 Morning freighters. Welcome to the freighter's lab. I'm your host Tom B. Thanks for visiting today We're gonna have FOMC minutes at One piece central standard times just a heads up in case you missed that And you can assume they'll be outside volatility and the rest of it So mind your risk and follow your plan. I stream live Monday through Friday 11 30 to one piece In standard time and if you follow the stream Try to be here at the start of the stream since I go over a higher level Overview of market conditions So this way you can see how the pieces fit together This stream is about integrating book map order flow tools with auction market theory Which is really participant behavior how the market works and using a tool called the volume profile Which is specifically volume and price integrated so you can see the behavior of these participants and the potential Value they put on one price versus the other low volume at a price may indicate exhaustion High volume at a price even temporarily may indicate acceptance think of it like shopping Which is the way I think about it. There's a retail price. There's high volume sellers buyers interact Everybody's happy if the price goes too high the buyers may not pay for it The volume drops off left less buyers at a higher price kind of logical if the price goes low And the buyers perceive it on sale just like when you shop You may buy more but the sellers will not keep the price down there That's why it's temporary and then they once they move the inventory or whatever their motivation is they will Raise the price back up to retail and again the price may go up from retail than the buyers exhaust And this rotation is what we see in the market and it happens in all time frames and all fractals. That's why When we actually think of the market at least I'm just giving you a sense of how I view it whether we're trading the intermediate time frame You know developing daily time from or even the micro structure this process takes place in all fractals or time frames And for me, it's not time-based It is really Volume-based and structure. So that's pretty much the idea of the stream. It is about participant behavior So you can decipher potentially what the participants think and See it develop in real time and then it's up to you To construct processes to get aligned with that based on your trade plan The other element that's really key and I think this is where many traders have an issue And I know I did early on when I was trading was differentiating between directional moves and Rotational moves and actually having a separate plan for different context and that's what it's referred to in the marketplace and Trying to do a one-size-fits-all is problematic because the market's not one dimensional but multi dimensional defractal or multi-time frame General disclosure all book map lit it limit to hold on one second guys I got my trade statement Reaching out Actually, there's a lot of audio alerts going up. So I'm gonna turn this down. So it doesn't distract I don't know if you can hear it through this microphone, but All book map limited materials information and presentations are for educational purposes only and should not be considered specific investment advice or Recommendations live trading is the simulation demo paper trading mode and strictly for educational purposes Live trading executed in simulation cannot accurately represent realistic trading performance risk disclosure trading futures equities and digital currencies involves substantial risk of loss and is not suitable for all investors and Investors can potentially lose all or more than the initial investment risk capital is money that can be lost without Jeopardizing one's financial security or lifestyle only risk capital should be used for trading and only those with sufficient risk capital should consider Trading and past performance is not necessarily indicative of future results and please remember This is not a trade calling room. The idea of this stream is to help you understand market mechanics How the market works why it might do some of the things it does and to assist with shall we say helping traders create a business of trading and Extracting metrics out of the market that can give you a statistical edge If you're random in your behavior in the market and let's assume the market is random in the sense of the outcome of any Specific rotation or iteration or interaction randomness times randomness equals chaos I don't think you can take chaos to the bank. However, you may be able to take extracted statistics Subject to again your vetting process and creating a plan to know when your trade shows up Not a random rotation Your trade if you knew where the edge showed up would that be a trade Potentially assuming you did the work and extracted the edge that you would execute on the other side of that a Current trade that you take today or multiple trades if they had no edge But actually statistically we're losing trades and you could see the metrics for it Would you continue continue trading that set up or whatever that manifestation is? That's the question and I think the answer is obvious But as traders I think what many of us do is we think the indicator Gives us an answer for Certainty and more indicators creates less risk. Well, I'm gonna suggest maybe it's the opposite Maybe more creates randomness Think about it and if it becomes random, how can you quantify it? If you can't quantify it if you think about how Vegas works You're sitting on the gambler side of the table and the house Extracts dollars from the gamblers because they play a game with a statistical edge. They don't play it randomly they play it Consistently and these are all the terms and things you've heard about in trading But it applies to all of us Many of us I think think somehow we're the exception. Well, I'm gonna say we're not Maybe the thing to do is Understand what others do and then become the exception and not do what they do That's the thought So let's think about the market naturally. What happened? The market yesterday went did the Alcapulco cliff dive It was a huge down day and those of you in the trader lab and those of you followed the stream We had I would say a lot of good opportunity and of course risk To participate in that market today is different. This is where This is where you need to understand context Because if you're trading today like yesterday, I would suggest potentially this is not the same kind of day You need a different plan And when you see the market and before the market opens remember, what do we do? We think about What is the condition the market sold off shorts in the market? What happened at eth? We took out Yesterday's low I suspect and I don't have it right in front of me and then we came back inside So we had sellers in the eth But the volume on the low end of the eth was light Which means and in the profile world if the volume tapers off as the market moves lower That means the price might be getting too low And then the price comes back up and rotates at a higher level that is suggesting Potentially that shorts We're covering in the eth So far you guys with me grab a pen and paper take some notes guys maximize your time Okay Also, if you have questions post them i'll do my best I suggest you guys post questions in youtube Because all the other posts that are in the bookmap discord trader lab chat and all the trades you guys posted all the other stuff Um Basically scroll off the screen So if you post in youtube, I can see them a little bit better and youtube you've got about a 15 second delay just so you know So what do we anticipate well if the market's short There's a couple of things in the trader lab. We talk Something remember we even talked about it. I think yesterday something called responsive buying We so who are the responders? Who are the initiators? Well, if the market is short that means the shorts already in the market If you're sitting short and the market starts rotating up or it's just lower whatever it is And we opened in yesterday's range you might cover. So there's two participants in here Uh the current shorts So think about what can happen yesterday was a big day down. It's an outsized day market opens We can get new sellers Those sellers will put buy stops Or you could get just longs liquidating