 Hey, good morning everybody welcome to the book map all markets order flow webinar here My name is Bruce And we'll get we're gonna go through the live order flow in the markets. It's a short day here today We're gonna go through It's you know not we're gonna be too much to look at here. I don't think However, that's okay I've got something I wanted to cover for this webinar in particular, which I think you find might find rather interesting Plus I want to go over some of the market pulse user case scenarios that we've been looking at again and again and finding some real value out of that so General disclosure all book map limited materials information and presentations are for educational purposes only and should not be considered specific investment advice nor recommendations risk disclosure treating futures equities and digital currencies Involves substantial risk of loss and is not suitable for all investors past performance is not necessarily indicative of future results All right, so let's jump in here and take a look looking at the s&p e-mini We can look at any market you guys like So just let me know. Good morning. Now, Louise and over in discord Good morning Stan and others All right, well so Well, let's just take a quick look at the the order flow and Then I want to dive into something a little bit different today since we have the shortened day and we're not looking for too much But you can see the Kind of overall trend here for You know 6 6 a.m. On down to the cash open here 9 30 to now 10 a.m The market has been kind of trending down But look at what's happening here now at the open. This is where everything changes You can see the change in the volume right here. You see the change in the size of the volume dots in bookmap And this is every day When there's when the market is open we see this kind of big shift in change We can also see some data here that came out at 945 east coast time and how This they really pull all that liquidity. This can give us so much insight though Okay, let's just take a look at this here and Understand what's going on? And this will get into the discussion. We're gonna have on on the markets today As well, so you can see the pulling of liquidity in here before the event And 945 is right in here And you can see that you know they're pulling before because they don't know people don't know what the number is going to be This guy up here clearly did not pull or these traders up at this price level of 45 69 And they stayed in the order book Okay, you can also see these other, you know partially Pulled orders up in these areas as well and then down here. Well, where do you see it? I mean, there's kind of partially staying in in some of these areas here after pulling just the You know 30 or 40 seconds before before the event. All right, so anyway the The important part to understand here is that if the buyers want to meet the sellers, this is where they are And look how we trade it up into this area now and punch through it And this is where the market is currently Okay, this is not coincidence Right, there's we can we can look at this now for today And understand this area in here as being important for for the activity for the here here and now It's a swing up here as well you know, we see the This swing up up in this area here is a little bit higher But the liquidity that we're talking about that stayed in here at this 69 level is a little bit below the swing That's what we want to understand is this context Right, so you can see this guy at 69 actually pulled that liquidity But there is other liquidity getting filled in these areas and this is a punch through that area and that swing So for all sorts of reasons in here now, we're starting to understand at a deeper level That this level here in price is important We look at the stop run above that area here. There are stops and icebergs in here Look at the iceberg transactions also In here and that relationship between larger players using iceberg orders and smaller retail traders Using stops and getting stopped out here All right, so we have a lot of things to kind of Consider at this price level in here And we're trying to get an answer here as well and we're get we're starting to get it right now You don't know here as it chops around but now look at the sellers come in look at the order book Looking for sellers to drop it into 67 and then 66 Okay, just by understanding this context here Right, and we're almost at 66 right now. Okay, so This is how you can start to read and understand order flow And when right when we were mentioning that it had not even gone to 67 yet. Okay, it has now But we didn't really know until we got an answer here by the participants in the In the order book as well as in the transactions here That sets us up nicely for what we're going to cover today. Hey, so Let me just oppose the question out there How many of you have heard of? First principles designed by first principles Don't have the Indian market up. So sorry about that Yeah, I don't don't I don't actually Look at it during this period Okay, it's closed anyway, right, so there's nothing nothing really we can do there So good morning, Steven Yes, Elon Musk talks about first principles exactly now, you know, it was Aristotle that began with this idea or concept of breaking things down into Understanding the essence behind the thing that you're studying and this is Was it Plato? I thought it was Aristotle but This is the an important element here That you're really trying to simplify breaking it down into the first kind of elements of what's behind something And we can do that here with the markets and Why this is so valuable and why someone like Musk or others use first principles is because first off It allows you to understand this and come up with your own Ideas instead of using someone else's So let's go through an example A lot of us when we first get into trading we're reading books or you know watching videos and Understanding the markets by what? candlesticks understanding patterns That's like the ABCs like you know head and shoulders pattern a flag pattern You will get to why I went through a flag pattern in our Strategies and setups area but In just a minute, but these kinds of patterns and these ideas in here That's from someone else. It's you haven't you haven't really looked at the market and you really haven't broken it down yourself So you're not thinking for yourself. You're learning by analogy. You're learning from others And that might be wrong might be a wrong assumption. We don't know But it might be okay, so going through and understanding something by first principles You are getting to the essence in the core of it And then trying to get an answer for that and we're gonna go through that process here in just a second With the markets before we do that. I want to show you guys the Black Friday, so hope everyone had a good Thanksgiving, but I want to show you guys this For the Black Friday sale that we're having here if you want to try book map This is the time to give it a shot. It's at a really great discount here. There's two different offers here and I can explain them so You know we get all we get a question all the time. Are there any specials? You know what's what's offered? Well, here it is, you know, so I I get this question all the time or any any specialist I'd like to try book map and we do this We've done this now a few years in a row. So this is this is the opportunity jump in try it out check it out and It's only running November 23rd to the 28th. So that'll be on Tuesday. It'll end Okay, so it started on Thursday here on Thanksgiving and we're running through the 28th Here are the two deals that you can get It this this one here is 50% off. It's for three months This is a this is a really nice deal This is available to anyone who's new to book map any of the digital free version users as well as current book map monthly Subscribers so you might be subscribing monthly right now if you want to get a discount Get it for three months here 50% off so go check it out if you are new to book map and