Trading LIVE with One of the World's BEST Scalpers (Perfect Sniper Entries)

This guy is a world-class scalper who trained under the world's best trader.

That's another sniper entry right there, guys. That's good. We got seller engaging. Mathematical. Oh my God, what a session. At $6,000, that's, that's really good.

There you go. On this special episode of Chart Fanatics, Andrea breaks down exactly how candlestick charts are created behind the scenes and exactly how the plumbing of the markets work.

Can you aim and hit the target with bow and arrow. Yes, you can be profitable with a normal price action strategy, but would you rather start by learning the bow and arrow, or would you start by learning a sniper rifle with thermal vision?

You'll finally learn the truth about stop loss hunting, news release, and much, much more.

And ICT traders will say, see, they hunted for stop losses, you know, and it's stupid because what the market is really hunting for is you. Show you how you can improve your win rate whether you trade classic technicals instead of seeing it as high, high, higher low, and always be following price and always being quote unquote late on the party, you can simply—

opening range breakout.

I don't need to wait for the breakout to understand that buyers are in control.

Or SMC using real order flow.

Whenever I saw this, I just triggered. I didn't need to wait for a breakout. I need— I didn't need to wait for an order block to form out. I literally timed the low perfectly just by looking.

Not only that, but he will then trade live during an entire New York session, breaking down candle by candle what is going to happen next, making more than $7,000 in a few hours during the Middle Eastern conflict.

We're going to bring them back to the Stone Ages. We're now floating at $6,000. That's really good. And we reached our target. I'm going to flatten the trade. I might add even one more contract.

There you go. Enjoy this episode on Chart Fanatics. Welcome back, everyone, to Chart Fanatics, the go-to channel for all of the very best strategy and concept breakdowns in the world with some of the greatest traders in the world as well. Talking of which, today we have someone who has trained under some of the greatest traders ever, not only just in terms of title, but actual trading champions, and been and spent time on their trading floor firsthand. He knows and understands, and he's going to break down today exactly how the markets operate, how they move, the reality behind if our stop losses are hunted or not, and how to supercharge your profitability no matter your strategy, whether you're an ICT trader, an opening range breakout trader using order flow. And not only that, he will then also go through chart examples and trade New York session live, right here, live in front of us, And for all of you, you might know who it is already, the one and only Andrea Cimi.

That was one hell of an intro, Riz.

Speechified, I got it first time.

Glad to be here. Thanks for having me.

My absolute pleasure. Thank you for being here and super excited because I think, you know, understanding the mechanics behind the actual market movements is a very, very important concept. But what are we going to go into in depth today?

Well, yes, to touch on that, and that's also the basics, you know, in a way. In the professional space, as I have been lucky enough to talk with these great traders, they all understand the basics of how the markets work. Like, how is a candle created? Something as basic as that. Most retail traders don't know. Like, what's the mechanics behind it? Because, you know, I've tried a bunch of retail strategies. Didn't work out for me, to be honest. But as soon as I started shifting towards the professional side of the industry, which is also the guys that you invite on your podcasts, right? Real traders. Then I really started understanding the markets and really becoming profitable because, you know, there's this meme, I'm not sure you're familiar with it, where, you know, in a curve of distribution of like super dumb people and super smart people, let's say it's not IQ, but it's trading skill, right? Let's say that this is skill. You have here the beginners that say trading should be simple. Then you have all the rest in the middle that says a bunch of bullshit, and then you reach up to the professionals and they also say the same thing that beginner said, trading should be simple, right? But how did they get to simplicity is the real question, because this travel over here goes through all a bunch of stuff. And this is the confusion of the retail trading space because they are exposed to so much concept, so many ideas, and most of the time they don't work. They're based on the wrong assumptions. So we're going to get in the really nitty-gritty details today. Okay. We're going to get a little bit more complicated than usual, maybe a little bit more academical as well. But it is needed and you viewers need to stick through it a little bit because in order to know what you need to simplify, you need to know the basics. Because otherwise, if you start just by being okay, it needs to be simple, but you don't know what you're basing your assumptions on.

Yes.

You don't know what to simplify. You need to first know as much as you can. At least that was my approach. And then I select what to simplify with.

Love that. Yeah.

So this is the plan for today. The very basics, which is how markets work, right? And a lot of people might think, hey, there's more buyers than sellers, so price goes up. But it's not that simple. It's a little bit more nuanced. And I'm going to explain the basic theory now, but I need to do a shout out first. And this shout out, it's to the man, the trader, the legend who got me into being passionate about order flow in the first place, which is Navinder Sarao. I'm not sure you're familiar with who he is. He's from India. He moved to London and he was involved in the 2010 flash crash.

I've tried to reach out to him. I can't find him.

If you can get him, bro, if you can get him to the pod, you have my lifetime respect. Absolutely lifetime respect. Because he's a very private individual, understandably, because he went through through so much stuff. And the cool thing about him, why he's such a legendary trader, if people don't know anything about his story, is because he literally beat banks at their own game. He literally beat the institutions and the big traders that actually manipulate price and manipulates order flow. And he read these things in the order book that we're going to learn about now. And he said, wait, They're like blatantly manipulating the markets. Let me do the same. Like, if you can't beat them, might as well join them, right? And he was able to do it on his own. And when the CFTC went into the case of the 2010 flash crash and analyzed the book during the flash crash, they saw this huge trader in the books that was placing thousands and thousands of orders in the book and never getting filled, which is spoofing, right? We're going to learn what it is today. And they thought it was a financial cartel because that size, the sheer size of this guy was so big that they could have never imagined it was a guy from Hounslow in his childhood bedroom with a software that he has built based on his understanding of order flow. And he contributed to the flash crash, so he got convicted and blah, blah, blah. So, you know, the guy from Hounslow who made $50 million out of what we're going to learn today, Got convicted and went through a bunch of bullshit, but the big banks and the big institutions and a lot of big market manipulators end up getting away with it. Of course. Which is a little bit unfair, to be honest. And that's why he's such a legendary trader and why he inspired me to understand, okay, how did he do that? How did he understand the markets? And the basic understanding of market is Markets work like an auction, right? A lot of people might have heard or might have been exposed recently, as we've done a bunch of work in the space on this, on the auction market theory idea that markets work like an auction. But how does it really work? Because auction market theory is quite an old concept. I'd like to modernize it a little bit. And instead of just auction market theory, I like to call it the liquidity auction theory. And to start from a very basic concept, right? You typically in an auction, what you have is the bidders, right? The rich billionaires in the audience that raise their hand and they want to buy the paintings. Let's say this is a painting from Leonardo da Vinci and the price of this is $1 million, right? Well, in the middle there's typically a middleman, right? The auctioneer. Here with a little hammer that says, hey, you get it. And a person might come and say, hey, I will accept the ask price of $1 million. Okay, that's the first price. And if we draw a candlestick of the auction, it will start here, right? This is the open. Next guy comes and say, hey, I'll pay $1 million and one. Okay, $1.1 million. That's the new price. Another guy comes, says, I'll pay 1.8. That's a new price. Another guy, 2 million, and so on and so forth, right? That's an auction. So the candlestick of such an auction would be a very big bullish candle typically, right? Yep. Without wicks, that's just a candle just going up. So this is exactly what happens in the market every single day, but not in the matter of buyers and sellers, but of demand and supply of orders, either buy or sell. So this is a demand and supply of liquidity. That's why it's an auction of liquidity. And instead of the paintings, you know, which is a one-sided auction, there's just selling activity going on. There's just this, let's say, sellers are the only one offering something. In the supply of the market of orders of liquidity, there's people buying and selling. That's what we call it, a double auction, right? So if this is the current price, for example, 100, you're typically going to have above in the upper prices, 102, 103, you're going to have sell orders, sell limits. Okay. And below the current price, so 99, 98, $0.97, you're going to have buy limit liquidity. These are what we call the market makers.

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This is the supply of buy and sell order. You should see this as the menu, as the catalog of the auction. We have people offering to buy in the bid and people offering to sell in the ask. Okay. But these are just, you know, orders placed there waiting, right? If you put just the painting in an auction and there's no bidder bidding at higher price, price won't move. That will be the price of the painting. That's exactly what happens here. So let's color them a little bit so we can have an understanding that these are buyers and these are sellers. So then the middleman in this case, the auctioneer for us would be, for example, the exchange. Let's say the CME, for example, for futures. Yeah. And the demand for buy liquidity and sell liquidity are still buy and sell orders, but in a different form, not in the form of limit orders, but in the form of aggressive orders. Right. So you have aggressive sellers and aggressive buyers. We show them as these bubbles. Right. You've seen the big trades from Fabio. You might know what I'm talking about. Yeah. And so how prices move in both sides of the auction, so up and down, is let's say, for example, you guys want to buy Eurodollar or you want to buy Bitcoin or you want to buy S&P 500, gold, whatever it is. If you click the Buy Market button, so Buy Market, Or, and this is going to need it later, you use a stop order. You're going to buy at the best possible price where there's at least a seller being offered.

Mm-hmm.

This is what we call the best ask. Best ask. So the best ask is where if you buy market, the exchange will fill you. Okay, so let's say you buy one contract, right? One lot. And there is one sell lot over here. These trades are matched, and when they're matched, the volume equals 1. And that's the first concept, right? So volume is created when there's a transaction where a market buyer, someone that was willing to accept a slightly worse price to get filled, gets filled when they're matched with a seller. And here you have the best bid, best bid. And if you were to sell market, the same thing goes, right? So if you want to sell 2 contracts, for example, the exchange will match you with wherever there's at least one buy offer. Whenever there's at least one buy painting in the auction, but you're going to have to pay a slightly lower price. And this difference between the best bid and the best ask, as some of you know, it's called the spread, right? This is the spread. So if, for example, you bought, let's say the candle first was here at 100, then you bought one contract. The guy sold it to you. That's the new price. So now the candle turns green, for example. Okay. And then I sold 2 contracts. I sold it at 99. So now this is the new price. 99 is the new price. So this candle— whoops. This candle will be going like this. Go like this. Turn red. And that's your bearish candle, right? Markets aren't moved because there's more buyers or more sellers. There's always an equal amount of buyers and sellers. Always, always. The difference is, the nuance is who was ready to pay a slightly lower price as long as they could get their hands on liquidity. That's why we call it the Liquidity Auction Theory because Market is somehow moved by FOMO in a way, but by the ability to, or the lack of the ability to wait, because these aggressive market participants, why we call these aggressive and these passive is because they cannot wait. I need to enter now. I cannot wait for someone to fill me. Because if you were—

So the passive ones are your limits and your—

Correct. The buy limits. This is literally buy limits and sell limits. Because if you were to buy, you have two options fundamentally, right? You either accept this sell offer or you place your little buy limit over here, right? And wait for someone to get you filled. Yeah. So this way you can get a slightly better price. So you have what we call pricing authority. but you don't have execution authority because you're not knowing if someone will come sell onto you and then you're going to get filled. So you have to risk not getting filled.

Gotcha.

And this is the basic concept, right? So this is widely discussed in the academic space, right? This is widely being studied from some of the most brilliant minds in the world.

Okay.

Theoreticians of market mechanics have been there for at least since the '80s. The first one was Kyle, Albert Kyle that came up with, you know, these first ideas of how the auction is affected by very informed traders. And he published a very famous research paper in, I think in the Journal of Finance called Continuous auction of insider trading or something like that. And he goes deep into this. And then this was followed through by a huge amount of research papers, especially after the flash crash, which we just talked about. And why do we need to know this? So we understand the first basic mechanics and later we're also going to see a practical example of how this works. But before we move on into that, We need to start a step back, in my opinion, and understand why someone wants to buy or sell. Like, okay, we understand how markets move now, but why do they move? What are the necessities of market operators? And to frame the market analysis, or let's say your understanding of market, unlike a retail trader, but like a professional, my framework is asking these basic questions: who, why, what, and how. You could have also the when and the where. We're not going to get deep into that today. But of course, what moves price?

Mm-hmm.

How does it move? Through a flow of buy and sell orders that are matched in the exchanges. When do they come? Yes, with cycles and, you know, the cyclical analysis and seasonality and blah, blah, blah. Where do they move? It's also very interesting. Arbitrage in which markets, intermarket analysis, you know, money getting out from bonds into stocks or vice versa or moving into gold. You know, when they say the stock market burned $1 trillion, yeah, they didn't burn it, bro. They just moved it somewhere where it's going to be, you know, getting a better treatment. You know, money moves where it's treated the best.

Yes.

And so the remaining question is who and why, which are very like widely discussed and there's a lot of misconceptions around it, especially unfortunately in the most, you know, famous or infamous trend in the retail space nowadays, which is, you know, the whole ICT concepts and SMC where the who is potentially one big holy algorithm that moves every single market in every single timeframe that was given to ICT or that he coded or that is between central banks and banks. Like there's a bunch of myths around it that are simply, you know, artificial and, you know, part of the cult. So let's clarify also that part. And what can we, we have to approach this scientifically. Who can we be sure is engaging in the markets? And creating the order flow that moves prices? Well, I like to divide between smart money, slow money, market makers, And small money. And then, retails.

I was about to say small money, but one step below that.

Yeah, one step below at the bottom of the food chain, retails. So this is an oversimplification, but it's to make you understand that there's very different types of market participants who engage in the market for different reasons. And for example, the type of institutional traders that are and exist in the market are so many, bro. Like so many. We're talking about, you know, commercial banks, investment banks, hedge funds, investment funds, long-only funds, pension funds, university endowments, sovereign funds, which is something huge. Like they're huge market participants. HFTs. Commodity trading advisors, commodity pool operators. There's so many different types of market participants. And my, let's say also you have central banks, you know, of course big companies that are simply there to hedge and stuff like that. So this is all part of the big money. So this is, we could say this is big money, right? Yeah. So the big money that really moves the market and The difference between smart money and slow money in the way I've understood the market by also reading the academic papers and stuff like that is how much they're willing to invest in a field of portfolio management called execution alpha. And there's another paper that explains this very beautifully and was the, let's say, the landmark, the milestone, the first milestone of this entire thing by I think Neil Chris and Robert Ongram or something like that, where they basically, what they discuss in this paper is if you're a big money participant, if you have huge amounts of money, how do you put them in the market? Because when you buy, when you want to buy Bitcoin, do you really have a struggle buying Bitcoin? No, there's always liquidity, right? There's always someone who's going to be your counterpart as a retail trader because you don't have the problem of size. But the more, and you've met a lot of these institutional traders, the more you go up and the more you scale up, the more the real problem isn't edge, it becomes liquidity. Finding a way to get this order filled at all. Because, you know, when you have, you know, you just buy Bitcoin, it's okay. But if you have billions of dollars that you need to invest into something, you know, it's going to take a long time and it's going to take some research to get it filled at the best possible price. And that's the field of execution alpha or optimal execution. And what we can be confidently Sure. That is proven and documented academically of how it actually works is that especially smart money, unlike small money, and this is the differentiation, they will have these big orders that we'll call meta orders and they will fraction it into very small orders. And this is the, the entire thing about order flow analysis, right? So the timing and the pace at which these orders are placed inside of the marketplace and poured into the marketplace, either on the buy limit side, on the passive side, or on the aggressive side. Is discussed in the so-called Efficient Frontier and of this paper that I just, that I just mentioned from the 2000s. And it came up with these. It was the basic, it was the foundation of so-called optimal execution algorithms or best execution algorithms. One of the most famous ones is VWAP.

Mm-hmm.

Yeah. And a lot of people might know VWAP as this beautiful moving average that moves around the price that has volume kind of integrated in the formula, which it is. You know, I'm not bashing on it. It's a great indicator if you contextualize it properly. But what is really behind it and why it is important is because it's one of the main best execution algorithms of institutions. Like, how are you going to pour it? Whenever we reach the VWAP or we're below the VWAP. Another one, for example, is TWAP, time-weighted average price.

Interesting.

So they're just going to split it through time without taking care of how much volume there is in the market, right? But with the VWAP, if there's more volume, they're joining with more volume. If there's less volume, they're joining with less volume.

Gotcha.

With the TWAP, they just put a little bit of volume bit by bit. Then you have percentage of volume, which is mostly based on volume, which is another best execution algorithm. You have implementation shortfall. You have so many different of these, and they're all trying to understand one thing. Should we be limit or should we be aggressive? And in which percentage so that we cannot, you know, so that we can optimize the balance between risk and opportunity, between slippage costs, because I have to pour all of this money into the market and pay a spread if I go aggressive, or should I stay limit but lose the opportunity for the price to rise because they don't fill me? Yeah, that's, that's the entire thing. And there's a whole branch of finance around this. Like literally, Riz, there's PhDs studying execution alpha and optimal execution algorithms for smart money to get the best possible fill. And there's a world around it, which is very, very fascinating. And most of the proprietary models they use are not public, right? These are just the very basic ones that we all know because they're very common.

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The reason why order flow analysis is so powerful is because you can identify this flow. Through time, through the right indicators, of course, because you need some specialized software, as you guys know, you can kind of assume with a fair degree of certainty that smart money is on your side and that you have the chance to join the party. So whenever I'm taking a look at the chart, and you're going to see it later, the only thing I care about is not necessarily delta or the exact place of the imbalance or, you know, all of these details. My only question is how, how much participation do we have in this from big traders? And that's what we're going to do today. That's what Fabio did with the big trades and all of that stuff. This is exactly the point.

And so you're having that deeper understanding of the mechanics of why and how price is moving allows you to get to the point, as you— to your point, at the very beginning, beginners say simplify. Then in the middle, we end up going out into the industry and then coming across all sorts of different strategies and mindsets and, you know, sometimes some really interesting stories and theories and, and, you know, it can get really overcomplex and overwhelming to a degree. But really, when it comes to that profitability and the professional side of things, it's that simplicity again. And I'm sure breaking this down, someone could sit there and feel a bit confused. You've done a really great job of breaking it down though. But of course, if this is new to them, they'll probably have to go over this a couple of times to really get that understanding. But again, a really great job of breaking it down.

Yeah.

But once you get to this point, and of course, practice experience comes in, but that's how would you say that that confidence with, say, Fabio, say yourself, say Carmine, for example, having that deep understanding of how markets move, how those mechanics are in place, that's where that confidence in coming into a session comes in.

For sure. Right?

Being able to understand that, okay, yesterday price moved in such a way that today we should probably expect this. And it doesn't mean again that we're, you know, when you have that understanding, you're suddenly, you know, the Messiah and able to predict every single market movement.

Absolutely correct.

But it creates a lot more confidence and a lot more certainty in what you should expect and how to react and engage with price.

100%. And this, this is another topic that was widely discussed, order flow autocorrelation. And order flow autocorrelation is whenever a day has a certain type of order flow, there's a high chance that the following day it's gonna have the same. So learning how to read not just price action by itself, but order flow is what truly allows you to, like, it's crazy. You're basically putting x-ray glasses on. And seeing what's going on behind the candles. I personally could not go back to candlestick alone because I would feel like I'm missing out on so much crucial information on who's dominating the market that I would be completely afraid of just clicking the buy market button all the time. I would be, you know, paralyzed. And the counter problem is that whenever you first learn this, you feel a little paralyzed because the first steps in order flow, you have so much more new information because it's not just candle up, candle down. It's who bought, who sold, who absorbed, who was aggressive, where's the imbalance, the delta, blah, blah. You have a lot of data points, a lot of data points. And my goal here with this session today is to simplify. It's to give you two very simple strategies that can summarize all the utter complexity that we need to embrace into something applicable, right? Amazing. So that's what we're going to do very soon. And the last question that I would like to answer before we move on is why. This is another big deal, right? Because why are the viewers engaging in the market? Well, likely because they want to pay their bills or they want to become millionaires. They want to change their lives. They want to, you know, make a living out of trading. And it's absolutely awesome. It's mostly speculative though, right? It's not capital growth really. Most of the money that is poured in the market By smart money and slow money is to invest, bro. Like most of the money is not leveraged. Most of the money is just invested to stay there a long time because of the liquidity constraints that they have, that they cannot just speculate from a, you know, 5-tick price movement with billions of dollars. They have to engage in long-term trading way more. That's why the most highest performing, like some of the most high-performing hedge funds in the world are either quantitative funds or global macro funds. And that's the biggest thing they do in the professional space, guys. They're not using— like, I know it's a stretch, but they're really focusing on very different things than what you guys focus on. The type of information they use is very different. And global macroeconomics is a big one. Quantitative analysis and quantitative systems are also a big one. Options, for example, are a big one. Like, I just discovered recently how shorting volatility, which means selling options, gives such a consistent and liquid edge. But I think that's a topic for another discussion because then we're going to go into some very crazy stuff. But to get it back to the why, well, for sure you have growth, capital growth and preservation. So a lot of the stuff that all of the money that is into the market, we need to understand is there to stay, is not there to make a move and go out. And in the Execution Alpha papers, they clearly demonstrated that there is a temporary impact of order flow of these big trades. And a permanent impact of this type of order flow, right? Because it will affect prices as we will see. And the main point is, you know, having a hedge against inflation, for example, because all of these billionaires are not trying to make a living out of trading, guys. Let me tell you this much. Their only goal is to stay rich and to not get poorer because of inflation eroding the value of money. And that's why markets typically just keep rising and rising and rising as more as they print money, right? So that's the main goal, right? There is of course some speculation, some bets, you know, that are more risky and some smart money participants or small money participants like some small firms, some small proprietary firms below, let's say $100 million in asset under management, which is still considered to be small money in, in the finance world. That some of the movements might be speculative, right? Retail traders are 100% speculative, but they don't affect big liquid markets. They may affect GameStop stocks or AMD or, you know, small caps. Yeah. When they gather together and they say, let's go against Goliath, right? But we don't matter at all in the big liquid markets. We're less than 5% of the volume. So the idea that they hunt for a stop loss, they have way bigger problems than worrying about your $200 stop loss, bro. Like really, in a prop firm account, You know, it's a little bit, which is a demo, you know, not even in the markets. And so it's growth, speculation. These are the main, let's say, reasons why they engage or hedging, hedging their exposures and let's say moving money around. So a lot of the intraday movements that we see are still due to these necessities from market makers and sorry, from smart money and slow money. And because they need to fill these huge orders, we see these movements in price that might last the entire day, right? That's why the opening range breakout is such a fascinating and powerful strategy that has worked for the last 20 years. We've analyzed it quantitatively for the last, I don't know, year at least. We've done extensive research on it, and it's one of the, really one of the most consistent edges out there.

Wow.

When in the ES, in the NASDAQ, Whenever there's a directional day, if you give a little bit of context, not just trade it automatically by itself, but a little bit of discretionary context, and you put this filter on, it's just phenomenal stuff. I've been trading with this only model for the last 3 or 4 months. I've been actively trading it, and I've done 20% of my account in 3 months. It's awesome. It's awesome performance, right? And so the why Is everything that relates to fundamental analysis. So fundamentals, macroeconomics, because these are reliable edges based on reality.

Mm-hmm.