right? So you got that too Then so new shorts long liquidating that gives you a down rotation then buy stops Once those sellers if they new shorts come in Buy stops and shorts currently in the market buy stops that creates the potential for Responders in other words, they are responding buy stops are responding to the up move. They're not necessarily initiating. Okay, so that creates our up potential So in this context, we are anticipating up To squeeze and take out weak shorts Okay Once that is done and of course the magic is trying to find where right that's a different challenge We'll talk about it. Then we're looking for something called mean reversion. That is outside in trading This is different then get on the train and uh fast You know get on the plane fast in your seat belt and we go for a large range. It's a different context So we're going to be looking for that then The possibility is to continue south or just to rotate in here two-sided trade So that's our possibilities coming in. Are you guys with me? So let's see what happens So this is our open here coming up by the way Session volume profile. This will show us all the volume at price and it's important So we know what's go what because remember as I said at the beginning of the stream All prices are not created equal This 4010 was our retail price from yesterday. This is called the volume point of control where it closed Remember what high volume is retail now the thing about retail is it changes Based on what the participants think a product might be worth in the whole purpose of a market And why we even have one is to try to determine what based on what the market might know Or suspect what is it worth and the way that happens is called the auction Which is what's too low what's too high and it happens at all time friends So we're coming to the open and this is going to show us this is the chart volume profile It's going to show us the volume as it's Whatever's on this chart Starting at the rth open. This is when it resets and so does this one. It's going to show us what's on the chart This is the overnight volume point of control This was the retail in the eth so not a lot had changed This was retail in rth yesterday retail eth so we have somewhat of a fair price So we can anticipate two-sided trade. I hope you're taking some notes Because if this is where before the market opens This is part of a trade plan and remember we don't know what will happen But if you can anticipate what might happen You will be prepared and you will have your setups already which have been vetted by you You'll know where your trade is before it even happens So let's take a look at the open And that's 830 rth. So where is it? There it is So the volume starts coming in let me open this up so you can see this and I always get into the open Because the open is difficult because it's fast and there's multiple time frame participants in the trader lab I recommend that traders have a separate plan. I do Not saying you should I do I have a separate plan because it's fast And you have to be very nimble and I would suggest experienced To read it quickly because again, it's just reward ratios. And what do you think? So let's watch so we're anticipating potential sellers Buy stops and then shorts in the market potentially squeeze and we don't know so we don't know anything so we don't watch You see So in this I have nothing to do because I look at this and I'm going well Typically, this is a trader lab short However, the context remember context suggests based on where we're opening And we're opening in a fair area that we can potentially see two-sided trade and short covering you do remember that right That's why I go through this. So let's look rth open This is your what I call a variable high volume node. This was retail Volume is moving up retail So what this is saying is too low Down here too low Too low This is retail pull back committed VWAP now for me. I'm not doing anything Why because of this two-sided trade Now this could be a short setup I'm going to tell you I was in no hurry this morning because I don't know where the outside edge is Very conservative this morning Watch This and I'm going to label this I call this a variable high volume node I'm just going to label And this is what I do every time and the reason I do this is for consistency And so I don't forget what was too high And remember what is this saying? This is retail now the fact that it's retail It's also The other way to think about this is If we're going up this is too low. Okay This is retail, but if we reject it It is saying too high Here is a short Are you guys tracking? This is a trader lab setup. Are you guys with me? Is everybody who's part of the trader lab See this short so guys the thing about The trader lab if you're new here, and I appreciate you visiting is the goal of the trader lab is to help you give you a toolbox Really? And also keep it as simple as possible um This is kind of call it a foundation piece and it's not when I say foundation. I don't mean newbie I'm talking about an understanding of market mechanics that you may not have Here's why we come back here think about this this consolidation. You notice there's directional move And then the pause what happens right here Right here Is an auction. Let me show it to you. I'm going to take you inside now when I'm looking at this I'm thinking this looks like a short. Okay I'm thinking it But I'm not one To rush in in this configuration because I don't know where our outside edges you understand now if you're very skilled And remember in the trader lab. I keep it at a certain level Here's your volume. Let me show it to you I'm going to show you some microstructure and this is a little more advanced But you're going to see something that's generic Right there Is high volume It is a consolidation right here We and this whole structure is volume and what's happening in here in multiple time frames or fractals Let me show you the fractal. In other words, this whole Thing is a consolidation. Okay This whole thing chop chop, you know too low too high the shoppers too low too high Up in here is the same process Too low too high too low too high too low here Too low too high too low too high too low too high break These are triggering short structures Right, you guys have seen this you've been in the stream Break so trigger break pull back to volume volume volume volume watch test volume If you were a have a vetted process This is a short If you don't have this as part of your plan and i'm not suggesting anybody does these are not recommendations The more structured trade in the trader lab Is the retracement Here's what happens here up here too high and you might be it might just be a suspect like I think it's too high But I don't know and i'm gonna wait of course we never go But here's the volume Now this is so developing more Fractal so shorter term fractal this yellow line is the developing daily time frame So Retail and fractal too high Retail and developing time frame i'm going up in fractals. Okay, so too high not you know up to you This it looks like retail. We break away and now the volume is here Watch This now is too high. I label it. I call it a variable high volume node And I like I say I make these things up because I don't know what to call it So years ago I came up with that because it's variable and it's a price that was too high Right here. What do we do? We come back and check it This sets up your short and here's how you would trigger this thing High volume break high break low trigger Now this is your volume right there Right where the white line is and you would need to be selling it on a pullback Which would be this Or this your stop needs to go here It's still only two points. I'm good with that. How about you watch? You'd have a scale and you'd get taken out of the trade. Okay, real world guys no magic So let's look pull back to the vhvn overnight volume point of control chop So we got here's the thing this didn't quite get there which was interesting This is the actual location. So this is a short we pull back here stop pick This is another triggering structure watch 40 to 7 stops coming out Thanks for playing. That's these guys 7 potential exhaustion Iceberg watch now Same trade. Let's watch and see what it does break short And you would