The first month you can get 60% off here now. This is kind of interesting too So this is open to people who knew to book map here or or as well our free digital users or Previous book map subscribers. So if you had book map, I don't know what the cut-off period was like Let's say, you know a couple years ago And you you try it out and you're kind of coming back and finding it interesting Then go for this deal here 60% off for the first month give it a try see what you think see if how see how you like it now that's just the Overall here if you if we click on grab the deal Okay Here is some of the details The exclusive 50% off deal. This is the three months here for the Current monthly subscribers for the free users and also brand new users here This is where you click and go through the process All right, and then for the ones that want to 60% off. That's this one here Reply refers to this 50% here this one here the 60% scroll down to the next one refers to this area here Hey for anyone that has the Is new to book map or previous subscriber And want the monthly 60% off deal. You'll need to put in this coupon code here 60% off. All right, so just read through it. It's pretty straightforward and there's FAQs here down below Okay, so anyway Go for the deal if you've been kind of hemming and hawing and in our discord and been checking out some some of the things Another thing that you can do as well Is take partake in the book map Academy? Okay, so for example We had a great Academy meeting last Wednesday just a couple days ago and if you're interested in In the Academy Well, then you get you have to subscribe to book map first. You have to have book map All right, so click on the more button here and go to this book map Academy and read through this in here You can apply here. It'll take you down the screen and just Enter your your credentials in here Or your your information in here there's FAQs below as well All right, so and and why I'm bringing that up here is because if we take a look here at Some of the live videos that we have here's our book map Academy coaching You know, we had a great great session in here, so you might want to check this out And get feedback we open the mic up and get feedback directly from book map coaches Get mentored here and you can work your way up to Getting book map for free in step two here in the book map Academy You'll start by applying for the junior Academy and then if you're accepted Then you'll join the junior Academy and that's kind of a testing ground. All right, so Anyway Just you got to have book map. So if you're interested in that Academy So get get the deal right now from book map Get the 50% off or 60% off and you can join the Academy as well. All right anyway, let's get back to these first principles and Understand We're gonna start with a big question here. We're not gonna start with indicators and we're not gonna start with You know candlesticks and and patterns and in any of that at all We don't want to cover any of that. We want to understand what makes up the market They why how does it trade? What makes price move? These are some of the very basic questions that we first want to tackle Understanding the first principles. Okay, and then we'll get into also trading but So let's close up the Indicator panel here in book map and then let's take a I'll take also off the Absorption indicator here. Okay, and let's answer that question And so what makes up the market? Well, what do you what do you guys think? What what is what is Within this structure of a market buyers and sellers, right? That that's true But what What exactly how are how are buyers and sellers participating? Exactly passive or active by stops sell stops. Well stops is just one But what you guys are getting at is it was precisely the the answer is orders The market is made up of orders That we're really diving down and getting into like, you know the binary elements behind the market Without orders there isn't a market Right, so Both of you guys are correct Stephen and RJ so This is what makes up the market And then there has to be an activity to one has to buy from another or sell to another Okay, so there has to be some sort of matching engine in here as well This what this is what makes up the market Okay, and you've probably heard a lot of people, you know, especially a lot of You know auction market theory, you know volume profile type of guys talk about this as an auction Well, that is precisely what it is Okay, it is actually a two-way auction Because if you look at an auction For let's say like a classic would be like a painting or something like a car or you know Whatever it is some sort of object in an auction at Christie's or you know, whatever it is that you see on TV all the time or Raising the paddle and saying I'm bidding on this and etc. Well, so that's a one-way auction And they're they're bidding on one One object or one thing and this is a two-way auction here Okay, because that you also have the let's say the artwork They're able to Reply back and And be able to say like yes, I know I'm not gonna take that or I will take your offer I don't want to take your your offer So there's back and forth on both sides, right? So it's it's a two-way auction and It's just buying and selling a very very simply the Limit orders what you see here in the heat map or in your COB column here Is the limit the sell orders above the market and limit buy orders down below. So these are Players are participants in the auction And they are bidding at these levels down here below price And they are offering up here. They are willing to sell up at these prices. So Someone says yeah, I will sell to you But it has to be up at up at this level at 69 up here and then I will sell to you Hey now These markets especially something like the the S&P they're incredible markets There are so many different players in here and they're doing so many different things and You know, we can get into the complexity about the Algos and the bots and all these different things it it doesn't matter though First principles. It's it's an actor in the market an actor in the auction No matter who they are. Okay might be a real person or it might be an algo And it is this auction here That is the the central theme Okay, so if we take a look at this in here And and start to understand and break it down More so who's going to take the This seller on like let's let's suppose this market right here and let me just stop it for a minute here I'm just kind of scroll back a little bit Let's suppose. This is the only area of liquidity can Make it a little starker here. This is let's suppose. There's no liquidity in here all of this and what you see in here It does not exist. Right. You only see it up here At and liquidity 171 contracts up here Okay, there's no market in here at all for any of these other prices because no one is willing To sell to you at those prices they will only sell to you here So if you want to buy you have to buy up here. This is the price. They are willing to sell Yeah, this sounds simple, but This is it just this is how the markets work and then it you can really start to understand now Well spread change or volatility Lots of different things a lack of liquidity in the market Why are you getting like, you know stopped out easily in some areas? Or why do you see a spread change and you get horrible prices? Etc. We're starting to answer that question by just understanding some of these very very core principles First principles in the market right so That that would be the auction So if I'm down here, the last transaction was at this price right here with the red rectangle 4565 and a quarter and I want to be a buyer and there's no liquidity in here. Where am I going to get filled? What do you what do you think? I know I know it's a simple question Warning treating for living now no answer. Okay Well, you're gonna get filled up here This is this is where the sellers are as simple as that So you're gonna get slipped One full S&P point and three quarters Okay, so almost two full points you're gonna get slipped