 Good morning traders. Welcome to the traders lab. I am Tom B Streaming live Monday through Friday 11 30 through 1 p.m. Eastern standard time This stream is about market mechanics understanding why the market does what it does how it does what it does and shedding light on how you might align With the behavior of the participants in the market ultimately the market's purpose is to Find a fair price It doesn't do that based on a crossover of an indicator It does it by the interaction between the buyers and the sellers ultimately that is what creates the market So the objective here is to help you integrate and understanding these market mechanics and behaviors Which may help you either use your indicators better? to try to stay aligned or Perhaps even move on to a different viewpoint of how to operate in a developing market structure So what we are going to be doing and looking at is how to integrate book map Which is an order flow tool with auction market theory? Auction market theory is the foundation of how the market works and the tool we use to view this as something called a volume profile And the volume profile is not complicated Though it might look foreign it is really a representation of price and volume because ultimately is volume That moves the market Nothing else So we're going to be looking at that in the intraday developing time frame and I think of it like a chassis In other words, what is happening with the interaction between the participants during as the day develops? How does it fit in to what has happened previously? structurally in all time frames So we'll be looking at this from looking at it from trading inside out So the order flow tool allows us to look at more micro structure and behaviors and then the objective is to overlay The structures in the developing that are happening in the developing time frame To get aligned with the higher time frame and that's what can create outside opportunity And of course it involves taking risk to take advantage of those potential opportunities General disclosure all book map limited Materials information and presentations are for educational purposes only and should not be considered specific investment advice or recommendations Live trading is in simulation demo paper trading mode and strictly for educational purposes Live trading executed in simulation cannot accurately represent realistic trading performance risk disclosure Trading futures equities and digital currencies involve substantial risk of loss and is not suitable for all investors and investor could potentially lose all Or more than the initial investment risk capital is money that can be lost without jeopardizing one's financial security or lifestyle Only risk capital should be used for trading and only those with sufficient risk capital should consider trading past performance is not necessarily Indicative of future results and remember this is not a trade calling room This is for educational purposes only to help you get a sense of market mechanics How the market works and then if you might be able to integrate that potential insight Into your current trade plan or develop something that might be more represented representative of the actual behavior of the participants in the market and I always do this little review. It takes a few minutes, but I think it's worth it Because if you don't understand the basics of the market, how could you ever develop into a more knowledgeable trader? And whether or not you use this in any fashion, it will help you understand why and the auction is very simple It's like going to the store. There's a retail price where buyers and sellers interact which creates high volume, right? A lot of volume we buy retail they sell retail. That's an agreement on Fairness if they put it on sale that price goes down if you perceive it's below value, you're gonna buy it That's why buyers might be motivated to interact in the market because they perceive Potentially that a price is too low on the other side of that if the price if that seller is raising the price And it goes beyond the area that you feel is fair less buyers are going to interact with that higher price until the sellers Run out of buyers at the higher price and they have to now lower the price to attract a buyer And this process takes place back and forth back and forth, which is what we see in rotations in the market At some point there an equilibrium is created again It's retail where everybody kind of says okay. This is fair now the thing about it is the market's job is to find These outside edges in all fractals or time frames and that is where the profile can be very useful Because we see this behavior at different locations in the market and you might think well overall It's just gonna where's the low? Where's the high of the day, right? Well in between those extremes of behavior the market is using the same process in all Distributions or let's call them what they are Consolidations and when you see a consolidation what you really have is an interaction between those buyers and sellers Where's the outside edge on both sides from the too low too high? Where's the median price or fair price in that interaction between buyers and sellers? So we are establishing as we progress through the day different locations of interaction of different time frame Participants but the process is generic of price discovery. So it's fractal. So I think of it as Higher time frame, but we are interacting in more micro structures in an attempt to get aligned for the larger Opportunity should have presented so and then the other element and this is something called context and today's a good example of it And I'm gonna explain what happened today because we have multiple context evolving And they're related to what happened yesterday In the RTH how we open today the early behavior and what the potential was and how we might navigate that And I hope you're all with me by the way if you're in YouTube also. Thanks for being here be sure to click on the cogwheel and Make sure you're in 1080p Also, if you want to review this later for any reason grab the link in YouTube save it And this stream will be available for replay up until sometime this evening Before it becomes removed. So if you have any interest in what we discussed today, it might be useful But it will not stay beyond this evening Also, there's a 15-second delay in YouTube And if you guys post questions, which I welcome you to do in the Discord a trader lab or in YouTube. I will try to answer questions that apply to the the group and again, thanks for being here and thanks for visiting the trader lab I'm gonna take a look at some higher time frame stuff to kind of give you because for me It's very important that we understand where we are now if you remember 4305 Was the top of this consolidation and I'm taking you back. So you know how we start looking at things and In here, this was remember we broke out of this consolidation 40 this was our target around 40 to 15 We trended out we trended out. This was our next target up here Fell back inside now. We have in the beginning of a potential consolidation And this is the fair price forty two seventy six Now Where did we open today? 4277 that is suggesting that right now the market likes this Area because we didn't break away from it now I'm gonna take you into a little more detail in this but I want you to see what it's doing now It's not exactly clear here. So I apologize for that. But yesterday the higher today was 4305 Ish the high of this consolidation? We have an artifact left behind And I'm gonna show it to you That we have the potential to test and it's sitting at 4308 25 So today we have the potential and again not a recommendation to come up take out yesterday's high check this artifact and then return back here or Continue higher and again, nobody knows that part of it. So let's go take a look now to a little more minutia and With a little more detail so you can kind of see how this comes together now in the auction Remember, there's multiple time frame participants. So let's look at this logically. Okay now This is FOMC day, okay, so Wednesday, this was our target around and it was around 4317 ish if you guys remember now we went through it, but then we fell back under it So that looks excessive to me. Okay, maybe it looks like upset, you know Excessive to you and we reversed left that wick. So now I'm thinking potential Consolidation is going to develop now. Let's look at these pieces. This is the 4308 75 on this day and this is how auction market theory works the highest volume on this day Wednesday was right here 4308 and Remember the market tends to check retail prices if this price is fair The market has a tendency if this now is the new retail price to go back and check is this really too high Think of it like a shopper, you know Is this still too high or is this one now too low and the market's job is to check Well, we liked it up here. Is it now too expensive and we almost tagged it yesterday Are we gonna come back and check it? I have no idea, but let's look a little further Excess now the market has been on a tear, right? Right up up up very nice FOMC day what's under FOMC day stops? What's under this low? stops Who's getting taken out the longs, but here's where things got interesting for me Yesterday, I was thinking okay Back in and we're gonna wipe everybody out and get more stops So here's what I use take a few notes and this is my mental process Just me you you know do whatever works for you, but I think about the potential So I know if I get under this low and there's stops the potential is to keep going and we could really rip all these longs I mean is that logical? I'm just reading if you have questions post them. I gotta try to read them So what do you guys think what is this saying? right here It's if this then that if not then what if we come down and take these stops out Then the next target is here and then the potential to cascade down, right and maybe even get down here 4215 not necessarily yesterday, but eventually because this was The last retail price so we have a retail price up here We have the retail price down here. This is in a higher time frame, so If this then that if not, then what we take out these stops of 4257 75 and we get the 55 huh if this then that if not, then what if not back Now what we have shorts. We have shorts We open today Right in here with that. It's telling us is no change Well, if we didn't go down if this then that if not then what then the sellers Here and here, but especially here yesterday's high are vulnerable to being squeezed So is that makes sense? So who's on the hook? the sellers Now we don't know what Is going to happen so that part We don't know so we're all good with we know we don't know write that down if you haven't thought about it This is not about knowing this is a forensic approach to just looking at the participant behavior Because if it doesn't do What the nature of the market is which is if this was a high and it might be we may never get back above here But if this is the high of this move, we can come back We have that artifact at 4308 quarter write that down That's called the naked volume point of control and all it is remember I'm talking about the