Profile and Flow Series: Delta Unwind

Alright, everyone, so in this video we're going to talk about delta unwinds. And some of you might have already tried to watch the original video, but unfortunately there was no sound. And I think sound is a pretty important component of these videos. So we're going to do this over again. I'm not sure what happened. I think I might actually had my mic on mute. So big faux pas on my part. But getting right to it. The delta unwind, this is, you know, a lot of this stuff is going to be pretty much the same across the board as far as, you know, setups, conditions. We look for, you know, a lot of what we're trying to take advantage of is one side losing control, one side getting crowded. And market profile gives us context, right? So market profile gives us an idea of where to get involved, where the market is spending most of its time, where value is developing. And then we look at, you know, order, floor, order flow for more nuanced information. Okay, so a delta unwind, just as an unwind sounds, imagine that we are, you know, winding something up and building up a lot of potential energy and then all of that is released. So the market is in this case, a lot of times what we'll see is that unwinds are typically what we would normally refer to as rollovers. So in this case, this will look like a backside retest and this will result in a rollover. So what we're looking at right here, more often than not, unwinds are what lead to our long liquidation structures when we're looking at double distributions. So when we see a structure that looks like this, a lot of the times this began as a market that might have been in balance up here. And then we have this unwind and we have this long liquidation, cascading structure. Now this can happen at the bottom where you have positioning unwind, delta unwind at the low of a move and it resolves in a reversal. The. But more often than not, we'll see this at highs and this will more often than not look like an unwind. Okay, so we're going to go for a record in this video. How many times can we say more often than not, or the word typically? Because sometimes we just like to anchor onto certain words. So typically, what you would refer to as a rollover, okay, where the market loses its ability to follow through, there's a loss of momentum. This often happens after there are multiple retests of a level. Right? And more often than not over range. So typically we'll see that this is built up over a two to three day range, two, three, four day range. You know, one of these micro ranges with btc, this can be, you know, interpolated into the lower time frames where, you know, you could be applying this onto a 5 minute chart, a 15 minute chart. Obviously it just has, it involves, you know, the move is probably going to be of less magnitude. Okay, so it sounds just as it is. As I said, imagine unwinding something that has a lot of pent up energy. One side has been in control for this short period of time. In this case, one side has been in control but ultimately is unable to follow through. We see the initial aggressiveness towards the extremes. Okay, we went over that and then there's a loss of these imbalance levels. So first there's a sign of absorption, then there's the loss of the imbalance levels, which ultimately are what we use as a trigger. And then you see an influx of volume in the opposite direction. So in this case we're going to be talking about a backside retest of what was a breakdown of a longer range. So I said this could happen at highs. So this structure right here, you can imagine this in isolation as well, at the high of a structure. And before we get into this, I have said before that there are many times when poor highs are left behind. Okay, Many times when poor highs are left behind. And specifically that is when the, there are rollovers. So when the market is unable to follow through. And this is an indication that there's been a loss of momentum, so loss of buyer interest up here. And then the market just collapses upon itself. And this is kind of what an unwind is, it's a collapse. So what we have right here is a market that had taken a substantial move to the downside after breaking down from this was around a nine day range. Okay, we have an immediate kickback. Market makes an aggressive move up. Following day is pretty much in balance. Okay, so in balance we have our points of control lining up. Okay, the market had closed, opened auction sideways and then closed, basically right where it had opened. All right, so not much movement whatsoever from this candle. Okay, we have a market that opened here, moved up, auction sideways and then closed right around where it had opened. Okay? So if we're looking at just the TPO charts, we see a market imbalance, we see a market that made an attempt to move upward. We could look at something like rotation factor. And immediately we see the market is making an aggressive move up, or not aggressive, but it is trying to work its way up. So positive Rotation factor, but it is obviously immediately showing signs of a loss of momentum. And we know that context is this is coming from a prior level that we just broke down from. So we're looking for ultimately signs of absorption, signs of a backside retest. Backside retest, meaning that if this was a previous consolidation we came from, and let's say that this was. We'll draw this a little bit better. Let's say that this was the range and this was the previous consolidation. You know, the backside retest is just taking a retest on the breakdown of this structure because there's a little bit more certainty at this point that this high is worth shorting. And at this point we could put a conservative stop up here or a more aggressive stop at the low, using this as a buffer. Okay, so in this case, you're not using the stop or the structure as a buffer. In the case of the stop up here, you're using this space as a buffer, saying that this was a range that we were making an attempt to move up from, but it broke down. So this is the little bit of cushion. We have to take this position. If we enter into a short and this broke down, it's a clear sign that this is losing strength. If we're back inside of this range, maybe we could reevaluate. But it's a backside retest. It's rather than just shorting the high. So, all right, so we move off of the low, semi balanced aggressiveness kind of dying down within the structure. And we're retesting the underside of a previous structure that we broke down from. So this is a longer period range actually coming from