Because fundamental analysis is the analysis of reality, is the quantitative and qualitative analysis of the foundations of reality. And one of them being macroeconomics, of course. And These are the biggest market drivers on the long term. So in the long term, and this is kind of summarizing the entire thing, in the long term, the why matters for long-term order flow. Of course, how this order flow is poured into the market is with execution alpha algorithms. And so we can jump on these trends and scalp our way up, for example, in the stock market. Because let's imagine this is losing ink. Let's say it's a bullish candlestick. What does this mean? As we discussed in the auction, it means that buyers were ready to accept paying higher prices here, higher prices here, slightly higher, slightly higher, slightly higher, slightly higher, slightly higher, and so on and so forth for the entire day. It means that buyers were aggressive enough and in the balance of risks of opportunity versus slippage risk, they gave more priority to slippage risk. And they were smart money with these meta orders split throughout the day, were willing to keep paying higher and higher prices as long as they can get their hands on the underlying asset. Let's see, this is the S&P. What does this mean? That they're investing in the stock market. A daily candle means that investors are joining the party because if it was only day traders, a day trader's impact on the stock market is one tick up when you buy, one tick down when you close the trade. So your net impact at the end of the day in the entire order flow, the temporary impact of your order flow is zero. So your candle, if no one invested today, would be flat. So the reason why a day candle closes upwards is because there's long-term traders inside, because there's people who bought and didn't close. So you have this upward drive and the daily candle simply means there's people inside today that came here to stay for more than one day at least. So for example, swing trading with the daily timeframe, that's why it works so well. And that's why it's one of the biggest, let's say, edge in candlestick analysis, in my opinion, is when you take a look at these timeframes specifically. Because you have this long-term edge, the weekly, the daily, if you're doing swing trading, candlesticks are just phenomenal for this, right? Then we can go deep into the auction. But this is already one big reason of long-term price movement. But this also means that unlike most of the academical space believes that markets are completely efficient, right? There's this theory that markets are just completely efficient. Me and you know they aren't because we meet so many great traders and we know for a fact that there's people outperforming the S&P 500, that they generate alpha, as we said. But most of the academic world is still convinced that you should just invest in the S&P 500 and that's the best thing you can do, even as a retail, which I partly agree with, but not because there's no edge, but because people are—

Most people won't.

Most people won't because they're not studying the right information. They're not approaching it as professional. They're just approaching it as a gambling business and they don't find a real edge. But in a book that I strongly advise everyone to read called Efficiently inefficient. This researcher, this professor, I think, of the University of Copenhagen discusses how institutions find an edge. He talks about this problem of execution. He talks about liquidity problems, but he also talks about what the most successful banks and hedge funds in the world actually do. He interviewed, I think, in the same book, Ken Griffin, which is the CEO of Citadel Security, which if he could get them on the podcast, bro, I'll be— can I stay on the side and just listen from the side, please?

One day. One day.

One day. And he discusses this at length where the reason why we as retail traders, if we scalp long the S&P 500, we might have a skew in the probability of profits and some edge that we can find, for example, with the opening range breakout, is because there's always going to be investors investing their money in the stock market. So they are our exit liquidity. Because if you buy here and here, there's people still willing to buy because they have a long-term buy program. So this is just the beginning of a long-term trend. Then if they keep buying, you are selling to them. And you took profit.

Yeah.

That's the concept around why we can actually have an edge if we look hard enough. The only problem that is also discussed in this book is how hard it is to find this edge, how hard it is to execute on it. And it has to be risky in order to exist. So this is the basic premises of everything. And before we move on into some practical example of order flow, the last piece of the puzzle is the one I wrote here, the other participants that is not part of smart money is market makers. And market makers—

The ones hunting our stops.

Correct. Market—

You have a very viral clip that I see almost daily.

Do I?

You're talking with Tom Hogarth in regards to this.

Yes, right?

Yeah, literally I see everywhere. Yeah, right.

They repost it. I didn't get any benefit from it because they just clipped it and didn't tag me.

I know.

That's so frustrating, man.

It's painful.

Anyway, market makers. So the thing is, a lot of people believe market makers are the banks. It's the banks, you know, it's the algo, it's the market makers. That's a very common misconception. But market making firms are a very specific type of firms that have a very specific business model. Some banks might act as market makers in some markets, but market makers are what we call the liquidity provider. So they're not hunting for liquidity. They actually are your liquidity, and you should be thankful they exist because otherwise you would get slipped so hard that you could not be profitable. The reason you can be having an edge is because of the liquidity provided by the market makers. And we get back to the book, right? We get back to the book. 199. Going to take some time.

That's okay. In the meantime, I want to give an example, actually, to your point. I'd like to hear your thoughts if I am explaining this in the correct manner, but there was a book called Margin Call— not book, a movie called Margin Call. And in that movie, it's in regards to the 2008 crash when they identify, you know, essentially what they have on their books is not going to last long and could be the end of that firm or institution. And therefore, they need to unwind this position, right? And to your point, these larger firms and institutions with the amount of money they're moving, they have to do it over time. Now, in that particular example, they're doing it probably a lot faster than they usually would. But they, again, talking about unwinding position because of the size and because, going to your point, the macro element of it, the fundamentals changed, right?

Exactly.

So the fundamental changed, they had to come together, What do we do? How do we unwind this? We need to unwind this quickly, right? So therefore, they have to then accept lower and lower and lower prices to sell at. So that became an aggressive sell order, exactly, which then completely shifted the market because of the size and speed, I imagine, that it was taking place at.

Absolutely correct. You completely nailed the point, bro. This is it. This is it. We don't need to move on. Uh, but that's what creates This is another field where we're getting so deep, but that is what we called order flow toxicity. In the technical world, there is a thing called order flow toxicity, and we need to understand market makers to understand what it is. So as we discussed, there's aggressive buyers and sellers and there's passive buyers and sellers. And I said, I already told you before, this is what we call market maker liquidity. So buy limits are what we call market making liquidity. Aggressive buyers and sellers, that are the bidders at the auction are what we call market-taking liquidity. So market makers and market takers. A market maker can be anyone. I can be a market maker if I make the market by placing a buy limit. If I place a buy limit, I'm a market maker. I become, I offer. So I create market for people to interact with. But a market-making firm is a firm that does only market making, which is placing buy limits and sell limits at the best bid and the best ask. So this is the best ask, this is the best bid. And what they do is they constantly put orders on the sell side, on the buy side here. So what market makers do is they always, they say they quote the bid and ask, but what it means, they place a sell limit and they place a buy limit. Easy as that. They quote, no, they just put a fucking order there. It's easy as that. And if you think about it, what we said, that if you buy, you're gonna buy from here, right? Let's say you buy, you're matched with one orders. So you're buying from 97, they are selling from 97. Okay. Then I come and I sell, and I sell market aggressively. And of course I'm gonna get filled here. So you paid a spread of $1. I paid the spread of $1, assuming these are dollars. The market makers made $1 on this transaction, right? Because he sold at 97, he bought back at 96. And as there is a huge flow of aggressive market participants every single day getting into the market with most of the time not a lot of imbalance between these two flows, Then whenever, you know, when you see price going up, it's very, very rare that you're going to see price going uptick, uptick, uptick, uptick, uptick, uptick, uptick. What likely you will see price doing most of the time is uptick, downtick, uptick, uptick, downtick, uptick, downtick, uptick. And there's more that when you see the candlestick, they don't just move, they move like this, right? This means market makers are making money. Because every uptick and downtick, they make money. Yeah. So the spread that you pay as a trader is the profit margin of market-making firms. And the only job they do is providing liquidity on the bid, on the ask. And it's a completely different business model because you don't want markets to be directional. You want prices to stay there ideally because— Yeah, of course. For example, when a news comes out, what do you think happens? Just assuming, you can say whatever, you can say complete nonsense.

I'll say we will have a spike in a particular direction, or at least a fast movement in one direction, at least.

And so they're clearly hunting for stop losses, right? Yeah, clearly. So no, the thing is, market makers have a deal with exchanges, right? And that they will provide liquidity as long as the CME, for example, gives them business. So you have to guarantee that at least 40% of the aggressive order flow goes to me as a market maker. Okay, then I will provide liquidity. I will take the risk of providing liquidity. And the risk is just pure directions, right? Because if price goes uptick, uptick, uptick, uptick, this market maker is selling here. Then he keeps selling it here, then keeps selling here and here, and he keeps selling at worse and worse prices without buying again to close his position. So that's the main risk for market makers. So the deal they have with exchanges is, and this is all publicly free information, by the way, this is not some crazy concept that you need to pay $5,000 for. You go to the CME website in the matching algorithms and you'll find it yourself, right? This is all freely available information. That's what the crazy part is. And since they, in these type of environments where market is extremely directional, this order flow is toxic for them. That's why we call it toxic order flow when it's one directional without downticks. Then they have a deal with the exchanges that they say, okay, a couple of milliseconds before a news comes out, you have to give me the ability to not provide liquidity for a couple of seconds because those moments are just crazy. So what you will see, and we'll see an example later, during CPI, during NFP, during FOMC. A lot of people doesn't know it, but this is exactly what's going on behind the scenes. They will delete this liquidity from the book and they will just leave it at the markets, right? So there might be maybe one sell— sorry, one sell limit here, super high, and one sell limit here, super low, because no one is willing to be a market maker here, neither the firms or other traders or HFTs. And these are maybe normal traders. Let's say some random orders here and there. Now, if you, Riz, want to buy, what will happen? If you want to buy market?

The spread will be extremely wide.

Correct. And you're going to be filled here, right?

Yep.

The spread is wide. The spread between bid and ask, best bid and best ask is wide. So if the candle was here, what will happen? Kaboom. So the first movement might be that one, and then I might sell. And where will I get filled? Well, I'll get filled over here, wherever there's at least one buy offer, because it's an auction. I need to be matched with a buyer. And so the candlestick at this point will completely reverse, leave a big spike above here, and turn red. And ICT traders will say, see, they hunted for stop losses, you know, and it's stupid because they're not really stop orders being triggered because these are the stop orders. Markets, buy markets and stop orders are the market takers. What the market is really hunting for is limit liquidity. Yep. So it's the other side of the spectrum. It's not hunting for stop losses. it's hunting for limits because we need to get filled now. That's all there is. And if you're going to see the footprint of the footprint chart of a news event like this, you're going to see maybe one here in this case and you're going to see 000-000-00001 and you're going to see what we call a liquidity void, the real liquidity void. Because there is literally no liquidity, there's no market.

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They need to have zero directional exposure. That's the thing about market makers. And I'm just going to give you one last little tip of the iceberg for you guys to just get curious and interested on options and option flow because If order flow, if when you read order flow, you think you're getting down the rabbit hole, when you look at option market makers, dealer hedging flow, you're getting into the real depth of the sea, the deepest point in the sea. Because this is the volume, let's say, of futures contracts in the stock market.

Yeah.

This is the volume. It's pretty similar of the entire stock market in the American stock market. This is the notional volume of options. So there's way more notional volume, there's way more money technically on options than in any other derivative of the stock market or the stock market itself, or these two combined. This is how big the option market is, especially for 0 DTE S&P 500 options. So And the cool thing about this is that market makers from options have a very completely different business model. I mean, the math they have to do is fucking crazy because you have delta, you have gamma, you have, you know, theta, vanna, vega. And you've interviewed probably my idol, my basically godlike figure in the options space, which is Cem Karçan, which he's just a super knowledgeable person. He's my favorite episode ever. I'm gonna rewatch it till I die. And this is the main thing. 50% of the volume in this. So half of this big bubble is market makers. Huge. Huge. And the way they hedge their exposure to direction is through something called dynamic delta hedging or gamma exposure hedging. And when you start getting deep into that, you understand that a lot of the movement we see nowadays on the ES on the S&P 500 or the Nasdaq future, they don't come because of an algo. They don't become, you know, because of toxic order flow. Most of the flow comes from hedging this directional exposure they have from option markets. And you can predict that and you can have a very accurate prediction of how the volatility would unfold throughout the day with some specific tools that are very expensive, very, very expensive. Don't suggest for beginners. If you're a professional, you probably already know this. So, but it's very fascinating. Maybe Next year, next podcast, we're going to talk about it. Next episode of Chart Fanatics. See you in Chart Fanatics. Subscribe to the channel. But yeah, I think let's—

Before we move on, let me just ask one thing, because I know there's people get a bit emotional when they hear about ICT or smart money or whatever it may be. But what the premise being though, that, you know, you could use those concepts if you like, right? If it helps you and you have an understanding of it. But the nature of the stories, right? And the almost victim-like mentality when taking losses or operating within the markets, as we were talking about, why is that important to dispel? And why is it important for people to have the actual understanding of what's going on in the markets? Even if you don't go into the deeper, deeper rabbit holes, as you say, but what we've covered so far.

The thing is, as you said, there's myths. There's the stories and there's the strategies, right? And they're two very different things. I'm never going to say to any ICT or SMC traders out there, don't trade these strategies. First of all, they're concepts. They're not strategies. I've quantitatively analyzed, for example, the models that ICT is like the actual trading entry models that are the silver bullet and the unicorn model. There's two models. We've tested it quantitatively. They're not profitable. Okay, so the strategies that he preaches are not profitable, but if you put the concepts together in a way that is comfortable for you and makes you profitable, I'm thinking about Jade Cap, I'm thinking about Kane, and people that have taken inspiration from that and created their own profitability with the concepts, 100%. Like we have some decent proof that some ICT traders are very successful, right? And so I'm never gonna say don't use this strategy, but oversimplifications on the wrong assumptions can lead most likely to unprofitability because you're starting from the wrong thesis, right? They're not hunting for your stop loss. They're hunting for a different type of liquidity. Because yes, markets are searching for liquidity. As we discussed, the main driver of market is liquidity because these big banks need to fill these huge orders and they need freaking liquidity to be a counterpart to their trades. But thinking that a retail's stop losses is the classic stop loss hunting, but that people think it's stop loss hunting. I'll tell you right now, this is not stop loss hunting. It's called a failed auction. We'll talk about it later. But even though the basic premise is wrong, it doesn't mean that the statistical validity of this pattern will lead or not to a downfall, because that's the only thing you should care about as a trader, right? So what I'm debating constantly on social media, and a lot of people get super fiery, and I love it because it's controversial and it brings views. It's good for business. But to be completely intellectually honest, as I've always said, if you want to trade this, gather data on it, backtest it, see if they actually prove to be an edge. I will talk about later about the auction market theory models, and you'll see that they're very similar because a lot of people might know this ICT Learn initially from Chris Laurie, which is, you know, he's a former institutional trader as well. And he, when he talks, he talks about stop runs, he talks about order blocks, he talks about bullish order flow, he talks about fair value gap. All of these are order flow concepts, pure order flow. He's talking about a block of orders. But if you want to spot an order block, why not look at the orders and see if there's an actual block of orders? Because you can see it through icebergs. I'm going to show you later. Or you want to know if they're hunting for stop losses? Well, you can actually see those stops being triggered in real time. Otherwise, typically this is an absorption. We're going to also go deep into that later. And if it's a stop run, right, a real stop run that I'm going to show you now how it works, or an absorption or an exhaustion, the pattern can be exactly the same one. But the reason why it happens, it completely differs. And the directional potential is completely different because a stop run, a real stop run doesn't have this potential. An absorption probably does. An exhaustion, probably somewhere in the middle. So understanding the nuances will help you even as an ICT trader to get rid of the myths, to maybe stay with the structure you started with, but with adding that extra layer of precision, of win rate, of risk to reward that will improve your edge. All we have is our edge. Just having a 5% win rate more, just being able to see that you can not evaluate that setup because you don't see the absorption, which is one of the main strategies I use, by the way, it's going to be a game changer for you, I promise. So before we move on to the examples, let's understand really what a stop run is, because I think this is a very interesting topic and we might as well get rid of it right away. So we finally understand how a stop run actually works and if it's real and if it's relevant, statistically speaking, and how. Spoiler alert, I created a strategy on stop runs alone. It was profitable for 2 or 3 years. Then it started, let's say the edge started not being present anymore because I explained it. And since it's a very small and tiny and very illiquid edge, it stopped working. And let's see how it works. So high, let's say this is the daily high also from the previous day. Have some highs over here and price is right here. Okay? When you say you have stop losses above here, what are these stop losses? In an order perspective, what are they?

There would be, I guess, if the—

If you sold here, right? If you sold here, you're going to put your stop loss here.

That's a buy stop, sorry.

Correct.

I'm getting there. I always feel pressure when the guests ask me questions. Like, if I get this wrong, it's game over.

So a seller sold here. And his stop loss is going to be here. So this is a buy stop. Buy stop. That's why they also call it buy stop liquidity, which is right. It's right. Up every single high and every single low, there will be some level of buy stop liquidity. That's an assumption we can all make. Let's draw the book once more, right? I'm not going to draw all the levels, but let's say this is the current price. And above here, we have Passive sellers, right, as we discussed. And below here you have passive buyers. What happens if there's a lot of buy market bubbles right here? Because as we discussed, buy stops are pending orders, yes, but they're not placed in the book. Because in the upper side of the book, there's only sell limits.

Yeah.

If you want to put a buy in the book, it's got to be a limit, right? So you don't see— that's why the Einstein of Wall Street always says you cannot see buy stops in the book. And he's right. Why? Because buy stops are orders placed from the brokerage side or your trading platform that will be executed market, as a market order, as a buy market, like someone clicking buy now. And be filled at the best possible price. That's why your stops get slipped. That's why you thought it was going to, you know, be filled here, but it's actually filled here. Why? Because spread widens and because all of these market orders will happen in the market all at once. Because as soon as price does this, all of these starts getting triggered and it creates this cascade effect where, you know, let's say there's a stop loss of 1, a stop loss of 10, a stop loss of 20, a stop loss of 5. And all of these, maybe one will get filled here.

And is this why you see Fabio talk about the—

That's exactly what it is. It's nothing but a stop run. Then it's going to go here, then here, then here. And they're going to get filled at slightly worse prices because they come to the market all at once, simultaneously, in a matter of milliseconds, they're all executed. So what you see is this. Yeah. Uptick. Market makers do not like this. They do not want to be here because this is toxic order flow for them because they're losing money. So market makers wish you don't trigger your stop losses. They don't like breakouts. Market makers are not present in breakout. That's why they hold most of the time and then they continue, right? Most of breakouts continue, in my opinion, when there's high volume.

Very interesting.

So the edge I have found is now the price is here, right? This is price now. Up here, what do you have? Still sell limits. Below here, technically you have buy limits, right?

Yep.

But, and this is the edge, the speed of recovery of the book, the so-called book resilience. Now you have this big emptiness in the book. It's going to take some time for market makers and HFTs and the rest of the market to repopulate this area with more buy limits.

Got you.

So the path of least resistance for price right now, where is it? Is it up or is it down?

I'd say up.

You say up, the path of least resistance. Well, here there's a lot of resistance.

Oh, there's no orders.

Yes.

So down.

Yeah. Correct. So what they will do, we got you this time.

Damn it. I was on a good roll.

Almost there. So this is the path where there's least resistance from market makers and where if there's one sell order, it will move price. If there's another one, it will move price.

Understood. Yeah.

So it takes less aggression to go this way than it takes to go more up because there's more friction from market maker liquidity. And so the edge I have found is whenever the stop run stops, so whenever you have the, the choo from Fabio, wait a couple seconds and just sell at the top. You just sell at the top. And you don't assume that price is going to reverse for the entire session. That happens 1 time out of 10. But this part happens 8 times out of 10 out of my backtest, especially with, you know, daily highs and daily lows. Very likely to happen. And the more volume there is, the more stops are being triggered, the more likely this will happen. So yes, stop runs exist. Yes, you can trade them. But do they have a directional potential that is statistically significant for the entire day? No, no. What the same pattern though might have a huge battle here, for example, because there's not just these ones, not just retail stop losses, but there's institutions and big funds and big trades from big traders that join the party and you might have a big battle. You don't know who's going to win yet. It might continue, it might drop back. But whenever this battle is over, you have a clear winner. And only when there's huge volume here from big market participants, then you have the directional edge. You see the nuance? This is phenomenal stuff. When I read this the first time, I was an ICT trader myself, kind of. I was an SMC trader. You know, I've learned from Fabio who learned from Chris Lory himself. And we were into this stop loss hunting thing, right? I was believing this too, guys. I was one of you guys. Then I woke up. Then I look at all this and I was like, huh, this is a little more nuanced, but I now understand how it works. This is a pattern you could still trade today, by the way, in the London session. Sometimes it works. We're going to maybe get a little bit deeper on this, on how to properly trade it and confirmations inside of Chart Academy, maybe. Yeah. Yeah. We could talk about that in Chart Academy. See you there, guys. A link in the description, I guess, or something.

100%.

OK. And that's about stop loss. So But the next question and the final question on the stop run topic is, are they really hunting it? That's another big question, right? Because the whole conspiracy theory is that they use this liquidity to fuel the next move, right? You always hear this thing, they fuel the next move.

Yeah.

It only makes sense that they're fueling the next move if the volume traded here and the amount of transaction and liquidity and stops that were actually triggered here is big enough to quote unquote fuel a next move. So you do not know if they're going to fuel the next move if you don't know how many big trades are there with the big bubble. But if you were to watch it from the distance and see that, let's say this is a big range and there's this, they stop for the liquidity and then this, right? Let's say we don't know this yet. If you draw a volume profile here and the volume profile is nothing more than executed liquidity. So volume is trades that matched. So if there was liquidity here, now it's triggered, it entered the market and it's going to be represented in the volume profile, right? What you're going to see is that most of the volume is always here. Most of the liquidity that was actually traded, not that maybe is there and maybe will get filled, that was actually traded is here. And right where it was all a plan and they fueled the next move, that's where you see the lowest amount of actually executed liquidity. So the assumption that this is purposefully done to gather more liquidity is pointless because there's not much liquidity around highs and lows, guys. There's the smallest amount. And this leads us to the auction market theory models that we're going to explain very soon. But this is the thing. Any other question on the stop run? Is it clear now? As we clarified it, we did it.

Thank you. I'm sure people will be there like, he was about to get into the chart examples and you stopped him. But I think it was worthwhile. Because I wanted to really, you know, a lot of people can just assume, oh, you know, you're trying to use ICT's name, or you're just a hater, or this. But in reality, it's more just educational. It's like just showing that, hey, you know, again, these things can work, right, when laid in a certain way and you create an edge out of it. But by having the actual understanding of markets, you can make it work, right?

Correct.

That's what you want to—

you can make it work even better, you know, is my argument.

Also, the— I think the stories, the problem with them is it creates a distraction for people. And an excuse, one of the two, or both. And then that becomes— it takes away from the intellectual side, the actual market mechanics side, and puts you in a different path, which for most people, I would assume, and based on what we can see, isn't a good path to be in. Whether you can take the same concepts and you can still feel any kind of way, whichever way you want in terms of who your mentor is or whatever that means, but just have an actual understanding of the markets. And that's what we're trying to do here.

Correct, 100%. What we've learned until now is that if there is a movement, it's because buyers are willing to accept paying higher and higher prices. Same thing on the downside, right? So from this basic concept of the double auction of the market, the buy limit auction and the sell limit auction, we can formulate two main or three main states of the market. A state of balance, a state of imbalance. These are the main ones, right? Let's say the main ones are two. This is the basic auction market theory models, right? And auction market theory was born in the, I think '70s or '80s. It's very old. We're talking Jim Dalton, we're talking Peter Stadelmayer, the inventor of the market profiles and all of these former institutional traders that wanted to kind of come up with a model that really explains how markets work, right? Because a lot of my— a lot of people might use this as a way to analyze markets, right? Classic market structure: higher high, higher low, higher high, higher low, higher high, higher low. This was invented in the 1850s by a guy named Charles Dow, Dow Jones. And it's a way to read the market that tries to understand the swings in price. And use price action and candlesticks as visual reference points using the high and the low. And you basically are based— you're trying to understand order flow, but you're based through price, right? You're still based on price. But we do not want nowadays to be caught in just price action. And because a high can be fake, especially in the lower time frames, right? So what we want to follow is not price. We want to follow the money, and the money is where the volume is because that's where most money's traded. So as we discussed, banks fraction their orders, little bit, little bit, little bit, little bit, little bit, and one order at a time. So this is their ideal scenario, right? When there's a balance in the market, this is good for market makers because they can profit and there is not one directional. This is good for banks because they have all the time and liquidity to, you know, this is the best time of the year to trade for big market participants because the auction is in balance. Aggressive sellers and aggressive buying forces are in balance. The flow is in balance, in a state of balance. That's what we call the fair value. And fair value, what fair value means is this is a fair price to trade. For what's my valuation of the underlying assets based on fundamentals, this is a fair price. This is a fair valuation. So both sides of the auction are in balance because they agree that this is the right price. This is why we call this acceptance. This is true acceptance of fair valuation of price. So at some point in the early stages of auction market theory, they would say a news might come out. CPI news, new information is incorporated into price. And so the auction of these small pieces of meta orders is not in balance anymore. It's in a situation of imbalance. So again, people will buy at higher prices, buy, buy, buy, buy, keep buying and keep buying and keep buying and keep buying at higher. And they're willing to pay higher and higher prices as long as they could get their hands on the underlying asset. They're willing to risk getting slipped. And this is the biggest meaning of direction. This is called price discovery, right? We call this price discovery because we're still discovering how much they're willing to pay in order to get their hands on the underlying asset. And at some point, they might find liquidity finally, because here there was a lot of liquidity. You know, there was a lot of counterpart. The auction is fair here. There's not a lot of liquidity because they want to keep buying. What they would wish when they were here is there was one big seller being their counterpart and hope to fill all of their orders here. But they had to fill their order gradually at worse and worse prices. This is inefficient order execution, right? So that's why they call it inefficiency. And that's why we call And, you know, the big, the great, the one and only ICT calls this the fair value gap. And it's a name that I completely agree with. It makes total sense to call this a fair value gap because price is not agreeing on what's the fair price.