auction the naked volume point of control or volume point of control It's a term that just indicates where the high volume is in the developing Daily profile it's retail for the day and this moves around during the day as the auction moves around So you'll see it move, you know, and we can we can glean some in insight from there But we have this artifact that was retail in other words in this day FOMC day This was the fair price and it's that yellow line We didn't get to it yesterday, which might and this is very very suspicious Because obviously we may never get back there the participants might have looked at this retail price It says you know what we're out of here. We don't need to check it. We only missed it by two points Three points, you know, that's you know in trading horseshoes and hand grenades. That's close So we may or may not take this high out, but remember let's put the pieces back together We opened in balance, which means no change Yesterday we took out the week longs and didn't follow through see the evidence Now this morning we opened With no change in other words and that sets up something called mean reversion in other words two-sided trade no change But who's on the hook? So we had early sellers, right? It was shorts in the morning Then it turns around Has range extension up which I'll show you and then comes back in that's a setup that we discuss in the trader lab It's called the IB failure, which is a mean reversion trade outside in back to the VPock, which I will show you Once we check that's a price check in the developing time frame price check in aisle 3 too low So what's next north and then we have statistics sitting out there the overnight high We had what's called the initial balance highs all statistics that we'll talk about and now these guys Potentially with their stops over the high of the day are potentially on the hook And that's going to be our objective today to see if we get there So any questions on the higher time frame context? How do we establish a trade plan? Well, we have to look at what's going on in the market Behavior and then determine the potential and nobody knows so, you know, it's not about knowing. It's a forensic approach And it's about suspecting Anybody ever watch? What was it called? Don't can't remember it'll come to me Detail I'm thinking of a detective show anyway So let's look at the early are there questions post your questions about higher time frame because remember Everything is built on higher time frames How you interact with the market is going to be in the developing time frame But you need to be always aware of where you are. So in relation to yesterday's our th in relation to the Intermediate time frame those composites that I was showing where are we in relation to that? Where are we relation to the ETH, which is the most recent auction and then what are the statistics open and who's potentially off-sides? It's kind of a Top-down approach and then executing inside out. Are you guys tracking? Yeah, Colombo. Thanks, Ricky. It's Colombo The very good detective if you guys have ever watched Colombo. It's back from the 70s or the 80s somewhere in there Rather simple but logical trading doesn't have to be complicated We think complexity gives us something over somebody else actually Simplicity gives you something over somebody else who is conflicted with complexity So conflict is not good simple good in my opinion, you know complexity is really I think a problem So here's where we open now. I want to show you the behavior We open this is the volume point of control right here. Let me try to zoom in a little bit for you here make it clear So this is our open and so you know we opened remember 70 ish 77 is the balance area and the higher time frame consolidation so this is nothing. It's changed So the market opens basically, you know unchanged in the value So it's opening So what is possible? Well, it can do anything of course, and you're gonna go time. You're brilliant. But yeah, however Let's look RTH open Market opens here chop chop no change from the previous day. So we're in acceptance That sets up the potential for two-sided trade. So let's watch market opens The volume point of control is here Now at this point, I really don't know what's going on I'm going huh because I know it's two-sided. It could do anything it breaks away from the volume point of control the volume is migrating down and The volume point of control shifts. This is my first indication that this is too high So I market I call it a variable high volume node now ignore this for now because this is current All right, so this is in the developing time frame now remember the context the context is balance Potential and acceptance so that means two sides Probably retail traders not the higher time frame are potentially active So I mark this I call it a variable high volume note And the reason I do this is because I don't want to lose where this thing is because this was an auction This is too low too high Too low too high right buyer and seller interaction and in this buyer and seller interaction was the volume and that's your retail price Now the thing about it is if this is too expensive The participants can leave it's like a store You know and it's just buyers and sellers this could be your convenience store You know smaller volume and then we break away that is saying too expensive Perhaps it moves down now. I'm going okay too high now. Let's look at the potential it retraces. Where does it come back? Price check here. This becomes if you have a structure for it a potential short price check rejection break pullback short Back to here back to here That's mean reversion. So what is being reversion balance two-sided trade and again? We don't know anything remember nobody knows in the trade. It's maybe Except the auction. This is how market mechanics tend to work. What are the participants? You don't need an indicator to see what's happening right here all you got to see is Behavior because this is how the market works break Pullback short to back too high. Where are we going to go? Let's go back and check here there Now what pull back to this? Now this was too high pull back here pull. Let's just see what it does Now there's another element that I want to mention to you at 43 let me just give you the exact number And you don't get to put all of these on this book man 4364 is something called the value area low and let me tell you what it is yesterday's volume In spite of everything you saw yesterday 70% of the volume basically took place between 42 64 and 42 81 call it 82 that was what's called fair now We don't know what that's really saying is for the day most of the volume took place in that range and then when we went outside of it They were extreme and the volume point of control yesterday and again retail for the entire day was around 42 77 ballpark look where we opened You see Where is the darn thing that's buried on your hair? Hold on I got to find this thing because I want you to see how this works 77 so if the fair price for the day was 77 we open here our THC that tells you nothing's changed So that's why we anticipate two-sided trade. Is that logical? Well captain, that's fine. You know, what's your time frame? So the shorts were on the table because of two-sided trade and remember don't forget the higher time frame We had we took out week-longs which suggests the upside the long side is ultimately going to win out in this but in the meantime these are Potential opportunities that we discuss in the trader lab again if you know, this is not what anyone else would do This is what the trader lab does and it's there's no judgment But but anyone does because we all follow our own trade plan So I bark this here and then I know where that 64 is and it's a coincidence by the way If you think there's magic in here. No It's always maybe so this becomes the the low of the day and yesterday's low We didn't take it out So if you can't and yesterday's low was an exhaustive low because we once we took out the stops Below the previous day we came back in and the fair price again was 77 you see logical now We have a stat Two stats again the eth high and low or overnight high and low has over a 90% probability One of them will get taken out during our th and the initial balance high and low one of them Initial balance being the first hour higher low our th will get taken out during The our th session and we don't know which one so don't think anybody knows Right, however the context suggests it's going to be the upside, but we don't know is what it will be except We have a plan that suggests now it can do anything, you know if we kept going down That's all fine, but we didn't so if this then that if not then what same process is the higher time frame We took out the week long yesterday and we came back in if this then that if not if not going down then what then come back Open in balance if this then that if not then what we open in ballots Then what mean reversion outside in two-sided trade nothing has changed see now we look who's vulnerable to shorts Right so early selling mean reversion puts the shorts in the market with the buy stops above if this then that if not Then what if we can't go down and take out yesterday's load then what then the shorts in the market gets squeezed then higher then statistics Right are you guys tracking? This is for me at least how I think it's a process because I don't know because I'm operating the I know I don't know but I have Hints based on the participant behavior, and this is what market mechanics is about. It's not about Anything more than tracking what the participants view Now I'm going to show you another trade And if you're in a two-sided trade, there's something that we call it still mean reversion So let me try to find it for you By the way, our target is up above Just so you know and again the market could care less alright This is our target for today and again it doesn't have to happen today or ever But that's an artifact of a retail price last time remember Fed day Okay, so And this I don't believe should be here No So that is our artifact. So that's kind of where we're looking maybe again. Nobody knows so we don't worry about that But let me show you this this is a trade we discuss I Get I just have to get myself oriented here that we discussed and you know We do post these things in the trader lab in the bookmap discord chat And in fact I posted this morning about 7 30 what the context was for today Which is basically what we're discussing right now And of course everybody does their own thing. This is just helping you know traders maybe get in alignment Post questions if you have them. I want to show you the next trade That we discussed in the trader lab, and these are not trade recommendations I don't call trades what I try to do is Discuss context and then is there a way to interact with that context? So the first hour high Let me just get this is Here the initial balance, okay, and I think it was made here so that high That first hour then will be 9 30 central time so at 9 30 the initial balance is fixed So it's right here Okay, right there. So that's the high so now remember We hit this target down below and again no clue, but it's an area to observe 64 