 Good morning traders and welcome to the bookmap pro trader webinar. This is actually eclipsing the Series we're gonna have the series next week It's actually kind of funny. It's gonna be kind of two weeks of series basically We have one tomorrow as well, and we may have a pro webinar on Friday Today we have Markets and mayhem of trader aid. We've done another webinar with him before it was excellent very concise and pertinent data here Trader biography Markets and mayhem is an experienced trader and investor cutting his teeth in the market starting in 2005 Learning to trade and then invest after doing some of the first trades during the dot-com boom which sparked a passion Mayhem has experience analyzing flows geopolitics Macro systematic trading and technicals and I have Mayhem's contact information here. They have a website Trader aid calm. There's another Macro visor calm and then a YouTube channel and then also some special offers here. I Believe this is correct. If it's not then I will update it. I'll put this into the chat for you I updated it yesterday, but it doesn't look correct now Anyway, let's go through disclosures and turn it over to mayhem general disclosure all bookmap limited materials Information and presentations are for educational purposes only and should not be considered specific investment advice nor recommendations risk disclosure trading futures equities and digital currencies Involves the substantial risk of loss and is not suitable for all investors. Past performance is not necessarily indicative of future results. All right, so let's get into it here and I will Project mayhem screen Okay, all right mayhem, we're all set take it away All right folks well, I hope everyone's having a good start to their trading week certainly an interesting day so far as we've opened and we got rejected pretty well off the open here and You know looking pretty interesting as we retest some of these pre-market levels But before we get too much deeper into the intraday trading Let's talk a little bit more about how I trade and a focus on book map with this the theme of this Presentation is coalescence as a compass the idea is when we look at trading What we're really trying to do is come up with a system that is repeatable that we understand That we have confidence in So that that way we're able to see our trades through But we're also able to get out if we no longer have a signal that has us in a trade or if we're exceeding our maximum risk So for me coalescence is key because looking for multiple convergences Helps me increase my confidence So if I can see that there is a lot of positioning at a key strike in spx We've got a large level of resting liquidity at or near that level We've got the longer-term auction perhaps showing us a lot of people like to transact at that level That's telling me we're probably going to go back there and that helps me to increase my confidence in putting on a trade If I'm expressing that opinion That also helps me to have a higher probability of a successful outcome because I'm being more disciplined in my approach I'm not taking on trades for the sake of taking on trades And I just want to put that out there because I think it's an important part of our growing process as traders No matter where you are, but especially earlier in the process To not take trades that don't comport to a system that we understand Because then navigating the trade becomes more difficult our consistency goes down Right and as a result we may find ourselves revenge trading or not being as confident or otherwise sort of self-sabotage So I rather go by a system to quantify how I'm going to get into my day trades and my swing trades And the theme of today is going to be coalescence is the driver for that system Doing so having such a systematic approach also It decreases the likelihood of taking on those low confidence trades because if you say I'm only trading my system You're not taking the stuff that kind of comes on the periphery of your radar and you're like, ah No, I've got something better to do with my time I want to make sure that I'm putting my money and time into good use It also reserves emotion and impulse when you see Your self Lurching into doing something because you feel it rather than it makes sense Sometimes those can be good trades, but often they're not and the biggest part is is it something you understand? Is it repeatable? Is it something you can put your risk reward on right off the gate? And if you can't those gut trades can really start to hurt after a while less trading is also better for overall capital Preservation now I know some folks like to scalp Aggressively and if you're good at it great But at the end of the day it does exhaust our time to be sitting in front of the screen the whole day It exhausts our intellectual capital and it can also put us into situations We might have more churn from commissions slippage and any losers So I like to have a system that helps me get into trades that are high risk You know a good favorable risk reward ratio So something where I'm feeling like maybe four to five times reward to risk is a good benchmark I see the markets getting sold down a little bit here. We've taken out the lows We will get to this but it does look like we're starting to have what you could quantify as a downwardly trending intraday Kind of price action situation here Mapping out key levels. This is really important to me because I need to know this going in advance of the trading day I don't like to get into the day and kind of fumble around and figure out where I am I'd rather do some prep overnight and coming in before the market opens and Some of the tools that I use help me to do that automatically But however you do it having those levels available before you're in a trade helps to understand what your risk and reward is It also helps to understand where some of those price targets and key resistance and support levels may be so for me I like to look at options positioning across the full s&p 500 index chain I also like to look at the zero DTE most active calls and puts in SPX because that is a Really important driver of price discovery. I like to look at prior key auction levels in multiple volume profiles, right? so I like to look at it both on a longer-term time frame and Also in an intraday time frame weekly daily and intraday are my key volume profiles that I look at I also like to look at book map for large levels of resting liquidity Like we can see if you're watching book map right now 4450 ES is a pretty key level with 489 contracts resting on the bid and then I'm pretty key into Looking at the institutions versus retail component or icebergs versus stops and you can see there's a bit of a theme there today With icebergs on the rise of stops are getting blown out a bit. So we'll talk a little bit more about that first Let's talk about options though. So full chain options positioning across SPX. There's usually about 10,000 Contracts on the chain that you have to be aware of across all the expirations and all the strikes Most of the price action most of the trading happens within about 5% of spot So you don't necessarily need to be going all over the map to really look at where important options trading is it's usually within you know up or down 5% of spot in SPX and So I've created a number of charts that just run automatically to help me map this out there's a variety of services that do similar but the goal is to just be aware of these levels and Quantifying them on the full chain through gamma exposure I found to be quite helpful and that's just your idea of what dealer exposure is at those levels So the largest gamma exposure or geck's