 Good morning book map community Welcome welcome all 22 people hanging out. Good to see you Please smash that thumbs up button if you can I sure would appreciate it All right. Well, let's start as always by zooming out and getting a bigger picture Understanding of what's going on in the market here today If you're joining us for the first time, my name is Charles I run a community called Pirate Traders. We are focused on the ES the NQ and how it moves throughout the two-way auction process We use market profile software, which is the screen you see on the left We use book map software, which is the screen you see on the right And then we use market internals, which are these screens that you'll see me click back to on occasion Each thing serves its own purpose in understanding what's going on with the auction process The screen over here on the left the market profile screen shows us in a three-dimensional way Where the market is spending the most time and where it is bringing in the most volume? The book map over here on the right shows us where the liquidity in the market is and what happens when the market gets to that liquidity So for example, we've got this little orange line right up here at 45 20 So i'm going to assume there's sellers waiting right there So if the market were to get up there those sellers would fill and then we'd pull back But what happens if that liquidity disappears right before we get there? What if as we push up to that level suddenly poof it's gone? Well, then the market will just poke right through and keep on going So by having the Three-dimensional perspective of where the market is spending the most time and where it's bringing in the most volume And where the liquidity ahead of time is and how it reacts to price that gives us an edge over our competition But to begin the day and the week we ought to assume all the way out and start with the monthly chart This is what jim dalton come calls Um the pre-market prep So basically what we want to do is we want to start zoomed all the way out at a monthly just to give us some different perspective Right, we've been staring at these charts intraday every day You know all week and so now we just want to give ourselves some a different way to look at the market So what jumps out at me right now looking at the monthly chart? Well, nothing in particular Overall, it seems the market is rolling over to the upside So my assumption is any pullback in here is merely looking for support to turn around and head back up Right I'm seeing some highs of previous monthly candles over here And it looks like right when we got up to those levels we ran out of steam and pulled back So again, nothing major there, but just an important thing to note All right, let's zoom in and we'll look at the weekly and see if with a little more detail Is there more information? Well, sure there absolutely is when we zoom in with the weekly we can see Balance and excess which is the two-way auction process that the market goes through On a shorter time frame so we could see we had balance in here and then we got some excess We had balance in here And then we got some excess and we are now balancing off that excess using price with a pullback So that's important to note just to understand where we are in the auction process Who's in charge and how much success are they having? The buyers have been in charge for a while here, right? They've been able to continually push the market higher Bring in new buyers push the market higher bring in new buyers push the market higher So they're probably again, this is on a weekly basis, right? We're zoomed way out right now They're probably still in charge. What happens when the buyers are in charge? Dips get bought Right, they buy the dip and then the market turns around and starts heading right back up So that's an important thing to note looking at the weekly We'll zoom in a little bit more and we'll take a look at the daily chart looking for some perspective there So again, the daily chart is giving us a little bit more information. We are seeing that the market had balance And it broke to the lower end of that balance, which is the sign bigger picture We need to balance off this excess with price not with time The market pulled back down We had more balance at the end of the week last week, which was just a very irregular type of thing But that was more balance right there. So now the question is Was that enough was friday's pullback enough? And now we're ready to go sideways until we can turn around and head back up Well, let's zoom in on the market profile chart to get even more information Oh Soon as we zoom in a little bit more suddenly we notice something There is a big unfilled gap right below us friday began to push down into that gap And as soon as it got in there, it ran out of momentum and started to go sideways So that is a sign there were buyers waiting there but You know history will tell us that the higher probability of the stronger hand longer term buyers Is that they will actually be waiting closer to that gap fill 44 78 So in my mind the fact that we entered that gap And didn't fill it on friday increases the odds that we're going to fill it today Okay, or this week. Anyway, I don't know that we'll do it today, but it's there. It's the target that the longer term Participants are watching Okay, well, if that's the case charles if you're thinking we got to head back down to fill that gap at 78 What will the market do to tell us that that's what's taking place? How will the market give us signals that we should be short for that