we got there, you know who knew Don't think I know. I don't know. I just know maybe so here's the next trade And I'm going to show you microstructure and guys if this interests you you should be grabbing screenshots or go back in Your own software and grab these because these are structured Based on the context and one of the more difficult things for traders is to understand the context and get into alignment It's not by the mid sell the mid or any of that because if you're zigging and you're not aligned in the context You're not going to have a pleasant experience Potentially and again every trade is random and you never know but the fact is if you understand context You would not be getting involved in the middle. You'd be in the outside edges because of the context Does everybody understand and I think context is not an easy concept At all It took me I mean I'm going to say my experience with as I didn't even know it existed when I first started trading Nobody ever talked about it Didn't exist So remember first hour is high up here. We take it out now We have another mean reversion trade So why would the market be going up after because it was going down in the morning It was outside in mean reversion you saw us on the short side and also, you know, what's above buy stops Let's go back to yesterday. What happened yesterday? We took out week long. It's no follow-through. Who's on the hook shorts What happens if we get early selling in the morning, which we had more shorts more buy stops What does that do for us? It puts more fuel above us So I'm aware of that in the trader lab Participants are aware of that. So now let's look at the next trade and what is the next trade if we go up? And we take out that high, which is basically here the early high Let me just confirm that so I know I'm not you know, because these things that get covered up. Let me just make sure Not making it easy Wait, let me look elsewhere. It's easier 42 79 75 Yeah, so it's right there. Okay, so the stops are above so let's look now We're gonna show you another mean reversion. Just keep up keep tracking grab screenshots Because what's the context? Two-sided trade So what do we have in the market? We have shorts who are getting squeezed. Thank you for playing the first hour high Right stops are above it and if we exhaust out what is the potential now the longs are on the hook Because it's two-sided trade even though. I know we can go higher And I have members statistics remember that right statistics here One of them overnight higher low over 90% probability remember Initial balance higher low one of them will get taken out Over 90% probability Past performance not necessarily take your future results. You got a vet right your own stats So I have this one taken out I have this one still on the table and so far we didn't get the one below So I am suspecting eventually we might get here So we might get here take out the current high of the day. So anyway in the meantime We're looking at mean reversion. Now. Here's how it sets up. Is everybody with me so far I'm trying to give you guys a sense of multiple time frames and trading inside out Uh, Mandy I read the stops and I'm going to show you how I do that with the stop iceberg detector I find it really usable for me because I kind of think about retail trader behavior As a really good call it a tell, you know, in other words, what do they do? Where are they wrong and I based it on me where what did I do? Where was I wrong? Well, I was always I guess you could call me except when I was a money manager I was a retail trader, you know, so Early on when I was learning like all of us. I did the things I thought I should do by the mid Do the V-Bot, you know all that right? But I didn't understand context so I would you know It's really easy just to be doing the wrong thing and I never understood why well now I understand and I can still do the wrong thing. It's not the point, you know trading is trading But I have a better idea of what my opportunity might be and now I have tools and book map is a tool That allows me to see inside so Let's look Market comes up. We take out the initial balance high now We have a setup and this is not a trade recommendation and past performance is not addicted to results I have to say that by the way That we may mean revert and come back inside and In the mean means the mean is the high volume node Which is the VPock in this sense. So let's look in the here micro structure Now when this happens, I am no idea So you guys know there's no magic to pick to quote high I'm still working on that and I think it's one of those things that will never happen because I really don't try to pick The high I try to I would I try to do is look at behavior that might indicate the development of something Now here's how I do it This is the session volume profile. This is just all the volume now if you haven't seen these things before you're probably thinking Well, you know, what is it? But in reality what's most important at least in my personal opinion is the Interaction of the participants in other words buyers and sellers right isn't that what makes up a market? Buyer and a seller meet and they transact they agree on a price So these buyers and sellers up in here actually had an agreement and they did volume in here However, once these guys transacted here We fell away from it that it's saying potentially this interact and I don't know at the time remember this might be too high Here's the other piece as we're coming up and taking out the high the first hour high 534 stops now here. I'm using the stop iceberg indicator and Specifically the stops are most important to me because I'm who do I trade against most of the time other retail traders? So this is them 146 stops still going higher 28 less Break so what does that tell me this was buy stops no new buyers at this time Potential exhaustion because the buyers were by stops not Initiators they were getting taken out. Can you see how this might give you some insight and again? It's not a mechanical process. We're really observing Participant behavior and up in here if the buyers were by stops and sellers We're taking the other side of it and then the buying stops what might you anticipate? Counter-rotation does that make sense? Yeah, serious. I can't I'm not going to go into the current context is the only way you understand the current context is to understand What happened and what it says so you can dance with it, but remember the current context? I've already reviewed in the higher time frame So we're trading inside out so even though we trade in this developing time frame We have to put it in Relationship to the higher time frame which I already reviewed and if you missed that grab the link The YouTube link and save it and you can review this if this is of interest to you Up to some time this evening before YouTube removes it So might want to do that and I think that'll answer the question because I have limited time So right here is potential exhaustion We break right here. I'm going to show you now the structure You see this too high at the high here 82 too low right here. So this is your auction Sellers buyers buyers Where are the buyers? We broke right up here too expensive and I don't know at the time until I see this Now we've taken out this structure. Here's what it looks like. You see that high volume node right there This this is an auction too low too high think of the shopper too low means yeah, it's on sale up here I'm not paying that and it's in a micro structure. This is the same process. That's happening throughout the whole day Except it's right in here. So I'm slicing it. This is like those Russian dolls You know, I'm looking at the micro to try to detect these guys these this is interaction This is an auction inside an auction. That's what I when I call fractal and again I don't know but right here this high volume. This is retail. This is where the most Transactions took place in here with this being too high when you break away It sets up the potential To come back in so let's look at the behavior now. We're gonna watch watch watch watch Back. This is the I be high right? So right here excess I if I want to get into this I For me I can get into this here or I can get into it here. This is the initial balance high. What happens at the initial balance high? Let me give you the rationale It's mean reversion by the way stops One tick over this so this is the initial balance high. This is Right in here. This chop chop is an auction There's a high volume node. Let me show it to you now This is you know this you may roll your eyes back in your head and think I'm gonna pass out But this is an auction. It was too high. Remember retail we chop chop in here It's an auction too high too low microstructure again, I don't know Retail so too high too high break away from it See now, this is the last auction Retail and The initial balance high the first hour high is here. What's above there stops Are we gonna come back? No clue. I Have targets below which are open That's the mid the VWAP and the V poc mean reversion is return to retail in the developing time frame so this is Micro time frame retail retail break Fuel below us now if we would have gotten down here, I would have nothing to do retracement stops only 11 at the initial balance high, right? short Stop above here target here This is a setup not a recommendation It is something we talk about all the time and where's the targets VWAP Mid V poc trades done Anybody have a question this is mean reversion. Does everybody see it? So that is something we call the IB failure or IBF if you're interested in understanding it it I have about 60 PDFs available for download in the book map Discord Traders Lab. You're all invited to take advantage of them. Give you some ideas, you know help you understand context Help you understand the developing time frame how you might dance with it And these are really important So it was shorts shorts shorts shorts Understanding higher is on the agenda, right? So this trade is done. That's what's called mean reversion And this is the mean Because the mean is the high volume. So if you think of this as a distribution of volume, which is what it really is This is the fair price Outside is unfair now remember what else is going on in all of this which is balance Shorts are accumulating in here. So we took the week shorts out that sets up the retracement now We're back here now for me. There's no long because I Want to take out So taking these shorts out Getting back here Finishes that trade now since this is already done. I don't come back You know, it's kind of like because this is a counter call this a mean it's mean reversion But it's counter-trend and what it's built on is the idea the market gets long You know the market gets short when the market's long. Where are the stops retail trader behavior mid VW So if I'm gonna take a short, who's on the hook and My target don't forget we didn't get there my targets are open and the sell these stops are under here So that's why short boom done now. It's not saying it can't go lower But this is the primary objective. Is this logical if you understand mean reversion and if you understand the rotational nature of the market and if you