The Only Trading Strategy You'll Need in 2026
Kardec Trader breaks down the PBD method, a trading system based on auction market theory and volume analysis. Three patterns—P for bull moves, B for bear moves, D for consolidation—repeat across timeframes and signal breakouts and failed auctions. Live examples from recent bootcamps show how to trade each setup with volume confirmation.
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In this video I'll teach you the ultimate trading strategy that you'll ever need as a trader. Why am I saying this so confidently? Well, I've personally learned this methodology from a team of Wall street traders, hedge fund managers and world trading champion with documented 200 yearly returns on the most famous trading competition in the world. So there's that. Not exactly your average TikTok guru. And this very simple framework took me from losing money and being unprofitable with all the classic stuff you find on social media, Fibonacci technical indicators and SMC and blah blah blah to now being able to generate consistent returns accounts as well. And in this video I will take this pro level trading framework which is the results of the most brilliant minds in the market, Nobel Prizes, down to a stupid simple strategy with three trading models, three setups that you can start implementing today with some practical examples of live trades that we took with our community. This model is called the PBD method and it's a model based on the most scientifically accurate, proven, documented and accredited theory around financial markets, which is the auction market theory. Let's dive right in starting from the basics. So in the theory of games, the auction theory has typically three models of auction. A forward auction, which is the classic auction, a reverse auction where sellers compete for buyers and then you have a double auction which is something more similar to financial markets. And in a classic auction you have the paintings, you have the auctioneer and you have of course all of the people of the rich guys wanting to buy the painting. So we can divide the participants of an auction in the bidders which are the demand, the auctioneer which is the middleman, and the paintings themselves which are the supply. And for example, this paint is being sold with a starting price of $1,000,000. Well, someone comes in and say I'll pay $1,100,000 for that. So he's willing to pay a slightly higher price and that becomes the new price. Someone else comes and says, hey, I'll pay $1.2 million. Well that becomes the new price. So price goes up and keeps going up because there's someone always willing to pay a slightly higher price, a spread between the previous price, if you will. Well, this is exactly what happens in financial markets as well. And the difference with a normal auction is that instead of paintings, you have a supply of buy and sell order at each level of price. So you have sell paintings being offered at the upper prices and buy painting being offered at the lower prices. The auctioneer or the middleman is Actually the exchange which is in charge of matching buy and sell orders. And then there is a demand of buying and sell orders. So there is a supply of buy and sell orders and a demand for buy and sell orders. Let's say this is the supply. We call these market makers or passive liquidity, also resting orders. And they're displayed in the so called order book or market depth. And up here you basically have sell limits or passive sellers. This is called the offer or the ask. And these order are offering to be a seller. They are the auction of sell orders. They wait for someone to accept their offers and accept paying a slightly higher price. Down here. Instead you have buy limits or passive buyers, also known as the bid. They are offering to be a buyer. They are the auction of buy orders and they wait for someone to accept that buy offer. We call these the best bid and the best ask. And again these are just resting order. They are offering liquidity. Just like paintings sold as an auction price will not move if someone don't come and say hey, I am willing to pay a higher price. So let's say someone comes and say, hey, I will buy those two contracts. Someone is selling at 100. We call this a market taker or an aggressive buyer. And he says I will buy two of those and these two are going to be matched. So he will buy market those two sell orders. That's a match and that becomes the new price. So the candle opens. Then another buyer comes and say I will buy two contracts at the best possible price where there's at least someone selling. And two of those five contracts are matched with this buyer. That's a match. And the candle ticks up because this is the new price. Then a seller comes and says, hey, I will sell five contracts at the best buyer. Well, he's going to find two contracts here and three contracts here. So that's a match. And this 98 becomes the new price. And the candle ticks down and leaves a wick above where it used to be. Now the difference between the best sell offer and the best buy offer is kind of wide. And this difference is called spread. So as you can see, markets, just like in an auction move because someone is willing to pay a slightly higher price, which is the spread as long as they can get their hands on the counterpart. Just like in an auction, you want that painting, everyone is buying it. So you want to offer a best price so that you can get your hands on that painting. Right? And it's exactly the same in financial market. Think about it. If you want to buy, you have two options. You either place a buy offer, which is a buy limit at a good price. So say you want to buy now, you offer one contract at 98, see if someone will sell. So you're going to hope that an aggressive seller will accept that offer, but you have no guarantee that