 Good morning traders and welcome. Happy Monday This is the book map channel. My name is Charles. I run a community called pirate traders We're focused on the ES the NQ and how it moves through the two-way auction process, okay We basically look at the market as a competition between buyers and sellers and How they're interacting with each other who is taking control and how far they can push the market So the way we do that is we look at you know several different pieces of software to give us indications of what we You know what we could understand versus this one you see over here on the left. That is the market profile software It's from a company called window trader But any market profile software is fine And basically what this does is this takes the same information that you have on a candlestick, right? Which is essentially where did the market go? How much time did it spend there and how much volume did it trade? That's the information that's available on a candlestick. It takes that same information And it shows it to you in a three-dimensional form So if you look at the screen over here on the left, you'll see that we're creating these bell-shaped curves These little areas right here Those are really important for understanding the behaviors of the market that is basically the areas where the market is spending the most time and Bringing in the most volume and any area where the market spends a lot of time and Brings in a lot of volume is an area where a lot of business is being had. What does that mean? It means that's an area where the buyers and the sellers are competing with one another to try to win Right, they're playing tug of war One side is trying to outpower the other and that is pretty much how every move happens The market moves to a new location They play tug of war they try to fight to see is there enough buyers to push it up or enough sellers to keep it going down And then it makes its next move So by looking at the the market through market profile software We're able to see where that two-sided trade takes place Okay, on the right side of the screen over here This is the book map software Okay, so what this does is this lets me look at the liquidity in the market This little white line that you see right here is very very important on the right side of that This shows the liquidity that is currently in the order books right here and then this over here on the left is the Liquidity that was there at that particular time So if you look at the colors here in the background where it's darker That's where there is less liquidity meaning less orders sitting there waiting to fill and Where there is you know more color the more and more towards the direction of red So it goes from you know black to blue to white to yellow to red The more and more towards the color red it gets the greater the amount of liquidity Was sitting there So by being able to see Where are the areas that the market spends the most time and brings in the most volume meaning the most trades actually exchange hands and Comparing that to what's happening in the liquidity in the orders that are waiting to fill We can see opportunities Okay, we have support. We have buyers stepping in Okay, we have liquidity above we have a target for them to move to boom We have an opportunity And then lastly we look at the internals which are in the background here. I Will pop these up from time to time in the middle up here top middle We have the breadth the VOLD Then we have on the right the AD SPD or the Advanceers vs. Decliners for the S&P 500 Then we have the tick chart for the NASDAQ and the are sorry for the NICI on the right and the NASDAQ in the middle and Then over here on the left side of the screen I have the SPX and the NDX and I have those up in 15-minute candles because I like to look at the 20 moving average the simple moving average on the 15-minute candles for Just the regular trading hours and that's a good support resistance level. Okay So those are the tools, right? That's everything I look at I got the market internals these give me a look under the hood and what's happening with the stocks, right at the actual market level I've got the book map and the Market profile showing me the orders in the ES and the NQ and where they trade and All of this information kind of gives me a feel For what the market is doing at any particular time if I feel like I understand what the market is doing I will likely know what comes next. That's just experience, right? I've I've traded the market so much I know if I'm seeing support and we have liquidity above or whatever the case may be I've got an opportunity to get long. I've got an opportunity to take profits and that's essentially what trading is So that's what I talk about all day every day as I stream All right, well, let's start because it's Monday morning. It's the beginning of a new week. Let's start with some perspective I like to use Jim Dalton's top-down approach to kind of zoom out We get so focused on what's happening intraday every little move up and down every point That we forget that there is actually an auction process happening on a much longer time frame as well Right there is debate happening Sure right now at this moment at this particular level where we're playing tug-of-war right now and we want to know who wins But there is also a tug-of-war happening on a bigger basis where buyers and sellers are competing So we're gonna start zoomed all the way out on the monthly chart that basically takes all the information from an entire month and Smushes it into a single candle and that helps us to get a really zoomed out perspective on the