And you're gonna get filled up here and you're gonna be all ready Let's suppose you get it trades up here immediately and then No one else is no one else is willing to buy up here and the next transaction takes place by a seller hitting the bid at 65 You're gonna be down immediately two points Okay, and each tick in here is 12 and a half bucks. So you're gonna be down 100 bucks Hey already Right $50 a point So that's how markets work that's how the auction process works And now these markets like I said are amazing Over the years like that, you know back in the in the pits in the days like before electronic markets You would have big spreads like this. You would have floor traders Scalp the market They would do this all day long They would say like I'll sell to you up here and then they buy it back down here And they do that all day long Right, and they're just making like maybe a maybe a few ticks or maybe a few points depends on the market Those days are gone more or less Because look at how tight the market is Hey every single price will the S&P at least every single E-mini product here every single price has liquidity And players are doing all sorts of things in here and this is really nice for us because There's so much liquidity in here you're gonna get filled in some place one or the other You know places on the bid or the offer it is one tick wide That's it So Fantastic liquidity Fantastic market we can jump over to crypto now crypto is a little different And in fact, I don't think I'll be able to show it here Yeah Yeah, maybe maybe we won't well so we'll stay away from crypto right now But some of the we just traded up into high liquidity up in here So interesting stuff and you see it immediately sell off This gets back to the first principles that will once we once we get down to Understanding what makes the market move we'll get into the higher time frame stuff. Okay, so anyway the Getting into back to the first principles We can understand that there's there's two sides to the trade the We have the limit Buy-in sell orders and we have the aggressors in here that will trade at market price Okay, so they'll say like well, this is this is where here. Let's just move in here This is where people are Providing liquidity at at 4565. There's 67 contracts here And there's 52 willing sellers up here at 65 and a quarter Okay, so if I want in to this market and I'm willing to pay up a tick A quarter point. This is where I'm gonna get filled Okay, I'm willing to get in I want I want to be in now And that's the aggressor part because you're not providing liquidity You are taking liquidity off of here and you would then trade with these These traders here and if you just hit it was let's let's suppose it was 10 contracts Right. Well, then you would take 10 of these contracts of the 52 and you'd have 42 left at this price level and that's it contract or the the transaction was done And you'll see a green dot in here and that would be your trade As simple as that so And then if it trades right back here To 65 someone sells hits market sell Because they could you know that the spread is here. Well, then you're gonna be down a tick and Yeah, you'll be down 1250 or you'll be down if it was 10 contracts you'd be down 125 dollars So immediately so anyway if we're starting to Break down and and look at the market in terms of first principles here We're starting to understand now What is the market is made up of and we're also starting to understand? The what what is making this market move? Okay, so the market is made up of Of orders of participants There there has to be participants in a market else. It's what they say there is no market for something and You might come up with a product Just like the S&P here is a product you come up with a product and no one wants to trade it. Well There's no market for it because no one wants to trade it You can talk to guys the back and during the financial crisis A lot of the institutional traders there's no bid No one wants to trade. There's too much risk. They don't even know what they're buying So there's no market. The markets are dead There's no liquidity And There's no transactions So, yeah, very very interesting time and Anyway the By understanding the orders We're starting to understand now price movement and what makes price move All right, so and it moves by a tick or It moves by where the liquidity is provided Right, so if for example Let's suppose that you have here more than 58 contracts that you wanted I'm sorry That was last transaction. Yeah, so let's suppose here at the best offer here There's there's there's 58 contracts there. Let's just move in a little bit Okay, so here at the best offer there's 61 contracts All right last transaction. There was just one transaction here. You can see it here The little green one means the last transaction And there's 61 contracts here 61 Contracts of liquidity now if I come into the market and I have 62 contracts that I want to trade I will take all of this liquidity here And I will move price up to this next level here And that's what makes price move It has taken all this liquidity here And has moved up one tick to here and this 77 here would now say 76 Because I also my 62 61 were traded here and the next one was traded here Because I hit market buy I want in right now. Give me what is available and that's that's And you have now moved price one tick Okay, and in fact you've kind of moved it against yourself Because now you're you're probably down Well, you're down 100. Let's I don't know how much you know You're down a tick on your 61 contracts here And then you're at the best offer and current price with your which you have zero on With your your one one lot up here Okay, so you're you're immediately down If you did that Okay, so but we're understanding now what makes the market move Because you a lot of times you hear like well, what do you mean? There's more buyers and sellers, you know That's impossible. It's true There cannot be more buyers and sellers for there's a matching engine for Each buyer there must be a seller and vice versa Okay, if there are more aggressive buyers than passive orders Then the market will still match with each one, but price will start to move up If there are more aggressive or market sell orders Then there are limit buy orders Then the market will move down Okay, so I know this sounds really simple, but We're starting with first principles and Where we're going with this Is understanding the market at a much deeper level And we're starting to understand moves at a much deeper level now Uh, thanks, Stephen. Yeah, the educational center or the learning learning center Explains these things as well. So let me show you that if we go to A book map calm Okay, and then you click on the more button here A go to the learning center Okay, so this is a good review of it and this market mechanics course that we put together a while ago Uh, this is still uh, it's evergreen content So, you know, don't be turned off by the Maybe the user It's where this aggressor the the interface in here is from, you know The older version of book map that shows the black and white heat map right, but We're going through the same Things in here and in fact we have illustrations That show you what happens if you do a certain thing They uh and uh market buy at one, you know volume of one in here and what what what exactly happens and moves price Okay, so I would encourage you guys to go and check out Uh that course, uh, so go to the learning center Uh, and then go to market mechanics course and at least check out part one here They were doing basically the same thing in here We're going into the first principles though and leaning on that And what we want to do is Uh extrapolate that And unpack it and understand it at a much much higher level Okay, because if we can start to understand now moves uh in here very very basic moves like we were just talking about We can start to understand Some of the previous activity in here and the participants And start to uh understand that there are more aggressive sellers in here