that will happen because someone needs to take action. Here you're just passive, you're just offering to buy. Or the other option is you buy market. So you immediately pay a slightly higher price and accept that sell offer to guarantee that you're going to get filled. Now do you understand the difference? So markets are moved by traders who cannot afford to wait to get filled. Let's make an example. Let's imagine that Apple has just discovered this new technology that will 10x their profit. Well, what will happen to their stock price? Well, let's imagine this is the order book of Apple. Well, the first thing will happen is likely there's going to be less willing sellers at higher prices. And secondly, you're going to have a lot of aggressive buyers who cannot wait to just put an order in the order book and wait to get filled. There's a little bit of FOMO around. So they will start buying tens and tens of contracts, tens and tens of Apple shares and they will eat all of this liquidity in the book and the candle from here will smash above your screen. And a very, very real and documented phenomenon typically happens, which is the candle pokes through your ceiling. So this does not happen because there's more buyers than sellers. There's always a match between the buyers and a seller. So there's always the same amount of buyers and sellers. But this happens because buyers are willing to pay worse and worse prices as long as they could get their hands on a seller. So now that we understood the basic mechanics of how price moves, we can define two main moments that in each auction, a moment where the auction is in a situation of balance, where aggressive sellers and aggressive buyers and passive sellers in the book and passive buyers in the book are pretty much agreeing that this is a fair price to auction, to trade. So there is no prevalence of aggression from either side. And then maybe something happens, as we said, maybe a news comes out or the perception of the market is changing on that specific asset, or simply because of order filling mechanism, where there is simply an imbalance between aggressive sellers and aggressive buyers. We see price moving in a situation of imbalance where this is not considered a fair valuation by both sides of the market, but it is considered very cheap, for example by buyers and this will drive the price of the underlying asset up until prices will be high enough for sellers, aggressive sellers, to start being interested in selling as aggressively as buyers are buying aggressively. And this will bring the auction back to a situation of balance or fair value. So we distinguish two phases. A phase of balanced market or fair value area, a phase of imbalanced market where there's no real fair value area, and then again a balanced market fair value area. But this is just the first level. This is just the first very basic model. And what you want to see, for example, in an uptrend is instead of looking at where price does its highs and its lows, you want to take a look at where the ranges are, because that's where the market is agreeing. That's the main price. Where market is agreeing, that's the value. That's a fact. Fair valuation of whatever the underlying asset is. Is it bitcoin, is it gold, is it stocks, whatever. But of course, markets are much more varied and it doesn't always happen that way. What is very likely you will see before we see a really imbalanced market is you're going to see failed auctions. So for example, sellers willing to pay lower and lower prices as long as they can get filled. But then buyers that were buying here, and we're buying here, driving the auction up, considering these prices to be even cheaper than what they bought until now. So driving the auction back up. Same when buyers are willing to accept a higher price as long as they could get filled, they might reach a level of price where sellers might start getting aggressive and drive price back inside, either because of a strong selling pressure or because the buying upward pressure isn't that strong anymore. So typically, before you see a clear situation of imbalance, you always have some form of failed auction. Very, very often where price tries, where the market tries to auction higher but can't. Because if sellers are selling here, are selling all the way here, are selling all the way here, aggressively, well, it's very likely that if you go up above this range and up above this range, they will sell even more aggressively. Same thing over here and over here. The same buyers that consider these prices cheap enough to keep buying higher and worth paying a spread, and that kept buying all the way here and here and here are likely going to consider these prices that are even cheaper, way cheaper, and drive the auction back either either in a situation of balance or to a new breakout. And then the next layer comes with volume. If you actually look at volume, which is trading activity, you'll notice that wherever price spends more time trading and the forces of the market are in a situation of balance, that's where typically you're going to see a lot of volume. The areas of imbalance instead, where just one side of the auction is pushing price higher, it's not a lot of trading going on here, it's not a lot of volume, not a lot of trading activity at that particular area. So you're going to see low volume areas. And again, when all of these buyers finally find some aggressive seller willing to keep price into balance to have a more effective filling of their orders and create a new situation of fair value, that's where most volume of trading, the volume of transactions, the most amount of money, if you will, is being traded. So by noticing this, so the underlying mechanics of supply and demand, the total volume traded, that is normally where price spends the most time, where price is in