Yeah.

Because the markets think that the fair value is here now, guys. And this is the new fair value area, right? So how I've ended up, thanks to learning from Thomas Porval, the mentor of the now I think 3 times world trading champion Patrick Nail, is reading the market not as a series of highs and lows, but reading the market as a series of consolidation, fair value areas, expansions, and fair valuation again. We've seen this through Wyckoff. Wyckoff got this before anyone else did in the 1930s, reading the tape in pieces of paper, coming up with how the markets was moving. He is the inventor of of accumulation, of distribution, markup markdown, volume spread analysis. He's the GOAT. Like, the GOAT is actually Wyckoff. And that's why you see so many similarities with ICT and Wyckoff and auction market theory and Wyckoff. It's exactly the same concept, but in the lens of the liquidity auction theory nowadays that we're more aware of how these order interactions work. Instead of just looking at a series of highs and lows, do this experiment at home, guys. Try to see it as a series of Areas of balance and areas of imbalance. And you're going to start noticing that in a situation where price action, the actual price action, let's draw it like this. Yeah, we'll do this, then move up, then move down, move up, move down, blah, blah, blah. Let's say the price action is this one. Instead of seeing it as higher high, higher low, higher high, higher low, higher high, higher low, and always be following price and always being quote unquote late on the party, you can simply look at where the big volume was traded. This is where the fair value was. Okay, this is where the fair value was at some point. Then this was the fair value at some point. So, and this is the price imbalance, auction imbalance, auction imbalance. And when you frame market as a series of price expansion, fair value, price expansion, fair value, you're going to start looking at the charts like this. You're going to understand the markets way better. I cannot explain how my vision of the market changed and how much this made me profitable. I really cannot explain. Because it's not just a visual reference. You're not simplifying just price. Back to what do we simplify with? This is simplified based on the money. This is simplified based on where most money was traded. And that's how you should look at the market at. And the second level is, so we understand this is the basic model. And the second thing is, Let's say price was here, pumped up, and now it's here. How do we trade this? So how do we use this model to trade? The first rule is that fair value must be rising. So we do not want just a break of structure, we want a shift in fair valuation, okay? Then we know we're on the long side. And the second thing is we're going to wait for what we called a failed auction. And a failed auction is if this is the current level of fair valuation, let's say, then here there's no volume at all. Here's a little bit more volume, right? Because this is this little volume here, little activity in trading here.

Okay.

We take the fair value area low, we take the fair value area high. And this is where price is agreeing now is the fair value. Aggressive sellers are more active on top. Aggressive buyers are more active at the bottoms. So whenever we see this price dropping below, this means that sellers are willing to pay lower and lower and lower prices to get filled. But we're getting into buyers, aggressive buyers territory here because this is much more aggressive in terms of is it a fair price to trade at, right? And so what you will often see at this situation is one of two things. Either sellers, these aggressive sellers finding a wall, the punch to the wall that Fabio always says, of buyers that are absorbing this pressure because if they were willing to buy all the way here and keep paying worse prices, they don't care. About getting filled at the best price. They care about execution, not pricing. Then it's very likely that if we're here, they're going to keep doing the same thing. This is the basic assumption, right? In this buy program, everything below the current fair valuation is discount, and there's a high chance that this will happen. Setup number 1, you wait for an absorption below here, you wait for aggression Here you want to see initiative, and we're going to see how to do it with the footprint chart. Enter on the test or wherever. Anyway, enter as soon as you see this. Stop loss below here, take profit here. High risk to reward, high win rate. This is 70% likely to happen. As we know, the value area is where 70% of the volume is traded because that's the standard deviation, right? And as we know, the standard deviation in a normal distribution of a curve, it's where 70% of the samples are traded, right? So in a sample of statistically analyzed data, for example, you know, IQ, well, here's the smart people, here's the stupid people, as we said before, or here's tall people, here's short people, right? Most of the samples will be here in the average, right? This is what we call the standard deviation. And anything that is outside is considered to be statistically an anomaly, right? Most people are 5'11" or 5'10", and a person 6'5", 6'5" is really tall. It's an anomaly. It doesn't happen all the time. Same thing with volume. Anything that happened outside is an anomaly because the fair valuation is this one now. So we have a statistically based chance that price will go to the other side and revert at least back to the mean, if not reaching the other side. Got you. Same thing over here. Same thing happens over here. This is a lower probability trade, right? Because of course we're in an uptrend. Yeah. So it's a little more risky to go reversal on this type of setup, but it's still very, very profitable. I did a trade yesterday exactly like this. Maybe we can break it down later. So these are the two setups. Failed auction above or failed auction below. The final setup is breakout. So when we see a breakout that has high potential of, you know, moving up with order flow confirmation, with big bubbles inside, blah, blah, blah, then we enter for a continuation type of trade. This can be done exactly the same in an opening range breakout strategy. So you take the first candle, and whenever we break above, you don't want to see buyers being absorbed. And reverting. Okay. We want to see buyers dominating the auction, more fair value built outside of the candle because they're showing you acceptance. And then you just buy with a much higher degree of confidence. You're going to save yourself. If you're an orb trader, guys, you're going to save yourself so many stop-loss. Thank me later, right? I can guarantee we have done extensive statistical analysis in the past. And I'm trading it right now. I've seen people who are in our community that have seen me trade this over the last 3 months. We probably took, I don't know, 2 stop-loss, like very, very high win rate. So strongly advise to test it out, especially if you're a beginner, right? You just take a fucking candle, you see if there's big bubbles inside. That's it.

Okay?

You don't need to overcomplicate it. You don't need to think about exhaustion, auction, blah, blah, blah. Let's keep it simple for today, right?

What do you think orb traders who aren't using order flow, what's the biggest mistake they're making, even?

The biggest mistake orb traders are making is trusting price alone. If they were to look behind the candles, they would see if the orb breakout has smart money on their side. And if it has smart money on their side, you know, a big meta order is coming into the market and being poured a little bit at a time, a little bit at a time, and you have a very high chance that it will continue out throughout the entire day. So especially for orb trader, this is phenomenal stuff. For ICT trader, we've already said, look at absorption, right? The difference between stop run and absorption. And we know that if it gets absorbed, and we're going to see now how it works, you're going to have much more edge that we revert if you're trying for a reversal trade on a liquidity grab pattern, right? And this is how I trade. This is literally how I trade. Then I trade short option strategies that are radically different, quantitative, but you know, that's for— I cannot even share that edge. I paid a lot of money to gather that edge, and I signed a big NDA for it. So some edges are not liquid enough, and I'm honestly telling you, there are some edges I cannot share because they're not liquid enough. This one is liquid enough and is based on a structural inefficiency of the order flow that is present in the marketplace. So Let's get started with the examples.

Amazing.

Yeah, let's go.

Yeah, for sure.

Okay, so let's get started. For this video, we're going to use DeepCharts, the platform you might know as well. It's the one we've recently released, and it's one of the— let's say I have a bias on this one, but one of the best order flow platforms, order flow analysis platform in the world. And I absolutely love it.

One of the key things is that you have it all in one.

Correct.

Because before traders would have to like, you know, have 4, 5, 6 different subscriptions, but you guys have consolidated it.

100%.

And then as order flow traders yourselves, you're able to make it so that it's the best possible.

Exactly. Exactly. We build it literally by traders from traders, just like TradeZilla, you know? And the cool thing here is you can execute, you can, you know, log into your prop firm accounts if they have Rithmic subscription, you can do copy trading, you can, You know, there's an integrated money manager, so you don't have to, you know, you do like a professional, right? This is a professional platform. So you're not just gonna rely on your goodwill to not risk too much. You can enforce a, how do you call it, circuit breaker that where, you know, maximum loss capped, blah, blah, blah. You have all of that. You can connect your prop firms. It's awesome. It's absolutely awesome. So let's start from the book. Let's open a new advanced depth of market. And see the auction unfold in real time and see how price moves based on what I said. So you can see the exact proof that the mechanics we've explained are exactly what's moving the market. So as you will start noticing, well, this is the book, right? This is the ask, sell limits above price. This is the bid, buy limits above price, as we discussed. And you're going to see price ticking up and down, up and down, up and down. Right. And I'm going to place here a resettable profile so we can see how it works. And this is the volume traded at each price level. Let me go to the 1-minute timeframe real quick. And whenever there's a trade— now, the last trade happened here. 69, 1250. Now it went down. You see the price is going, is following up. And whenever it goes down, it's because there's a trade either happening here or a trade happening here. An aggressive seller being matched here or an aggressive buyer being matched with a passive seller. That's all there is. This is why markets move. This is the mechanics behind it. And we can go one level deeper and activate the order flow bid-ask. And I'm just going to use my template. Let me pull that out. So as you can see, this is a footprint chart, right? This is your normal candlestick, your good old boring candlestick, but with the extra layer on top of who was aggressive where. So on this side, you have aggressive buyers that are taking all of these sell offers. This is not just buyers, okay? It's not because there is more buyers. It's because buyers are willing to accept higher prices to be matched with a seller always. It's not more buyers, it's buyers are more aggressive. Buyers cannot wait. Okay, that's all there is. That's all there is to the market. It's a bunch of FOMO guys. That's all there is. I cannot wait to get filled. So this is the ask side of the column, buyers that hit the ask or lifted the ask. The purple one is sellers, aggressive sellers that were ready to accept lower prices. So hitting the bid, as we say. This, these colors are based on the order flow imbalance. If there's an imbalance between aggressive buying and aggressive selling in an auction, these numbers come alive in a way. There's another way of seeing all of this, which is also really cool. That is on the other software of our suite, which is Deepdome, which is not released yet. So you're getting a preview now.

Exclusive. Yeah.

Yeah. You're getting an exclusive one, but we're gonna release it very soon. And it basically showcases this, but in a deeper way. This is the DOM, right? And this is the Deep DOM. So the deeper version of the depth of market. It's a little bit of a wordplay right there. But let's, for example, open again here the same asset, right? The S&P 500. So what this one does, it's a very similar thing. The only thing, the only difference is it shows you how liquidity changes through time. So before the current price, On this side, you can see the history of the order book and how it changed through time. And you're going to see these liquidity areas, these areas where price, where there's a lot of aggressive, sorry, passive sellers or passive buyers in the book ready to engage, ready to sell or to buy. And so what you will see as markets look for liquidity is that price will gravitate towards these areas because markets, are, you know, mostly big operators that need liquidity. So they're really— the only liquidity they're really struggling to hunt is limit liquidity. Okay, that's all there is. And this is just another visualization. We're not going to use this today, uh, even though there's some specific stop runs indicators here you can plot on your chart, and they give you with 100% certainty if there are stops being triggered. Okay, uh, there's no— there's none now in the chart, but maybe we'll see it another day, uh, or in the live trading part. So typically what I— this is the nitty-gritty details, right? But how I typically keep my trade, my setup is on the 5-minute chart. This is a template that is shared with everyone if you have a DeepShorts license. And this basically summarizes the basics. Okay, the basics I always need to know. So you have the cumulative volume profile. The daily volume profile divided into cash session or regular trading hours and ETH extended trading hour or electronic trading hours. The Asian and the London session, you might say, right? And you can see it also through here, right? This is volume, right? This is the classic good old volume indicator. When we are in the cash session at 9:30 EST, starting and finishing at 4:00 EST, you typically have the biggest amount of volume because the big Wall Street traders are joining the party. The stock market officially, the bell rings, ding, ding, ding, ding, ding, you know? And what you're going to see is there's two main patterns, three main patterns, let's say, in the daily auction. You have the opening auction with a lot of volume. You have typically a lot of volume in the first few hours, then sleeping completely. and then you have this huge spike. A lot of people might think, yeah, the opening bell is where the most volume is traded. Eh, wrong. This thing over here is something very interesting called the market on close orders or the closing auctions. So during the closing auction, why you see a lot of these is because if these best execution algorithms that we discussed were not able to place all of their orders throughout the session, they're gonna keep some of them as close as possible to the closing of the session. So there's a lot of aggressive orders. This is what I call the market maker feast because they fill the order up with a lot of liquidity and all of these aggressive orders come into the market all at once at the end of the session. And it's the highest volume peak of the entire session. And that's why sometimes if there is a so-called market on close imbalance that you can read through specific platforms that we're going to add on to DeepShorts very soon, In real time, you can see how this imbalance works, and you can predict with a fair degree of certainty if there's going to be a very high push up or down. And so there is some level of predictability over here that I'm not going to get into today. But, you know, feel free to do your own research on this. It's really, really fascinating. Even though it's not part of the strategy, I'm going to walk you through one of the trades of the actual strategy that happened exactly yesterday. That I've traded yesterday. I think maybe, when was it? Yes, exactly at the open, where I, first of all, I start by looking at the overall volume profile, right? And if we thought about the auction model we just explained, what is the current situation? Well, aggressive sellers, aggressive sellers, aggressive sellers, and balance. This is all balance, right? We're on the 5-minute chart. This is several days, several weeks. So the composite volume profile shows me, okay, the entirety of the chart. You can see what's the volume distribution of that. Okay, this is it. This is it. So we have the value area low. We have the value area high. What's the first setup I've explained? Failed auction with absorbed sellers and aggressive buyers taking control. Other setup is aggressive buyers being absorbed, sellers taking control. And my goal is to reach the other side. Of the fair value area, right? This is what we discussed yesterday. This is exactly what happened. And it was, to be honest, one of my best trading sessions ever yesterday, okay? Because we were already at the low of the value, okay? We were already in the bottom of the distribution. This is where buyers always got aggressive, aggressive, aggressive, aggressive. So it's likely that they will be again. And secondly, so we are on the value area low and also we are within the previous day value area, which is the second data point I'm looking at. I'm looking at the overall and the previous session.

Yeah.

Also regarding the previous session, we see that we're on the bottom of the fair valuation. There you go. So we are, we have two confluences together that are absolutely phenomenal. And we already see that yesterday's sellers got absorbed as they try to exit.

Yep.

So this happens, long session, blah, blah, blah. We approach this and the very first thing that happens is they sweep the liquidity, right? But we don't need to wait for a break of structure, a fair value gap test, and maybe enter. No, I've entered right here. And how I entered is simply by looking at order flow. So as soon as the bell rang, we dropped down here. Aggressive sellers on the bottom, they're getting absorbed already, but I'm not ready yet. I'm not ready to execute yet. I want to see buyers getting control. So if you see below here, there's a strong battle. This is not stop losses of retail traders. This is thousands and thousands of contracts. This is no retails, okay? These are market on open orders, which is the smaller brother of the market on close orders because you have an opening auction and a closing auction. The opening auction is orders that were placed before the opening bell with the target of being opened within the first few minutes of the open, right? So that's why you see a lot of volatility because of these huge orders. We'd not only see a big bubble on the wick of the candle, which is the secret, because order flow and price always go together. It's not just order flow, it's not just price, it's how price moves order flow and how much effort is required to move price. This is all order flow analysis. There's a big effort from sellers here on the wick of a candle, and on the bottom, buyers get aggressive and win the battle because then Here there was fair valuation, right? In the short-term profile.

Okay.

Yeah. A lot of fair valuation and then breakout with strength and a lot of these little collars over here that are called imbalances, right? It's an order flow imbalance. Whenever I saw this, I just triggered. I didn't need to wait for a breakout. I didn't need to wait for an order block to form out. I literally timed the low perfectly. Just by looking not just at candlesticks, but what happens behind them. So this was my trade entry. I shared it, by the way, with the broker statement and everything on my social medias yesterday. So it's not just something I'm saying I've done. I've actually done it and you can verify it. And this was the entry. Stop loss where? Below the big trade of sellers. Because if sellers get in control again, if these sellers actually meant it, you know, then, then My analysis is invalidated, right? And then on top I had aggressive seller, right? But first my target, my initial target was this, right? So we zoom out, we take a look at the, we retake the previous day value area. So the previous session value area, which is the target as we discussed, we always like to do this ping pong thing where we, from one side we go to the next one. That's where I took my target. That's the first trade. Right. And this is the next question, right? Okay. We failed to auction below the fair valuation. We're at the bottom. There's a high chance that we will get to the other side of the great value area, right? How can we trigger in such a way that it's very confidently going to profit? Well, first of all, here we broke out of the value area high, which is good. Yeah. How did we break out is the real question. When can I be confident that now is the time to trade? Be that I have a long bias, opening range breakout, for example, right? We've waited the first 5 minutes, 5 minutes, 5 minutes. The opening range breakout is this. This is the high of the opening range. This is the low of the opening range. When I saw this candle, What is this candle showing me in your opinion? Just look at it. What is it showing?

Showing aggressive bias.

For sure. And they are on a wick. So this means there's a lot of effort, but it didn't accept yet.

Okay.

And right after, we see aggressive sellers taking control, sellers on the body of the candle, and price dropping back inside. I am not ready yet. To trade the opening range breakout. I need to see buyers clearly in control because as of now, they're still being absorbed. They did a big, beautiful move. Yes, we're still bullish. Yes, but the timing is not yet. So we see sellers in control. Again, sellers in control. I can even just delete the footprint for a second, right? And just do it like Fabio does. And just take a look at the candles with the bubbles. And the candle with the bubble just tells you, hey, this is an aggressive buyer stepping into the market. And when there's an aggressive buyer, there's passive sellers always. So it's always a battle of effort and pressure. So when do I want to get involved in the market? When I see a big trade in the body of the candle? No. Big seller in the body of a sell candle? No, because that means acceptance. Aggressive buyers at the top of a sell candle. No, this means buyers are still being absorbed and price is still going down. When do I enter? Whenever buyers take control. So I wait for a candle with this bubble. That was my second entry. Or I can wait for the opening range breakout to happen. So this level. Yep. And whenever this candle closes like this, not with the buyers on the top wick that signals absorption, but on the body that signals acceptance and strength and toxic order flow, informed order flow, then I just open very confidently. I may place my stop loss below, I don't know, the point of control of this, maybe below this low in a way that makes sense. And I can target the end of the session and these last areas. And this would've been a profitable trade by itself. 1:2 risk to reward ratio. It's more than enough. You know, probably this session a little bit less, but that's why I timed it slightly before. I did the first entry over here. I did the second entry right above here, anticipating the opening range breakout because I don't need to wait for the breakout to understand that buyers are in control. Yeah. Because I see it here. I don't need to wait for the breakout, but still the bias is the breakout. So this was my trade. It was a 1:4 or something risk to reward ratio. And I got out as soon as buyers failed. My exit was around here when I saw that these buyers get absorbed at the top and sellers start taking control. I exited just in case. And then the session closed. Done for the day. Wrapped up. It's actually very simple. Would you agree?

Yes.

Yeah. It's simply understanding where the money is going and where is the flow of smart money going. We knew that yesterday we were here. Order flow, autocorrelation. If yesterday something happened, might happen today as well. Yesterday we sold, but we accepted these prices, right? So the best thing to do today is not just to buy right away, and hope for the best for the rest of the session. We want to see another breakup with strength above here because it's not just price as we discussed, but it's also the money. We want to see big trades coming in. And the power of these big trades, this big trade indicator, is that it takes the good old footprint and it simplifies it by only filtering out the big trades, the only trades that matter. So this, for example, is a filter on the S&P of 150 contracts. So whenever you see a bubble, it means that it's at least the smallest ones. The smaller ones are 150 contracts of S&P 500 E-mini futures, real market. Okay. These bubbles might be thousands. The big ones might be thousands and thousands of contracts. We can also plot the numbers, by the way. So the power of this sits in the fact that you don't need to learn all the order flow patterns. You don't need to learn all the footprint patterns, the exhaustion, the imbalance, the absorbed, like all of these very nitty gritty details. You're going to have time to learn them as you get deeper into order flow. But you can start as simple as are buyers and sellers absorbed during attempts of breakouts from a fair valuation area? Or are they in control of the movement? That's when the breakout will actually happen with smart money on your side. That's the model.

I love it. I love it. And like you said, you can just simplify it down to, you know, your volume area highs and lows, and then obviously knowing where the aggressive buyers and sellers are and where they're getting absorbed and just correlating that with the candlesticks. Isn't it?

Exactly.

But you can add more layers as you start if you want to, and if you wish to sort of get even deeper understanding. But just those two elements alone presents an amazing opportunity and no doubt plenty of trade opportunities to take advantage of.

100%. Also throughout the day, like I am, I'm trading the ES, right? And Fabio's trading the NASDAQ. And in my opinion, that's two very completely different assets. They're like, the older brother and the younger brother, the older sister and the older sister. For me, ES is more calm and it's way slower in price action. It's more liquid, it's more slow. It's like, I like to make this comparison. I hope it doesn't offend anybody, but for me, ES is like a tradwife. It's like a housewife that, you know, it's somewhat predictable, it's solid, it does these movements throughout the day. NASDAQ is still more of a party girl, right? It's a younger, more adolescent party girl that likes to go up, likes to go down. She can either make you a king or she can make you miserable. You know, that kind of thing.

The volatility.

Exactly. And so I've learned to read the order flow of the ES.

Got you.

And I'm now confident in reading the order flow of the ES. Fabio on the NASDAQ, he's a monster, bro. He's so freaking good at— he's literally, we say he has a remote control for NASDAQ because he's literally able to anticipate 8 out of 10 what the market is going to do. That's why he's such a great scalper. I'm not a scalper per se here. I'm more of an intraday trader. I like to get my entry done, stay inside for the rest of the day, and not worry about trading my stop loss every 200, you know, like Fabio does. That's a very stressful type of trading that is not for me. And I tried and it didn't work out really well. But it's also about— it's going to be about— it's not just about the tool, right? It's about the strategy. It's about the risk management. And what we build is tools for traders. We don't necessarily— yeah, we still teach you some strategies like we're doing here, but it's completely for free because at the end of the day, you are to be the executive of your strategy. You have to be the one executing, but the tool doesn't make the trader. And this is very important. And it's against my interest to say this, but this tool alone will not make you profitable because it's not about the tool you use, it's how you use it, right? As we said before, you can be profitable only with price action. Absolutely, yes. What we're having here is a— it's a different language. Okay? It's a different— it's understanding the true language of the market. It will not make you automatically profitable by itself. But what I can promise is that if you learn the language, if you put in the work, if you do the homework and look at the markets every single day, you're going to start being so much more confident about your entries. Not only going to improve your edge on a mathematical level and improve your win rate and your risk to reward ratio and the stats of your strategy, but this is also and specifically mostly going to give you confidence in how you enter your trades because you just see if smart money's on your side. You don't need to guess that there's a fair value gap. You don't need to guess that there's an order block. You can see the little bubbles, the little blocks of orders in real time in the markets. So you don't have to do a lot of the interpretation and multi-timeframe analysis that is needed in price action trading because the market is giving you, is providing you this information. So this is like, it's like, are you, can you aim and hit the target with bow and arrow? Yes, you can be profitable with a normal price action strategy, even though it may be a little bit outdated. You can, can you hit the target? Can you be precise? Yes. But Would you rather start by learning the bow and arrow or would you start by learning a sniper rifle with thermal vision? Of course, like in both cases you can be profitable, you can hit the target, but what are the chances that you're gonna be more precise, more confident, and more profitable ultimately as a consequence of objectivity and increased quality of data, not just quantity. We're not adding stuff on top of the chart because we want more magical indicators. That's not what we want. This is not indicators based on past data. This is literally a deeper layer of information. Candlesticks are more of an indicator than order flow is, because order flow is causing prices to move. So order flow stands to price action like price action stands to EMAs.

