 Good morning traders. Welcome to the traders lab. I'm Tom be streaming live Monday through Friday 1130 to one piece and standard time the stream is about Market mechanics integrating order flow with an understanding of how the market works auction market theory and using a tool called the volume profile to Observe the integration of participant behavior. That's buyers and sellers in the intraday developing time frame The objective is to use market structure in order to overlay or integrate into higher time frame behavior a note Please we will be streaming next Monday, and then we'll be taking a week off Which will be next Tuesday Returning the following Tuesday, so there'll be no stream between now and then So feel free during that time to Watch the posted YouTube videos up there if you have interest in trend a configurations and multiple time frame But we will be back the following Tuesday, which I believe is August 30th 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 modes 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 An 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 please remember. This is not a trade calling room This is about understanding market Mechanics to help you get a better understanding of why the market does what it does how it does what it does and potentially how you might recognize these behaviors and interactions with multiple time frame participants to potentially help you Either develop a trade plan or better deploy the trade plan you have now and again This is for educational purposes only in past performance is not necessarily indicative of future results Simply put auction market theory is buyers and sellers coming together not complicated You shop you're in the auction There's a retail price where everybody agrees and there's a price when it goes on sale Where if you perceive it's under the fair price, you'll buy more Just think about shopping if the price goes up at some point You will not buy it because if you perceive it's too far away from a fair price That will shut off your buying and at some point other buyers will also have the same Responses that price moves higher now if the sellers want to engage the buyers What has to happen they have to lower the price and they lower the price to attract the buyers And at some point the volume or the agreement between a fair price of buyer and seller Will create high volume and we can recognize that high volume in the volume profile Which allows us to see volume at price the other aspect of that is that's retail Right, so if you want to equate it to our shopping experience because we are market Participants in the supermarket the financial market works the same way It's just a lot more volume a lot more activity and the other element to this whole thing is this auction process Takes place in all Fractals or as you guys think of it time frame So while we can have an auction in a very tight range It could be a couple of points There's still a buyer and a seller interacting and even in a very short Time frame there will be a retail price or agreement between those buyers and sellers and A too high and a too low price and if we break away one way or the other from that Auction it gives us insight to what at that place at that time with those Participants perceive as a fair price And if the price is unfair the market can leave that area and go to another one and it does it in multiple time frames And we'll be looking at that the other element is context and this is where a lot of traders get jammed up And I'm going to show you a couple examples Because I always like to start out with the higher time frame to help you guys see how do these pieces fit together So we're going to look a little bit at yesterday and the behavior of yesterday and why it's different from today And how you might adjust your plan to get aligned with the developing context Which is definitely different from yesterday now the tool that I use to integrate these behaviors And to look you might say under the hood and get to a granular level is an order flow tool Which is book map and it allows us to see absorption stop sweeps icebergs Retail stop behavior of course the order flow we have something called a heat map the changes in the order flow And more micro structure so it kind of gets this closer to the real-time interaction between those buyers and Sellers and it helps at least for me It just gets me closer and in fact with book map if you want you can get down to Nanoseconds now, I don't know about you. I can't deal with a nanosecond, but it's that granular so you can zoom in to whatever time or Structure is important to you that you can recognize and act upon and then subject to your trade plan potentially Get aligned with the market against subject to your plan and remember this is really about understanding how the market works If you've been in indicator world Pretty much you're trying to figure out how an indicator works and how to get it to work better more than likely but Most traders especially retail traders never really gain an understanding of why the market does what it does what the mechanics are And even how it better integrate their tools, even if they're indicators If they have a market understanding of the mechanics that may have a better opportunity to use those tools as Suppose to blindly follow a line that's crossing over that is not sensitive To the context or the mechanics of the market, so this is yesterday So let's look at yesterday, and this is the close of the day yesterday, but this is what's important so this was a this is a consolidation, okay and 4122 ish Down here was the retail price and this behavior remember I said it's fractal. It takes place in all time frames So basically these are RT daily RTH bars and what I do and what we might do is When the market starts trading over itself, this creates consolidation, right kind of and you can see this in a one-minute You know bars if you want to call them are candles or 15 minute Whatever monthly pick one. It's all the same behavior. So it's generic and when I get to micro structures We're going to see the same behavior. So that's the the process is really pretty neat as far as the auction goes because once you understand it You understand and you'll recognize its behavior everywhere in all fractals and all time frames But this is a daily RTH time frame daily candles, okay Too low. Oh, it's on sale. Let's buy it. I'm not paying that. I think it's too expensive See so this is the nature of auction and it's consolidation this orange line is basically the retail price So even though we were criss-crossing Most of the volume Transactive right here. So that kind of creates a fair so unfair see unfair unfair unfair unfair But look what happened here price check retail don't take out those stops hint hint Breakout now we break out of a consolidation. What happens all the stops above it Become fuel and then we move up to the next area now There's a consolidation off to the left which you can't see and this was the retail price in that consolidation That's 40 to 15 and that was our target coming up Okay, and that day we got the 42 14 75, you know something like that, but remember horseshoes and hand grenades So what happens next we open and we come back and check it from above Retail and again higher time frame. We come back into the basically where the volume Transacted in this day and it's a retail check in the day time frame too low Continue trend trend trend, right FOMC day 43 27 50 and we had a target around 43 17 ish so it was hit and then we reversed wick is that too high Well, so you can see the progression of this thing now at this point. This looks like excess. We all agree on that So what do we do the following day? So this was Wednesday Thursday Lower high But this is where it got interesting This day we take out these guys that means the longs and this day We only take these the this low out by I think it was two points That kind is a caution flag for and we come back inside if you draw the volume and We do a day by day by day to include the current volume that area was 42 76 for the retail price. So Too low too high. Okay, and down here too low. So too low too high too low Right lower. So here's the possibility Yesterday, where do we open right around 42 77? What that is saying and I want you to follow the narrative It's important is that nothing had changed at this time yesterday That is contextual in other words if we open and at that time the participants are going. Yeah, nothing's changed What are we going to do in here? We're going to check both sides Potentially and that sets up something called Balance because that's what's going on here in all balances a term for consolidation But look what it is charting 101 Inside day Both sides active nobody grabbing the ball, but what do we know? We know this We also know above this high are stops So yesterday it was mean reversion in other words outside in shorts shorts shorts, right? We narrated that yesterday. We also had a long Opportunity and we had two targets. We had the overnight high Which was up near the high of the day I think we got a little bit past it and then 43 oh eight which would have taken this out For the stops and for me it was this was possible and then whatever happens happens, right? So This was Kind of your fulcrum now Let's go to today any if you have questions by the way post them in the chat and in YouTube Make sure you hit the cog wheel and you're on 1080p and there's about a 15 second delay in YouTube So, you know be patient and I will try to answer questions that kind of apply to everybody, you know, yeah, hi Sam So let's take a look yesterday And you guys are familiar with triangles right now there's nothing perfect here draw a line wherever you want it I wasn't concerned about that this we were moving though into the apex And if you guys know triangles, it's compression and a squeeze What was the probability? We were kind of thinking downside, but I was thinking maybe we get up and then go down You know and again, you don't know doesn't matter because we had short short long all of them were good You know and that was yesterday yesterday's history today though Change and it sets up a pretty interesting opportunity Let's look at today Change and when it changes in my opinion you need a trade plan for the current context and this is what's called context So here we are and what do we do we open now yesterday? We opened what's called in value in range, you know balance So choppy choppy choppy two sides because nothing had changed Something changed today We gap We open under yesterday's low and all these longs that are in here Which means stops under here stops are under here and what is this price? 42 15 so somewhere on the agenda Potentially is 42 15 and if we fall out of here more stops more stops 41 22 that's how this works now. This is the higher time frame So let's think about this now. We're talking about the context We are no longer in balance balance meaning inside a consolidation, right? We have broken out this so this is a breakout what that is telling us. Let's I want to interpret it for you This is unfair This was your Two-sided auction in this now 42 76 is too high. So what was the last price? Here 42 15 so in theory Too high Let's return price check in aisle 3 and after this Depending on and it can do anything we can come out hang out rotate, you know, whatever Eventually this or not right because that part we don't know but the current conditions suggest shorts right, so then it's a matter of alignment and The different behavior that takes place in this condition because while yesterday you might have been trading both sides Which is what we were discussing here in the trader lab and on the stream, right today It's only one side unless your trade plan unless you're a counter rotation trader. So at the moment the reasonable thing Potentially is unless it changes is to be looking for mean reversion or outside in trades not a recommendation That's just a lay of the land Any questions on the context because that's our starting point. Do you have a question ask about it? Think about it. Do you have a trade plan? Here's the real question in all of this is When you recognize change Do you approach it the same way as you would have the date yesterday when the context was different? Is it one size fits all or is there a Way to adjust an adjustment doesn't have to just be You know how the auction works or what you see But can you understand the sense of what has changed and how do you navigate and even if you're using indicators? What how do you use an indicator in this context? Versus how you might use it yesterday if you find that you're trading one way and You're getting different results and you're wondering why it's Inconsistent if that is happening to you why some days it seems to be good in a line And other days you just get bashed around it's probably being out of alignment with the context and Because most of us when we get in the indicator world never learn about how the market works and that it has different behaviors not only in the day type but even in her day so for me and in the trader lab What we are attempting to do is get into alignment with the higher timeframe and Then use get in alignment in the developing timeframe and then use fractals or micro structures to execute and Try to get aligned for these higher timeframe rotations any questions, and then I'll move on to how we started out today Rare that's those are dailies Because I'm including the micro composite as it's called or the higher timeframe. Those are just daily candles You know, so this is a these are dailies. All right daily day day RTH only Okay, because that's where the volume is so every day now here and here. I didn't have one here This started going into balance so I started drawing one and then I include them as every day progresses I'm just including it Say and then I'm also noting. Where's the lows? Where's the highs? Where's too high? Where's too low? Where's fair? fair Two sides inside bar usually proceeds, you know potential breakouts, you know, so like here I mean here's a move. Here's an inside bar. What did it do? It went the other way now turned out that But we were looking for north at that time, but here We think we have excess it certainly look like it and there's your inside bar. All an inside bar is is in decision So that's why it was two-sided trade yesterday, you know Well today at the moment it depending again on how you operate it unless you're a counter-trend trader It's short. So anyway, so anyway, let's go back to the open. Okay, and this is where the first short was And I think I narrate did I narrate this? I don't remember, you know, I think I did I don't know I do narrate in the trader lab as the day develops when I can You know subject to my own activity, so let's look here gap lower, okay Under yesterday's low so that that is that's a gap, right? So we understand