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This FREE NQ Indicator Changed How I See Daily Range — Transcript

by Christopher Creamer | Orderflow Trader · 4,612 words · 640 segments · language en · Watch on YouTube

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0:00All right, what's up? It's Thrax. We're
0:01back for another video. In this video,
0:03I'm going to be going over an indicator
0:05I've been working on for pretty long
0:07time. I've been working on it for about
0:09six months, and I've been forward
0:12testing it now for a while. I'm pretty
0:15happy with how it turned out, and I'm
0:18going to be releasing it so that you
0:19guys can actually use it, and hopefully
0:22it can help you with your own trading.
0:24But in order to use this indicator,
0:27it is very important that I explain how
0:29it should be used. Um because this is
0:31not just like a signal generator. So
0:35we'll get into a little bit about why I
0:37created it, what it actually is, and how
0:39you're supposed to use it. And then
0:41hopefully you guys can use it. Let me
0:43know your thoughts and then maybe we can
0:46make it better or maybe it'll just help
0:48you in your trading and making better
0:50decisions. So this is the NQ volatility
0:54range indicator. It's the NQ it's called
0:57NQ volatility range. Now this indicator
1:00is specifically only for NQ. The reason
1:04why is because this indicator is
1:07essentially taking statistical data and
1:10then creating
1:12zones or areas that we watch based off
1:15of eight years of NQ data that I ran. I
1:19basically created like a script to
1:21determine how far away does price
1:23typically deviate above Asia session or
1:26below Asia session on a given day but
1:28it's only for NQ. So I had like eight
1:31years of open high low close data. I ran
1:34some tests um and then this indicator
1:37was basically born. So we're going to go
1:40over the purpose and the logic and then
1:42the proper use of it. And then we're
1:44also going to talk about a little bit
1:46about how I use sessions a little bit
1:48because this is this is the whole point
1:50of the indicator really comes down to
1:54how I actually determine kind of what
1:56I'm expecting to happen on a daily
1:58profile or what's going to happen during
2:00New York session. And that all comes
2:03down to a daily candle. So daily range
2:06expansion, right? So most traders, they
2:08might treat volatility as random or most
2:12indicators might have, you know, fixed
2:14levels that are projected and they
2:16ignore regime changes. They ignore
2:18volatility changes and they're just
2:20posting static uh levels. And sometimes
2:24traders might enter too early because
2:25they don't understand where expansion
2:27statistically will get exhausted and
2:29then Asia session is often ignored
2:32despite anchoring the daily auction. So
2:35what do we typically see in a daily
2:37candle? Well, usually what makes up a
2:41daily candle sessions. Now the way that
2:43I think about it is that we have Asia,
2:46London, and New York. You can say that
2:48there is also CBDR. There's different
2:51Asia sessions that open. There's
2:53different sessions that open throughout
2:54here. You can have New York AM, lunch,
2:57New York PM. Um, but realistically, if
3:00this is a daily candle here on the right
3:02side and we have the open, the high, the
3:04low, and the close, what usually makes
3:07up a daily candle, just to keep things
3:10simple, is Asia, London, and New York.
3:12What is the indicator doing? Well, the
3:14indicator is basically marking out our
3:16Asia session and then it's creating
3:18levels above and below Asia session for
3:22what the statistical averages are on how
3:25far away we're going to expand lower or
3:28expand higher from Asia high or Asia
3:31low. So when we have the indicator here,
3:33we have Asia session, we have Asia high,
3:37Asia low, there's also the middle of
3:40Asia or the equilibrium of the range.
3:43Then we have quarters. Quarter one,
3:44quarter two. This is basically 25% or
3:4875%. Now the goal is to basically
3:52understand where might this daily candle
3:55wick get created. So we have these
3:58different zones. We'll go into them, but
4:00if you just kind of look at this
4:02picture, we expanded above into one of
4:04our zones. We reversed down and then the
4:08move got exhausted in this other zone.