You know?

Yeah. It's what moves price. So it's a deeper layer of information.

So with price action, you would, a lot of the time, wait. For a 5-minute, 15-minute, even 1-minute close to try then interpret, oh, buyers won there, sellers won there, or this means this.

Yes.

Versus order flow, you're real-time. And to your point though, as well, in terms of the not just execution, but the stop-loss placement, what I've seen with order flow watching Fabio, even watching yourself here and giving these examples, and no doubt we'll see when you're trading live as well, is that you can then actually bring up the invalidation zone based on where the smart money, the last signature was, right? Of those sellers or buyers, depending on the actual setup. But it allows you then to have a tighter stop loss without trying to force it or gamble. Because a lot of people, when just trading price action, would have to assume the actual low of that move, the higher low, whatever you may call it, or the candle low, versus in this case, you might have it just, even if it's a difference of 5, 10 ticks, makes all the difference in terms of the reward to risk.

100%. 100%. And you can dynamically manage it because you see it developing in real time.

Exactly.

It's a different, it's a deeper layer and it's going to take, again, as I said, it's a language. It needs some time to learn and it's going to take your own style to trade it. I still trade very differently than Fabio, for example, because Fabio is like, I don't know how into boxing you are, but there's this boxer called Canelo, right? Yeah. And his style is very defensive, right? It's really hard to hit that guy. Because he's always dodging. He's always like— this is exactly like Fabio. Fabio is Canelo for me because he's always protective. He's never giving a chance to the market to hit him. He's always trailing his stop loss, trailing his stop loss, entering on a high probability area so that he has the time to put itself to break even. If it comes back, fuck it, I'm out. That's what I see. A lot of attempts, small punches, and every once in a while he gets to throw the hook and KO. That's Fabio. Another trader that I've met, Tom Hogarth, he instead is a heavyweight boxer, right? He does situational analysis and if he buys and he's right and market is giving him, he doesn't just cover himself, he punches more. He's Mike Tyson. He's just coming at you and increasing size and using a money management model or strategy that increases size as soon as you're more right. It's more similar to reverse martingale, right? Or anti-martingale. And that's completely different trading style. Even though you might be based on very similar type of information, how you manage your position and your trades throughout the lifetime of that specific position creates all the difference in the world. For example, I stopped putting my stop loss at breakeven because so often in the ES, as it's more calm, it's not as volatile as the Nasdaq, you might have deeper retracement. You might have dirty price action that spikes you out and then goes. You have no idea how many times I've done this. I've been spiked out right before the move happened. It was so frustrating. I lost so much money and not because of the trades itself, but because I then revenge trade, you know? And after a while I found my own way with the tool. And this tool, specifically order flow, gave me clear indications on when it makes sense to break even, on when it makes sense to trail the stop or when it makes sense to add. So it's not just helping you on the timing of your entry, but also on how you manage the position throughout the day. It's absolutely phenomenal. And I strongly advise guys, you know, to just give it a try. Absolutely.

Well, I guess from here, we're going to trade live. We're going to be coming back Monday. So for all those people out there and theorists, we love them. But totally, we love them. But they, you know, the assumption of, oh, you guys sit down for 5 days and then pick the best day. Well, we're not, because we would, I'm sure, rather trade today, but we're trading on Monday because that's when the studio was available. So in case you see a change of clothes now, that is why. But we're going to now be trading these concepts live Monday. Well, Monday coming up for us, Monday the 2nd of March.

Yep.

New York session. And whatever happens will happen, and we'll see how that goes. But that's what you'll see next.

So see you next time.