here's the open gap that is saying we are Rejecting yesterday's range and because we know it's a triangle. It's also a breakout So we have a breakout of a higher time frame consolidation, right? Here's our open now Here's what happens on the open and guys, please take notes because You need to understand the different behavior and have a plan and again, this is just a suggestion That you think about things you think about the markets not one dimensional it's a multi-dimensional process There's different time frame participants Yesterday was locals and those were by locals. That's like it used to be on the floor. Sorry It was retail trader behavior. The higher time frame wasn't active You could tell that because it was just Rotational it was going nowhere and we were inside nothing had changed the higher time frame gets Activated when there's more of a and they are responsible for outsized moves. Also, we are responsible because we are typically on the wrong side based on the statistics and our stops and Intermediate time frame stops become the fuel Right, so let's look Market opens lower now. Here's the first hint Now, let me again, please take a note. Here's what tends to happen Let's assume you were short in that consolidation and let's maybe you got short on FOMC day You saw the wick maybe the day after on a counter rotation. You're putting your position on We don't know. Maybe you're a hedging whatever right? We don't know. We're not interested in that We see the reversal the wick we see the potential going into balance, which just means consolidation that we know We don't know What we don't know is is it just and again, you don't know except I think we all pretty much suspected But let's assume we don't know because he'd stay in the flow of I know I don't know you least are open to whatever might develop so we don't know but we see the reverse on FOMC day and then we Considered the potential to go into balance or consolidation, which is what you saw now the there's two possibilities We come down. It's a fake. We turn back around. We go up We take out the high of FOMC day and go up to the next level higher, right? That's possible not probable but again, we have to have our mind open or that is the extreme and We now consolidate and break out to the downside so that's the lay of the land now in the stream Based on the things we know and just based on the lay of the land And based on the fact the market was rallying We know where the fuel and fuel means sell stops the longs or the vulnerable ones You see if you think about it on this rally We squeeze the short so all those buy stops were coming out once we exhaust out then who's off sides It's the longs and that's the nature how the market works. It's looking for extremes on both sides, right? So let's go back to the open. So here's our 830 Central is our th open for me There it is open print right here now. What happens if you were short? typically often What happens is you may take some profit and so Right here There's 500 stops going off so open and a lot of traders will just you know, they're gonna see the open and They're gonna look for this counter rotation and that's what I look for. So write this now It's called a responsive buying there's two kinds of Let's just say trade types that might take place and Think about yourself if you were short and you let's just say you're not you're you know You're holding a position and you get a gap lower and you're short from higher up Whether it was yesterday the day before might you take some profits? You're not initiating to get long what you are doing is Responding to the lower open. That's the difference between a responder and an initiator The initiator would be someone who's initiating a new position to get aligned with the trend the Responder is taking advantage of the lower open and responding. So it's a more profit-taking. It's a profit-taking side Versus the initiative side. Does that make sense? Okay So I'm getting a question about the triangle. It's in the beginning of the stream You can go grab the the YouTube link. You can go back and review this it'll be available Probably through six seven p.m. Central Standard Time, and then it'll be gone So if you just I recommend everybody review this because we talked so you guys in case you missed the beginning of this I Reviewed the higher timeframe context and how it changed So what was happening yesterday? How that we in the stream? We were looking at it yesterday and the behavior how you might interact with it And today the change in the behavior and what we're looking at right now is how you might interact with it So responsive buying 500 buy stops going off and then right here three watch Market opens volume is here Check Too low volume moves here Check too low Volume is back here Higher Exhaustion remember who uses the stops you get 500 stops here And this is what how I this is just the way I look at the tool the stop iceberg detector and Retail traders Right who uses these kind of tight stops, you know It's not the big guys. It's us Right here. I go, huh look at that Exhaustion now for me Now I don't know right here. I'm going. I don't know because it could do this give a little pullback to here and Go higher. So I am on guard. I want to get short because the context has changed We have a breakout we have stops below us. So the goal for me is to find a place to get short So I'm going to show you the first short Every that makes sure this makes some sense. So here's what it is Exhaustion right here Is you can see this volume? Let me try to take it back now This is micro structure and this is not a trade recommendation This takes practice and understanding and by the way There's no reason for anyone to interact here. I'm just showing you how I read it There's other places to get involved. It doesn't have to be here. It just depends right subject to your trade plan So if you're going, I don't know then you don't know That's okay because there are many opportunities. It's just a matter of yours So let's watch So exhaustion chop chop Chop right chopped up chop. You're going. Yeah, but this is consolidation. This is So don't forget who's a buyer They're responding. Here's the exhaustion Watch So we break low Check this so this was too low And right now we're thinking this might be too high, but we don't know so that's why you're seeing this So and I know I'm in the minutia, but I want you to see how you might Read it and interpret the behavior of the participants and that's pretty much what we're talking about, right? right here break Pullback is a short potentially and not a trade recommendation Stops have to be over the high So let's watch the behavior So here's how I read this open responsive binding And this is called the volume point of control by the way Just so you know what this is if it's far into you It is where the highest volume is trading. So it's moving with the volume So when this moves and now there's more volume up here You see this consolidation more volume than down here. It moves up. We pull back It's tracking the volume and in the morning when we first open it's very sensitive So it's helping me see is volume and price moving together if volume moves away Is it too high? Remember? We're talking now. This is microstructure. So you're going to look at this and maybe you'll go I don't know and don't worry about it because it takes time To see the nuance, but I'm not suggesting that this is Shall I say a structure that you guys Might interact with it starts out to understand the process, which is the auction Which is what's the purpose of the market too low where it's too high too high too low And it's auctioning remember participant behavior. Where's too low? Where's too high? Oh, it's a deal. Well, I'm gonna cover That's too high. How about down here? Well, that's retail. That's too low How about back up here? Oh, that's too high exhaustion right there Then what let's check here That was retail too low Come back too high and again. I still have this and I'm going, huh liquidity comes in order flow Break see the reaction pull back to where? Where it was too high where the liquidity was break This is your short Right here. Where's your stop above here? What's your objective risk neutral your stop then depending where you enter and let's assume you're like me I don't sell this I go, uh there Okay, so 59 61 and a half 62 Three points, you know guys, right? I always talk about I try to keep my wrist to three points So now if I'm in at 59 I need to get a scale. Where does it pull back? Watch here Scale risk neutral next target here Watch There's more Pull back to where watch This is taking out the stops right here and it's only a stop pick Target now there's more Now this was the eth volume point of control Basically at the end of a session wherever this is was the fair price If we open Away from the fair price from the last auction, which is eth Then this is a viable target. So too high price check In the next bigger aisle and there's another target below. Let me just show you that one. So, you know It's the overnight wherever it was overnight low, which I think is here 42 40 and that's the primary objective on this at the moment. So again open Short This could be a short also So here's the thing you get short here if you're running a tight stop you would have a scale you would scratch You'd put it back out. You would scale You'd get your next target and then there's another short right here. Here's how it works And then I'll answer questions. I just want to show you Here's how this works. So Short scale Target, okay, we got that Break below Remember here Break below Break below Break below. These are short opportunities. Okay now recommendations watch Chop chop target, right? Sorry, where is it? There it is. Sorry lost it there target Break below pullback Targets still open below the overnight stat short add or nothing Target Are you guys tracking right here is a sequence in alignment? And you can see what I'm trying to show you guys is the behavior Because if you understand auction in other words, how does this thing work? Uh, you're going to understand that it's checking prices just like you in the supermarket And it's going to blow past. It's going to go into stops. That's trading. That's the way it works real world and it doesn't matter Because the the goal is to get risk neutral And then be able to fund your trade to the next location here And then new setup here if it's in your trade plan and then next target This is the overnight low. We have more targets But I'm just going to keep it at that at the moment Do you have any questions? Billy Bob, it just it's just subject to you know Billy Bob's asking why don't I wait for the opening swing low? Well You can I Read the auction Billy. So I'm in a more sensitive position to try to see the nuance Uh, that's what this is now. Where's the opening swing low? Well, initially you might think it's this That might be the opening swing high See So opening swing high Is that opening swing low failure to take out the high is a short say but now is this the opening swing low Where which one of these is the opening swing low? You see would you use this or would you use this? And then where's the pullback? You see so for me? I'm looking at the auction So I get more immediate information. Now it doesn't mean I don't take a stop. I mean, you know, I'm certainly okay I never euphoric about it. But if I follow my trade plan, I'm that's my accountability piece And it's just one, you know, so if I take a trade here and I didn't get my scale And uh, it comes back on me, you know, I could take a stop That's okay because look at my potential My trade is down to here initially So I've got good risk reward in this thing, you know So if I didn't get scaled and it did this move over here. I get taken out I put it right back on again. I that's just my plan because I like a three-point stop Uh to probe the market for location because I know this today is going to be an outsized opportunity Because of the context Um, but I use the same process, you know, even when we're trading in range I just know like yesterday it was much riskier Because we and you saw yesterday's range we opened kind of in the middle went up went down went up, you know It was two sided. So that's a different context for me. I don't trade like this In that in that context, but in this context break out. I'm looking for the responsive buying It's pretty limp, you know, I also know this high Is vulnerable because we're going to get shorts in here. So there's two possibilities We open responsive buying and then we roll over We open selling and then Squeeze take out the weak shorts the early shorts. So I know that that's that's the possibility here But then again, but I don't after that. I don't know what'll happen, of course So I have my trade and I put my trade on and I get my scale And if I get taken out I'm out if I see the exhaustion it was just a squeeze, which is what it was I put the trade right back on again Again, that's just me. I'm not recommending that, of course, because I don't make any recommendations And you have everybody has formulae d'oro trade now. Anyway, I hope that answers your question about the opening swing, you know Yeah, Billy Billy Bell Yeah, you know, it's it's really uh So for me, it's I'm reading the auction. Remember, this is auction market theory. So it's, you know, too high Too low too high Too low too high And then what? Stop pick. Thanks for playing. You're out Now we can go so I anticipate the behavior because I know retail trader behavior We're thinking where would we all put our stops here? And if it comes back, yeah, we're out That's why the idea is the scale To allow the trade to have time because we don't know But then once they're out and we have exhaustion then the train can pull out of the station And there's another short here if you needed it against this With the stop above here Right here doesn't have to be above here. It's above the auction. Let me show it. I'm gonna go in and show it to you Okay And you guys should take screenshots if you if you have any interest in this of the behavior because it's not Random the rotations are random, but the behavior of the auction is very organized, you know, remember This is too high So too low too high chop chop Chop it shifts down So right in here Short short Okay, so short. This was the first short, right? This is the one I showed you right here break Pull back Pull back stop pick right there This is nothing. You see it nothing pick Break This is still up here. Don't forget. This was too high break Pull back You've got this level here, which was too high Stop pick which means not real Just squeeze a tear you break Here or break pull back to Here you see the symmetry So here here shorts So I mean there's multiple ways to engage with this like target All right, and then once we break below it, which says This still is too high Otherwise we would