4:11Now that's great. I mean could have been
4:13cherrypicked. It was cherrypicked but
4:15this is just trying to give you an
4:16example of of how this is going to look
4:19when it works properly. Now we do need
4:22to understand though that since this is
4:25based on statistical averages that there
4:28are days that are outliers to the data.
4:30So if on average a daily candle moves,
4:33you know, let's just say 400 points or
4:35350 points, we can have days during that
4:39time where a daily candle some catalyst
4:42might happen and it moves like a,000
4:44points for the daily range. Then
4:46obviously on the outlier days like that
4:49the outliers to the data um the way that
4:53this is used is different because this
4:55is calculating basically the averages on
4:57average on a normal type of volatility
5:00day where are we typically looking for
5:02price to basically expand get exhausted
5:05and potentially turn around. It's not
5:08predicting direction. Okay. It's just
5:10defining statistically meaningful
5:14locations relative to Asia high and Asia
5:17low or Asia session in general. Now, why
5:20do we use Asia session? Well, I use the
5:24Asia session as the daily auction anchor
5:26because it usually is going to align
5:28with roughly the open of the daily
5:31candle in most most cases and Asia
5:35session establishes the initial balance
5:37of the day. There are days where we
5:39expand during Asia session, you know,
5:41sometimes on Sundays or whatever, but
5:44Asia creates the range and then London
5:47and New York act as expansion and
5:49distribution phases during the day. And
5:52then over years of data, price
5:55consistently reacts relative to Asia
5:57high and Asia low. So that's why I use
5:59Asia session as the daily auction
6:02anchor. It's just an observed
6:03statistical behavior just across
6:05thousands of sessions when I ran the
6:07data and I created a script to basically
6:10determine this information. So sessions
6:13are a really big thing when it comes to
6:16how I set up my day for trading. I allow
6:19Asia session to form. I see what London
6:22and Asia did prior to New York open to
6:25then get an idea on what I believe New
6:27York open is going to do. If you're ever
6:29in the Discord and you see my daily
6:31outlooks and you know I'm drawing things
6:33out and you're thinking to yourself, why
6:35is he drawing this out? It's because I'm
6:38looking at this. I am looking at Asia
6:40session and London session and then I'm
6:42trying to determine what is the most
6:43probable thing for New York to do when
6:46New York opens up. So that comes into a
6:50session rotation model basically. So how
6:53the three sessions typically will
6:55interact with each other like we
6:57mentioned earlier Asia session will
6:59typically define the balance and the
7:00range and then London can often create
7:02the daily wick or it can just be a
7:05manipulation away from Asia's range and
7:08then New York often resolves the true
7:10directional move or is the continuation.
7:13So keep in mind these are these two
7:16images are different days. Now the model
7:18looks the same. We have Asia session
7:20here. We have Asia session here. London
7:23deviates below before New York takes it
7:26back up. There are days where we have
7:29Asia, London, and New York all moving in
7:32the same direction without any of the
7:33highs getting taken or any of the lows
7:37getting taken. And there are also days
7:39where the the sessions just go sideways.
7:41We have Asia, London, and New York. So,
7:45this is not going to happen every day.
7:47We're not trading certainty. We're just
7:49trading statistical tendencies on where
7:52this might actually go. So what is the
7:54indicator actually doing? Well, the
7:56indicator is locking in Asia session.