a structure that was trending upward. So it's not that we're approaching this and thinking, oh, looking for the delta unwind here in the first day or even the second day. But what we're starting to do is hopefully get better at picking up on the evidence that this is setting up over time. So we're looking at this in hindsight. What we're not saying right now is that you're looking for a delta unwind right here and that you'd be able to spot it. So we're looking for likely a retest of the underside of this structure. So we get the retest. So the market moves off of the low up to the high. Not much of a the ability to close at that level. You can see that we closed down here right where price opened. When we look at CVD first. Okay, so CVD shows that we have aggressiveness towards the upside we have slightly more aggressiveness in terms of CVD than we actually do in price action. So we could see a substantial amount of wicks towards this high. But the market has made an aggressive move off of the low and retested the underside of that structure. Okay. One of the things to pay attention to is that at this low, there's no sign of absorption. So it's not like at this low that we see that, for example, CVD is showing anything in terms of price action that is not being picked up. So we're not seeing, for example, that price is making, in this case, a higher low, but CVD is making a lower low. There's really no signs at this low that there is any kind of major absorption at the low. So we'd have to assume that maybe continuation is already a little bit more possible at this point or considered a little bit more just because we don't have any major signs that a buyer has stepped in down here in terms of the passive hand stepping in. Right. And being able to see that on cvd. So aggressiveness off of the low. And we're going to get that first retest. So going to get that first retest. Hopefully a backside retest gives us some kind of consolidation against this level that we could look to position around. So the first retest, we look at that on the actual footprint, there's a few things that are worth paying attention to. The move up was aggressive. We had volume behind the entire move, delta behind the entire move towards this high. The first area that we retested, the underside of that structure where we actually came in contact with it, volume did drop off. So we see 15 million, 13 million in the teens. Not really in the low teens whatsoever within the structure, except for within the consolidation. But talking about the aggressiveness towards the highs at the highs, you want to see high volume. So at the highs, high volume. At the highs, high volume. And then when we get over here, our last two candles before this rolls over after that first attempt up low volume. Right. We're looking at, in this case, excuse me, that lines up 15 and 13. All right. So not too much volume at the high. Okay. We have aggressiveness, but there's a few imbalances that are worth paying attention to. Okay. These are sort of our anchor points from now on. So imbalance at the high beginning right here, ton of aggressiveness. Unable to close above that level. More specifically, one right here as well, though. Okay. So we could see there's a little bit of a single print here. So we have an Area where there's these four zeros where this never went. Bid price traded through this very rapidly and we had not had this in this structure prior at all. So if we go back throughout any of this structure, you will not find any period like that where there is a gap. Okay. We might have initially off the low, when there's a low, large amount of stops being run, but towards the high into this aggressive move at the high. At any of the other highs within the structure, we haven't had this type of gap. Right. So we see that we have this imbalance right here. So we're going to look at that because this should serve as a support if we're retesting it. So the first retest that we get come back down into this level where the imbalance occurred and we begin to break down. So this is the first move into the structure. Now again, we're not approaching this at this point thinking this is going to be the delta unwind. We might be approaching this and thinking that this is a scalp opportunity, that maybe this is a reclaim into this level. Right. This is an area we're going to be observing. But we're not thinking delta unwind immediately. We don't have enough evidence. As we pan across the structure, what we'll see is that this imbalance level, Price returns to it and we'll get rejected from it. So we get more aggressiveness, unable to close above that level. And that has now flipped as some microstructural support and resistance flip. So Price is able to close through this level. So we're able to break through this level on the low time frames. But again we come up into that level where the imbalance last occurred. Okay, so level where the last imbalance occurred, where Price was unable to gain acceptance into Price returns to that level. Now on the CVD at this point we're seeing that there is very clear one sidedness by buyers in this case to move Price up. There's very clear one sidedness even, even within this micro range. So even before we get to the right side of this where the collapse begins. So it is very clear within this structure we have a very obvious delta divergence. Price is not even making a close through this high. The delta divergence started showing up before then. So on this move up, while Price was down here, we were already making a higher high in delta. So this is a very clean setup because at this point, you, you know, we don't have any kind of violation of this high. We don't have to wonder if delta is leading yet. All right, where if price passed through here and delta was still increasing, that maybe it's leading. There's no sign that we've lost this level. You know, what we would normally look for is if this was our trigger, if price was still moving through and we had this delta divergence, we would want to see something like this where we lost the level. So here we have it showing up kind of immediately. So we see that this is crowding already. So crowding with really no result. So we are setting up for an unwind because at this point we see we have a ton of aggressiveness into the high as well. So we're looking at this on a 30 minute chart. All right, 30 minute chart. You would be looking at the last structure on the high time frame to find your sticky points, period. But what you would see on the low time frames is that whether you're looking at