're
3:42:11going to be looking to trade the funded
3:42:14accounts and some of our other accounts
3:42:16here today. But, the first trade that we
3:42:18took, we were watching us come down. We
3:42:20came into the new We came into the new
3:42:22put wall location. We had buyers start
3:42:24stepping in. We started coming up. I
3:42:26entered in on the continuation of that
3:42:29for us to create structure, and we were
3:42:30able to hit profit target. So, we're
3:42:32going to wait now. There is no We sold
3:42:35just immediately off the open. There's
3:42:37no wick to the upside. We may I mean,
3:42:40there's a tiny wick, but we may continue
3:42:42this sell-off. Keep in mind, if we are
3:42:44going lower, eyes are set for the green
3:42:46box right here for the end dog to get
3:42:47filled, and then we're going to be
3:42:48moving into the hourly location. This is
3:42:52a very important level, though. So, as
3:42:54we begin to push back into the put wall,
3:42:57I'm going to be watching footprint to
3:42:58see
3:42:59if there's a potential for us to snap
3:43:02back up because also, if you're to draw
3:43:04out this range on a 5-minute, where we,
3:43:06you know, it's sitting right right
3:43:07around here. So, we're pushing into that
3:43:10put wall right now. What I'm actually
3:43:11going to do on this eval is I'm about to
3:43:13fade this. I'm going to put my stop at
3:43:15the lows. We'll see if we start snapping
3:43:17back up.
3:43:19We have this hour or this 5-minutes
3:43:21about to close. I just need us to get to
3:43:24the top of the 5-minute from the open
3:43:26for us to just go test the open one
3:43:28time.
3:43:29>> Order filled.
3:43:30>> All right. So, we hit profit target on
3:43:32that for about 84 points. Second trade,
3:43:35we pushed down off the open. Little to
3:43:37no wick to the upside. We approached
3:43:40discount of this 5-minute leg. We tapped
3:43:42into basically the put wall again. So, I
3:43:45went long. As we began to stall here for
3:43:48a moment, I went long, and then we got
3:43:50out. And the only reason why we got out,
3:43:52just so you know, is because
3:43:54profit target, right?
3:43:56Because if we were holding this on like
3:43:58a
3:43:59like a funded account, you would
3:44:00actually want to hold it a little bit
3:44:02more because there is a potential for us
3:44:04to expand further up,
3:44:05uh potentially into here or even where
3:44:08the previous put wall was. So, So, now
3:44:10I'm watching uh to see if we're actually
3:44:12going to continue up. And then, in the
3:44:14event that we continue up, I'm going to
3:44:16have my eyes set on that 265 area for a
3:44:18potential to just watch whether or not
3:44:20we're going to rotate lower, rotate back
3:44:23again lower, or if we're going to
3:44:24actually start accepting up past it and
3:44:26going higher. So, we're pushing up. This
3:44:29265 area is going to be key. We have the
3:44:31largest net call volume, highest call
3:44:33volume, highest absolute gamma, and it
3:44:35was the previous put wall. Our eyes are
3:44:38currently set on 265. All right, we're
3:44:41about 10 points away from previous uh or
3:44:44this is the new put wall. It moved from
3:44:46down here back to up here. So, this is
3:44:48going to be a key level to watch for.
3:44:51We'll be looking to see if, you know, we
3:44:53see any type of reason to take a short
3:44:55up here
3:44:56and then come back down or if we're
3:44:59going to um accept back above it. If we
3:45:03begin to accept it back up Oh, hold on.
3:45:06So, we just got a little bit of a Some
3:45:08sellers popping in right here. I am
3:45:10watching I'm like looking up here though
3:45:12for a potential short, but I don't want
3:45:15to take it yet. I want to I need it to
3:45:17be cleaner. We have sellers, you know,
3:45:19kind of entering in, but I just I don't
3:45:22trust it yet. And if anything, what I'll
3:45:24do is if we are going to put this in as
3:45:27the high, then I'll be looking for us to
3:45:30first of all get past this area back to
3:45:32the 180 and I'll wait for another like
3:45:34attempt higher and then a failure and
3:45:36then I'll go short.
3:45:38There's two potential areas I'm going to
3:45:39look for a short depending on what
3:45:41footprint shows me.
3:45:46Here and here.
3:45:47We're going to be watching this area
3:45:49that has uh
3:45:51the 224 area and then 265 area. But, we
3:45:54need confirmation in terms of attempt to
3:45:57push higher like right now and then we
3:45:59need to see buyers fail and get
3:46:01absorbed. And if we start to rotate
3:46:02lower, then I'm going to take a short.
3:46:16>> All right, depending on how how this
3:46:17closes, I might take a continuation
3:46:19lower.
3:46:20This is just an area right here where we
3:46:22could potentially bounce back up from.
3:46:25>> Order filled.
3:46:26>> All right, I'm going to go short right
3:46:27here. I'm anticipating for us to break
3:46:29past this area. We got our reaction out
3:46:32of the area we were looking for. It
3:46:33wasn't as clean as we wanted it to be.
3:46:36I'm just going to be putting my stop
3:46:37right here. I'm going to be targeting
3:46:39down towards the uh the put wall again
3:46:41around 27,060.
3:46:43So, uh we were watching 265,
3:46:46didn't
3:46:47completely get up there. We did get to
3:46:49that 224 level. We started respecting
3:46:51it. We started seeing sellers start
3:46:52stepping in. So, at this point, I'm
3:46:54trying to see if we're going to continue
3:46:56down back towards the put wall of where
3:46:58we were pre-market and where we tried to
3:47:01push down the first time at open. We
3:47:03just need um a bit of selling pressure
3:47:06to continue this move lower.
3:47:08Um and if we do start seeing some
3:47:10selling pressure, then at that point,
3:47:12I'm going to be moving my stop to break
3:47:13even.