market There's not gonna be anything, you know that you would get day trade wise out of looking at a monthly chart But it just gives you some perspective as to what is happening So what jumps out at me right away when I look at the monthly chart? Well, we had several years of access to the upside Okay We are clearly now balancing that off We did not balance it off with price Right we didn't pull price all the way back down to test these previous highs over here So that tells us we're balancing it off with time now. This is on the monthly basis So when you say you're balancing with time on the monthly basis, you're talking about over a period of years You are balancing Okay, so that's one perspective. I'm gonna carry forward the market is in balance You're about to hear that word a lot So next let's jump into the weekly basis Okay, so now each candle represents one week's worth of information. What do we see? Well zoomed way out the same thing we saw before it's balance on the weekly basis We are in one big giant balance area right here the market pushed From one end of Balance to the other it tried to break above it could not break out It came back in once it pulled back in came in back test and boom opposite end Right tried to go back up couldn't make it sideways sideways sideways sideways all the way back up Oh test it and now we're reversed back in so all of this is tug-of-war all of this is the market each one of these Weeks the market is playing tug-of-war, but there is also tug-of-war happening over the years right Or over the months in this case So now let's zoom in to the daily and let's take a look here. Well, when we look at the daily chart What do we see? We had a lot of excess to the downside this time big move to the downside Turned around and started heading back did not come back and completely backfill it with price So now we're doing it with time This looks a lot like the monthly chart Inversed the other way around So if I'm looking at the daily chart right now I'm thinking the fact that we could not move all the way up towards the 4460 level Means we need to go sideways down here Okay, we got a pullback So the next question is is this pullback over when is the momentum down or The beginning of the balance up however you want to look at it the support that's going to reverse the market back up Where is that? That is the main focus this morning Okay, so now let me zoom in and take a look at the market on the market profile chart Where I'm seeing where the trade has been taking intraday and what a mess of a market So we had that momentum up Rolled the market over Broke lower came back up back tested that Re-entered a previous balance area and now since Friday. We have been doing nothing But dancing right on top of this balance area low or sorry bounce area high right here at 43 68 So what does that mean? It means this is the current tug-of-war level right here The break of this tug-of-war Will give us a sign of who's winning on the daily tug-of-war, right? Which will give us a sign of who's winning on the weekly tug-of-war Which will give us a sign of who's winning on the monthly time of war tug-of-war, right? You see how this builds how this information builds one on top of the other one on top of the other to give you insights So the way I'm gonna approach my trading this morning is basically like this. I'm gonna assume That the market is just trying to decide how it wants to interact with this area right here around 43 68 I have this marked as a previous balance area high The reason that this area is important is because if this breaks and the market heads lower It is likely to head all the way down to the balance area low. It is likely to head all the way down to around 4275 Okay, so this area acting as support and holding the market up is very important Because a break could lead to a big move In that same regard if this area holds this support Right if this area can hold the support and the market continues higher Well, then we've back tested and we're ready to move higher. So let's zoom back out at that daily chart once again and See if that's our next move Where is that next move up probably going? To test this area up here again, right the 4420s so either way whether the market breaks lower or Breaks higher. It's got quite a move to make once it breaks away from this level Once it gets away from this balance area high around 43 68 So intraday this morning when the market opens. I'm gonna assume just like the overnight did We are gonna play tug of war. We're gonna try to push higher come back down We're gonna try to push lower and come back up and so on and so forth We call that a chop zone So I suspect that for the first half an hour at least if not maybe even the first few hours of the day We're likely to chop inside this zone. We've got resistance at 43 84 from the base of the single prints down on Friday and Then we've got all this support down here from Friday The market spent a lot of time and brought in a lot of volume to create support that was confirmed by being held over the weekend So we have got an excellent location for tug of war While they're chopping it up for the first hour or two today I'm not gonna be looking for trades because I'm just gonna say listen guys. I don't know which way it's gonna break I don't know what's gonna happen next So you guys play tug of war you fight you go up two points and down three points and up five points and down four points and you just keep Drive each other mad, but when we either get above The base of the single prints at 43 84 and I see new buyers up there Or we get below this node right here around Friday's