have bounced off it pull back short Target is this overnight low next target and then you know wherever This trade is done Okay, so that was it with a potential add or Whatever or initiation if subject to a trade plan any questions on this one Yeah price yesterday was an interesting day I was kind of thinking we'd squeeze a little higher, which is why the long side came into play Uh later in the session because I know we you know not no, but suspected we would get more shorts in there And in the morning we had that it was mean reversion yesterday Outside in only no inside out trades you guys remember that I was saying no We can't trade in the middle because of what the context was that's why yesterday is so important I believe if you guys want to figure out I was going to say context and the differences of the how you approach the market You need to go into yesterday Relative to where it is to the preceding days because it's in a big consolidation And then how do you trade yesterday compared to how you trade today? There are two separate trade plans in my opinion and if you can separate them You're going to get a handle on context and you're going to be able to adjust Uh to what is actually happening in the market versus just trying to do the same Thing because the same thing if you were trading yesterday Uh like today you would have gotten I think pretty much demolished Or potentially not had let's just say a positive outcome if you try to trade Yesterday like today Uh if you know and if you tried to trade today like yesterday You still could have a problem and I got to say it's not a recommendation and all that and past performance Not necessarily good future results, but I think you get a real edge over other retail traders who are bound by Indicators that don't are not context sensitive. They're just price sensitive. It's very different And uh and it's not that you can't integrate an indicator if if that's your thing But if you know context, I think you have would have a better idea of what indicator to use And how to use it because you would use them differently. I believe and again, I don't use any indicators because You know, I don't want the conflict and I don't need them. So Let's continue Now this is current. So this is now what was going on before now. This is an important event right here This is called the volume point of control now What remember what the volume point of control is is where all the volume in the developing time frame is taking place What it is saying here is now What was above us is too expensive And that's I call that v poc migration in other words when we first opened up, right We were doing this And this was our initial target remember well when you fall out and then we broke below Which is saying this is too expensive and all the volume up here Now I'm going to make a little mark in here I call the variable high volume node And I think the likelihood of getting back here is pretty low, but then again, I don't know So I just sort of go. Yeah, I don't know but I mark it because what it is showing me is this was an auction The participants did a lot of volume up here. We rotated and that's what you're seeing in this Oh, I like it. It's on sale or maybe it's just I'm covering See who's buying are you anybody buying? I don't think so. I think it's See the other part of this who's a buyer Is it somebody who thinks this thing is going up or is it someone who is sitting short And their trailing stops or they see the opera they see a counter rotation and they cover See that's why I was mentioning on the open. Who's buying? Who's selling? Who's initiating? Who's responding? It's a difference because the responders are weak It's the initiators or call it the advancing army In my opinion is who you want to get on that side if there's a counter attack and a counter attack might only be buy stops You know trailers, you know us retail who are covering But this is our over under now the key to this is we fell out in other words too high Right. I'm not paying that. Let's go to another store The volume point and control shifts down here. It is saying too high and now the market is accepting a lower Value and it's going to rotate again. It rotates right. Oh, where's too high? That's its job Where are we not going to buy right? You're the buyer. You're out shopping. You want to buy an s&p Are you going to where do you want to buy it? Well, are you going to buy it up here? Or do you want to buy it down there? Well, if you're inclined to be covering You'd be doing it down here and you'd be looking to get selling or not buying up here and then you get this That's called consolidation. So In all fractals or timeframes. We're doing the same thing Does that make sense? Rare the eth V pock is the fairest price in that auction. It is the most recent behavior in the participants basically Even though it's light volume. It's a valid auction It doesn't have the same volume, of course, but it has enough volume and what if we open above What the most recent auction was it's reasonable in this context because we opened out of balance Rejecting the consolidation above us that and we know there's longs in the market and a lot of fuel to the downside that we're going to come back And then we have that overnight statistic Which is over 90 probability of us sitting right under here Which was the next target and then we have something called the initial balance statistic Which is the first art first hour rth higher low Over 90 that will take either the initial balance higher low out Well, all things considered we'd be looking for this one And we'd be looking for the overnight low. Does that make sense? So there's Organization in auction it's it's you can see it and if you understand it Why in a word you got to understand why? Why would we if we reject? Above and break out why would we go to the most recent auction? Which is this eth and check it and then if we have statistics Over 90 for the overnight low, which is under this thing the v-wap and over 90 for this that we might be somewhat confident that these are on the table Not a recommendation past performance not necessarily in taking a future results etc You got to vet your own ideas, but that's how I kind of go with it. I go, okay And my logic is if this then that if not then what? You know and then how do we engage now? Let's any questions before I move on to how do we continue to engage? So where are the stops? Let's look at the moment. Where are they the v-pac is now at 42 39, which is right here This is our new retail price. Let's go a little bit further. I won't go into the i below I didn't narrate it, but it is another continuation Setup, maybe I should talk about it briefly I guess I will By the way, pdfs of all this behavior is available in the trader lab if you have any interest in it you know This is remember over 90 probability that we'll take it out and we know There's long liquidation. See this 800 cell stops coming out See when you see the big numbers That's really where the momentum is going to be 800 say now look at this a thousand by icebergs a thousand by icebergs Is that you know, what is that going to do for us? Let's see Now we're coming back here to potential Location, let's just see no It was actually here, but it was just nothing You know, I didn't discuss it So we're just gonna but it could be if you have a plan for it This is also another opportunity right here where it runs in the trouble is right at the low You see this chop chop chop chop It's a consolidation when you break out of it. The trade is over. So I don't know, you know But it's a setup we discuss in the trader lab, but here's what's more material to me Where's the retail price here? Where's the stops VWAP? Do I want to join these guys? No, I don't Where's the mid 42 43 75 I think somewhere up in here so mid VWAP So what do we have? There's a couple possibilities. We know there's stops at VWAP in my opinion that makes it a bit risky Of course, everything's risky and trading so We can anticipate retail trader behavior two things stops above the VWAP But this is a location for a short. So this is very Reconflicted So and here's why Too high Is this too high or are we done for now and we're going to squeeze? So where's the stops? Mid which is right in here this little red thing And VWAP I have nothing I can do in here Even though this is a potential short This creates more risk for me because retail traders are going to have their stops here Do you guys remember you keep your stops up there? And do you also remember you automatically would sell the mid or the VWAP? I cannot engage and it doesn't matter That this may go from here to here And and this is my target by the way down here somewhere around here. Remember I got to put that on the chart where to go 4215 right Now by target all it means is maybe maybe not Maybe someday maybe never right? And that's called the micro composite volume point of control in other words It's the next higher time frame, which is the ones I was showing you at the beginning I got to put it on here just so you know it's there So nothing to do remember. I'm not calling trades. I'm giving you a sense of context and retail trader behavior So if this was not in this here, this would be a short However, we have a swing high here and stops here. So I have nothing to do So I'm we're just going to watch it. Okay So I'm a tourist and remember my trade plan incorporates retail trader behavior. So in a vacuum short this Nothing to do So let's keep an eye and in the meantime you got questions throw them in there Here's the other part of this This is a short with the problem as you know, this is a problem This is a problem So and the reason is we can come down here Pick some stops and then reverse back So I consider this a tough because for me, there's a couple elements one. I want these guys out. The other part is This is my obstacle so I want I need the range Because this would be my first target Coming down. So I have nothing I can do here because while this is partially I say partially A setup. It's got some pieces. It's got context. It's got location. It has problem View up so nothing to do And then this is the target for scale. I need the range So do I want to join these guys and let's look to the left? Where's the last swing here? What's above here? By the way, write that down look to the left. Aren't there stops up here? So I this is a real For me, it's just I'm going to go. Yeah That's so much And it doesn't matter if we go and take the low of the day out, which it certainly can do. I just go. Okay It's not my trade Because for me Risk is you know risk mitigation and understanding market mechanics is job number one with this swing sitting here And stops it in here And stops at the mid all this This is a risky location to engage as I View it and again, even though this is a short Just doesn't have the right elements if these guys are taken out and we come back then it clears the deck for me Because they took this swing out See is that logical Value area high. There's really no value at the moment Um You know, yeah, maybe You know, I mean if it got up to and the developing value area high is just below the mid if we got up there I wouldn't be selling value area high. I'd be looking for the squeeze Above the mid and that would set up a potential short I mean for me, I want these guys out This is my you know location to scale so the problem What's my range? I can't enter here instantly. I'd be entering probably here There's just not enough meat on the bone You know because my risk stays about the same, you know, if I get in over here, it's 37 50 to you know 39 50 So it's about two points or so. It's very tight So there's I just it's not my trade It is my trade except for this see because I have another component of my trade Setups have to be qualified in a couple areas. One is where's the stops If they've taken out And there's no follow through it's it makes this a much better opportunity But there's now what happens is if I join here, I know there's a bunch of stops sitting right above here and here And we didn't take them out you see so to me it's just not a good play You know and I have to be okay that you know when I see this And or if it goes down and takes the low out, I have to be able to not I have to keep fomo and check and crazy because I could stimulate it But it's more about waiting for the trades that are let's just say have better probabilities Uh Then so for me the better probability is these this this thing gets taken out and then we fail That sets up a better trade for me for me. All right now For those of you who are okay with this then that's your trade plan Yeah dnt that's how I look at it. It's not um Just you guys know I'm narrating. I'm on I'm on a different book map. You'll like this. This is brilliant This is what happens on friday This is where the stops are above here So in the here So for me, this is a setup Except this is a problem that swing is a problem. So I can't Engage and this is my scale see so all of this is kind of Okay, but it doesn't qualify so I can't do anything Now I have to manage my emotional state that that's about what I got to do here Which is fine, you know There's so many opportunities I For me, it's not like gee. I should have done this. I should have done that when you start having that emotional state It's all being triggered Um, and it's not a good thing It's more important that you develop the discipline when not the trade because over time What you're going to remember is the times You know The trade does whatever you think it might do You will not remember the times you didn't wait and follow your trade plan Because the mind is selective and then you'll be or if you're going how could I good have gotten this trade? You know this That's not the in my opinion again. Just my opinion not the right process the right process is Hugging your trade plan and you grade yourself by your trade plan. There's Thousands of trades If you survive long enough to have a career in trading where they become somewhat inconsequential You know any one of them is just kind of a you know, it's a metric at some point You know, so anyway, that's the way I look at it And it wasn't that I haven't had all those thoughts and experiences and emotions because it's just part of trading It's what you do and how you recognize them and instead of going In other words, I'm going to encourage you to recognize the behavior that deviates from your trade plan If you don't have a plan for this situation, maybe you ought to have one For me, the plan is not to step in front of us But to use it To my advantage and if it doesn't show up for me, then it's because of its proximity You see now if this was you know someplace else, it wouldn't be the same. I'd be short But because of the swing in this and I know I'm kind of going over it But it's important to me because part of market mechanics think about it. You think from two sides