that are moving price down If that is the case so we can see that in here, right look at the sellers Sellers here's the buyers green dots market buyers sellers Some some buyers in here a little bit more a little bit more able to move price up back to here And then look at the auction back and forth in here Right, there's more sellers here uh, so When uh, when I say more more sellers, there's more aggressive sellers in here compared to aggressive buyers Right, we're not we're not talking about liquidity at the moment. We're just talking about the transactions, which are the volume dots All right, so uh now these are the ones that move price though. We know that So if we see that there are more sellers in here Then we're looking for sellers to Uh, potentially if they take all the liquidity here 39 contracts They will move price to the next level and maybe the next level Okay, so uh, I and By looking at this right here right now I would look for price to come to the next tick and then also this liquidity here at 64 and a half Okay, well, let's scroll forward and see there we go. It's already moving down Hey buyers come back, but look at the selling again buyers come back buyers starting to move it away here And now I I haven't seen this price action. I don't know what happens next But uh, there's this is why we go through a couple scenarios Uh during the these these market webinars and uh the all markets webinar And we go through a scenario. We are still looking for sellers to auction down into these areas in this liquidity Uh, and uh We had a move back up here And we're still looking for that though, right? There's more sellers than there are buyers Hey, and then here we get our move, right? And it's traded into 64 and a half Do you understand Steven? This is this is really starting to understand Um, you know, what makes this market move? Uh, and understand these first principles in here Uh from auction and orders from orders to auction to price movement right, so Uh, we traded down here now what I talked about earlier was Also another thing And we're still getting into we're getting into first principles still Uh, but we're understanding that at a little bit, uh deeper level And going through different scenarios in here The scenario is that there are more sellers in these areas here Okay, no question. So we're looking for a price to go and test this liquidity and it did Right, so However, we can also Start to understand. Yes, there's more uh tapesh. There there is more selling pressure. Yes There is more aggressors selling Then there are limit buy orders So they are able to move price Uh, as we said Okay, and then test into or trade into Where they can find more buyers And that is here in the heat map That's 64 and a half right here Okay, 171 contracts look at look at the uh the bump up in the uh in the order book in here We talk about order book skew all the time There this there is a skew in this book here There are more on the bid here Compared to these areas up in here Right, so the question is In here Are there enough sellers to trade into this area here and take all that liquidity and trade through it So is there more uh aggressive selling pressure At this point here in this view We do not see more sellers We see that there's actually more buyers here and they completely absorb the selling pressure How much traded 31 contracts it's right here in front of us Okay, and again, we're really you know getting into these first principles And we're understanding these basic market mechanics here and this is what moves the market Now what where I wanted to go through um, and we just defined also another uh key concept in here absorption There are there are more limit buy orders here Then there are market sell orders Or selling pressure All right, so we can go through another scenario now Is if they're if they are auctioning into here And trading into this limit buy or these limit buy orders in here, but they cannot trade through it The second scenario that we go through as well Well, maybe There's no market down here anymore No one's willing to trade with these guys at 64 and a half There's too many buyers So The market auctions back up And now we can we can look at maybe the limit or the market buy orders in here And this relationship with the liquidity the limit sell orders So the scenario is in here If the if there are more market buy orders in here And they're going to test back up into these ranges up here where it traded previously We can see price move away from this whole area here We talk about trapped volume a lot In fact, we look for it In a in a high probability setup And this is starting to get now a little bit You know further into it and we're kind of moving away from first principles But we're basing our knowledge off of these first principles And our knowledge would be an assumption That all of these sellers in here They're they're participating in the market They will need to be buyers to cover As price moves against them Okay, now we don't know if the these sellers in here are exiting the market or entering Are they entering short or they exiting But when we talk about trapped volume we look at all of these transactions in here And we look for a squeeze that these sellers in here got it wrong They can't get through this liquidity here these buyers So we look for An auction up here Okay, and we don't have too much right now in this view. There's some transactions up in here Not many right 170 compared to 800 right below it Four times almost more than four times more just below it here And that's just one tick So the scenario is And understanding the trapped volume Or trapped traders would be these sellers who can't trade through This level of 64 and a half They were completely absorbed here So the scenario is if We can auction up here and find buyers And we're looking for a lot of buyers Okay, like we were looking for a lot of sellers in here now. We're looking for a lot of buyers up here That's 65 and three quarters If we get enough Then we're looking for price to move and trade up into this liquidity at at uh 60 uh 66 and on onwards To the upside here Right, so Is it do you are you guys finding this interesting or just a little bit of feedback? Over in youtube if you can give me some feedback just hit the thumbs up button there Uh, give me a like on this. Uh, it'd be interesting to see like what you feel about this Uh, and you know, I mean, I I can just say like what we're what we're doing On by design in here because we know it's a short day Is to go over first principles Instead of by analogy and getting all confused with data from candlestick charts Okay, the comparison here would be by analogy like, oh, okay. Well, someone says You know, this is a breakout and this is what it looks like But you don't understand why You know and they'll say oh, you should trade, you know the the breakout and like Or look for a pullback, you know to some of these little areas And and and then trade it back into the mean or or look for extension, etc Whatever whatever the the strategy might be Um, but now you're you're going by someone else's uh advice or analogy And this is this is not good Uh, this is why like we you really don't want to take. I mean, it's good to learn from others for sure Okay, but here you're learning and digging into it for yourself Uh, and you're going to come up with your own ideas Uh, and you're going to be able to use those ideas to bounce it off of maybe other other people's advice or other people's Uh insights Okay, instead of going by analogy and accepting their, uh Insights on the market All right, so when we really boil it down, we're really starting to understand now Uh, what we're looking for And that's how you can start to develop your own way of trading in your own setup So now there's two things you can do up here If we get our buyers and at auctions up here Then we're looking for this to go higher Okay, because we know that these these traders in here are selling and they will have to be buyers And that's an assumption But that it is based off of first principles