lows We'll call it 43 50 If we get below there and find resistance, then I'll know it's time to party, right? Then I'll know it's time to look for trades Because if it's gonna go higher First we'll get support here and then it will go a lot higher And if it's gonna go lower first we'll get resistance here and then it'll go a lot lower But it will be very choppy in between those two And so that's the the market understanding that I come into the market with this morning All right now the NQ is a little bit messier in terms of balance areas An exactness So I wouldn't be quite as bearish as I would on the ES right because the ES is right on a previous Balance area high where if it breaks lower it would break to the balance area low the NQ is above it right now So you guys haven't even pulled back to back test that bad boy So even if the market broke lower, I'm not sure there'd be a large move to the downside You may just pull back back test this support and go nowhere But I would be just as bullish to the upside that if they get above the overnight high and they find support We're heading back up to test the 15 440s, okay So same thing chop zoned with the overnight range The overnight high is the area that we're looking to get above and stay above If they can do that the move is to head up higher towards the 15 440s If they get below the overnight low, I would look at it very differently It would be a monitor for continuation situation where first I would say can they find resistance Right in here around, you know five one hundred fifteen one hundred if so, can they test Friday's low at 15060 If so, do they get new selling there? Do they turn that into resistance if so can they test? We'll just call it fifteen hundred Right if so, do we get a balance there or not now if all those things happen if we push below This node and we get resistance. We push below the overnight low We get resistance We push back into the previous balance and we continue to trade down there Then I'd get ready to party then I get ready for that big move to the downside below fifteen hundred Okay, so that's the ES and the NQ and the two-way auction process for this morning Any questions hit me in the chat. Good morning to Keith Bust a move in the house Michael. Good morning to you. Oh and KT for Your Sunday morning news welcome to you Keith when you get a chance can you explain how your tick chart? How you use your tick chart? What is the data? How do you read it? What does it mean? How do you pay for it? Thanks. Yeah, no problem So the market internals those four from from the background there The breath the advanceers versus declineers and the ticks They are all they should be free with any charting Software you have sometimes they make you pay extra for it But you shouldn't most most brokerages would give it to you for free and Basically, it's just a ticker. So, you know like like a stock ticker VOLD you can do for the advanceers versus declineers either ADD Which is the full market all the stocks being traded or the AD SPD, which is just the stocks in the S&P 500 then for the ticks TICK, that's the nicies ticks and TICK dash Q is the NASDAQs ticks So the symbols might be slightly different depending on what, you know, a brokerage you use and what data you use But it should be something in this range just google it you'll figure it out So what is the tick chart and how do I use it? Well, the TICK is basically measuring the buyers and the sellers at the actual level of the nicie itself, okay so at the exchange level are they buying and selling actual shares of the stocks and the way to read it is as purely a momentum indicator, so you don't look at it like candlesticks, that's you know candlesticks they move in a certain direction to tell you they have momentum That's not necessarily as much the case with the ticks It's really where they interact to that zero line that really matters So you could think of the zero line as being like neutral the zero line is where the The buyers and sellers are the same And no one's winning and from that point from the zero line Whichever way the ticks go that's a piece of information you can use That can tell you who's trying to take control So let's say for example The market is is the ticks are moving higher and the price of the market is moving higher Right and then the ticks get to the zero line and the market is right at say a resistance level, right And then boom those ticks they try to get above and they get smacked right back down below that zero line again That's the market telling you wait a minute They're selling the underlying shares. They're selling resistance So that might be a sign that the resistance is going to come in the futures Right, so it's not a leading indicator It is a lagging indicator, but it's as close to real time as you can get About what momentum is happening in the market So there's two things i'm paying attention to the first is that zero line and where we are in relation to it Are we above it? Or are we below it, right? And then what direction are the candles moving? So if we start below and we move up through it and we keep going up Well, that's very bullish. There's a lot of momentum We got back to the zero line and the buyers took control and they're continuing to bring in more momentum and more momentum That's really bullish Right, but if they come back up to the zero line and they poke above and then they get smacked back down Well, that's less bullish. That's more neutral. We're probably gonna chop Same thing the other direction So it's just kind of a way to understand momentum Now where you will kill yourself as a trader is if you try