Also, it's part of anticipating where the market might go and why Just like when I was short going for that overnight volume point of control or going for this why And now pull back up here. Why might it continue? Well because of the all the structure Why might you get squeezed because of this so I can't do anything Because I my setup I want this I don't want to join these guys because now there's stops here There's stops here and there's maybe guys trailing stops in here. So the buyers are starting the stack up And when I say buyers buy stops not buy yours different, right? So that's what so when the market counter rotates. What is it rotating on the buyers are the stops I don't think you're going to find buyers saying wow, this is great. We're going back to the high of the day I'm not saying it can't what I'm saying is would you get long here? You know, Michael grab the link. I can't go back to the open grab the youtube link And then you can watch it and just speed, you know go back Take a look at that You can look at it right now or just grab the link and after the close whenever you want this Will be this Recording will be available probably through about six o'clock this evening central time and then it's gone You know So you can kind of review it and fast forward it or you know, whatever you want to do Um Oh, it's something else guys, uh two points one. I'm not going to be streaming Starting next Tuesday through the following Monday, which means I'll be returning the following Tuesday, august 30th So, you know I'm going to miss all of you The other part is In the trader lab We have About 60 pdf's of these behaviors That you can observe in different contexts with meticulous note circles arrows, you know little things, you know stuff like that and a A video that I did an advanced trader webinar I did for bookman back last year that really is an overview of these mechanics if you will and give you better understanding of the auction You know, what why is it doing this? Well, if you understand auction, then you understand the behavior And then how you kind of can identify context And not only the context in the higher time frame But how it changes in her day so you can try to stay in alignment with it because it changes You know, we can be directional like we were in the morning and now we are in a different context How do you adjust and how do you integrate the changing interday development inside higher time frames? It is multi-dimensional. So you can get somewhat of a better handle on that If you watch that it's about an hour great great watching over the weekend, you know It's worth an hour. I think and then trend a configurations How do you operate the trend day which is not the same as rotational like we had yesterday Yet there are aspects that are similar in certain ideas. For example, we are now in balance Which is this, you know back and forth two sides. By the way, here's our stops coming out. So we're going to watch now That creates something called mean reversion. That's an outside in trade Not an inside out trade. So while this is doable, it's still going to be doable We're going to be looking for outside edges not trade by the way, not a trade recommendation. So where's our outside edge? Let's go take a look Our outside edge is up here So now we want to be looking so we can anticipate stops at the VWAP, right? Stops at the mid and stops up in here So this is our area to start observing Let's watch okay, and these are not trade recommendations. Remember not a trade calling work So now we got our stops only 19 171 19 now watch right here Watch the behavior Micro structure right here. So watch right in here. Just watch it guys It can do anything. It's I don't think anything more than that, but this is micro structure Potential exhaustion you got to watch now. It's not there yet It's like getting ripe watch this Just watch it now. Don't forget mid Low volume area. It can squeeze further not saying it's ripe just saying observe This is micro high volume structure This is stops. This is alignment Just watch Not a recommendation. I really want to caution you guys This is not trading Calling this is behavioral So we're gonna observe it nothing to do or just watching Right, so there's a micro structure and an auction Volume is here Retail volume was here retail Too low What's up here the fuel? Let's watch That's why it's if this then that if not then what? Watch this area watch this area. What's up there stops? What are we going to get mechanical traders right here? This is where the vulnerability is going to be up in here. So We just have to watch And you got to watch for the order book too because that can give you as we say shenanigan Who came up with the word shenanigan? I got to look that up Ingrid, which video? If you're talking to the the fundamental one go to book map.com You'll see a little link in there. This is join discord chat You don't have to be a book map subscriber You won't be solicited and then you'll see after you go through the little welcome thing Trader lab chat and pinned at the top of the trader lab chat There are About 60 pdf so you can download so you can kind of look at this stuff and think about it And also that video is up there too. So you can watch that maybe watch it this weekend So let's watch our behavior see we're it's kind of we're kind of in the area right Stops are still here. I am extremely cautious Because So let's watch the order book. This is could be algorithmic behavior, you know In lots of times what I observe and I'm not saying anything more than observations And you should if you're interested in order flow, you should attend our advanced trader webinars That are specific to order flow so you can kind of understand what this is about this All right, we see a seller. We see the book thickening up The thing you got to be careful about is we're right in front of the mid They are pulling which opens the door However One of the things I observe and I have no idea by the way is So far this is selling right? I mean, this is a selling scenario here This would be Where we might go but You have to now they're adding so that's good for the short. So let's watch it see them coming down It's all good if they flip it and then pull here It's going to take it up into the mid So there's a lot of games with this So they can be getting us trapped So, you know That's your possibility here, but so far it's supporting the short So this is what it has And then this coming down is supporting the short now you got to watch the behavior So we'll watch the behavior. I have nothing to do here This could be a short but I want this Just like I wanted this see Stops now this might be your short and I have no idea I have a trade plan I don't and again you have to follow your own trade plan. This is a short But I have a problem same one I had with the VWAP So I have nothing to do Again just me because of this Well, so let's observe it. Yeah Ingrid did I answer your question? Did you get that? Huh G falcon boy. Thanks for that. I'm just finding out what shenanigan is Monkeys asking me how I know about stop picks a retail trader behavior. In other words, what do we do? us us Where do we put our stops VWAP mid? Where do we automatically? sell VWAP mid Do I do I want to join the retail traders? No Am I willing to let the trade go and not be on the on the bus? Yes Why right here? You're seeing why this is why stops and this area up here outside edge What is that outside edges of consolidations stops? So this is a vulnerable area, but it sets up my opportunity My opportunity is going to be now guys remember context. How do we operate and called? I don't know if you want to call this a trending environment, but let's say kind of You know I mean we're out of balance We've broken out Market went down. It is floating in air here It has not resolved in my opinion to what the downside potential is so now for me. It's outside in that's called mean reversion And mean reversion is outside from somewhere Back to the mean which is this and if you guys remember yesterday We were trading both sides Outside in right and it was short short short because of the morning the context was short side Based because we opened in range and value of so two sides. Yeah Today it's one side outside in so it's using the same process Anticipating retail trader behavior, which is here Right, so I'm looking for the stops. I don't want to join the stops Call me chicken But how about how call me experienced? Where's the stops? here here So above the bed up into this area Nothing is up there except stops. Does that make sense? See I'm not saying it'll do anything. I have no crystal ball I do know retail trader behavior So why am I going to do something that they would do since we know they don't do so well? Does that make sense? Jen of the mid is the high load of all of my two So here we are. Let's watch now Now is there any surprises you may say yes to me. No Write this down think like a retail trader don't act like one if you can think like a retail trader then you can anticipate their behavior and that'll be stops selling And then maybe further and there's we don't know but this is setting up now a potential Opportunity and I can't say it is isn't or anything. This is where you would scale So let's observe not a recommendation. Let's just watch it Just think about it Watch this behavior right in here Chop chop break Looking for A behavior right in here not a recommendation. We're just tourist, right? There's alignment We'll see what it does I have no idea by the way This is vulnerable So we just have to be watching If we don't get squeezed here you're seeing this exhaustion So we're watching important If we squeeze boom Do they pull What or do they pull we're bracketed here now? Let's watch No ideas. This is all key behavior. There's your volume There's a little Little hand on the lid a little lid pushing the cork a little bit maybe they can pull They're bracketing down here. They're pulling. Let's just try to watch the order book Not a recommendation. Really guys just watch Because there's no way to know and that's trading what it'll do. This is still vulnerable So like any trade the best you got is maybe if we rotate down from here No idea. See they pulled we can now pop higher. This is how the order book can fool you See pushing lower flip pull Now can go higher and I have no idea. So That's for me why order book Very slimy Because the algos that are in here can just as easily throw this out here to get you on the wrong side And there's no way to know now. Remember what our target is, right? Mean reversion So where's stops v-wap. So and look at this guy coming in here. So See him. That's algo. So you can see how it's automatically moving jumping jumping So the trade is the short right to hear to hear That's this basic trade And that's based on you could do this with this. I'm only by the way in the trader lab. I only discussed two lock configurations In other words, the the purpose of the trader lab is to kind of create foundations that you can build a business off of But without a market understanding nothing you're going nowhere in my opinion. Let's you understand how the market works Uh and what the purpose of it is and the interaction of the participants Why you know, so once you understand why and then you can see the configurations as they unfold I think you have a better chance of getting and staying in alignment And if you understand retail trader behavior, that's an asset. So we start putting these pieces together That's kind of the idea, right Does that make sense The f uh the f v-wap. No, I don't um I do not take the i'm getting a question the over no the full session v-wap here Well, no, but it's not If i'm in a vacuum I might think about it, but the current auction supersedes Because now the overnight and the overnight low all that is done I'm now operating in the daytime frame auction. In other words, this is the the most recent behavior So what i'm doing is i'm kind of letting developing context overlap Yesterday's context, which we're out of balance. So it's not, you know It's not in play at the moment and then the most recent context was eth So i'm going to work with the eth context until the current one that is developing supersedes it now I'm operating in this so that's why the mid You know this lvn area. So that's why it's short to here notice So i'm now risk neutral if that was in your trade plan and you guys know it's in my trade plan But I don't call trade. So, you know Uh, but this is now there's something going on right here That I have to be careful. See what's happening with the volume. The volume is beginning to migrate That is a bit of a warning will robinson. I call this v poc migration. So now For this to go lower. I have to get below here and here If I can't get below then we have the potential to come right back and squeeze. So we'll see what it does, okay so You remember when we got short we had the migration Going the other way for the short side Now the v poc is migrating what that is suggesting is This down here Was too low this Was too low We checked here Too low We move higher So far too low And that could suggest a squeeze and I don't know so I don't need to know why first target Here scale Hold Helmet nothing more to do next target or scratch Is everybody tracking? Major tom I don't see the context changing the up. I see the context this counter rotations So I don't have any long ideas. I don't trade the counter trend I want I kind of look at it where I use the counter trend trades to get positioned and get aligned with the higher time frame Because i'm not interested in you know, this I you know because I know Here's a way to think about it and I don't know what the market will do. Remember I that part I don't know it's all random in the sense of how and when But unless something changes I'm only a seller today And it's just a matter of using the counter trend rotations to get in alignment because I have targets and I want the range If i'm running a three-point stop, which is about my thing I want this I want 10 points 15 points I'm not trading for this Not even worth it to me Um, it just has no no meaning no value Because if I'm gonna I gotta risk about three over here Well, what am I risking three four to there? I mean, what am I where am I going? So I'm just talking about me. I'm into The high, you know, this is not scalping and I'm not trying to trade this what I and I did Previous I'm not saying I never have you guys who've been following, you know, there were times I would be taking over 100 trades a day Um, so I've been there done that and what I found was because I when I started out there was none of this it was um Swing trading and trend following, you know, so I my orientation was not To fiddle with this stuff. It was always to try to get larger rotations But over time, you know, you get kind of curious about can I do it? Can the disc does it pay? um But it