understand where the stops are Which becomes the fuel Say any questions on mean reversion before we go on so I did notice a Trader taking the short after we hit the targets For me, that's the low probability because now who's on the other side by stops and let's go back What else do we have? Well, we hit our target primary again. No way to know what is going to happen except Where's the fuel now if we got the longs out and we didn't come back down and all we did was do a price check And that's what this is price check and when we came up here. What was it? Price check same process fractal price retracement price check stop pick short Down price check in a developing time frame same behavior higher fractal logical Where are the stops here and above the high of the day? Statistics, and I don't know where we went here because I'm not looking Open and a target above 4308 right so now let's think of it logically if the market Got long and the stops are here under you know the mid the VWAP and who knows We took out the initial balance high Which has over a 90% probability suggesting that the shorts We're getting squeezed and remember yesterday Only week longs taken out which may or may not be material for today take out the week longs Price check and reject then what potential to go higher to where Does it logical if this then that if not then what where are we? Does that make sense? Can you see how you kind of think it through? Any questions And then we'll kind of get the real time Humphrey, I don't know if it's the risk the shorted I be high No, there's no risk free trades So we still have two-sided trade here now I can tell you for me if I don't get involved here. I'm perfectly okay Just doesn't matter because I have this to be thinking about so I know now again It can do anything you know we could fall out the bottom end and I want to know that's possible Because there's two sides playing in here today, right? I'm gonna take this out of here Now let's look at the auction up here. Now. I can't pick a high of the day, right? I'm going I don't know because my job isn't to do that. I can't I don't know where it is So, you know anybody who tells you pick the high and the low I I suggest you get in your Ferrari and drive in the other direction And if you don't have a Ferrari just save up for one Then so this here chop chop chop. This is a consolidation. You see it this in here See it happens in all ranges I try to get into it in a very tight range because what's happening in all of this is Happening right there See and it's happening here So it's happening in all of this but because it's chop I you know, I don't know now once it breaks out of this Then I can tell what's happening, but I can't execute in here. So it's not the point, you know Here you can see the high volume in here. So this rotation this consolidation too high. I'm not paying that. Oh It's on sale But now we're breaking out of it Which is saying at the moment this high volume, which is retail where we crisscross crisscross is too high So what's our potential come back? Check here again, and again, it's not a recommendation. So for me I you know if this is not my trade It just doesn't matter. I need to wait for my trade So I understand the behavior, but it doesn't mean I can do anything with it or I want to do anything with it So where's the stops? Well, this is still mean reversion. See we're back inside the initial balance. We fell out of this Where's the stops VWOP mid? Potential to come back here and potential to come down to the other side So we'll see what it does, but for me I'm gonna say is you know and again you have to have a trade plan. Is this your trade or Is it park because you already took your trades and now you're waiting for your trade You know trading at least for me is not about trying to catch every squiggle in the market It's about putting together the context and who's vulnerable So we already took our mean reversion. We came out and took the shorts now. We are mean reverting again It's the same process two-sided trade now Who's gonna take control take the ball? I can't tell you that We're still in a mean reversion because we're in balance So both sides are on the hook here, you know, so and so for me tourist But we can see the structures, right? Does everybody see the structures? Do you have a trade plan to trade here? I have to tell you I have an overnight statistic here. That's over 90 percent. So Who is it dirty Harry said? Do you feel lucky? So I may not be on a short here Unless my trade plan doesn't care about this statistic Let me look here a little further And this is where order flow can give you a little heads up too, but order flow is pretty flaky, you know In other words, it doesn't have to be real Like right here. See this is in the book market comes up Takes it hits it pulls back checks it They come back in over here. Let's see what happens Now I don't consider these actionable, but if you start In other words based on what I do in the trader lab, I kind of stay away from this. We have uh webinars specifically on order flow So I don't I'm trying to really Focus on market mechanics and understanding of context then you can always add in tools You know like this. This is a Potential selling event based on the order flow and the alignment. However picking the high a day not so much Here you see microstructure high volume node right in here We break below we pull back You have support here in the book. It's a short potentially if it's part of your trade plan Again, I don't discuss these I guess I am discussing it, but I don't discuss them because if you don't have the basic understanding It's not about trying to find trades It's about being sure that you have a handle on interpreting context And then you have a trade plan for that context if you're in the wrong Context and you're trading a plan that's for a different behavior You're not going to have a good experience because you're out of alignment So right here The book supported the short and the microstructure Right there Is your retail price in this interaction up here? You fall out of it and where do you come back? Look at the alignment So alignment for a short and I normally don't go into this Because I don't want to make trouble with the this In the auction remember auction test break short. So short here Stop over here. Not a recommendation break pull back volume here Structure so other opportunities. So chop chop break short chop chop break short Mean reversion stops VWAP Where potentially back here and lower or not Does that make sense and I don't want to make trouble. I'm just trying to show you a structure Well mason the thing with statistics is The thing is that they're out there Uh, but it's a pri for me. It's a prioritization And that's this is hard Because it creates conflict. In other words getting short here with that statistic right above I know that's open, but I know what's the current input. See What think about it is a prioritization of inputs? Uh, so we have yesterday's rth, right and the previous, you know, so we have the higher time frame intermediate context We know the longs Got popped but weekly. So there's still longs in the market We know there's shorts in the market too from yesterday and the day before so who's vulnerable both sides are vulnerable But it seems to me that the shorts Might be more vulnerable, but I I don't know So the developing time frame even though we have the statistic open and we have another statistic above us at 4308 ish Are open which gives me the leaning towards the upside I know we're in balance. Remember nothing has changed. That's 77 is balance So it's two-sided and again, I don't know, you know, we could come out the i below no problem and get down here And take this one out. That's what we don't know and the reason is Balance now there's another thing to be aware of in balance We can take out the i behind the i below And the reason is Balance so we could take out the the shorts Which we did We can come back in and mean revert Which would take you back here and now the longs have their stops under here They can get taken out and then we can come back in and just slosh both sides abusing everybody Well, that's tradable if you understand the context and you have a plan for it, you know And you understand that one of these stats Has over a 90 probability of getting taken out, but let's let's think through it again We're taking both sides, right? We took this out so We can Come down, but we already did this. So let's look at what we've done See you got to kind of look over here. What do we do? Well, we mean reverted got here boom Took out the shorts fine. Who's in the market right now the longs And if it's truly balanced, nothing says we're not going to come under here Because there's fuel here and Where's the rest of it under here? So it's possible. So if you're doing mean reversion, which would be from up here If that was your trade and if it's not it's not this is where you're going then it's helmet Just like it was over here It's helmet time because we could have done this move From this well, we didn't so then the shorts had a cover. Thanks for playing now. What exhaustion mean reversion back Except now where's the where's the stops below us? So we got to see but this is the next this is the target You know in here not a recommendation, but it's logical, isn't it mean reversion? This is the mean stops here under here, so potentially if it was me Obviously I got to think about this, but I'm also going to think about this Any questions on the logic? Humphrey, I just share market mechanics So I don't you know The traders lab is really giving traders tools And then have them develop Things I do offer, you know all those pdf's that You know traders can look at and then think about it, you know What what's going on and if and it's really a narrative That's kind of least in my mind It's process and narrative and it's always maybe you know, maybe it'll do this Maybe it'll do that if it does this then that if it doesn't do it then what you know so like here If it doesn't do something like continue down and take these guys out then what well then short covering And again, I have no idea, you know, so that trades over but once we come out here and I see the auction I know then we can get Stops are going to be under the I be high Right retail trader behavior Stops are under the v-wob and potentially mean reversion. So this then longs So now this low current low is more vulnerable market doesn't have to get there But what's the condition of the market two-sided trade? Right now the shorts are taken out. Who's left the longs? And again, it never has to do any of this. It could just come down here I don't know where the mid is It's probably in here. So it could come down Take the stops at the v-wob The bid I would assume is around here someplace Or was whereas Gotta look. Oh, it's above us. Yeah So 77 quarter ish right at the open and then potential back here. So that's kind of what's on, you know, or not, you know Remember, I don't know. Look at this This is skewing the book Is that real or they're just pushing it up. I want you to see when you see liquidity What is the purpose of this? Is it just to get retail traders in? Is it to skew the book so