take a stop Or you get a scale actually up to you if you entered here 9 10 11 Here your stop is here. You'd be looking to get short And this is a tough trade because it's two-sided trade today And you would think that we're going for the overnight high, which is this remember there's over a 90 probability we take out either the overnight high overnight very choppy trade. Here's When you get out here, this is another short Pull back here Scale you're going for this. It's called mean reversion outside in trading doesn't get there Very difficult trade today. Here's your volume. This is your short Going and your scale or your targets ahead of the mid into vwap didn't quite get there The idea in the trader lab is to get risk neutral So wherever your entry is to where the trade fails That's where your first contract Goes to get risk neutral and then you go with a runner or runners. We only talk about a two lot Comes outside takes the stops and of course, that's the one that gets to the target but watch high volume high volume This is called mean reversion. We always joke in the trader lab. Yeah, it's mean why you're trying to find outside edges to come back to the mean So that's what this trade is So this is your volume. You can see it there. Let's see if it comes back See another trader lab setup when I say setup The setups are mean reversion. They're outside in so it's all the same trade But it's you're trying to find outside Now this one bang Buyers at the mid in the vwap Okay, come outside back to the volume, which is now here And this is short and you're trying to get back here. It's still outside in trader. Okay You never know which one do you I wish I knew because I would skip the other ones you know now Let's talk about targets Uh, I think at the time if I remember this one, let me just remember Can't remember these There's something about 40. Oh five that I think we have to talk about. Yeah, make a note about this right here 40. Oh five. I'm gonna put something in here and then we're gonna talk about it. Perhaps I can remember it Should take no I'm gonna label this I'm doing something a little different here today because I want to show you a little something And you know, I'm always cautious to add anything because some of you may run with it right away and um It's not necessarily Something you should add because you don't need it But it's something you can add. So I think it was 40. Oh five. So let's go So anyway, this is your short finally And you have 39 90 down here also with about 700 contracts. You need to be conscious of that This is what book map is going to help you with Why are 700 contracts sitting down in here? That's The highest liquidity in the limit order book in the neighborhood. You want to be conscious of that They're sitting there because potentially the market is going to go there Now I say potentially because nobody's going to know anything. So let's watch. So let's watch I think this is the right level. Let's just see what happens here. Do you see this? 40. Oh five Are you guys with me? Grandala it's supposed to be retail because the trade size is small Can you expand on that question? And I'll try to clarify that I don't quite understand that So this liquidity I labeled it And I looked at it Let's look at the behavior here. I'm gonna turn something on here so you can see something By the way, there's a new version of book map coming out by version I mean an upgrade that you should get notification on version 7.4 And you're going to need that for enhancements that are coming out There's a lot of super stuff coming out, especially on the dome and multiple brackets in other words Similar to strategy orders that'll be server side A number of excellent items also the ability to draw on here and expand it So it keeps going. So if you let for example, if you drew a box or a rectangle around high volume And it still needs a little tweaking. It would not stop. It would just keep going. I find that pretty useful This is kind of why these vhv ends and hv ends are on here But it would give you something that you know, it's sitting there. So these are some I'm just mentioning it and There'll be more information on it. I don't go over that in this stream There are others who are much more knowledgeable about it than me So this here They added here in the book it traded out This is material And you're gonna go. Why is that? Well a couple of things first of all Let's look at this this at the moment. It's too high. This was the last area. All right. We come down We take out yesterday's low We're outside of value We have the overnight stat which remember we don't know which one over 90 probability will take one of those Okay, so that was the target on this short from up here Now I don't know about you guys But uh, if I was on a trade like that and I have a statistic and I see we miss this And I see this selling is that unreasonable Once the train gets rolling And we already had our buying potentially the short squeeze that we would continue in the direction of the trend And I'm gonna say maybe And who knows right so that was the target And I consider this a pretty nice trade. So even if you know, uh, if you weren't able Wherever you want to get into it, you can get into it, you know, it's up to you You have to follow a trade plan. So, you know Down you go Nice trade Now let's look at something else. This is called v pock migration. I'm going to show you another trader lab Set up now. You have to remember the condition Come on The condition of the market What do we get we come down we get our overnight stat It's now 9 15 in the morning at 9 30 central time We have a another statistic called the overnight high or the overnight. I'm sorry The the initial balance high and low. That's what I be stands for and all it means is first hour high or low And statistically and again past performance not in dicker future results any statistic I mentioned you have to bet. There's over 90 probability of taking one of them out During our th. Well considering the lay of the land considering we have All this liquidity 700 contracts sitting here and you can see it on the heat map. Remember I said earlier this Potentially is going to get Traded Maybe and again, it's always maybe but where's our opportunity? Well, if we are directional Then potentially if you have a setup for this Then mid v-wap. Let's go look and what else? 40 05 It's material. So let's go look And this is in the trader lab now whether or not you take these trades is totally up to you You know, these are not trade recommendations, but let's look So we come up Selling icebergs Location I'm looking for a trade recommendation I'm looking for exhaustion 76 stops go off And in this area what's important to me is get what I call a stop pick Retail trader behavior. They put their stops at the mid Great. Do I want to put my stop there? No. Do I want to Wait for that? Maybe subject to your plan You need to vet triggers and setups if you don't if you're at a retail location You know where we anticipate Your retail trader behavior Do you want stops to come out or do you want to get in In front of the stops because this can come up and just blow right up here to v-wap or not But here's what we get in the trigger And I suggest you guys think about this. This is what's in the trader lab also There's 60 pdf's of this behavior you can download so you can kind of look at this stuff I had to think about it, you know, plus a primer webinar I did that kind of gives you an overview of this process Which you may find useful to integrate, you know into your plan or if you don't have a plan to start thinking about If that might be useful Traders, I know who do this As a career Have it all planned out before it happens They know that under this condition if you get this and we didn't get above remember Then potentially and we're below yesterday's retail price. You see you start putting the pieces together then potentially We can roll down to that liquidity again. Nobody knows but here's the trigger Let's look at this This is what's so neat about book map is you can get inside So this not a good spot Though that looks like a short My trade plan now I can tell you it's not that I can't take a trade here, but I prefer this I want to see Stops come out because of and then I see this liquidity taking the other