didn't My broker liked it You know, when you start getting a gift basket from your broker at the end of the month, you have to, you know, you're Something ought to it ought to be a tip off Um, so anyway for me, it wasn't it just didn't make any sense because my risk is pretty constant, you know And when I got book map, I actually was able to reduce my risk My my stops had to be wider because I didn't have the granularity That I have, you know now with book map, so it helped me um, so what that meant was tighter stop and shorter disc because of better execution and Shorter distance for risk neutral that really impacts your metrics, you know, so that's anyway, that's kind of how I experienced it You know, does that make sense? So anyway for me unless something changes, but long is not on the laundry list And if it turns into a long i'm done. I I just doesn't matter to me because to me um, I got to ask ask yourself Based on what you know Based on quote the good news, which was the fomc and we rallied and squeezed into it Then the news comes out and we make a top Then who's on the hook? It's all those logs. Well, they're below us still, you know, there's more meat on the bone here So we're cleaning these guys out And where's our low? Let me take a look 25. Well What about these guys? What about their stops? And then we have 42 15. So for me 40 to 15, but that's not the end of the planet That's just where this fuel is and this is retail Now where the next layer of stops under here so Now when how if That's not my job My job is to attempt to stay in alignment. So right now. Do I want to join the guys that are getting blown out? I don't Do I want to get long? For a counter rotation. I don't let me tell you why Who is long? Who is the buyer? Now I'm not saying we won't come all the way back up and come here right because it can do that But I got to say I'm more inclined to think This the reason is other than counter rotations, which are buy stops Are there people buying because it's such a bargain or Are the counter rotations going to be used By the longs to get out of their positions What would you do? see Christopher the way you reset you go to your Session volume profile right click on it and you put the time of day you want it to reset so RTH open so it's at time not sessions start nothing. It's specifically the time. So this is the anyway This is the context. So for me, it's short short short If things change and we blow, you know, we start rolling up Then I got to see how far up we come and then still short and if things get funky and and it's not clear to me I just don't trade, you know, I just stand aside and totally there it becomes clear But for me, I will not be thinking longs I am see this So this is what now let's put these pieces back together short scale V pock migration warning will robinson right not a long warning will robinson so Scale scratch flat It's as easy as that now what let's go back right Now remember now remember we identify locations of behavior. So where's our swings? Here which we just got where else let's look got to look left There so we're up over these swings Now we have to see and this is the area another area for shorts. So let's observe and again, it's a little funky, right? So let's watch And it's a little trickier This is a structure But this is your obstacle. So you'd have to you know, is there enough range here to here to here? So this is an outside mean reversion And I know per my plan where my locations are Got to take the stops at the mid which we did Count a rotation to the v pock for the scale, which we did Squeeze further into where here, which we had previously identified. It's the next area for short That's just trading as far as I see it, you know Because I don't know, you know, if you think you know Send me a personal message. We'll talk Because I want to know but in the interim all I know is potential behavior and obstacles And I'm watching the auction. So a short out of here is back to here and then hold for this Retail stops this this this so let's see if this one ferments All it is is one trade and I think you can see the logic can't you? So in a trade plan, I have something called a setup What is a setup? Locations to interact with the market in other words, it's maybe at best So maybe we take the stops at the mid and we come back to Fair price. That's mean reversion Which it did then we start shifting up. That suggests a problem Don't know Shifts up presses. We go to the next location. That's all this is Outside in mean reversion. Where to back here then what back on the original trade the same trade by the way Nothing's changed. It's all it is. I'm probing for the location And I accept the randomness So why did this one? No, we know why But we don't know it would because we could have just kept going To the target. What did we do squeezed took them out Took out all the stops remember we looked to the left Remember low volume area vulnerable Short same trade where to well we got the VWOP So scale risk neutral Back here Same trade that's how I look at it. I'm just doing the same thing I'm just in what I'm attempting to do is get alignment At locations, but I want the stops out Which is why now this was okay And now this one we took these guys out and those you look to the left those swings makes it better, right? Now same trade different location Back mean reversion and then wherever Is that makes sense? Can you see the logic? Christopher did I answer your question? Well major tom. It's just a trade. In other words, you have a location You understand context and then all you're doing is testing for the right location. It's very random I mean, that's why trades are random. Otherwise, we just wait for the right bus You know, unfortunately, we don't you know, that's the problem if you will or the challenge It's I mean the opportunity cost so when I looked at this I also know auction market theory which puts this Target you see so this was all okay for me You know scale then what squeeze then what outside then what short then what scale It's the same rinse repeat then we either take this out and that's all good or bad scratch Just another trade or We get down we got to get below here and then we go here. That's the trade. That's all there is to it It's not more complicated than that If if you want to be sure and I mean you I mean any of us we want the sure thing We're still waiting for the magic eight ball to come back for the factory to give us the quote right trade The right trade is identifying Locations to potentially interact with the market the next part of your trade is where might it go your obstacle for your scale Is there enough range between your entry and a failure? To get to here, which is basically it Then we pull back to where you see the volume right here That's your over under we come back above that volume. We're going to take this out Not complicated So let's observe. Okay, and if they take it out you scratch well scratch scratch That's how in my opinion you probe the market Because the payday could be pretty good That's it And then it's just gee I scratched a couple trades. All right But this is still The outside edge so we have to watch okay. Here's your micro high volume structure probably going to take it out, right? Okay Let's just see what it does here. Like I said, it's probably going to take it out get these guys Let's watch So when I put one of these things on and again, it's just me I have to get risk neutral to pay for this stop My stop is above here if I get taken out I scratch My broker sends me a little gift basket around the holidays And that's it If we don't take this out And we reverse out of here Then I'm back in this That's all it's nowhere complicated that So if you and I really want to suggest complexity does not solve the problem Complexity creates the problem. This is simple I think it's simple. What do you guys think this complicated? So slotted area that short's about to get taken out. Let's talk about this Yeah, you're right. It is about to get taken out except that didn't Huh, why is that slot slot as areas over in the discord trader lab chat and by the way the trader lab is an interactive community of traders with Diverse backgrounds experiences and it's a collective experience And what happens is it's interactive In other words, you got to have the guts to put yourself out there This is not about looking good. This is about being in the business of trading So if you want to look like, you know, it's not a place for egos It's a place for humility and asking the questions Because that it takes courage you want to have you want to be a trader you got to have courage And if you don't and I mean anybody doesn't have the courage to put themselves out there How are you going to have the courage to execute? It's not ego. I left my ego in the Grand Canyon many years ago Because when you start in this you actually think you can figure it out And the reality is if you go down the track that most retail traders go on Statistically you're not going to be doing this So the reason I started the stream was well because I got a lot of interest in some of the things I was posting And it kind of was by popular demand, you know But it wasn't intentional. I'm not an educator. I'm not a vendor, you know So I'm not one of those guys. This is hey sign up book map doesn't do that either, which is pretty amazing So but I understand how the market works And it's only because I've done everything you guys have done. It's not because I woke up, you know, brilliant No, I woke up the same way you guys did. I started out You know, like we all do the thing is I could not fit when I was doing system design And I built trading systems Um There were they were problems because they are mathematically based and they are basically indicator based looking back now looking forward and it's always Um optimization walk forward testing, right? You guys have probably heard of this Why do we have to optimize? right Why are you guys going in with the little screwdriver tweaking? Your oscillators your mac d or your moving average or your envelopes or your haganash pick one You know, I don't know pick anything. Why do they have a hundred indicators in the software package? Why? I think you know why so If that is why and if it exists And if they need 80 or 100 to sell you an indicator based software package, which is what we all want retail Then why are the retail outcomes? so poor Maybe It requires a different thought process and maybe even some different tools Or at least a way of understanding how the market works because when we're focused on an indicator We're not learning about market mechanics or the behavior of these participants We're trying to find a way to get the darn thing to fit But the reality is we're trying to fit an indicator around the market Whereas the market is not interested or cares about our quote indicator So we're always chasing the market from behind. We're not in alignment So the thing about auction market theory the volume profile and these market mechanics, you know It's to understand the behavior. Why if you know why you might be able to use an indicator That's in alignment with the current behavior and context and in your day. It changes also This behavior is not the same as what we had earlier But what it is is if the behavior is down then counter rotations subject to your trade plan and timeframe are to be sold So I can't get long And doesn't mean you can't i'm just saying I can't my job is to stay in alignment if I understand that then i'm only trading one side I don't want to join the weak hands and it doesn't matter if we get a 15 point rotation up I want to sell a 15 point me again. I'm only talking to me You may say hey I could sell if you're one of these guys who can rock and roll buy here sell here buy here sell here You know buy here, but whatever that's great I haven't observed people being able to do that and stay in the business The guys I know stay in the business are swinging For these larger rotations because you've got to recover the cost of probing the market And if for me if if it's a three point stop Ish or less, I think that's pretty good in the yes I know about you and I can do that because of microstructure and book map You say so that helps me And I don't change what i'm doing So if I take if I got here and I took a stop it doesn't Other than being annoyed and those things you say to your monitor when in you know private I released my frustration and I say okay nothing's changed. It's just a location Let's get short. Let's get short. Let's get short not a trade recommendation. Where to Stop swear thing and then here So, you know, this is the trade right doesn't mean anything more than it's a trade Can it come back and take me out? Of course Is that okay? I got to be okay with it because I'm probing the market for a location That's all I'm trying to do is get in stay in alignment and this outside edge So, you know what this is this is still this is what's the context Down trend higher time frame mean reversion Mean as in mean in quotes is outside it So this is how at least for me how I engage in this current Context so my higher time frame context is down And I'm in rotation now so it's changed So I want to try to get outside to come back to this and then This so just remember this is next on the hip parade and we have a long ball Which I have no idea which is 42 15 wherever down here some place right and I have no idea So it's right in here So that's the long ball target, which I will trade towards Unless things dramatically change and we leave all this behind and come up if we start coming up I'm just done, you know, I'm not going to play the long side today But again, it's a function of time frame and for me I want the bigger trades So I hope that makes sense and I hope that's useful and there's no right or wrong in trading by the way guys What's right and wrong is your trade plan and following it So if you have a trade plan for you know this stuff, that's okay You know, I don't make judgments, but to me if I'm going to risk three and I don't trade a one lot So let's just say threes There's got to be range And there's got to be something that justifies it That's it any questions So we're in this trade Not a recommendation Johnny you ask about volume profile versus tpo's Is that what you're asking me? By the way, just as a reminder, I will be streaming on monday and then i'm taking a week off for um I guess a little break, you know So from tuesday, I'll be back next tuesday august 30th So I know you're gonna miss me Well, maybe not but um I will be back in the meantime Grab the link from this video. You can watch it again after the market if it You know, if there's anything here, uh that interests you also up on youtube I have a number of trend configuration videos Um, which kind of are going to show you something similar to what you see me doing right here because what happens is Um, often in a