they can be selling? What is it? I don't know the answer, by the way, but if I see liquidity, it's not actionable So I don't base a trade off of this I base a trade off of the auction And that's that prioritization of inputs, you know Now let's say you were long. Let's go back here. You're long and this is your target Doesn't get there. You know, there's no way to know, right? So you got to have a trade management process Or how about this? I'm just giving you some ideas We think it's going here Which is what I would be thinking because that is the next target based on the statistics One of them, we don't know and but I think it'd be reasonable to say it would be this one. Yeah But I see the auction And I see the auction and I see it break away from the volume, which is telling me counter rotation. Now. I don't know You know, it's just a trade Right here it fails. Do I exit? Or do I what do I do? Or do I see the exhaustion and know now that we can mean revert? So what's your trade plan on that? See you don't have to be short here, obviously But you could be out of a long and then be looking, you know to reengage Subject to your trade plan and if you don't have a trade plan for this condition, guess what your job is not to trade It's not to make make trades happen your job is to wait for your trade Based on your process and your understanding of the context when those are not aligned You know, your job is just to sit and be a tourist You're not here to make up trades You're really here to understand the condition and when it aligns with your trade plan To take advantage of it Hold on one second guys any question Yeah, okay. Sorry guys any questions I got distracted here. I'm I'm back Yeah, Humphrey. I don't there's no I there's no cost I don't there's no cost for this. There's no subscription. I'm not a vendor I'm not into that at all This is just I'm sharing some pieces of what I've developed and how I've evolved Over you know with over 40 years of trading So and I will tell you that it's not has not always been a pleasant experience because that's the nature of Of this process, you know of developing I should say a market understanding and So no If you're interested in you know being part of the community, it's called the trader lab. You will go to bookmap.com Join the discord chat, you don't have to be a subscriber You won't be solicited and there's a lot of education not just what I do but Stocks on stocks options crypto, you know other financial products So it's pretty diverse and order flow In order flow in and of itself is its own animal, you know, because remember they're in a different time frame than us You know hft algorithmic behavior is really a whole different animal So it's kind of where are we in the financial food chain? You know, we're not in a good place You know, we're kind of the at the the end of the bottom of the barrel So I think if we know what the statistics are for retail traders that we have to Understand why that happens or have it happens to retail traders and then not do what they do And understand what they do why they do it and really just have a different approach Because that approach doesn't work For the majority and I mean over 90 percent according to the statistics That i'm aware of anyway of retail traders success So if that is the reality I can use that behavior that is consistent Make it an asset And also if I can understand the interaction of the market why See most of us are using indicators, which don't teach us anything about the market We're constantly trying to get the indicator to do the work And then we're going to tune them and tweak them and we're going to be looking in the rear view mirror Optimizing which is just more chaos and randomness. So that's why I don't use any indicators Only because I don't need them. I I need this real-time input I don't want something that's looking backwards to tell me the market's going down, you know, I can see it right here So I'm just saying is that's my approach and then when it comes to the higher time frame, which somebody by the way This is our target, right and potentially the low of the day. So we'll see. I don't know not a recommendation, right? We're just tourists here. Remember, I don't give trade recommendations Uh, this is how I look at the higher time frame In all it is it's very simple. None of this is complicated. It's all logical It looks complicated until you understand what it is If you think of the market as an auction, you know Too low too high. Where's the sellers? I'm not paying that. Where's the buyers? Oh, it's on sale. See this was 42 15 It's a retail price from a consolidation I what I do is I look at where the market trades over itself This is the beginning of what's called balance Too high. In other words, I'm not paying that. Well, where's too low? I don't know by the way, but I anticipate this Well, the thing is Here's the the so I overlap these I draw a profile over this Because I want to see in this auction Where is the volume? Where's the retail between this time frame participants? It's right around 42 78 Ish Right in here So if that's the case, that's fair Too low too high fair We open in fair today. So that's why you're getting too side of trade Now let's take it one step further and this is where the being like colombo a detective, right? Yesterday so if this is too high yesterday We were short short short short and then we had a squeeze We came all the way up Got the 4305 We have an open target at 4308 quarter. We missed it Again, that might be too high. That's a retail price from this day fomsc day And here's what else we did. We took out the Cell stops here and we took out the cell stops here and the key to this is it's a tell Right here Was the low of this day was 57 75 We're selling off. We only got to 55 Why didn't we just keep going? If the weak longs are getting taken out, right Why do we come back in Question does that mean that we only took out weak longs and that potentially We're going to eventually come back up and take out the this high And squeeze a little bit before we either go down or continue higher and I you know Don't have an opinion about that. I'm more interested in this So we are trading right now this With the shorts vulnerable And again, no idea if we break out of here then down The same so the reason that we're going with this mean reversion is we're nothing has changed Because this the market participants were saying yeah, we like this now we can come out And we can come back we could do anything right So in here until it changes for me, it's mean reversion I hope that answers the question about the higher time frame and I went back to it because I if you don't Put these pieces together. It's about trading inside out So now if I'm thinking balance and two-sided trade, I have to go back to my developing time frame And go okay, what's the story here? Well, I got statistics I know if it's if the shorts got Shot over here Auction too high. Where am I headed back here? Can you see it then while who's on the hook? Let's go the other way It's logical. Isn't it these guys If you are long tell me what your emotional state is Where's your stop might you have it under low of the day? What statistic do we have available the overnight low? You know and we can take out the overnight low Take out yesterday's low come back in or not do any of this We could just come under here or not again. I have no idea this. I don't know So I go in the I know I don't know but what I know is the context So until it changes which it will and it changes in her day I'm inside out. I'm sorry outside in no inside So if it comes here and it takes off like a bullet Great But why would I think it won't do that? because of this swing In the low of the day and my statistic and I'm going I don't know So I don't know and the fact that I don't know it doesn't matter because in trading I know I never know so I don't think about knowing I think about possibilities And I know that if I don't get this statistic That everybody who's long And has their stops under here and their stops under the low of the day that now they're on the hook So let's watch and see is this logical Uh, I'm sorry. I don't use any indicators. So I don't know what to tell you. I don't know, you know But this is mean reversion guys. This is Something that I think contextually you really need to stop and think about I recommend you go to the trader lab Uh, if you're interested in getting pictures if you will of these circles arrows diagrams balloons You know all those things where I detail out These behaviors and it's not that and this is not remember I'm not a formal educator. It's not what I do. I'm not a vendor. I have nothing to do with that No interest in that My interest is trying to help traders get the foundation Uh of a understanding of market mechanics and behavior because if you don't know why You're always going to be confused. I think and we're all confused a lot of the time So I don't think this a limb this doesn't eliminate confusion What it does is it helps you stay in alignment and then if you have tools You know, like in a mean reversion trade, maybe, uh Divergences workable here You know, but where do you get short? Would it be on this rotation? Would it be on this one? Would it be see? How do you know Would you be selling selling selling because divergence has no clue? so If you have something that you can read the auction maybe that divergence Will happen when you have structure And I have no idea. I haven't used indicators in so many years. I don't remember all I know is It wasn't a good solution for me and I built trading systems So they were very math heavy funk mathematically math function heavy With optimization structures and arrays in them. So they were You know kind of happening and I traded with them. Here's the other problem I traded with them, but I was always kind of, uh, you know, working looking backwards to try to get forward And you're always trying to you know, it's like driving in the indy 500 looking in the rear view mirror It's not a good plan ultimately Though at times circuit certain market conditions Uh would be in alignment, but the market doesn't stay in the same condition It changes during the day and you know all of that So that's very hard to have a systematic approach that is somewhat rigid to certain contexts That's my point So in the trader lab, we talk about context and different trade plans for different contexts This kind of day is not the same day as where you buy the mid and off you go like a rocket If anything, this is where you avoid the middle and you're on the outside edges. It's completely different That's the difference. I think So rare did I answer the question the time frame for the higher time frame is where there's balance or overlap As soon as it goes into a consolidation I combine the volume of the daily rth Candles until if it's trending, there's no there's no balance, which means no consolidation. There's nothing to combine It's when it falls back over itself that then it the it's starting to potentially change You know Does that answer that question? Oh a trader. I don't use any any indicators I don't need a vix to tell me the market's rotating down. And so the vix is ticking up I don't need to look at