Month: July 2018

yesterday I identified about 10 opportunities and never made money because i pulled the trigger to late. This walkthrough will marry the two approaches of AR and SC and take every trade with a 1 point Stop Loss and 1st Target.

Above are the first of five opportunities taking during the first 90 minutes.

1. First entry is the 1:1 reaction line at point 1 created from the move down
2. Second we have a channel overshoot
3. Third trade is also a channel overshoot
4. Fourth trade is a with trend channel touch
5. Fifth is a with trend channel touch.

So lets now look at the volume profile during each of these entries.

 

 

 

 

 

 

 

 

 

 

 

 

The first entry above is an F2 hitting the Vpoc of the developing distribution.

 

 

 

 

 

 

 

 

The Second entry is responsive buying within the wiggle room of the dist.

 

 

 

 

 

 

 

Third entry again is an F2

 

 

 

 

 

 

 

Fourth entry is an F2

Fifth entry below is a cookie cutter or the edge of value in the down move.

Ok an NF3 trade states we don’t fade what appears to be absorption coming off the low. People who hit the bid thinking we were going lower now need to hit the offer to get out. This causes a volume spike.

 

Question is now why doesn’t it spike through the Queue who is on the other side?

Could be first scalps for new longs! How easily does the market clear the queue on retest. Does it absorb again. On clearing the queue does the market hit the bid again?

The DOM is the single  most important tool in the Prop trading World. However it’s essentially telling the same tale as the tape with the exception that as well as whats printing we have the Depth pf market.

10 Year Notes Absorption and Backtick
Price has been moving down and suddenly we see absorption on the Bid at 070. Every time the bid is cleared the buyer immediately sweeps the offer as it steps down and nothing gets through to 065.

This is our first heads up that a buyer is interested here. however the Seller takes the 070 Bid and brings 2000 down on the offer. Only 38 trade into the next price however before the buyer sweeps the offer indicating he;s still in play.
The Buyer then takes out the next offer at 075 and places size on the Bid. This is the first time he has lifted to consecutive offers and likely the start of his press. We then have a pattern of offers pulling off and the buyer sweeping and stacking the bid until we reach 085. The seller sweeps the buyers Bid at this level which is the first indication of Balance. Time to take profit if long.