trade? Certainly, we shouldn't get short right now. Of course not don't get short right now Anything could happen But there are signals to look for along the way So first and foremost Because we are opening inside the previous day's range The first thing that we're expecting the market to do is what we call chop Which is basically just trade up and down inside a range much like it did in the overnight here Just grind up and then grind down and then grind up and grind down and just keep going up and down and up and down and up down Until it has enough momentum again intraday today this morning to break one way or another Perhaps it breaks higher and we start to head back up or perhaps it breaks lower and we start to head lower So the first question we want to ask ourselves is what will that chop zone be What will be that range where the market will likely just bounce up and down While it's trying to decide what comes next All right. Well, what are the important levels for us to watch? Above let's say the market were to open exactly where it is right now at 17 The first level to watch above would be 45 1850 that was the base of a set of single prints down on friday and that often acts as resistance When the market pushes back up So our first thought will be do we get resistance right there? If we get resistance that will be a little bit bearish to see not a reason to get short Just a signal from the market. Hey The bulls are not in charge here. Okay, so then we'll look for support on the way down What are the areas that are likely to act as support? Well, this very large node that we have right here from the overnight is likely to act as support And then this other node down here where you can see we spent a lot of time and we brought in some volume Okay, so those are our support levels that we'll be assuming as the market goes down. It's going to bounce there So we've got resistance support All right, what happens if we break through the single prints to the upside? Well, if we can break through the single prints to the upside, let's say we can get above 45 18 Well, then the target becomes the overnight high at 45 22 if they get through this resistance There is a decent prob probability. I would call it 70 probability that the market will then head up and test that overnight high What is testing the overnight high mean? It just means the market will go to that level It doesn't mean anything will come next Right, we have to wait and see what comes next But if we can get through those single prints, there is a decent probability We will at least test that overnight high So once we get there, we'll be asking ourselves what happens at that overnight high Does the market just poke above there and come right back down? If so, we assume more chop more sideways more grind Only if it is able to get above that overnight high And stay up there and find support and bring in buyers up there at that higher level Can we get bullish that the market wants to go higher today? Okay, so resistance at 18 Or a look above and fail of the overnight range means we're coming back down. It means we have more chop Support at you know, again, these aren't exact levels, but just support at this node right here Or support at this node right here means more chop It means we're turning around and we're heading back up And so as long as we stay between those two areas as long as we're between here and here There is no reason to enter a trade because they could turn it around at any moment They could push it way up or they could stay in a tight range They could go really really slow and then instantly pop lower or slowly grind higher Literally anything is possible. There is no Statistical probabilities in your favor while we're in that chop zone Okay, but once we break out Then the probabilities go in your favor. Okay, so we talked about the breakout of the high Pushing above that overnight high and finding support. What would be the breakout to the downside? Well getting below this node So we'll call it 4504 and getting resistance there Increases the odds just like getting through the base of the single prints would increase the odds We're going to test the overnight high Getting through this note of support at four would increase the odds. We're testing the overnight low however I would not need to wait to see new sellers below that overnight low because of that gap because we have This giant magnet tugging on price Saying hey come down here and fill this gap. You know you want to You know there's buyers waiting down here. Come on, baby If we can get below this node and find resistance that is acceptable to me to target the gap fill So then what i'll be doing is monitoring for continuation In that move. So what is the next thing if we're going to head down and fill that gap? What is the next thing that I want to see happen? Well, I want to see first the market gets below there and gets resistance Then it tests the overnight low Then I want to see new sellers at the overnight low new resistance To continue to push the market down to yesterday's low and same thing there I do not want to see us just poke below yesterday's low and then pull right back up Right, I want to see us find new sellers down there below yesterday's low As long as I keep seeing what I want to see as long as we push below here We get the sellers there. We push below the overnight low. We get the sellers there. We push below Yesterday's low fridays low and we get new sellers there. I am certain we're heading to fill that gap I can be very very confident with that move once I see what I