 Good morning traders. Welcome to the Traders Lab. I'm Tom B. Streaming live Monday through Friday 11 30 a.m. to 1 p. Eastern Standard Time. This stream is about market mechanics, understanding market behavior as seen through the lens of auction market theory using a tool called the volume profile to integrate the behavior of the market in the intraday developing time frame. Essentially what we are looking to do is use order flow tools for integration in a more micro time frame in alignment with higher time frames to take advantage of potential outside move or larger rotations in the market in order to meet potential risk-reward parameters. This is not trade recommendations. This is strictly for educational purposes. The idea is to help you understand how the market works and how you might integrate that behavior into your current trade plan or potentially use it to align with other tools that you might be using. One of the key components of understanding the auction and how markets operate is that they are not one dimensional but they operate on multiple levels inside of themselves in the fractal nature. In other words what you might consider time is actually fractal. Remember the market is not on the clock. The clock is a human invention. The market is only really subject to open, closed reports or external events that may cause it to reprice. In addition it is shifting contexts in a day. So what might be directional is we've seen this morning at one point can turn rotational and that is actually a different type of behavior to potentially engage in the market. And again this is for educational purposes. We're going to do a brief review of this process. If you're new here, thanks for being here. If you're in YouTube, please you are in a 15 second delay. If you post questions I will attempt to answer all questions that are relevant to the larger group. Thanks Paul. Good to be back. General disclosure. All book map limited materials information and presentations are for educational purposes only and should not be considered specific investment advice or recommendations. Live trading is in simulation demo paper trading mode and strictly for educational purposes. Live trading executed in simulation cannot accurately represent realistic trading performance risk disclosure trading futures equities and digital currencies involves substantial risk of loss that is not suitable for all investors and investor could potentially lose all or more than the initial investment risk capital is money that can be lost without jeopardizing ones. Financial security or lifestyle only risk capital should be used for trading and only those with sufficient risk capital should consider trading past performance is not necessarily indicative of future results. This is not a trade calling room. This is strictly for educational purposes. We look backwards and we look forward. So let's take a look and get caught up. Now yeah I think we'll kind of stick to our format because there's always new visitors or you need a review and the reason I do this is because we learn through repetition and we can get very myopic and what we're trying to do without understanding how or why. If you can get how or why integrated into your thinking you then will be able to potentially get into better alignment with what the market is trying to do and during the day the market's not one size fits all it is actually going through different behaviors if you can separate those behaviors out you might actually be able to integrate your activity with better alignment and again past performance is not indicative of future result auction market theory is simple it's just shopping you go to the store you're participating in an auction if the price is below it let's say we have a retail price and it's a dollar whatever it is and it goes down to 75 cents you perceive a dollar as the retail price but 75 cents a deal you buy more that's what motivates you as a buyer if the price goes back up to a dollar you're still engaged because that's retail you're used to paying it it's a fair price if it goes up to a dollar quarter dollar fifty you may say you know that's just a little too expensive you'll look for an alternative or you just won't buy it that's how the auction works so the price is moving up and down to engage buyers to and then and we're just assuming buyers at the moment if the price goes too high you don't buy it if you sell that product what do you have to do to engage the buyer if the price is too high you have to lower the price so if the market is selling off you are looking for buyers and the market will go as low as it needs to go to attract buyers now to give you an idea how this might work is you'll notice that the market rotates during the day well the auction takes place in all fractals or time frames in fact we just had a short scenario just set up here i'll talk about it after we get past this the volume profile is the representation of how this happens and the reason volume is important is because that shows you where the interest is for example that retail price high volume right buyers and sellers agree and then where we move away from that retail price the market moves around checking prices in all fractals or all time frames and by using a tool like book map which is an order flow tool we can see these micro structures where this actual auction takes place and lots of times the way i try to visualize it mentally and i think it's sometimes important to connect something like trading to things we experience day to day in our lives is if you go to a convenience store there's a lower price that's a sale there's a higher price you won't pay and there's an agreement at a retail price now convenience store doesn't do big volume and let's just say it's a small interaction a short time frame interaction in a convenience store well that has a retail price and it's and what might happen is we can go and shop in that store in a micro structure because it's a convenience store not high volume and see the same behavior of the auction and then if the market moves away it is saying that retail price is unfair and then the buyers and sellers in mass move to a different location that is a somewhat of snapshot psychologically or mentally how you might visualize what's going on in this auction that takes place at all price levels in the developing time frame context is the thing that throws most traders off i think because we can start out one way two sided trade we can break away from it and then have range expansion in other words the market moves directionally then it pauses checks an area rotates a little bit moves away from it that's context and the context changes in all fractals or timeframes it's a recognition of context and the potential changes that i think are really key and where many traders get out of alignment and then unfortunately might have a bad experience book mappings the order flow tool lets us seize the activity of the book where that liquidity is added and pulled algo behavior higher time frame lower time frame interactions and microstructure so i hope you find that useful now i want to show you the higher time frame and this kind of i think will give you a sense of auction market theory and how it works in a higher time frame and i have to tell you it was over years of observation of this that really got me to accept how the market operates before this i was driven more by a shorter term structure classical charting patterns when i'm going back now to the early 80s you know when i first came upon market profile which was time-based because we didn't have volume but it took me a while to kind of get out of my head to be stuck in these little you know the inner day and to look much beyond it so here's what we have and i want to go back this is the recent consolidation we had and if you guys remember this was an inside day that was neutral and we knew with an inside day the possibility exists this is now being a consolidation that we can break up above or below but we also kind of figured you know the lay the land is short so the probability was we would break out to the downside what we don't know is when well here is our breakout and where did we go if anybody remembers 42 15 42 16 was this level this was an important level coming up this was an important level that we tested coming down so this was our check of this level we go up here chop chop this is a consolidation this creates our new retail so you know how a consolidations work it's the shopper oh it's on sale this is too high i'm not going to pay that and what it's doing is as it consolidates this is where the fairest price was in other words retail in this consolidation now you guys know what consolidations are it's two sides and one side's going to throw the towel in well in this consolidation and notice we have this little bar here that closed that checked it the retail and closed above it leaving a tail that's what set this up breakout what do we check this level which is from a consolidation way over here okay check it from above check this body of this candle too low off we go to the next level too high to the and now we consolidate okay creates 42 76 retail too expensive break away now watch here's the big gap start consolidating come back to 4202 come back to i think this is i don't have i can't quite see it let me take a look didn't quite get back to 15 sorry guys gonna run over to another chart 4206 quarter it looks like didn't get back this is saying too high and now you see this now here's another interesting thing this consolidation from over here uh 4122 it was important on the way up it was retail too low remember check check too high boom break check right to 4022 pull back can't quite get there break under 4022 too high you see the behavior big sell-off yesterday a little tries to recover today was either going to be potential squeeze or continuation where does it go now again these are not recommendations this is just a tendency of how an auction behaves 3969 and these this is off of this consolidation currently what is the low of the day anybody 68 half thank you can you guys see this 3969 which was created back here july 22nd i think this is to the just to give you an idea the market comes back to check retail and that's the beauty of the auction it's from july 20th through july 27th is this this was the retail price based on this auction we checked it so i hope you can kind of see there's some there's order what seems to be this order is order any questions on the higher time frame now i have not by the way i have no idea so you think there you know is it going to get here now ever never does it come back here that part i have no clue but i do know this is an eventful day this this one and i know yesterday was kind of a shot you know it may be and i don't know come back in and squeeze that's because i always am thinking you know where's the stop so maybe we can get up and come down but there was some interday activity