3:47:16All right, so we don't want to see price
3:47:18at this point get past 181.
3:47:21I'm going to tighten stop right above
3:47:22this 5-minute candle. So, we're risking
3:47:24about 25 points because right here is uh
3:47:28the POC of the last 15-minute candle.
3:47:30So, if we're going to continue lower, I
3:47:32need to see it get respected and for us
3:47:34to continue this drop lower back towards
3:47:36uh the put wall.
3:47:40All right, so we need to see some
3:47:41continuation. Stop's now at break even.
3:47:44It's really important that we actually
3:47:46get past this uh
3:47:48large seller here. Otherwise, we don't
3:47:50want them to be trapped and then we
3:47:52spring back up.
3:47:55All right, we're getting a lot of
3:47:55pressure right now. Stop is going to
3:47:58actually trail behind this 5-minute
3:48:00candle.
3:48:02So, position's currently looking like
3:48:03this. We're about $600 in profit. We're
3:48:06going to see if we can get our
3:48:07continuation lower towards the uh the
3:48:10put wall here.
3:48:11We just need to keep this selling
3:48:12pressure. If
3:48:14we stay below where this low volume node
3:48:17is in these
3:48:18uh the large seller here, then I'm
3:48:20actually going to trail it even harder.
3:48:23Just right above this area. We need to
3:48:25be careful as we start approaching this
3:48:27area again where we keep seeing buyers
3:48:29defend it.
3:48:31All right, at this point I'm going to
3:48:32trail even tighter just right above the
3:48:35the large seller here.
3:48:37We're getting good selling pressure.
3:48:39I'm actually going to start trailing a
3:48:40little tighter. I just don't want us to
3:48:42bounce off of this area hard, so
3:48:46>> Order filled.
3:48:47>> Beautiful. All right, so we were able to
3:48:49catch this trade. We got out at the put
3:48:52wall again because there is a chance
3:48:54that we can bounce off of it, but at
3:48:57that point I think I'm actually done
3:48:59today, so
3:49:01we were able to hit profit target on
3:49:03this account with longs pre-market off
3:49:06the put wall.
3:49:07We were able to at the open have us drop
3:49:10back into location, take longs again off
3:49:13the put wall.
3:49:14And then on the funded account where we
3:49:16were looking for the previous put wall
3:49:18for a potential reversal back down
3:49:20towards these lows for a continuation.
3:49:23Um
3:49:24we were watching this area, too. We
3:49:25didn't see a clean entry until we
3:49:26started slipping lower outside of this
3:49:28compression, then we went for a
3:49:29continuation targeted down here, so in
3:49:32total today 71 85
3:49:36and 104 points. So, what is that? So, in
3:49:39total we caught 260 points today. In
3:49:43total is about 1,000 ticks. So,
3:49:45honestly, that's a banger day. Makes
3:49:47makes me uh comfortable to stop here.
3:49:50So, I just want to mention if we were to
3:49:53go look at the daily bias that I had
3:49:56today, it
3:49:57kind of played out perfectly in terms of
3:49:59what we were actually looking for. We
3:50:01were looking for price to come up off
3:50:03the put wall, come into this area, and
3:50:05then have our continuation lower. If
3:50:07you've been trading and you've been
3:50:09losing money, or if you're switching
3:50:11strategies all the time looking for the
3:50:14new entry model,
3:50:16um you're trying a different method,
3:50:17you're buying new courses, you're
3:50:20looking for the right person to copy
3:50:22their trades, or you're trying to join a
3:50:24new Discord, or whatever, and nothing's
3:50:27working,
3:50:31I need you to hear this.
3:50:33It's not the strategy in most cases,
3:50:37it's you. You're the reason why it's not
3:50:40working.
3:50:42And that doesn't necessarily mean you
3:50:44can trade any
3:50:47and as long as you trade it correctly,
3:50:49it's going to work. No, you do need an
3:50:51edge, but my point is just that if
3:50:54somebody were to have a statistically
3:50:56proven edge and they teach you exactly
3:50:58how to do it, if you don't have the
3:51:00right foundation, chances are you're
3:51:03probably going to have much different
3:51:05results.
3:51:07And
3:51:08I know that's not what most of you
3:51:10probably want to hear, but it's the
3:51:13truth, and it's the reason why most
3:51:15people who try and do this, even though
3:51:17there's so much information out on the
3:51:19internet that you can use to your
3:51:20advantage,
3:51:22that they still lose money, and they
3:51:24still never make money. And I know it's
3:51:26the truth because I did it. I did it for
3:51:292 years.
3:51:30I lost money every day for 2 years. I
3:51:33blew probably, before I got a payout, I
3:51:36probably blew like 150 to 200 accounts,
3:51:40and they were like big-sized accounts,
3:51:41so
3:51:42I probably spent close to like
3:51:45$50,000,
3:51:46probably more than that, of cash.
3:51:50Of cash that I actually didn't even
3:51:51have, that I put on a credit card. I had
3:51:53no idea how I was going to pay it off.
3:51:55And I did all of that while thinking
3:51:58that the problem was I needed to find
3:52:00the right setup. I needed to find the
3:52:02right strategy or that one indicator
3:52:05that was just going to make everything
3:52:07work.
3:52:09It's not about that. It's not about the
3:52:11indicator or the strategy or whatever.
3:52:15Now, again, because there's going to be
3:52:17people watching this who go,
3:52:19"Oh, don't give me this about
3:52:21edge doesn't matter and it's just about
3:52:24psychology." No, I agree. Edge does
3:52:26matter, but even if you have an edge, if
3:52:29you can't execute it properly, then the
3:52:31edge doesn't mean jack So, the
3:52:34point of this video is just to explain
3:52:38you need to start with a proper
3:52:40foundation.