want to see But there's no reason to feel like right now up here I should get in a short for that gap fill because the probability is just as high That we poke above that overnight high and then turn around and head higher So it's better to wait for confirmation. It's better to wait for more information Before jumping into the trade just because my perspective on the daily is that we need to fill this gap Doesn't mean I should instantly be in a short intraday to get there There are more signals. I need to look for along the way Okay So that's it for me chop zone this morning. Let's just watch how it chops Let's look for signals of which way it's going to break out of the chop And then once it breaks one way or another, let's get in a trade and let's monitor for continuation That's my system and i'm sticking to it We got 74 people hanging out Let's see if we can get some likes up in here Smash that thumbs up for the pirate Hello new culture Good morning nor auto trading Alex is here. Good morning to you Jay Tgim The casino's back open, baby Raj Says hi, could you share your views on crude oil? Um, I will share my I will look at the crude oil chart and I will share my views But I have to give you a caveat. I don't trade oil So I have no edge, you know, I'm not better than anyone else at it um Whereas with the es I have an edge because I trade it every day Okay, um So what you've got here on crude oil is balance On a larger time frame Which looks like this right here Okay, so the market every time it's tried to push above here It's been smack back down smack back down smack back down and looky looky where we are right now All right, we're right back at that balance area So the higher probability is that the market is going to Do the exact same thing it did here and here and here and here And it's going to turn around and head back down now. This is on the daily So it doesn't mean it has to happen today, but in the days to come So what I would be watching for If I was trading crude this morning Is I'd be looking at the level 82 95 Okay, and I'd be saying to myself. Can we get back above that level? If the market wants to go higher if it wants to break out of this range that it's been stuck in It should be able to get above there and stay above there No reason to rush into a long trade if we're going to break out of a balance area. That's this big We will likely get a very big move You know, it could lead to getting all the way up to 94 Okay, so you don't have to rush into the entry for that larger move Um better to wait for confirmation If it stays below there Right, then that what we got on Friday was the look above and fail That likely means we're heading back down towards the 80 level So I would be cautious this morning. You could use Friday's low As a good level to watch for support or resistance You could pretty much treat Friday's range like a chop zone So if they get below Friday's low, oh, yeah, they're definitely going lower Okay, but they could chop around all day inside of there And it's this is an area, you know looking at it zoomed out. This is an area that calls for caution Because this is where the market has been smacked down again and again and again If they didn't have the momentum to break out You know back here in april What happened? No reason to assume the same thing can happen once again So be very cautious at this area and wait for confirmation Let's take a look at the nq real quick on the market profile Man, nq much trickier than the es here Ironically the nq looks like the es usually looks With its balance. That's so funny Um anyway, okay, so what you've got on the nq is we had this balance area Okay, we broke out of that balance and immediately ran out of steam Which is interesting because that's a sign there were buyers waiting around the 15 360 level that that large note of support Those bigger players they wanted to get long in there. Okay, so that is interesting to see especially with a gap fill Just below But what happened on friday? They got all the way back up into balance They began to bring in buyers and then they failed So that makes this just a back test of that balance area Which increases the odds of continuation lower So it is bearish just like the es to try to head down and fill the gap left behind from yesterday However, I think it will be a much harder trip to get there. There's going to be a lot of support waiting around 15 350 Okay This same area has been support again and again So likely the chop on the nq will be intense today Before we'll be able to break below there and continue down to fill the gap I wouldn't really want to short this. I mean, it's I know it's frustrating to imagine I wouldn't want to short it until it got below friday's low I need to see it get down there back into that gap and then short it for the gap fill Inside of here. This is just a giant chop zone And they could take it up. They could take it down. They could take it all over the place They could spend all day if they want So a little more tricky there on the nq It's calling for patience this morning For what it's worth this node that we're sitting in right now at 15 4 30 Is very strong resistance So with the overnight inventory being net long Meaning that the highest probability is the first move will be to the downside If they're able to keep it going like right from the open, they'll probably almost certainly test that overnight high um But I wouldn't get bullish unless they found support up there Because as soon as those overnight traders as soon as all these people who who've been long take profits