to use the internals to enter trades And to make decisions about trades if you're trying to be like, I'm just going to stare at the tick chart And decide whether I want to get long or short based on that You'll go mad. They really only work as a way of To sort of confirm an understanding that you have come to based on price action You always want to start with price action. What is actually happening on the chart? That's the the important information. So how would I use ticks this morning? Well, the market's going to open We're going to head up to test that overnight high, which is also the base of the single prints down From Friday. So we would suspect there is both a magnet to get price there And resistance once it does So there's a pretty high probability. We're going to test that overnight high Okay, so once the market pushed up there, then I'm clicking on the ticks Then boop, I lower this down. I look at the ticks. Where are they right now at this moment? When we're right on that resistance and I'm looking for the information right then and there What's going on? Okay, where are the ticks right now? If I sit and watch the ticks as the market moves up there They might get me bullish Right because they're going above the zero line and they're pushing up and I'm feeling good But then once it gets to the resistance if they get smacked back down That's smack down that move back to the zero line. That's the important move right So that's what I want to watch. So I pretty much ignore the market internals Until something in price action is asking me to to look for a confirmation. Are we getting resistance? Are we getting support? Are we breaking out? Are we failing and pulling back in? Let me look at the internals for a confirmation four minutes to mark it open Good morning to nap Jay Thank god. It's monday. The casino is open. Beep beep beep beep Not yet for three minutes Keith says everyone give charles a thumbs up. I concur keith. Let's get some thumbs up We got 94 people hanging out but only 22 thumbs Only 22 thumbs for charles Good morning mike Nor auto trading in the house caution is here Tom gun. Good to see you What is the best broker? Yeah, no, I don't answer that solid joke um David jean. Good morning to you Any other questions? Let me know Two minutes to mark it open So once again for those of you playing the home game That are just arriving now. I am seeing the overnight range as a chop zone At market open. So my assumption is for the first hour of the day We're going to grind around between 43 50 and 43 85 Okay, we're just going to go up and down and up and down and all over the place and it's going to drive you mad We've got some good strong support right here around 43 66 to 43 71 And some good strong support down here between like 43 50 and 43 58 So the likelihood that the market heads lower is um A slightly less It's a slightly lower probability than that the market will go higher But until we get above 43 84 and find support We just don't know because they could easily poke above and then come right back down And we could easily spend the whole day grinding around in here So we don't think they're going lower not right away. There's a lot of support and there's going to have to be some sideways chop first Um, if they do push down there if they push down below 43 50 And they're finding resistance. Well, hell, yeah, we'll get bearish But until then we just assume sideways chop And we watch that overnight high for support And pretty much the same thing with the nq a little less bearish at the lows because they have not tested their uh bounce area high yet So resistance below, uh 15 100 would look to test 15 0 60 And then look for new sellers there only if I saw new sellers there Would I get bearish for further downside continuation? And the same thing above 15 188 Support above there would be bullish for continuation higher But anything else would just lead to more sideways trade inside the overnight range Market is open Let the chop begin Looking for some chop fest chop it up, baby A little chop fest chop it up now Good morning to pavel Percy psc and shashank Welcome Shawshank says it was a good chop song Thank you Chopping broccoli All right, so here's the test of the overnight high So remember we had a magnet to pull it there because it was the overnight high But now there's resistance there because it was the base of the c singles down So we're looking to get at least one more letter above the uh a here To make a good high and then c does it pull back down into the overnight range? Or can they stay up above the overnight high? Let's see what happens Right now we consider that high weak And when we look at the book map there was an iceberg at that high So that just confirms there's going to be some tug of war here some chop on the overnight high A little incoming bot chop Okay, so they just made a good high So now the question becomes can we stay up here? Can we stay above 43? 