a situation of balance. This is the basic of the PBD methodology. So for example, in a market situation like this, where people, you know, will basically do the classic thing, they will look at microstructure, break of structures, swing highs, swing lows in the upper time frame and then go into the lower time frame and see what happens with swings of price that can be random at times. Well, instead of just framing it as a sterile series of market highs and lows, which are just, just a visual reference of the results of an auction that we can read, we just take into considerations where the ranges are, because that's where most of the money was traded. And we want to follow the big money, we want to follow the smart money. And we do that by looking at where the ranges are. And I invite you to start analyzing the market as a series of situation of imbalance, going to a situation of balance with some failed auction here and there, followed by situations of imbalance. Again, a phase of price discovery, a search for liquidity that eventually finds aggressive counterparts with of course their due failed auctions here and there. And then again a situation of imbalance followed by situation of balance with its due failed auctions. Again, situations of imbalance followed by situations of balance and then again imbalance. And if you try to simplify this even more, you'll start noticing that these shapes of a P or a B are constantly being formed. And this is the basic of the PBD methodology, that's why it's called pbd. So let's take an overview of the PBD models and how exactly they work in a very simple way. And I'm going to gonna give this to you guys as a document that you can study and work with. I'm gonna put it in my telegram channel completely for free. And let's start from the P setups. And the P setup is based exactly on the concept that the auction was driven higher and higher and higher by aggressive buyers coming up and accepting to pay higher and higher prices as long as they can get filled. Right. And at some point up here, you had sellers starting getting to the auction. So we know that this area of price is an area where it's likely to see sellers take control of the auction at the same time. The more we go down, the closer we get to prices that these buyers were considering cheap all the way through. So if they bought here and here and here and here and here and here, very likely that if price drops hard enough, they're going to start taking control of the auction again and push the auction again higher up to a point where prices will consider these prices to be premium enough to sell and take control of the auction again. So this is what happens in the market on a daily basis and on every, every single time frame that you can name. We're going to see some example very soon and also some example from a trade that we took live inside of our deep charts community. And what basically happens here is this range forms, right? So you could take, let's say a long here on the bounce and a short here on the bounce. That's an option. But the option with the highest win rate possibly and the highest risk to reward ratio is if you plot, if you consider this to be a volume area where at least 70% of the volume is traded. Statistically speaking, anything that happens out outside of this area is considerable, a statistical anomaly. So it's something that will get out of the current standard deviation of short term volume. So whenever you see price dropping outside of it, there's a really high chance that price will drop back inside in an area of comfort in the same area where both buyers and sellers are considering these to be fair prices to trade aggressively at. So this is why the P. The first P setup is, is you wait for price to break out of a range and then to break back in. This is what Tom calls the break in setup. Because imagine if buyers were ready to buy all the way here, all the way here, all the way here, and take control of the auction. Imagine if we go even lower where it's like very likely that the same buyers that pushed the auction up and created the situation of imbalance in the first place are going to Step back in and push the auction back inside. So what you can do here is wait for a candle to close inside of the range, wait for a test and buy to go to the other side. Similarly, the next idea is the breakout. So, and this one is, let's say, the last idea that probably happened after some failed auctions here and there happened, right? Because we define these as failed auctions. So some failed auctions might already have happened here and there, but at some point the buyers might take control of the auction. As you know, we've already clarified when in an uptrend. So if this was the fair price before and now this is the fair price. The auction is officially bullish. And whenever we see a candle breaking outside side with strength and initiative. Another idea is to trade the breakout, but not when the breakout, for example, immediately drops back inside. Because that could be easily the same concept of failed auction below here, but above here. So we want to maybe take some extra caution here and wait for maybe a couple of candles to stay outside and then join the party. Or we want this candle here to have like a lot of volume and a lot of initiative, which is something we can verify with order flow, as we'll see later. So these two are the continuation type of setups where we know we're in a bullish auction and so we trade with the current trend, but we have also the opportunity to look for reversals. So we might want to look for a failed auction on the upside, where during the breakout, maybe there was not a lot of buying going on. You see buyers getting a little weak, exhausting the movement, and then you see a big strong red candle that drops back inside. Well, that's a cool idea