above the spot price is what I call a wall of calls It's sort of common phrasing for people that are trading trading options to look at it as such It often acts as a level of resistance. Similarly below that the largest Net geck's below spot that's negative is that wall of puts, right? So those are two areas to watch they typically fall on pretty big even numbers sometimes you get the you know The 50s in there, but forty four hundred and forty six hundred these are two levels to watch in SPX options positioning You can see right now. The implication is about 12 billion dollars of selling per SPX move of 1% down and vice versa about 12 billion dollars of buying for Every SPX move 1% up and we'll talk a little bit more about what that means But the implication is that dealers are short gamma here or in negative gamma territory The next area that I like to look at is gross gamma exposure the largest area of that tends to be a bit of a Vault trigger. What does that mean? It means when you cross below that level, which we are of course quite a bit below now You have an increase in volatility So not only do you have that as we are at present negative? Gamma environment or dealers short gamma. You also have us well below this vault trigger So that's important It just adds to the potential for more erratic Infra-day and intermediate term price discovery trends We're also at a time of year where seasonality matters because volatility comes back and Volatility starts to become more pronounced from mid-august on and we've certainly seen that so far We also have other factors There's less volume and less liquidity in the market over the later summer and That also tends to add to volatility because it takes less volume or less order flow to move price more if there's less Participation so all of that you just got to kind of keep in the back of your head that moves might be a little wider So that also means position sizes should probably be a little smaller and stops should be a little bit more judicious About managing that risk So walls and triggers these are what we've just looked at right a call wall or a put wall tends to act as a level of resistance or support respectively a Volatility trigger particularly a very large one like we had on the last chart at 4,500 can act both as a magnet for price as Well as a level that once we push below price discovery becomes more chaotic and we've seen that Since we pushed below this 4,500 level and even last night we challenged it in the overnight if you adjust ES for SPX It's about a 16 point Delta and we did test it several times overnight. We got rejected ultimately So it is a pretty key level. It's become a bit of a ceiling here with the way that trading is happening and 4,400 Be based on options positioning could be a pretty important level of support for buyers to try to defend now These levels they can and will move regularly particularly during large market moves Opex week which we're in in fact tomorrow is vixperation and the release of Fed minutes So that'll be fun and also where there are event catalysts that might change hedging flows or otherwise Gamma flip changes hedging dynamics as well. This is another area. That's important to take into consideration So the naive model that we have at trader aid Calculates the gamma flip based on assuming all the options exposure on the SPX chain is bought to open Because that data whether it's bought to open or sold to open in terms of what's creating open interest isn't readily available But most of the options positioning I enlarge is bought to open. So it's a relatively accurate portrayal We have other large banks like Goldman saying also they see dealers is having Basically a short gamma or negative gamma environment as well. So the model works And what it's showing us now is that gamma flip bubbles approximately 45 24 That's quite a bit above us about 75 points above us right now again adjusting SPX for ES levels with that delta of 16 points And that delta continues to flatten out as we approach the contract role in September But this is telling us that there is a fair amount of a chase dynamic at play that idea that When we're in negative gamma territory dealers are more likely to short dips and buy rips sell rips and and and and buy dips is the opposite Dynamic that you see which is long or positive gamma So in a short gamma environment to recap you have dealers that are more likely to buy rips and sell dips that Exacerbates volatility in a long gamma environment. You have dealers more likely to buy dips and sell rips which compresses volatility so this is the environment we're in right now a short or negative gamma environment and That is something to keep in mind when you're looking again at positioning and how you're going to size Going into a trading day or week or month like this now I like to look at the zero DTE most active puts and calls for SPX This was taken from yesterday's data. This is just a quick chart that I look at regularly I've also put in a plug-in to the cloud notes on book map that visualizes this on screen. We'll show that Shortly, but the reason this data is important to me is that SPX is the biggest options market in the world and zero DTE trading in SPX is more than half of all trading more than half of all options in SPX are Bought to close within six and a half hours or less so that's a bit of a mind-blowing stat and then you know options activity is getting more and more I Would say a key component of the market not only because of how much of a driver it is But also how large it is overall so zero DTE SPX options trading accounts now for 53% of all options trading in the index Let that settle in for a second because it's a bit of a mind-blowing stat Volumes are regularly hitting all-time highs in these options and about 600 billion of notional value in SPX to expire within six and a half hours or less trades every single day and It gets better because volume continues to hit all-time high So for us as traders it means we have to adapt and evolve to survive and thrive right if options are driving the market That changes some of the dynamics as to what we should be watching It's actually gotten to the point now Where the majority of ES trading is driven by SPX market makers because there's so much flow happening in SPX zero DTE options That ES is merely a reflection of their hedging activity for most of the volume Obviously not all of it, but most of it and that changes the game a little bit It means we need to be more cognizant as to what people are doing particularly with those short dated expiration Now volume profile and resting liquidity are other areas that I find it very important to watch I like to watch the volume profile as I mentioned intraday on a daily time frame and a weekly time frame Mapping out those key areas where market participants have wanted or not wanted To participate to understand how they may react to those levels is important like in a high volume node It acts more like a magnet and a low volume node acts more like a decision zone where market participants Haven't wanted to stay there in the past and often don't in the present So you tend to see either a rejection or a break above Whereas with a high volume node you may get kind of sucked into that and turn around for a bit because that's an area Where the auction participants have really enjoyed Transacting so it's important to watch those levels that helps to give me a better idea of What people have thought in the past and then to know what people are thinking in the present I do like to look at resting liquidity book map is a brilliant tool to do that and I really like to look at contracts of 200 or resting offers