side This is how the heat map can help you So I see these guys come in there Buying is the buy stops and these Are holding the market. So let's look break So we have a trigger Now we want to see what's going to happen here right back up here Volume but no pick Pick I call a stop pick they ever get your stop picked off Pick because that's where the buy stops are and now what selling Pull back and test now look. Let's get in the book map a little closer And this is just one way to look at it and you know You have to decide If it's for you hold on one second Okay Selling and it's really a suspect at this point, you know, but here So volume volume Volume we're under here. That is still in the book. That's like pressure wind at your back. This is a potential short now The range on this is very tight Right until this drops down when that drops down That is adding wind at your back because it's saying what's up above is too high Also, look what happens in the order book See what's happening. That's like wind. Let's just go and see now the other part of this is remember Where's our target? It's down at 90 right here Okay This comes down Now for me This is the short. This is a potential add Or a potential short right here And this is a trader. I call this v poc migration. It's also another setup in the trader life But this is your target You need to decide subject to your trade plan whether whether you want to play in this range and your stop would be above here So this is your target Target Are you guys tracking? Uh, Mike, I don't have the time to do the I do it verbally I can't show the chart of the higher time frame But I give at the start of the stream and if you know, you guys are interested in the higher time frame overview I start sharp at 10 30 central time 11 30 eastern standard And I always go over the higher time frame in the context So if you you know and if you're in the bookmap discord trader lab chat, you can always review these streams They're available for 24 hours Um You know do your homework and in fact if you're watching the stream Probably a good thing to do is to just take some notes and if you see something interesting notice the time stamp on it and then You know speed through The the replay and uh on the discord Um, that's available in bookmap Discord trader lab chat of the youtube and then you can maybe take screenshots Isolation, um, I have binders and binders and binders of these behaviors that I researched over the years And I have more binders that have been thrown in the garbage day, you know Here to think about of all the stuff that I'm jettisoned But you know at some point you start seeing certain things and certain behaviors And if you can quantify them, you know And you understand and it takes time to understand everything But what I want to suggest to you guys is you don't need all the Standing initially it's like a broad stroke Um and interpreting a language I always think of the auction is the participants are sharing with us their perception and their price discovery process This is a long trigger here now for me. It's not I didn't participate in it, but it is I'm going to show it to you And and here's what makes it interesting This is a target now. You don't know Like everybody it's always a mystery, right? You know, what's going to happen? I don't know So, uh, break that down. You know, you don't know take yourself off the hook for needing to be right It's not your job to be right You can't Uh, what you can do is know you have a statistical edge. That's where the being right comes from Being right is your accountability to a vetted trade plan Just like the casino they play the game the same way But they know they have an edge and they don't change the game Uh, so they can lose their edge on and you know, they just play it the same And they look at losses like overhead cost of production. That's what we do If you're a professional trader, uh, you really have to reframe And put it and understand that your emotions are going to run wild Which is just part of our humanity if you will So you can't get rid of the emotional state and all the that voice in your head I ought to get out now. It's going to fail. I'm going to move my stop or Jesus doesn't look right. No, what's that? You know, that's hide, you know, jekyll and hide. That's those Emotions that are running rampant that are speaking in your ear and you'll think it's logical and it's It's triggered by emotions and chemicals So the vetted trade plan is to help you manage all that because your accountability is not to the randomness of the market It's actually to your trade plan and if your trade plan has an edge Then over time it'll show up But you need to develop the confidence in order to execute a plan. So here's the uh, look at this Let's look at this So this liquidity was sitting in the book We came into it 103 stops went off and there's absorption right there Okay, so 158 transacted right here in this liquidity Right in here. So you have the 103 stops I don't pick the bottom, you know, so for me, it's not a trade I do Well, come on But you can see why it was important because of this look. There's still 649 contracts down there Which might mean at some point we may come back again So this sets up a context called mean reversion and now again I'm going to remind and this is a setup in the trader lab right here. Let me explain what this is Now we're outside of yesterday's range. So for me, it is not a long But it is a trader lab mean reversion Long and what I'm going to mention to you about it is Two ways to use it if we are inside the yesterday's range Uh, it would be a long it's a counter trend trade. It's called mean reversion In this and this is up to you. It's not up to me. I'm just telling you Kind of what I do. I'm more inclined to just wait for You know specific conditions, you know But you can kind of do your thing Always it's based on the metrics. So if this says potentially to come back to high volume up above This is called mean reversion and it mean reversion So once we see this behavior Then the context has changed and and in mean reversion Let me just try to show it to you see we're outside yesterday's range. So there's no long So mean reversion means back to the mean. This is retail. So that's the mean and then the potential Since we're back in the coming back in the range to come back to the other side So if this is retail And now you have too low now where is too high and good luck with figuring that out But this puts us back in the outside in configuration potentially And here's another one in this trade And you could write this down. It's called the ibf not necessary along But if you think the trend is down potentially set up for outside in short not a recommendation And here's where it might go the targets For this trade are the mean so mid VWAP mean and developing value area high Where is it? I think it's covered up. Hold on. I gotta try to find a level here. That's probably covered up. Hold on It's the developing value area high. Can anybody tell me where it was at the time? Because I can't find it Maybe it's up here Yeah, there it is. So roughly this is the target potentially on that long. Are you guys with me? So let's see what it does here These are structured trades that are in the trader lab and again like everything their ideas. They're not recommendations Um all oh here we go and this So we have this as an obstacle. Remember It was a short earlier wasn't it so potential to come here And here Okay. Oh, there you go. No clue. Let me mark these up. So this is the next target up here. Okay, and this Are you guys with me? And you know, I don't know where the market is since I can't see it So this is as much a surprise to me as anything, you know, especially, you know, you put a trade on and it's like What's gonna happen? I don't know so too low too high target and target Now let's go look. Okay Are you guys tracking? Let me make sure I got everything in here that I need This is a trader lab setup by the way, you know that ib And these are your targets here here here That's called the ibh ibf. I'm sorry Losing my mind. Yeah, she and I'm sorry. I've already kind of uh, explained all of it the Just try to be here early. Um I started 10 30 central time. I give a overview of the market condition and what we might anticipate today's