7:59It's locking in the highs and the lows
8:01at the close and then it's using the
8:03daily average true range to define
8:06expected volatility. So up here on the
8:10indicator right now, this indicator is
8:12using ATR value of 20. And so if the
8:16daily range let's say from a 28 ATR is
8:19278 points well then it has a
8:22mathematical calculation to determine
8:25the up projections and the down
8:26projections for these zones. They are
8:29not symmetrical they are asymmetrical
8:32because the data shows that when price
8:34deviates below Asia and deviates above
8:36Asia they are not the same. one is
8:38larger than the other. And that's really
8:40important. And that's part of the reason
8:42why this indicator to me is pretty cool
8:44because somebody can sit here and
8:46basically define Asia session and then
8:49they draw a fib going up and a fib going
8:52down. I actually have an indicator like
8:55that. It's called session range
8:56projections. Um but there's no
8:59statistical data backing that. So I
9:01think this one is a lot more accurate
9:03and that's kind of where this idea came
9:04from in the beginning. So the zones
9:08print after Asia session is established,
9:11but they do not repaint during the
9:13session. So the moment that the session
9:14closes, these levels here are going to
9:17print and they're going to stay there
9:18the rest of the day. Then the next day,
9:22it will recalculate based off of what
9:24the ATR is now. And then it's going to
9:27repaint the zones and send them out on
9:30your chart basically. And they're going
9:32to stay there the whole day. So it's a
9:33rolling calculation that is going to
9:35adjust to volatility as the market
9:38regime changes or vol volatility
9:40basically contracts or expands as the
9:43week moves forward as the month moves
9:45forward. So you never really have to
9:46change it. It's it's adjusting it
9:48automatically itself every day. Now
9:51where did I where did I get the
9:53statistical foundation for this? So,
9:56like I mentioned earlier, I did download
9:58like it was like 15 years of open, high,
10:02low, close data on a bunch of different
10:04time frames for NASDAQ. And then I focus
10:07more so on as volatility's been
10:09building, you know, in the more recent
10:11years for the NASDAQ as more money's
10:13involved. It measures the average
10:15expansion beyond Asia high and low and
10:18it's using volatility normalization to
10:20stay relevant across regimes. So, that's
10:22what I was mentioning earlier. So it's
10:24going to prevent erratic behavior
10:26through change clamping. So it's a
10:29rolling calculation. They are not
10:31arbitrary fib levels. These are
10:33volatility adjusted statistical
10:35reference areas. So there are different
10:37zones here and they have different names
10:38for them and I'm going to go over that
10:40right now. So typically there's, you
10:42know, five levels here. We have level
10:45one, we have AVR minus, AVR, AVR plus,
10:49and then we have a max level. What AVR
10:52stands for is it basically just stands
10:54for average volatility range. So the way
10:57that we use these or the way that we
10:58understand them is that [snorts]
11:02when price deviates away from Asia
11:04session, the first place it's going to
11:06touch or the initial expansion area is
11:08going to be level one. Level one has two
11:11parts to it. It is this gray zone you
11:12see here, but then there is a red area
11:15in the gray zone. It's basically like
11:17the OTE of level one. Usually London
11:21will be the first to reach this area
11:23because after London attacks Asia highs
11:26or Asia lows once it opens up it's going
11:29to expand into level one. AVR minus is
11:32this dotted line here. Now on days where
11:35we're not really moving or expanding in
11:37a directional manner we're typically
11:39going to stay within AVR minus. We're
11:41going to stay between this dotted line
11:44and this dotted line.
11:46This area right here, AVR, is the
11:48average expected expansion right here.
11:51So, this is the average expansion that
11:53we'd usually see um when price will
11:56deviate away from Asia session. Now, AVR
12:00plus is just the extended expansion. So,
12:02if we do have a big move that day, we'll
12:05likely reach AVR plus and then we would
12:07be looking in this location for
12:08potential exhaustion or for price to
12:10start turning around. depending on
12:12context, depending on higher time frame
12:14structure and the higher time frame
12:16draw, things like that. And then the max
12:18level is statistically stretched
12:20territory. So price realistically should
12:24not get past this area. And if it does
12:26get past this area, then
12:30something happened that day. It's an
12:32outlier to the data. It's very rare that
12:35price does get past this area. And when
12:37it does, it's usually a massive day, a
12:40really big move. It's like if the ATR or
12:43the ADR is typically about uh you know
12:47300 to 400 points we'll say and then we
12:50have a day where it's like a 600 or 700
12:52point candle or an 800 point candle then
12:55yes we will expand past the max. But
12:58again we're basing this off of
12:59statistics. We're basing it off of
13:01averages. And when you're basing it off
13:02of that, there are outliers to the data
13:04and sometimes price does expand past the
13:07max, but it's not very often.