which i also will go into today to show you kind of how this developed in a couple of trades that based on what we discussed in the trailer lab and their never recommendations are understanding of the auction in ways you might have participated if there's any further questions torlman i'll do my best to answer them if you need technical support you know just reach out to support at bookmap.com and i you know will try to do my best to to get you what you're looking for and remember this is market mechanics it's for educational purposes only now we gotta announce find book map and we'll be good to go okay so i want to show you this morning so i gotta get back to rth open wherever that went 830 central time let me find it because there was the first opportunity in my opinion was right off the open pretty close and i want to show you how it manifests itself now this was posted in the trader lab again i don't call trades uh the idea of the trader labs to help you see behavior and when you see a process that tends to unfold in a somewhat consistent basis i think that's how setups get created and everybody does their own thing and there are examples of these available to anyone you know all you need to do is come to the trader lab there's about 60 pdfs of behaviors that you might be interested in that may give you something to think about you know because it isn't what any individual does it's really what you can mentally get your head around and if you understand how the market works or at least the auction if you accept that the market is an auction and not random what is random is how it might get anywhere you know that we don't know in fact we don't really know anything but what we do know is the possibilities right so let's take a look here now when the market opens right we don't know you know i mean it's like it's like i don't know so but we know a couple of things so the market opens the volume point of control is here now this is called the volume point of control and all this is this is early volume in other words the market opens volume comes in and this tracks where the highest volume is as the developing date you know time frame they call it developing because it's evolving or developing so this is showing us the behavior and the volume and this is called the chart volume profile this is the full day the session volume profile don't let this if you haven't seen this before don't let it bother you it's just volume and the volume profile is the horizontal representation of volume we also can see this in these dots these dots that you see on the screen represent delta so all it is is who's the aggressor in this volume and if it's green it means the buyers are lifting you know they were aggressive here all right and this is our stop indicator this is icebergs you can see the little iceberg thing you know but this is the stops and for me it's very important to observe retail trader behavior and to me most of us who are retail traders are using stops and we use tight stops because we don't have a deep pocket so let's take a look here market opens developing volume point of control you see the volume you know the interaction buyers and sellers and you see it moving higher so this is saying north at the moment and this is in a microstructure 12 stops go off 31 now we make a new high and again i don't know remember i'm not saying i know anything i'm watching the development that's all i got at the moment seven stops go off seven stops 31 and 7 now indicator 101 divergence right now this is not an indicator this is just mbo data which is disseminated by the chicago mercantile exchange cma tags the orders so we can see were they icebergs you know was right here there was iceberg selling well these are buy stops and as you guys know a stop becomes a market order so we can see them but when the market moves higher and we see less buying so these are market orders and no buying above it right that's divergence 101 is everybody tracking okay so this turns out to be the high of the day and remember nobody knows so don't worry about that part who knows right i don't know so now this is the overnight volume point of control what this is saying so you know what it is is this was the retail price in the eth in other words where the highest volume took place for the eth session so this is retail right so here we are we go up all right here's this exhaustion that we're talking about now it changes it aggregates depending but with the beauty of this is i can zoom out and get to see the minutiae and that's and that also shows me the volume right here whatever's on the on the uh screen that's why it's chart volume profile so i can isolate this and i can see this volume now since i'm kind of in the auction thing what the volume is telling me is remember retail and this is in micro so i'm in the microstructure retail exhaustion again i have no clue open was there so let's watch the behavior and this is where i'm looking for a short so i'm watching i'm watching i'm watching again i don't know you know i'm going huh okay now this is important and i supposed to market and of course i didn't do it here you know so you know i have more than one book my umbrella in here so it gets a little chaotic especially on the open because they're marking a lot of levels let me just put this in so i call these variable high volume nodes and all i do is i'm tracking the volume migration and i call this v poc migration in other words you see it it's migrating and and it's very sensitive when the because the volume is just starting up this resets that our th open which is 830 central time so i'm trying to get everybody aligned here so you know okay so we uh v poc moves up here that's represented by this high volume right here see it this is retail this is an auction and it's the buyers and sellers going uh what about this no how about up here so the volume is moving up right so the volume point of control is moving up with the volume then we have a change in behavior now i want you to see it we break away from here break below this that was your micro high volume right here which i had marked this is currently the high which we don't know right is it the high and we break below so that sets up a potential short pullback this is your over under this high volume up here i'm just showing you what we discussed in the trader lab and there's a couple more opportunities let me just show you but let me just show you this okay so think of it like this you're the shopper the shoppers are the buyers and the sellers remember if it's too high you're not going to pay it this was retail in the microstructure now these are not actionable they are informative and that's a different i want you to differentiate that okay because this is how i'm watching the development so here so retail break below test here test there these are retail prices so too low too high marked it break below this is an over under right here i have this now this is minutia not actionable minutia unless you understand it and you're very sensitive to what's going on but let's just watch it too high break below too high too high see it very nuanced watch too high potential shorts watch don't worry about it watch watch too high overnight v poc retail for the eth below it pullback retail retail retail retail you're a shopper what are the shoppers telling us in the auction they're saying too high too high whoop come on a little rusty here can't use a mouse break it moves down so too high too high so this is too high break too high break this is auction so once you can understand what it says i think you have an advantage too high too high too high too high test too high see it too high back to the open too high too high overnight low naked volume point of control by the way this was uh an artifact left behind uh and this is a retail price from a day that was left behind so this means at one point the market said yeah this is uh you know we accept this price and now we're coming down and it's the same concept but this is left behind from a developing from a daily time frame so it has a higher time frame component to it these are interday developing components but the behavior is the same price check okay price check so let's watch then we'll get you caught up try to get into real time now remember 40 15 coming down important we took it out and yesterday's low was aligned with it coincidence not to me now once we get through it v pock migration all this volume now the maximum volume now is here and it is saying we're going potentially lower notice the migration this is telling me that this is potential acceptance okay now there's more uh 40 hundred you notice this right here this is sitting in the book and you'll notice we get a reaction off it so right here you know i'm looking at this i'm going huh that's an interesting place maybe to get out of dodge right so but this is still going down let's look at the behavior watch v pock drops down break off of this back to it price check is it still too expensive yes now we have a statistic i want to show you this one this is called the initial balance the initial balance is the first hour high or low rth it has over 90 probability that either the initial balance high or low in other words first our rth higher low will get taken out during the rth session of course we don't know which one but i'd say today we can kind of guess and that's set first hour is 9 30 my time so that would be here that's the initial balance low back here potential short if it's part of your trade plan and then you have this and since you have over a 90 statistic it's reasonable to think that it might go lower okay this sets up the next target here then this is a the naked volume point of control so let's see what we do now there is another short over here if you have it in your trade plan this one i don't think i i didn't mention in the trader lab this is your target here so i think i've covered the lay of the land and then i want to talk to you about changes in context but before i do i'm going to look at the questions i haven't been able to and it takes me a little time to look at the questions so thanks for your patience and there is a 15 second delay and by the way if you have questions on stocks or options i'm not really someone who can give you good input on that or you know option strategies but there are in book map specific webinars on those products one thing that is important is that all trading is based on the interaction of buyers and sellers in other words it's an auction so these price points and this behavior is generic to all markets now i can say if you're in option strategies queues spies whatever you know or individual stocks they behave the same so this process applies now if you're let's just say and this is not a recommendation i don't you know i don't trade those products now if you're trading queues you might be operating an intermediate time frame you know in other words you might be operating in these higher time