two-sided trade So it's a mean reversion mostly so it was Looking for the long squeezed early looking for the shorts for continuation down now It's the longs or potential short for mean reversion. So This is an important area. We're in a long setup here that has to be vetted in the sense of Right here To here to here to here. That's the long. It's not a trade. I would take because I'm a little more Um Just part of my plan, but in the trader lab. This is a trade that many traders take it's uh available In fact, if you want to get the if you want to review the stream if you go to book map.com You'll see a link joined the uh discord Chat and it'll give you access to the trader lab All the resources there's webinars 60 PDFs you can download of these setups and You know, all this is the trader lab is a toolbox of ideas And the goal of the trader lab is to help traders become career traders by understanding this is a business of statistics In other words probabilities. So let's see what happens at our level right here And that's our target. So, you know, we got a couple of pieces right here. So potential reaction here And or continuation now again, let me give you another possibility So right here Here and potential to take this out and basically what it is suggesting the possibility of what's called a two-sided day So are a neutral day But if we don't get up above in here and we can rotate back So it's a suspect at the moment for outside it But if you're interested in reviewing this stream and they're available for 24 hours for all participants in the trader lab Um, you will go to book map.com Join the discord chat. You don't have to be a book map subscriber You will be solicited and there's a lot of additional education order flow stocks options mark and maker behavior algorithmic behavior Um and much more and of course the order flow to the max Which is very important to try to I think gain edges over other traders and I'll have tools like this You know, this is a high tier order flow tool and uh, it does help substantially It helps me. I'm just saying see inside microstructure So I can read the behavior. This is stops Icebergs all of this adds another level of insight to participant behavior So let's see if we get our next target for the ibh rbf I must be tired or something And don't forget we have fomc coming up. So, uh, I'm going to suggest everyone that you, uh, You know mind your risk I have a specific plan Uh for uh reports I also have a different plan for the open And then this is sort of like open field running and even this is contextual This is mean reverse in trading. It is not get on the bullet train like yesterday. So um different So, uh, I Suggest that traders try to understand the different behaviors and then isolate the behavior and then actually have setups Designed for the behaviors. So so this is our targeting I mean remember the market can do anything and these are not trade recommendations Uh, brian, it's what I do, you know, I what I try to do is Uh, do I take ibfs? I what I do is not so material. I don't think I mean I'm going to say that because I've been doing this almost 43 years But in the trader lab, it's really about creating a foundation of understanding market mechanics In uh vetting setups and then having the you know, the other part that's really hard for us Is actually doing what we're supposed to do like waiting for our trade and developing the discipline not to feel the emotions Uh, because we're gonna feel it all the time, you know, you're sitting as a tourist and you see a 30 point trade go by You're gonna have feelings about it. The thing that becomes important in most retail traders Never get to a place where they can accept That it's not their trade Because ultimately it's developing the discipline to let go of the emotional state of how you feel about it That actually determines the potential longevity to survive and become a career trader You can always add, you know, but if traders and i'm only i'm not speaking to you I'm saying generically now because everybody's different and watch the book thickening up here in the location So let's just watch behavior. Okay We have exhaustion. We have liquidity potential triggering structure not a recommendation We have alignment. We'll see what it does. No clue Not my job to know because I can't know but let's watch this And guys, this is not a trade. This is just a suspect The suspect is here in the volume if we don't if we can't get above this it potentially sets up a trigger If we come back above then there's not a so let's just watch Take a note take a time because this could fail as much as anything else And i'm not recommending it because we can still come out the top end and take the shorts out We have their stops over the high of the day That's always part of trading, right? So let's just watch the behavior. So this Is above the volume it has to come under this So let's see what it does and if it does Maybe and it's not a recommendation Then you're looking at this Let's watch Remember this is not a trade calling room. It's just maybe We're right here. We're coming above the volume. So this is not you might say is it has not quite happened it is fermenting If we come above here, then there's nothing here See right where the white line is that's where it has to break And push away from it So we're testing the high We have an iceberg in liquidity What you have now when you see icebergs like that What happens if they transact and they finish and then they're done? There's that open the hatch And that's very important. So we know there's an iceberg going off here We know there's liquidity in the book And we have to see the behavior here. So this is a critical mass right here. So we'll watch it It looks like it's going to continue higher and say So that's why nada So when I see icebergs What I want to know is What's the behavior after the iceberg executes? And again, nobody knows so when I see that iceberg And lots of times, you know, we see an iceberg and the market goes, you know Right But often if you see an iceberg transacting and for me the fact there's an iceberg and there's not a reason to step in front of it It's not a signal. It's not in anything what it's telling me is there's somebody absorbing the buyers now Here's the thing if an iceberg, which is a seller is absorbing the buyers And there's more buyers after that iceberg is filled. What do you think is going to happen? Well, the seller is done the buyers So then we get your squirt. Now, what happens after that? Let's watch We're at a target area. We're at an outside now. Remember, there's buy stops here. So this is vulnerable If we don't come down under this Then potentially these guys are going to be on the hook So let's observe the behavior. I just want you to see behavior. This is not a trade calling So let's watch So this is your potential trigger. You see it So this would be your potential short here And you have to get risk neutral. Now, there's the buy iceberg might be disrupting the whole thing These are called mean reversion and I and they're problematic in the sense of when you start Trying to trade mean reversion. You don't know where the outside edge is. So they're pretty hard Like here, you see you get the rotation Okay, this has to stay right below here Or else this will be over This is coming up underneath that skews the book. We need them to pull and not trade If they pull it opens the hatch if they stay in the book then we may Go north we have to see the behavior and they pulled And this down here is the target on this it might be what we call the hail mary pass That's a football term American football now where they just throw it in the end zone. So this is your short Your job is to get risk neutral To buy the stop on your runner And these are hard because of Trying to find the outside edge So let's just watch this one, okay So Depending on your entry. So there's your trigger here. Here's your pullback. This is your short Stop here and again. I'm not calling trades Your job is to whatever the distance from entry wherever it was to failure is the Target on the first contract Wherever now your stop stays here and your runner Two ways to play this by the way, this is the target at the moment and if it Stopped here so Assuming you get scaled now the worst that can happen is you