any of that. I used to I used to have 32 markets up How do you like to be looking at all that stuff? You know, I'd be watching the dollar. I'd be watching the dollar yen. I'd be watching the bonds I have the vix the trend that that you know ratio of up to down volume, you know issues down, blah Yeah, I don't look at any of that Because it's not material. What's material is the interaction of these participants And what they perceive as fair and unfair and then that behavior gives me an indication of you know What might happen? And then it's where are we within the previous day's area and remember 77 is sort of the fair price, you know So if that's the fair price until things change the market kind of likes this, that's why it's mean reversion And that's why this stops. I think they were over here vulnerable But the primary target of mean reversion is the mean and now we're adding one more piece in a statistic and One of these they overnight higher low is on the hook longs in the market. They've had their play So maybe we take them out and then come back in all things are possible But until it changes, this is what it is It's kind of if this then that if not then what if we don't get to this stat then what well the longs are vulnerable Mean reversion price check up here failure Where to here And in the trader lab one of the things we talk about or I mentioned to him is you know Traders who are trying to kind of create setups, right? We all want a setup Well, the setup is only appropriate if you understand the context If you understand the context and so you guys understand this what you're seeing here is most Of the time what the context is it's mean reversion its rotation. That's called balance When it gets out of balance you get that trend configuration That's in other words it runs away and it doesn't know what it's worth It goes I don't know and it goes goes goes goes goes a lots of times. It's a squeeze You know and we're one side like when you break out of a consolidation you get these higher You know these bigger ranges because of all the energy You know you look at this here. This was a consolidation. We broke out of it. See the run See the run see the run see the run now what we're coming back on ourselves So that is forming a consolidation. I don't know what it's going to do here Remember we can come down. This is a suspect because we didn't get any further yesterday We can still come out We could do anything so remember that part. I I don't know what I know is what happened yesterday and where we opened today That's what sets up two-sided trade one side is going to blink I know these guys are short. We have shorts shorts This has a potential to squeeze because of what we did yesterday. See how i'm putting these pieces together Other than that I don't know And it's not I can't know what I know is the possibilities So I'm on guard. I have a statistic. I have the overnight high. I have the overnight low I've taken out shorts in our developing time frame and longs are vulnerable. I can come down Check this low come back in check the low keep going Or never get there and just rotate. I have no idea So that's that's what I know until it changes. So that's how I think of it I think of context and I don't know when it'll change I just don't know but I know and the reason I was mentioning mean reversion to you guys is most of the time the market's in this This situation So most of the time it's going to be Rotational once it's in an area. It likes it's just it's shoppers. I'm not paying this Oh, it's on sale wherever that is or it's not, you know In back, uh, if it changes And what you need to understand is the market goes through interday it changes its configuration So we might be directional in the morning and then go into balance and start rotating So all of a sudden you're not trading at the same way if you are What works in the morning? And if you find that you know, it starts out one way and you're doing all right And then something happens and the same things you were doing earlier are now getting you In a jammed and you're giving back your potential gains from the morning if you don't Get a sense of why Then you're going to keep doing that if you can get a handle on context and nobody knows what it will do So don't think that's going to happen. But if you can recognize behaviors, you might be able to either adjust Your uh game plan or stay out of the market because it doesn't align I mean, there's three remember there's three positions in the market long short flat flat's pretty important If that's where you lose your dollars They give back your gains from your hard work and risk from earlier on when you were in alignment At least that's my my feeling about it. So i'm not trying to figure out how to trade every wiggle I want to figure out when to trade and then when not to trade It's like waiting for your bus, you know, notice how we got below here and took these stops, right? That was pretty logical. Now what I don't know. What about these guys? Are they on the hook? Don't know Is this statistic going to go or are we going to come all the way back up and take this one? One of them over 90 probability and I can't tell you which one so i'm just outside in right Mean reversion. So what is the the process that might be most beneficial? Not easy because nothing is but it's simple is learning mean reversion and having a plan for mean reversion Because this is the condition of the market most at a time rotational, right? It could be directional and then get rotational and you're still going to trade a rotation If you guys watch my videos on trend day configurations There's a lot of similarity because even if the market is directional, let's just say we up up up up up This thing never came back Well, it still rotates and if you can detect the trend you're going to use counter rotations Or mean reversion to attempt to get aligned for a continuation this process has multiple uses It's either outside in or if we were going up up up You'd be using the counter rotations for continuations Up subject to context. That's why mean reversion I think is kind of a basic concept that you can use in a lot of different scenarios Any questions guys, is this making sense? Well the vhvn is stale Not using it It's mean reversion all that is done. We are in balance So it's this outside in Who's vulnerable? That's the way I think about it. What statistics are open low overnight low and high. That's all I know What happens and for me the primary trade is to hear and maybe a little stop pick because of this swing And after that it doesn't matter to me Now if I'm trading and let's just assume I'm not going for this Which and in the trader lab we only talk about two contracts Not multiple not runners and the rest of it because I want to keep it simple Because if you you can build a trade plan in my opinion on a two contract process The job of the first contract and this is not a recommendation It's just something we talk about, you know, and that's subject to you know, everybody's different But two lots the first lot is to get you risk neutral In other words buy your stop and your stop is from Entry wherever that is to where the trade fails and for me it's structure I don't use like oh, I'm going to use a five point stop. Why would have if the trade fails at three? So, you know for an entry To failure then my goal is to get a rotation to cover the stop in other words The distance from entry to failure now. I'm risk neutral now I just put my feet up put my helmet on and look for my target And then be done with it. But what's wrong with this trade? It's about a three point risk, right? Right three three and change to here Per contract. So you got six points you get three risk neutral to here Does anybody have a problem with that? Is that not? Cost effective from a risk reward standpoint based on the context Just a question Well candle, I don't think you have been here long enough to make any judgment How long you've been watching this stream? I mean if it's not for you, you shouldn't waste your time obviously But I don't think unless you've been this is a process Of trading in alignment with Auction structure The candles are not part of this other than the daily time frame and even then it's not about the candle. It's about the volume So The candles are just representations. They could be bars. It doesn't matter, you know And of course a wick a wick on a on a candle does give you information, right? But I see the same thing in the volume. So The difference is with a candle. I need to see the volume that transacts Because that's the true auction. It's not price In my opinion again, this is just a process. It's what transacts and understanding Why the market does what it does? It's not about a high and a low. It's what created it Who creates it and what information might you extract from that that is actually usable To potentially engage with the market at certain locations that are part of a trade plan So, you know, if this is new, you know hang out Uh, you know, but I always say at the beginning of the stream that if you haven't viewed the market this way It's going to be very far Only the reason I'm saying that it was to me you know I mean, I first saw it. I thought I landed on mars and I said this is crazy because I grew up on charts You know and then indicators So, uh over time though I found the limitations and all of those and they all everything has a limitation this does too, but this keeps me closer to the actual real-time development Uh, so because I'm trading inside of all of this. So this is my kind of like my lily pad And I'm trading a context called mean reversion. So it's outside in You know and the longs are vulnerable. That's all I know here, you know after that. I don't know but I'm in alignment And the behavior of the participants is really what trading is all about In my opinion and if I can detect that behavior in the shortest time frame possible it allows me to interact with the market and Cut my risk down to the the smallest increment that I can and Hopefully with my plan get risk neutral and then go on to target which primarily is here and the bonus round would be under here But the trade can be done right here And that's I think pretty good, you know Again, that's just me It might not suit anybody else because my time frame is I'm attempting to align in the developing time frame Overlaying it inside of higher time frames. So anyway, I hope that makes some sense, you know Well, oh little, um, you know um It can do anything But I but here's what I know I know that I have a statistic that either the overnight high or low, which is here in here Over 90 probability one of them will get taken out during rth again There's it's not a hundred percent. So maybe none of them get taken out But I know who's on the hook now is the longs And I know it's a two-sided trade and it's mean reversion. So it's outside in we've been taken that we've been squeezing up here We didn't get to this statistic and let's you know, it's almost like logic in the sense of being a detective It's a forensic thought process. Well, who's vulnerable? Well, we have sell stops under here I don't know if we're going to get there. No, I do and we have a statistic here Which we may or