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Hi everyone, and welcome back to Chart Fanatics. Hi Riz. Unfortunately, he's not here with me because he flew away from Dubai as we are in the very middle of the conflict that is going on with Iran and US and Israel and all the Middle East countries. So we couldn't manage to be together for this live session. This last few weeks has been quite turbulent. Everything is pretty much pretty much safe here in Dubai, but we couldn't manage to do it together. So I'm going to do it by myself here. This is Friday the 6th of March, and I'm going to try and keep on the same screen my execution venue, which is Charles Schwab in the Thinkorswim platform, which is what I'm using for now to basically just buy and sell as I'm both an options trader and a futures trader. And this is one of the few brokers that can allow me to do both in the same platform. As we are working to do that on, uh, DeepCharts, as it's not a function which is completely ready yet, and I can only do futures on DeepCharts. But I will use DeepCharts with this setup for everything that relates to order flow analysis, to take my decision, to time my entries for everything that relates to order flow analysis. So we have a 5-minute chart here, which, you know, for whoever is using, uh, DeepCharts, we have it right here in Andrea Cimi. You have exactly my template. This is the 5-minute template. This is the 1-minute you see on this side. The 5-minute you see on this side is this one, and they're composed by slightly different, uh, charts. We have a 5-minute chart here that I typically use for bias, so I typically take a look at long-term volume profiles. I typically like to activate the composite volume profile, which allows me to see the last few sessions loaded on the chart but seen through a volume profile, through the lens of where was the most money traded. And that's where I typically start. I typically take a look at what happened compared to this blue area, which is the value area, the fair value of the last, let's say, 10-ish session. I can even expand it a little bit if I go here on price chart to build my bias. I can also maybe take a look at the last 90 days of data. I'm going to wait for this chart to build. In the meantime, this is what I use to time the entries even better. So here's where I really go when I have to execute only into the nitty-gritty details of order flow. I don't like to have it open the entire time because sometimes there is some noise that I want to be filtered out, and I don't want to see necessarily all of this data in the chart at all times. As the second indicator I have activated on the 5-minute chart is is the very famous now Deep Trades indicator, which is these bubbles that basically filter out what I see in the footprint, but only the big numbers. The big numbers that you see here, those 300s, 300s, 500, 1000, all of these huge orders that are entering the market in real time are basically filtered out by this amazing indicator on an order-by-order basis with market-by-order technology. And basically allow me to see only the trades that matter inside of the charts. So this is what I mostly use. What I also use on the side of all of this is the liquidity heatmap. I want to see how liquidity is being interacted with. As you can see, there's a lot of liquidity areas, very heated areas. Those are the areas where there's a lot of buy limits on the lower side. And like these, for example, they're demand zones. So, so buy limits stacked at one price level. Those areas are very, very hot. And then we have colder areas and middle areas. These are the supply zones, so the sell limits. And I basically use this for targets, use this for understanding if there is some form of order flow manipulation going on. And this is basically my setup. I normally have it on multiple screens. Because we are on YouTube, I'm going to try my best to have it all in one screen. So we're going to have execution here on my ChartSwap account, regulated broker, as you guys may know. And just out of transparency purposes, let's just do a quick login into this same account. And also to make you understand, but let's log in live together. I think this is something that should be done by more traders in the industry. Right. But let's log in into ChartSwap. ChartSwap is a regulated broker. I don't have any affiliation with them of any form, but this is an account where I have around $200,000 worth of personal money. This is not a prop firm account. This is a real account. I've quit prop firm trading a long time ago, and I've never done it ever since because there's too many rules. I like to be a little bit more flexible with drawdown. I don't want to have a trailing drawdown, and I have the capital to just, you know, put my capital all in my account and then grow it through time. As you can see, I've recently deposited around $150K in January, and we started at $209,000, $9,000 of which were a previous year profit. And as you can see in the last few weeks, as this escalation has started, um, since March 1st specifically, uh, we started this account at $227,000. So what happens during the last few weeks, the last few days, let's say, where we had this conflict is markets started moving way faster and the same order flow patterns I used to rely on do not work the same way. And there's new patterns arising. For example, something I started noticing is that you see a lot of big informed traders taking positions right before big news come out. So you see a lot of it. You can If you learn how to read order flow, especially with a platform like this one, you can really start to notice patterns that normally you would not see. And when you connect the dots, you can actually interpret it in such a way where it's sometimes obvious that there is a lot of insider trading going on, a lot of manipulation going on, and you can adapt in real time. But it's not easy. I was able in the first few days from March First, to do two very profitable sessions. One session did around $7,000 in profit. Another session, again, $6,000, $7,000 in profit. And then I gave back all of this money to the market in the last few sessions that were really, really rough. I personally, you know, did some mistakes as well because this is a completely new market regime for me. And, you know, especially when volatility is high, I'm learning more and more how the markets work. I'm taking this as a learning phase. And this money I'm giving back to the market is somehow a learning fee that I'm paying to the markets. As you know, it's the first time I actively trade and scalp with order flow during such a big conflict with such high volatility, where the normal rules of price action and order flow can be just overthrown completely by a tweet coming out of nowhere or a news coming out about a country saying something. So, you know, it's It's, it's not the easiest conditions to trade, even though some of the logics of auction market theory that we've learned in the first part of this video are still valid. Right. But not in the same way. You need to filter out some stuff. And, you know, one of the execution patterns that I use, which is the momentum ignition, which is when you see big market orders spread out in the market all at once, big orders hitting the bid or hitting the ask. And eating away all the liquidity in the book. These type of patterns that I normally look to enter a trade are now so common that they don't necessarily lead to the ignition of a new movement. Right. And so you have to be really careful. It's a very, let's say, didactical experience and let's say educational experience for me just to trade the market in this environment. And today we have a very, very interesting contest. Context to start around. So as I said, I start from this composite volume profile that basically takes the entirety of the last 90 days worth of price action and order flow and summarizes where the money has been traded, right? And as you guys know, I'm going to activate a pen so I can draw around the chart a little bit. What I like to see is, are we in a situation of fair value Or are we in a situation where we're getting out of balance in a new phase of price discovery? So I would start from somewhere like this. And let's say this is the current area of fair value, right? And this is 70% of the volume traded throughout the last weeks and months. And this is the standard deviation. And what I would normally look like— and the reason why I went long in the last few sessions was because I analyzed this as a failed auction because we went again, as most of the times happened, below the value area. What happens is, you know, it's this blue line. You can see it. You see this and again and again and again and again and even again. So we saw a lot of failed auctions happening because the Market was still evaluating, right? Market was still agreeing this was a fair price to trade at. That's what we have to understand. This is a fair price to trade at for the market. But today, as you can see from the pre-market action, is something has changed because not only we have general uncertainty due to the war, but also today we started having a huge spike in oil prices today. We reached around $90, I think. Let's— let me open, let me open the crude oil chart real quick. I can go here on the NYMEX, select crude oil, let it build. It's going to download some data now. Plus, what the other thing that happened today And I'm going to put the— my newsfeed here is we got nonfarm payrolls actual compared to forecast, which was 55K. We had 92,000 negative payrolls for this reading, which is absolutely crazy. I mean, I was not expecting it, to be honest. I'm going to— I still have to look at the report from the Bureau of Labor Statistics. But we are getting now into a situation where the Federal Reserve, which is the, you know, the one in charge of interest rates and monetary policy decision, will have to decide in their balance of weights of, you know, is it more important to take care of inflation or taking care of the job market? They're going to have to decide if the current oil shock And the consequential inflation spike that we're going to see and hike that we're going to 100% see in the next few readings is going to be more important than the labor market. Because as you guys know, one of the biggest drivers are financial markets and risk appetite is interest rates and monetary policy decisions from central banks. So as things are shifting now into a scenario where we have both a problem of inflation and a problem of labor, that's the worst scenario the Federal Reserve can have to deal with. And it's called stagflation because you have rising inflation and deteriorating job market. That's the worst possible scenario. And in most instances in history where this has happened, stock markets dropped typically, or at least throughout the year had, uh, you know, considerably worse performance. So as you can see now from the chart, this is the chart of US WTI crude oil. Look at this. We started with a gap that almost got filled. I was ready to buy a call here that I didn't buy. And I'm, you know, sometimes you just, you know, you cannot trade with regret, but with benefit of hindsight, it could have been a really good trade. And as you can see, in the last few days, the escalation in the Middle East have led prices up by 24% since the opening. We're running at $88. Some analysts and some nations could— are saying that now that this oil shock could lead up to $150 a barrel. That's a lot. That's absolutely crazy stuff that we haven't seen since the war in Ukraine. So this oil shock will lead to more inflation to all countries on Earth, all countries on Earth. And this is just the catalyst that we needed together with this nonfarm payroll, in my humble opinion, to see potentially the beginning of a retracement in the very overextended stock market that we have seen over the last few years, you know, because of the AI, because of the hype and the liquidity and the risk appetite that was there. Now it's going to have to reprice a lot. So I'm overall with the bearish bias on the macroeconomic side of things, even though, as we know, macroeconomics and financial markets sentiment don't always go together. As you know, the economy is a thing, financial markets are something different. They have their own life. You know, they have their own way of assessing and pricing in news. But today it's a pretty much bearish day, as you can also see from the action right after the NFPs. And we're going to see it through here. What you can see is that sometimes right after the news happens, you see some fading movement and we basically close back there. And it's just a volatility spike due to a lack of liquidity from market makers, as we've explained. And if we zoom in here, we're probably going to see some lack of liquidity at some levels. You see all these 0.0000. That's exactly what we've been talking about before. But this time we didn't reverse after the big spike, which is this one. We continued auctioning lower, which means that this is a market-moving type of news. The narrative around these type of data is going to be leading the market into a new phase, into a new direction. And we are going to look for opportunities to exploit this. As, as I was saying before, we have an official, in my opinion, new phase of out-of-balance price discovery. We are officially breaking out of the area of value that we have been auctioning in for the last months. And we're right at the end of a huge distribution phase, in my opinion, where today we might see these lows getting taken. And if these lows are getting taken and if market makers on the options side of the market are going to have to aggressively hedge their delta, and if today it's a negative gamma type of session, we might see a lot of squeeze, as we say. We might see a lot of the market participants starting to liquidate, starting to decrease exposure, starting to, you know, buy more put options. And this is not just going to increase the implied volatility in option prices, but it's going to lead all of this, you know, buy volume on the put side of options is going to lead market makers in the option market to have to hedge their delta on the downside because they're going to be short put. And so whenever price drops, they're going to have to sell ES to hedge themselves. So this is going to create this negative feedback loop, this vicious circle that will likely lead to very strong bearish movement that we want to capitalize on. And in order to time this in the intraday ideas, in the scalping ideas, blah, blah, blah, we're going to use the models that I've taught you before. Unfortunately, one of the models I really like is the gap fill, right? So what I like to see is from the previous session closing, I like to see where does this current session open, right? If this is yesterday's close and today, let's say we're opening here, typically there is around a 70% chance that especially in the short side. So for a long setup for a gap fill, this typically happens around 70% of the time. To 50% of the gap, that happens around 85% of the time. But it happens mostly when there's a technical gap. This is a fundamental gap. This is not, you know, portfolio rebalancing type of action. This is positions being taken. This is strong liquidation. And we haven't started the New York session yet. So I'm definitely trying to avoid as much as possible these type of trade. Even though some reversal might happen, it might be very aggressive. Those are very short-term scalp ideas that I'm not going to execute with you guys today, even though in my personal account I might try it here and there, but they're more risky. Okay. But today I want to focus specifically on applying what we've learned in the previous video. So we're going to mostly look for what we discussed. So we're going to wait for the 15-minute opening range. We're going to open a sentinel position during the open just to see if there's any chance that we're just going to start bearish. And then continue bearish. So maybe we can just increase size gradually through time after the opening range. But maybe some position could be evaluated even before the 15-minute opening range. We could use the 5-minute opening range breakout, which is, let's say, the, the, the younger brother of the 15-minute opening range breakout. It's more aggressive, but it allows you to not miss very directional moves that in these type of days could happen. I'm of the opinion that we could potentially see one of the most bearish days of the stock market of the last months. In my opinion, it could be. Let's see if we're going to be able to do this live. It's absolutely phenomenal. We didn't plan this before. I just booked this studio today. It's not cherry-picked at all. I show you also the previous session yesterday. Here there was very good entries that I didn't manage properly. Some were profits, some were not. We had the opening range breakout over here, faked us out, so I got one stop loss. Then we had the official breakout. This was a profit, but then it came back to break even. So I tried to rejoin the party over here, took some scalps over here, got chopped out a little bit in the middle of this range, took some shorts, exited a little too early. Got chopped out over here again and then try the last short that went to stop loss. So it was a very, it was a very, let's say, poorly executed session, even though the signals were there, because we had, you know, the after situation of agreement, we have exiting from fair value, then again, fair value. And at the bottoms here, we had aggressive sellers being absorbed. We had aggressive buyers being absorbed. So there were setups also here. I also took this one, and unfortunately I got stopped out of breakeven on that one as well, uh, and then price moved without me. So, you know, some of these sessions, you know, some of these setups might still be happening, but you need to enforce better risk management, better, you know, being more selective with your setups because you can see a lot of them. And this is the type of pattern that I was explaining you before, the type of insider type of setup that I've been seeing a lot lately. Right over here at around 12:10 Eastern time, I'm going to show you what happened, but through the footprint chart, because I think the footprint chart will show this in a much more detailed fashion. So let me go back into yesterday's auction. I think it was around here. Yes, right over here. We had this situation happening. If I see this happening today, I'm joining the party. You see this? This is not a bug. This is not a liquidity void. This is a huge market order of thousands of sell contracts that one huge operator, right before news came out, clicked the sell market button. And flooded the market with these aggressive buy orders. This is what we call a momentum ignition, which happens very often, but in a smaller fashion. A momentum ignition this big typically means that algorithms and breakout traders will typically join the party right after this happened. And as you can see, right after this candle over here, we had a huge drop. The news came out about, you know, chips and AI and Nvidia, blah, blah, blah. And right after that, this huge move happened. So if I see something like this happening today as well, I might join the party as a trigger, even if the bias isn't necessarily there. So I'm going to try to adapt a little bit better to how the market's conditions are. And now let's have this screen on this side. We're about to open. The opening bell is about to ring. So we can start very soon. It's 9:22 and we're going to wait to see what happens. We've already had aggressive buyer trying to push the auction up and one passive seller— sorry, and one aggressive seller taking control back of the auction. So this is the current state of the auction now. Another thing that you're going to see me using a lot is participation. So what I typically do here is I look at candle by candle volume, not just in the 5-minute, but also in the 1-minute to assess participation in general. And for today, my rule will be that I will not engage or not open trades if I don't see a participation of at least 4,000 contracts to 5,000 contracts per bar. Candle, because, um, this is the mistake I've done in the last few days where I was, you know, seeing a lot of fast movement, not realizing that it's simply a lack of market makers. It's not real dominance, it's not real aggression, it's lack of liquidity. There was not a high participation. The, the stop losses I've took in the last few days were in situations where there was a very low level of participation with volume. And you can see it in this yellow area over here. This line is total volume. This line is delta. So the volume delta. And here you have delta percentage. These are the typical things that I keep on my chart. And delta percentage typically is, you know, total volume divided— sorry, total delta divided by total volume expressed in percentage. So of these volumes, how much more were we aggressive on either the sell side or the long side? So these are— this is, this is all I need. I'm going to have this here. I'm going to have this news feed on this other screen. And we're going to have also right below here the liquidity heat map. And we're going to see what happens now. We're about to open. Let's zoom in. And right below here we have the Stop Iceberg indicator. This is going to basically tell us if there are some stops being triggered in real time, if there are icebergs being filled in real time, and basically give us a little bit of an overview of what institutions might be doing or big traders might be doing through MBO data, which is awesome. Um, okay, we have another absorption here from buyers. So buyers try to auction up. Now I can see this already as a short-term consolidation session, uh, phase, and this is exactly what I like to look for when I'm looking for shorts. I want to see price dropping and not only dropping, but consolidating there. A lot of people might enter a trade, see consolidation and start worrying. Well, actually, that just means that fair value has just shifted from here to here. So you can chill out. You don't need to fear if markets start consolidating after your entry. I can, I can promise you that. But if price starts going like this, then it typically means if there's high volume, that this is a strong low and price discovery failed. And then at that point, I just trail my stop loss. If I'm, let's say, inside from here, I would trail my stop loss up above here. And just in case if price reverses very aggressively, I'm out. And then I— if a new auction is confirmed, then I might engage only if we see this or this or this. These are the only setups that I'm going to evaluate today. I'm going to try and be as selective as possible, and I will try to explain you guys in real time. And as you'll see today, if some news pops out, we're going to see a lot of movement, a lot of volatility. So in these type of market environments, especially for the beginners, Always be mindful of liquidity risk. Always be mindful that you're going to get spread out. You're going to get slipped out of your position. Your stop might not be triggered at the level you expected. So you always have to take extra care on your risk, or at least use way lower leverage than usual and use a lower contract size than usual. Luckily, as of today, the margins for futures in Charles Schwab are already pretty low, so I can open a maximum of 3 contracts, I think, 3 ES contracts. So, you know, it's, it's really hard. This is the thing, right? You don't even need to enforce risk management. Just, just choose a broker with high margins and you're going to be fine. And we start. I expect some bearishness to present itself. But let's see. Now, what you're going to witness now is what we call the opening auction. And you have market on open orders joining the market. So orders that were not placed in the markets. Let me see. And we can see it from here. We have the market on opening balance. We have a negative imbalance on the S&P 500. And— oof, it's lagging. So, yeah. Some bearishness is already starting. As I expect a lot of bearishness, I might load a contract already, just one contract, not much, to start building my position for today. This is not a full-size type of position. I'm just risking a couple hundred dollars just to warm up the situation. And if there's any aggressiveness, at least I have some contracts already placed at a decent level. And I'm going to cover myself right above this absorption that you can see here, which is around 6753. So slightly above that. And then whenever the first 5-minute range is set, I might engage again on the short side. Unless, you know, and you know, these type of trades, they are more aggressive. Yes. But, you know, and as you can see also here, we saw aggressive buyers being absorbed with this bubble. They are exactly these guys. So these guys are these guys. It's just here you have to look at the numbers and the colors in the delta. Here you have to actually look at the bubble. And that's pretty much, that's pretty much more convenient in a way because you just see the bubble. I typically do not look at the heatmap during the opening auction because it can be a little bit messy. As you can see, you will see a lot of market maker clouds going on. And I'm going to wait until it gets a little bit cleaner. Okay, we already have a rejection on the lower side for now. By the way, a retracement in the early stages of today's session is still possible. Like, I'm more than willing to take the stop loss if it's going to retrace. I'm going to wait for the retracement to let's say, exhaust with order flow. And, and that's it. We see that aggressive sellers try to be aggressive at the lower side of this candle, but they got overthrown by buyers in the early stages. This is a 1-minute timeframe, of course, and aggressive buyers are now starting to push the auction up. And as you can see on this chart, We have a volume profile of this session that I'm going to delete for now. And we have these two lines called IVB, which is nothing but the opening range breakout. Okay, it's the opening range breakout, but with, you know, some filters related to volume, etc., etc. So I'm going to just hide the volume profiles for now. And in the IVB model, I have the 15-minute opening range. And as you will see later, it's going to give us some cool projections on where price might go based on statistical analysis. I would expect price to go at least below here, so below today's low, and see some aggressive auction taking place at these lows. When that happens, I might put my trade at breakeven. As of now, the auction is bearish overall but still pretty balanced. As you can see from Delta, there's both aggressive buyers and sellers. So we have -2% Delta, 2% Delta, 1%, 0%, 3%. That's the lower this number, the lower the imbalance, let's say, in the auction. This is a pretty balanced auction. And what we can expect to see in these type of market environments is market makers of futures markets, of all types of markets, less willing to engage and provide inventory, as we say. Okay, we are breaking out. We have a big buyer. Let me just put this trade to breakeven. Sorry, big seller. Let's put this trade to breakeven. Should be around here, right? Sometimes, yeah, I really am not a huge fan of Charles Schwab's Thinkorswim for charting. Let me just put the buy stop over here and let's see if it's going to give us another confirmation to engage. I would like to wait for a breakout of the 5-minute range. 1, 2, 3, 4, 5. Oh, that was it. Unfortunately, that was it. I didn't catch it. But let's see, we can still get a good entry. We have aggressive buyers on the bottom, 11,000 contracts. This is what I mean by participation, guys. So as you can see now, if during a breakout of any low whatsoever— so these, we have a lot of lows, blah blah blah. If we see aggression coming in, that's a good sign. Now I might engage with another contract wherever there's the nearest cluster of imbalances, which is right here. The other cluster of imbalances is around here. So this is where I could put potentially some buy limits, even though I'm not so sure they're going to be able to fill it today, guys. Let's see. Let's put a buy limit on this area. So on the 67.30— sell limit, sorry, not buy. Did I say buy limit? And another one, I think it was right over here at 67.36. [No speech]I think we got filled on the first one. Let's see. Yes, this one got filled. For now, it seems like we're having an absorption at the bottom, as you can see, where we have a rejection with the candle plotting a wick with a big seller in the wick. That typically means absorption. So we're always going to need to be a little careful for that. So I'm just going to load 2 contracts for now and wait to load the third one until we have a second breakout, because this could still be— this could still be reabsorbed. But we're right on the verge of taking these lows. So as soon as we take these lows is where I expect the big moves to start happening. It's not going to be just a liquidity hunt. It's going to be, or let's say, liquidity grab. But I would expect a breakout here to be sustained through time. But it's pretty clear we had absorbed buyer here, this seller dominating the auction. Now we're going to see some pretty fast retracement likely, and I want to see these sellers over here keeping the control of the auction. See, there's already a rejection exactly from that imbalance level. I might load another contract and start engaging because I see that aggressive sellers are still present. And that's the first setup for today, loaded with the full size that I normally use, which is 3 contracts. And I'm going to put my invalidation level a little bit up, probably somewhere around here, but I'm still going to reserve the ability to manage it differently if I see different information in the auction. We have aggressive buyer trying to push the auction up very aggressively. We had 8% delta on this candle, but this imbalance has hold for now. Sellers are taking control again. Let's see. If they're going to be able to reach out again for this low, because here we have aggressive, uh, sellers being absorbed. So I expect these buyers to defend their position now, as it's happening. I would not like very much to see price retracing all the way back inside, because that would mean that, uh, the first trade idea for today would be a loss. But it's completely fine. Let's see if these sellers are going to be obliterated because they— these guys gave a first answer already. And again, they're engaging again. That's good. I'm going to configure this as a supply zone. Let's give a quick check to the liquidity heatmap to see where potential targets might be. We have a huge area of liquidity right at the lows. I'm pretty confident we're going to be able to reach that if it's not deleted. We have 6720s as a first potential target. 6720s is around this level. Auction is pretty balanced for now. We don't have, um, a clear direction as of yet, but I can see that the big buyers that tried to join the auction here were absorbed already. Let's see from here. Well, we don't have big buyers really taking control here or being absorbed, at least with the MBO filter. And as soon as this candle turns, if it turns purple and start auctioning lower, I might put the trade officially at breakeven. See, these are the momentum ignition I typically look at. Do you see when price start moving really, really fast like this? This is called momentum ignition, and normally it doesn't happen very often, right? This thing normally in a, in a, in a low volatility environment happens very unfrequently and often leads to algorithm to follow that type of toxic order flow, right? Right? But in these type of situation, you see momentum ignitions on both sides of the auction because of the high volatility, because of the, you know, the current market situation, and because of market makers not be really willing to provide liquidity in the books. And we define toxic order flow as one-directional type of order flow that doesn't tick up and down, as you can see here, right? You can see a sell candle will tick up, tick down, tick up, tick down, and overall go down, but it will always have this up-down type of auction. When just downticks happen or just upticks happen, just like a news event, you see, we define this as toxic order flow because that's an unprofitable auction for market makers. See, also we have very fast move up, but all of, all of this has happened in the last few days. Every time this happened, it didn't always bring to a new direction. The sellers are still defending. The speed of the book these last few days is very fast. Okay, now we have aggressive buyers starting to auction a little bit more aggressively. Still no big buyer plotted in our big trades with the big bubble. Let's see how liquidity is evolving with all of these buyers, a lot of effort now being completely rejected in the same sell area, which is the imbalance. And this is the cool thing about order flow, right? That if normally in— with normal price action, you would draw the fair value gap from here, let's say, to here. So from the wick to the next one, here you can be much more precise and just take a look at the imbalance cluster. Cluster, because that's where they're likely going to be defending, because that's where aggressive sellers get aggressive and where we could expect them to be again. This is kind of the, the idea, right? It's a very nervous market environment. That's why in this type of environment, I prefer just to look at the 5-minute chart and, you know, because this, this is too dirty. This order flow is too dirty. This auction is, you know, there's too much information that I don't need that will lead me to take into consideration in the short term information that might be just noise, you know. And so sometimes you just need to get rid of the normal footprint chart and just get back to normal candlesticks with bubbles and the liquidity heatmap. And not just taking a look at every single high and low, right? Okay, this candle closed bearish for now, which is a good sign. If we break— now that we have the opening range, right? We have 1 minute, 1, 1, 1. So we have 3 5-minute candles. This is the 15-minute opening range. So if we get a breakout below here with a candle that closes below and closes potentially with big sellers, not rejected like this, because this is still rejection. And as you can see, this rejection for now is holding. Like, this seller got absorbed and buyers are trying to step in over here. Whenever this gets broken with a candle that in the body of the candle, just like here, closes below that level, then I can be confident that we— it might be a winning trade. But for now, the auction is imbalanced. I have no clear winner yet, so I'm going to patiently wait. For the winner to show up. Let's take a look here. We're now floating $800 in profit. That's not much. And yes, we have our liquidation level slightly above here on the $67.50. $67.50 is here. Yeah, it's, it's, it's a decent, it's a decent take profit. I could even bring it on 6754, but let's see, let's see if we got any news here. No, we got— we have no, no, no clear auction. Um, what I would like to see now is sellers starting to engage again. Yes, we have them, they're engaging the low. I want this auction to continue and not reject right away. I want these imbalances to hold and not be a temporary thing. Otherwise, we might still be in a situation of balance. Now we have buyers engaging again. Maybe we're not ready to break out yet. Oh, yes, we are. Let's see. OK, now we're probably going to have, as you can see here, a lot of color starting to pop out. We're probably going to have a big candle here. Yeah, big bubble over here. We're having the breakout that we were expecting. Uh, okay, we got aggressive buyers also. This is something typical in the last few days. You have aggressive buyers and sellers at the same level. If they close this candle below, uh, 67.16, this is a very good trade and it's, it's likely going to continue. If they reject like this, we might have the first stop loss for today. And I'm okay with taking that. And we've just reached the tip right here. But I expect this, today's auction, to still give some bearishness today. I don't— I would honestly be surprised if this just rejects and goes up. We're now floating $1,600 in profits. The breakeven level would be somewhere around here. I could still evaluate a breakeven, to be honest. Like, if this is a rejection and I see, let's say, more bullish order flow engaging here, I might close the trade at breakeven to not lose any more money because we're right at the low. And sometimes you see some retracement, some more, you know, contrarian type of temporarily at least auction, and maybe look for another entry later. It's something we can evaluate for today. But for now, there's no sign of a huge aggression from buyers. I'm going to wait because we'd still, we'd still keep— we still could spike slightly above here. And if this takes my breakeven and then starts running, I'd rather take a stop loss instead. Like, I'd rather be stopped out slightly above when I completely know that the setup is invalidated than getting a short-term spike, uh, stopping me out of the position. And then, you know, you always say it's better safe than sorry, but sometimes it's better sorry than just hyper safe, right? Also because we, we, yeah, there has been a one candle on the bullish side, but still nothing worth of significance. But we could for now at least get back at here. We probably going to get back here, but again, too much action here. Let's stick on the 5-minute and see what happens. See, when we see aggressive sellers in the wicks of the candle, it's not always like— it's typically a bad sign. But we also want to see what the following candle does. And probably we reached the level of liquidity, by the way. Yes, we did. And we did. We did indeed reach that level of liquidity, as you can see. It was exactly the first target that I explained before, where if we reach it, I would, you know, start considering breakevens, which I'm doing now. Not many news going on at the moment. And typically this would not be a setup. Like typically this is, this is an option of a reversal setup. I'm going to just open it here. This is a very risky setup that I normally do not take. But just to make you understand the logic behind it. When you see in such a different environment though, because we're in a bearish auction, so we're trying to find a reversal pattern here. This is one of the setups that I like to take where we have aggressive sellers being absorbed, buyers taking control. But in a different situation because now we're right very close to the lows. I don't know, this could have been an idea, but as my bias is pretty bearish and the news are very bearish for today, I'm willing— not, I'm not willing to engage on the long side so much. And but this is one of those ideas. As I said, we're right back where we started this phase. Now buyers starting to get a little more aggressive, but not huge delta. We have 10% delta. Let's see where our stop loss is at and maybe just give a little bit more space. What's going on? Okay, let's keep it where it was before because we could still see a spike above here. Still, these sellers that sold here are now presenting themselves again with strength, with volume, with initiative, with vengeance. And this is what you define typically as a strong high where you see big volume on the way up. Then big volume on the way down. That's a strong high. I would like to have seen a green bubble in the wick of this candle, maybe a buyer being absorbed. That would have been a good signal. For now, we don't have it. Okay, we have some talks from the Federal Reserve. They say inflation is really high and this is not good news. So we have If you got several months like that, it would be a concern. It was a tough miss on the jobs report today. So yeah, these comments are likely going to help us with our short trade, but we'll see how, let's say, the markets price these comments in. Look at the precision of these areas, though. Like, just the imbalance cluster is enough. This is very typical. Maybe it doesn't go for the entire day. Like, it could break it now, but look at where price really responds. Here goes, goes up here, rejects, goes up here again. That's the area where we've rejected the entire time. Because these big sellers will present themselves again. That's the idea. Because of the, uh, principle of order flow autocorrelation. Still not a lot of— like, a lot of volume, yes, but we're still in a consolidating environment. It's not a wise moment to take choices. Other than fading. So in these types of environments, these type of setup like the reversal setup I've just tried here on the demo, even though it's a little bit riskier, and as you can see, it doesn't give necessarily a lot of, um, a lot of directionality and a lot of, uh, positive excursion in price. But when you're in a consolidative environment like this one where price is in a situation of acceptance of fair value, you typically take these trades from here to here, then from here to here, then now from here to here, and you basically kind of try and ping pong whenever there's a failed auction. But we already have a setup, that's the margin we have today. So it's not supposed to be a hyper scalping session today. We're going to go intraday and just look and just comment the order flow. And if we have some of these other ideas, maybe execute them here on a demo because Uh, the main idea that we're executing is the first one I said. Let's take a look here. We have volume kind of decreasing on the lower side. There's not a lot of engagement from aggressive sellers yet, so this might bounce all the way up again. But let's see. They're approaching the low, so I want to see what happens there. Uh, not much. 2.2, it's probably not ready for the breakout yet. In this type of situation, this is exactly what I'm saying. Uh, if you see a big bubble here being absorbed and price rejecting, buyers taking control, it's a potential long idea. But none of these conditions are currently present, and we have lower volume. We have 3.8. Let's see when we approach the low what's going to happen. I'm also going to take a look at what's the current state of gamma exposure for today real quick. So today we're net short gamma. Is it aggressive buyers? Not a lot of them. We also have a put wall right here. You have big market participants betting on price staying in a consolidative environment today. That's a very interesting, uh, data point. Some more news are coming out, uh, regarding the conflict. IRC target US forces in Al Dhafra base. In the UAE and in Kuwait. Now we're going to have to wait a little bit, guys. I think the editors are going to have to cut some of the, some of the boredom unless we just trade this on a demo just to, you know, just to test some of these PBD setups and see still some practical implementation. If this gets broken with another rejection, we might still be in a consolidating environment. And as we've already— there we go. Let's see. Aggressive buyer on the bottom. Aggressive sellers also. Let's see who's going to get it. When? Yeah, we got aggressive sellers. We got participation. These buyers get absorbed. You see this 480 contracts here got absorbed, and you can see it from here. I would like this candle to close like this, but I can already tell this is not enough volume, and we're probably going to reverse from now. So this, this is the type of aggressive setup that, that I would execute in these type of environments, targeting here. That's basically it. Again, I'm not trying to engage in these trades today on the real account because our main idea is, let's say, to continue the bearishness. But this is a big rejection, guys. I'm not sure we're going to keep also the real one open. I may consider actually breakeven now. We have also put walls below. I don't know. It smells like shit. I would have expected way more aggression from sellers. Yeah, yeah, buyers are taking control. I'm not going to close as of yet because I could still see this auction being rejected. Oh, that's a lot. I want to see some rejection going on here. I don't want this to be accepted. There is no news driving this event, so this is all order flow. So I'm not, I'm not going to close my trade now. And I expect this to be a momentary spike and get back in a situation of balance again. But this is buyer definitely getting aggressive. Huge imbalances, 11,000. A lot of volume though. We have a lot of buying going on. Sellers being absorbed at the bottom. IVB hasn't broken out yet. I would expect aggressive sellers now to rebalance at least partly. This imbalance over here, because this is toxic order flow, and I would not like to see another breakout from the, from the following candle. I'd like this to be being reabsorbed very quickly. You also have kind of run out of, of great liquidity areas. Yeah, we might probably be out for this position. Let's see if we're going to get stopped out. But these guys are, are, are still buying. They're still buying for now. I want to see a clear rejection over here, otherwise we're likely going to be stopped out today, guys. See a first attempt from sellers. We got some buyers being absorbed right over here. I like this. This is where I would, you know, with the, with the aggressive ideas, potentially open a short already. the big bubble over here. This is exactly what I was expecting. Now I would like to see volume increasing on the way back inside. So this is, this is the idea, right? Like, this is the failed auction setup in a consolidation environment where we have this situation going on, absorptions at the bottoms, absorptions at the top, trying to fade them to revert back to the mean or revert back to the situation of fair value. This is the first setup we've seen. The other setup we can see now is the opening range breakout moving to the upper side. If, if this gets broken, got aggressive buyer stepping in. As you can see, these setups have a way lower win rate and they can get stopped out very quickly. Even though it could have still been a profit in this case. Like, it could still go down. But as of now, something that I don't like for my short position is that I see a huge aggression holding up. So if we see a very strong breakout above here, then I'm pretty sure we're going to get stopped out. But as we can see now, yeah, it stopped out. We got a little bit greedy of the stop loss there, having it a little bit up. Would have been a wise choice. You know, having stop losses very tight in such a consolidating environment— sorry, volatile environment— it's not a wise choice. But now we have aggressors coming back in. We have these aggressive sellers, very aggressive. I'd like these to be, uh, dominating the auction. Now we have 5,000 contracts worth of volume, so This is participation. When I see strong breakout with a lot of participation, then in the same area outside, so in these candles, participation going lower and lower, it's a good sign that we might be exhausting the buy movement. And when we break back inside, I want to see big volume and a candle closing inside side though, and this candle closed with a rejection again. So this is a strong low, as I said. More volume also on the way up. So this could be just a test to continue higher, and in that case, we might be, you know, taking a break and reassess the, the direction for today. Still, we have this big buyer on the wick, but this— how this candle, this 5-minute candle, closed really bullish, and we have a strong rejection here. So I'm pretty positive we're going to go to stop loss. Yeah, but still nothing, still not a lot of volume. I don't know. We'll just wait and see. Okay, let's see if this is going to be the auction that going to bring us back into the situation of balance. One more attempt rejected for now. [No speech]Let's see what's going to happen. Below this low, I would expect some squeeze by aggressive sellers. Yes, there it is, there's a squeeze. It's classic, right, from Fabio. Uh, it's exactly this, it's, uh, sell orders being triggered at a breakout, also known as breakout liquidity. See, if, if we were not that greedy with the stop loss, even though we could have spiked this out with a spread in normal market conditions, but if the stop loss were where it was supposed to be, let's say, this would already been, uh, another profit, another take profit based on the same principle— aggressive buyer, uh, being absorbed at the top of a failed auction. And for this trade, it was a good idea to basically put the stop loss a little bit above to give the market a little bit of area to breathe so that we can still be inside of this trade. Um, and let's just be patient and wait for the market to unfold the new auction because I'm still confident on my overall view and I don't want to get spiked out, out of fear for a stop loss. Who cares about a stop loss? This is also the mindset you need to have, guys. Just who cares about a stop loss, right? It's just one of the thousands of trades you're going to take in your lifetime, right? So never get nervous about taking a stop and maybe reentering. You know, it's like whatever, it's whatever. So this is a good signal. We have 5,000 contracts. Being traded. So we're still likely going to stay inside of this range for a while until we have a clear winner or some news coming out and giving the direction. But as I told you before, volume on the way out increasing, decreasing here, which means less volume, less interest, less participation, and on the way back inside, more volume. It means that we're not ready. This is the classic failed auction behavior. It means that we're not ready to move outside of balance, that we're still agreeing that this is a fair price to trade, and there's no interest from both sides of the auction in trading outside. It's not about highs or lows, it's not about fair value gap, it's not about candles, it's about ranges. We have a bullish candle with 3,000 contracts worth of volume. It's not much. We got these imbalances over here now being overthrown. Let's see if they're going to hold or if we're going to break outside with more volume. At which point I'll just accept the loss and move on with my day. I'd like to see this candle to fail. Because if they break and they take a stop loss, they take our stop loss, it's likely that we will revisit these highs for this session, if not even, um, retrace a little bit higher up until Let's see. Okay, so there's some— there's potential long ideas, by the way. Like, if we break above, we can also try the actual breakout of the opening range. If it breaks above here, I might reverse my position. Let's see how they're going to behave. But this looks to be a break. It looks like we're reversing for today, guys. It looks like we're reversing. We're gonna— we could have a strong reversal from the bottoms, which is, you know, something I need to adapt in case. I don't want to marry my vision of— or marry my bias, let's say. If markets are giving me clear indication that we're breaking outside of this area, and these few candles are gonna keep moving higher, it's likely they were gonna move out for the rest of the session. And as I can see, it's very probable. So I'm gonna adapt, reverse, close this trade, and I'm gonna accept this $2,000 loss. And I'm probably gonna aim to rebalance, uh, these highs as well. And potentially target a deeper retracement for the day. I can set a stop above, below here, and this is the last setup I'm going to try with you guys today. And we'll see, we'll see how that goes. Yeah, we also accepted a candle that closed above these big trades. So yeah, we could be bullish. Also, there was a huge absorption of sellers right at the bottom. I was expecting a deeper move if I wanted to fade this move and let's say buy from the bottom. I would like to have seen a stronger flush in the market. So for example, I would like to have seen this being reabsorbed, not just a couple of ticks, you know what I mean? Some aggressive sellers trying to take control, but they are being absorbed as we speak. See, sometimes macroeconomics news might be completely bearish, but you can still see some bullish order flow in the stock market to prove the point that, you know, macroeconomics and global macro sentiment in financial markets are not priced in the same way. It's not that obvious. Okay, this is very interesting on the liquidity side of things. We're starting to have, uh, way more, um, aggressive— sorry, passive participants on this, on this side. Uh, this is a very typical pattern in the books. Whenever you see areas of liquidity after areas of liquidity, we typically see this from price action kind of walking its way through these areas of liquidity. I don't like much what I'm seeing for now here. Um, volume going down during a breakout, not a good sign. I would have liked to see this auction to keep moving up with strength, speed. Volume initiative. And for now, we're not seeing any of that. Let's recap also the trades here. We took one stop loss like this that had some good potential targets below these lows, opting for a bearish type of session. And second trade is going to be this one, likely with a target around 6,800, probably. No, 6780, around these areas. Um, but for the target, let's, let's also think in terms of volume. Uh, let's take the composite, let's take the previous day. Yeah, we have yesterday's lows right here. This was the consolidation of yesterday. Yesterday consolidation is here, so this was the area of fair value from yesterday for, let's say, most of the area. This could be a potential first target, uh, this is going to be our supply. I'm going to put it extended, and this could be one of the targets. If we break back inside, like, I, I highly doubt it, or let's say I would not expect it, but if this happens, if we break above here, then the, the next level could be these ones. So yesterday's point of control could be a target also, because that's also where we have, um Yesterday's gap, but I see sellers being— sellers are starting to take control on the top. Buyers actually getting aggressive now. That's, that's a good sign. Let's, uh, let's get into the details for a second, but we got aggressive sellers on the top. I don't like this. It could reverse, guys. It could easily reverse right at the top. Aggressive sellers, buyers being absorbed. Uh, not so good. 6,000 contracts worth of volume, but all in the, in the absorption wick. Not good yet. This could, this could be a another reversal. But let's see, let's, let's, let's wait patiently and give time to markets to assess what's the actual direction. But we officially broke out of the opening range breakout. If this candle closes with a body, it's, let's say, by the official rules of the IVB model, Uh, this is, you know, one more reason to engage. And at this point, I might place myself at breakeven because, you know, let's see where we're at. We, we pretty much repaid the stop loss that we just took. But yeah, again, again, this is happening. I'm going to patiently wait, but if I see some aggression, some serious sell aggression, not 1,000 contracts but like 4,000 or 5,000, then I might consider, uh, closing this trade at breakeven and just, you know, be done for today's session. If instead we see these aggressive buyers continuing to buy, then I'm chill. We got sellers very aggressive on the top, as you could expect, but also sellers were aggressive here and they got absorbed. And for now, these buyers and sellers are keeping the auction up. But this could be a strong high, guys. This could be a strong high. 6,000 contracts rejected. If the next candle drops with strength, a lot of strength from sellers, not just aggressively hitting the bid but controlling the auction with a candle that closes below, then I might, you know, even reverse the trade again, unfortunately. No, that's not what I call domination. Uh, let me just get this one over here and plot this one on top. Okay, aggressive buyer engaging again. That's good, but still not a lot of volume, 1,700 contracts. I want to see this high being broken out with strength, initiative, and volume. And not sellers taking control with as much aggression. Yeah, like this. If this rejects, I'm still in. If not, I'm out. Still low volume though. 6,000, then 3,000, 4,000, 3,000, 4,000, 1,000. Let's take a look at the 5-minute. What a boring auction. Some days are just like this, guys. Give some volatility, then it reverses. Still not a lot of volume. You know, I expected a directional session. If the market is going to tell me that we're going to have a consolidative session, I will switch my approach for today and consider this as an opportunity to short again. Until we revisit these lows again. But it's still early because for now we have no clear— I want to see sellers being present and they're not at the moment. Oh, okay. Let's see how this auction is going to unfold. This is very important. For now it's rejecting, but I want to see more buyers engaging as this breakout unfolds. Okay, okay, we're getting strong. 16% Delta. Come on, 3.8. More imbalance, more auctioning up. That's good, that's a good sign, guys, if the candle closes like this and not like this. We probably have some aggressive— yeah, whatever. Nah, nah, nah. I'm putting my trade to break even, guys. This is, this is a good aggression. Right, then we had aggressive sellers taking control. Okay, now we're— now I'm confident we're good. We can put the break even. Yes. Okay, so let me take this trade now. We, we've paid back our stop loss for today and are now running slightly in profit. Nothing huge, but I might trail this time. This time I'm going to be a little bit more active, even though it's not part of the setups that— or let's say that the position management we've talked about, but it's worth, uh, it's worth the money. This is a good sign, by the way. Like, this is a really good sign. We have strength and aggression This is, this is what you define as an initiative auction. Because all of this, as you can see also from the colors of the candles, from the, from the numbers, there was no clear domination from anybody. But when you see this type of candle, then you see a lot of imbalances in the candle, a lot of green in the body of the candle, a lot of volume in the candle. That's when you know things are getting interesting. Markets— market participants are willing to trade at these prices. Then of course we got a big buyer absorbed on the top. So it's, it's a bunch of mixed signal today. And this normally does— like, this, this, um, amount of mixed signals typically doesn't happen, but when news pops out when new macroeconomic regimes, uh, let's say, unfolds, the, the patterns you normally see in order flow change dramatically. That's why the thing is, order flow is not an edge in and of itself. Order flow is a tool that you need to read, and you look for patterns in the data you read, just like with price. It's just a deeper layer of price, of of, let's say, information and data. So you still look for patterns just like a price action trader, but you look for patterns in the institutional order flow, in the order flow made by traders that matter, that is the causing factor of price movements. But sometimes, as, you know, markets evolve and let's say the phase, the market phase you're in switches. The patterns you're used to see are not responding the same way anymore. This happens with any type of patterns or setup you can quantify, both on the price action side of things and on the order flow side of things. Like, it— this is not necessarily edge decay. This is adverse market conditions. Let's see if we're going to be able to break above here. From the liquidity side of things, we have some targets still to fill out, so I can expect that we'll walk through these areas. And maybe reach 6780. 6780, that could be a good target. Not a huge risk to reward, as you can see, guys. You know, today I am just executing the intraday type of setups because of the current market conditions. And the scalp setups for today, I'm just keeping it for you guys on the demo for today because I don't have the, let's say, both enough margin as the margin requirements have been, let's say, hiked, and also the risk aversion because in this last couple days I got too many mixed signals also for scalps. So I'd rather stick for what my account is, you know, my real account, because this is not a prop firm account I can afford to burn and then buy another one. This is my real money. When you have real money on the line, you're, you know, your trading behavior changes. I can assure you that. And you're more into protecting than risking. Okay, but we have a clear, a very clear and beautiful auction. I wish all auctions were like this. But whenever you see signs of the auction changing, because, you know, this was, this was a clear situation of fair value. This was a clear failed auction. But when we failed to auction, to keep auctioning here, and we had a big rejection, I just, you know, and we broke outside, that's when I can confirm it's a breakout and I'm really willing to engage and join the party. Not here, because I don't see a follow-through, right? So that was a good, a good idea to, you know, exit our original idea, uh, change our idea for today, be flexible, and avoid getting chopped out in super small time frame trades. As you guys can see, yes, This was a target, like this small idea was a target. This was probably a breakeven, I guess, or a stop loss right here. So it was, it was all right, but I'd rather let positions run for the day. We're now floating $1,000 in profit. It's not much, but it's better than nothing. And the worst that can happen today is that we close the session at breakeven for now. We're approaching the target levels at 6780s, at which point there's always two options. You either put a take profit there and just exit, or you trail your stop. And it can be a little tricky because if you trail your stop, you could get stopped out because this is a sell area. And then price could continue. So it's not necessarily the bad idea to be super aggressive with the trailings. At the same time, you don't want to lose the profit, right? And as we're approaching this area, I might just consider exiting and risking that price might keep going higher and miss this move. Like, the idea of missing this move, it's better for me than missing all of this profit and maybe closing the session at breakeven because of a stupid spike. So I'd rather take profits at the levels I've, uh, pre-decided. We have the 6780s right there. Let's see if we have more liquidity on the upper end, but no. We don't have much, but the auction is still, it's still really bullish. I mean, look at these bubbles. Oh, we have aggressive, really aggressive sellers on the bottom. I might exit this position as we speak just in case because we are in a very strong sell area. So I can at least take a partial profit. And as we see sellers engaging and big bubbles joining the party, aggressive sellers on the top wick with absorbed buyers. That's a typical, let's say, sign of reversal. So I might want to get out of the position. We could still have more, let's say, positive excursion, but I'm okay for now and I'm going to wait if there's any other setup because This, this is, this could be potentially a more valid strong high, but it's still early. I'm just going to sell one contract to engage on the sell area and maybe increase the exposure if we get extra confirmations. I want to join the party of this big seller, even if it's just a retracement, because this is a really high probability setup. I'd like to see sellers engaging a little bit more. For now it's 3,000 contracts, is not much. Oh, Thinkorswim is typically— sometimes it's lagging. I don't like the charting, I don't like the trading. Okay, okay, now we're talking, now we're talking. Now we have aggressive sellers taking control. 5,000 contracts in the sell candle, that's even more than the breakout. So we have some confirmations for now. Let's see, because this could still be the initiation of a consolidative phase. As this was the initial fair value, this is a sell area. We have big aggressive sellers joining the party. I might add one more contract and then wait, but no, not yet. Okay, we got more aggressive sellers. That's good. 5,000 contracts, 6,000 contracts. So we still have some interest in moving back down. That's good. Well, this trade can be put at breakeven. Let's see if there's any news coming out. Nothing huge. So we close this other trade at a profit, 1:2-something risk-to-reward ratio. Yeah, as we're not having a clear directionality for today, I'm not going to opt for my initial idea because my initial idea was to, hey, let's swing it the entire day. But we don't have the necessary market condition to swing the entire day. So this trade was closed here at a net profit. This is the second— let's say the third trade for today. Could be until here, at least a 1:3 risk-to-reward ratio. Less contract size as it's a reversal trade, so it's typically more risky. But you never know with these market conditions. I mean, typically is where— this is where I would risk less because I'm trying to time a top. You know, it's not that easy and it doesn't happen that often. That's why I engage less. But in these type of market environments, you know, it could still be, it could still be a AAA setup, you know, in the classic ranking ideas. But what I would expect now is this to be the top of the next consolidative range. And if we do this now, I might engage in these short-term trades and maybe opt for a long only if we break above there. But I highly doubt we're going to go up any further than $67.90. It's really— I would be surprised, to say the least. Okay, sellers are not present anymore. We have aggressive buyers trying to take control with a lot of volume. You have $4,000. I'm out of here. We're moving on to scalping, guys, now. Sorry, but the market conditions are varying so quickly. So quick scalp over here. I'm gonna delete it. Um, now what I want to see, what I want to wait for is a low to be plotted somewhere around here, or it can be this one, as we've again rejected with aggressive sellers being absorbed, and this potentially being the beginning of a consolidation area that I'm going to fade the shit out of. Specifically, I would like to look for more longs right below here if they reject again, more sells from here, the next rejection. And whenever there's a strong convincing breakout, then I might engage for a continuation setup. But this is, this is not in my parameters of a directional session. Since the open, we're now at 0.21 variation, like, uh, gain for today. Auction is now pretty balanced but with a lot of volume, right? So we have 5,000, 6,000, 4,000, 5,000, 5,000, 5,000. This is a balanced auction. We don't have a— we don't have a huge delta. So we can wait for more, a little more retracement and wait for the range to start forming out. We're probably going to have a little time lapse now. We're now touching the test of the IVB. We got a bunch of aggressive sellers here, got getting absorbed. You can see it from here. If buyers engage, I might start considering to fade back the high. When I scalp, I typically keep my size at 2 contracts. If I see buyer, buyers engaging, I might buy until the high again. Let's see. For now, this is a strong breakout, sort of. We have 6% Delta. That's not a— it's not the type of breakout that I consider to be indicative of continuation. 1,000 contracts, meh. See, today we had one fake out below the opening range, another auction that now completely reversed. We exited at the right time, in my opinion, but I'm still not convinced that this is going to be a complete reversal because order flow is not telling me this. There's very low participation in this lower movement. 2,000 contracts, what the fuck is that? Sorry for the French. You can beep it out, beep it out, editors. 3,000 contracts in a breakout, like, what the hell is that? It's not convincing. Auction is not convincing. Okay, that's better. When you see a lot of numbers, that typically means a lot of these, uh, colored numbers. This mean imbalance, aggression, initiative. That's better. But still, volume is getting lower. Even if you see it here, we had a strong low and this candle is, I don't know, 18,000 in 5 minutes is not much. So this is our high. Whenever this candle closes, this might be our low. In order to fade this, I would like to see buyers taking clear control and sellers, big sellers being absorbed. Otherwise, we don't have a setup. Okay, auction is definitely bearish on the direction side of things, but participation is not huge. No news are coming out. 3,000 contracts. We're starting to see some volume. We have a bubble, which means big, big sellers are engaging here. We need to see how this candle closes. If this completely rejects, it can be a valid buy idea. Oh, more aggressive sellers. 5,000 contracts. If this is a low, it's a strong low. If we're breaking back inside, then it might be a complete reversal, and then I might choose not to engage at all. But for now, this— after this candle, I'm willing to change my idea again. I want to see how this candle does, and I want to see if these big sellers are going to be in the body of the candle. Because if they're going to close like this in 3 minutes, then sellers took back control of the auction and I have to adapt once more. The only thing that could have been managed a little bit better was this trade because I was more, let's say, I was maybe a little too confident on the macro, overall macro trend. So it could have been a stop loss that could have been saved. And maybe took a little bit more similar action to what I've done here right at these lows. So whenever I had a clear understanding from order flow that buyers were taking control, I could have exited this trade a little early, but I got more greedy on the reward than the risk, which is a mistake that I did not do here. Again, this candle is now approaching to close very bearish, but I could still evaluate some reversals. Low volume. We're starting to reject. Yep. Could be the beginning of— yep. I'm engaging on the longs. Oh, the feeling was awful, was very laggy. I'm going to place my stop below this liquidity pocket, these two levels here. It's 6745, 6745, maybe a little bit lower. It's a very low-risk trade. This is probably just a couple hundred dollars worth of risk on the idea behind a rejection beginning with sellers on the bottom. It's a very aggressive, uh, type of execution, as you can see. But we're also on the typical test of the IVB, so we also have the opening range breakout test on our side. So it's, it's— the area is also really good to look for longs, but I'm lowering the risk because of the current regime of liquidity and the markets. And this, this bearishness was not news-driven. That's why I'm also keeping the news here, because if this was news-driven, I would wait. But as this is just order flow and let's say meta orders, long-term stuff, The regime is still consolidated for me. So as you can see, my style of trading has shifted as we speak. I was more into long-term directional stuff, but when the markets told me that the regime has changed, I switched my approach into looking for some more short-term order flow ideas rather than just wishing for the markets to, you know, give me directionality. It doesn't happen always. And what I'm going to approach here now, even though I just entered this last trade on the test over here. So this is the current trade idea, very tight stop loss. I could aim for this. This is what I'm going to aim for. I could even aim for higher. Right. But as the market regime is currently not the best, if I see this pattern happening again over here, I'm trailing my stop right below that, getting the fuck out and eventually joining again because this is now ping pong regime.