frames these micro composite time frames for larger swings or you know you're you're just day trading futures and using the intermediate structures and then aligning inside with more micro structures it's all a function of your time frame and your fractal so all of this is generic so if you can understand the auction i think you've got something over the rest of the crowd who does not because they don't trade with the auction all right so the next area where are the stops now i always think about where i gotta by the way i have to label this here i'm slacken off here so where you guys think stops are in this market anybody have an idea what do you think think like a retail trader don't act like one where would the stops be do you think perhaps maybe you know maybe right maybe anybody right the stops are sitting think about retail traders where do they put their stops above here above the v-wap and above the mid now when we hit this target and again there's no precision in trading you know to me this is a random event with structure so yeah that what's random is if we will get there when we will get there uh how other than that it's orderly right so this auction is orderly the fact that we got here is part of the auction and we might have made the low for the day and or we might not that's not my job you know my job is to try to look at structure and get aligned with it now i want to talk to you about structure because once we got down here you'll notice the behavior changed counter rotation but let's look over here now this once and now the volume point of control is here this is important again this is saying fair price here at the moment retail right up here unfair say down here now here's what is happening this changes the context you'll notice that we've been moving like a bullet train i guess we can agree other than some pauses and consolidations the market's going lower right we all agree down down down down long not part of the deal at least not for me you got to follow your own trade plan i'm not you know my goal is to get in alignment with the higher timeframe but also never forget that retail trader behavior is somewhat consistent and unfortunately statistically not so successful write that down by the way think like a retail trader don't act like one if you have a statistic and remember statistics are important you know um and all statistics are just right probabilities are nothing more than that and you know there are times when you can get if something has a 90 probability uh 10 percent of the time it's not going to work and you're going to go yeah if tom you're brilliant but i'm going to say you know sometimes that 10 percent can show up more than once it can show up twice in a row three times in a row and it does happen that's the thing with statistics so statistically the odds of getting here no idea so you know but this one is pretty good and given the context over a 90 probability past performance not addicted to future results this and now where this stops if we take this one out and now fair is here think about it too low oh it's on sale price check in the big aisle this is like going to those big stores you know the the giant stores you know that have huge volume walmart sam's clubs casco here in the states you know just those big box stores big big ones all right so this is a higher time frame retail so now where the stops here the initial balance low mid v-wops so now we're looking for what a change in the context outside in this is called mean reversion we're no longer directional we are now going into what's called balance that means the market is run out of sellers at the moment and now since this is our retail price too high too low too high too low so now we're going all right and now the market's doing business and for the time being this is where the retail price is okay and you'll see that it started moving back up a little bit i call this v pock migration write that down what this is saying at the moment that this right here might be too low so we need to market we're going to call it a variable high volume node of v hvm that means it's a previous location of where the highest volume is and we want to keep that in mind and now write this down v pock migration what does it mean and how might you react when you see it i'm going to give you what i think and again past performance not addictive future results because everything's random so if this is suggesting too high is and now we move the opposite direction is it saying maybe this is too low if i'm in a short mode mentally and i just want to sell sell sell and i see this what does that say about my idea of getting short does that say maybe caution will robinson warning will robinson pressure think of it as volume pressure where the stops out here on the outside edge so what do we have mid i b v-wap so this becomes an area that i think is very vulnerable to the potential squeezeteria why buy stops so i have to be super cautious and for me i don't get involved here again not a recommendation because if i do get involved i have to remember where the stops are 40 hundred up above here up above the v-wap now it's not that i can't dance in here i can but i have to not forget so 40 was important coming down let me show you this is where you'd be going by the way if you got a short back to retail too high potentially back here and then potentially here so this to me while you might have a plan for this this is called mean reversion by the way i meant the point of me telling you about this is the change in the behavior to balance is outside in so the outside in is remember too high too low right the shopper too high too low oh retail say too high didn't get back there warning will robinson plus shifting up warning will robinson see so this is putting this on the table if you're a short-term trader this is viable here to here remember you're a shopper and you're going this is retail i'm not going to pay that with alignment see the book see the exhaustion see the behavior let me open it up i'm going to show you microstructure i just want you to see how this works once you understand what it says and this is speaking it's a language you can interpret now i'm not suggesting you trigger you got to understand it before you can do anything with it right does this look familiar up exhaustion divergence 101 40 hundred was big liquidity coming down it's in the book isn't that interesting now let me take you into the structure again i gotta open it up for you i hope you're getting something out of this i just because if you can understand how to read the language i think you are way ahead of the pack because most retail traders are in the indicator business they don't understand how the market works they think it's plug and play unfortunately not so much in my humble opinion otherwise we just get that old indicator out we'd plug a few in and we'd go down the basement to collect from the atm right if you think it's that simple i'm going to suggest that you rethink that trading doesn't have to be complicated but it's not plug and play so remember stops are up here outside edge of the consolidation mean reversion is coming back so let's look let me see if i can open this up and show you the minutiae i just want you to see it because remember what we said what is an auction right too high too low and we don't know where but we have some indications here and here so this is alignment risky because of this and that's okay we take risk all the time right right here chop chop you see no buyer up here exhaustion exhaustion exhaustion location vulnerable here's your entry right here see this this here is retail chop chop chop right too low too high too low break away this is a breakout of a micro consolidation and i'm not saying this is something you should do i want you to understand what this represents this is no different than this whole chop chop except it's in a micro structure and book map is allowing us to see where the order flow was we know it was important coming down and the key is not that you can do anything with this this is the tip off the break at location not in the middle of anywhere and the pullback you remember with the vhv ends how i was showing you the pullbacks this is the same thing except it's in micro structure in there is retail this is like your little convenience store low volume not much not a lot of customers they have a retail price too they have a price where they raise the price and you're going there's no chance i'm going to pay that much for a pint of ice cream 10 o'clock on a saturday night and then there's the low price but it breaks away and pulls back to it potential short where to remember i was saying here so let's see what does it do pretty close so what this is saying here is too high in this micro structure there's a high volume area right there break test into the next higher time frame which is this is retail right down here to test got close and where's the stops let's remember here right can you kind of see so write down think like a retail trader don't act like one where's their stops here so now now we want to watch and these are not trade recommendations we're in real time now if you have any questions now's a good time to throw them out there where's the next layer of stops the mid and what's key up here 40 15 so what did we do remember i said v poc migration warning will robinson can you see the pieces and how it speaks is this making some sense i'm going to take a look at your question sorry about that yeah i'm sorry you know guys i just review the es in here i don't do bitcoin or nq i stick with one market just so we have continuity yeah especially with these levels but the behavior in the auction is the same i mean i use the same process on nq when i trade nq but in here since there's all different experience levels i think es is the most generic product and from a volatility point of view from a risk management and again past performance not in dickie future results it's because of its depth it's good and it's rotational so there's a lot of opportunity in it but you can take this and apply it this process of understanding market behavior and apply it to anything so this is retail trader behavior and that's what we use in the trader lab is think like a retail trader don't act like one 569 stops thanks for playing outside edge we're still looking for mean reversion so let's see if we get it and here's the thing with context and this is so important this move from the low down here is not the same behavior once we come off a target we go into something called balance which is mean reversion and that is a different trade plan in my opinion at least that's the way i operate because this is not the same as the bullet train right if you're trading this like the bullet train you may have i think a challenge instead it's a different plan outside in outside in mean reversion too high i'm not paying that and where was the squeeze where did we say retail trader behavior