to take a short short to the other side of the current range with still a really high percentage chance that this will happen. Maybe not as much as this type of failed auction, because again, we're going against the current trend. But this is still a valid short auction idea. And this is the third setup, the fourth setup, which is also a reversal setup. This is the most reversal type of setup is you wait for a P to form a breakout to happen with a lot of volume. But instead of breaking back in and opting to go up, more sellers take control of the auction and break below here with a lot of initial initiative and vengeance. And so you want to short this all the way to the beginning of the impulse. And these are the P setups. The B setups are basically the same, but opposite. Right? So we're in a qualified short auction, not market Structure auction specifically. So probably here there was some form of consolidation that was broken through by a phase of imbalance and initiative and then a new situation of balance of fair value where both buyers and aggressive sellers, where both aggressive sellers and aggressive buyers and passive sellers and passive buyers are agreeing that this is a fair price to trade at. And you know, all of these sellers that were considering these prices to be very expensive and they sold them and that continued selling here and continued selling here and continued selling here. Whereas buyers started considering these prices to be decently cheap enough to take control of the aggressive auction once more up until the point that they started started buying and buying and buying all the way here. Well, these very strong sellers that consider these prices to be cheap enough to sell the crap out of this market, they're likely going to step in again and take the auction back where most of the auction is. So the first standard deviation, everything that is outside of it will be considered as an anomaly. And so this is our first short idea to continue a current trend. You could evaluate also these short idea. I'm not saying it's not right, but a lot of the time they will get these level dirty. It's very hard that these areas will just push all the way super easy. Otherwise it would be too fucking easy to trade. Right? So the idea here is the same as before. We are in a short auction that is qualified by not a break of structure. It's a clear set of auctioning and volume and a lot of money being traded here. So this is the new fair valuation of the underlying asset. And we want to see a breakout from here likely after have having seen also this type of thing. Right. So we very likely could have already seen some form of failed auction here just like this one. So you can also take this type of trade and then when we break out officially with strong volume, with initiative, with vengeance, with volume increasing, then it makes sense take this test and continue joining the short auction. The other ideas are again reversal type of setups where we want to either take a failed auction to the downside, where sellers are keep selling this market to the downside up until the point where they break this level. But the same buyers that kept buying here, here and here and took control of the auction might take control of the auction even more now that we are outside of a comfortable area where 70% of the volume is, this is the first standard deviation. So outside this could still be an anomaly. And statistically speaking, buyers are very likely to take control of the auction again as they have shown us throughout the last, last short term auction. Again, not the same type of win rate of a failed auction that concurs in the trend because this is reversing the trend, but still a good setup to go to the upside. Same thing over here. If we have a breakout where sellers clearly are not that present and buyers are clearly taking control of the auction, we want to see if they don't break back inside and they take control again up to the point where I break another high with strength and with volume and with initiative and with vengeance. We want to see this market market reach the beginning of this impulse. And this is a buy idea to basically reverse the trend. If of course, maybe we are in a key area of the volume profile, blah, blah, blah, blah, blah. All of these frameworks, as you've seen, both the B and the P can be used in all sorts of time frame. You can use it in the daily time frame to spot long term trading ideas or bias or to build actually your bias. Or you can use them in the lower time frame to look for your entries such as in the 5 minute time frame and the 1 minute time frame time frame. And then you have the D setups, which is basically the same idea. The only thing here is we're consolidating, right? So we're consolidating. We don't have a clear direction, we don't have either an uptrend or a downtrend, but we're in a consolidating environment. And the first idea is to short every upwards failed auction and long every lower failed auction and trade the breakouts only and only if there's strength, volume, initiative and so on and so forth forth. So it's basically the same setups. So just by thinking about the shape of a P, the shape of a B and the shape of a D, you get very easy setups. That simplifies auction mechanics in a very unique way. And the next level is to understand what happens during these breakouts. Let's say this is a P, right? And what happens in a P type of price action setup is you're going to see volume increasing and most of the volume being traded in this range. Because we're spending a lot of time here, there's a lot of trading going on. And this is where you see where the smart money is. This is where you see where the most big amounts of money are traded by both sides of the market. That's why we call this phase an acceptance phase. And if you consider this volume