Okay.

I, I'm going to explain it in very simple terms. This is ping pong regime for me. Very strong. Oh, that's good. Sick. 7,000 contracts worth of bullish volume. We haven't seen this amount of volume in any of these candles, so it's very clear who's in control for now. We might aim for these highs, and we're already almost at target. But again, this is all order flow. Like, look at the news now. I'm gonna update it just in case. As of now, there's no news coming out that could lead such bullishness. This is all order flow. Like, this is all technical stuff. And by technical stuff, I mean, of course, in the broader concept of order flow and meta orders and these, you know, gradual pouring into the market of huge trades. Let's see if this, if this candle is going to plot the high, because we have a lot of strength here. I'm confident we're going to reach this, so I'm not going to trail the stop as of yet. I want to see this high getting tackled, and we have also liquidity to be taken right above the high. Which is this level over here. I expect it to be taken, and when they take it, I might trail the stop. These huge buyers are still dominating. They didn't approach the liquidity area yet. They might be doing it now. Big sellers again. Oh my God, let's see. Strong imbalance. I, I want this to be rejected ASAP, otherwise I'm going to also trail. I could also already trail my stop above here— sorry, below here. Okay, it rejected. That's good. 3,000 contracts, but we probably got buyers absorbed here. Yeah, I might, I might trail, guys. I'm going to trail below the low of this candle in case it reverses, and I'm willing to get spiked out but at least take home a couple thousand dollars worth of profit. Okay, this is my trail stop. Seems like we might be approaching it now, because typically this acts like a magnet, but it can also act as a repellent because people say, hey, there's an informed trader there, so I don't want to engage with that guy. He might know something I don't. So it has always this dichotomy of big liquidity. Okay, we got trailed, stopped out. Oh, not yet. Yeah, because I normally trade not at the very low because there can be some spikes, but typically a little bit below. 4,000 contracts, it's not a lot of volume. But increasing compared to the previous one. Okay, see how we— sometimes it moves very fast and nervous. That's typically what happens at the beginning of big movements. But in this last few days, these momentum ignition, they don't lead to big market movements. They just stay there and they consolidate for hours and hours. It's just so frustrating because you have to completely readapt the way you approach the market. And as Wyckoff used to say, you know, people learn from what other people said about the market, not about what the market has to say about itself. And this has been my philosophy ever since I've studied the first, you know, instances where I've studied Wyckoff with Fabio, which was the basics of his methodology with price action as well. And so true. I mean, you need to adapt. Okay, we're approaching that liquidity level. Ooh, more liquidity got even more— they got even more passive on this side. Strong aggression again from buyers, 4,000 contracts. That's great. I like this. This makes me confident that we might reach these levels. As always, when you see low volume, these type of things can be faded very quickly. When you see, see, 2020 typically gets reabsorbed pretty quickly unless there's a big bubble, and we don't have it, I think. No, we don't have it. Okay, we're approaching that high. We— oh, they deleted that liquidity. That's, that's some almost spoofing sign. I'm not saying this is spoofing, but this is fake. This was fake liquidity, which means that the seller that was keeping the market at bay has now completely reconsidered, or maybe just, you know, shifted his position here. But you see how these big bubbles, aggressive buyers, are still present. So many signals, so many, so, so many things. Yes, as I was saying, I would expect these areas to be reabsorbed. When you see 0.2, 0.2, they typically get faded down very quickly. And if this auction fails again, then if we break below here, I might already engage on the low, on the short side. But because we have this absorbed buyer, right? But still, this candle is bullish. And I would like to see this pattern not inside the range because it has less, less of an edge. If this happens here and I try to fade it, we're still on the top, so it's still a good area, but I don't have the confidence to put my stop loss a couple of ticks above. If I see here the big bubble then rejecting, I can protect myself above that big bubble. Okay, it got faded, as I said, but it confirmed the direction for now. Yes, and we took that liquidity. That's the big buy bubble that we're going to see here. Yes, that's correct. So now I'm going to trail my stop loss even more aggressively. Because if this is the beginning of a new bearish phase, I want to be out and join the party on the sell side. See, these big buyers get absorbed over here. They ate that sell liquidity that was in the book. We got slightly up. If this candle rejects, I may be willing to engage on the short side. Uh, let me get my contracts ready, but I want to see some sellers engaging. This, like, absorption itself is not enough. I want to see some momentum ignition from sellers, and no, we don't have any of that. So this is still, still valid. We might take the high, which is the last, the last resort. We're going to sweep this high and see what happens there. I'm going to keep trailing my stop loss now. I'm going to put it here. Okay, we got— you see this? This is going to be another bubble on the chart. No, not yet. But I see an absorbed buyer right at the top. 461 contracts were traded on the ask, and we still have a lot of liquidity being reloaded here. These sellers are real now. Let's see if this is going to be the reversal as we've taken out the high. No, we got more bullishness coming in. We're not ready yet to short. We're still in pure buyer domination. This might be it. Let's see. I got so many windows. Yeah, I hope you guys appreciate this IKEA that I'm doing with one screen. I normally use this in 5 different screens. So this is a stress test for me to see how fast my, my finger is at executing. Okay, I'm going to trail my stop below this candle now. As soon as we break above here, I'm going to trail it. Plus I have to even execute on different platforms. It's just so frustrating. It's like I, I want to lose money, you know. 3,000 contracts means there's less interest at trading at these levels. We might be reversing. Okay, let's engage. So maybe a little bit early, but as we have the pattern on the wick and some rejection starting on the sell side, I'm gonna— I'm willing to engage with my stop above 67.78. I'm okay with being stopped out. It's maybe a couple hundred dollars, like it's a very tight stop loss anyways. So I'm going to put a buy stop above here. And again, we got seller engaging. Mathematical. Oh my God, what a session. Yes, same pattern that I've explained before. I engaged maybe with a little bit of anticipation because I saw some of that momentum ignition starting from seller. So I was willing to take a couple hundred dollars worth of risk for potentially making a really good reward. I can almost put my stop loss at breakeven very quickly now as I have this imbalance defending my trade. And if it gets broken out, this could be an invalid setup. So we closed our trade around here and we've opened another trade with a very tight stop right above here, aiming at these lows over here. 755 is good. Can put the stop to breakeven. We're already floating $700 in profit. Yeah, almost breakeven. Almost breakeven. Let's see what the news are saying. Let's update. Not much, uh, some stuff. Iran delaying— delays naming a new leader. Well, whatever. General, uh, general uncertainty doesn't mean clear directionality. And I'm basically like, what you're seeing me doing today is seeing the mistakes I've done in the previous session and not making them in the current one. Like, don't hope for big directionality because sometimes they, they give it all in the London session, for example. And then they consolidated for the entire session. So I'm not— I changed my approach very quickly. And that's what you need to do, in my, in my humble opinion, as a trader, especially when you trade order flow and you scalp intraday, blah, blah, blah, to get the most out of the data you buy and you pay for because, you know, order flow has a cost. But to get the most out of it, changing idea very quickly is probably the biggest single most important lesson I've had from Fabio and from all of these amazing trader I've learned this craft from. See, now we have this candle dominating the auction as of now, and we have this candle starting to absorb some sellers at the bottom and starting to engage some buyers. But it doesn't worry me for now because the volume is lower. The volume is 3,000 for now, and there's more volume on the sell side. So this imbalance again, do you see the imbalance clusters I've explained before? Supply. This is the real areas of supply. You track it from one tick above the imbalance color to one tick below. And that's the areas that typically hold. Do you see the precision of these areas? It doesn't always give a, let's say, directional for the entire day type of thing. But you see some responses. And that's the beauty of order flow, of looking at real order flow behind what's happening with normal candlesticks. Now I'm waiting for this low to be triggered, some aggressive selling starting to kick in, and this candle being a little bit rebalanced. Okay, we got exactly what I expected, some aggressive selling starting right at the bottom. This typically happens because breakout traders or stops being triggered as well. But don't worry, they're not hunting for your stop loss. As I always like to say, we got more aggressive sellers. See, this is not stop loss hunting. This is directional. We have 200 contracts worth of volume there. Let's see if— no big bubble yet. Let's see. I would like to wait at least until this area. This is a demand. So I'm going to wait to see what happens here and maybe engage, as I've done before, with a trailed stop loss, because if it reverses, then I'm out and I can engage for the long side again. But this— if this is the final breakout, I would expect it to be very aggressive. And at that point, I can just keep my stop loss there and not close my position, just in case price ultimately decides to respect my bias I've had for the day. And at that point, I can trail my stop right above here to avoid this happening again, but still reserving the chances and the possibility to, you know, take advantage of the entire move of the day. Because again, the news today were awful for the American economy. I'm really struggling to understand what this bullishness is about. Like, I would be really, really surprised if we broke above here. You see also how the area we plotted before is absolutely being respected because it's not a normal support and resistance area. This is volume support. This is money. The cool thing about order flow is that you can track money, and with a platform like DeepCharts, you can do it so with such an intuitive interface that most, uh, platforms unfortunately do not have. And that's kind of the added value we have on DeepCharts that I'm very proud of, um, what, uh, the Volumetrica team has done with this platform. Um, let's comment a little bit what's going on here. We had a small burst of volume, not much. Volume is decreasing. 2,000 contracts per candle, 1,000 contracts per candle. Not much, which is exactly what I would expect in the middle of a range, right? So, but for now, yeah, we're just going to wait until our, our target is sort of reached and then we're going to start trailing. And as we can see here, They've— okay, they're engaging some liquidity. But could you see here what happened? There was a really big seller who moved his order around and tried to sell. And as buyers approached it— oops. As buyers approached this level, let me— oops. Let me zoom in like this. There's a lot of data my computer is processing right now.

There you go.

Buyers started this, like they started being aggressive towards here. We can replay it like this. But no, they didn't even touch it. Look at this. They didn't even touch it. There was a hidden order below here that got absorbed. Very interesting, because this order got executed slightly below, but there was little to no volume here. Look at this. That's very interesting. Let's see at which point we are. Let's see where we're at. Volume deflating, not a lot of trading activity going on. We have our stop loss at breakeven, very safely. Actually, let's put it a little bit in profit. We're floating $5,000 for today after starting from a $2,000 loss that was completely preventable. But again, the goal of trading is not to trade perfectly every single idea, is to, you know, trade as best as you can. If we close, if we manage to take this target, we might close approximately at 6 or 7,000 and we could be done for the day. But as we have a little more time here, we have 2 more hours to spend together at this podcast studio. I might just continue to scalp it a little bit See, uh, some big candle but low volume. I'm still not worried. Well, wait, we got big buyers here absorbed at one level. 3,500 contracts on the long side. Big buyers being absorbed. If they're going to close the candle above this guy, I might close my trade right away. Otherwise, if they reject this then this is good news for us. And it seems like for now it is. So I could even, like, I could aim at like trailing my stop loss above here. This is the type of style Fabio has on the NASDAQ. Not so confident in doing it on the ES because, you know, the order flow is a little bit different on these two assets. They're brothers, but they're not twins. But this is what he would do. As I know him, he would trail his stop loss right above the big trades. I'm not going to do it now, but let's imagine it would happen by putting a red line here just to assume and have it as a reference point for, you know, to inspire different potential style of position management. But 5,000 contracts worth of volume. I like this, and I like the fact that it got rejected with this much volume because this means this is a strong high. Big volume on the way up, big volume on the way down, absorption here. This is a strong high. I really do not expect this to be broken. I expect this to reverse now and continue towards our target. Exactly, exactly. I like this. Let's see what liquidity is doing. We might add a button to go back to the last part of the screen. This is still on a beta, by the way. We're about to launch it. Um, this, uh, DeepDOM platform is not out for purchase as I'm recording this video. It might be when you see this video though. 1,300 aggressive buyers. I'm not afraid of you guys. If this is all you have, you're going to get absorbed. 2,000 contracts. Boring stuff. Really boring, nothing to be afraid of. Let's stay here. Okay, now these buyers seem to be a little bit more aggressive. See, now this trailed idea would have been stopped out. This is why I don't like it on the ES. On the NASDAQ, typically this works very well though. You see, they, they would have stopped this out and now completely reversed. Do you see this candle? 2,600 contracts. That's nothing. And see, now we have 3,400 contracts on the sell side, which means we're still willing to trade at these prices. If they break above here with strength, with volume, with initiative, with real initiative auctions like this, you know, when you see this— oops, nope— when you see this type of volume, huge delta percentage, 7,000 contracts, a lot of imbalances, that's what I call an initiative auction. Look at this, this is nothing. Oops. Let me reveal the chart. Was a little glitch, sometimes happen. Maybe editor cut the glitch. But look at this. This is 2,000 contracts worth of volume. That's why it doesn't scare me, because what scares me is a big crowd of money coming towards me, not some mere 2,000 contracts. On the ES, it's nothing. It's literally nothing. So we're starting to approach the final target for this trade. And I would expect, by the way, these guys who pushed the auction up to kind of represent themselves. And as you can see, this was a big imbalance cluster, right? This was the first imbalance cluster. We can extend it. From one point below to one point up. The other imbalance cluster I can see here was this one. A lot of these very colored number. So these are the two areas. Let's put it as a demand and extend it. It's demand zone 1. This is demand zone 2. And as you can see, these are the areas where you see buyers getting aggressive. Look at this first imbalance. Once, twice, and then again thrice. See, this is exactly where I would expect buyers getting aggressive. Imbalance number 1 got walked through pretty quickly. Imbalance number 2 completely hold the price. In the 5-minute chart, we also have a clear confirmation that this was a complete absorption. Now I might trail. Now I might trail. I'm very close to closing this trade anyways because we're approaching the target. So, you know, if they suddenly reverse because of a news coming out of nowhere, I don't want to lose all the profit that I've made for now, so I'm going to trail the stop loss above here, very safe, and then trail my stop loss more aggressively as we approach this low. Okay, now we got some— you see, this is what I mean by momentum ignition. Do you see this very fast move? Is some news coming out? Let's see if there's any news or it's just order flow. No, no news, just order flow. Yes, very directional, but 4% delta. Mm, smelling 3,300 contracts, very fast price movement, but not a lot of substance inside. So this still doesn't worry me, doesn't scare me for now. I'm willing to get stopped out. It's okay. So this was a big reject. We didn't take target. Oh my God, I got distracted by the cameras. Fuck, I didn't take the target. That was the target. Goddamn it, I got lost in the explanation. Well, I guess we'll just, we'll just do it as it is. This would have been a target already. We're going to wait for it to drop a little bit below and take our target maybe even lower. So probably we could reach somewhere around here and take this low out. But that was the original target. I completely— I got lost in the explanation that I didn't realize we were at the predicted target. See, that's the problem of explaining live trading and trading by yourself. That's why I was a little bit risk-averse today, because I'm also explaining. I'm not just trading by myself and taking decisions. I'm taking decisions, explaining why, showing why, trying to be, you know, friendly, as beginner-friendly as possible towards order flow. But you see, once more, 7% delta. Do you see a lot of color in this candle? A lot of aggression like this or like this? No, it's empty. That's why I don't believe this candle. That's what I said. I don't, I don't trust this. This smells. I want to see— if I were to be scared of this candle, I want to see real participation. 3,000 contracts compared to the average of the last few candles is nothing. This is real. This is numbers. This is auction. And this is the advantage of order flow you're never gonna see from candlesticks. If you just see price moving fast, you're gonna get scared and close your fucking trade because you got scared of the price going towards your way. But here you can take more informed trading decision. That's the power of order flow. And that's why auction market theory is, in my opinion, the best way to frame your understanding of the market and your decisions. Got one more rejection. We can also delete the volume profile for now. Still very flat auction, which is okay because still I'm confident we're going to reach these levels. Let's see if liquidity is giving us any further targets. What a dirty book we have today. Oh, we don't have much below here, to be honest. Let me zoom in and make it a little bit— yeah, this is the market maker cloud. We're going to probably implement some sort of filter here. Let me just increase the contrast.