vwap i b right short to where here that's this trade this is a different context remember context right can you guys see the difference in the behavior from what we had earlier and then after we hit this how it changed how the v pock and this is another hint hint hint v pock migration you guys wrote it down right did you notice when we tested back down where did we go here here too low too low too low too low shift pressure warning will robinson right here is the warning check check opposite behavior from what we had before right rotation back to the 40 bang stops which is warning will robinson back different context can you guys see the difference in the context yeah simon i hope to answer your question about why i don't i just stick with the es it's our it's really price i don't i this is very clear to me i mean if you if you read the auction i think this is extremely clear not saying it's right wrong or anything but this is not disorganized to me this is extremely organized behavior from an auction perspective and if you can uh and i mean all traders if you can kind of get the idea what's going on i think you can potentially better navigate it if you have a plan for it and these are different plans in other words i have no idea that this is was on the hip parade today i think i thought it was eventually on the hip parade but eventually has no you know there's no calendar when it comes to the market remember the function of the market is to find a retail price if at this time and this is subject to change always because it's a market this is too low if this is too low and i have vpok migration suggesting at the moment this is too low so i hit a higher time frame vpok intermeet in the developing daily time frame this is too low we can still do anything this is the outside edge mean reversion separate trade plan guys what it is is what i try to do and for me and again it's just me and it's not anything more than the way i think is there's no long for me there would be covering for me if i was into this it's just another target all right which and i wasn't i was long gone which is doesn't matter i just follow a trade plan you know i don't have any oh i should have what if you're having regrets over something the only regret in my opinion you should have ever in trading is not following your trade plan you know i hear traders often saying gee i shoulda well no you should just shoulda follow your plan you know that's the only shoulda you got shoulda let the runner go shoulda this and that is a part of your subconscious or your your fight or flight and fomo mechanism is triggered and you're not recognizing it i think it's more important to recognize those psychological triggers and and the self-talk and if it's destructive self-talk you got as they say put a leash on it anyway i hope that's useful so if you're having that mental process going that doesn't belong in trading that is you know think about that outside if that's how you think whoever you are and we all have those thoughts i'm not saying none of us are unique here nobody is you know we're all the same in the sense of our triggerings uh emotionally and psychologically it's when you recognize the destructiveness of that behavior in trading now you got to deal with it because otherwise you're feeding fomo and you'll become impulsive and you'll go through all kinds of stuff because you'll get those triggers still i get them you know why didn't i have another runner why didn't i have one on and get down to this target down here you know why not it's not in my trade plan uh you know it is in my trade plan but once the train left the station i just have locations to interact and then i have targets and i have no idea you know depending on where we went into balance if it would have happened higher up i would have another you know i'd just be trading towards it i trade towards targets but i have no clue so i'm just telling you me i'm sure there's others are much better at it but um i don't know you know so anyway this this is another short and this is a target and then punt then you manage the trade or you're all out does that make sense i'm just looking at the questions if there aren't any guys so um i'm getting a question do we look for a value area i think you have to look at really the behavior i don't get hung up on you know a lot of us tend to look for certainty you know like here's a line here's this here's a fibonacci number you know something i don't i don't understand why because we're trying to overlay structures on a market that's job is not to look at a structure it's to find a fair price so the market goes as low as it needs to go to attract you the buyer now the buyer can be somebody who's covering right we don't know who it is or is an initiator we don't know uh and for me not so much i can only be a seller because i want to be aligned now i do know we hit a key level down below so what kind of seller do i become well i'm gonna trade my plan because i know i don't know if things get rolling and we take out the low of the day i gotta tell you um you know i'm putting on the flak jacket but at the moment this is my trade there's nothing more back here and then you could be done with it depending you know on your number of contracts and in the trade lab we talk about a memo of two one to get risk neutral and the second one to go to the target so this is our target and then because this is the mean in the mean reversion that's the mean that's the high volume then we can check this which was too low price check in aisle three is what i call these remember the supermarket so right here was too low we checked it here we checked it here we can stop here come back too low or come back here and check this one again so i have no idea you know so for me but this is the main target so i trade targets because i trade auction right this is the auction outside oh i'm not paying that right you're the shopper this is retail well we're in a a market where the sellers are looking for the buyers this is a squeeze so now the weak hands are out what can the market do continue potentially keeping in mind where the low of the day is and that it was significant this is the next level that we left behind potential check here and if it's still too low reverse off of here come back or continue and i don't know what it'll do that's the magic of trading like i don't know so but i here's what i know retail price mean reversion stops we talked about that before it happened i says we think like a retail trader don't act like one and if you didn't write that down please write it down it's an asset if if you accept the market is random and by random not in the auction but in the rotations like this why did we go up here why didn't we do it here that's what i talk when i mentioned random why did we not touch this but get close to it you see why did we come up here between those stops and then why do we get it this time you see those are the things that's where i when i mentioned randomness besides the whole thing is random so you know how it gets there does it get there no clue and i really think it's important to be in a flexible boat where you accept that you don't know see the only thing in my opinion you should need to know is your trade plan and that you have a vetted process to interact with the market what happens after that happens that's just the way it works you know so let's watch this level here right and again no precision this is like horseshoes and hand grenades you know there is no precision in the market and one of the reasons there's no precision is because the stops the momentum that's created like in something like this you see so anyway this is our level here to be watching if this is still too low then back here and then we hang out in here so for me other than what we spoke about earlier in this and potentially that one you know but remember when we talked about this one there was a caveat what was sitting up here right so that's why you need to think like a retail trader you know not act like one and if you are going to act when you know this is above you you have to be you got to be conscious of it you know i always look and think where what is the retail trader behavior and this is what mean reversion is outside in okay this is the high volume this is retail if that's too high and we think it might be back to retail price check and then we're here which was too low but it might check pretty close you know remember no precision so that's it for this so that was that i hope it made sense you know it's not what you know and to me this is workable i can handle this that's 10 points right what do you guys think uh jch is asking me if these naked volume point of control this is these are artifacts left behind from days that we had left behind last time we were up here and they were the retail price and fair price for those days and then we took off to the upside and those were too low well now the auction has determined that they're too high or i'm sorry not low enough and we went just to a higher time frame so i take these off these are toast they're done right but we're still this is all in this range though so but this is what's important this is one of those but in the next higher time frame that's so the behavior is generic when i point out a little micro structure chop chop and it breaks and it checks it in something that's a couple ticks it's the same process as what you're seeing here in the intermediate time frame that is in my opinion the beauty of the auction because once you understand the purpose of the market why it does what it does and you can kind of figure out why we don't always know in fact we never know what it will do but if we understand what it might do and what its purpose is i think we have a real advantage now how you integrate your trade plan how you interact with the market what your triggers are your risk management and all that that's all up to you and your trade plan you know in the trader lab we discuss things like this and i've got over 60 pdfs posted in there of different ideas of how to navigate the market you know behaviorals and then an introductory video was pinned in the trader lab also um on kind of an overview of auction market theory and the mechanics of understanding how the market behaves as it develops during the day and how all these pieces integrate and fit together might be useful um if you have any interest in that by the way the trader lab is a group of traders that say uh and we do discuss auction market theory and how to use uh the volume profile etc by the way those of you who are watching the stream on uh tb2 are you getting any little things jumping up and down over the screen right now little strange little things jumping up and down you are what the heck is that anybody know what that is that's pretty wild i gotta figure out what that is guys i've never seen that before oh it's really nice yeah let's let's do that um i for me on the stop losses uh ryer uh