3:52:41And most people skip that. Most people
3:52:43just go immediate immediately to some
3:52:45type of pattern preference or some type
3:52:47of that they're trying to trade
3:52:50that they see on the internet where some
3:52:51guy goes, "This one setup changed my
3:52:54life and this one indicator gives me a
3:52:5790% win rate." And then you got people
3:53:00who don't know anything else other than
3:53:01trading and they just like try and copy
3:53:03and paste what they see in a video
3:53:07and then they lose. And they wonder why.
3:53:09They say, "Oh, that was a
3:53:10strategy. That doesn't work." I'm
3:53:13going to tell you in this video exactly
3:53:15why this happens. And more importantly,
3:53:18I'm going to tell you what you actually
3:53:19need to fix before the strategy or it
3:53:23really any type of edge is actually
3:53:24going to work for you. Because most
3:53:26traders figure this out too late. And
3:53:28actually,
3:53:30some traders never figure it out at all.
3:53:32And they just quit. They either quit or
3:53:35they keep doing the same thing
3:53:38over and over and over and then they're
3:53:40in the same spot for years. There's
3:53:42people in this industry who are
3:53:44literally waking up every morning to
3:53:46trade doing the exact same chasing
3:53:49strategies
3:53:51for years and they never get a payout.
3:53:54Some of them don't even don't even uh
3:53:56pass evaluations when you can literally
3:53:58do that just by luck. And so, here's
3:54:01what's happening to most traders right
3:54:03now. They find a strategy.
3:54:05They see it looks simple. It makes
3:54:07sense. It makes sense based off of the
3:54:09video from the guy that they just
3:54:11watched. So, then you go and you demo
3:54:13trade it. You paper trade it. You back
3:54:15test for a couple hours.
3:54:17It looks good. Looks simple. It's
3:54:20working and then the moment you take it
3:54:21live, uh you start losing.
3:54:25It doesn't do the same as it was when
3:54:27you were doing demo and back testing.
3:54:29So, then you think, "Oh, I probably just
3:54:31need to tweak it." So, you go in, you
3:54:33tweak it, and then you lose again. So,
3:54:35now you start wondering to yourself,
3:54:38does this strategy even work?
3:54:40Is this strategy even real? Did it stop
3:54:43working? Did the market change? And then
3:54:45they go back to YouTube
3:54:48and then they find another video with
3:54:50some guy saying that he has a 90% win
3:54:52rate or this one set up changes life
3:54:55like I was mentioning earlier.
3:54:58And it looks simple. Looks clean again.
3:55:01So, you try that one instead. You just
3:55:03keep going until you think you're going
3:55:05to find something that's that's going to
3:55:06work. And the problem is is that
3:55:10logically, this cycle makes sense.
3:55:13Logically, when you're inside of it. Of
3:55:15course, you change strategies when the
3:55:18current one isn't working. That's
3:55:20rational, but it's based on a false
3:55:23assumption. The assumption is not that
3:55:26the strategy is the reason you're
3:55:28losing. In almost every time, for most
3:55:31people, it's not. Then the thing is is
3:55:33like in most cases, if it's not the
3:55:35strategy, then what is it? Well,
3:55:38again,
3:55:41you do need an actual strategy that has
3:55:43an edge. You do need an actual edge. But
3:55:45the only way you can execute on that
3:55:47edge again is if you have the right
3:55:49foundation. So, in my own experience,
3:55:52both from trading on my own and watching
3:55:54other traders just trade and seeing the
3:55:57people around me who are also trying to
3:55:58be consistently profitable trader,
3:56:01it always comes down to three main
3:56:04things.
3:56:05Most traders don't actually have real
3:56:08risk management. They have the idea of
3:56:11risk management and they know they're
3:56:13supposed to they they know the rule
3:56:15where they hear it and they say, "Oh,
3:56:16you're only supposed to risk 1% of your
3:56:18account." And and they're no they know
3:56:20they're not supposed to overtrade or
3:56:22oversize. Um
3:56:25and they know they're not supposed to
3:56:26add to losing positions and blah blah
3:56:28blah blah blah. Every way you we hear
3:56:30this all the time. Everyone knows this.
3:56:33But then, the market opens and then all
3:56:35of that just flies out the
3:56:37window. Just flies out the window.
3:56:40It's like imagine if you're training to
3:56:42be a fighter, okay? And
3:56:45you're in the gym, you're punching the
3:56:47bag, you're doing the pad work, you're
3:56:49sparring with somebody, and you have a
3:56:51plan. You've been watching tape on the
3:56:52other guy. You know how you should be
3:56:54fighting this guy. You step into the
3:56:56ring on the day of the fight, you get
3:56:59punched in the face, and then all of
3:57:01that planning just flies out the
3:57:03window.
3:57:05Everybody has a plan. I know you guys
3:57:07have probably heard this. Everyone has a
3:57:09plan until they get punched in the face.
3:57:10And it's the same
3:57:13when it comes to trading.
3:57:15Real risk management isn't a rule that
3:57:18you follow when things are going well.
3:57:20Real risk management is what keeps you
3:57:23alive and keeps you in the game when
3:57:26things are not going well. And the
3:57:27entire point of it
3:57:30is not so that you make more money.
3:57:33It's so that you have an account to
3:57:35trade tomorrow. Because if you don't
3:57:38have an account, then
3:57:41what are we talking about? Strategy set
3:57:44up, risk management, psychology, you
3:57:47don't have a account. None of it
3:57:49matters anymore. None of it matters.
3:57:51None of it. Not your edge, not your
3:57:53skills on the chart, not your set up.
3:57:57None of it. So, survivability isn't
3:58:00boring. It's actually the most
3:58:02aggressive long-term strategy that you
3:58:04have. So, your goal when you sit down to
3:58:06trade is not to make as much money as
3:58:09possible. Your goal is to lose as little
3:58:11money as possible, pretty much. That
3:58:14reframe alone changes everything about
3:58:17how you approach the market. Now again,
3:58:19I'm going to say this a few times
3:58:24because it's really important.