scratch the trade that helps you psychologically to actually stay in the trade The other piece is a trade management process that you need to vet in other words What's the best way to manage this? Do you let it come all the way back and scratch? or Do you have a process where potentially you get other selling structures like this and once it triggers? Maybe you manage your trade behind these Maybe two back or something and again you have to vet that are you guys tracking just trying to show you ideas That's exactly right has or stops are there caution, uh, I just have a plan and I still feel my emotions. He's uh caution is asking How do I manage my emotions? Uh, I used to think I could suppress them I mean it was like I wanted to have a cattle prod at my at my trading desk So I could give my and I ended up with a rubber band on my wrist Uh to try to do behavior, you know like um thick rubber band And snap it when I would have those thoughts Uh, I still get them so that didn't quite do it. Um What actually for me was very helpful was knowing that I had the statistics And when I would have the emotions, I figured that's just a you know, that's hide, you know Jekyll and hide dr. Jekyll dr Hi, you know, hi was the crazy Unbridled emotions well all those that talk in my head is being generated by an emotional state Which is chemically induced it's released, you know, oh don't step in front of the bus You know, oh get out of the way. Oh, you're going to get run over, you know all that Well, that has nothing to do with trading. That's fine when you're out in the outside world in the non-trading world You know, but this is the trading world. It's like it's got its own Uh behavior, you know and and the the way around it to answer your question was statistics And then opening to the trade plan and going okay This trade has x percent probability that I'll get risk neutral before a full stop Then what is the probability this trade will get here? Well, that's something else What is the probability that if I manage the trade with a certain process that I'll get, you know What is the best way over time to do it? You know, we all think we want to go we want to go for this but The market participants may have a different idea our job is not, you know, we don't have any control Over what they do we only have control over what we do and the statistics give you the ability to manage the emotions So if you know where your trade was and remember, where was the the target for the long it was right there Right and if you're following the stream, you know, that's the ibf target, which may or may not be part of your trade plan Um and in the stream I kind of keep things very structured for trader lab participants because they have to vet it so If I give you an idea in this context The ibf, which is the mean reversion trade outside and from down at the low of the day Has more risk to it of not doing its thing than if we were in the previous day's range However, we're now back in the previous day's range and that's what this is the target. Okay now the next problem Is this Stops here now. Here's the other piece for you guys if we take out the high of the day Here, let me get to you a statistic. You might find this Interesting Let me find it There's a uh, let me just see I'm looking for a statistic on what are the probabilities of taking out both the overnight high and overnight low It's 24 almost 25 that we're going to take this out And the probabilities of taking out both the ib high and the ib low. Let me just find that for you Got a lot of stats here. I got to find them But you see statistics are kind of important, you know, very important actually Um 29 probability that we take this out So we have a 29 probability to take out the first hour high first hour low Okay, and then to take out the overnight high overnight low, which I already forgot Uh, I gotta look again at these stats. There's a lot of them Sorry about that guys, but it's I'm looking at a sheet with a lot of numbers on it 24 percent so We can take this out Even tag this if we come back in we're going to come back here potentially. This is again mean reversion So this short you'd have a scale and it is going north. So potentially here We'll see And that's as complicated as trading is guys. It's just probabilities of one thing happening over the other You know So in the trader lab if you can get this here if you can get risk neutral The worst that's going to happen. You're going to scratch And the trip by the way the trade fails here. It hasn't failed you because your stop is here Are you guys with me? Uh Traffic Tragic there we go. Tragic is asking a question. What are the difference? Uh, the icebergs with lower opacity Great out versus the ones uh, not really much difference. Uh, these are larger. It's just a filter So these stand out and I don't see the minutia. That's all That's all it is And I just I want the stops are more important to me than the icebergs for me because Retail traders use the stops most more sophisticated traders do not you do not manage their trades that way So if I see the market moving higher and I see exhaustion, then who are the buyers? See is it stops? So this trade fails up here and it has not gotten taken out So this short is still on and you'd be risk neutral now. Here's a question for this astute group If you were sitting all in all out. Well Be honest with yourself When it comes back here to the volume Okay, but what happens when it does this? Would you have bailed out right here? Oh, it's gonna fail Anybody? Yeah, we all used to do it Greater tail you never did that Well, we all do that because of fear and uh, FOMO and fear of loss fear this. Oh my god It's gonna fail. Why should I wait for my stop? I'll save that two ticks I can't tell you how many 40 point trades. I missed In order to save two ticks Or 20s or 30s. It's beyond You know, but by the way, here's an idea for you guys And I haven't brought this up in a while, but I want to mention it What helped helped me a lot years and years ago You know, I'm doing it almost 43 years So I've had the chance to make more mistakes than most of you or probably really most of you and You know with a lack of understanding And more bringing beliefs with me and trying to make trading fit around beliefs That I brought from the outside world versus Understanding the trading is its own like landing on mars And you have to adjust to the atmosphere and the actual reality of what it is You know, we're we bring what we think we know and now we're going to become traders But if you don't know what trading is And it's not indicators And you're trying to make it fit You're going to find it difficult. I did that Early on When I started in 1980 But here's the thing that I found helpful What it was is I created something called an error cost calculator So I would plug in trades I didn't take and why don't I take them fear Stops I moved when it wasn't wouldn't I shouldn't have You see Bailing out and I quantified what that Did instead of just moving on to the next trade and my mind is now on to the next happy meal And not looking at the cost or the consequences You see It wasn't quantified what I found was I was the reason Not the market not the randomness of it. It was me And I made it I imagine this imagine you're you're costing yourself $3,000 a week And you're not thinking about it And I don't know, you know, that's all subject to you know, whatever you do, right number of trades But in the es if you have a vetted trade plan You can certainly be profitable if you could actually Extract that edge statistically and then have the patients to do it And then the times you don't do it. What does it cost you? How about you might already be on the path of being a profitable trader? But you're sabotaging yourself because you don't know what the price is Other than I want to do better. I want to do better. Yeah, we all want to do better But if you could put a dollar amount to it write a check out Write it out to your broker or the other retail traders and put it on your monitor when you see $2,000 a week fit whatever the number is and put it over a month and there's five or $6,000 that you are just throwing away Uh, is that going to help you change your behavior? Think about it Well, you know, dr. Fina, I'm the thing that's really difficult. Dr. Fina. I'm