it's structural i gotta put you guys on hold for a minute i gotta see if i can do something about that nonsense that's going on in discord hold on a second yeah i'm sorry about that guys i'm back okay um yeah i don't know what's going on it's on tb2 um and there's just nonsense going on there some all these little emojis or whatever they are jumping up and down so wonderful back to the vhvn okay so now we want to see the behavior here and now we gotta watch this but this is your outside-in-trade mean reversion so guys this is called balance and you can kind of see what it is it's a consolidation and what we did and write this down you gotta look to the left where the stops above this swing where do we go above the vwap took the stops out thanks for playing we have parting gifts for you in the play at home game so now we want to watch so this was a short right so here's how this works you get your short you get a scale if that's your trade plan this is your target or you take a short you take a scale ahead of this feel lucky as dirty harry would say and then you hold a runner down towards the low or ahead of it this is your obstacle here and we're below it is everybody tracking and the other part about the mean reversion that i was mentioning to you guys shorts only for me today now i know there's counter trend traders and i always my hat goes off to them because they help for me because i need them to create the squeeze but that sets me up to get back in alignment so i try to keep it simple you know i'm not someone who says yeah i want to get this little rotation and that if you think that's trading i think you might be a little disappointed at least and again it's only my opinion to me trading is trying to get aligned with the higher time frame who's advancing who is withdrawing who's retreating i would suspect the buyers are retreating wouldn't you would you suspect that the sellers are taking advantage of counter rotations if if you think that's might be what's going on then would you be a seller or would you want to be a buyer what do you think seller i'm with you i want to be a seller rare the ibf is i call it the ib failure and it's specifically a mean reversion setup where we have what's called range extension in other words we take out the first hour low and then we come back in above the initial balance which wherever that was lost it must be under here someplace i think it was here i don't know but it's somewhere around here let me look yeah around 40 even you know so it's right under here this was the first hour and what it is is the market comes back inside and then reverts back but there's a little problem with that because it's not qualified in this context context is down now the ib and taking the stops out is to get real lined for mean reversion v pock is below us that means this is the fair price so if i come to an outside edge remember retail where's too high well if i get buy stops out because we know they're sitting above the vwap in this liquidity potentially and you know in this area if we can squeeze them and there's no follow through then it's mean reversion back here so the ib the ibf has is contextual it is not mechanical so when i know the stops are above the ib but the v pock is below it becomes stop pick or squeeze reversion so this is what context is about guys and when we talk about context and how confusing it can be it's about alignment so for me and it's just my plan i can't get long at all i can only get short until something changes and you guys tell me what has changed anything rare i don't use the composites from the micro composites i'm really more about retail so and they're only 70 percent you know the whole thing about a quote value area it's just a statistical you know it's sort of like it's a 70 ish of the volume in any fractal so i don't use them but i use them only in relation to the previous day so let's just say we open inside the previous day's range and value which means nothing has changed and i anticipate two-sided trade early other than that i don't use them because i'm more interested in what i'm seeing right here because as this day develops it's giving me information the auction is telling me too high too high too low fair and look where we are now there's no precision in this so you know don't get carried away so this was our next area to check and all we did was get below here you know stops are under here stops are under here for the lungs so this is for me is only selling today and it doesn't matter now if it reverses and all of a sudden it's a new day the federal reserve says money for everybody let's get the five helicopters going get your get your laundry basket out the cash catch the cash other than that it's south of the border in my trade plan with the caveats of we hit this now we take it out um you know then uh game on but for me the game right now is outside in it's nothing that's all there is now if it changes it puts the down here on the you know on the map but um you know whether or not that's gonna happen i have no idea we can come down here check it come back we can come down here check it pull back and keep going see that part i don't know but i don't think anybody knows that in fact nobody knows it because it's all random but since i hit my target i my viewpoint at the moment is just rotation balance mean reversion can you guys get a sense and i'm asking this question for everybody what the difference is in the context and how you over might overlay the context which is mean reversion which is balance inside of the directional move can you see how these fractal pieces overlay each other does that make sense michael i don't use tpo's anymore um i mean i did forever but once volume just rep to me is a more accurate viewpoint um but you can i mean there's nothing saying you can't and i mean i just do it at my thing uh but i find the volume since i use it in the microstructures for triggering um it's much more relevant to me to see the retail behavior so i can see it in the volume and with the stop and iceberg indicator and i for me you know the stops help me see inside um it you know and that's all volume based you know so i'm just it's more meaningful for me you know personal preference you know there's no one way you know the thing i get asked a lot you know there's no one way to do this i think there's just a way that you can get wrap your head around that makes sense to you however you interpret it but i suggest it's not an indicator thing it's really more behavioral you know what's the market trying to do i mean what's the purpose of the market you know remember buyers and sellers what's too low let's get a buyer and a buyer in this case can be a short covering remember that it's not somebody who says gee i want to buy the market here i think it's wonderful why would you want to buy the market so for me in the downtrend and if you guys haven't noticed we are in a downtrend if we're in a downtrend then there's no reason to be a buyer there's only selling until it might change now that's me if we have counter trend traders then you know that's up to you i can't operate like that and let me tell you why unless i'm in a different market context where i'm really going to trade two sides which i do in this context i only have short because who's withdrawing who's the army in retreat it's the buyers so counter rotations which are squeezes and stops and whatever else once that's exhausted i want to get back on the train and i want to join the army that's advancing these guys are thrown under the bus hey louis make a counter attack the rest of us are going to get out of here okay and these sellers the longs that are still in the market you know from wherever they're going to use counter rotations to do what to get out so they get become sellers does that make sense why would i want to join the buyers when i know the sellers are going please let me out until it changes does that make sense uh rare the previous day is asking me about value errors yeah it's where it opens for me relative to the rth and also the eth of you know the most current auction is eth prior to this like today's rth open and then where are we relative to the previous rth you know where do we open and then that tells me has something changed you know because that's pretty much how that works you know and today the selling really kicked off real early you know you saw it just had nothing and that's where our first short started not because we're clairvoyant because nobody knows it's because of the auction and what it said with those v pock migrations the return the test and it's doing this on all timeframes you say so let's watch how we're how we do down here this is real interesting isn't it so this was your short target then either you're holding or you're out it's simple and in the trader lab i only discussed two lots because we because if you create a foundation then you go from there you know without a foundation you don't need you don't need more setups you need one that you can explain what i've always figured is the best way to kind of check yourself in the sense of do you really know are you just gambling and guessing is to be able to explain why can you explain why if you can't then you don't have a trade plan because you can't define it so why is really important boy those emoji things are jumping all over whoever came up with that idea i got news for you i'd like to have take them out behind the garage and have a conversation if you know what i mean in the most polite way 46 i can't give you examples now i don't have one but i do know in the stream when those conditions exist you know we talk about them right and there's probably some videos that i've got up on youtube that you guys might be interested in trend day configuration a balanced day configuration it's called inside day they're from a couple weeks ago trend breakout i think and then a multiple time frame video those three could give everybody a pretty good idea of what's what you know they're fairly detailed and especially a trend day configuration how do you operate in the trend configuration this is an example of a trend configuration which is continuation trades when it shifts out of directional to mean reversion it's a different context so i have in my plan basically when i recognize the change in behavior and that was here right here then i'm on guard you know for this and again i don't know you know could have done it here i don't know right so i don't know there to there mean reversion and the reason is we hit a target we came all the way up isn't this a change in behavior down down down down up where's the stops here where's the vpok here that's what mean reversion is back and now we got our stops which is what we were looking for now continuation what i find is you want these guys out if they can get taken out with no buying above then it's just a squeeze and that gives you your opportunity for mean reversion that's that's the context and that's the