trend configuration, unless it's just everybody's bailing out the window at one time, um, It you get that range move the big move Then the market goes into a different context, which is consolidation. That's what we're in right now consolidation In other words rotational trade. So but if the trend is down, I just want to reiterate. What am I going to do? I'm selling it But I need I'm not going to sell it down here I've got to get outside to get the mean reversion. So I'm now in a different context. I'm in mean reversion I'm in Mean reversion so I can only go short because the context is down And I'm going for this for my next target Why do you think I'd go for this anybody? What do you think anybody got an idea? Well, there's another reason stops There are longs who play in this So It's reasonable now. Also, let's look at the distribution outside Retail, where's too low? Where are stops outside edge? Now it may never get there it might get there Right. I don't know by the way see this right here. Where do we check right here price check Price check price check aisle three. So we are accepting this So and you'll notice and this is what I find so interesting and what and then when I started looking at the market My I don't know where I fit it with everybody else who uses volume profile I will tell you years many years ago I was in a chat room with guys who were market profiles writers and I And there was tpo's and volume was just becoming available So I was using tpo and volume kind of put together, you know So I was watching the different behaviors the time-based behavior. And so, you know what a tpo is their 30 minute Call it they call them brackets, but basically like a 30 minute time frame and initially when the Market profile was created by peter stottelmeier back in the 80s What happened was They didn't have volume. They only had time. So time became a proxy for volume Which means if the market spent time In an area it was assumed more volume Would take place there right which is logical. So they built the profile out this Structure based on how much time it's spent and that became your proxy for volume Then when volume showed up it was much more accurate because the clock is you know an artificial thing Though it was a good proxy time is not relevant to the auction It really isn't other than open close lunchtime, you know, I mean it's relevant only because of the differential in volume but not anything else so I started looking at this v poc migration You know and I was interpreting and saying well, what does this mean? Why would it and I started, you know, it would shift up Let's just say it shifts here. I go and then it would shift down here. I go. What's what's that? you know, what's that telling us and Let's just say we had some disagreements about The interpretation so, you know, apparently I didn't stay there so Over time my view of the mechanics of the market changed And I read more into microstructures because of what it meant in other words, what does this mean? um And then initially I was doing like five minute pro. I mean I we didn't have you know this we didn't have a book map You know all you had was your regular charts, you know, so I started drawing profiles over Microstructures in having micro profiles. I mean I went out of my mind Trying to identify this behavior now. I can do it much easier because of this Remember wasn't this where our over-under was right there at the short? Right there And the stop was there Do you think that's pretty good? How did I know that what I know is what created it the auction? What I don't know is are we going to take it out? That's trading what I know is If I wasn't short and I saw this and this I could have shorted here And my stop would be over here. I know that I know if I get below here And you notice the reaction That this is my target guys has anything changed Yeah, Christopher. I uh, well, I use volume through all of it, you know Um, whether it's the higher time frame to me. It's all based on volume Because in the end, you know all what volume is is the interaction of a buyer and seller And there's going to be areas where there's not a lot of interaction like up in here lower volume Outside edge of a distribution which is what remember and I don't like to you know, I'm just going to say it's not about being right or wrong It's about understanding behavior. It's really what it is. What is the market doing? What's it trying to do is where might it do it? Who's vulnerable where and again, we don't know, you know, why not this why not be here from this rotation? I don't know Random why not Go straight down from here. I don't know Why come down Come back and then fail. I don't know So I don't need to know because I accept. I don't know that's what takes me off the hook If you think you need to know and it's about being right You're creating an impediment to your ability to stay Potentially aligned because if it's about I know I'm going to be right. That's not trading That is not trading guys Trading in my opinion is interacting with the market when at a location that has some Uh sense to it that is in alignment with the the higher time frame participants if they're active The higher time frame participants are not buying in my opinion The higher time frame participants are using counter rotations to sell. We're the guys with the stops This is the exhaustion See so it's all here. I think it's logical Um If you're a counter trend trader, you know, god bless you Me not so much And it's not that I can't it's that where's my opportunity it's to hear And I understand why Uh This side of it how far Was it to the v-wap? Was it to the mid? Where was it this? Was it there? Was it there? Where was it? I don't know. We tried there. That was fine. We tried here That's fine. We still got the target. Nothing's changed And it can still take out the low of the day and we have 42 15 below you should write this down And again, I have no idea. It doesn't matter. See, I don't worry quote about that my worry And it's not worry, but my need is to get risk neutral to buy the trade Then I can sit back and go well You know now what I don't know Oh, it took me out. I scratched good trade Here it is again Scale comes back doesn't take me out good trade Comes back Doesn't take me out. By the way, I have additional setups in here to add which I don't discuss in the trader lab The fact is if you understand it You can now dance with it. You can interpret it because you understand how the market works And you understand retail trader behavior guys if you make it simple, you'll be able to do it in my opinion I have to say past performance not indicative of future results not trade recommendations, etc. This is one way to kind of Reverse engineer and then put it back together If you keep it simple, I think you're going to have a pretty good shot at understanding without understanding. It's chaos Isn't it? Well rob insanity is part of being a trader. Um, you have to be a bit, you know Strange. Yeah, johnny Johnny you need software. Basically that gives you the daily time frames If that's what you're asking me, you know higher time frame structure You know this kind of thing. This is your higher time frame. So all I'm doing is for me. It's the volume supersedes anything the book You know all different time frame participants. I do look at the book I do see where the liquidity rests. I look at the strikes, you know, I mean There's more but not really because once the rubber where does the rubber meet the road? It's the interaction between the participants if I have alignment with and I can read the order flow. It can help Uh, I also know the order flows can be quite flaky Uh in misleading because the there's algos in there that trap retail traders. I understand You know, so You know like this here, this was fine. But what's their time frame? I mean we saw this for a potential short Here, which we didn't take we made a new high because this is all bs to me Then that was viable short scale scratch short again No liquidity really in the book up here. You see now here we come down and you see the liquidity coming down That's pressing. This is pressing. This is all fine. But It's different what's different and this is just an opinion is I don't trade on the liquidity I can't because their time frame and is an intent Um, is not the same as mine My time frame is to hear from here and I see that pays the bills, you know 45 to 35 is 10 points Okay, and a scale to get risk neutral. I'm all good with that with a stop. That's under three points I'm good with that and if I'm running a runner And we only talk two like lots in the trader lab I'm going beyond because I got 15 out there and potentially new low not a recommendation But that's my thing. So johnny I'm getting aligned I mean, you know as best I can Trading a trade plan that once we shift into rotational trade. I'm in an outside and mean reversion This is its own isolated context That is overlaid on a higher time frame context, which is south of the border Is that does that make sense everybody? Well, I uh major time I use investor rt But there's other software packages that uh, If you're asking about the higher time frame Uh, but I can't comment on them because Investor rt was like the first Soft significant professional piece of software That uh had volume profile and the thought of learning anything new at this point. My life is beyond I don't have the patience So I just use investor rt And if you come to the trader lab if you're not you haven't come there you can ask those guys because they're all doing volume profile Auction market theory pretty much and they have you know, they use different products and they could probably give you their insights You know, whether it's sierra Toss, I can't even name them because I don't I don't think about it But you know the common things that are up there trader view. I think you know All right, I can't even tell you so I'm not the person to ask But if you guys are interested in the trader lab in the community, it's Um, it's available to everybody plus a lot of free education stocks options crypto Stops icebergs are flow, you know all that so it's all free. It's every day Something going on We have a specific streamer for crypto who just is a crypto specialist Not my thing because I've been in the future. I'm in the futures traders in 1980. So I'm kind of stuck in a groove Um So I kind of stay with this But it's this process. So you understand is generic across all markets. So I mean Guys I uh, let's just say guys. I know trade crude trade bonds. You pick it nasdaq. It doesn't matter jelly beans if there's a market for it It auctions because that's where buyers and sellers meet and they agree on a price So this activity takes place all over the place. What's fair? What's unfair and different participants have different time frames, you know, so what's fair, you know, right here There's an interaction between a buyer and a seller By the way, here's a target, right? Got to pay attention so That's the kind of thing Right here is interaction between a buyer and a seller Too low too high boom break away here a buyer and a seller High volume node retail price too high Pull back price check in the micro aisle I think of these like your convenience store Because it's a small auction, but it's the same behavior and there was a retail price Between just these guys in here if you break away from it It's too high We ran out of buyers And then if the sellers are looking for buyers, what do they have to do? Think about it this way. They got to lower their price to find a buyer Please buy it. Please buy it. Please buy it. And now buyers and it could just be short covering. I have no idea Buy it buy it buy it buy it. We come back to the retail price. That was too high Buyers go nah Down you go logical Uh increased risk reward. Johnny, I think it's a matter of time frame, you know So next target Is this making sense guys? Can you see why? Why it's why and then how So it's context Then it's where Right identified ahead of time then how microstructure Stop picks Mean reversion from a location outside edge. Where is the outside? That's what they call it mean Because you might have to probe for it And unless we blow through all of this nothing has changed. This is in my opinion Where it pays Not this This so johnny you see what i'm saying here short scale Target Potential now rotation back in watch and hold runner target Not a recommendation. Is this logical? uh Major tom the trend is down Higher time frame targets around 15 ish And again, it doesn't have to get there lower the day is another area So it's based on the number of runners, you know and how you manage them, you know for me So I anyway, I hope you guys found this useful, you know um This is what what we do in the trader lab Try to stay sane try to be disciplined try to learn to auction market understand how the market works If you're going to trade I think you need to understand the market. I don't think it's a built out plug and play Which is really indicators if you think that this business is plug and play I'm going to think you're I'm going to suggest you might be very disappointed Um, if you think somebody can just plug an indicator in Overlay a few time frames and have an ATM in the basement and make a living I'm going to I'm going to suggest to you you're going to be potentially be disappointed Um, again, it's not a recommendation that this is the solution that what I'm doing here It's just one way to slice and dice it But in the end if you don't understand how the market works. I don't know how you can deploy any kind of strategy It starts with understanding And most retail traders never get to a place of understanding what they're doing Because they're going down the rabbit hole of indicators thinking well, it's the right combination or it's the right tuning, right? Haven't we all thought that I have When I divide when I developed trading systems wasn't that what I was doing And then we tend to go maybe just more indicators or maybe a different indicator or a different combination And and what you're going to find is the randomness of the application of an indicator because the indicators are not Sensitive to context That's where the issue I think is most difficult because if you're looking at an indicator You're only really looking at them for certain behaviors. Well this The morning behavior was straight down Now the behavior is rotation mean reversion. It's different See so anyway, that's just my little two cents on that and it may not be appropriate, you know for you or you know It's just my truth, you know, and that's why I do this When I started trading there was no information. We didn't you had two choices. You buy a book or you go to a seminar There was nothing else. There was no internet There was nada So that was about it You guys are at the opposite end. You got the internet. You got so much information. You can't tell as they say