this on the 30 minute, the 5 minute doesn't matter. Is that towards the left to right or left? As this translated from left to right, what we see is that delta was actually increasing. So we have downward price action even on the low time frames and delta is still increasing. We have a positive delta over here. Positive delta over here where we have in this case lower price action than the prior. Right. Positive cvd. Excuse me. So CVD has gone up in this case, but price has been unable to move up and we still have signs that buyers are getting aggressive into this level. So with an unwind, with a rollover, you don't really get any kind of spikes up. So what I shared not too long ago and since we're redoing this video, is that not every time do we need to have something that looks like this at the high, where you have, let's say that this was a first high and then price range move sideways and then before this breaks down, it needs to take the high. Okay, so sometimes you don't get that. Sometimes you just get this delta unwind where price rolls over, where you start to see that price rolls over. And most importantly, we're leaving behind all of this delta. The trigger for this trade is losing the microstructure that we established between it that was actually from an imbalance on a move up to the high. So if we zoom out this level at 9200, excuse me, 9240, 9250. This is where the imbalance occurred on the way up on the final break towards the high, where again, we had more crowding at that level as well. So we Have a breakdown through the imbalance. And one of the most important things to pay attention to is that at this point, at this break, price was offered. So it's not like price has broken through this level and immediately liquidated anybody. We see that price broke down, and now we have someone offering this. So someone is willing to passively sell this at this point. So in this case, we have a very obvious sign that we have crowding at the high. We have low time frame delta showing up as being more aggressive or low time frame cvd, which is. Doesn't really make a difference anyway, because if you're looking at this on a candlestick chart over a long period of time, CVD is cbd. But we could see that price action is really not translating to much strength whatsoever. Right. For this increase. Even looking at this on the low time frames, it is rolling over. If we look at this compared to something like V wap, losing vwap again, which is where the market has been putting on risk. So we're looking at this drop right now. And more importantly, within this structure, after the signs of divergence, after the signs of crowding, we're losing the microstructure that we built on the way up. So high imbalance occurs here. Break up to the high divergence, break down, retest that imbalance level, make a move up, Very obvious divergence. And now the trigger for any aggressive entry would be, at this point, entering in at this aggressive break. So aggressive break, in this case, with an aggressive stop. So aggressive entry. Excuse me. So in this kind of trade, what we're doing is taking advantage of the market as it is likely to start spilling over. So we're positioning ourselves in anticipation that what we're trying to do is ride a wave that's building up. So we know that over the course of this structure, we've had a lot of volume come in. We've had a very obvious delta divergence, and we've had very obvious imbalances at the high. Okay, so the market has gotten aggressive into this level. We know that this is a substantial resistance. At this point. We've lost where the market has put on risk. And when I say the market, often I'm just talking about where price is, but we're talking about losing vwap and we have this aggressive dump under structure. So this is the kind of trade where I will position aggressively, anticipating a large unwind of this positioning. Okay, we're losing structure. We're below microstructure that we established on the way up. This dump is Going to be the, you know, the what precedes the eventual collapse that built up within the structure or the. Excuse me, the eventual collapse of the pressure that built up within this structure. So in this kind of trade, what we would be doing is targeting the next significant area. So if you look at the TPO chart, what I would normally be doing is just targeting where we had levels to clean up. All right. Previous points of control, poor lows. In this case, we have two back to back poor lows. This is pretty much set up for a flush. So all we did was see that the market got crowded into this level. So got crowded into this level. In the final move up, looked like it was trying to make an attempt at this high. Again, fell back within the prior day's value. Okay. Has this flush move that breaks structure. And at this point we could get aggressively behind this position and put on a tight stop back above this high. So you could put on a tight stop at this point back above the most recent high before this breakdown. Okay. You see that price went offered right here. Meaning that someone was willing to passively sell this. It wasn't just that we saw that sellers were aggressively selling this right here. It was passively sold. Okay. So getting right behind this candle, I would put a stop above this high and I'd be targeting these lows. All right. This is the kind of trade where I would just enter in with a market order. Okay. Because what we're doing is anticipating that this is going to. It's going to collapse on itself. Right. It's going to move rather rapidly and we're looking at a 30 minute candle right now. But if we looked at this on something like just to show you that this is not just easily looked back on with a 30 minute candle, we put on the five minute. Make sure that we go back to that period. Let's go back to. Okay. All right. So right there. So we could see that right when price. This is, this is even better because it shows you low time frame, how it acted at that level. This is the imbalance level right here. As soon as price made this aggressive move into the low and it became a shift of aggressive selling. This went offered right here. So this went offered right at the low. Okay. That's a sign that control has shifted and that passive sellers are willing to sell a low rather than sell a high. Okay. Even though it's close to the high, it's not at that range micro high. They're selling it more towards the low, looking to push this lower. Okay. Knowing that there's likely going to be some type of liquidation from any kind of long pressure that built up.