difference when it changes from jumping out the window to this kind of rotation so when i get this i get this now i'm looking for outside in not complicated guys you just have to recognize the change in behavior indicators you know what are they going to be telling you here what i don't know sell here sell there sell there what sell there which one sell here sell here sell here sell here sell here which one if you understood the context you might be waiting for this or not waiting for a crossover but waiting for the behavior to get short right here right here short indicator cross i don't know where you know hindsight it's always clear but what about this one what about this one you'll see so and this one we talked about right here right but this is the key so i'm just pointing it out okay this no idea this to this yes then to here retail too low got below it shocking isn't it no idea random so now you got to see but that's what this trade is this trade mean reversion is outside back to the mean which is that and then potentially around to the other side this is where oh it's on sale for those time frame traders i'm not paying that retail so now we're in a rotation now it can change we can fall out of this and you know go south but do you see the difference in the behavior outside outside now i have no idea what will happen on this side right i mean nobody knows at least nobody's called me up and said hey tom you know but i do know this side because of the trend being down mean and then outside to somewhere and i have no idea i don't think about it it's not my job i can't predict i can anticipate so i anticipate and what setups are in my opinion are anticipation sorry anticipations of potential isn't that what a setup is and isn't it like well it might do this if it does then what i know before it gets here what i'm going to do that's what a trade plan is if you don't have one if you're impulsing and making it up that's not going to work out probably if i know retail trader behavior and remember to write that down think like one where are their stops right at the i b high which is right under the v-wap and the v-wap it's alignment because that they all act in mass do i want to get in front of them this one is risky or work pretty good the worst that would happen if you're following your trade plan is you would scratch it if you have running a two lot to get risk neutral or you'd take a stop if you had a ridge if you didn't react to this coming up knowing that the stops were above you because we talked about it that's up to you in your trade plan my trade plan this to this and then punt because i have no idea down to here and again i don't know that so i don't worry about that but that's what this is mean reversion no long because i can't get long is this logical can you kind of see the thought process and what the auction says hey joe thanks for being here good luck with your flight any questions guys so you can see there's no longs for me in other words i want somebody else you know you know i i welcome somebody else getting along here can't be me the only long i would have is to cover a short so we could call that buying right but i don't kind see that the same way i am responding versus initiating this is initiative behavior because it's aligned with the trend these counter rotations are response responders it's a different buyer this is not a strong buyer as far as i can recognize this is somebody who's in a maybe a short time frame and it's just a rotation and you know in the s e s you know 5.6 point rotation is noise i mean that's just your average you know rotations this is just sort of the way this thing works so you know so now you know another piece of the puzzle is how do you manage your trade and everybody has to kind of come up with that solution because it's really time frame based and you know and i can't get into that because it's how many contracts do you trade you know one of the things about going up to higher time frames is you end up giving a lot of it back you know if you're let's just say this never happened you know and let's say we only got here and you're short from here well now what what are you going to do with this it can come right back here see so how do you manage that do you just trail somehow where do you let it come all the way back here give eight points back you see i'm only asking the question because you need to have that answer or you accept the randomness and you just let it you know but you have to have statistics to know where you know that sweet spot is because the thing with rotations they're random so you know i think the tendency is to try to create you know curve fit something in you know so how do you do that and this is not a recommendation do you just trail stops behind consolidations when they stop pick do you move your stop down when you get this and then you make a new load you put your stop here and you get taken out as we mean revert back here and then you leave this 80 86 whatever 88 you know six seven eight points on the table what does that do to you mentally you see i don't throw a party and pop a champagne cork i have teeth marks on the edge of my desk so i have you know that's something that uh is disturbing to me so i operate a little differently i prefer higher probability behaviors so it's a matter of again your trade plan and what aligns with you mentally i mean there's guys in the trader lab that put a trade on and they go on vacation i mean i don't know how they do it you know uh and they're trading higher time frames but they're using the same process so guys if you're you know if you think uh all we're doing here is auction market theory in all fractals and time frames using the same process to get into alignment so we execute in for me the shortest time frame i can isolate out because that's how i establish for me again personally my risk is where a structure fails i don't need to hang out with a fixed stop if i can get away with a two three point stop i'm happy with that because it's going to only be uh happen it's only gonna get taken if the structure i'm leaning on fails but if i'm waiting patiently for behaviors and locations is that a smart thing for me to do then to wait for the location in the stop pick look for divergence look for a triggering structure and put my stop above it because if it just gives me the little head fake it takes me out i'm okay with that because it may take me out and then fail from the next layer up and then i just put the trade back on again like what if we had taken this one over here right put it back out now it goes now to wherever right where's your trade management huh that's a different topic but i hope you guys see the order there's order and i invite you to come to the trader lab if you're interested in this it's a basically a group of like-minded traders with diverse experiences operate in different timeframes use different tools even different products but it's about auction market theory volume profile and how to participate in the inter-day developing time frame and in order to attempt to get it aligned with higher time frame rotations so it's not scalping it is integration because in the end we all initiate our trades in the developing time frame any questions before we uh say hasta la vista um lanny the difference between um initiative and responsive just think of it what what the terms are initiative behavior or those who are quote initiating or putting on going more like with the trend responders or someone like this if these guys are short they're responding to this price and that creates the buying which gives you the counter rotation and then this buy stops above here are actually the fuel in other words it it kind of has its own momentum and then we can come back here or not you know whatever it does it does that part clueless but we can see behavior here you can see the book see the behavior you know order flows its own unique experience notice how the book is coming down it's pressing here now they may pull you know there's all kinds of nonsense that goes on with this you know with the order flow but let's look see how this is moving down that puts pressure now if you're interested in order flow uh bruce uh does say special webinars which are open to everybody uh monday tuesday and friday specifically on order flow uh and using order flow tools and uh he covers uh he'll cover bitcoin uh stocks you know options uh es or nq whatever you know pick one we haven't done pork bellies over there but you never know with bruce and that would give you insight by the way if you're interested in the trader lab go to bookmap.com and it says join discord and you would have access to all the free education and there's things going on every day crypto options stocks cues you know the rest of it um and uh you know guest traders just a lot of stuff um and it's you don't have to be a bookmap subscriber and you know you know you won't be solicited you know you don't uh and this is open to everybody so i would you know suggest if you find any value in this um you know that you check it out anyway uh free pdfs there's 60 of them on the structures that i'm discussing here and these behaviors plus much more and then a uh introductory video uh it's pinned to the top of the trader lab uh text channel and you can take a look at that um i'm thinking what else i might have for you the other thing is i do narrate interday uh for the discord for our trader lab members when there's something worth mentioning but i think you get the idea of what's going on this is about you guys it's not about me this is about you guys understanding there's method and madness it appears like chaos it's not sometimes it is chaotic because the market is you know has an input that hasn't digested it and has to try to figure out what does this mean so at auctions but the market is continually in auction i mean take a look at what we did too high too low fair different behavior if you understand these behaviors now nobody knows what the market will do so don't think there's no uh you know the magic eight ball don't have one that works anyway but you can get an idea of what might happen and then you can uh derive a plan specifically for the anticipated behavior and the market pretty much is doesn't have a lot of modes um it's either directional you know range extension or rotational where it gets into an area and then there's a certain sense of calm where it rotates so both sides are active this is important right here watch this behavior this becomes vhvm we're going to market this was the area that was too low before you see so now and then it went up here and now we're back here so it's an auction remember these levels can change now i'm going to market variable high volume node and remember what is it telling me where the highest volume is in the developing daily time frame and what was retail if now the volume is moving down remember wanting warning will robinson when it went the other way now