If you are selling in here Your position now is a buyer You are now a buyer in this market Hey vice versa, if you are a buyer in a market, you're you are now your next action is to sell And then it's a question of where are you going to sell? Hey market makers and professional traders they You know, you hear about stop runs and like, you know kind of You know really really kind of nasty activity Just just you know, annihilating the retail traders Well, but it it's pretty simple If there are a lot of sellers in here and you know that they have to cover Uh, and and they have to be a buyer now. Where are they likely to buy? And if you can move the market in that way, well, then you've you've got an edge over them Okay, so we look for The potential of buyers up here to squeeze these sellers and we look for the stop run We look for high liquidity the high liquidity is up here at 76 and a half Um, etc Going through these different market scenarios here How they may play off of based off of the first principles So in here, look what's happening up here and we start to judge the auction And we start to understand what's going on up in these areas How much did it trade up here? How much interest is there in trading up here? Not too much right now Hey, we don't see a lot of transactions up here Okay, in fact in here here Once twice thrice It traded up or the best the best offer was up here, but not one transaction took place The last transaction was here and it was a little too lot up here And that's it So it is exhausting out it is telling us here at this time right now That there is no market here Okay, there's no one willing to transact up here the best offer is up here If you want to be a buyer, this is where you got to transact at this price level Okay, so and no one no one is buying up here Okay, there's liquidity it's here, but do you want it? Do you want to buy do you want to transact with these 70 contracts up here? And we're getting our answer right right now. No Hey, so We're looking for a couple scenarios in here Are we looking for our trap? Sellers in this big range in here to be squeezed by buyers. Well, then we need to see buyers up here at 65 and three quarters If we get buyers up in here We're looking for the move higher Okay, because they will have to be compelled To uh to buy back Okay, because they're out of loss and they want to minimize losing Uh now the opposite scenario here Uh is what if we get sellers Uh transacting back here at 65 and a quarter or 65 Okay, and there because there's no market up here But if we we need to see transactions in here that there is an auction going on Here and and people are participating in it We get our sellers in here. That's when we can look for the test back down to 64 and a half So no no buyers no buyers some selling not bad Okay, a little back and forth here selling All right, let's see now Sellers should be able to drop it No Back and forth back and forth now. We are looking at like this is 10 seconds of data here Right between uh 10 28 and in 50 seconds to 10 29 Okay, so back and forth back and forth really not seeing anything We're also really not seeing any big buying here or really any big selling And that is a clue or a tip off in here If we had a lot more selling in here and I thought this was probably enough in here to get it back down to 64 and a half We don't have uh any Any buying up here and then it just kind of went back and forth However, look look at this retest back up here So once twice thrice The fourth time up here no one and we're finding sellers again Okay, so on this time frame I would look for the sellers to try to drop it into 64 and a half And it's still just back and forth in here now some some did actually now now we have 10 contracts up here That transacted in this little range Okay, so it's getting interesting or a little more interesting and These guys are now pulling their liquidity And nothing happens here nothing nothing nothing nothing. Okay. I gotta see all right. So our our second scenario is now starting to play out We're getting buyers up here now more significant buyers up in here Okay, so now We're going through our second scenario and we're looking for the buyers to try to trade up into 60 this this liquidity up here at 60 67 and a half Okay, okay, and we and that's that's the move that starts to unfold here Hey, do we get anything that transacted up there? No, they don't even trade that Hey, but it came one tick shy of it uh anyway Is it is it kind of clear how we're coming up with these scenarios? starting to understand Uh, and this is actually kind of nice in here what we're seeing we see this all the time And we'll go we'll go over this and understand this move here as well Okay, but in this little auction back and forth in here We're trying to gauge and understand the supply and the demand Of the orders uh and and these participants actions Right, so uh now And because we did not at first we saw all this exhaustion we're looking for sellers and we're looking for them to drop price Here's where we see the shift in the change in here And guys as you guys know that participate in these webinars. We we we talk about this all the time and we see this shift in that change Uh, and then we're looking for you know back up into swings or liquidity First one is actually up here now now that we zoom out. We have a little more information We would look for that first test to be here The second one to be in the list of liquidity up here right, so uh Now look at what we we we just covered Right, and like I said, I I don't know what is unfolded here because I haven't even looked So uh And rob this is actually one of the things that you've looked at a lot In here, okay, so actually let me clear the drawings Okay, and let's look at what we were just studying With first principles we're studying this range in here And we we saw the the exhaustion in here And we're going through the two scenarios. Is it going to be buyers or sellers that break the the the level? Well, we got our answer It was buyers and they went right to where we were Thinking they may go because that's where the sellers are Uh now look at this little range in here though And we can draw a line across that And again, we're starting to understand via the first principles Why the market came back and tested here? Uh, and it's kind of looking for sellers in here pound a few Just not enough uh to to drop it back down in auction back down into this area here All right, so Uh if it if it cannot And we start to find buyers back in here again We're looking for the price to move up to meet the higher liquidity up here All right, so anyway guys, I perhaps this is uh, uh A boring for you. I I don't know. Um, there's like I said, it would thought we'd take this opportunity because the There's not a whole lot of price action going in here. Uh, well, I was not anticipating a lot being at a half half day in here Uh, and in the u.s. A lot of people are going to be off Right, but I wanted to cover this, uh And talk about market mechanics and first principles and use that as the vehicle to understand the market mechanics Okay, because this is really what moves the market and now we're starting to extrapolate that into bigger moves Rob, this is one of the things that you've noticed again and again again To move back down after a breakout a pullback to test not only where it broke out from but also there's going to be a lot of transactions in here In fact, let's just zoom into here And we can now start to look at this little range in here and where did most transactions take place clearly Right here Okay At 65 and a half. This is your high volume node This is your poc All of this all this means in here Uh is that this is the most traded level And that means that most people agree with this price Okay, so And and that's just fact so The market can come back and retest this area to see If they're, you know, maybe this is overvalued up here. Maybe these buyers are they a lot of people think they're crazy I I'm not going to buy it up there Like there's no way That's just overvalued. In