distribution with a normal distribution of volume with A standard deviation, just like you do in statistical analysis. You when where, you know, you take the distribution of height of males in a population and you're going to see that, for example, 70%, around 70% is 68.9 will fall under this category where maybe most people are between 165cm tall and 175cm tall. And there's going to be way less people that are 190cm tall and there's going to be way less people that are 150. So most of the elements, elements in this sample of data will tend to fall under this area, which is called a standard deviation, or around 70% of the elements that we're taking into analysis. So the same thing we can say about volume, right? So in this auction, most of the volume was exactly traded inside of our peak. That's why we consider everything outside to be, statistically speaking, some form of anomaly that is likely to revert back to its mean. So this is, is exactly the P setup that we saw and the P setup that we saw before with the long failed auction where we opt for a reverse type of setup and a short auction that fails, where we opt to buy this market, okay? And we can go even a level deeper and we want to see, for example, what is volume doing, right? Because typically every breakout of this magnitude will typically have some buying activity, right? Because we have a lot of buyers that simply buy breaks, a lot of algorithms, a lot of, you know, retail traders or banks or algorithms in general that simply buy every breakout. So you're going to have some breakout, liquidity, pushing the auction price up, at least temporarily. And then you're going to see a dry up in volume. You're going to see volume decreasing, decreasing. And on the way down, on the way back inside of the range on the P, you want to see volume increasing instead. So that's why we need to kind of check with volume if we want some extra very powerful confirmation what is going on in these candles so that we can confidently execute such trades and change our idea dynamically for day traders with a level of dynamicism that allows us to be profitable and to dynamically manage our position. And the same thing happens here, right? The same thing we want to see here. Of course there's going to be some selling activity when you break below a range. So you're going to see some level of increase in volume, but you want to see that increase dry up as we go on. And you want to see, especially on the way up, volume increasing as we drop inside of the Range again as we pierce through the lowest part of this range and get back inside. So these are our buy ideas, right? So it's the same concept that we just saw. So this is the same concept we just saw. Simply we add an extra layer of confirmation with volume and we're going to want to see some example very soon. And the same thing happens with the breakouts. Okay? So the breakout setups are the same confirmation concepts. And what you want to see is, for example, if you want to opt for a reversal type of setup, you want to see strength on the way out of the range, weakness on the way up, and then strength again on the way down. You want to see sellers being clearly in control of the auction. The same thing would happen here. What you want to see here is volume increasing on the way up, volume kind of decreasing on the way down, and then strong again. And if you have these type of extra confirmation, then you're up to taking a very high win rate type of trade. So these are the theoretical mod. Now see some examples. So let's start from taking this idea on daily time frame. If you are a swing trader, this is typically the time frame you're likely going to be using one of the time frames at least. And when do we qualify that we are in an upward trending auction? Well, we're going to take a look at where price pumped up, then created a range. This is our first P. We're going to zoom in there, see what happened. Really. We had pump up, then price started dropping, then a response up. So whenever you see that there's, let's say big move up, a move down, small move up again. Well, that's pretty much your range and that's where you know, this is your peak. And then what happened? Broke outside, we broke back inside there. Why? Because the buyers that here drove the auction so quickly and so aggressively up are very likely to be doing it again. And if we for example, draw a volume profile of this area over here, let it build for a second because he has to download some volume data. And if we exactly take a look at the main value area, which is the one in blue, we can see that this is the upper area, this is the lower area. So have we. We could say that this is our peak and we can simply wait for a breakout and then a break in. And this is our buy idea to get to the other side. The second idea, as we discussed, is the breakout. So we wait for a breakout and maybe for a test and we move up, easy as that. And this is A very high win rate setup because you have both the statistical anomaly that we are outside of the standard deviation. So there's a very high likelihood that we will see more, more trading activity inside of the 70% first standard deviation rather than outside. So you have this statistical advantage on your side that 70% of the next auction will happen from this place to this place. So that's your edge. Plus all of the buyers that here drove price up very aggressively because of fundamental reasons, because of their valuation of the underlying asset are going to be present again if price becomes, becomes cheaper than here. Because here they were still buying. Still buying, still buying, still buying, still buying, still buying. So if price drops even more, they're likely to keep buying again. Right. And then the second setup pops up. So you see price creating a candle that clearly closes above the main value