The market comes right back down So both markets opening in a chop zone A cha cha chop zone Good morning ebb and flow Ebb and flow says our spike rules in play. No, they're not Uh, they actually are for the nq. Although we're opening above the spike. So that is the least bearish scenario But for the es it wasn't actually a spike. I know this seems crazy But they pulled back up into the k period by like a point Um, so that's not a spike. They would have had to have closed below here For it to have been a spike down. So there are no spike rules That's just a sign the market got itself overly short overly fast So this morning it is just a good old fashion chop zone Watch and push it up watch and push it down Watch and push it all around and wait for them to break out before you look for opportunities because Calculating the statistical probabilities in here is impossible Good morning to gull J s caution New culture says where can I learn from you? Oh, well, that's a great question. That's my favorite question Um, so there's two ways you can learn from me Depending on what tickles your fancy I have a membership group that you can see at the top of the screen The link to go find that it's pyrotraders.io slash join And it's $10 a month. I do what I just did every day I talk about the market before the market opens and then, uh, you know, watch the the market trade for the first hour You can learn that way I also have an e-course that you can take which can be found on the website And uh, that e-course explains all the stuff that I look at and and how I read the market I will tell you because you're probably used to fru ruse who tell you just learn my one simple strategy And you'll make money for the rest of your life My way of trading is hard work. I have to show up every day It's never easy. It is always a challenge But I have an edge and so that is what I try to teach how you can discover an edge for yourself It doesn't mean trading will ever be easy But it can make trading simple Right now before the opening bell rings. I know there's nothing to do Until we break out of the chop zone. So there's no reason to be stressed this morning There's no reason to be like, are they going to go up? Are they going to go down? Is the buyers? I don't need to do that. I can just relax And when the market is ready to make its bigger move, which is either turn around and head higher Or head back down towards filling that gap I'll wait and see us break out of the chop zone. Then I know to participate That alone is a giant edge So many traders will drive themselves nuts in the first hour of the day on a day like today Trying to predict which way the market's going to go and then they get stopped out And then they go the other way and then they get stopped out and then they go the other way And you know by the time we finally are ready to break one direction or another They're exhausted and their account size is depleted. So These little things give you an advantage over your competition Knowing when to participate Where to participate and how to recognize when you're wrong That's the most important thing When what should happens doesn't is the most powerful tool you'll ever have Because day trading is about being able to change your mind Over and over and over again being open to the flow of the market And the information from the market is constantly changing That is what the auction process gives us An ability to make sense of that randomness Raj says what's book map saying So in a chop zone like this book map isn't super helpful first thing in the morning Because like I said, it's going to be all games, right? It's going to be just bots trying to take money from the scalpers who are trying to trade for the first hour So there's going to be tons of false information that pops up That totally confuses you. Oh my god. Look at that liquidity come in. Oh, no, it disappeared. Oh, look, there's an iceberg Oh, no, they went right through it. Ah, you're going to be all over the place It's the same thing with the market internals the ticks are up the ticks are down. What's happening Ah, it's going to be crazy because it's a chop zone. So the best thing we can do Is use price action. We know the levels to look at We know what to expect to see when we get to them Let's just let them go to those levels and see what happens Then once we have a clue about what comes next we can use the other tools to guide us along the way I will tell you one thing from book map When you have a day where you're expecting chop is you can just zoom out like I have here And kind of look where the larger nodes of liquidity are essentially the darker colors Now again, I would not short just because there's more liquidity below than above But it is something to keep in mind Especially if we look above that overnight high and fail If we push all the way up there Giving these overnight traders a chance to take profits and the momentum instantly runs out Then we want to keep in mind that there's a lot of liquidity waiting down there near the lows Okay But the best thing we can do once the market opens is just watch the price action Good morning to Gino Pavel Daniel Old gringo Um caution says I recall you were very skeptical of that Up move on Friday turned out to be true it did unfortunately I wasn't sitting in front of my computer, but if you guys recall when I left on Friday I said the base of the spike down was likely to act as resistance And there it was right there. We literally went Two points higher and then ran out of momentum and came right back down So that is what we call