shoot from shinola shoot and You go down the these rabbit holes Or you subscribe somewhere and you end up with nothing for your effort and your time so I'm just suggesting maybe you kind of dust yourself off And think about what you're doing if you have a positive expectancy and you're a profitable trader Then this conversation is not for you You know, but if you've been doing this for a while and you tend to be waking up in the same place like a trading groundhog experience then consider Maybe looking into some other options for yourself Because a career if you want to be a trader and I mean professional trader You got to be doing what the retail traders aren't doing because statistically You know what their statistics are right? Anybody not know trading groundhog. Yeah, man I don't know. Yeah, uh dnt batter. Yeah over 90 of retail trader fail I'm gonna ask you guys This weekend, why don't you take it evaluate your trading career? What have you done? How's it going? What are you doing differently or you're doing? Let's just say manifestations of the same thing With similar tools with Out of different outcome If that's your situation I think it's really time to call a timeout and do a reevaluation because all you have In my opinion unless you're independently wealthy and this is a hobby is time And you have your account If you're trading and you don't have a viable plan You're going to either run out of time or run out of dollars. I don't think that's a good plan I think you could do better Now you have to decide what better is I'm not saying what I do is better than anything But I think I'm showing day after day here that there might be some rationale Why understanding market mechanics and behavior of the participants is really the secret sauce And there's no secret. It's right in front of you, you know, it's just that we're we're we're brought up and I think many ways You know vendors sell indicators, you know, how to use this this and this combine the mac d with the v-wap and it did Really? maybe But do you think maybe understanding what the mechanics of the market might give you Some advantage over the traders that blindly sell the v-wap or sell the med, you know Do you think using their behavior becomes an asset not a liability So that's why I always say think like a retail trader don't act like one because we know their behavior It was my behavior. I'm no different than you. I used to sell the med It was brilliant. Oh, I'm going to sell the mid splat Then it was why am I getting taken out at the med? Huh Look at that I guess there's some stops there. How about that? Hmm, maybe I shouldn't do that Maybe I should wait for the stops and then see the behavior afterwards Oh, that seems better. Maybe we should make that part of our plan Maybe that's better than stepping in front of the stops Even if the trade runs away without me over time Does that's does that discipline yield better results than the couple of moves that you miss? Over time Are you in this time for the long term? Is this your career or what? Do you want to gamble go to Vegas see a show get the buffet? You want a business? Losses or cost of production Doesn't make me a good or bad person. I'm just running a business Do I have a vetted plan that I have confidence in and I have the courage to execute? Yeah, I did the work I did the research I saw things that repeated over and over again. I had to change my thinking I had to be willing to walk in a different path than the other retail traders I had to take criticism Because I was lonely Because when I was starting to do this 1985 this But not this market profile. I learned market profile from peter stottelbauer He created it. He taught me market profile. I couldn't trade with it I spent over a year going what the heck is going on this makes sense. I can't trade with it Would you stay persistent under those conditions? You see So i'm just suggesting to you guys that if you're doing if you're not getting the results If you're tweaking you are chasing and you're doing an optimization You're not probably conscious of it Because you're going to look and say, you know, if this was just adjusted to this I would have caught that move right here or gee this time if I was using a 15 minute Candle bar call it whatever you want or a nine ema sma But oh, maybe the 20 sma on the kelder channel and maybe one and a half deviate. Do you know what i'm saying? That's curve fitting guys Oh, and then I got to wait for the 30 minute the 15 minute and the five minute, but i'll What? That's all curve Has nothing to do with context If you can understand the behavior of participants and how it's reflected by the true Reflection of market behavior, which is volume. I think you're way ahead of the pack There's I don't use one indicator Other than tags Which are not an indicator of retail Stops with the stop iceberg because it just helps me See exhaustion, so I find that useful, but if I don't see the exhaustion it doesn't supersede what I do in other words But I have a few years of doing this so what if what you're seeing looks Confusing it's because you might be viewing the market through a different lens and Those indicators We become dependent But if you think about what an indicator is and I mean think about it pro and con there's pros and cons to everything There's to everything even this think about what you're trying to extract from the indicator Think about the ability of that indicator to get aligned With what the context is context is king And if you take a look at the way I Overview this And you know by the way, I'm going for low a day in 42 15. Who knows and by the way, I don't worry about that I don't care Absolutely could care less My job is already done on that trade This is the process If you understand this Now you know what's going on You absolutely know what's going on The job of the market is auction What's too high? We found that out at fomc high with that wick right in that reversal What is fair it trades inside itself? That's balance. That's a consolidation two sides are active. Hey, louis, which is what's too low What's too high? I don't know Yesterday inside indecision Uh-oh Warning will robinson Potential squeeze fail or whatever gap out See a later alligator time to get short. It's that simple Now the interaction of the participants in the developing time frame the microstructure. How do we observe it? Just the volume And that the tool is a profile and all it's showing you is price and volume It's not an indicator. It's just showing you price and volume and it's not time-based Are you guys with me Time frame well Fractals So for me, I'm trading the higher time frame So time frame, but I'm using All of it is the volume profile and multiple time frames or fractals And I'm not trying to get aligned for the larger move. Why risk reward? I want to get paid I want to be able to also cover my cost for stops Which is part of overhead Cost of production if I'm in a business I know I'm going to have If I'm manufacturing I'm going to have jobs that I don't get paid on I'm going to have jobs where I take a loss and overall if I have net potential yield I'm going to be profitable. Isn't that how you run a business? Then the context What is that? I have to understand the potential And also recognize When it might change and I do it in all time frames, which relates to this But the context as you know right now is outside in it's not bullet train It's bullet train rotation So now I'm in the down bullet With outside in outside it. I'm aligned with the higher time frame Dyes, I'm losing my voice. So, you know, there's not I don't have much more time and I'm trading outside in And then bookmap lets me see inside So I can see the order flow. I can see that stop exhaustion I can see microstructure, which is this In the microstructure for execution and trade management Does it make sense? No, I don't reverse major tom if it goes against me I'm out because it's a structural failure I in other words context for me is short, right? And if let's say I got in at the mid And I got stopped out I don't go long Because I have my context that says short only unless something dramatically changes then I go. Hey, I don't know Because when I get into I don't know I go. I don't know in other words. I go stand aside. It's not clear I don't in other words I have a trade plan that aligns with my perception of context If it changes and now I'm going I don't know Because it can change in the more shorter term While the higher time frame is still down, but it might squeeze further, right? I don't know If I see that I'll just stand aside and go I don't know until I see another location Of potential behavior. By the way, what's the next potential area behavior trader lab? What's the next potential area to observe? Uh, you know anti luck. I don't look at the I don't look at the inflows outflows rebalancing. No, I stay in the real time So I don't I don't look at that, you know I don't look at Market makers. I don't think too much about that. I have looked into you know market maker behavior You know option hedging and things of this nature. I've looked at all that stuff But I find and then this is just me personally Anything extraneous Uh to what is right in front of me Creates conflict. So I have stripped it down, right guys I be the initial balance is the next location to observe which is 42 34 50 for stop pick not a recommendation Let's observe it So I you know, I used to look at everything. I'm but you know by everything. I know about everything But let's just say a lot, you know, and um So even option expiration today I don't it doesn't change how I approach the market and one the reason I kind of came to that Was I used to put all these inputs in and all it did was confuse me because what's what? How do you prioritize the like it's option expiration? Well, what does that mean? Does that mean I don't trade? I it doesn't And here's let me give you the the therefore or the why the why is Everybody in this market or I don't know about everybody But let's just say the major players in this market which create the outsized moves already know all that I perceive other than a report that might come out and shock the market and then it has to You know reprice for the new input that it's all known And the things we don't know are known You know, they know who are they those who know more than we do which is a lot because we don't know anything We're retail traders. So if I assume I know I don't know then I can't take what I think is relevant that all others already know Because the big houses, you know the citadels, they know the hft houses all these guys they all know this stuff It's in the market So I where am I trying to go? I'm trying to stay as close as I can to the market I know this is my next location in iraq right here. I also know there's stops above here So this is my area to observe right do and let's go back to rule, you know, one of the rules Where are the stops? Look at the behavior of the book. This is like a lure. I consider this a lure Now if the market turns right here and makes a beeline Fine Doesn't matter if I wasn't in But if I have a runner on Where's my stop? It's not going to be right above here. In fact, where's it going to be? Not where the stops are How might I use it depending on the behavior? Here's two possibilities. We come in continue Then this last swing low is an obstacle We get below the last little swing then low of the day, right? Right, right, right? Where is that thing down here? and 15 We come back above we can squeeze and come back up here. That's the possibilities If it comes I'm already telling you how this is my trade plan not a recommendation. So sell here After stop pick no stop pick no no bueno It takes it out comes back up here observe pullback Continuation so all I have is shorts not trade recommendations gang Because it's not at best. It's maybe right here is potential exhaustion. So let's observe it Not a recommendation. We're just going to take a peek This is like looking behind the financial curtain. How do you like that? Let's take a peek behind the financial curtain Because that's what I'm doing here guys We're looking behind the financial curtain. We really are we're looking inside and we're anticipating retail trader behavior Which just stops here also selling But I want what's my rule doesn't have to be I'm just saying for the trader lab Stop pick if I don't get the I'm not joining these guys Who are they the 95 percenters? Not my plan. My plan is to use the 95 percenters to my advantage, which is stops Now it's pretty tempting to run right in here, isn't it? You see how the book is pressing here. I think that's just well, what's what's the term? I don't want to say sucker play. I'll say allure Is that better? Well, Cory as far as how you um How you manage the trade is kind of a different Conversation and I don't get into that Because it's really a function of the individual And it's really different, you know, so here's our stop pick. Okay, so now let's watch And remember we're touring. Let's look up above us Here's a consolidation Always look to the left. Here's the high volume right here Stops now we're observing Everybody on track. We're going to watch This area Just watch nothing to do tourists So we're just watching I'm looking for exhaustion Now remember we can come back, you know, we can do all this So let's watch This area we're observing it, right So let's just watch we can do anything tourists Remember clueless So we're observing behavior not a trade recommendation And remember The outcome of anything is random So we don't know Watch the behavior of the order book And right here In this this is our Thing to observe not a recommendation. These guys are trading Interesting isn't it? They're pulling above so they're opening the door See how the book flipped Nothing you could do about this So nothing to do If this was something you engaged with there'd be a small stop here It's not a big deal. I don't think So now Stand by If that was your trade Where are the stops now? So we're going back to this So I have to say This is you know What this is is trying to get back in alignment for the continuation We have lunchtime Which often we get counter rotations It's still a potential short in here. It's just tricky, you know, which it always is So let's watch this behavior here these algos right here See how they pull and then flip This is this will get you into trouble. So this in and of itself Is not You know, I I don't look at this and do anything And with this kind of beat these guys because this is just alga. So I don't do that I am interested in Certain behavior. I want to go back and look in the book. Just see what what's what here So I'm I'm a tourist now. I got nothing to do But I'm still going to be looking for an opportunity to come outside in But nothing to do. So I have nothing to do here But I am still stalking and outside in So this So if I get involved Up in