3:58:27You need an edge, though.
3:58:29You need an edge. I'm not going to sit
3:58:32here and like tell you that all
3:58:36strategies work and that it's all about
3:58:39psychology and do that whole guru
3:58:42But look, if you're going to
3:58:45like
3:58:46try and trade and you're trying to
3:58:48execute an edge that you've tested or
3:58:52whatever,
3:58:53the only way to execute that edge in
3:58:56live market environments is by executing
3:58:58it on a foundation that you've built.
3:59:00And so, there's things that we do that
3:59:04are variables that go against our edge.
3:59:07Like for example, one of them is tilt.
3:59:09Here's something that a lot of people
3:59:11get wrong about tilt. You can be
3:59:13perfectly calm, but you can be tilted at
3:59:16the same time. A lot of people like to
3:59:18think about tilt meaning that you're
3:59:20angry or you're getting sweaty or hot or
3:59:24you're you're trying to
3:59:27identify tilt through
3:59:29emotions, I guess. But you can sit
3:59:32there, you can be totally fine, but you
3:59:35can still be in a mental state where you
3:59:37can't evaluate
3:59:40a set up correctly. You can't make
3:59:42calculated decisions. And so people
3:59:44won't realize that they're tilting until
3:59:47they start
3:59:48feeling the feeling of tilting. By that
3:59:50point, I mean, it's like, dude, you
3:59:52already lost. You already lost. Probably
3:59:54at that point, your account's basically
3:59:55gone.
3:59:57And some people don't even realize
3:59:58they're tilting until the account is
4:00:00actually gone.
4:00:01So, how do you know that you tilted?
4:00:04Well, it's not necessarily based off of
4:00:06emotions. It's based off of behavior.
4:00:08You got to watch your behavior. It's not
4:00:10your feelings. Like, did you just take a
4:00:12trade that didn't fully meet your
4:00:14criteria? Did you just increase your
4:00:16size because you lost three in a row and
4:00:19you're trying to make it back quicker?
4:00:20Did you just hold past your stop because
4:00:23you think it's some type of liquidity
4:00:24grab and that it's going to come back?
4:00:27Those are all tilt behaviors. And you
4:00:28can be totally calm while you do all of
4:00:31that. And they're almost always
4:00:33invisible to the person that is doing
4:00:35it. And I've blown more accounts from
4:00:39tilt than anything else. Before I
4:00:41started trading, I used to just gamble
4:00:43all the time. I'd go to the casino
4:00:45probably every weekend. Knew I was going
4:00:48to lose money. I found it fun.
4:00:51I just loved to gamble. And then I
4:00:53started trading and then I treated the
4:00:55same way. And then it just
4:00:58I tilted constantly, every day. I'd blow
4:01:00like two, three accounts every day. I'd
4:01:03hit my daily loss limit. I'd tell myself
4:01:06I was just going to take one more trade,
4:01:09see if I can make it just a little bit
4:01:10less of a loss. And that turned into
4:01:12another trade and another trade and
4:01:14another trade. And then next thing I
4:01:16know, my account's gone. Whip out the
4:01:17credit card, go get another account, do
4:01:19the same exact over again. And I
4:01:21thought I was being
4:01:23disciplined by like sitting there and
4:01:26watching the charts and making sure I
4:01:28wasn't missing any opportunities and not
4:01:30getting distracted, but I was actually
4:01:32doing the opposite. The fix isn't
4:01:35necessarily having willpower. The fix is
4:01:38having hard rules set in place that
4:01:41stops the day before tilt
4:01:44ever sets, before tilt ever gives you
4:01:47the opportunity to even act on it. When
4:01:49you hit your daily loss limit, you close
4:01:52the platform. Not after one more trade,
4:01:55not after you sit there for another 20
4:01:57minutes and see if a better opportunity
4:01:59pops up, not the chart one more time.
4:02:03You close it. You just close it. And so,
4:02:07there are things that people who are
4:02:08trading, who are struggling trading,
4:02:11don't realize is even happening. And the
4:02:14way that most traders approach this is
4:02:17you see somebody online who makes a lot
4:02:19of money. You go, "Oh, that looked easy.
4:02:21I want to learn how to trade." You click
4:02:22on the guy's profile. Oh, in this guy's
4:02:24profile, he's got this one strategy or
4:02:26this one setup that changes his life.
4:02:29that he has this 90% win rate Whatever
4:02:32the it says. I don't know.
4:02:34People say the same but the point
4:02:36is it's just like you try and learn it
4:02:39and you try and make it work. And that's
4:02:41the first thing you do. You just try and
4:02:42make the strategy work. Then you
4:02:44realize, "Oh, I need risk management."
4:02:47And then so you start reading about
4:02:49psychology. You hear traders say you
4:02:51need to read Trading in the Zone and
4:02:52Best Loser Wins and all these different
4:02:55things. So then you start focusing on
4:02:56that. And then eventually, after losing
4:02:59a lot of money, you start to understand
4:03:02that you should have started with the
4:03:03foundation.
4:03:05Should have started with the foundation.
4:03:08Not the strategy.
4:03:10Strategy's not the foundation. The
4:03:11strategy is something you build on top
4:03:13of the foundation. But people do it
4:03:14backwards, and doing it backwards is
4:03:17going to cause you
4:03:19to lose thousands of dollars. Think
4:03:23about it like building a house, okay?
4:03:26If you know anything about building a
4:03:27house, you have to lay a foundation
4:03:30before you put up the walls. You don't
4:03:33put up the walls before you pour the
4:03:35foundation. You don't put the roof on
4:03:37before you build the walls. And it
4:03:39happens in a specific order because each
4:03:42layer depends on the one below it.