13:11Now, when you use this indicator though,
13:13context is a non-negotiable. This is not
13:16like a a trade signal. You're not going
13:19to just like watch price enter a zone
13:22and then just blindly take a trade like
13:23a reversal if it enters a zone. That's
13:25not the intention of this indicator.
13:28That's not what I was intending it to be
13:29used for. So you should not be using it
13:32that way. It requires context. It
13:34requires directional bias. And that
13:36directional bias has to come from things
13:38like higher time frame market structure
13:41and just understanding the market
13:42environment. And the zones are to be
13:44used as location and exhaustion areas
13:48that we'd be potentially watching for.
13:50These are not entries. Even though you
13:53might see the zones and they look like,
13:54oh, it's going to bounce from this zone
13:56or whatever, it's just supposed to be
13:58used as a confluence. So, for example,
14:01let's say on a day like this where your
14:04bias is short. Okay, New York opens,
14:08your bias is short. That doesn't
14:10necessarily mean you should be buying
14:12every single zone. You're short. Your
14:15bias is short. Why are you going to be
14:17buying against your bias just because it
14:19hit a zone? That doesn't make any sense.
14:21And that's not how this is supposed to
14:22be used. So, you don't have to trade the
14:25price action based off of this
14:26indicator. And you shouldn't be trading
14:28price action based off of this indicator
14:30just because price touched a zone. So
14:32what is this indicator and what is it
14:34not? This is really important. This
14:35indicator is a volatility based location
14:38framework that we can use basically as a
14:41confluence tool as long as we're using
14:44context with it. It's just a way to
14:46quantify Asia relative expansion in a
14:50statistically meaningful ma matter.
14:52Basically, what it's not is it's not a
14:55signal generator or a prediction tool.
14:57And it's not a replacement for execution
14:59skill. Don't get this indicator and then
15:01just start blindly taking trades because
15:03it's in the zone. That's not how it's
15:06really supposed to work. That's not why
15:07I made the indicator and that's not even
15:09how I use it anyways. So, I'm going to
15:11go to the charts and we're going to take
15:13a look at how it should actually be used
15:16and how it should not be used basically.
15:18All right. So, here we are on the
15:19charts. We have our indicator here.
15:22indicator here, indicator here. The way
15:25you should be thinking about this is
15:27this is a daily candle. This is a daily
15:30candle. And this is a daily candle. So
15:33within these daily candles, we have
15:34Asia, London, and New York. Asia,
15:37London, and New York. Asia, London, and
15:40New York. So Asia is going to basically
15:42be uh the blue box, London is the red
15:45box, and then we have the gray box as
15:48New York. All right, my bad. I had to
15:50take off my jacket. It was getting kind
15:51of hot. So anyways, in this daily candle
15:54that we have, we're trying to basically
15:56determine how far away above and below
15:58Asia session is price likely going to
16:00move before turning around and returning
16:02to Asia session. And so the idea is is
16:06that typically what happens and it
16:07doesn't happen every day but typically
16:09what happens is if price deviates away
16:12from Asia session sometime throughout
16:14the day it is likely or oftent times it
16:18does happen where we return back to
16:20Asia's range whether we come back to the
16:22highs the lows or we come back to the
16:24equilibrium or one of the quarters. So
16:27the idea is is that first before we even
16:30use this indicator like at all, we have
16:33to determine what our bias is for the
16:36day. So if on a daily bias we wake up on
16:40this day here, if on a daily bias we
16:44wake up on this day here and we think
16:47that price is going to basically
16:49continue higher, then we're not going to
16:53be looking at these areas here or this
16:55area here or this area here to try and
16:58take a sell. Okay. Now, if we thought,
17:01okay, here's Asia session, here's London
17:03lows. London lows and Asia lows haven't
17:06been taken out, we're at least coming
17:08and taking out London lows when New York
17:11opens up. If our bias is short, then
17:14this is where we're going to potentially
17:16use these areas. If that makes sense.
17:19And if we are short, if our bias is
17:21short, then if price comes down into
17:23this area, this area, or this area,
17:26we're not going to be taking a long.