here someplace This is my first obstacle And then again continuation down lower the day 4215 So not trade recommendations and we might just chop around come back We can come back. So, you know, we can come all the way back here You know the mid wherever that is back here So this is all and we can also come back up into this again So I don't know what it'll do But I have to sit and wait now. So I have nothing to do If I get a setup here Remember what's vulnerable these guys 40 So it's dirty. Harry used to say or did say still might say do you feel lucky? so We're inside here now So I have to be cautious and I need to be patient because of retail trader behavior. That's what I've got So I just sit and wait. There's nothing more to do But I am stalking I hope that's useful Yeah, 42 is kind of the retail price. We can come back and check it When we squeeze these guys out at the VWAP So that would be an area to observe and we in mid is up here So we can go back in the to squeeze the Tyria and you know, do the same thing we did before come back outside See mean reversion. So we're still playing mean reversion It's the thing is from where right? So if we we might only come back here to this high volume Pop it and I got to look to the left and see what's over there and then Continue back to here to I'd be and then you know here Or Not, you know here knows we got some liquidity sitting in the book Not huge 300, but it's there. So that could be a target also Not saying just maybe so now it's just wait So now I sit back and I've still I would think based on what we've discussed here had been a pretty good morning right so Not really much much abuse Very small abuse um And the game is still on it's just now it's kind of moving if you're a battlefield strategist You're moving your troops around, you know, you're responding to the other side I look at these like counterattacks So where are they going to run out of energy and we're going to push back we if we're the sellers, that's all you know So and I don't know where that is So I have to wait for a location and I prefer to get stops picked off Or not because something like this like right here I can read selling But can I short that? If I got this See so for me, it just leaves it right here is a short trigger But it's not in alignment. It's like in nowhere. So When I see triggering structures, they must be aligned. It's only a trigger Where is it? Well, I got stops here I don't want to step in over here get a counter rotation and then have it come up and squeeze me You see so I have to let it go and if this thing comes down and does that I got to accept it Anyway, I hope you find This useful If you want grab the link Above in youtube if you want to watch this again this afternoon, you know after the close you want to abuse yourself It'll be available probably through six ish Central standard time if you want to it's you know, not that long The other thing is if you haven't visited the trader lab I there's an open invitation to all of you to come to the trader lab. It's a great community of traders Diverse experiences we leverage our group our collective experience to get better Go to book map.com join discord Go to the trader lab chat You won't be solicited. You don't have to be a subscriber and there's loads of free education I think education is good free is better and if you trade stocks it applies if you trade options crypto If you're interested in the order book, you know different Details, it's quite excellent Um, and if some of you guys have been the route of vendors and subscriptions and No, the magic indicator you already know and I think free is a much better option. That's just me Also, if you come to the discord trader lab, there's 60 pdfs. You can download of these behaviors Also an introductory video just to understand some of these mechanics and auction market theory in the profile Which will save you tons of time You don't have to go down the rabbit hole with any of this just keep it simple If you keep it simple, you'll make tremendous progress. I think in a short period of time Many of the traders in the trader lab have really, you know changed their approach And it didn't take them a lot of brain damage to do it It just takes time To change how you view things if you're always looking at indicators You're hung up on looking at one line crossing over the other a divergence This is different. We're just looking at the participant behavior and drawing conclusions because in the end it is them That create everything Willie retail trader behavior. Just think of what you do. You already know it What do we do as retail traders? So how do you learn retail trader? Where do you put your stops? Where do you interact with the market? Do you sell the mid at mechanically or the or the VWAP? What do you do? You know, where do they where do retail traders put their stops? They're here So what do I anticipate? Market's going to go there And again, it doesn't have to it could write this could be the top of the rotation and we go down It absolutely can do that and my trade plan requires me not to get involved I mean Why because of what retail traders do they're the most consistent group on on the planet when it comes to traders And they're most consistent losers So What do they do? Well, if I know what they do and they lose Maybe I shouldn't do what they do. Maybe I should since that's you know, I think of statistics And if there's over a 90 probability that what they do is they're going to lose and be out of the business Then maybe I can use that their consistent behavior as an asset For me That means don't do what they do where are their stops? Here And the med, you know, are they going to get taken out? I don't know You know that parts random But do I want to be short here when the stops are there? I can't do it And there's believe me. There's a voice in my head that says you're going to miss it. You're going to miss it Get short. Get short. Get short That's FOMO. That's my emotional state And it's a disruptor. It'll make me do crazy I know that So over time it's not if this is the top of the rotation and we take out the low now and Hit my targets below. I'm not on it Other than the emotional state it generates. I know over time It makes more sense for me not to be engaging here, but to be engaging after this Let's hang out a few minutes see maybe if we can see what it does see if the logic makes sense inverted FOMO Huh exactly and remember the emotional states are a chemical response fight or flight, you know And when you're getting triggered emotionally, you'll feel it What I found was I'd have an out-of-body experience somebody else would jump in there grab the mouse and start clicking It was like really So this looks like a short doesn't it it does to me It looks like a short. I mean it's behaving exactly like a short to me except for this So I can't trade it and you know, there's something helping in my mind right now saying sell it sell it sell it Because if we are in the right location, it's a it's a trigger for me So I can't do it And I'm conflicted. I'm feeling it. I want you to know the feelings don't go away It's the idea of understanding what the outcome is of responding to the feeling not responding to the trade plan So maybe we'll see what it does from here By the way if it goes on and takes out the low you will have barking in the helping But you won't see me chasing it if it comes up here and takes this out Then you're going to see why I have a trade plan Now what happens after that? I have no idea Yeah, I may not still have a trade or I may have a trade and I may get stopped out That's okay, but unless I get certain requirements based on my trade plan. There's nothing I can do here. I'm just sitting on a tourist Hope it makes sense Joe it's a short for me Theoretically and not a recommendation because of the context which is down You know That's really really what it is FOMO fighters. Yeah, there's a group that name, right? So let's see what we're doing So I may go through that little FOMO experience, right? So we'll see You guys can probably watch this on your own, you know, I'm kind of going over time here and I'm going to get penalized Using too much bandwidth and electricity So this is a cell structure, you know With a problem, so it's a nada event and by the way, so who's asked me why I'd be selling it? Um, yeah, cap it up. I'm familiar with that. I don't use any of that Yeah, Joe context is And it takes time, you know, because you got to look in multiple time frames to understand context. This is daily RTH, you know So each one of those cancels is a day and basically this is a consolidation So, you know, we were looking at this. This is fomc day Thanks for playing Extreme wick break come back inside This was the thing that kind of threw me a little bit. I saw this pick and come back inside That set up yesterday, which was two-sided trade. We opened in fair price So it was short short short long in the afternoon inside bar and one way or the other you're going to come out of this Assume we were assuming it's going to be the downside but until it is it isn't, you know There you are. So now context is what? If this is a consolidation and remember auction market theory. Oh, it's on sale. I'm not paying that It's like It's on sale We can't get above there Too high too high now yesterday. I didn't know, you know, I thought we could get up here Take up take out buy stops and then fail that to me would have made it juicier But it doesn't matter inside And we were trading at retail, which is this price right here So we opened at 77 or something. I mean, so we just So that's retail. So there's acceptance Now the problem with a retail price like this in a configuration with an extreme With all these longs in here with their stops below us Is there's fuel? So once you come out of here, this is where the context is Everybody out the window together. So then how do you stay aligned with it outside? In other words when the counter rotates If you have a plan for it, you're selling it. So it's how do you do that and that that So now we're putting the pieces together fractal, right then And this is what we've been doing. I think we had a short word. We have a short here to here I don't remember here to here to here, right? I think we we tried one around here I don't remember. I can't remember anymore, but somewhere Now we're looking for another one and there's nothing to do. So right in here, I have nothing to do I want this to go and then this is the target and then low of the day I don't have anything. I have a triggering structure and I don't my trade plan says you can't so I got nothing to do Me Now you when I mean you I mean anybody else you can be selling this And if you're willing that, you know, if it's up to your trade plan my trade plan, I want these shorts out This is because I need to range the scale to here also. So, you know But this is a trade except it's not for me, but I you can see all the pieces, right? Does it make sense? So again, I don't but I think I pretty well nailed this pretty good except my trade plan And which is not necessarily your trade plan, you know, I'm not saying also I would not be taking this except Let's just say the rule is this So but this is the trade. So it's you know, the trade's working But not my plan Right. So here But I think you can kind of if you can put these pieces together in the sense of context, which is the toughest part I think of trading is the idea of alignment and not getting caught up in this Stuff, you know, I don't want to be in this thing. I want to be with these guys. See I want to be this And 15 So why would I play in this and get out of alignment when my whole goal was to get in alignment with the bigger time frame? You know the higher time frame Which are sellers see Anyway, I hope you found it useful guys Um Again, I won't by the way, I'm going to be off next week Tuesday Through the following Monday returning next Tuesday, august 30th. If you want to make a note You know Just so you don't think I've gone south of the border The other part is in the meantime if you come to if you want to be part of the trader lab, you're all invited You go to bookmap.com Join the discard chat and come to the trader lab You don't have to subscribe to bookmap now ever never Lot of free education and a great group of traders Who where we try to leverage our collective experience our senior trader has over 54 years experience And then we have of course newer traders and everybody we all work together to get better Many traders have done the same thing you're doing Or have done Or whatever, you know, we've all gone down Similar paths and also different ones Just depends how long you've been doing it, right If you're into stocks options crypto, whatever we cover all of it in there And it's all free education not to mention order flow Which I think at some point if you're going to be in this business You need to understand how to use tools Like bookmap because remember whether in the matter whether you use a tool like this or not your competition is So can you learn to use it effectively and it's a specialty tool It's not a plug-and-play and if you're used to indicators now, this is not the way this works As you get into more levels of sophistication, there's more nuance So you really in my opinion need to kind of make this is this a career choice? If it's a career choice Maybe take this weekend Think about what are you doing? What works what doesn't work? And are you kind of jumping from indicator to indicator looking for the quote magic indicator that might not exist Or the right combination if you're doing that We've all done it But maybe that's not the way to go. Maybe you need a different approach. That's all I can say So thanks again for being here. Thanks for being part of the trader lab. Remember I'll be off next week and If you got something out of this Grab the link up on top in youtube and you can watch it again up till this evening In addition, I have videos posted on youtube of trend day configurations You'll see a lot of similarities to what i'm doing right here And then maybe you'll get a little benefit out of getting a better handle on the context Remember the target on this thing is the low And 42 15 Have a great evening. Have a great day. Have a super weekend. Thanks for being part of the trader lab. And by the way Um, I do continue this narration in the trader lab intermittently during the trading day So while this is the only time I do the stream Because obviously I do other things than this And I have to pay attention when i'm doing those other things Um I do drop in and narrate audio So unlimited number of you can be there. Just kind of stay on that voice channel and uh, also keep an eye on the chat And you'll know because I post in the chat going on audio So you can just jump on the stream and it's unlimited Thanks again. Have a great weekend. Appreciate y'all visiting the trader lab