4:03:46You don't put up the walls on a
4:03:49foundation and then start to blame the
4:03:51walls for not staying upright. That's
4:03:54not how it works.
4:03:56And trading is identical to that.
4:03:58Foundation first.
4:03:59How does the market actually work? What
4:04:01am I trading? Like what is this? How to
4:04:04manage risk? How to take losses
4:04:06correctly? Then the strategy. Then
4:04:09bankroll management and scaling. It's in
4:04:11that order, always.
4:04:14Always. The typical order is like people
4:04:16will come in, learn a strategy, try and
4:04:18scale it, then try and learn uh
4:04:21risk management and psychology,
4:04:24and then try and figure out what the
4:04:25market's actually doing.
4:04:27You're doing it backwards. If you jump
4:04:30to the strategy before you build a
4:04:31foundation, you are going to blow up.
4:04:34You are going to lose.
4:04:36You may get lucky, you may have some
4:04:38variance, you may have like a good month
4:04:39or whatever, but over time you're going
4:04:41to lose. And then you're going to blame
4:04:43the strategy. You're going to say, "Oh,
4:04:45well, that strategy doesn't work." And
4:04:47you're going to go to another strategy.
4:04:49And then it's going to happen again
4:04:51because the foundation was never there
4:04:53to begin with. So, what do we actually
4:04:55need to do?
4:04:57Well, we need to start with the right
4:04:59goal.
4:05:00So, the first shift is the hardest one
4:05:03because it feels counterintuitive. Stop
4:05:06trying to make money.
4:05:09You need to start trying to stay in the
4:05:11game.
4:05:13I know how that sounds.
4:05:15You're trading because you want to make
4:05:16money. We're all trading because we want
4:05:18to make money. I know. I get it.
4:05:21But here's the thing. For me, when I
4:05:23stopped focusing on trying to make money
4:05:26and started focusing purely on
4:05:28surviving, on not blowing accounts, not
4:05:31blowing two, three, four accounts every
4:05:34single day, not whipping out my credit
4:05:36card to then re-up on more accounts just
4:05:39to do the same again, that's when
4:05:41the money actually started coming. Every
4:05:44morning before you sit down,
4:05:46your only question your only question
4:05:49really is, what's the most I'm willing
4:05:51to lose today? And when you hit that
4:05:53number, and it has to be a real number.
4:05:55See, here here's the issue. People
4:05:58will be like, I'm going to
4:06:01stop trading after I lose $500. But they
4:06:04were never really willing to risk $500
4:06:07in the first place. And so, when you do
4:06:09hit that $500,
4:06:11it's uncomfortable.
4:06:13And you want to fix that uncomfort.
4:06:16So, you're going to try and fix it. And
4:06:18that means you're going to try and
4:06:20continue to trade. So, when you set a
4:06:22daily loss limit, you need to be
4:06:25honest about it. You People set loss
4:06:28limits without really thinking about
4:06:31what it's going to be like when they
4:06:33actually hit that loss limit.
4:06:35So, it's really important that you
4:06:37choose
4:06:39the right number for you. I can't tell
4:06:41you what it is.
4:06:43Somebody can be totally comfortable with
4:06:45losing $1,000 on the day. Somebody might
4:06:48not be comfortable losing a few hundred
4:06:50dollars on the day.
4:06:52Now, if you're not willing to lose any
4:06:53money on the day, well then guess what?
4:06:55You should probably go do something else
4:06:56cuz you're going to There's going to be
4:06:57days where we lose. We're not thinking
4:06:59about, oh, I'm sitting down at my
4:07:01computer. How much money am I going to
4:07:02try and make today? What's my profit
4:07:04target today? It's, what is the maximum
4:07:08amount of damage that I can live with
4:07:10before I shut it down?
4:07:12Before I stop. So, that's the lens.
4:07:14That's the foundation of every good
4:07:17trading day. The traders that I have met
4:07:21in this space that I actually respect,
4:07:24the ones who are who are actually
4:07:27consistently profitable,
4:07:29they all have one thing in common. They
4:07:31care way more about how they traded than
4:07:35how much money they made. A losing trade
4:07:37that was executed correctly, like right
4:07:40entry criteria, proper sizing, properly
4:07:44placed stop, taken off at a structural
4:07:47invalidation area, that's a good trade.
4:07:50You did your job. The market just didn't
4:07:52cooperate at that time. A winning trade
4:07:54that came from a revenge trade, where
4:07:57you already broke all your rules and
4:07:59you're just trading
4:08:01out of desperation to make your money
4:08:02back, that's a bad trade. It doesn't
4:08:05matter if it wins or loses. That is a
4:08:06bad trade, even if it made money. It's a
4:08:09bad trade even if it made money, because
4:08:11you didn't trust your process. You
4:08:13gambled. You got lucky.
4:08:15And that's not going to consistently
4:08:17happen over a long period of time. It's
4:08:20a ticking time bomb.
4:08:22If you do that, that is a ticking time
4:08:24bomb. You're going to blow all of your
4:08:26accounts if you continuously do that.
4:08:29The process has to be defined before you
4:08:32ever touch a live account, before you
4:08:34ever get into a funded account, not
4:08:36after, and definitely not while you're
4:08:38figuring it out. Before. Has to be
4:08:40before. So, if you're serious
4:08:43and you're struggling
4:08:46with trading,
4:08:48if you're serious about trying to be
4:08:50profitable and trying to actually change
4:08:52the results or the outcomes of your
4:08:54effort, here is the sequence. And I need
4:08:57you to trust this order because every
4:08:59step depends on the one before it. The
4:09:01first step
4:09:03in the proper foundation for learning
4:09:05how to trade is understanding how the
4:09:07market actually moves. Not pattern
4:09:10recognition, not when this candle
4:09:12pattern appears you you buy or when this
4:09:16indicator prints a buy signal you buy it
4:09:19and this is where you place your stop
4:09:20and your TP. No, understanding why price
4:09:24is actually moving. What is driving it?