and bids of over 250 contracts in size and That's during regular trading hours obviously after hours It's a bit different But that helps me to map out where I'm going to pay attention to on the chart versus where I'm not going to quite give as much attention I Find those larger areas of resting liquidity tend to be more Magnetic particularly on a day where you're trending and you're going in the direction towards one of them and I like to look at institutions versus retail and That for me looks at stops and icebergs, right? So icebergs are more likely to be institutional participation and stops are more likely to be smaller traders They may not be all retail, but they're likely to be smaller traders And that helps us to determine the flows behind price action, right? So if we see a lot of iceberg buying While the market is starting to dip that can be an assignment You've got a larger institutional player that's starting to step in what catches my attention is size So I've seen days turn around almost on a dime when you get someone going in with thousands of contracts particularly You know three thousand and above that can put a little bit of a change to overall price action and increase the amount of Potential that you know, you're gonna have a reversal at that point because first of all if you're seller in that situation and Someone huge comes in and just lobs three thousand contracts in you're gonna see that you're gonna say, huh Okay Well, someone has a completely different point of view than me and they probably have a lot more money Maybe I'll step out of the way and you often do see that you often do see that sort of turn about in In market dynamics, but you know, you can't just see the iceberg and get in you've got to see the price action Confirm it as well. So the other side of it is it's helpful to see stops being blown out, right? Those sell stops being blown out as the icebergs are buying So, you know smaller players are getting taken out of their positions larger players are accumulating and You're potentially gonna see in the price action then that validation that could give one idea of getting into the trade That's just an example using this as an indicator. I found it to be very helpful So let's talk a little bit more Before we dive in just about the basics here because I think this is a really important part of trading its psychology And the psychology of trading determines whether we survive or we don't right So right now We have a lot of people Unfortunately that have kind of gone into just reflexively buying every dip and I get that it's worked it works until it doesn't and One concern with that is it doesn't come with basic risk management practices It doesn't always necessarily come with a system a repeatable trading strategy that allows us to understand what we're doing Why we're doing why it works? And I think that's a really important component of successful trading because trading is if you do it seriously If you're gonna do it full-time it is a job It's not just lottoes and lambos and betting on calls and you know getting a hundred fold returns or whatever and just being rich And retired and moving to a private island within a week or two I know that some folks advertise it like that I know folks out there listening to this either live or Later are gonna laugh a little bit But the reality is that trading is really more like a job. It's a career if you're gonna do it Well, you have to be able to do it consistently if you're gonna do it consistently You have to understand what it is that you're doing So that's an important part of trading is the consistency component, right? And how do you become consistent? You have a system a system keeps you honest if Things don't comport to that system You don't get in the trade if the system tells you the trades not working you get out The system says it's time to take profits to take profits And when you build a system that works for you, it doesn't mean it's set in stone You got to keep iterating and improving there might be dynamics in the markets that shift And I think it's really important to also be open-minded about how we have to evolve like looking just in this presentation About how much options are now a key determinant of price action Well, then we have to evolve our system to take that into consideration, right? It would behoove us to do that So that means we take trades at fist fit the system We've created we avoid those that do not we journal our training and I meet a lot of great traders that do not journal I still think everyone should journal. I journal I meet a lot of other traders that are very serious about this that look at it as a job as a career And they do journal because no matter how good you've become you can always get better And one way you do that is being your own sort of Reviewer right you've got to be your own critic you've got to look through all your trades and say what's working What's not working? How can I focus more on the approaches that are working? How was I feeling when I got into these trades that did work or didn't because a motion does play a big Role we are humans after all most of us are not using automated code to execute all of our trades and Even if we are we have to trust our system right to stay in those trades so it's it's also about making sure we have a quantifiable system and In order to come up with one that we can continue to iterate and improve Journaling is a key component. So I like to have a journal that talks about, you know, how I entered the trade Ideally, I entered the trade with more than one entry. I don't like pretending I'm smarter than the market. So often as a case unless it's a very short time horizon or it's a small position I will use multiple entries and ideally exits if I'm afforded the opportunity and I journal that not just the first entry But everyone what was my thesis? Why am I in this trade so that I can look back at that if it's a longer-term trade and understand what I'm doing What quantifies, you know, because at the time when we're doing the trade, it all seems very clear But then time passes and some of those things may not be recalled quite as easily So we have to have that written down and we should have a system that's formulaic. So it's very easy to replicate, right? It's almost like template-driven And then finally, you know, when you get into this routine when you have a system when you are consistent when you find yourself Discipline you're gonna save a lot of mental energy What's the biggest thing that gets traders burnout? Why because we're spending mental energy doing nothing like staring at every tick on the screen is not going to be What gets you to retire early? Okay, you have to be smart about how you use your time and your energy and consistently become smarter and smarter about that I know some really good traders who only trade like the first two hours of the day and then they're just done And it makes sense if you look at the way volume is there's not much to do sometimes until like the last hour or hour and a half So be sure you preserve your mental capital trading is Not a sprint. It is a marathon You have to be there Next day Next week next month Next year You have to be there with your capital. You have to be there with your mind You have to be there as a better version of yourself than you were previously So that you can You know look back and say wow look at all these milestones Well, how are you going to quantify them without a journal? Right, then you can look back and really see how you've gotten better over time So that's the main takeaway is you know, not only are we looking at co-lessons as a compass That's the key theme But I want to