just a back test of a breakout Generally when the market breaks out of balance It will come back and just test it one more time So this was our balance area the market broke lower came back tested it And then we head lower Couldn't have known at that moment that that's what's happening But once we got cessation Then we knew all right. We got one minute to market open. We are opening near those highs So remember the overnight inventory is net long That increases the odds they need to make a move to the downside If they don't if they immediately go to the overnight high That's a when what should happens doesn't Let's see what happens and we're off to the races Okay, so here's that scenario where we immediately head straight to that overnight high That in my mind increases the odds that we will look above and fail Because this will give all these overnight traders a chance to take profits So the only thing that could get me bullish is if we can bring in new buyers up here And stay up here above the overnight high moment of truth can They hold it round two can they hold it So this is the moment that all those overnight traders Almost entirely net long They're taking profits Are there new buyers from today's regular trading hours that are going to step in here and keep it going So far ticks are saying yes on the buyers Okay, so we've left behind a low volume high which increases the odds will test it again But we are noticing That there is taper every time the price pushes up Fewer and fewer participants That is less bullish to see Okay, so as far as letting trades come to me If the market can hold the overnight high at 45 22 Whilst getting back to the zero line on the ticks So the ticks got to come back to zero and then bounce again If I see the bounce I will be bullish for continuation higher Because that will be a sign of the new buyers stepping in But I don't trust it quite yet So charles the market's pushing higher. Why aren't you bullish yet? Well, look at those ticks. They're not going up. They're going down So more likely the people going long here are shorts that are covering Then necessarily new money buying and it's a bot shenanigan zone Bot shenanigan zone Okay, I'm officially bullish. They are holding that high So that is a sign of some new buyers. I don't know how far they can push it But for now they're in control So as long as we stay above the overnight high, I will remain bullish If we pass back through there and head back down into the overnight range Then I look for a pullback and more chop But for now my assumption is they'll be buyers waiting because they've been buying this whole time So we are looking for support and a bounce on the ticks Can't They Hold it. All right. So this just became a look above and fail of the balance area Which means we're re-entering the chop zone Looking for where the market will find support First level is literally right at the opening price 45 18 And then 45 16 And then the question is when they bounce can they get back above that overnight high So this is the moment of truth for those buyers on the ticks if they can't get them back above the zero line We're likely to go sideways for a while here Inside that overnight range. All right, no bounce Get ready for chop folks So they just tried to take the market higher and they failed So now the sellers take control and see how far down they can push it So our assumption at this point because we looked above and failed The overnight high is that we're not going back up there So any buyers that step in here are likely to get smacked back down And we keep chopping and chopping and chopping If the opposite happens if the buyers step in and they get back above that overnight high again Well, then this was just a liquidation and we get bullish once again But for now the higher probability is that this market's going sideways for a bit Let's jump over and take a look at the nq Yeah, nq just still inside that overnight range So more chop look for support around uh 15 350 And sideways from there Gonna be some tug of war this morning Good morning to siku Rob the trader Rob the rob the trader We're all kind of trying to rob traders here every day like we're trying to rob each other So that can be taken two ways rob What is the market profile chart? It is called window trader spelled window spelled without a w at the end Any market profile software will do though All you need to be able to see is the tpo's which are the letters Those show you where the market spends the most time And then the volume profile the little volume candles that just tells you where the market is bringing in the most volume By being able to see that you can recognize where business is happening So for example because we were bringing in all that volume above the overnight high There was a chance that could have held the support to continue higher But as soon as it didn't as soon as we passed back through the overnight range, where were we going? Back to where all the business was in the overnight right right back down So by being able to just see where those levels are where does the volume come in Where's the next spot gives you indications of what's happening bigger picture And any market profile software will do that As well as the bot shenanigans we see here in the book map Again just further increasing the odds that all that's happening right now Is the the computers are trying to take the money from the scalpers They're just going to go sideways for a couple hours Squeeze as many people long squeeze as many people short And just grind up and down Until they