4:09:27Why is it bouncing back and forth? Why
4:09:30is it running in a singular direction?
4:09:32And who's on the side who's on the other
4:09:34side of the trade that you're you're
4:09:36taking? Because without this you're
4:09:39essentially just guessing. The second
4:09:41step is risk management and that
4:09:43includes like how to actually take a
4:09:46loss because they're going to happen.
4:09:48How to take a loss. How to size into
4:09:51positions. How to define before the
4:09:54entry what it is that you're actually
4:09:57doing and where it is where you're
4:10:00wrong.
4:10:01This is the foundation for everything
4:10:04and if you skip this the other steps are
4:10:06just going to fall apart. Step three is
4:10:10the strategy and the entries. Actually
4:10:12learning and validating
4:10:14validating
4:10:16what your edge is and how to execute on
4:10:18it.
4:10:19Again, perfect psychology with a
4:10:21edge is not going to work. It's
4:10:24just not going to work over a long
4:10:25period of time. It won't have you won't
4:10:28be successful unless you have an edge.
4:10:30There's no going around it. Anyone who
4:10:32sits here and makes these types of
4:10:33videos and tries to talk about
4:10:35psychology, at the end of the day it is
4:10:38the strategy too. It is. You do need to
4:10:40have an edge.
4:10:42But the thing is is is just that this is
4:10:44where most traders start and it's the
4:10:46wrong starting point. It's just the
4:10:48wrong way to start. It should be after
4:10:51the first two steps and then the fourth
4:10:54step if you're trading prop firms is
4:10:56bankroll management but specifically
4:10:58with prop firms. How to use payouts to
4:11:01fund evaluations, how to scale properly
4:11:04without ever going into the red and how
4:11:06to build multiple income streams from
4:11:10multiple funded accounts. That's the
4:11:12order. Foundation, risk, edge, and then
4:11:15scaling. Most people try and do like
4:11:18edge first, scale second, risk third,
4:11:23and then fourth is the foundation. And
4:11:25they wonder why
4:11:27nothing works.
4:11:29And the last thing that I want to talk
4:11:30about in this video before we wrap it up
4:11:32is just the timeline. People get into
4:11:35trading because they it looks like it's
4:11:37so easy. It looks like it's so easy,
4:11:40right?
4:11:41People get into trading and they expect
4:11:42to be profitable in like 3 months. And
4:11:45when they're not, they feel like they're
4:11:47failing. They see everything online.
4:11:49Everyone's always winning, right? That's
4:11:51the only thing we see online. Everyone's
4:11:52always winning. Why am I the only one
4:11:54that's losing?
4:11:56And then they say, "Trading is a scam.
4:11:59All these videos of these guys who are
4:12:01telling me strategies,
4:12:03they say it works for them. I tried it,
4:12:05it doesn't work for me. I'm losing every
4:12:07day. Trading this guy's same strategy
4:12:09and he's winning every day. This is
4:12:10a scam." Well, take some time to be good
4:12:14at trading. It takes some time.
4:12:16You know, they say like you hear the
4:12:18thing where they say it takes 2 to 3
4:12:20years to be profitable in trading, and
4:12:22for some people it might be faster, and
4:12:24for others it might be longer.
4:12:27And it all has to do with the behaviors
4:12:31and the person that is actually
4:12:34attempting to trade because everybody's
4:12:35different.
4:12:37There's going to be people who have
4:12:39behaviors and tendencies that they do in
4:12:41their normal day-to-day life that's
4:12:43going to translate well to trading. And
4:12:45then there's other people, like myself,
4:12:47who like to gamble, where that's a
4:12:49terrible thing to bring into trading,
4:12:51but you're going to bring it in because
4:12:52those are behaviors and and patterns
4:12:54that you typically do outside of
4:12:56trading.
4:12:58So, depending on the person, it can take
4:12:59a long time, or
4:13:01it can just
4:13:02start working for you because, again,
4:13:05everybody's different. But, they say 2
4:13:07to 3 years to be profitable. Now, do I
4:13:10believe that? Uh,
4:13:12I don't really know. Did it take me 2
4:13:13years basically to become profitable?
4:13:15Yeah. So, I guess I support that
4:13:17statistic. So, that's that's one thing
4:13:20to consider. But, that's just the
4:13:22reality of it. We'll just say 2 to 3
4:13:24years. That means 2 to 3 years of losing
4:13:27money, of learning, adjusting, tweaking,
4:13:31and building the mental infrastructure
4:13:34to be able to successfully trade
4:13:36profitably, consistently, long-term.
4:13:40And, I'm not saying that necessarily to
4:13:42discourage you. I'm saying that because
4:13:45it's important to understand the
4:13:47timeline of this learning curve or this
4:13:49process going into it. I'm sure a lot of
4:13:52people who are watching this video are I
4:13:55mean, I would assume, are probably in
4:13:57their first or second year of trading
4:13:59and they're or even in their first
4:14:00couple months of trading and they're not
4:14:01finding success. If you understand the
4:14:04timeline,
4:14:05you're going to make decisions that are
4:14:07going to keep you in the game long
4:14:09enough to get there instead of blowing
4:14:12everything, trying to shortcut it, and
4:14:14then just saying, "This doesn't
4:14:16work." and then quitting. The
4:14:18people that lose everything, why? They
4:14:21try and shortcut the timeline. It takes
4:14:23time to learn how to trade properly.
4:14:26We're dealing with money. We're dealing
4:14:28with emotions. We're We're This is not
4:14:30easy. People size up too fast. They
4:14:32over-leverage. They can't accept the
4:14:34fact that they're wrong. They don't like
4:14:36being wrong. They skip the foundation.