83 Or do we pull back down through the opening price? Staying up here and turning this into support would be bullish for continuation higher Failing and pulling back through the opening price would lead to more chop What's it going to be market? What's it going to be? Michael says how much time do I spend in my room? Are you talking about the brigade? So yeah, I've got a membership group called the pirate traders brigade link above Not you can't touch it on the screen, but you could type it in Yeah, if you want to join it's 10 bucks a month I do the first hour every day no matter what I do the first hour live And then the rest of the day I just take it from there if I'm done trading and I don't want to keep going I just stop Um, if I'm kind of in and out, you know, like trading kind of keeping an eye on it I'll jump in and mention things throughout the day But uh, generally it's the first hour for sure and then I take it from there Gino, good morning to you Tom says everybody was kung fu fighting Their moves were fast as lightning I would say that sounds a little bit frightening Them cats was fast as lightning The side gig guru In my my best Terminator voice Chop it chop it now Bring me the chopper It's going down It's going down again Get to the chopper Michael good morning to you Okay, so this is one of those moments. We're above the overnight high Okay, we're starting to spend some time. We're starting to bring in some volume So now i'm looking over at the ticks to see they're above the zero line What's going to happen when they test it? Does it bounce? Or does it push through? I'm also watching those icebergs on the book map I'm recognizing that we are still in one of these bot shenanigan zones Playing tug of war here So I do assume we're going to come back down and test this iceberg at uh, 43 84 At least one more time To test that overnight high for support And we'll see if it can hold shenanigans Oh, yeah Yep, icebergs already stepping in bot shenanigans Busta move says single prince said i'll be back walfir Says sec approved a btci chair spot etf. Are you serious? wait Saying it so That would be bitcoin should bounce Oh, yeah There you go from 26 800 to 28 400 Yeah, so you talk about balance and excess man btc is in white a balance area I would say if they can hold they'll come back down they'll test 2800 if they can hold that I would get bullish at 2800 for a move up towards, you know, the 32s um To test the resistance up here But first I need to see that hold because you are right freaking smack dab in the middle of balance Truly on the bitcoin All right, here we go. Can they hold the overnight high? If they hold it it's bullish for continuation higher if it fails More chop They Hold it. Oh, that's a big no as we pass back through the opening price The chop continues The chop continues So if they were going to go higher this morning What they should have done is exactly what they did Push up above that overnight high Do exactly what they did Come back down and test it for support But instead the tick should have bounced at the zero line and gone back up And the price should not have come back through the opening price So that's just a sign. We need more two-sided trade. There was not enough buyers last time So we dip down we put the market on sale We get some discount shoppers that step in and then we give it another go Yeah, it does feel like we're going to come back for that overnight high So I really trust this support Down here around the overnight low That should hold to come back and test it again Um, so hill says when you say can they hold higher? Meaning the price the candle shouldn't close above. No, no price shouldn't go So it's all about where price goes so when The market comes back down To test that overnight high it can go a little bit below, you know, it can poke down. That's okay But then it needs to immediately come back up and it needs to be doing business above Right the the the back and forth exchange needs to be above there So as soon as they pull below and they start to do the exchange below, which is what we're doing right now It tells us they weren't ready to keep going higher So they need to pull back down now. I don't know how far they'll need to pull back down Maybe they find support here. Maybe here. Maybe here. Maybe here. Maybe here. Maybe here I don't know where they'll find support, but I know they're not ready to keep going higher yet They need to put the market on discount and find those discount shoppers And so you say well, Charles, why does that happen? Why why does it why is it so common that we head to the overnight high or the overnight low? And then whatever happens next Is what happens throughout the day It's because of the overnight traders, right There's a lot of people over the weekend who went long in here from 43 50 to 43 67 There was lots of traders buying they kept buying and buying and buying and buying and buying and buying Now they kept going all the way up to here and they closed for the overnight You know here at the highs So that tells us that most of the participants in the overnight are net long More of them are long Right and we know they're all bullish or they're all long from this area in here down here is where they started They're buying right so when the our market opens and we push above their high All these traders who bought in the overnight their fingers are crossed right at this moment They're like what's going to happen is the us going to take the market higher today or not There that's the question that they're asking themselves And if we the us traders right if we start to step in and we start to buy above that overnight high Well, then these people don't need to take profits. They can stay in their trades The market might go higher all day long. Why would they take profits now, right? So there's there's no profit taking that happens Whereas if we do what we literally just did you go above that overnight high and you pull back down in Well, now all these long participants from the overnight from the weekend They're starting to get a little nervous, right? They're starting to be like oh, shit Is this trade going to work? Is the us going to take the market higher today or not? So slowly but surely they're starting to get squeezed And so we're waiting to find out as they pull back down into this