dive into psychology because no trading strategy will be successful without a really disciplined objective approach and then finally Disclaimer what might work for me might not work for you. My system is not the end all be all It's just what I've come up with trading the markets since 2005 and learning and kind of applying Different knowledge from my experience and those of others that I've admired and looked up to into my trading style So take what works for you Uh, you know, I welcome your questions and your feedback as well once we wrap up the presentation But make sure that you don't try to just apply it literally as a drop-in You've got to make sure whatever your trading works for you your personality your system Whatever allows you to be consistent and disciplined So let's dive in we're going to look at some real-time examples including my dynamic spx options mapping system As visualized through book map I'll discuss how I use book map as a part of my day and swing trading strategies for es in the broader market And of course, as I mentioned, I will welcome your questions and feedback as I conclude So i'm going to switch screens folks. Give me a second And we're going to go into book map here and bruce. I don't know if you need to grab this again, but um Yeah, I need to get that again. Here we go. Here's a book map stream. There you go. Uh-huh All right, folks, so I'm just going to resize things because I use this on a smaller monitor Uh, so you can see on screen That we've got a a number of familiar Parts of this chart and one area that looks a little new So I'm going to walk you through just the new part first So everyone understands what we're talking about what we're looking at and then we'll get into what we're seeing in book map On the farthest right column, you'll see something called options And in options, you'll see various labels and as we zoom out a little bit You can see that there's more and more of those labels for key levels Now what we're doing here is mapping out some of those areas that you saw on the charts, right those SPX charts, excuse me mayhem. Yeah, the resolution is pretty pretty high. I don't know if you could Make it a bit lower Sure. Yeah, let me switch screens again real quick and just put it over here. Yeah, let me know is that looks better Yeah, okay all right The perils of ultra-wide screens. Okay, so We've got a number of key options levels that you can see on this right column here Hot call is the most active spx call Flip is the gamma flip level vol is the vol trigger Key is one of these key areas of options exposure where there's an unusually large amount of exposure and then hot put about where we are Right now Not much of a coincidence is the highest activity put for that zero dtspx Options chain So why is this all important because it takes all of these levels both full chain And zero dte and converts them to book map so I can see them right on screen. So it just saves me a little bit of a time This is something that I've put together recently It'll eventually be available on the book map marketplace But the reason that I wanted to show you all this today is because with the outsized role that Options play in the market being able to have this just kind of bright built into the screen It's it's been a game changer for myself and many others And it's just it's a little bit easier to visualize it rather than having to go through You know a website look at a link or have a different chart in another window. So I I like to be simple I don't just like coalescence as a compass. I like To reduce complexity. There's nothing wrong with simplicity and book map is is one of the screens that I look at the most Particularly now that I have so much on it. So as we look at the the book map Window today one thing that calls out to me is there's been a very patient bitter here Sitting just above 4400 for a long time with this thousand plus order They have they've been there for I want to say almost two weeks now maybe longer But that's something I have my eye on because typically if someone sits there with size for a long time It's not going to be a spoof It's someone who's genuinely interested in bidding the market down Which would be a pretty key level too like spx 4400 as we looked at On the options positioning charts is a key Area it's a wall of puts and that would be just around here around 44 16 So this is a little lower But you know when you get those big tests of key levels you could see it visualized here That tends to get a little bit of an outsize move So you could have a test at that level maybe a little bit of a break this order gets pulled in So that's something I am looking for I am Looking for this market to probably retest That spx 4400 level over the next couple weeks I don't know if it will be this week, but I do think it's very interesting that this is a week where we're going into Options expiration. We've got a number of catalysts You know, we've got the Fed minutes tomorrow with vixperation Which can further amplify the potential for volatility And we'll see what the Fed minutes do but this isn't a particularly well hedged market into this dynamic One other area that I didn't talk about during the presentation But I think it's important to understand is skew and how that impacts a week like this We're going into options expiration, right? So the flows that are talked about often Gem Carson talks about them as the the second order Greeks the van and charm flow Or basically delta decay and theta decay flows Those intensify a lot Over you know really this week up until Wednesday And and that's sort of like Wednesday is going to be sort of peak flow and then we're we're off All those flows are kind of turned off for the next two two and a half weeks Why is that important? Well going into this week skew on the s and p which is the premium Between calls and puts it's it's lighter than it was so some of those hedges were taken off Which means those flows won't be quite as strong as we can see today They weren't enough to sort of save the market from itself this morning typically the strongest time for those flows the first and last hour of trading And the other side of it is that on the single stock side, particularly the mega caps were very call skew heavy Which means that these same flows actually go the other way They take liquidity out of those stocks as you approach OPEC So just some dynamics to think about as we're heading into what seems to be a Trend day lower and that's really what I'm looking for as we've broken below The trading range in the first half hour of trading and multiple other time frames as well We can see it's become a bit of a risk off day. There are some reasons for it I know that folks want to believe that a rate cut from the people's bank of china is bullish that it adds liquidity But I think it's actually the opposite I think it's us seeing that they're not doing nearly enough and they continue to limp along to try to catch up On the other side, we got really hot retail sales and consumers were gobbling up discretionary items again Which is probably a sign that the battle against inflation may have a little bit more work to do similar with what we got with PPI data last week. We do see bonds continuing to move lower yields are the highest they've been since october and that does Matter to the market and that is I believe having an impact on price discovery today as well We do see some more stops getting blown out here about 428 contracts sell stopped out. So we're seeing a continuation of this downside to me I'm looking at 44 50 as a pretty easy target. It's got a rather ominous number Of contracts on that bid 666 So, you know, that's