4:14:39And, the people who make it, well,
4:14:42they understand that this is a long-term
4:14:44game, that this is a long game. And,
4:14:46they decide that they actually want to
4:14:47play the long game. If you have the
4:14:49right process and you actually follow
4:14:51it, I genuinely think you can cut that 2
4:14:53to 3 years down significantly. And,
4:14:56that's not because trading gets easier,
4:14:58but it's because you stop wasting time
4:15:00on the things that don't actually
4:15:02matter. So, on that note, I do want to
4:15:05talk a little bit about psychology when
4:15:08it comes to trading. Now, one of the
4:15:10biggest things that affected the way
4:15:12that I trade and helped me become more
4:15:14consistent is changing the perspective
4:15:16from trying to make money to focusing on
4:15:20the process of execution and the quality
4:15:23of that execution as well as just the
4:15:25mindset of survivability. Because if you
4:15:28can't survive long enough for edge to
4:15:30actually compound, then nothing else
4:15:33actually matters. And most traders
4:15:35actually have it wrong. They are
4:15:37obsessed with the front end of their
4:15:39trading, entries, setups, indicators,
4:15:43win rate, optimization, and they will
4:15:45spend years trying to perfect the front
4:15:48end without ever focusing on the back
4:15:51end of their process. But, the back end
4:15:53is where accounts actually go to die,
4:15:56and it's where you actually have control
4:15:58over it. You don't necessarily have
4:16:00control over how many A game setups the
4:16:03market might offer you in any given
4:16:05session. And when I started to
4:16:07understand this, I stopped focusing on
4:16:09grading performance based off of P&L
4:16:11alone, and I started grading myself off
4:16:13of something that I read in a book from
4:16:16Jared Tendler. It's called The Mental
4:16:17Game of Trading. It's an amazing book
4:16:19that talks about the psychology of
4:16:21trading. And I've read many psychology
4:16:24books in terms of trading and also just
4:16:26normal psychology books, but The Mental
4:16:28Game of Trading was the one that
4:16:30actually resonated with me the most. And
4:16:32it introduced this concept to me of A
4:16:35game, B game, and C game. And I've heard
4:16:38this before, but it was provided in a
4:16:40way where it actually made sense. Now,
4:16:43as most of us know, your A game is when
4:16:45you're fully aligned with your system.
4:16:47So, you followed your process, you
4:16:49waited for conditions, you respected
4:16:51risk, and your execution was actually
4:16:53clean. And that does not mean that every
4:16:56A-game session actually produces a green
4:16:59P&L. Because you can trade perfectly,
4:17:01and you can still lose. That's something
4:17:03that a lot of traders just struggle to
4:17:06accept. Because in trading, a good trade
4:17:09can lose, and a bad trade can actually
4:17:12win. Now, when it comes to B-game, your
4:17:14B-game is still acceptable. Maybe
4:17:16execution isn't perfect, maybe you
4:17:18hesitated a little, or maybe you forced
4:17:20a trade, but overall, you stayed
4:17:23structurally sound. But the C-game
4:17:25trading, or the back end, is where the
4:17:27destruction actually happens. And it's
4:17:29what we actually have the most control
4:17:31over. C-game is emotional trading.
4:17:34That's things like revenge trading, or
4:17:36oversizing, or forcing trades in chop,
4:17:39or ignoring invalidation, and breaking
4:17:42loss limits trying to make money back
4:17:44immediately. And here's the dangerous
4:17:46part. This is the exact reason why most
4:17:48traders blow up and destroy accounts.
4:17:51One or two C-game sessions can destroy
4:17:55weeks, or even months, of A-game or
4:17:58B-game sessions. Now, the important
4:18:00thing to understand in trading is that
4:18:02there are necessary losses, and there
4:18:04are unnecessary losses. Necessary losses
4:18:07are just the cost of doing business.
4:18:10They're business expenses. You followed
4:18:12your framework, the environment was
4:18:14valid, the setup that you chose to take
4:18:17met the proper criteria, and you
4:18:19actually executed on it correctly, and
4:18:21the trade lost. That is normal. That is
4:18:24variance. That is the cost of
4:18:27participating in a probabilistic
4:18:29environment. Unnecessary losses are
4:18:31totally different. Those are losses that
4:18:34are created by emotional
4:18:35decision-making, taking trades during
4:18:38low-volatility chop, or trading without
4:18:40a plan, or moving stops emotionally, or
4:18:43revenge trading after a loser, or even
4:18:45after a break even, or just simply
4:18:47trying to force the market to pay you
4:18:50today. Necessary losses are unavoidable,
4:18:53but unnecessary losses are where traders
4:18:56destroy themselves. And most traders
4:18:58spend all of their time and energy
4:19:01trying to eliminate necessary losses
4:19:04instead of trying to eliminate the
4:19:06unnecessary losses. And that's
4:19:08backwards.
4:19:10It's backwards. One of the most
4:19:12important concepts that I've ever
4:19:14understood in trading is the process of
4:19:17tightening the back end. Tightening the
4:19:19C game, reducing the C game. Most
4:19:21traders only focus on improving
4:19:24performance when they're at their best.
4:19:26They optimize setups, they optimize
4:19:28entries, they optimize their different
4:19:31confirmations, but that's front-end
4:19:33optimization. And tons of struggling
4:19:36traders just do not study themselves
4:19:39when they're emotionally compromised.