Yeah.

Buyers engaging once more, 2,000 contracts. I'm not impressed. Not impressed by sellers either, uh, but this is just pure consolidative behavior. I'm not going to take a decision until I see money on the table. See, once more, once more sellers engaging. Every time they try to auction up, sellers took control again with real imbalance though. Look at also here, imbalance cluster dominating this entire auction. Where do sellers start engaging again? Right over here. Cannot see with price, guys. Hard to see with price. You can, you can simplify it, right? You can, you can try and simplify with such things as smart money concepts, but it's always going to be deducing from price, not seeing the orders. You're guessing what order flow might be because you're looking at order blocks, you know, liquidity sweeps, that kind of stuff. But you're, you're, you're guessing there is an order block. You don't see the order block, the block of orders, right? Okay, we got some interesting absorption below here of sellers. You're probably going to see it also here. Yep. Sellers being absorbed, that's when I raise my antennas and maybe trailed my stop loss a little bit closer because this could be the beginning of either a reversal or a continuation. If they break below this one now, I can be confident we're going to reach the target. Otherwise, if this is the current low and we see big aggression from buyers Volume also traded on the bid, not just the ask. Sorry, on the ask, not just the bid, like here, because this is all traded in the bid. This is all aggressive selling. But see, still, still no, no reasonable buyer. Sellers engaging again here. And then we have this final area right over here. Let's see if we're going to get these highs taken out and then give last response from sellers. But again, see, aggressive sellers representing themselves third time. 1, 2, 3. The level of details order flow provides is undeniable. Okay, we seem to have some liquidity at the 6750, which is exactly where our target is. 6750, it's the final target. But for now, they're rejecting a big bubble, so it's not a good sign. Also, this sell candle is not as, as participated as I would like it to be. And sellers got absorbed here once. Let's see if they're going to absorb again. Approaching the area. We managed to broke through it, but 1,000 contracts worth of volume. Yeah, this is still all, all boring consolidative behavior. This is fair value. Fair value is boring. But as you see, as we've broken outside of this, right below it, more participation joins because the money was here. We just see it through these, through this bubble that now is in the body of the candle. And now we can start trailing our stop loss even lower. Let's wait for some more drift to happen outside here. And I don't want to see these buyers taking control. We see a big buyer here. Mm, that smells— that doesn't smell good for sellers. See how, uh, the book is getting way faster now? Speed of book typically means, uh, something big is about to happen. Another strong low. Buyers aggressive on the bottom. Let me trail it a little bit more just to save some extra couple hundred dollars, which is not to be disgusted. But let's see if buyers actually take control, because for now this is 3,000 contracts is not impressive yet. There's a big buyer here that I see from the footprint, but I don't see from MBO. Okay, now we're talking. Now we're talking. 3.5 could be, could be the moment where we see buyers taking control. But not yet. Again, imbalance level, sellers protecting. Uh, let me give some room for price to breathe because I'm not, I'm not still convinced that this is a now or never type of situation. I prefer to exit manually when, when I see Because yes, this is a strong low, but compared to the rest of the volume, we're still in a consolidative area. We still have some chances to get here. So in this case, I'd rather be a little bit more greedy, avoid being spiked out by these short-term, very fast auctions that lead to nothing. See, again, 3,000 contracts, not impressive. Okay, now we're starting to talk. See if there's any news coming out. No, still order flow, still order flow. No news coming out, so this is not a news-driven order flow. This is short-term stuff. Aggressive sellers already trying to, uh, be active around here. Yes, we can see these, uh, big bubble of sellers. This is a— if the candle closes with a wick with sellers on top, this is called a rejection candle. This is order flow rejection. Again, this is the area where I would expect it to happen because we got big buyers being absorbed here and expect the same big sellers to defend their trades and take the same trades as this is technically premium for them. Premium not based on a price swing. Not based on a Fibonacci premium, based on volume. But we have 5,000 contracts worth of volume. This could be a reversal setup, by the way. We don't have, we don't have many contracts, but we cannot engage, unfortunately. But if this reverses, it could be like if this candle closes short. And we see some nice rejection here. We get buyers absorbed again. Oh, we got stopped out. Really? Was it that close? I thought I put it more up. That's a pity. But let's see. We are running at around $5,000-ish in profit. This could still— I could still rejoin the party here because I see volume, 5,000 contracts, even though it's, it's on the middle of the range. I really, I really don't want that, but the pattern could be there. Let's see. Unfortunately, we did not take target at the expected area, so we, we, we've, we've gambled a couple hundreds, couple thousands. We, we didn't gamble them, we left them on the table. If this is a strong high, I might, I might opt for the reversal and maybe risk a couple hundred dollars here again. If they keep breaking up, we're probably out for today. I was waiting for something to happen like this pattern. I was waiting for it to happen a little bit lower because it's way more common that they will do these type of patterns below some lows than not. Like what happened here, right? I could have engaged early, but I waited for this. I waited for the high to be taken out. Okay, sellers are being aggressive. Let's engage with just 2 contracts. This could be a short-term failed auction. I'm willing to risk a couple hundred dollars to, to be proven wrong. But this was a good, a good momentum ignition. This is the pattern that I've been talking about where they start really fast, but this last few days hasn't been working so greatly. So it's, you know, could be, could be fake, could be all fake, and we're probably gonna get stopped out on this one. Okay, small stop loss, couple hundred dollars lost on this attempt. We're probably going to move higher now. I'm not going to engage anymore in the center of the range. We're close to the top, to be honest, but I'm going to engage on the sell side only if they do this again. Now I'm going to wait because, yeah, last few days have been consistently these false signals. Big sellers engaging and then reversing, spiking you out. And then just consolidating here for the rest of the session and just doing a, a big hell of order flow. Still nothing impressive. 2,000 contracts. They, for now, like, if they start going now, if they really start dropping back inside and they just spiked me out before going, ICT was right. They hunted my stop loss. They clearly hunted my stop loss. Come on, guys, this is obvious, right? Maybe does it mean that my stop loss was too tight? Hm, they hunted it. No, it was right there. You know, price is volatile, so it's going to take it. A smarter idea to engage here would have been let's say a more patient version of the same trade but with a lower risk to reward would have been to wait for this candle to close maybe inside this range. I was a little bit, I was a bit, a little bit early on this trade. For now, this is a strong breakout. Like, for now, this is a breakout, and we can see it also because This is fair value built outside of the previous areas of value, so we might be breaking above. I'm not engaging for the longs because we're right close to the highs, so it's a very risky type of trade, super short term, not the market conditions to do it, so I'm not willing to take the risk. Let's just, let's just imagine it. With a demo, and I'll take this opportunity to show you. We have multiple ideas for, let's say, if you go on Options and Settings, that was the Warzone voice that I typically like, but I might want to put a softer voice. Order submitted. You know, this is the kind of stuff you can only do at DeepCharts. This is the most stupid stuff, right? But it's one of those details that are cute. Order submitted. Yes, let's link them. $2,000 worth of volume. Yeah, I would never open this trade on a real account. Like, it was mostly to show you the sounds. But now, but now if this order— yeah, look at this, bro. $3,000 con. Well, it's a little bit better, but still boring. I like to explain everything with academic precision, but when these things happen and it's like me and Fabio trading, We typically say, yeah, now banks are having lunch. That's our explanation for the drop in volatility you see in the middle of the session. They're clearly at lunch. See, that idea would have been very frustrating to execute because you would trade it, you would put your stop here, but you have— you're in such a consolidative area still. It would have been possibly profitable, though. But this is exactly what I mean when, when, when I talk about auction, right? Most auction was here. Most volume was here. If you have the volume profile, you see this shifting volume being created outside of the previous area of value. Price discovery holding real imbalance. And now again, you can expect it to happen again. Now let's see what's going on now that volume is sort of on the buy side. 2,000, 3,000 contracts, still nothing impressive. I want to engage when I see big numbers, big numbers. I want one big seller got absorbed here. Let's see if we can see it here. If it's not big enough, not big enough. So this trade was closed around here or probably here. Unfortunately, we did not get the pattern that we typically wait for here. Otherwise, this could have been another long idea, but unfortunately did not. It did not show up. And when the edge doesn't show up, We wait. 3,200 contracts worth of volume. We're starting to see more volume engaging exactly here at the top of our distribution. And this is exactly a fractal concept, right? This is exactly the same thing I've explained you now. We had this move up, consolidative, spike below, buy it until here, spike above. We were waiting for another spike here. Didn't happen. Now, what's going to happen here is I either want to fade this again with absorption and volume on the seller side, or if I want to opt for a continuation, just like happened here, right, that it was like this, I want to wait for this to happen. Price accepting above the previous day value because this is, as you remember, the supply area and also above this. So it has to accept and create value and show me that it's not just a phase of price discovery that fails, but the both sides of the auction accepting that as a new fair price. But as you can see now, we're already rejecting from here without giving us clear signals. 2,000 contracts worth of volume. I do not engage. If this was very strong volume, uh, big bubbles, all of that good stuff, big volume, smart money on our side, then I would engage. But I didn't have this chance for now. Let's see if we're going to reach these highs. Now what you could argue now is, well, now it's going to clearly break above? Well, we don't have enough information yet. We don't have news driving any price action. So this is all auction meta orders, long-term stuff. So when can we engage here safely? Not just when we have a big burst in volume, because now I expect volume to keep being lower. Also, time-wise, read the auction. The opening auction is where typically you have in the first hour of the session the most volatility, the most volume, the most money. Why? Because of what I've explained in the episode as well. But I'm going to show you now to give you an extra tip of knowledge. What you typically see happening is— let me take it. I'm going to take a picture for you. It's not because of cycles or some weird conspiracy thing. It's just because of this. This is a very basic scheme of how best execution algorithms from banks engage typically in the markets. And you have several types of Best execution algorithms. You have VWAP, TVWAP, participate, target close, steps, momentum value, hunt, implementation shortfall, blah, blah, blah. These are all based on a 2000, on the paper from the 2000s that I explained, Optimal Execution of Portfolio Transactions by Neil and the other guy. Sorry, other guy. So as you can see, In the VWAP type of volume-driven algorithms that basically take these meta orders, these huge orders from market participants, and gradually pour it into the market, you have VWAP, which is exactly following how volume goes through time, and you have TVWAP, which is a little bit of volume at all times. This is time-based. Then you have Participate, so in the middle of the session And then you have target close. Most of the volatility, most of the volume will be at the open of the session and at the close, you see. And this is because that's how markets typically move. You have the opening auction, the closing auction, and that's where most money is traded. Okay, we've reached the high and we've taken it out already. Let's see what's happening from the order flow perspective. 3,100 contracts. That's better. We still are in buyer's domination. I'm going to have our execution venue here just in case. And for now, we'll just wait until we get a clear signal. Otherwise, we won't engage. See, it could have been worth it to let this trade run, right? But I managed through order flow to exit at the right time, re-enter at the right time, and take these scalps that otherwise would, would, you know, this helped me recovering my loss and being at a huge net profit, like much better. If I only let this run now, we would probably be still around breakeven. So I'm really happy about how managed it and how I was able to kind of adapt in real time. And I'm glad that you guys got to see this, you know, this type of session, because it's not just about order flow and strategy. It's about how to adapt. It's, I think it's a very, very good educational session. And it's all in real time. It's all with a real account. It's all real time connected stuff. Live trading. It's the first one we've recorded. So there's no cherry picking. So I'm very glad this happened. Okay, see, also, uh, this trail stop was a good chance, was a good, uh, decision. Okay, we got sellers starting to engage, but still nothing impressive. 1,600 contracts is not what I'm looking for. I can see some absorbed traders here, but it's not much. But the area is good. Okay, now we're seeing 2,000 contracts. That's better. I might get in with one contract for now because this is not the complete pattern. I'm okay to get stopped out on one contract because we have an aggressive seller here, and maybe add if I see more confirmation. But for now, I'm, I'm not so confident, so I'm going to lower my size. So what I'm doing now is I see the setup on an auction market theory level is there, a failed auction and reversal. But what the pattern that gives me the best confirmation for entry is absorption at the top, which happened a little bit, just a little, just a tiny little bit. But you see, still trade profitable. I can already put it at breakeven. $300 is not much, but Uh, that's how risk goes today. Protection is king. And again, we get a great initiative, 3,400 contracts. Let's draw it also here. By the way, I do these live sessions, uh, also on YouTube. In my channel. I don't know if Arisa is going to get angry if I promote my channel a little bit, but I do this live both on DeepCharts, uh, once a week, and once a week on my YouTube channel, just in case if you want to keep watching this type of content. So we've engaged at 7325, 7325. 5. It's a little bit lower than this. 7325. Stop can be above the big trade in this case, or the absorption we saw here before, which is 6776. Yeah, that's pretty much right. We're already at breakeven and We could keep engaging if it gives a test on these imbalances. This is the cluster of imbalance that I want to hold. I would expect this time that we're going to actually take out these lows and approach this level instead. Unlike before, unfortunately with a little bit lower size because we didn't have all of our confirmation. But again, you cannot trade perfectly. With the benefit of hindsight, uh, this could have been traded much better. But you know, we're live trading, we're not backtesting and showing you past data and saying, see, you should have done this. Yeah, whatever. Okay, still not a lot of volume. I might increase the exposure if we get here. Let's see, 1,600 contracts. It's okay, we can sell another contract. What a bad feel though I get with Charles. I think there's maybe a delay in the connection. 3,000, could be, could be a stop. Oops, I didn't even make it in time. 4,000. Let me put my other trade as a stop. That's unfortunate. The beauty of being live. But 4,000 contracts isn't good. We're likely, we're likely going to get stopped out on this one, and I'm okay to take the stop. Okay. Yeah, we got 4,000 contracts. I, I don't wish to engage anymore, so we might be breaking above because we had 3,000 contracts worth of volume inside, then 4,000 contracts worth of volume on the aggressive buying side. Too much mixed signals. Unfortunately, this is how these few days are going. So I'd rather not take a trade, accept a small loss, and wait until I have clearer confirmation. We've again risked, what, a couple hundred dollars? Again, we're still widely in profit, and we're likely going to either wait this setup to form out on the bottom or engage when there is considerable volatility in volume. Because for now it's just like, look at this, bro. Like, it's not easy to trade this type of market behavior and environment. Like, it's completely consolidated. Consolidation, consolidation, consolidation. It's not easy to trade. So the only way I can trade this, as I've expected a directional session at the beginning, but it wasn't delivered, then I just need to switch approach and, you know, be very patient for the day. That's, that's, that's all I can do. And only evaluate the best setups. Let's delete some tools.

Clear.

Could have been a good trade. Yeah, do I care? Not much. I mean, this could go to target, but the win rate of this setup, by analyzing my trade, this was basically a breakeven. I prefer to stay at breakeven than engaging in an unclear setup. We didn't have an absorbed buyer here. Uh, right after the break back in, we had more volume on the upside. So I'm happy to be out of this trade even if it goes to take profit because I'm following my rules, I'm following my principles for a good trading setup. So now we're gonna see, now we're gonna just wait again. No, apparently we were good at taking breakeven. Yes, exactly. More aggressive sellers starting to kick in now. So this was a breakeven slash a small loss. Again, aggressive sellers, but not really a lot of absorbed buying. I just played here for— let's just play it here for the science, but I'm not going to risk money on this one again. I want to wait to risk money only if they take with all the confirmations. I'm going to stop engaging on these setups now. Order submitted. Order submitted. And as you can see, 3,000 contracts worth of volume, 2,000 contracts. It's just— it's whatever, you know, not convincing. I don't believe this sell auction, not because I'm looking at a candle rejecting but because I see from volume that there's no will to push lower. Okay, now we're starting to see some aggression. We got 1,700 contracts, not much, but at least I see some imbalance going on. And now we probably going to reach the target. As you guys see, I'm playing it a little bit safer today because last few sessions I engaged in a lot of these instances where order flow was not as clear and, and it didn't go so well as you saw from my performance report. Um, but today I'm— if, if I want to, let's say, still express my edge and still see how it would have performed if I opened it, I like to place some demo trades just to see. This is my, my way of, you know, uh, getting rid of revenge trading and FOMO. Opening it on a demo still gives me the dopamine of, see, I would have been right. But at the same time, because I'm not willing to be proven wrong and risk money and put the money where my mouth is on this setup, I just do it on a demo. So it's a safe way to kind of get rid of the emotions for me. That's how I like to do it normally. I do this as well in a lot of my days. Well, in this case, even though there was less volume, the move still happened. You know, doesn't happen very often, so I'm not gonna, I'm not gonna bet my money on this, even though it was a setup that kind of follows the, the parameters in general. The only thing that was not there, which is the thing that I'm mostly waiting for, is the money. This was more of a price action setup than, than an order flow setup. Because you just waited for a bounce out from a support, from a resistance, let's say. But still with some good timing, right? And this is the cool thing about order flow. Whatever type of strategy you might use, order flow can help you with timing the entry better, with, you know, improving your overall performance in general. But it's good that today we're in profit on the real account, we're profit on the demo account. So, so it's all good, it's all good. See, rejecting again. They didn't reach our target yet. So frustrating. This is consolidative auction at its best, at its finest. Let's wait now and see if anything is going to happen below this low, or if it's just going to stay inside of this range for the entire of the day and we're just going to be very bored. Like, look at this. This is, this is literally London session volume. And every time we get at this point of the day, the last two sessions been always like this: breaking out the opening range once, faking it, breaking out officially, consolidating for the entire session, and then giving a last burst of volatility at the end of the session. So now I'm not so willing to engage. Let's see if we're going to be able to get a decisive move in the next 45 minutes that I have still the podcast studio. Otherwise, that's it for today, I guess. Because I've been here for 4 hours already. Yeah. It's been a long session. Probably this video is going to be so long. See, fast move up, typical momentum ignition. Typically I would buy here on a normal day, but as it's been behaving for the last few days, I cannot consider this a good enough trigger. Because fast price action in these few days doesn't mean continuation. It mostly means reversals. Exactly. Recovered all of that inefficient, let's say, order filling because of a lack of inventory for market makers. That's, that's all these last few sessions have been like. We have some liquidity right below here, which could have been our target, right? The target we were seeing before as well. So this is— this might be where we're heading. But when you have low volume typically you have less direction. So I don't have— if I don't have money on my side, I'm okay with staying out. I wish we could just, you know, finish this session with one last beautiful trade, but unlikely to happen. Also no news for now. It's been silent for a while, and when no news comes, typically volatility gets low, and then on the last part of the day you start seeing stuff again. Look at this choppiness. Unbearable. Uh, let's recap and let's also show the trades we took today. So we go here, let's make some form of recap, apply. These were the trades we took today. Um, we might take one last trade below these low if we fail to auction any lower. It's going to be our last trade for today, but we got, uh, still decently selective. We timed perfectly some highs, some lows. We timed perfectly the reversal of the session. So I'm pretty, I'm pretty happy about how today, uh, how today went and how today unfolded. We're closing for now at $4,000 worth of profit, which is not much. I partly recovered some of the drawdown that I've been experiencing in the last few sessions. This could have been a setup if there were volume, but again, 2,700 contracts doesn't impress me. We have more lows here and we probably still didn't reach the liquidity level, which is at 6750, which is exactly here. So let's see, that's where I might be willing to engage once more. See, this is going to be reabsorbed now. Like, I I could even do this, you know, and do these super short-term trades because it's very likely reabsorbing this. But is it worth putting money on the line? Meh, super short-term stuff. I wouldn't—

there you go.