area. Well, that's your signal that this can be a potential buy trade. In this case is a very decent, profitable trade. So that's it. That's all there is. Now we can look at the next auction and see, okay, this is the next impulse. Where is the next consolidation likely here. Okay, so I can again take my volume profile if I have deep charts or even not. Okay. It's just to show you the auction mechanics behind it. And I can see for example that majority of the volume was traded here actually. Here. Yeah. And what do we see then? See a breakout happening. A test. That's our second long trade idea. And of course on the way out from here, we clearly saw that another range has formed. So for example, when we have the movement move up, then the move down and then again a little move up, that's our range. Okay. And we see here for example, that we have our breakouts right here. Not much of a failed auction around except for this one. But now that we are pretty sure this is a range, this is the first idea we have. Okay, we have a breakout where outside of the main area value. This one now. And we have our breakout, we have our test and then we move all the way up. Okay, Also here we have, let's summarize a little bit of the trade we could have taken in this situation. This was our first idea. Our second idea was this breakout over here. Let's even say we have just a one to one risk to reward ratio to be really, really pessimistic about the performance of this approach with very large stop losses and stuff like that. And then we had this other setup when we had this breakout. This test probably would not have filled if we placed like A pending order right here. It probably did not get filled. So let's not even consider it. Even though it would be a win. Then we had a breakout that filled on the test. Ideally, your stop loss in this situation could be below the point of control. Or if you want to be more conservative, you can put it below the entire area. And here even just a one to one risk to reward ratio would be profitable. And then what happened here if you wanted was the candle closed back inside. Right? So this would be a reversal setup, which as we know has a lower win rate. But still, let's for the sake of science, propose a one to one risk to reward ratio here. That would still be a profit. If you were a little bit more conservative with your stock stop loss above here, this would probably not be a target. Okay, so we can also consider this a stop loss. And then the second breakout would also have been a profit. We had another breakout right over here and that would have been a profit as well. And we continue like this, analyzing the auction. We have an upward impulse over here. And this is our new P, which is this one. Price moves up and then consolidates. This is the main area of value. Let's drag it a little further. There you go. So now our statistically speaking, our standard deviation is this one. And as you can see, we have the first breakout here. Even with a one to one risk to reward ratio, this could have been easily target. Then we broke back inside. That was probably a stop loss we would have sold here. As you see, this setup is particularly less profitable. This would have been a direct stop loss. Then again, we had this big move up. So in this situation you could argue, yes, this is the current value area. We have had a first buy idea here that probably would have gone to stop loss. This was a stop loss. The sell idea over here would have been probably more profitable. So we would have a one to one risk to reward ratio and it would be a target. And the second breakout over here would have been a success, very successful trade over here. Then another big impulse up started. This is our new standard deviation. Then a new impulse up started. This is our new standard deviation. And then you know, this is just a very simplistic approach, but this is a trade idea. This is a trade idea. This is a trade idea even as the range is forming. But for the sake of the basic version of the strategy, let's say this is a first trade and then we break back inside. Even outside of this range. I don't know what happened specifically in this day. Probably some Fundamental news. But we didn't have a candle close inside. That gave us a test to go to the other side. We only had a close below and a close back inside. So this was the first idea which was I would say profitable depending on how you open it. And then you have another breakout here which was profitable. Profitable. I mean you get the point. So for example, in this type of environment we would have had a lot of profitable trades and very few losses. And we're just considering a one to one risk to reward ratio. We're not optimizing the entry, we're not timing the entry perfectly with order flow. Let's remove all the drawings and let's see together what's happening now. How I would do it personally is I would start with a daily time frame and see that this is currently the main consolidation area. So this is the main area. We had some failed auction up, some failed auction down. So my first idea is to take this as the main value area. But let's say that the range is still forming. So let's say we're here and here we just had market dropping down at the same levels where these buyer pushed the auction up and up and kept buying all the way here. So of course buyers are going to be very tempted to keep controlling the auction on the way up here. So what happens? A daily candle closes inside of the range. That's our first buy idea. So we take the test and we move to the other side. Side. And by the way, this trade we took live in front of hundreds of people in the last boot camp we did at deep charts and I'm going to show you later the trade and how we took this idea on the daily time frame to then go to the lower time frame and take trades on the