uh, okay, they moved it up just because they heard us talking So now it's 668 So but now it's 739. So someone's getting a little bit more serious Stepping up that bid 740 now And and they're probably seeing the same thing that we're seeing here that there's a further breakdown in price action That this thing looks like it does want to continue to move a bit lower here And, you know, there are reasons we've had a really great rally this year, but it's been very narrow Um, and while there's been some broadening out, I wouldn't say that we're at a point where we could call it healthy Meanwhile, the leadership in that rally has been a lot of very expensive stocks So seeing a re-rating of that risk is is not too unlikely Particularly as rates move higher and higher And we're now at a point where equity risk premium is at the lowest level in about 22 years So that means basically you're getting paid better to be a investor in You know treasury paper and notes than you are in stocks based on earnings yields versus sort of risk-free returns But moving into just the daily time frame here I see a number of things that uh do continue to concern me about the way that the market has been trading You've got the nasdaq and the russell also quite weak today The russell selling off the way that it is even though it is an indexable of garbage companies and 40 percent of them Don't make any money. It is a risk indicator. It's a risk appetite indicator similar with um, You know specialty funds like arc and when they're leading the way lower That is a bit of a risk off signal Similarly when they're leading the way higher, that's a bit of a risk on signal So we do see some risk off signals. We also see it in just overall market breadth It's about 75 percent declineers underneath the service and 77 percent of stocks making new lows versus new highs and today So it it is overall a bit of a challenge day But it makes sense with you know the sort of phase that we're in now We're starting to give back some of these returns. We are not only in a seasonally elevated time of year for volatility We're also in a seasonally poor time of year for price discovery in stocks August tends to be not the greatest month in september follows on with a little bit more pressure And another factor that adds to that that we do want to consider just as a part of the liquidity dynamics here is The treasury is now issuing more long dated debt not this week but last week they did And they're going to continue doing so as they upsize their issuance and that longer dated debt Isn't likely to be pulled out of the reverse repo It's likely to be pulled out of bank reserves and it is likely to have an effect on liquidity in the market And that's been one of the drivers of this rally So just factors to keep in the background for us in august in september as we move throughout This third quarter that there are a number of drivers that can upsize volatility and fat and left tail outcomes As we're trading this market The hot put level still hasn't moved So that tells us that you know, even though we have a market that is trading weak The overall options activity has not moved lower. So they're not targeting a lower strike yet That data is updated every two minutes. So we'll see when it refreshes if we get any different information on that But for now, this is a market that looks like it wants to continue to move lower I don't know if our friend down there just above 4400 gets his fill today per se, but I think that Mr. 800 contracts at 4,450 that that's probably a no-brainer that we're going to see that get filled Yeah, mayhem. I have a question for you. So, um, based off of of that, um Yeah, multiple confluences there that you just ran through Um, what do you see in book map in the order flow that might also point to this move lower? Yeah, so that huge resting bid at 4,450 has me very interested I think that someone's quite serious with their 800 contracts Wanting to bid in and around that level. Maybe it's someone who got a nice short in at a higher price earlier Uh, so that's one thing I'm looking at. The other thing I'm looking at is that distribution from the icebergs Institutions continue to sell into this. They're not yet absorbing this and so icebergs remain pretty negative negative 764 stops are also getting blown out a bit, but uh, you know, that's that's Not yet at an extreme where I would say, you know, we've seen the end of the stop run like I of yet we haven't seen that kind of Chasing price down in a stop run. They've been pretty orderly. So I'd say so far It looks like the market positioning dynamics are still vulnerable to further downside um, and that institutions are positioned for that and we're looking at that resting bid to kind of confirm that Right, we've got the institutions that have been iceberging into this move lower And then we've got that large resting bid looking to either cover a short or get longer some combination of two Down there at 44 50. So it all kind of adds in to that same picture Excellent. Um, so then So that's an interesting way that you're using the icebergs there of just kind of overall bigger picture general feel that Uh, you want that to go along with the trend in this case Meaning that the larger players they're not covering yet and they're they're certainly not interested in buying at this point Agreed Yeah, and and that's something that I really do want to see to feel more confident about You know if if I was going to be Saying that this move is over to the downside Then I would want to see institutions lapping up some of this weakness And I'm really not seeing that instead. I'm seeing them increase their bid well below current price about 10 handles below Which tells me they're really looking for the opposite. They're looking for lower prices before they start piling in Yeah, yeah, and then just I mean, I'm not looking for spilling any of the secret sauce here, but uh, uh, like How would you kind of um edge into a trade here or like what what kind of areas or you don't have to go through anything specific right now in the live market, but in in in general like, uh, what is it that finally makes you Pull the trigger So, you know in a situation like this if I was looking to go the other way One thing that I'd like to see is some changes in the liquidity dynamics So I'd like to see institutions become larger buyers Um, I'd like to see that that sort of stop out moment where you see a lot of retail really get blown out with some, uh, You know some singles to the downside where there's people that are just basically getting out at any price they can Uh, that would help me to say, okay, that happens first Maybe we've got a little bit of a blowout then we see the iceberging continuing to buy That would help me get a little bit more confident on the reversal and then possibly we start to see Uh, some of this key options activity move back, uh, towards this this level here So maybe we see the hot put move a little bit lower The hot call move a little bit lower telling us that the options traders are looking to have a different price range But perhaps one that allows price to move a little bit higher on this reversal Because right now even with the current hot put hot call They're still kind of looking for price to look to go a bit higher than where it is right now So for me, um, I do like to look at a little bit of Uh, like the other thing that I would like to see bruce that we often see when we're seeing Credible reversal is liquidity offers building up above and kind of a stair step pattern So you get close to the first level they start building up there Kind of doing that a little bit of 44 70 Then you should see someone coming