fact, maybe I'll sell it back to here to value And there is your mean reversion trade Okay, back to an an average or kind of average price in here um that uh Would be your uh, um your high volume node Okay, so Let's take a look. We said 60 65 and a half And it went one tick below that We see some selling in here Okay, but not enough Not enough Uh selling in here and now we're looking to see now Well, if if the market cannot If the market does not accept in here any longer and we're not seeing a lot of transactions in here At this price level uh, so If we're not seeing a lot of transactions like we did previously in here Maybe the assumption is values at a different level now Right, so it would maybe it's up here that there's another high volume node Okay, so it's up here now Uh potentially Okay, or maybe up in here as well. Don't see a high volume node, but we see some pretty big transactions Okay, you know the liquid is up here We do not on the retest here. We do not see Uh a whole lot of transactions in here Okay, so the assumption would be That price will probably not accept back down here It it it tested it traded Okay, but it is likely to go back up and to trade into these areas here Yeah, because there's not a whole lot. In fact, this is what we call a low volume pullback Okay, and you can see it uh here In also in the in the volume bars here Okay So there's not a whole lot of selling in here And if the market Is not, you know, we don't find the sellers down here and it cannot trade back down in here Uh a lot We're going to look for this would be buyers would look for taking it back into an area where it can facilitate trade Okay, so we'd look for the move back up Okay, and beautiful move up into the liquidity we are looking for right So this process and this understanding is now now of of the first principles and understanding the um The market is made up of orders And the it is an auction a two-way auction And that also this is The movement of the market depends on More buyers than sellers or more aggressive buyers than sellers. I should say Or more aggressive sellers than buyers Okay, that take all of the liquidity at one price level and can trade to the next level right, so Now we're starting to understand The different participants and what their actions might be And we're starting to understand The these price structures as well And so price structures is a little different than market mechanics It's the market mechanics that make up the price structures It so and there's so much. I mean like There this is what we've covered so far is just the Very very small tip of the iceberg. However, for those of you who know your your Market profile or your auction market theory or your patterns or your your you know price action and structure You can see like now we can start to understand all of it behind it all of what makes up this And it's it's it's really quite profound What what you can derive from what we've just covered And we can look at now bigger moves though as well we can we can look at the same principles Okay from that binary kind of market mechanics we extrapolated into a smaller move Okay, we can zoom out more Okay, and we can look at bigger moves And we're looking at and going through the same exact process Based off of first principles Okay, I am convinced that this is like uh This order flow that we're talking about and the um These these first principles here on the market mechanics Work on all time frames I'm I'm convinced about it like it works on the daily chart It works on the monthly chart We can look at you know weekly bars in here. It is the same process Okay, so uh, it's and and where this is becomes like It is these principles behind What I think are derivatives of that is candlestick patterns or You know volume profile or whatever it might be It but is based off of these uh first principles in understanding the auction Uh, and then you can you can derive or get into the details on the higher time frames as well and understand these same same principles okay, so On the daily we're not seeing a whole lot uh to cover here. I mean we've covered all of this move in here Which is which was great um The um We can look at today's action in here And look at this auction in here in this back and forth Right. Well, you know, it's just in in this kind of big trading range Um, you know from down here 62 Uh and a half or something on up to here at at 71 Okay, so like a 10 point range or so and We're seeing this back and forth in here and we don't see That we see every time it comes back down here so far We're seeing that there's buyers that we're willing to buy at this uh end of the range in here And trade it back up into the middle or the other side Every time that we've seen sellers come in Uh, they they've they've been up in these wicks up in here Now we can take the same ideas in here and look at what's currently happening Okay, so let's just go through the process because I'm looking for sellers to retest it back down here Right and we're going to look at a book map to understand that Uh, because we're only looking at the higher time frame here and there's so much missing from here Uh, we don't know but what we do know By looking at these candles in here Uh was the range was up in here Now it's tighter and it's smaller down here Uh, it hasn't gone up to these highs uh before And we're still seeing right currently right now We're seeing some selling coming in Okay, we traded back down here as you guys can see on this 15 minute chart and we've come back up into the range again Okay, so I'm looking for sellers though because they seem to be less Uh buyers willing to trade it back up into these previous areas in here So I'm actually looking for sellers down here again To trade it back down to the bottom of the range. So we're trading from the inside out And we're looking for sellers to move price To test this area down here That's it. Now. That's just one scenario now. Look what's happening It's starting to go into a green candle now. Well, it just It's just uh kind of flipping in here. So well Then if we don't find sellers here willing to take this back down Then I'm curious. We're gonna have to find a lot of buyers up here At this 68 level let's say 67 and a half to 68 somewhere around in here And we're gonna have to find a lot of buyers in here to lift it back up and retest these areas Okay, so Uh, let's look at book map Right. So anyway, the point was you can use these same principles On much much higher time frames And it is exactly the same It is still an auction And they're still based on the orders and the participants uh in that auction It's just a higher time frame all right So, uh now we can also look into a few different things now And start to understand based off of the first principles This context that we're talking about earlier This context between buyers and sellers And going through these scenarios so Well, uh, so where is where are the majority of the sellers willing to deal in this market? Well, they're up here. This is the liquidity the majority of them the heat map very nicely shows that in book map The question is We know what makes price move Is the aggressors And they take the liquidity and if they take enough liquidity by buying They'll move to the next price level and start to transact into that liquidity Okay, so we're looking up and starting to understand up in here. Do we have enough buyers? To be able to break this range here And trade up into these areas here And this is where we start to understand skew in the order book that we've talked about for years They look at the order book in here and look at the liquidity in here in heat map Okay, it's kind of You know back and forth. I mean that there there seem to be more sellers up in here for sure But it's not orange or yellow or red And they keep adding and pulling too. You see the the changes in the heat map And then we don't we haven't found the buyers yet Enough buyers Look at look at the um the previous behavior in here And do we see like big green dots willing to to lift this market higher? Not