may not get to if we get under yesterday's low and there's a more selling and we don't just come back inside Uh, then we can extend, you know So it can go off either side. I can't tell because it's two-sided So one side may throw the towel in and I'm prepared for either one It just doesn't matter and if we come out of this range It sets up then a directional move I'm inclined to think it'll be to the upside But we came pretty close to hitting an upside target yesterday So it's very muddy for me because we're in balance. That's and so I can only at the moment work outside in Because it's mean reversion. That's what balance is two-sided trade you know That's all it is So the median the median which is the mean I should say the mean is this Because that's where the retail price is. This is where acceptance is So if we get outside think of it like a rubber band, it's stretched out and the buyers go, ah, it's too high So where's it going to come back? potentially to retail and then it has the potential to come out the other side and go where's too low And not forgetting and I don't mean to keep repeating There's stops under here. So that's part of my logic And then again with any trade. We don't know how if or when see the thing with the trade is The rotational aspect of it is random So we don't know like here, you know, I think we had the short here right to here Why did it stop there and make new highs? Why didn't it go down? And take out the lungs over here I have to tell you I have no clue So we come back out Auction too high. Where do we come back back here? What do we do take out the stops under here very logical now? What do we do? Don't know So but I can't initiate in here I can only work on the outside edge because of the context of the market And then possibly this is still on the table So I have nothing to do if I'm running a too lot and that's all I talk about in the trader lab because we're thinking Build a foundation, right? I'm done here If I'm running threes So it's scale target Hold that's the next trade Because I have a statistic and I have lungs vulnerable under here. Does that make sense? So that's kind of the rationale and again, nobody knows but the primary thing is back here Because that's what mean reversion is any questions on mean reversion. It's a good day to see it Uh, David as far as the spoofing goes No, only after the fact David when it comes to spoofing, I am a big suspect of order flow But I do know the difference Uh, and it takes a lot of time to see the nuance of the book and that's because there's different Participants with different agendas. You got algos. You got hft in there. It's different, you know So, you know icebergs and all this It's all different behavior. So I find that Uh, I prioritize my inputs in other words for me the most meaningful information is the participant behavior That's the rear of the rubber meets the road What do these participants think in here? I can see it Why does this exist? Well, I can see it If this is too high in the words this auction This consolidation is too high and this is the check and it breaks away Then what? Next time developing time frame back here. It's logical. Then what? Potentially and it's only potential down here and maybe here and I mean don't know So that's why if I was running three, I'd be going to this But the trade primarily is done over here And then this is sort of your icing on the cake part, you know, like a runner And if it comes back up You know, then you have trade management for the runner You know, so that's up to your trade plan again That's why with twos this is still a very nice trade. I think and it's all very logical and it's very structured So I talk about structured trades Because you can kind of wait for you know, it's like stalking your trade and it's about alignment with the context Uh, and I think I've already discovered it by Discuss that by the way guys if you're interested in reviewing this because if you haven't seen this type of process before It's going to be very Different, um, and it will also conflict with your beliefs Because it's another way to Let's just say, um, read the behavior or understand market mechanics, which is what this is about This is not about indicators because I don't need an indicator. I got the real time Interaction of the participants, which to me is the best indicator. What do they think? Not what my oscillator thinks or my moving average or my pencil line that I draw on a chart the market doesn't care about any of that What the market is all about is the interaction of the buyer and the seller, right? It's that's really what it is and the other part of the market is trying to find a price That these participants might agree on that's fair right now. This is their price that they think is fair. So currently It's too expensive out here And then we got to see is this is this still too low And we're going to take these guys out or are we going to take these guys out that part? I don't know So that's you know, but I have pieces that I do know until it changes. That's pretty good. I think after that. I don't know Then it's trade management because of randomness See so that's as far as I can take it because that's all I know Uh, and then it's like everybody else here I'm waiting to see what the participants decide because I don't decide I just try to get aligned And then I take my risk and either you know trade works or I take a stop and I go on the next trade But for me the trades have to have risk-reward ratio too when I'm up here. This is my target that pays Right if I'm up here and I take a three-point hit Or on a two-lot six points. It still was worth it because of risk reward if I'm sitting and I have no range I have no trade Doesn't matter if I know to context doesn't matter what I see if I can't make it worthwhile based on my trade plan Then I'm just sitting here and I'm watching Because I have nothing to do Any final questions? And David, I hope I answered your question And oh little um as far as understanding the auction it takes time to think in that way You know, it just takes time and if you're interested in any of those, um You know, there's there's uh come to uh, if you're interested in a trader lab and the resources I have 60 pdf so I've posted of different configurations that you can review and In your spare time and away from the market Uh and just look at them and look at what it says because this market speaks It actually is giving you a lot of information. Um, it's a way of interpreting it And not depending on some plug and play, you know indicator to tell you what's right in front of you Um, because an indicator is is pretty generic And if indicators actually worked over to long haul, I don't know why they have 80 or 100 indicators in a software package I've always thought, huh, wouldn't they just have the good ones in there and Yeah, but why is that? It's just something to sell software in my opinion. And you know, the other fallacy with the indicators is they work at times What's the indicators are not sensitive to as context So when we use indicators, we're tending to always do the same thing with them Even though the condition of the market is not the same And that's where I think the problem is with an indicator If you can understand the context you might better deploy indicators Uh, because you know when they will work for a specific condition and you also know when you shouldn't use them I think that would be an important contribution to traders who want to use those tools Um, I find that too many inputs create conflict and inconsistency So I've kind of gone the other direction and a lot of other traders. I know Um, I'm just going to say traders. I know who've been trading for a while. I use this process Um and indicators are really not A big part of their toolbox Um, for the reasons I've already stated doesn't mean it can't be part of yours I don't make a judgment, but I'm showing you something here that I think can contribute to your understanding And then it's how do you deploy whatever tools you want to use and minimize the conflict Because if you have conflict, you're going to be that it's the conflict stimulates the In the mind of fight or flight and the fear and all these things and there is no certainty in trading But can your process have a certain sense of certainty and consistency if your process is consistent You can measure it If you have an inconsistent process, then you've got chaos in my opinion If you're interested in those pdfs, I invite you all to the trader lab, you know Go to bookmap.com says join, you know Join discord and also take advantage of all the other free education stocks crypto Order flow. I mean there's courses on order flow You don't need to be a subscriber You won't be solicited and as far as bookmap goes if you find a way to incorporate it into your process and you see let's just say It gives you a net Profit off of the cost, you know, like everything cost of production if it gives you a yield and grade if not then don't bother You know, I think you can trade Effectively, but I find that because when I started using this tool and I got it in 2015 when it first came out Before all these enhancements to it that it allowed me to reduce my risk because I could see better inside Versus using rankos or any, you know ticks or any price base bar. So I could see better so it reduced my risk for me So tighter stops and if I have a better entry then my distance to get risk neutral is closer, right? So it skewed everything in a positive way. So, you know That's at least my view of it. So, you know and everybody, you know, not everything's for everybody It certainly is this but most retail traders never are in the business long enough To get to use a tool like this and like every tool if you're looking for an indicator that's pushed You know, and whatever you call it Click play deal, you know plug and play. This is not this has more sophistication. It's more advanced So, you know, by the way, where do we just go here? 582 stops. Let me just take a look just want to be sure what's going on here initial balance high Came down and checked. So this is remember. I'm thinking the longs are vulnerable, but I don't know. See, I can't tell What I know is mean reversion. Let's look at what we did. We came down and checked and we This is too low outside in But since we came down here, I'm not going to be on the outside in even if it comes back here again Which is the possibility because we're still in balance and mean reversion. Who's on the hook Remember, I'm still thinking a short squeeze and I can't I can't tell so I'm just telling you This is the straight oil from the can. I don't know So this is rotation. That's what's you know, so if we went here And now we checked here. See this is retail, right? Look This moves higher. It's suggesting at the moment This is too low. This is the same process up here except Micro structure The volume in there was too high. We came back to the volume in here potentially and I don't know too low The volume point of control which is the developing volume for the day moves higher This area here was too low We check it too low. We rotate up Potential now mean reversion, but only to here and potentially here Nothing to do. I have I am