in at 75 or 80 and so on and so forth and sort of Stacking those offers above progressively as we move higher. That's something else it kind of tells me It's like, uh, you know market with the carrot and the stick They're using the carrot to pull the price a bit because the auction tends to like to go where there's liquidity to release Yeah, yeah, yeah, we that 44 70 is really interesting level. We just saw like on friday I'm sure you saw that as well like about I don't know several thousands of of icebergs filling but going, you know, long Or maybe covering we don't know but like Certainly they were fine And now we're below that and now we're seeing liquidity on the offer there Exactly, um, so so then it sounds like if I can kind of, um, uh Understand you you're you're you're you're trading methodology Um for for uh execution, um, you're you're kind of inching in and out like, um, maybe a kind of, uh Or you may do that many times, right? So you'll, uh, maybe, um, Uh, maybe maybe you're you're short already a few contracts you would add a few more in, uh, going with the position or maybe, um, scaling out a bit Uh on the way down, uh with that big stop run is for example something like this Um, are you kind of like positioning yourself kind of an overall? Uh for the day type of of move or are you looking for kind of You know more of a scalp type of positioning So I do trade multiple timeframes. Um, like for example coming into today when I saw that this market repeatedly rejected overnight And then pre-market that same level around 4500 spx where there's a lot of options positioning That's where I started to build a short Because I felt like my risk reward is pretty clearly defined here if it moves, you know, seven points above I'm going to get out otherwise. I'm looking for about, uh, 50 points down. So My target is is, uh, you know Pretty well already on screen Uh, I'm I've moved it down a little bit because I see that 44 50 bid that may prove to be a mistake It may not but the conviction of that bidder has me interested in extending my price target just a little bit lower So that's where I am on on the trade for today Uh, just coming into it with the idea that, you know, there's there's still room for this range to be explored down to about 4400 spx over the course of this week And I think with today's price action and and really how those delta and theta decay flows haven't added much of a bid to This market and the breaking down of the opening range I'm kind of confident that we'll we'll get to that 44 50 And that's where I'll be flattening out at about 44 51 I don't go right in at their level because it can get a little volatile or sometimes price can run away But I usually give myself about a point buffer Interesting so then I mean with this kind of, um, uh trading, um method Uh, how do you kind of keep track of your different time frames? I mean, uh You're kind of looking at a lot of stuff Uh tracking over Um quite a bit of time too So I have you know, maybe Three four charts that I'm looking at I'm looking at the weekly time frame the daily time frame I'm looking at intraday and then I'm also looking at, you know, kind of a shorter intraday time frame with book map um And it's actually I would say something that makes it simple for me and the reason for that is For example, you know, sometimes you see fractals like you'll see a pattern that repeats on the intraday The daily and the weekly that vastly increases my confidence of an outcome when I see a fractal like that And so looking at multiple time frames really helps for that The other thing is just knowing where those key areas of volume profile are where people have really liked to transact And the only way to do that is to really look at a look at price action over multiple time frames to discern that So it for me it behooves me to kind of keep me honest if I'm not zooming out Then I might develop a bias But if I zoom out, you know, and I'm going out to the daily and weekly time frame It's much harder. It's but it's it's much easier to be more systematic with my approach So for me, it's just always, uh, you know, ever since I really started to do more swing trading and day trading It's always been part of my core ethos to look at multiple time frames and ensure that I'm not getting kind of Myopic with my view and I know it doesn't fit everyone's trading style And some traders, you know, stick to like one chart and they do really well with it And that's why earlier I said, you know, my trading style might not be for everyone But I feel like looking at multiple time frames as strange and maybe as counterintuitive as it may sound Is actually easier for me than to just look at a single time frame because then it makes it easier for me to do What I'm talking about in this presentation, which is find that coalescence And uh, try to trade off of it Yeah, yeah, no, that that makes really good sense. Um, so, uh, okay So, uh, and then for for the day trading, though, do you typically find yourself scaling in and out? Yes, I do. Um, now out depends a lot on risk management. I might get stopped out. That happens all at once, you know in in in terms of, uh Taking profit though, I do like to scale out because look like when I get into a position Um, just like when I get out of a position if I'm if I'm going in or out of those positions with the idea that I'm smarter than the market I'm probably going to get hurt and I feel like going, you know, just all in and once and all out at once is kind of me Uh, flaunting price discovery is a process And I found that over time back testing when I use scale in and scale out versus single entry and exit My scale in and scale out trades are more consistent. They tend to produce better profitability over time So it's it's worked for me. Um, and I like the idea of having a core You know, and once I take that off when I reach my initial objective I have runners on and maybe I achieve, you know, an extension to whatever the move is with those runners But yeah, often is the case that, um, scaling in and scaling out is another part of my trading strategy that keeps me honest Yeah, yeah, that makes makes sense as well. Um, so, um Then are you also trading options quite a bit? I trade options. I trade, um multiple time frames of options too. I have been guilty of trading zero dte. Don't judge me Um, but I've also traded, you know, options out for weekly monthly, um, you know all the way out to leaps And I love trading options. I think trading options is a really important way to manage risk And when done properly when it's not just a, you know, one sided trade gamble When we're looking at diagonal calendar spreads, for example, to express a bullish view You're affording yourself the opportunity to be a little wrong on timing as long as you're right on the outcome Because you're reducing your total debit by selling that for, you know, that that closer month And, uh, using that to fund your further out position And there's ways that you can roll those positions where you're not, it's not costing as much premium And where one part of the trade data decay actually works in your favor So for me, I like to trade, um options as a mechanism to hedge and also as a mechanism for capital, uh, uh, accumulation and also as a way to generate income I mean, there's absolutely nothing wrong with, uh, volatility harvesting strategies on both sides Like, you know, for me, I might have long positions that are high conviction that I'm not getting out of And I may decide that there are certain opportunities, particularly when there's a volatility catalyst To sell call options against elevated premiums so I can, uh, gain a little bit of income From the way