17:28Why? because that's going against our
17:31daily bias. Why the would we take a
17:33long position just because a box is
17:35here? Um if our bias is short, you just
17:39wouldn't do that. So what happens on
17:41this day, right? Well, Asia session gets
17:44created. We have the high and the low.
17:45Price deviates away above Asia into
17:48level one. Comes down a little bit, but
17:50then continues into the AVR minus. Now
17:54price
17:55kind of gets a little bit exhausted at
17:58AVR minus. It doesn't want to continue
18:00higher yet, but then we have New York
18:02open. When New York opens, we push
18:05through here and then we start to kind
18:06of stall in this area. So, the way that
18:09I would be using this is if I wanted to
18:11see us go lower and I thought that this
18:13move going up was basically
18:17Then what I'm going to be looking for is
18:18now that we are in this area, I'm going
18:21to be using my other parts of my
18:23strategy such as order flow or if we
18:26have levels here to the left or whatever
18:28it may be to determine whether or not I
18:30should actually be taking a trade in
18:32this area. But I'm not just going to
18:35blindly enter as price gets into here.
18:39There's always the chance that we may
18:40just like stall here for a bit and then
18:42push higher into this zone, right? And
18:44then again, I'd be looking in this area
18:46to see what price is actually going to
18:48do. Now, in this case, we did expand
18:50into the AVR. Price stalled out. We
18:53turned around and we came back to Asia's
18:55range. We took London lows. At that
18:58point, I would basically be done
18:59trading. Now, what happened on this day?
19:03Well, Asia got created. We have the
19:06high. We have the low. We have the EQ
19:08and the levels in the middle. The first
19:10thing that happens is London session
19:12opens up. We end up attacking Asia lows
19:15and we go right into level one. Now,
19:18level one, we bounce up, we kind of mess
19:22around. New York opens, we come down, we
19:24stay within AVR minus, we stay within
19:26AVR minus, we bounce back up, and we
19:29basically consolidate. we stay in
19:31between these levels. Now, if we ever
19:35have a day where we basically
19:37consolidate, then on those days, it is
19:39likely that we stay within AVR minus to
19:42AVR minus. Let's say the next day opens
19:46up and here we are with this day. Asia
19:49session opens up. It creates its range.
19:51We now have the high. We now have the
19:53low. Well, in this scenario here, let's
19:56say that our daily bias was based off of
19:59higher time frames. We believe price
20:01should be going higher. So what are we
20:03going to be looking for? Well, we're
20:05going to be watching these lows. We're
20:07going to see if price wants to come out,
20:09sweep the lows, and then start to head
20:11higher. Okay, so let's say if that was
20:14going to be our bias on the day, we
20:16wanted to see previous daily lows get
20:18taken out. And then we wanted to look
20:20for a rejection or a bounce to take us
20:23higher towards a higher time frame draw
20:26on liquidity if it was sitting somewhere
20:28up here. And that's where we were
20:29looking at and what was in our head when
20:32we're looking at higher time frame
20:33structure. So as London session opens
20:36up, it pushes down past level one. It
20:39pushes past AVR minus and it comes into
20:42AVR.
20:44It begins to consolidate. It doesn't get
20:46past AVR and it turns around. Now it
20:50comes back to Asia session before New
20:53York open. New York then opens up and we
20:56begin to push. Now, in a situation like
20:58this, if our bias on the day was to go
21:01long and our bias on the day was that
21:03price was targeting some type of higher
21:05time frame draw up here, then just
21:09because price is pushing into level one
21:12to the upside or AVR to the upside or
21:14AVR plus to the upside, it doesn't mean
21:17that we're going to sell there. Why?
21:19Because why would we be selling against
21:21what we believe is to be happening? If
21:24we think there's a draw up here and we
21:26think price on a higher time frame is
21:28coming higher after a sweep of
21:31liquidity, why are we going to short it?