support again Do us market traders step in at those levels? If they do great, then the market keeps going higher. If not, then it gets very bearish below here Because you squeeze all these people plus you convince all these new traders from the regular trading hours to join the short So that's why we get that You know Look above and fail or look above and go at overnight highs or lows Am I just boring you guys out right now? You guys like this dude is such a fucking nerd shut up. Charles about your auction process We get it. We get it. Charles. It's a competition. We get it Jonathan, thank you Speaking of keeping it going Let's keep going with those thumbs up. We got 136 people hanging out only 48 likes Let me know if you like with a thumbs up Thank you guys I wasn't fishing for a compliment. Appreciate it. Any other questions from the chat anything you want to know Got nine minutes left in this stream Are we grind and grind on this overnight high? David v says so to build on what you just said This would mean that most traders will not take profits until the market goes to a level Where they might just break even instead of securing profits Well, it's a psychological thing everyone has a different system for how they take profits But it's just a psychological thing if you got long in here okay when the Regular trading hours gets above the overnight high You want that to be support because that tells you the market's going to keep going higher Now, maybe you're using a trailing stop or maybe you have, you know, your your take profit order at resistance above or whatever You know, however you take profits It's just the idea that if the market's going to keep going higher You want to see new business you want to see American traders regular trading hours traders Getting in to keep it going right you started the momentum. You want to see them keep that momentum going So the more it pulls back down The the more and more of those people are going to panic Now, how will they get out of their trade once they start to panic? They may just let the market come back down and fill their stop order Or they may choose to get out at market just, you know, hit the flat button and get flat up here Right So that's the the important thing is as long as there's support at the overnight high They're still in as soon as it fails that support disappears all these buyers start to disappear So then the next auction so the first auction was to get up there. The next auction is how far down does it go? Do we just squeeze a few a few overnight traders bring in some regular trade regular trades and take another stab Which is what's happening now or do we have to pull all the way back down and test their support? If we have to pull back down and test their support, what happens, right? Do they hold or do they get squeezed? Do new sellers pile on to take it lower or do we run out of steam right in support and turn around and come back up? That's what becomes important Okay, but now we're back above the overnight high. We have the ticks the ticks are holding Okay, we bounce to the zero line and they're above again So we're back to asking the same question we asked before This is round two Ding ding ding can they hold that overnight high? same game If they hold it we get bullish for continuation higher if they fail we assume more chop And we just keep playing this game as long as we must until the buyers take control Either above the overnight high or back down in the support. Nope chop continues Once again, I keep trying to break out to the upside and they keep pulling me back down Okay, so now we're back inside the overnight range. We've shifted the ticks below the zero line So we still have that iceberg above us That is like a magnet that is pulling on price wanting to come back up and test 43 90 once again Okay, it's up there that magnet So if we push back through the opening price now And then come back up and turn what is currently support into resistance That would be bearish So let's see what happens We're not there yet But we're getting close probably right as we print the b period. Yep This is what happens when the market is in balance guys Sometimes it just goes nowhere on important levels. It just grinds and grinds Before it decides they move that iceberg up That's a little bit bullish. Hey and the ticks are holding All right. Well, just as I finished the stream I got a call for you guys. I'm now bullish I'm bullish as long as we can stay above the opening price To head up and test first 43 96 Then 43 or sorry 4405 And then if there's no resistance at either of those levels Then I would look to test the weak references above But we got to stay above the opening price If we pass back through the opening price now It'll be more chop more sideways inside that overnight range But for now it's bullish The buyers are trying to take control And the question is can they hold it? Can they keep holding support at 43 84? And like I said The the call disappears if we pass back through the opening price, then I'm just wrong But for now, I think we're trying to head higher With that, I will say goodbye To the good people of book map And hello to the pirates in the chat If you are in the brigade If you have been willing to risk less than a single point of profit on the es Less than a single tick of profit on the es If you're willing to pay that To hear my insights every morning Then head on over to the private stream And the rest of you will see you next Monday Have a great one everyone. Bye-bye If you're not in the brigade head on over and watch bruce's stream also on the book map channel. Okay. Bye. Thank you very much