that, um, you know, that that volatility event may make those options relatively expensive in comparison And if I get called away at a certain strike, you know, that that just means I get an opportunity to sell some puts on the other side And eventually get put back into my position So I do like options, um, a lot for, you know, especially swing trading and investing I I think the zero DTE stuff is is very high risk. It's a great adrenaline rush It can you can make a lot of money. You can also lose a lot of money I've had, uh, you know, zero DTE trades that were easy 30 xers in like a matter of hours But you have to understand on the other side of it. It can go the exact opposite way So, you know, it's always good to never put a lot of capital at risk in any trade like that where you might lose your entire principle in a matter of hours Yeah, yeah, so wow, I mean, uh, so you may have been like, uh, I don't know, um, at least five, uh, or more trades on, uh, at one given time I mean, you know, look, I have a swing trade portfolio that I keep in a separate account Then I have my day trade portfolio that I have in a separate account then my taxable That's in a separate account obviously than my retirement. So I have, um, in in my swing trade portfolio about 20 positions on Longs and shorts, um, some areas where options are being sold against, uh, you know, either one of that Part of the trade I have my investment portfolio on where I've got, uh, you know, several dozen positions Over the long run and then I've got my day trade portfolio where, you know, I might get into two or three things during the day But before the day closes, I'm flat. I don't have, I don't really carry, uh, stuff in my day trade portfolio overnight Unless there's some extenuating circumstance Yeah, yeah understood. Okay Um, everybody I had to create a, um, special events, um A hashtag special events, um, room there if you have any questions, uh, you'll just see it up above in discord Or any questions that you may have over, uh, in youtube, uh, maybe that's the quickest, uh, if anyone wants to Ask any questions here, uh, since we have mayhem, uh, and a lot of fascinating things going on here So get your questions out, um Yeah, so let's see. Is there anything else that you want to, uh, cover in in in general or anything specifically like I mean, I'm fascinated with what you're doing here. Um, the um Yeah, I mean, I just have many many questions. I don't even know where to begin, uh with them all Uh, let's see. Go ahead, bro. Yeah. Yeah, okay. Um, well, yeah, edwin is asking about your tool, uh over in your options. Um, Uh, uh, column, uh, when will that be available? Great question, edwin. It is something I'm working hard on to make available soon There's some areas I need to, uh, add to because there's a couple of other areas of intraday Options dynamics that I'd like to Add to it and then I plan to put it on the book map marketplace and I really Appreciate the support of the whole book map team. Everyone there has been absolutely amazing For so for right now the only place that it is available is on the trader aid plus discord Um and good news, you know, if if folks did want to join us there and there's no sell here Just if you did you get 30 off with the code book map 30 until sunday Yeah, I'll put that into the chat as well. Um, so that people can, uh Or if you want to put that into the chat, um, uh, trader it might might be better Since you have the link, um, and uh, yeah, so this hashtag special dash events chat room there and then also over Got it um Any other questions in here? No, it doesn't look like it The biggest thing that I would say about anything and and really just being at this game for a little while is we just have to Keep an open mind That's the biggest key to being successful over time is realizing that you can't Always win with the same strategy That you can't get too confident in yourself as a trader the moment You think you know everything or the you think you've got the golden touch is the moment You're probably going to blow yourself up And it's it's really a lot more about being humble and always being a student of the market and always keeping an open mind And that's why I continue to plug away at coding and you know putting out Fascinating charts and sharing ideas and opportunities and just always being a student of the market and the in the world around me because I find that finance is there's always something to learn and you could say that about a lot of subjects But finance is like a universe within itself There's so much to learn and there's a lot of value in accumulating that knowledge because it can make us better traders and better investors And it can also help us in other areas of life So the biggest thing that I would leave everyone with today as a thought Is never stop learning Ever the moment you stop learning is the moment that you stop really participating in this wild game called life And so as a trader as a human being always keep your mind open Always be ready to learn more because it will serve you well Having a hungry mind that's well sated with knowledge is your best asset And that's something that pays dividends more than any investment you could make elsewhere Wow, I mean we should just end it on that. I mean that is just really really nice to hear and very sage advice I'm wondering However, if you already have your system, then Are you learning other systems or are you just trying to refine that system? How do how do you um put the learning into? Optimizing your system Sure So I mean I have a number of different systems that I use depending on time frame an asset class right and one of the Biggest things for me as a trader Uh has been kind of coming to appreciate the varying personalities of different asset classes because Everything truly does have a personality. It has everything to do with who's trading it So if i'm trading gold Completely different personality than crude Different personality than tenure notes different personality than s&p futures Euros, I mean everything has a different personality So I have different approaches to different markets What I do to trade the s&p and what we've talked about today Is completely different than how I'll trade a lot of commodities or currencies or bonds or even single stocks Because it's all you've got to kind of Scientifically validate that your approach works. It can't just feel right and you can't just make a couple good trades and be like Yep, I've got it down I mean that that no one who ever was consistently a good trader over a long period of time Took such a haphazard approach. So for me, I like to back test rigorously um, I like to identify different ways of managing entry exit risk at time exposure And one thing I didn't talk about today that I can talk about during a future presentation that I think is very important Is identifying time as a risk. It's not just our capital. It's a risk. It's our time What other opportunities could and should we have been in that we weren't because we're married to something that didn't work So that's another thing and that I test for there's actually ways to kind of identify Key periods of time after a signal is fired off to see whether or not it's really working Right and again varies by the personality of the asset you're trading But that's how I do it bruce. I build systems off of a combination of back testing and real Person experience like being in the driver's seat of the system and taking notes as to what's working What's not working and trying to continuously refine and iterate and improve Okay, so then I I mean I could I could talk to you for for hours. Um, but I'm just uh, curious then so