it is suggesting potential continuation or not again i don't know right so we don't worry about knowing what we do is try to anticipate and observe so this was too low remember it shifted up that suggested pressure to the upside remember i'm just bringing you back now what this was too low this might be too high so now it's back here vhvm this is now the fair price unfair potential to push lower don't know where to not my job to know let's observe the behavior i'll hang out here with you guys a while i want you to see the speech the dance it's like music the market is speaking if you know how to interpret it now it doesn't you know like anything in trading it's the best you got is maybe i mean we could come down here come back here come back here right we know that so yes that's what it can do but the fact that this moved down does not give us some insight as to potential all you got in trading is potential so too low migrating potential to come back and check or come back here this is our outside edge of this distribution see where the low volume is too low didn't stay down there came back up didn't get back here that is a insight that the market and the participants are saying they're saying is huh too high well this over here before was too low right is this really too high or are we going to come back and check it right it can do that stops are sitting here and here you do remember look left right that down look left where's the fuel if we come up here we're going probably here if we can't get back here we can't get over this then we're going there if this then that if not then what write that down if this then that if not then what if this shifts down and we don't get back then what south if it shifts down we pull back and we can't get lower then what then back here it's that or not maybe not a recommendation because you can narrate at least that's how I think of the market you know I just mentally have this thing about what's it telling me because the participants are the one who create the prices not you not me it's the participants and they interact remember buyer and a seller buyer and a seller there's a buyer and a seller at each of these price points a buyer and a seller we don't know why that person's buying it might be somebody covering right or somebody buying because they think this is undervalued in we're going to go you know reverse why are they buying I have no answer on that one but I know what this means so if you know what it means and remember subject to change all the time because it's a narrative it's a story if we come back above here remember stops are here where does that bring us potentially back here and again I don't know let's watch any final questions I know I've said that before but hey you know it's so interesting you know I can't help myself boy I don't know what 3987 is I'm not using that micro composite if you look at my chart um I'll give you the dates 720 to 727 is the micro composite 3969 is the retail price in that time frame and it is here on my chart somewhere there it is there so that's a target whoops let me fix that I didn't you know I haven't looked this stuff in a while so 3969 you know you're away from a week things get a little out of whack so observer the liquidity is and observer this is you don't get back you don't get back but this is balance see how we're coming back to retail so we can stay in here so for me all I have is outside outside outside selling I I can't get involved for me on the long side and you guys already know why so it's all I got to do here hope you get something out of this if you are interested in the trader lab our senior trader has over 54 years of experience it's a collaborative really so we all can try to get better if you trade options or stocks you're welcome the conversation centers around the ES but it's really because it's easier to keep stay focused but it's all about the auction so levels are levels they exist in all markets you'll see the same behavior in all markets so it doesn't really matter all you need is some liquidity in there you got to have volume or else nothing works right I think palladium I'm trying to remember the markets back in the stone age where there was like you know nobody would trade it and it'd be sitting there it's before they came out like with elect electricity futures and you know whatever else light bulbs but back in the day I just remember you know because I used to trade the metals complex fairly actively in the in the stone age and palladium I was kind of interested interest I who trades this stuff you have a stop display a tapish what do you mean okay oh this it's a kind of a running total like here what it's showing me is this resets every minute basically it's taking a one minute picture of the accumulated or aggregated sell stops in a one minute window so it's showing me 648 stops going off 88 buying iceberg so you know so this is the stops you're seeing the same thing on the screen but this is just doing in a kind of like the total one minute window so within a minute it's just moving that around but you can see it here I don't really use I when we first started with the stop iceberg detector it wasn't on on chart it was just down here and then it got added up here I use this one primarily because I want to see that stop divergence right so but this is still on here I mean I have this one set not here but if I get a big number accumulating it gives me an alert because I don't need to see you know 16 went off I'm looking at my screen you know and I'm you know I'm looking at this like here look at this open this up a little bit so I have nothing to do here there's nothing here for me nothing I mean because it's not outside you know it's just nowhere so for me there's no I don't do anything with this you know I'm not looking to try to make something out of nothing I just doesn't matter to me I think in trading and it's a personal opinion it's not about catching all these ripples if you think that's trading you're in big for I think you're going to be very disappointed in and probably not going to be doing it for very long in my opinion it's risk reward you know risk is your job is the managed risk job number one and you need the outside you need the range to make it pay so if you're playing this kind of stuff because for me my risk and this is not a valid thing but let's just say my risk is the same here as it would be down here it's the same why would I take a risk to do that when I could take a risk for this or some component you see what I'm saying so the thing with the trade plan is you have to define not only the context and how to operate with a vetted trade plan for those contexts keeping in mind what do we got today south of the border where to nobody knows how far don't know is the low a day and don't know does it matter no what matters is alignment with the context then everything else can unfold from there but if you're you're trying to be a buyer picking the low and raise your hand if you've ever tried to do that I have news for you probably not the best way to to interact with the market you know I'd like somebody else to come up with the low of the day thank you now I have some structure to lean on if that was my plan for today which it's not but if it was I want somebody else now right here is this a long well not for me see it's nothing it's are we going to get back here we didn't that would be a short for me break didn't do it where do we come back are we going to come here it shifts doesn't do it nothing to do if it goes down 40 points nothing to do why not in my trade plan I just sit and wait if I'm doing anything else shame on me because it's not in my trade plan when it aligns my job is to take the trade if it if the quote setup doesn't show up my job is to be a tourist and wait for my bus that's the job and may not be you know if you think it's an action thing and you're looking for stimulus and you know you're triggered and all this attachment to dollars and all this and how much you could make it's not the way to think in my opinion at least not as a trader you know trading is a business and you should approach it as a business losses or cost of production if you're following a trade plan you know just like a manufacturer or anybody who runs a business they don't make it up as they go they have a plan they know what it costs to produce you know they know what their net is over a sample size of jobs well for us it's trades that's all it is you know and we're trying to find an edge where is something out of whack where it might give us something to exploit what do the participants say about the current value you know is the price too high too low what's it doing is it fair well apparently this is still too high now where are we going to go that part i don't know if we take this out it opens the door the behavior in this area is going to be very important we can come down take it out come back in i mean this is still retail it can test it no precision looks pretty precise i don't see it that way i always see it as maybe then we have to look below i don't even know if i got my levels in down here looks like no see let me just go look below see what's down here i'm looking at another chart so give me a second well here's what's downstairs 30 roughly 390305 then 3856 ish so 39 ish you know 3910 in there you know so 39 ish doesn't have to do it now ever never doesn't matter may not get there today and again i don't that's not my job my job is to wait for the trade put it on attempt to get risk neutral subject to my trade plan and then punt and punt means kick the ball because i don't know you know and then manage the trade subject to my trade plan so that's it it's not more complicated than that guys if you're it complexity obscures simplicity and the simpler you can make this i believe the better and again it's just my personal experience as someone who came from system design and complexity i thought complexity was like trying to find the secret you know i'm gonna find the right combination and nobody else will know it i'll figure it out yeah if you're tweaking and tuning your curve fitting uh not sustainable in my opinion now i'm not saying you can't develop a quote system but that has to be if it's a system it's not discretionary it has to be consistent what happened to me in system design was the context change was the thing that became problematic so and i tried to create systems that would actually detect the context change and change to a different you know like let's just say different behavior different setups and all this kind of stuff and it was usually problematic and unstable um and then when i was doing indicators you kind of move in the same kind of directions you know you're trying to find a combination of indicators combination of time frames combination of tuning you know keep going and keep going it's all the same indicators or systems are really derivative in my opinion so uh anyway so i don't do any of that