yet Okay, not at all uh, so Then are we going to find sellers in here? We'll come up retest this area and this is just uh prices too high And I want to be very careful here about this Because price too high in an auction We're going to get a lot of insight And not just say that that price has come up into these areas and tested Uh, we want to understand the context and the order flow to give us the insight Hey, because uh, that's what will give us value here from book map All right, so the context would be Is there more supply up here with limit sell orders? And what is the relationship between that and the market buy orders? like before here We said that uh, there's a lot of liquidity down here. There was complete absorption. I guess right right in this area here Right complete absorption. I can't recall if it was this area or somewhere else, but like uh They they were not able to trade through this liquidity here Okay, so we got our answer That is the context here that we're talking about It was completely absorbed So at the top at these ranges up in here in current price We're looking for that context as well Is there a lot of supply with limit sell orders? or Are we finding a lot of aggressive market buy orders willing to trade and be attracted to that liquidity wanting to transact into it and so far I don't see a whole lot of buyers interested in it I see some selling and some back and forth in here Uh, and I I really I don't I don't have much of an opinion on that and and I hate to use the word opinion, but like um It's factual. I mean we don't see market buy orders in here Okay, now we're starting to see some here, but also the liquidity has stepped up here So does someone want to make the deal here? Do buyers want to transact into this liquidity? Okay, they do Getting our answer Right, but there's still more liquidity up here Do we really see buyers really interested? No Not yet We may Now if we don't though And we start to see sellers here at this 67 and a quarter Then I'm looking for it to to trade back down into where it can transact Which would be a previous value area And maybe to the even the other side here Okay, because look at the little step off from here at 65 Uh eight almost 9 000 here and then almost 6 000 just below it. So 3 000 less So this would be a good area for it to trade to And looking for now sellers to trade it back to those areas Now we can start to gauge and understand also the context of the aggressive sellers Do we see a lot of that? A little bit not not much though not much Okay, so we're not getting too much insight here Is this too high? Well, it was for for this time frame here Okay, and uh and we see we traded into this liquidity But there was not enough buyers in here that thought this this was um Uh a good value So yeah, uh, that means that if there's not enough buyers up here then it is it's too high And we look for sellers to drive it back down into an area where It's comfortable A price level that is considered value a value area Okay, now look at this one up here Okay, we we can we did find some buying interest where we're back up here again Okay, so And we when we just uh see it retest back up here And we don't find any buyers Okay, so what now it exhausted here the question though Is are we are we still finding um buyers or are we starting to find sellers? And that's the context that we want to understand here. Is it too high? Okay, well now look at the buyers come back again So actually now we've hung out up here multiple times And let's read the buyers and sellers in this auction here And trying to gain understanding because actually i'm looking for buyers to trade into this level here Okay, because we have and here's why Because look at the the buying and selling in here Right, and we do see selling and we do see buying Okay, and but we keep coming back up here And then we see quite a bit of buying and and these little areas in here And there's no one really underneath here skewing the the bid No one's like willing to buy at a higher level up in here yet. Okay, that's not good for us to to push through here Okay, however, if there's still interest up in here without that Is bullish All right, so buyers still seem to kind of climb and trade back up into these levels here Now you can talk about also your your this auction in here in terms of profile Here's your p-shaped profile A lot of transactions taking place up here All right, so Then are they willing though to trade up into this liquidity so far and not it has not occurred yet Okay, let's read this auction right now currently Are we finding buyers in here? Right at the current price because it's kind of a high volume node here No, we're not at the moment Okay, there's a little bit Okay, so A little bit more now look at the bid down here too. We haven't seen that before right, so now We're curious here looking for more up here at 67 and a half Okay, we're getting our answer right now There's there's none We didn't retest back up here instead. We found actually some sellers Okay, so what they were interested in this liquidity that we thought would maybe it was skew the order book And we'd find more buyers up in here. We didn't we didn't Hey, so what does that tell us in the auction in here? All right, so we're back down to the bottom of this range in here and we're finding these sellers Trying to transact into this value previous point of control here Okay, or this high volume node here at 60 66 and a half our quarter Okay, so now we're starting to understand a bit more about what's happening up in this level up in here And we actually haven't answered the question is this too high So that that's the the answer right now Okay, now now we're now we're starting to this starting to unfold a bit more a lot more is starting to happen here Okay, but we don't know if this is too high right now to be honest Okay, now look at the buyers coming in now Okay That's good Uh looking for a lot more right at this 60. This is a high volume node at 67 and a quarter I want to see a big green dot in here If I do I would look for price to come up into these levels Okay, I don't think that this is too high In fact, maybe we'll get a breakout And explore and trade into a new area where it can transact And create a new value area all right, so anyway guys like just uh starting to um Understand This auction process and from based off of first principles Value and what prices are what the instrument is worth And we're starting to evaluate that And starting to understand what traders think about that that these these price levels here Are they willing to transact at these levels? This is why you always hear about not just vwap but twap Okay, it is the time that it accepted at a price level That also is value Right, so all of this based off of these first principles and market mechanics Hey, and look at we're still finding buyers climb back up here So is it too high? No It's not too high All right buyers. Let's see it then if it's not too high then I want to see you transact here at 60 67 and three quarters And then here's our p shaped here Meaning that this top edge Is weak meaning weak that it can break Okay, so we look for transactions up here Now it's this context again of liquidity that we really want to understand between liquidity price structure Uh and the aggressors Okay, and then we can look into um The potential move in here now. This is why we always cover Especially like with the market pulse tool that we've been looking at we start to cover The pulled liquidity the pressure of the volume etc And if the and these scenarios that we go through we're looking for pulled liquidity up in here We want to see them pull and we want to see them add on the bid And based off of that auction We're looking for the aggressors to respond With a market market buy order. So if that unfolds and we see the market buy order here the big green dot We are looking for price to go higher because we know there's appetite to buy and there's less liquidity here So we are looking for the move higher This can be extrapolated to all markets