like this new Options tool for example. So yeah, it was it was basically when you presented before you didn't you didn't have this No, so then And you already had a pretty sound system, but you continued to question to probe and to um Experiment uh, and you go, well, what if the you know, I try it with this So you had to not only develop this new tool But then you have to test it Does it work? Does it have value for you? Uh, and So I I guess uh, this this is an ongoing thing for you. You're just always, uh, looking at, um Trading this way Well, yeah, and so I come from a background of being an entrepreneur and being Uh, very sort of autodidactic applying myself to whatever I'm interested in and taking it apart Putting it back together trying to make it better along the way trying to figure out how it all works And so for me, you know, I began to appreciate just how important options were driving price discovery in 2021 And then just further and further dove into that learning more and more and I've been writing tools to map out options exposure, uh, gamma exposure volume, uh, gamma flip levels and so forth and then modifying tools that have existed to make them better And so I felt like, you know Because I'm using book maps so much and it has some really cool features I feel like I should just add this in because otherwise I'm flipping around all these different charts Like I know even when I didn't have it in my system I was always considering it and even during the last presentation Options were like one of the drivers of the the theme of convergence and coalescence So I felt like, you know, I could probably save myself a lot of time Just putting this right on the same screen And I'll be honest like look like any other human being I default to trying to be lazy where it's smart to be lazy And one of the areas it's smart to be lazy is not looking at six million screens to find your data, right? So if I was already looking at this data, I figured I may as well just add this right into book map And then that way I can make more informed decisions with less mental fatigue Yeah, absolutely. In fact, it begs the question for Creating a heat map based off of your options levels there within book map Yes, that would be awesome. And if you all ever want to Collaborate on any such projects like that, I would be 100 interested. Okay. Yeah, I'll I'll put the word out I mean, we've been playing around with us things with in options for a while And I don't think we we we never really came to something but this this kind of Codifies it or at least focuses it on Some of those thoughts it makes it makes good sense. It's just You know coming to light now And it's really, you know, when you look at all of the trading that happens every day 70 percent of the notional value that exchanges hands is expressed in options and over half of that Within six and a half hours or less to expiration So it's such an important driver of price discovery and just about everything Like anything that has a liquid options contract It often ends up being the tail that wags the dog and we can look at it in single stocks I mean look at for how long teslas options were the most active by by multiple fold of any stock Including those that were, you know, apple or three times its size. Um, and that was a big Determinant of price discovery in the underlying all that near to the money Close dated call options buying really helped to squeeze price higher by multiples over a period longer than a year And we've seen this in other cases, you know Softbank at one point was actually pushing up their portfolio by doing a lot of unsavory options buying and they got caught I think it was in 2018 or so, but it still demonstrates the value Of understanding these flows and watching them Yeah, it makes good sense um So I I don't see any other questions mayhem. Uh, so, uh, I'll give you the last word, but uh, love to have you back Absolutely, really really fascinating stuff. Uh, but uh, yeah, uh, if you can leave us with any, uh, uh, parting, uh advice Yeah, sure. Uh, first bruce always appreciate the invite really love the book map community The software everyone on the book map team you guys are all awesome So it's it's a pleasure to be here and I look forward to the next opportunity to join you all And in terms of of parting words, I would just say look I know that you know going into this year Um, a lot of folks including myself thought we'd probably see a different type of market We've not seen that type of market yet, but I don't know that all that has been necessarily canceled I think it's been for stalled. So my humble view just from a longer term perspective I do think we're at a risky inflection point in the market It's something that I've been talking about quite a bit at trader aid and macro visor Just due to positioning dynamics You have sentiment flow positioning all at stretch levels that are what we saw in november 2021 or worse Uh, and that's just telling you there's a lot of euphoria out there particularly concentrated in certain outperforming parts of the market that have Risen more because of multiple expansion Than fundamental improvement and I think that elevates risk So if if folks out there have had a really good, you know year and they've got a bunch of longs in these areas that have run Significantly probably not a terrible idea to consider whether it makes sense to take profits or hedge hedges are historically cheap here Um, just just some thoughts I don't know that the back half of this year is necessarily going to look like the front half And I think the next couple of months could be a little tricky out there So, you know also be sure that if you've been trading this market It's been kind of set to easy mode that you identify that there is a changing character that's happened over the last several weeks It's changing intraday trading dynamics, too Speaking of options for the longest time this year At the money put premium was being sold to fund buying out of the money close to the money call premium zero dte, right? Now we're seeing those dynamics shift a little bit on down days We are seeing at the money call premium being sold to buy out of the money puts And that does add to some of that downside pressure So why is that important to me? Because it tells me that there is a character change happening in this market We are going to be entering a more Vulnerable period from really Thursday of this week on for the next two and a half weeks after that There's some structural weakness in the way that the market flows happen That could predispose us to wider price ranges, right? And just finally if you look at my book map stream, you're still on it You can see the hot put move down significantly here now below the guy who's sitting at 806 At 44 50 on that resting bid That's telling me that you know, we are actually moving into a dynamic where possibly we do see some lower push to price discovery So all of that, um, you know, I I really just like To look at the market through multiple lenses macro fundamental technical flows sentiment positioning all that adds up to pictures that help me quantify my risk and return potential And also whether or not I even want to be in a trade The last thought I'll leave everyone with is sometimes the best trade that you make is the trade that you did not take There's no reason to always be in look for your opportunities and choose them wisely All right. Excellent. Well, thank you so much mayhem. Uh, and uh, we look forward to doing another one again with you soon Sounds good my friend. Well, thanks again for having me. I hope everyone out there has a great rest of your trading week I will see you around Bye. Bye