saying that Staying in the trade is the hardest part Because of the time frames it really is Uh, I've always wrestled with that myself is what time frame am I treating? Because it's almost like a one-size-doesn't fit all so I've kind of broken my time frames down to a certain extent by You know targeting And fractals And if I'm trading when in other words if I have runners and this is not really material Depending on what where you're at by you. I mean everybody generically Um, but if I have runners that are and I don't have high time frame targets here at in this context, but Uh, if I'm looking at a higher time frame for a runner, I'm using I have to give more back To sit through the rotations and I've always found that You know my brain my mind wants it all Well, I should have done this. Well, I should have you know anybody with the shoulda There is no shoulda what there shoulda be is a plant Again, not for you doctor. I I understand the um So what is the designation of the Contract that is quote a runner But if you're if traders are running a two lot, then it's primarily to specific targeting based on the setup and combining a trailing A trail management process that's also vetted So this context is potentially outside in trading and where's the stops now? They're up here so Statistically we can come up here And we can come up here now. Here's another piece to this We're inside yesterday's value area Theoretically we can come up here And this was a target coming down yesterday. I leave it on here So Subject two We can just come out come in that's one possibility here Or we can come out Get to here get into here and come back or stay in here. I have no clue But this is two sided trade. It is its own behavior its own context It is Mean reversion outside and the thing you don't know is always. Where's the outside? So stops and potentially to here or out here and then back in here So that's this context and those are trader lab Areas to observe which is the way I like to think of it. Okay any questions on this? So There are you can see the liquidity coming in up here. Let's look at what it is So right at 20 we have three hundred seventy five contracts. They're probably going to trade out It's right ahead of the overnight high we get it through the now. There's another couple things here So we have what's called balance balance is two sided trade that means the buyers and the sellers are active which we could see We got down to that liquidity on the bottom we filled some and now we're coming up to the other side Let's go take a look if there's anything sitting in the book up here. That's material at the moment not real So what's our next opportunity to observe it's going to be This pop outside and then potential mean reversion back to here Now I have no clue and these are not recommendations But here's how I look at it When I come into this, I know I'm in the context of two sided trade. I know the market is short And I know that buyers buy stops are above the high of the day I know if I come out to the target of the ibf and I can't get back to the mean Then and we had that short which was a scratch Then the next opportunity is going to be after this And I don't you know like everybody I have no clue It's not my job to know my job is to look for behavior and exhaustion And if we come back inside it sets up the same trade from the bottom the ibf from the other side And again, it's not a recommendation because we can keep squeezing, you know, that's part of the thrill So this is our area after this Then it can squeeze and squirt In other words buy stops, you know And then you got to see if we get exhaustion and then potential for a short back under here And you know potentially back and we will see and I really don't want anybody to be doing this, of course And by the way, don't forget we have fomc coming up And here's another thing to think about squeeze out shorts and then what Longs square up in front of fomc We have to remember that so let's watch the behavior. These guys are pulling That's another thing about liquidity. It is like walking on a slippery banana peel because you don't know their intent Here's our stops coming out. Let's watch now Did we hit the ibf? Let me just look here They were absorbed iceberg on the other side location Easy to get run over right here. There's no trade here remember Often unless it's a huge iceberg which absorbs everything often what you get is a reaction and then If they're done, we can continue higher. These are things you need to study and understand it's another piece and uh bruce does order flow monday tuesday and friday Uh and if you come to bookmap discord, you can take advantage of all this free education It's free. You don't have to be a subscriber to bookmap. You don't be solicited Also in the trader lab, there's 60 pdfs You can download of these behaviors and you need to vet everything the trader lab's a toolbox, you know, so let's watch right here We're watching here. So now we want to watch micro high volume break inside This volume is key all of this right here. So we want to watch This is a potential short. It's not a recommendation watch I mean, this is aggressive because you know it is Because I find mean reversion mean Because you have to really be careful with it because all you might be doing is getting into a counter rotation And then the squeeze continues and these by stops become fuel so That's just really what it is and there's no way to sugar coated for you. This is a short And you have to get risk neutral and your stop goes here This is the same trade we're looking for from this location. It's all the same all it is is locations like real estate This is the target Extended and you would manage to trade are you guys tracking? Can you kind of see the logic even though it's uh, you know Curious the difference in trading es over spy is the leverage liquidity. Well spy is very liquid But what I'm going to say is uh, it's the leverage Um, I mean if you're day trading spy, I don't the you know, it's up to you in your metrics It's really metric driven. Uh, the process is generic You know the way the market behaves. It's it's the same it's all built on the same mechanics and that's participant behavior. So the trade Short scale your risk neutral stop stays here You put your helmet on and now you either manage the trade or whatever and this is where you're headed And this is called the ibf neutral ibf Again, not a recommendation, but and you know, I don't call trades. I'm narrating I don't know. I think the real world here There's nothing ideal about this But here's what's ideal You'll notice I spoke about the trade before it happened That's what having a trade plan is you're like a hunter. You're in the wherever you're in the jungle You're behind the tree you anticipate where the game or your target might show up You don't make it up. You don't chase the rotations or the the saber-tooth tire that doesn't come past your tree That's what setups are and the idea of a setup is that it is vetted. In other words, it has an edge Now whatever happens here. I have no idea My job Is to say, where's my trade? Where might it show up? Who locations here and here? That's all right. Now if it comes outside and keeps going, I'll be looking up in here I already know that and this is my target. This is the same trade that we were playing with over here Same trade. See Nothing has changed Location has changed Are you guys tracking? Yeah, you're welcome tj Tragic is mentioning uh tj about the advantage of trading the es over the spy And he posted this in the bookmap discord trade lab chat, which are all invited to visit Download the pdfs of setups and the rest of it in a couple webinars. I did He says I personally prefer futures versus spy more time to trade you can start with a small account if trading micros so In the micros I think our dollar I don't worry. What are they dollar 25 cents a tick or something like that five dollars a point versus 50 dollars for the regular es so And you got depth and liquidity You know stops and limits and the rest of it. So you might find that useful But you know, whatever works for you, I mean this process that I'm showing you works across all timeframes Swing trading, you know option strategies. I mean everybody does their own thing, you know, I don't use any