five minute time frame using the exact framework. So let's say that this is our main idea. And now what happened is we had price closing above and creating another range. This for example can be our new fair value area. And what just happened is we broke out and then we broke back in. So this is still a short idea. And now there's two options. We either have a failed auction over here, which is my ideal setup and buy until we reach the all time highs or if we're not ready yet because we're too overextended and this is still the main value area, we might drop outside of here. And if we break below here, I can look for ideas to go to the other side of our D in this case. So I'm combinating this D With this P to find this type of setup as a confirmation for this type of setup. Now let's drop into some lower time frame. Let's get to the five minute chart. So now we can see a lot more detail. And if we drop into the intraday time frames, we can clearly see what the auction is doing even without taking care of higher highs, higher lows and stuff like that. But simply taking a look at where the ranges are going, right, and we clearly see that from a situation of balance, we had a situation of imbalance and then price getting back to a situation of balance inside of the main area we are looking to trade at. Let's extend this area just to have it here. So from the main value area, what happened here? We created value accepting lower prices as the main fair valuation and then immediately after accepting higher prices as the main valuation inside of the main area value where 70% of the trades will happen. So we expect price to do this. And I can already see here that for example, this was our fair value area on the way to down on the, where we had this sort of B setup and then we had this P on the way up. So we're officially in an upward auction. So what do we do here? We either wait for a failed auction below here, or we wait for a breakout here. Because the overall trend is upwards, the overall auction is bullish. So what we can do here is wait for a breakout of these ranges which ultimately happens. And we want to drop into some even lower time frame and really zoom in into the breakout and see what happened during the breakout. So we zoom in and even here you can spot and zoom inside and see for example that this breakout didn't hold. We're just by the way at the beginning of the session, so you could use a filter, for example, like the opening range breakout and then wait for a P close outside. So we have a failed auction below here we have finally a candle breaking out of this main value area. So you either buy here and that's your intraday trade, or you wait for another pen to form and another breakout to happen. Either way, your trade is not only extremely successful, but in a very directional asset like stock indices or in general the stock market, these are very beautiful trades to take. So you either buy here, stop loss below the point of control and up for a 1 to 3, 1 to 4 with a very high win rate, or again we zoom in. We take this as our short term auction model, trade this breakout instead, put your stop loss below the point of control and reach again a 1 to 3, 1 to 4, 1 to 5 with extreme ease. The following day, guess what happens. See price moving up reading its P. Let's see how this went. And guess what happened. You're going to see this. If you start reading the market with P's and B's, you start going to really get it. Failed auctions. Failed auction. Failed auction. Failed auction. Failed auction. Failed auction. P Closing here. Another breakout. I bet your ass that volume is increasing here. And then guess what happens after this P and this P. Another P. What happens during this P? Failed auction. Nice break. Breakout again. So many trading opportunities here, here, here, here, or even here. Simply following the main trade idea of the higher time frames. And then guess what? We reached the other side. And now you're probably going to say, yeah, thank you very much. But with the benefit of hindsight, everyone can be able just to tell, hey, this is what happened. So I'm right. But to truly prove your thesis, you have to do this shit live. I completely agree. That's what we did in the bootcamp and that's what I'm planning to do on this channel if this video reaches 5000 likes. But let me go into deep charts in the live events that we've hosted. This was on the 24th. Let's go on the 24th and see what happened. So this is a live session that we hosted live in front of around 500 people on November 24, which was exactly here where I've told you. And we simply took a look at the main and we simply took a look at what was the main area of value where. Where were the low volume nodes where all of the failed auctions happened. Let's hear it. This is the area. Couldn't try it again. Couldn't try it again. Couldn't try it again. Couldn't. These are all failed auctions. So yes, we created some value here. We created some decent area of volume. But then what happened? Great buying pressure, strong upwards momentum, and we went back inside of an area of comfort, which is where we are now. Okay, and now looking at the macro perspective, we are breaking outside of two days of ranging, which is a lot of volume. And we're breaking out right now. So this is actually a long setup, guys. This is a long. It's going to be likely to be a long session. So the first trade idea is whenever we break above the opening range, we'd like to buy here as soon as we have some confirmation and maybe get to the other side of the value area, taking out these highs and these highs and this is where we're going to probably respond after. So that was the main idea. Now. Now let's see the development of the setup itself. Ooh, there we have it. Let's see if we can be able to close. But we have a big trade here. So breakout with