in park Because one of these sides is going to get taken out and I couldn't tell you so I don't need to do anything But look at my range now So I have two possibilities. This is still mean reversion Back here back here still break below or Break high and I don't know so I can just sit here now and do nothing I have no need to trade Just me So what's your trade plan for this? Do you keep trading it? Or do you look at where the fuel is and what the market has done and what it hasn't done? If this then that if not then what if we don't get down and take the longs out at this time then what? If this moves up and we test it from above Which says this might be too low then what? If we come back and take out the stops at the I be high, which I think we did then what? counter rotation back in or too low and then squeeze We can hang out a little bit If you're interested and we can kind of see how it develops, but you know, it's lunch In Chicago. So chop is not unusual, you know, and this is balance. So that's our context. I don't know what it'll do but for me If I'm going to take risk I want it to be with range once I get to this My risk doesn't change But my opportunity goes down. So Do I want to trade in this? Well? I know that the opportunity would be to here And then I don't know So the range is You know compressing Is it makes sense now? I can't enter here, you know, I'm still looking to try to figure out how to do that I can't Let's look at the microstructure. See this little rotation right here. You see that little high volume node This is an auction 500 stops coming up 21 exhaustion Right here Is high volume. This is your micro retail price. This is like your convenience store down the street location Chop exhaustion don't know at the time break. That's a trigger pull back to the microstructure Now this is not a trade I would take because where am I going, you know short So let's assume, you know, you're in 78 and I'm saying because it's not anything we do Stop above 80 two-point risk target Five points. I don't know. Do you want to risk? What did I say two for five and it's really four because it's two lot Or you're scalping a one lot, but you know to here. I don't know What's your trade plan and then we're back into this thing again or not This is a mean reversion the market's condition is Outside in so I have no idea but you know I don't know if it's worth the trouble What's your trade plan any questions on mean reversion since that's what we got Or in it's my stop is based on structure And I can typically get around three point stop in the mini, you know, which is 150 a contract Ballpark, you know three three and a half This one was less. It was like two and change I like that Because my goal is risk management first And minimum risk if I and because look where my target is. I mean I don't have a lot to work with here You know four point three point. I mean I could get risk neutral, but I know let's go back to what we know too low Volume and price are migrating It puts these guys potentially on the hook And I don't know But remember we are suspicious of a continuing squeeze in this statistic I can't tell which side is going to win Except what we did in the higher time frame yesterday. Let's go back to that See this is kind of how I try to put pieces together and I can't tell what it'll do Don't nobody knows what it'll do If somebody does know I want you to reach out to me personally and we'll have a nice conversation But other than that, I can only try to stay in alignment with it And accept that it It can do anything. This is the the tip off to me of to be very careful on the short side because FOMC Reversal yesterday take out these longs. Thank you Take these guys, but come back And here's your body, you know, or your volume. Here's in this consolidation, which is developing You know 78 77 is the fair price in this volume. So and we're accepting it So who's on the hook? Well longs down here. Why didn't they get taken out yesterday? Question. Bing bing bing question If they didn't get taken out and we had profit taking profit taking shorts shorts And weak longs out with no follow-through that puts me on alert Of potential squeeze and potential takeout yesterday is high and then fail or whatever it does or continue You know, wherever I don't know, but this is indicating to me that I have to be a cautious short And so far the market is suggesting Squeeze a Tyria and I have a target at 4308 25 Not a recommendation Is everybody tracking any questions before I sign off Got a bunch of comedians over in the trader lab By the way, you guys if you're in youtube and you haven't come over to the trader lab to visit go to bookmap.com Join discord chat. You won't be solicited. You don't have to be a subscriber to bookmap now ever never not the point A lot of free education stocks options futures order flow loads of things you can access To help you get a better understanding of the market and it's not just one way to do it You know, there's so many different ways to trade, but I think Most of us go down The idea that complexity reveals clarity and it's actually the opposite, you know So I think that might be something you might want to take advantage of come to the trader lab We have our senior trader has over 54 years experience and And then newer traders, of course, so it's very diverse The other thing is we are leveraging our experience our collective experience because you And I and the others we've all done the same thing We're on different roads and different paths, but we're all on a similar journey And maybe someone else's experience can maybe save you time and potentially dollars For going down rabbit holes that may be dead ends. I've certainly spent years in rabbit holes Looking to make something work that didn't work, but I believed erroneously that it could work Uh, so it was kind of like proving I just got to find the right way or I just got to make the right You know all that right? We've all gone through that So if you're still going through that the answer might not lie in doing what you're doing, but it may be Finding other ways to integrate what you do into what you're doing Or not do what you're doing if it doesn't have a positive expectancy and I everybody's answer is different there, you know So, uh, and if you come over to the trader lab, it's a great community And there's those pds that you you know, you're all welcome to about 60 of them of different configurations that you can study Also, there's a introductory video Up there on auction market theory and the profile and just integration of these behaviors Which you might find and we'll save you time, you know, whether or not you ever use any of this as you know Not material, but I think with a better understanding of how the market works It'll give you maybe an advantage over Our main competition, which is other retail traders who have no idea because they're Going down the indicator rabbit hole thinking plug-and-play somehow is going to give them an atm in the basement Which I suspect is probably not going to be the case again Past performance not indicative of future results and you have to vet your own ideas, but by all means have a trade plan that you vet So you know statistically what your probability is of any outcome. So it's not random Thanks for being here. Thanks for being in the trader lab Appreciate it all of you And by the way, I continue, uh, these narrations in the trader lab in the book map discord lab Um So the audio stream will continue As circumstances dictate I try to stay in touch And uh, again, thanks for being part of the trader lab. Just a note. I will not be here Next week from tuesday through the end of the week I won't say i'm going fishing but you might think of it that way so, uh But I will be checking in But there won't be a live stream But there's going to be streams ongoing every day in the uh book map discord chat. So there's loads of education So again, um order flow, I think especially Is a very confusing element and uh, what I have found with order flow So, you know is when do I pay attention to it when don't die and that takes time This is a specialty tool And it's not if you're used to plug and play flip an indicator on and somehow you're gonna It doesn't work like that in the real world, you know So This takes a different skill to understand why This was important Why we came back here Why this liquidity showed up here if you didn't know the answer then you don't understand order flow And that's okay. The thing about it is can you understand order flow? What separates this behavior? from this Or this Or that Why is this here? Why is this here? Why is this here? And what is the impact? Is this real or And are these guys going to pull and open the door now remember? I think the shorts are going to get squeezed So what is real? Why did we react here? See if you understand order flow, you might be able to put it together But for me order flow is not a triggering mechanism This is the chassis That I build everything on in the developing time frame the microstructure Is the behavior that shows me what the participants think in all time frames So I have in a way I can see microstructure that'll show me a counter rotation But I have to overlay it on this Because this is where the higher, you know the daily Participants are active And I'm attempting to work with the microstructure to get aligned with this for these rotations And then let's go back again Back again. I got to come back I always have to come back to this so it's Microstructure inside a daily developing structure inside of this that's with fractal So I can operate in all of this But I can never lose sight of who's on the hook So it could be these guys and I use statistics Which kind of helps Which says just to me North not a trade recommendation. Are you guys tracking? Is it logical? So that's it Not complicated If you make it complicated, you'll be in a state of confusion Now we are always in the state of unknown Because rotations are random I mean how to market does what it does Does it do it does it not do it? But the auction is giving us insight to behavior What did we do? What did we not do? If this then that if not then what? If we come down and mean revert and we can't take these guys out and remember at the time I don't know so don't think I know anything Um, we come up the volume shifts key We check retail here. No different than the microtime frame when we pull back to high volume It's the same thing. It's all generic too low. Then what? Move away warning will Robinson Potential mean reversion. I can't take it remember Comes back Doesn't quite tag it or doesn't right here Too low then what? Potential squeeze it here you Then what I think I lost it. Where's that overnight this? And write it down Not a recommendation This 430 a quarter Takes out yesterday's high. So that is what our potential is And again, it may not do it today. It may do it tomorrow. It may never do it No idea doesn't matter Because I don't know That's it Thanks for being here again and trader lab. I will be visiting with you So stay on the stream stay in the audio In the voice channel and I will be there Uh a little later today. I have a little business to take care of. Thanks again guys. We'll see you soon