indicators I do use Detectors this detects the tags This is rhythmic data from the and it's cme data That orders are tagged, you know, if it's a limit order a stop order a market order the exchange needs to know what it is, right? So These are by stops. We can see the stops going off You can see the icebergs going selling icebergs. This is the limit order book You can see it and bookmap helps us visualize all this and for me, that's a huge asset I never, you know, used to Who knew right what was going on? well At least for me, that's why I got bookmap because I connect I can see inside this now and I could never see it before You know, I I just couldn't get my time frame down Uh and understand what was going on as well So this gives me just more Structure and insight so that you know short You know This is your trigger. So this is your short or if you're very experienced, you could get in a little quicker Ultimately, this is like reading music or translation Of a language Once you can speak the language Um, you'll be able to interpret what might be going on and when assuming you have a vetted trade plan in a setup Which is this, um, you know to interact with the market and take your risk and You know do your thing That is really what trading is the trade plan has to happen before I think the ability to become in a personal opinion Again, not a recommendation the ability to become a career trader comes from having a business plan and a trade plan Think about if you want to start a business. Do you wing it? Or do you actually know what it costs you to produce a widget? What does it cost you to produce a profit in trading? if you understand vetting a setup if you understand that there's a statistical aspect to this Um, it may change the way you experience trading. It's not a video game. It's really a business and Many retail traders think it's indicator based business But it's not indicators are a proxy for participant behavior If you understand what the participants are doing and you understand the context, which is potentially outside in trading You would actually have a plan for this, which is what i'm discussing here in the trader lab with you Is that this is not get on the bus and uh write it to uh to the moon alice We're in a downtrend market is short We have sellers today and we know the market's short. We know we can squeeze these guys out who are short We also know if we take weak hands out and there's no buying above it Which there can be that then If there's no buying above this Where the buy stops were which was over the first high of the day that we can come back down Inside that's all we know will it do it that part? No, no Hope you get something out of this guys Hope you find this useful This is the trader lab guys and if you the idea the trader lab is to help traders Become independent career traders. Uh, it's not for everybody I mean trading is not for everyone. It really takes An adjustment in view point Of what trading is Um, i've been doing it almost 43 years. I i'm ashamed to tell you how long it took me Uh to kind of figure this stuff out Because I started with system design. I was a swing trader And those of you who've been on the stream before know this but I was a A swing trader in a trend trader. There was no day trading When I started If you were a day trader, you were on the floor So, um And early on I got introduced to oscillators. I worked. I shared an office with george lane. He actually created stochastics So you might say I have some of that in my blood. I thought the holy grail showed up And of course not so much But you don't know and then I created systems and went from there so, um I have quite a bit of background But that is neither here nor there what's relative and all of that is I had to change what I thought trading was What I thought trading was to what it is Um, and it was me that had the change Um, and I kept what I was doing was it was I kept using derivatives of a process that ultimately would break down It was curve fitting and I was inconsistent Which is why I went to system design to create consistency and the metrics So I'm just giving you a little the two cent tour about a little bit about me And, um, ultimately I became a money manager, you know, so, uh and Did manage some substantial numbers over the years But as a retail trader, you know, it kind of changes things a bit But along the way, I kept making very similar derivative mistakes I kind of take an idea that was logical, you know, how many times you think you have a great idea you get excited I've I've spent a couple years on some of those great ideas only to throw them away Because I kept trying to get them to work where in reality. I was really on the wrong path Um, and I'm just saying is maybe some of you are having a similar experience If you are then it's a matter of do you want to keep doing it and it's not that You know, this is not the right way to do anything. It's just a way But I think if you can interpret what's going on in the condition of the market, it might differentiate How you experience or read the market and understanding Participant behavior is a big part of it. In other words, retail trader behavior think like a retail trader Don't act like one. Where do they put their stops there? Well, if we know that are we going to put our stop there There's one question and the other thing is if their stops are there And they get taken out and there's no follow through and at the moment there isn't there might be No clue not my job. Do I want to know after these weak hands are out retail traders sell the market Get risk neutral if it takes out the high of the day again fine If it doesn't here is that worth the risk reward of Let me show you See I look at trades there's more to trading just click in the mouse. It's is it worth the risk To get in here here You know here With at 17 call it 17 whatever doesn't matter 17 and three quarters Would a stop at 19 and three quarters a two-point risk on multiple contracts if I risk two points I'm risk neutral because my first scale is two points out the worst that can happen It is my broker sends me the gift basket. Thanks for playing and I now have a runner And if I have a trade management process The worst that happens is I scratch or I gradually move my stop down behind structure if I vetted it And my target is here Is that worth two points or two contracts four points of risk for this? 10 points What do you think? That's what we talk about and work on in the trader lab and you're all invited if you're interested come to trader lab You go to bookmap.com. You'll see a link join the discord chat Uh come over to trader lab chat. You can download those 60 PDFs of behaviors and setups Also, there's a primer webinar. I did that'll give you an overview of this process circles arrows and the rest of it And also another webinar on the business side of trader, which you might find interesting at least Also, if you're interested in this stream, be sure to be here when it starts because I give an overview Of statistics the condition of the market and the potential today The overview was mean reversion. It was squeeze a terrier two-sided trade And if you were here, so come in the beginning so you know what we're looking for and then I go through the The open and how it the story evolves That's what I do exactly the same way and this is how I trade It's just one way But you might be able to better deploy indicators or your understanding of the mark if you get a little better understanding of the language This is language It is speaking. Can you interpret it the interpretation is not based on the indicator the indicator is overlaying participant behavior You're interested go to book map.com. You don't have to be a subscriber There's a lot of additional free education join the discord chat or there's a link in the bottom of youtube Um, and if you got something out of this today, how about a thumb up on your way out the door? Thanks for visiting the trader lab. I look forward to seeing you guys tomorrow And remember f o m c guys trade safe Wear a helmet and if you don't have a plan for it Step aside and study it Isolate behaviors and then when your your bus shows up, you know what your job is. Thanks again guys See you tomorrow and please be here when the stream starts so you can get the full enchilada