the big trade means we're probably going to keep going up. And this is our setup for the day. If we close this candle like this, we close this candle like this with a strong delta, and yes, we're ready. This is a qualified buy setup. Let's see how aggressive sellers will be now. If they're too fast to draw back down, this is not a good sign, of course, but this would be a stop loss I'm happy to take. So it would be somewhere like here and stopping probably here. The ultimate goal would be to have a very strong, bullish session and reach this side. Okay. But that's a very, very ambitious goal. You can either wait for your stop loss because we're happy to take a stop loss, a stop loss like this one, because it has all of our confirmations. We have the big trades on a breakout. We have a strong rejection. Or if you want to manage it more dynamically, if you see a very strong conviction of sellers inside here, which with increasing volume, then you know it's probably going to go to stop loss. So we took this trade live in front of everyone and we had this little P. We had the breakout of the P with high volume and with the big trades that you guys know, Fabio likes to use a lot. And we had strong volume on the way up. So you see volume from 3 gradually increasing to 4, 4, 5, etc. So this was a qualified breakout we entered once it gave us another 10 test, just in case. And let's see how this session performed. Like this could be a scalp idea to go to the other side and then break above. Below, Above. Sorry, break above again. Could I scalp? With everything I'm teaching, I'm literally calling every single market movement in front of your eyes live plus the trade. And this was exactly the trade that we saw here up until here, and then the following session did the exact same auction and reached our final target. Now, if we have had to make a prediction from scratch now that we are outside of the main value area of this D, but at the same time, we broke outside of it with a very strong P, what I would personally do is take this into consideration and look for failed auction, which, by the way, we did. And we took live this short as well. Let me show you that one as well. This was December 8th. Let's get back to the calendar and take a look at December 8, which is this one. And let's see what happened here. So as you can see, we've identified the main area value. We just saw that this was a breakout and we just dropped back inside with a lot of volume. But then buyers started being absorbed at the top. Right. We can clearly see it from here. And the previous value area we open and what happens? Sellers take control of the auction. Okay. That's our first indication. And then what happens? We create some value here. There you go. Exactly. So again we see the P being formed. Again here we see a B being formed. An opening range break. So we have the breakout of the B and of the opening range breakout plus a breakout. Breakout of this two areas here that are simply the previous value area. And so our idea is to short from here and keep going down for the rest of the session. Let's see what happened. And we're now trying to break out. So what we're going to do now is going to analyze these two candles and go to the one minute time frame and decide if it's an auction worth selling. Okay. If we were to apply, let's say half of our risk, 1% of, let's say 50% of our daily risk on two trades. Trades. One of them would be now. Okay, so the first idea is just to sell here. We can place our stop loss slightly above here and ideally have a target at least on the lower end of this value area. Not sure we're going to get there by today. It depends on how the overall sentiment is. But this is the mechanical approach. Okay, this is the mechanical approach. We have the first 50 minute opening range. We sell the breakout. Okay, so this is our first sell idea for today. And then we're going to take a look at the auction and with a little bit of discretion we're going to try and understand if. If it's still worth selling. Realistically I would say it is. Okay. But let's take a look at our auction and see if we need to break out from here again. But now as you can see we're. This breakout is really good. So yeah, we can confirm we're in a sell auction now as we have the confirmation that we're finally in control of the auction. This is the first idea. So the first areas you could consider selling, you either sell momentum here or which is more conservative but better is you sell on the imbalance balance if it fails. So this was the first trade idea, this was the second trade idea with some extra confirmation but the same concept is still there. We have a drop down P, a very strong breakout with a lot of volume that creates almost another P. And then you know, this is another trade idea to the downside. But we just traded on the test on the breakout of the B. So now we basically just took this B, wait for a strong breakout, wait for a test, entered our trade, placed our stop loss very conservatively above and now we're going to wait and see what happens. So yeah, for the entirety of the session we dropped below. This was the original area, this was the level we've dropped. We've created some range, we've broken out of it and we've targeted the other side. And before the end of the session we went very close to that target and then ultimately smashed it using the exact same framework that you just learned. So I strongly advise you to test it out. Let me know in the comments if you tried it, if you found an edge with it and like this video to get it to 5,000. So we're if you going see to start trading these type of setup live here on YouTube altogether. And for that you might want to subscribe to the channel and activate the notification bell so you don't miss it. That's all for today folks and I'll see you in the next one. Bye.