4:19:41They actually don't even want to think
4:19:42about it, and they just cope. And they
4:19:45say, "Oh, well, I'm just going to follow
4:19:46my rules next time." But they're not
4:19:48truly analyzing what happens after a
4:19:52loss. They're not studying the tilt
4:19:55patterns that they have for themselves,
4:19:57and they're not identifying those
4:19:58trigger points. And more importantly,
4:20:01they're not building a system that
4:20:03activates when judgment degrades. I
4:20:05mean, we all know that when you start
4:20:08tilting, it is incredibly difficult and
4:20:11usually it only stops in one of two
4:20:13ways. Either you blow the account or you
4:20:15end green on the day. Neither of those
4:20:17are good outcome, but traders ignore
4:20:20this, and then they repeat the same
4:20:22cycle over and over and over. So then,
4:20:26what is back-end tightening? Well,
4:20:27back-end tightening means building
4:20:30structural defenses against your worst
4:20:33behavior, against the worst version of
4:20:35yourself. Not motivational quotes, not,
4:20:38"Oh, I'm just going to try and follow my
4:20:40rules next time," or "I'm going to try
4:20:42harder. It's not about relying on
4:20:44discipline in the moment. It's actual
4:20:46systems. It's hard shut down rules,
4:20:49daily loss limits, trade limits,
4:20:51reducing size after emotional
4:20:54escalation, or just having the
4:20:57self-control to actually walk away when
4:20:59you start to recognize that your
4:21:01decision quality is degrading
4:21:03drastically. Because the goal at the end
4:21:05of the day is not necessarily to become
4:21:07a robot. The goal is to stop
4:21:10catastrophic sessions before they
4:21:12actually begin to spiral out of control.
4:21:14And this is also why traders fail once
4:21:18they actually start making money. The
4:21:20first payout is dangerous because
4:21:23psychologically what happens a lot of
4:21:25the time is traders stop protecting
4:21:28capital and they start trying to
4:21:30accelerate outcomes. They increase size
4:21:33too quickly or they increase accounts
4:21:36too quickly and they end up increasing
4:21:38pressure too quickly. And then one
4:21:40emotional session wipes out everything
4:21:43that they've built. Scaling should
4:21:46happen after survivability has been
4:21:49proven. Most traders are so quick to try
4:21:52and scale and it becomes a ticking time
4:21:54bomb for themselves. You do not scale
4:21:56before that happens. Think about it like
4:21:59this. A trader who cannot consistently
4:22:01protect a small account is not magically
4:22:04going to protect 10 of them. Because
4:22:07more size or more accounts amplifies
4:22:11emotional instability. It does not fix
4:22:15it. And this is why I always say you
4:22:17need to earn the right to scale. First,
4:22:19you prove consistency, then you prove
4:22:22emotional control, then you prove that
4:22:24you can actually survive variance for
4:22:26your edge, and then you can actually
4:22:28scale, but you scale systematically, not
4:22:31recklessly. Because in trading
4:22:34longevity matters more than speed. The
4:22:37real goal in trading is to think in
4:22:39terms of long-term consistent success or
4:22:43long-term success. It's not necessarily
4:22:46about making money today or making money
4:22:48on this trade or this session. It's
4:22:51about being able to trade tomorrow,
4:22:53being able to continue to trade. And
4:22:56that line completely changed how I
4:22:58viewed trading. I talked to so many
4:22:59traders and they all
4:23:01claim they have the same problem. Oh, I
4:23:03just can't follow my rules or psychology
4:23:06or blah blah blah blah blah. You cannot
4:23:08treat every session like it's a life or
4:23:11death situation. And if it is a life or
4:23:13death situation, you're doing something
4:23:15wrong. Once you actually understand
4:23:17that, you stop forcing outcomes. You
4:23:20stop trying to recover losses
4:23:23emotionally and you stop needing or
4:23:25itching for action every moment of the
4:23:28day. And you start thinking like someone
4:23:31who is looking to build long-term
4:23:33consistency instead of chasing
4:23:35short-term dopamine. Because a lot of
4:23:37traders think that consistency comes
4:23:40from being perfect. It doesn't.
4:23:41Consistency emerges when catastrophic
4:23:44behavior is removed. Because the traders
4:23:47who survive are not the traders that
4:23:48never lose. They are the traders whose
4:23:51worst days are controlled. And that's
4:23:54the game. Protect capital, protect
4:23:56decision quality, and protect your
4:23:58survivability. Because the whole point
4:24:00is if you can stay in the game long
4:24:01enough and you actually have an edge, a
4:24:04true edge. You really do need an edge.
4:24:06If you actually have an edge, then the
4:24:09math actually has a chance to work. But
4:24:11again, you do need an edge. Anyone who
4:24:14sits here and tells you it's all about
4:24:15psychology is full of it. It's not how
4:24:18this works. You need an edge. You need a
4:24:20system. You need a strategy and you need
4:24:22to trade it and execute it properly.
4:24:25It's not only about psychology. But at
4:24:27the end of the day, an edge or strategy
4:24:30doesn't matter if you can't execute
4:24:32properly. It literally doesn't mean
4:24:34anything and I mentioned that earlier.
4:24:37So, if you're serious about actually
4:24:38trading this and you don't want to spend
4:24:40another year stuck in the payout destroy
4:24:43cycle. I've got a few spots left in my
4:24:45one-on-one mentorship where I do live
4:24:47trading sessions, personal daily trade
4:24:50reviews, and direct message or access to
4:24:53me on a daily basis and the full
4:24:55framework of how I actually trade, but
4:24:58it's built out around your specific
4:25:00situation or problems that you may be
4:25:02facing and a lot of other stuff. So,
4:25:05it's not some 600 person mentorship
4:25:08where you're not actually getting the
4:25:09attention or the help that you really
4:25:10need. And if you follow the process and
4:25:12you do what I say and within 90 days if
4:25:15you're not able to pull a payout, I keep
4:25:17working with you for free, doesn't
4:25:19matter how long until you can actually
4:25:21pull one out. So, the risk is on me and
4:25:23that's how confident I am in this
4:25:25program. So, if you're ready, fill out
4:25:27the application. It's the first link in
4:25:29the description below. And if you're not
4:25:31ready, no stress. I post content on my
4:25:33channel for free that you can watch and
4:25:36you can hopefully find some educational
4:25:38value from. I'll catch you guys later.
4:25:40Peace.

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