i don't use any indicators because what is an indicator based on is price well i can see the price right here on the screen i don't need something to tell me the market's going down i certainly don't need to look at the vex to see that it's higher right so why do i do i need the ticker the trend i used to watch all of that what does that do for me i got everything i need right here and i think you will too because anything else that you bring in can create conflict cloud and create paralysis by analysis for me it's very simple and if it doesn't align you know with the things i require as far as my trade plan goes i don't have a trade it doesn't matter you know if you're sitting here saying is gee i should have sold this or i should have got in over here whatever it is that's not trading it's not the shoulder it's what's my job my job is to have a vetted trade plan my job is to execute it when the trade shows up my job is also to stand by and not trade when i don't when it doesn't meet those parameters that's how you measure yourself in this business the bottom line shows up when you do what you're supposed to do when you're supposed to do it randomness is the end in me if you perform in a random manner uh you're gambling so and then gamblers should go to vegas see the show get the buffet so let's not be gamblers let's have trade plans let's vet them let's be disciplined let's understand the trading is a business it is not a gambling environment it is taking intelligent risk and what it is is understanding risk management discipline having a plan if you don't have a plan get one if you don't know how to create a plan come to the trader lab there's a lot of support there by other traders like you who are in the same place or maybe further along or not as far along as you are uh take advantage of the free education that book map offers you can go to bookmap.com join the discord uh chat you won't be solicited there you don't have to be a book map subscriber you know not required and there's a lot of education it goes beyond what i do here so i think education is good and the worst that can happen is you walk away with something and maybe a little more knowledge uh that you might be able to apply uh to help you move along in your career thanks for being here everybody appreciate uh your time uh trader lab uh i will be dropping in uh you know to uh drop in a few words of uh i don't know observation and uh i want to thank you all for being here we're going to be back on our regular schedule so it's going to be um 11 30 to one eastern standard time and that's monday through friday um if you haven't watched the videos i have posted uh and you are looking to understand context there's one up there that and these are recent they're this month they were posted um one says inside trading the inside day and inside is basically a two-sided trade balanced different behavior then there's trend configuration the breakout that we had from that consolidation last week uh what that means how to interact with it and then there's another one that just really goes into multiple time frames how you integrate and you're seeing it today really how you integrate developing time frame uh and inside of higher time frames like because this is our higher time frame retail price and a consolidation and how you use microstructures it's all the same if you take those three and you take a weekend i'm going to leave them up for a little while longer and your job my recommendation is that you isolate the days take notes um think about what are the pieces what's going on um what do you see i'm just looking at those little thumbs that just popped up in discord on the tb2 i got a few words for discord about that so we'll see anyway watch those create a trade plan if you don't have a trade plan guys you're not you got to have an accountability piece you need to manage manage the emotional state you need to write down and keep a journal as far as why you put a trade on go back and review them if you're taking a lot of trades and you're not highly skilled i'm going to ask you why does that mean you're impulsive uh you're experiencing FOMO and you're being triggered by it or are you intentional you sit you're disciplined you wait you're like a hunter you know you're waiting for your specific target you are not interacting randomly very important you can always add to a trade plan but if you don't have one there's nothing to add to and you probably aren't going to be needing one because you might not be here uh and i want everybody to be able to succeed i'm not saying this is the answer you know but i think it's an important piece because if you can understand market mechanics why it does what it does then you might be able to build some structure around it um that might give you a better opportunity or maybe help you define an edge better you know so here we are back right here this is very important so you can kind of see if we look at this whole thing bullet express right to the target change in behavior mean reversion right outside in stop squeeze we were looking for that outside in and now continuation pullback didn't quite get here shift warning will Robinson too high see the narration and then punt because who knows back here okay now what don't know take it out south and remember we can come here go below it if we come back above it it sets potential mean reversion again not a long potential rotation if we can't get back above here then i go and put the helmet on and i go down to the basement and i open up the storm cellar and potentially go there let me see make sure i got our targets back out um and these are not recommendations they're just structure around 3910 3900 would be a potential target down here yeah down in here you know well get over here here so like this this is your higher time frame retail price that was fair last time we were here if this becomes unfair it puts this one on the table and this so you can kind of see the logic right this is a retail price that was left behind in a developing daily time frame that was too low we haven't come back to check it this is in the next higher time frame micro composite which is the same as this you see this i think you can maybe see the logic and all i'm doing is integrating time frames this is developing time frame so i'm tracking how this migrates and the behavior which gives me insight this is the current retail price in our developing time frame there it is there's all the volume this was our higher time frame retail price which we is the low of the day coincidence wink wink and then if we fall out of here and don't get back inside it puts this on the table potentially not a recommendation at some point in the future again no idea and if we keep going you know more fun so i hope you again i know i was about to tune off but you know with things happening um i wanted to stay with you guys uh into this test back to the low back to the micro composite v pock and again not a recommendation past performance not indicative future results wear a helmet any questions your guys homework homework you got to do homework um you need a trade plan and don't allow yourself to get overwhelmed pick one condition i see now i think the thing you see most of the time is mean reversion because this these kind of directional moves are not you know the regular it's not every day kind of deal a lot of the time i mean we can be directional and then we go into you know this kind of stuff rotation that's mean reversion so you'll see this kind of thing more often in all time frames uh the kind of bullet express that we've had is really more contextual to the current you know situation see the sequence too high too high too high too low back to here stop pick short too high didn't get back move down too high fair outside edge it's like music stops by stops by stops by stops by the way here's something i want to point out to you guys icebergs 2400 1800 1200 is that tell you something here 2500 is it this guy covering what does it mean so if you see icebergs i for me i don't activate on them here's here's something for you 27 ice 100 icebergs here let me ask you why didn't the market reverse at this 2500 but it came off at this one is it because of the icebergs or because of this what this which one of those is more relevant do you think the auction or an iceberg which what do you think i have a priority of input i'm not saying it's right i have no opinion i just know i see this and i see it as potentially random here here here okay but now what what does this mean is this the low of the day or is it just because of this i don't have an answer but my priority of inputs the auction is the most important thing because the auction tells me what the participants perceived do we know what the agenda is of this iceberg or this group of icebergs are they buying because they think the price is a deal are they covering because they were selling on the way down i don't have that i don't have that answer so because i know i don't know it's not important to me as far as how i navigate and again it's just a personal thing it might be i i don't understand icebergs but i understand the auction so as long as i'm so it's a priority of inputs so and it's no different than you guys who look at a higher time frame and whatever or 60 minute or 30 minute you know how do you prioritize all this stuff well this is my priority because i know what this represents i know what this is that's retail i know the market thought it was too cheap last time we were here and we went away it's logical to come back and check it it's also logical that it might be still too low and that's why we got the counter rotation you see now what is it still too low do we come back here too low or do we fiddle around build energy and break out of here and come down to the next level i don't have the answer that's the question you need to be thinking about and you may not have the answer but you do have an idea i think of knowing where these locations are why they mean something isn't why important we don't know what it'll do but we know why something exists and then based on what we know about it might give us an indication of what to anticipate if we come back to the level again have a great day everybody thanks for being part of the trader lab if you are looking for those 60 PDFs to give you behaviors to observe and things you might be able to mold into part of your trade plan go to bookmap.com join the discord chat you don't have to be a subscriber to bookmap you won't be solicited there's all kinds of free education options stocks cues everything you know futures order flow a lot of different crypto you know live crypto streaming a lot of things for a lot of different interests and auction market theory what i do volume profiles one piece you know but for me this is what i do and i hope you get some value out of it maybe it'll help you develop further in your trading career thanks for being here we'll see you tomorrow