pick their direction If you did for any reason take a look above and fail trade of the overnight high I would say moving your stop below your entry would be a reasonable move now Or taking profits in support here knowing they're likely to bounce and turn around and head back up If not, you're just waiting for more information Mark says nq is dragging es down Um, I wouldn't say that I'd say they're both doing the exact same thing Which is like they're just stuck in that overnight range stuck in that chop zone and it's short term You know participants Picking each other's pockets as Jim Dalton would say So the fact that the nq pulled down before the es just meant there was still liquidity waiting up here They knew they still had these stops And they had to go get those first So just looking at the nq here What's the observation that jumps out at us right away? I'm gonna leave this one to the chat. What are you guys seeing looking at the market profile on the nq? That seems glaringly obvious to us right now Anyone any takers? Balance, okay, you're right. Absolutely What else? Volume in the middle of the range exactly Ben bounce correct But it look at how it's balancing look at the levels Where is it running out of steam to the upside? Exactly where it did in the overnight Where is it running out of steam to the downside exactly where it did in the overnight? Where is it bringing all the volume exactly where it did in the overnight? So the nq is telling us it's going nowhere It's just going to keep doing what it did in the overnight Keep chopping up chopping down chopping up chopping down until it can finally bring in enough buyers Or sellers to break one way or to other Whatever this was We're getting more of it this morning. All right back to the es So that is our second look above and fail of the overnight range Increasing the odds that the buyers are not in control and we're going to get more chop Chopping broccoli Caleb says don't dittle in the middle You guys are love it Andrew says value is lower. Let's take a look was value lower in the q You're right value is overlapping to lower It's it's a little bit too early to put a lot of weight on that but that is a little bit bearish to see Both markets actually New culture says wow everything makes a lot of sense now. It's much more clear when you explain it Well, just forgive me when i'm wrong, but yeah It took me a long time to understand That There are just certain behaviors the market repeats over and over again And they can be read Our case says apple is dragging es down. What's apple doing? Oh shit Oh boy Apple has momentum Look at that Okay, so this is a classic example of balancing with price instead of time Again, this is a much longer time frame here But this like over a period of months the market was in balance it broke out of that balance And instead of just going sideways at higher prices it had to pull back But I would say we are literally testing that right now So there's a very real chance we get a bounce today in apple, but for now they have the momentum Four days of trend down with a gap that has assigned the sellers are in control So I would say look for support at 177.60 for a bounce there If they don't get it Gets more bearish But I suspect they will bounce there today Okay, so we got a look above and fail two of them actually of the overnight high Increasing the odds that the market will break out of the chop zone to the downside So now we're looking for information that would confirm that We're looking for the market to find support at one of these levels Head back up and then turn the half back into resistance wherever it may be at the time If they can do that that would increase the odds. They're going to break the low But now we need to find that support Man, this whole morning has just a bit about toasting these short-term traders Grabbing the stops on these scalpers Thank you. Thank you. Thank you. Thank you. Thank you. Thank you so once again at this point if the market can hold the half back Which is at 45 19 as resistance that will increase the odds that the market is heading lower today And that we'll be able to break out of the chop zone to the downside So that's a very important level to keep an eye on 45 19 I don't know how long we're going to go sideways and I don't know which way we're going to break But if that holds whenever we do break it will be more likely to the downside Which would make sense as on a bigger picture both markets have a gap that needs filling to the downside So whilst we are in a chop zone and it's too early to officially make a call I would describe myself as bearish um neutral to bearish Thinking the higher probability is a break lower, but I don't know how long it's going to take We may chop like this for hours or we may instantly break But I if we can hold that half back at 45 19 I believe the highest probability will be heading lower today Okay, now in a when what should happens doesn't If we're able to push right back through that level. Well, then we have more chop. We have more uncertainty But if it holds that gets me bearish For continuation lower With that I must say goodbye to the book map community. I love you. I appreciate you head on over and um watch bruce's stream He is the master And if you're a member of the brigade head on over and we'll uh, we'll hang out in the private stream I look forward to seeing you guys there. Thank you so much for joining me this morning And uh, if you're not in the brigade, we'll see you next monday If not, I'll see you in about five minutes. All right. Thank you very much