I wouldn't even get filled on Charles Schwab at this speed. Only DeepCharts has this speed because it has a proper data feed. But for some reason, the feeling in Charles lately has been a little bit laggy. But see, that's what I meant. You basically wait for a spike in a low volatility environment, low volume environment, low liquidity. The path of least resistance is going to be back. But this is a pattern that it's not easy to execute. You need to stay in front of the chart. You need to wait for it. It's a classic stop run type of setup. It's very short term. Not wise to put a stop loss at that point, but just have a mental stop loss because it could spike you out and then reverse. Okay, we got some aggressive selling going on. It got absorbed. Okay, see, this is again the same pattern that now it's going to reabsorb. Yeah. Yeah. Once you start seeing these patterns, then you can also start executing them. But just seeing them, and I've been seeing these patterns happening in the last few days in this completely new market regime, that's not enough to say I have an edge. I need hundreds of samples of data. I need to have seen the thing so many times that I can just execute it with confidence. But I don't have a lot of statistical validation on this for now. It's just discretion. It's just short-term pattern recognition. And, you know, doesn't always, you know, it lasts. These are the types of edge that only last for some specific periods of time in low liquidity regime, in low inventory regimes. And, you know, it's not a sustainable edge that you can just, you know, trade for every type of market environment. Right. See, the only type of— the only way you can make money in these type of situations is just to have some clear pattern and some strategy for consolidative environments. And my strategy here did not tell me to enter, so I'm gonna abide to my rules because again, it's the same idea, right? It's the same concept. If you draw a volume profile, let's, um, actually let's create, let's create a duplicate of this chart. And let's now delete the drawing tools. Now, if you draw a volume profile of the last impulse, you can just draw it like this, or even better, we have an indicator called Deep Swing profile, deep profile swing. And if you set it at highest lowest, uh, cut this last part, please. I not do have time to set it up now. So if you trace, for example, a volume profile of this entire price distribution, you'll see that this is the value area high, our supply zone, and this is our value area low, which is our demand zone. The only type of trading that makes sense in this type of environment where we have low volatility, low volume is exactly what we've done today. So waiting for absorptions, absorptions, and try to fade them to the other side of the value area. Same thing we've tried over here, even though we got break, break evened out. And, you know, we missed some setups below here. The point is typically, and again, we're in a different type of market regime. But typically what you'll see happening is price slightly going outside of these, having a burst of volume activity that it's just temporary, absorbing some big sellers, some big buyers, and reversing back to the mean. Same thing up here. That's what I was waiting for. But unfortunately, these setups did not show up, so they didn't give me the confidence to execute. And I'm not talking about some abstract form of confidence. I'm talking about statistical confidence. Now the last few candles have been a little bit more participative. 3,000 contracts, still nothing impressive. Um, so we'll wait again, but now we at least took these lows. And nothing happened. Literally nothing happened below those lows. It was just some contracts being traded, but nothing huge. I want to see big participation, big bubbles, big sellers. And again, we can try it for the science, but order filled, order submitted. We're just going to, we're just going to do it like this for today because I don't have my big bubble confirmation. That's the— I'm still going to respect that rule. All of these were profitable trades, so it would still— it would still be, uh, like these trades in a demo that we took were profitable. Yes. Do I care that I didn't take them? No, because as of now in this high volatility environment, I want to take as less risky setup as possible, protect my capital, get out of drawdown, and then, you know, when, when situation— when, when market environment start being more somewhat predictable, or at least, you know, the signals are having a follow-through, then I might start taking these type of setups again. Order submitted. But see here, this is more of an exhaustion type of setup, not an absorption type of setup. And exhaustions are much harder to predict than absorptions because you never know if it— if the exhaustion has actually exhausted and if it's finished. An absorption, you can tell, but an exhaustion in volume, it just means that volume is lower and the move is done and they're not willing to sell anymore. But how, how can you know? Okay. Confidently, only if you have a very strong bullish momentum after. And this is not strong. This is 2,000 contracts. It's, it's not enough to risk my real money in for now. But at least we have something to take a look at, you know what I mean? Otherwise it would have been a very boring session without these quick demo trades idea. Okay, yeah, this, this setup, for example, would have been a loss. And I'm glad we didn't take it because as I told you, these setups are way less win rate because we don't have the bubble confirmation, which is just a very simple basic word for you, you know, beginners at order flow. We call it the bubble, right? Because you want to make it simple, but it's nothing more than participation, institutional activities, big traders, smart money. Now we might have Some interesting auction volume is starting to rise. Big sellers are taking control. Yes, that's what I want to see. 3,700, 4,000 contracts. Let's see if it's just order flow or it's just news. We have some news, but this got out 10 minutes ago, so this is not it. This could be still reversed. Uh, I'm going to try and fade this as soon as I have some extra confirmation. But why is my— oh, let's see. 4,000 contracts worth of volume is a good amount, but for now it's just Sellers in control. It's, it's— I have no clear sign of absorption yet. This is still control from sellers. I want to see a clear rejection, or at least some signs of a beginning of a rejection. In that case, I will engage with 2 contracts. Okay, let's engage. Little bit aggressive, but It's the last trade of the session, so at least we, we do something. It's not a, it's not a perfect setup, but I can risk a couple hundred dollars on this one. And if I get stopped out and it gives me another entry, I can also re-engage. I'm okay with being a little early and maybe get a little stop loss, a couple hundred dollars, because the risk to reward is very high. Seems like we get stopped out. Yep, still nothing, but volume decreasing on the way down. This is, this is a signal. I'm still willing to take this buy. Let's give it another chance. Again, we're trying an exhaustion now, but at least So we don't have the absorption, right? I was waiting for sellers to be absorbed here. We don't have it. The reason I'm still engaging is because we failed— we, we started an auction below. I'm aiming at this at being a failed auction because after big volume, I see an exhaustion in volume, a dry up in volume, no follow-up. So it can still be a potentially a trade, even though a little bit less likely, because again Absorption is, you know, the best, the best of the best for these type of reversal, short-term reversal setups. Sellers still very active. I'm going to wait for buyers to take control because for now we didn't have any confirmation for that. We've, you know, we've risked a couple hundred dollars more. We're $3,500 in profit for the session, so I can still risk some of the profit that I've made for today. For the setup. But I want to see a more clear control of buyers now. No, we got still sellers in control. Let's see what's going to happen below here. But this could also be a definitive breakout. Like, I'm also open to the idea that this might not return into balance, but this could be the price discovery we've been waiting for the entire session. And we could continue lower for the rest of the day. That's also an option I'm evaluating, even though the volume is not great in this continuation. There's just been a spike of volume in the breakout and then some form of dry up, but now they're starting to, to engage a little bit more. Let's see, let's see. I want to stay open-minded for the next few minutes, but yeah, they've been aggressive below the low, which is something typical. And also not a lot of volume. Still 2,000 contracts is not much. 3,000 contracts, that's better, but still on a low. Some small momentum from buyers trying to, trying to buy, but still nothing. Very little volume. Yeah, we've broken out of this range. We have a full candle accepting below, not a lot of volume, but at least some increase in volume, as you can see from here. Okay, wait, buyers are getting a little aggressive now. Let's see. Okay, we got some volume. This is the last trade I'm going to trade for today, guys. Uh, if it reverses from here, it's very likely that we're gonna have a bearish session instead, and maybe I'll engage on some shorts later, but I think for today that's, that's all. Our target can be— we can probably put a breakeven already when we hit the value area low. So we could potentially put a breakeven here. Let's, let's have it. So when we reach this level, we can put a breakeven. The target is again at least the point of control of this. Stop loss is below here. Soon we're going to put a breakeven. This is our last chance for today. Point of control, yes, is exactly there. Our time at the podcast is also finishing, so I'm not sure I'm going to be able to show you the target, but you can also get back into the charts and see what happened here exactly at 12:45, uh, PM Eastern Standard Time on March 6th. As you can see, we're also connected So it's all so real time, if that wasn't clear. Okay, we're close to putting our trade at breakeven, and then these buyers are going to have to deal with these guys over here. Yeah, exactly. Imbalance cluster. Already rejecting. If, if they dominate, I'm okay to take a breakeven on this one. Supply. If I see crazy aggressiveness from sellers, I might just exit the trade and not even care for a second. But I need to see some clear, like, strong, strong aggression, not 200 volumes, like way more than this. But let's keep it here just in case. I'm ready to flatten my position in case that happens, because as we've broken with a full candle and spent some time below here, this could mean fair value outside of fair value, which means continuation. And I do not want to be in that trade in case that's the case. Sorry for the warplay. But if they manage to break this, this imbalance, it means that, you know, we could still approach and re-engage into fair value and potentially reach the target. Otherwise, if we break back, I'm not sure. If we break back here, maybe the initial bias I've had for today is potentially good. But, you know, I see from the option market a lot of big traders betting on price staying inside of the range. So, so, yeah. Not so confident in the long term, like in a full directional day today. Okay, we got aggressive sellers starting to reject a little bit in this exact area, but buyers are now taking control and pushing the auction up and up. So these sellers might, will, might, will, might have to, will, may have to protect themselves. And liquidate their positions. That's another sniper entry right there, guys. That's good. Um, at this point, I might see sellers getting aggressive a little bit again as we're right where we broke out. So this imbalance might still hold, and actually it's probably more correct to draw it including these ones as well. This is the breakout imbalance, so I would like this area to be broken out. So if we broke inside, then, then I might be confident that we reached the other side. But for now, we could see some rejection, even though I'm not— I'm, I'm positive we'll not see some strong rejection here. Let's see if we have something on the big trades. No, today— see, today we had no big trades here. Um, we, we traded an exhaustion that was much more higher probability, higher in probability than these exhaustions over here because we had, you know, a stronger failed auction. We went even more lower where sellers get absorbed before. So, you know, it was, it was a much better— yes, okay, uh, we've broken out of the imbalance with strength, with volume. 2,000 contracts, 3,000 contracts almost. A lot of imbalances, 16% delta. Buyers are in control. That's good. Let's put our trade to break-even now. We got 3,000 contracts worth of volume on this candle that broke the imbalance, but it's temporary for now. We have also sellers being aggressive exactly at these areas. We have the other clusters of imbalance here that I didn't draw out, and we're rejecting this area now, and sellers are getting more aggressive now. If they get even more aggressive now, it means this is the test of the value area low that we've just broken and we will continue lower. And I'm willing to take my breakeven and be done for today and eventually considering sell ideas later on. It could be also I could reverse as I've done here at the early stages of the session, I could reverse the idea, but I'm not expecting huge volatility for the rest of the day unless some big news that I cannot predict comes out, and that's not a good strategy for now. So that's all I'm going to do for today. I'll maybe— yeah, yeah, we have 2, 2,400 contracts So we had some sellers that we were expecting. Same guys that broke out represented themselves, and I want to see them fail because this is still 2,300 contracts, is not much. I don't like the fact that I don't see big bubbles. I would love to have seen some big buyers stepping in, for example, in this candle, in this candle, but still not a lot of participation, which leads me to think we're still in a consolidative environment, which is, you know, a bit boring, but you got to do what you got to do. Let's see if from the liquidity side of things we can have some insights. As you see, we've successfully reached the level of liquidity we were monitoring before. We've took all of this liquidity out, 1, 2, 3 levels, and now another potential target will likely appear on the upper end of the range. But for now, we don't have clear liquidity areas to target. Not a lot of volume going on on the sell side, on this side of the auction. If we break up here with strength, I'm— we're likely going to go to take profit. Uh, let's see where we open the trade exactly so we can place our position properly. 67.45. So it's somewhere around here. We've already had close with the rejection on the 5 minutes. Not a good sign, but still very low volume, very low volume. I'm gonna, I'm gonna just give it a little bit of room to breathe because I don't want to get spiked out by short-term stuff. And I eventually will close manually if I see some strength in the volume side. And if I see strong seller really engaging with a lot of volume, I'm going to get out manually. Way better than getting spiked out just to see price reversing. I hate that. I really hate that. Okay, buyers slowly getting control. I'm still not confident. 1,800 contracts doesn't impress me. Could still be completely reabsorbed. I wish there were some big buyers joining the party, some big bubbles, you know. This is why I don't like exhaustion type of trades, because, you know, you never really have that, that, you know, confident data point that money's on your side, right? You're just, you're just opting for a mean reverting setup without, without the best possible confirmations. And as we can see here as well, this cluster of 5 imbalances all at the same time without any retracement, without any bid— sorry, without any ask being traded, is what's holding now price. They didn't really manage to break through this yet. Aggressive sellers slowly taking control, but still nothing. 1,700 contracts where the volume is nothing. Two rejections for now on the same area, so these sellers are still dominating the auction. If they get active again, I might reverse the trade, but for now For now, that's it. 1,700 contracts doesn't impress me yet. Super fast move up, as you can see. It's going to be reversed, probably. Yeah. Very boring situations to be in. Okay, we got some aggression now. Buyers got a little more serious in this small auction. But yeah, you can see volume increasing, 2.3. But we want to see this to be a strong move up, not just— we, as you can see, it's always the balance between order flow and price action. Okay, we got probably some momentum ignition here. Let's see if there, there's some bubbles. No, still nothing. Okay, that's what I'm talking about. That's better. 2,500 contracts breaking back in the volume area. Let's see if we can manage to keep this auction like this and the candle, uh, keeping the break inside of the area for the next 3, 4, 3, 4 minutes. But as I see volume getting back inside of the auction, so 4,300 contracts worth of volume in the break back in, it's really good. So now that I see 4,000 contracts worth of volume on the break back in, I'm confident we will reach again the highs So I can even trail my stop loss likely below here and let the trade run until at least the other side of the value area. Again, as it was the target for the entire day, or even be— if, as you know, now we're approaching the power hour, I could evaluate letting the trade run a little bit further, maybe leave one contract running just for the sake of it, but just having this is, is already more than enough. The next candle is already decently participated, 3,100 contracts worth of volume, um, which is good. And it's a, it's a decisional candle. And as you've seen, as soon as we broken out of this, like, we had to push really hard to break this. We tried once, couldn't. Tried again, couldn't. And now we What we needed to break this was exactly this: 4,300 contracts worth of volume on the upside, huge imbalances from the buy side right here. I'd like this imbalance not to be disturbed any longer and hold our trade for the rest of the session. I have 30 more minutes here in the podcast studio. Let's see if they're going to get, you know, to our target on time, or we're going to just have to wait. But this is, you know, this is the last trade for today. Worst case scenario, it's a break-even or maybe a trail stop below here, somewhere around there. Yeah, so worst case scenario, we close the day at $3,000-ish worth of profit. Best case scenario, uh, let's see, let's see the projection of this. Let's go into settings. Fixed contract size, 3 contracts. No, we're in with 2, right? Yes, we're in with 2 contracts. Give okay, save. And this would lead us to a profit of around $3,000-ish. So we might close the day at $5K. But again, one more rejection. What a boring day. What a boring day, but still 1,700 contracts going to be reabsorbed very soon. Not a lot of volume on the way down, so I'm okay. Let me just again just leave it at break even for now, not trail it. I don't want to get spiked out in the middle of this because as you can see, there's a lot of quick, fast movements that then get reabsorbed very quickly. But one more rejection after these— like, I would like no candle to close below this. Still nothing to be worried about. 2,000 contract is fine. But if they get more aggressive and they fail again, because you see, they failed again here, they rejected. We're not ready yet to consider this fair value again. Even though this is a good sign, you know, in these type of market environments, you're never 100% sure. You can just follow the money as much as possible and react in real time and adapt the strategy. As we've seen, I'm not getting excited about this candle yet. Uh, let's see from the execution, we can maybe now trail it. See, didn't get, didn't get excited about it. There you go. And as you can see, as I have been exposed a lot to order flow, even in the noise, I know where to, when to get excited and when to not get excited by looking at the overall volume. But sometimes beginners, as they will approach footprint charts on the 1-minute time frame. They will get very emotional about short-term price action and short-term price movement. And all of this can lead to an overflow of information and an overload on informa— of information. So as a beginner, just using the bubbles, just using the candles and the bubbles and the volume, it's more than enough. This is more experienced stuff. It's going to get you a little bit of time to get used to a really short-term, fast action. And this is like on a scalping level. So if you're stepping into— if you're just stepping into order flow, you're making your first steps, you're taking your first steps, I would advise you to just keep it simple as much as possible because it's more information, right? And experience tells you how you're going to filter that information out through discretion and through experience. And through pattern recognition. Um, so doing it with something more simple, something more, let's say, easy to understand, like bubbles, big bubbles, much better to start. Really, really much better to start. This is our stop around here. Um, so our initial idea for the target is this area over here, $67.70 more or less. Already here, if I start seeing some intensive auction on the, on the, on the bid, I might trail the stop already. This is area number 1, but I'm pretty confident we're gonna reach even as much as $67.80 as we've done the last flush below these lows. Can still be potentially valid and potentially have another spike above here and then get rejected again on this area, which is the dominance from sellers. And if we really want it, even though I, I'm not— I wouldn't be so confident, but if we expect, for example, the last part of the session to be more volatile then the protection level is what the IVB model, um, which is, you know, the, the projection, the statistical projection for opening range breakouts, uh, could lead us to, let's say, evaluate another target to. But yeah, as we've been consolidating for the rest of the session, I'm not gonna have— I'm not gonna presume or have the audacity to assume that we're gonna 100% breakout from here. I don't know yet. I will have to evaluate based on new information. In a similar fashion with— it's very similar to Bayesian probability. I'm not sure you're familiar with what Bayesian probability is, but it's basically a type of probability that keeps taking into account to, let's say, do some projection, some, let's say, some probability projection of the chances of something happening in the future, into the calculus of this, into calculating the probability, they keep considering the new information that is provided and adapting the prediction and let's say the probability of an event happening as you gather new information. And this is the type of philosophy, quote unquote. It's not that mathematical because it's based on discretion, but it's more like the type of discretionary trading that I do is more similar to this Bayesian probability concept. Okay, we're close to reaching the first, uh, target, which is typically the point of control. Let's see how they're going to interact with this. I'm not going to trail my stop loss yet, but I'm just going to check. We're now floating $2,000 in profit. We might close the session at $5,000, which is decent. Uh, my best sessions I typically close at, I don't know, $10,000, $12,000. So this is not my best session in terms of, uh, monetary value, but it's still— it was still a decently managed session. It's definitely not one of my best, best, best, absolutely best sessions, but we're gonna keep it real and just, and just upload this as it is. There was a lot of, you know, things that could have been done better, but again, the point of trading and why we're trading live and being transparent is because knowing the reality of trading, knowing that trading is not going to be perfect, is real. We've pierced through the point of control like it was nothing, bro. Like Now we see big buyers engaging. That's good. The auction is still going on. They're still willing to keep buying at higher and higher prices. And that's really good. That's really, really good. We're about to reach the final target. We're now floating at $6,000. That's, that's really good. More buyers engaging in the auction. Let's see if there's any news coming out. Uh, not really. Still order flow, uh, driving meta orders. And we reached our target. Let's get ready to trail. 7,000 contracts worth of volume. It's really good. And we're having a rejection already. I'm gonna flatten the trade, close the position. I might already— I might still look at this. I'm gonna do it. I'm sorry, but this is such a good setup. When you see all of these buyers being absorbed, then you just know it's a now or never type of situation. Big sellers again. Look at this, bro. I'm sorry, I think I might gonna have to extend the podcast again. But this is such a great setup, guys. This is finally happening, you know, it's finally happening. There's a lot of participation, a lot of absorption at the top. This is exactly the area we've been talking about. I know it's gonna get boring, but this is exactly the same setup. Uh, I might add even one more contract. This is the officially last trade for today. Uh, bit aggressive, but whatever. Let's liquidate above here. It's the last trade I'm going to try for today. I promise, Mom, this is the last game. This is the last game for today. So we sell here. You might even be a little bit more generous with the stop loss because otherwise it's just going to spike it slightly. I'm okay to take a little bit bigger risk on this one. Because of the sheer amount of big trades that got absorbed over here. I mean, look at this, bro. Look at this. That's some intense stuff. And if they break above, then we probably— we're probably going to keep going long for the rest of the session, huh? Still, it's still potentially an option. So, but I want to— I want to get stopped out a little bit more above. I want to give some room for price to breathe. Yeah, I'm more than okay to take this risk, but I don't want to get spiked out in the short-term auction like it happened before. So I'm gonna give room to breathe, maybe spike a little bit up here, fail once more, and then the target is again, guess where, right below here. There you go. That's great. Even if it's, you know, even if it's just— it's not gonna go to target, it was already sniped. Like, it's— wow. The precision of order flow always leaves me astounded, flabbergasted. Again, sellers being aggressive now. Let's see if they're gonna hold. 4,000 contracts on the way back inside. Let's fucking go. They might— they— I mean, okay, like, people might say this is not real, but guys, this is— this is literally connected in real time. We've logged in together. I promise it's not AI. Okay. And then we're going to open the brokerage platform one last time to see if these numbers add up, to prove it's 100% legit and real. See, maybe it's a stop loss because these got— these guys got absorbed pretty quickly, to be honest. 5,300 contracts sellers absorbed on the wick. So now this is, this is probably I mean, I don't have enough data to assess this accurately. Yes, but it could still go up. I mean, I would never have expected a bullish session for today because of the macro context, but it is what it is. Let's log in once more into the brokerage platform to see if everything we've showed today is legit, because there's too much faking in this industry. So it's okay to relog in, you know, don't cut here, editors. Log back in, log into Schwab, see if everything is real. As you can see, net liquidity in day trades, $232,000. It's exactly the value we have here. It's the same account. Ending in 642, ending in 642. So it's all legit. I'm going to even update the page once more to make sure we're talking about the right stuff. And regardless of how this trade goes, it was a pleasure to show you some live examples of what order flow can help you with, with timing your trades, with you know, deciding how to manage, how to eventually switch your idea for today. And I hope you found some value in this session outside from the monetary value, outside from everything that is, you know, technical and the snipers and blah, blah, blah. That can be exciting. Uh, just on a very rational level, I hope this gave you value. And if you're ever going to want to, you know, get even deeper than order flow, or let's, let's say, go even deeper with order flow, feel free to, you know, rewatch this video as many times as you need. And let's see if we're going to get stopped out. But we still got absorbed buyers up here. I can still see them. Wrong chart. Right above here, they're still absorbing. Let's see if sellers are going to engage again, this time leading the auction and not getting absorbed. My stop is currently at 6782. Let's see if that's a smart place. Maybe a little bit up. Some rejection. Still, even if this, even if this trade goes to stop loss, we will close the session at $5,000-ish, which is around— what is it? 2% of the account-ish. Yeah, around 2%, which is completely good. Sellers are retaking control and we're running again in profit. It would be cool to close the session at $10,000. We're $7,400 for now. It's a great session, guys. Again, this is not typical. Performance is not guaranteed. Trading is risky. And as you can see, where I just came out of a very bad session where I lost almost $8,000, and now I'm recovering. So again, this is part— this is part of a long-term process. It's one small session as a small landmine the, the brick above the brick above brick, brick, brick, brick to build your equity line through time with. And as you can see, the approach, as it's real money, it's not a prop firm account, is more conservative with risk, more conservative with size. And the goal, the number one goal is protection, protection, protection. It's going to be a slow way down, likely, but pretty confident it's going to happen. Otherwise, I'm happy to take another stop loss here. Oh, we got news coming out. We get news coming out. We're going to see probably some volatility coming in. China is in talks with Boeing to order the— we got some China news. Let's see how market's going to react. But this is, this is sort of bullish for the Boeing company. So let's see how the S&P 500 reacts. We have 6 more minutes in this studio before they kick me out, so let's see if we're going to get stopped out, or otherwise I will, you know, record a last part when I'm home, when I'm back at the hotel, and update you on the last setup. Or you can, you know, just go back into the chart And so let's, let's also draw it. There we have it. So our last trade idea, we had one execution here that was a stop loss. We had one execution here that now was a take profit. And we have one last execution here. Aiming again at these lows that is now floating. And we took a bunch of Rs today. Minus 1, plus 1, probably, then plus 5, plus 1, minus 1, minus 1, plus 5, plus— let's see. So it's a good— it's a good— like, if you actually look at the— not at the money, not at the percentage, but the risk-to-reward ratio, it was a great session. It was a really, really great session considering what we've risked. I think it was— it was— the profit factor for today is great. Let's make a projection. If we reach around here, As a target, yeah, we probably, we're probably going to close it at around $10K for today. 2 contracts. Let's add the calculator. Let's see where we got in. Price $67,7575. So probably somewhere around here, 75, 75. So here, if we reach the targets, it's plus $2,000. We're floating now around $800. So this should lead to around $2,000 in profit. And yeah, we might close at a at a decent profit. I know we're 3 contracts, sorry, this is not 2, it's 3. 3 contracts. Yeah, we could, we could definitely, if, if the target gets reached, we could definitely close at, um, a $10K session, which is between the ranges of my best sessions. Like, my best sessions, as I told you, this is more or less the range. Yeah, the Boeing Company. Exactly. Boeing Company spiked out very aggressively. We're not even at breakeven. I think it's— it could be a good idea to move our stop to entry. So worst case scenario, we close at $6,000 profit.

Oops.

Best case scenario, $10K. Or other case, they're going to kick me out and I'm just going to close the position because otherwise I cannot manage it. And I'm just going to close the trade just like that. At whatever the profit level is. Still sellers in control. Let's see if we have any relevant information from liquidity. Not much other than— let's zoom in a little. We could reach 67.50s again. But we've just closed some liquidity below here, so we could close the session at $8K. It's okay, I could let it run, but I could also say fuck it and close the session like this as they're knocking the door wanting to kick me out of here. Let's see. I'm going to test their patience. I mean, slowly but surely, we're going to probably reach 6750s. Was a very intense session, guys. A lot of trades happened today. 3,000. Yeah, let's just get the hell out. Close it like this. I'm okay with not taking this extra 3K. It's okay for today. They are kicking me out. So it was a pleasure. I hope you guys enjoyed it. My channel should be either tagged on this video or in the description. That's all, and I'll see you in the next one. Ciao.