Okay, look at we we're just going over crypto uh earlier on Here it is here Transactions took place up into here market sell orders trading it right back down Into areas of high liquidity down here. Let's look at nvidia Uh, maybe not let's look at uh, I guess I'm looking at the absorption indicator in here Uh, I wanted to do some testing on it. But uh, look at this auction here in apple Same ideas in here. Look at look at the bid here High liquidity Sellers are transacting into these guys now They're bidding up though through here Okay, so there's a couple of questions in here then to end scenarios to take a look at very very simple Um I see I don't see a lot of buyers up in here. I see exhaustion And we see sellers just traded into this high liquidity that has been bidding up throughout here Okay, so now I don't see other liquidity until really kind of down here at 80 189 35 or down here at 189 18 or so So now sellers if they come in with some selling pressure they can very easily move the market back down Is the opposite as well though They're bidding up and they're getting filled in here. What if we get exhaustion on the on the sell side in here Okay, now we're looking for buyers back up here And if we get buyers back up in here around this 189 58 to 60 level look out This is going to go higher All right Any of those sellers in here will be flipped and have to have to cover on the move back up Okay, I'm not seeing sellers in here I'm looking for buyers in here now I saw this really strong bid and I'm looking for buyers now to to come in Uh and and lift it and break this price structure here To retest another price structure and hide liquidity on the offer The most being right here at 89 75 Okay These are really simple ideas based off of These first principles that we're looking at and book map in the order flow right, so Let me see if there's any questions and and guys um So I see 19 likes in here Uh, which is good, uh, that's fine. I'm saying if you do like this Kind of education. Please hit the like button and let me know Uh, we will cover more about this kind these kinds of things, but we'll we'll you know extrapolate it into all sorts of different trading It will we'll talk about momentum trades. We'll talk about range bound trades, you know, we'll talk about Trap traders, etc It's all based off of understanding The auction and the and the order behavior Uh to gain gain insight to where price might be going next All right, so uh Anyway, uh, yeah, okay. All right. I'm getting some good feedback. Thank you guys. Um And uh, yeah, now we can we'll get into uh also trading uh this as well Uh, which is actually pretty simple Uh, the the trading is is is really really simple based off of this. It's like, okay Well, where do we think price is going to go? Where do we think? That buyers have taken control Okay, and in this setup here now, this is not a trade recommendation and we won't do that in here Uh, but uh, uh, you know, you could be getting involved anywhere in here You could be placing your stop pretty aggressively here or even at the swing here Uh, and then you're looking for uh taking some profit back up into these levels here Okay, where that liquidity is or front running that liquidity now This is something where you know talking about the trading part Okay, you first need to understand the auction process You understand what you're looking for This is why in that book map academy. We mark up our charts. We identify these elements in here Uh, and then we start to uh parlay that into a trading strategy Okay, so we know that buyers uh have the edge up in here Okay, so we're looking for them now to kind of uh explore higher areas here All right, and you know after looking at that many times over Then we're looking we're looking at a a risk model around, uh, uh this potential opportunity Okay, and and looking for it to work out or it doesn't And if we look at enough of these and understand this auction enough and understand the players behavior in here enough Yeah, we're gonna have losses No, that's a part of the business Uh, but we have a higher potential of it working out Uh, if we understand, uh, some of these principles in here All right, so uh, this is where the um the trading plan, uh comes next with the Understanding exactly what you're looking for and where exactly you're looking for price to go And then putting your risk wrapping your risk model around that And then going through it again and again and again All right, so uh, uh, and then continue to learn Continue to go into deeper understanding of trap traders or context You can talk about other markets. You can use first principles for understanding market correlations Like this is apple Okay, apple is like it's you know, uh In a downtrend here is it reversing? Right is is it starting is are we going to find a reversal here? Are we going to get trend continuation? All right, so uh, uh You know Well, we'll look for that here But like what I want to say is like what about nvidia now stocks are stocks are a little different because Let me take off the absorption here. Um, stocks are a little different because you know each each stock um Is its own performer And and and actually the auction is different Uh in a stock as well You know, you have uh A float of of shares out there. So it's it's very different. Uh, in fact, it's starkly different Um, then uh, then futures. Okay, there can be unlimited contracts in futures All right, so unless the the the company Um, that has the stock here offers more shares Then that's something different Um, but uh in the futures market, uh, there's open interest Okay, new shares or new contracts are um, uh created all the time All right, so anyway, um the uh Yeah, we'll get more into understanding. Um Um, some of the trading behind this as well But it's like I said, it's its first understanding How these markets work, uh, and then starting to to get into, um Looking for something higher probability Because you're based off you're you're basing your, um A knowledge here off off of exactly the mechanics behind these markets First principles And then looking for specific things that give us insight to where price might go next and what it what might be considered value Uh, and then we're looking for taking advantage of that by understanding the behavior here, uh Of what we know moves the markets All right, all right enough guys. Um, it's over my time. Uh, and uh Uh We'll we'll wrap up here. I just wanted to let you guys know again if you are interested in book map, uh, there we're having this, um Opportunity right now is our black friday, uh that you know, we get the question all the time Are there any deals going on? Well, there is now That's why I want to cover it. Um, november 23rd to the 28th. Um, if you're a current subscriber A current monthly subscriber a free digital user or brand new to book map. You can get three months of book map at half off Uh, there's also another one over here. You can get 60 off But this is for the first month only and this is available to a different group here Uh, it is available to new People to book map free users or previous book map subscribers So if you're a previous subscriber and you're you're back here checking out book map, uh, then uh, uh, and you're interested in this Give it a shot for a month uh, get 60 off and uh, uh, you know, you can partake in the uh, the um uh book map academy and uh Start to document some of the things that we're covering in here um with uh the the order flow and then uh You know, maybe this is something that starts to work for you At least you gave it a try all right all right guys, so Anyway, let's let's uh, we'll wrap it up. Thanks everyone for coming. Enjoy the weekend. Uh, it's um You know, we had our holiday uh yesterday The markets will be closed and I think in another hour and a half or no two hours Uh, so not looking for much, you know today, uh, so I took the time to to go over this Uh market mechanics here in more detail for you guys Okay, thanks again guys, uh, and we'll see you on monday. All right. Take care. Have a good weekend