21:34We wouldn't. Now, what you can do
21:36though, because these are still
21:37statistical averages on how far away we
21:40might actually expand past Asia highs,
21:42we can be watching these these areas for
21:45the move to the upside to basically
21:47fizzle out or get exhausted. So, as we
21:50push higher, we push through level one
21:52with a lot of pressure to the upside. We
21:55come into AVR, there's really still
21:58pressure going to the upside. Now AVR
22:01here, this AVR, not AVR minus, but the
22:05normal AVR, we see price kind of slow
22:08down a little bit. It is lunch, but
22:10eventually it pushes above it. So the
22:12next area that I'm looking at is going
22:14to be AVR Plus. Now AVR Plus gets hit.
22:18We have price up here. This doesn't mean
22:20I'm going to take it short, but it means
22:23that this is statistically a meaningful
22:26location in terms of a of an expansion
22:28move where it may get exhausted. And we
22:31are at the end of the day here towards
22:33the last hour of the market. So, this
22:36may be a good area to take profit if
22:39that's if that makes sense. That's kind
22:42of how I use this indicator. I'm using
22:45it just as confluence for reference of
22:48location on how far away below or above
22:51Asia session are we typically going to
22:53deviate away before potentially turning
22:56around. I do not make trades just
22:59because it touches a zone. I do not make
23:01trades because it touches that zone or
23:03that zone. I just understand where we
23:06are in relation to Asia session. I
23:09understand the location and then I
23:11understand the higher time frame on
23:13where we should actually be moving in my
23:16opinion so that I can use this as
23:19context to build trade ideas and that's
23:22how this was intended to be used. So if
23:24you're going to use it, you need to use
23:26it with context. You need to use it with
23:29a little bit of discretion. This is not
23:31built for trade signals. Now, if you do
23:35use it the correct way and you
23:37understand
23:39that this is basically just a helper to
23:42understand location,
23:45then it can be pretty powerful. I think
23:47so. I think it was this is a great
23:50indicator for me and I use it all the
23:53time. I've been using it every day and
23:56it's really helped me out with my
23:57trading. Now, this is a private
24:00indicator. I'm not selling it to you
24:02guys. I'm not doing I'm not trying to
24:05sell it. You can get this indicator for
24:07free. I'm going to give you this guy.
24:09I'm going to give you this indicator for
24:10free. You can just check the link in the
24:13description and then you can claim
24:14access to it. You do need to be a part
24:17of our community though. But guess what?
24:19The community is also free. This is just
24:22something I'm providing to our Discord
24:25community as something that is going to
24:28potentially help out. And if you find it
24:30useful and if you figure out a good way
24:32to use it, great. If you have feedback
24:34or things that you think should be
24:36changed on it, let me know. I'll hear
24:39you out. And then
24:42that's basically it. The last thing here
24:44is just the table up here. This is just
24:46keeping track. So, it's telling you what
24:48the ATR is using. It's using an ATR of
24:5120. It's telling you what the up
24:53projection and down projection is. The
24:55only thing that you should be changing
24:57in this indicator at all when it comes
24:58to the settings, by the way, is the time
25:02zone and the ATR length and then just
25:03the way that it looks.
25:06That is it. If market conditions changed
25:10just recently, something happened,
25:11tariffs came out, whatever, then yeah,
25:14we can lower the ATR length so that we
25:16can basically
25:18have zones that are more relevant to
25:21recent price action because we're going
25:24ATR off of a daily candle. So, if we're
25:26doing a length of 20, it's looking at
25:28the past 20 candles, basically. So, 20
25:31days is a lot of time. A lot of things
25:33can happen in 20 days. If something
25:35happened five days ago then and we want
25:37more uh recent zones then we can lower
25:41this. My recommendation to you is to
25:43keep this at 20. I think it's a good
25:45idea to keep it at 20. I've been testing
25:47it on 20. It's been working on 20. It's
25:51been working as intended on a 20 value.
25:54So just keep it there. I hope this helps
25:58somebody. If it doesn't help you or then
26:02don't use it. But if it helps you,
26:05great. If you have questions about it,
26:07feel free to ask me in the comment
26:08section below. And if you want access to
26:10this indicator, check the link in the
26:12description. This is free, but it's
26:15private,
26:16but it's free. So test it out. Let me
26:20know your thoughts, and I'll catch you
26:21guys next time I trade. Peace.

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