 Good morning to the book map community Welcome one welcome all my name is Charles I run a community called pirate traders and I'm here today to talk to you about the ES the NQ and the two-way auction process How does the market move? Why does it move the way it does and where on earth might it go? Let's dive right in Well last week was a Crazy week for the market. There was a lot of volatility in both directions But overall the momentum was to the downside Okay, particularly on Friday the market made lower highs lower lows and had the value overlapping to lower so what we're looking at over here on the left side of the screen that is a Market profile chart Market profile is essentially just a way to organize the information It's very similar to a candlestick The only difference is a candlestick gives you a two-dimensional view of the information and the market profile gives you a three-dimensional view So when you see these profiles here that have sort of these blue boxes around them And the volume is sort of pink and purple that is the regular trading hours And then the ones that have the light blue and dark blue volume. That is the overnight market Okay, so just starting zoomed out here looking at the market profile For Thursday and Friday both days were very large ranges Okay, and we made lower highs and lower lows on the daytime frame We also had value which is the blue box Overlapping to lower. Okay, so that is all bearish to see for the market. However On a longer term time frame over the last few weeks the market has been balancing in a range So we'll just zoom out real quickly take a look at the daily chart and you can see, you know There's lots of different ways to measure this balance You could see it like a big box that's going like this where we've been going sideways for the last month or so you could see it as the trend lines down and The market has been getting smacked down and smacked down and smacked down You could see it as this triangle here Where the market is building up? Sideways getting tighter and tighter and tighter ready to burst one way or to other There are lots of different ways that you could measure the balance But the long and the short of it is this market is in balance. It goes down It turns around and goes back up. It turns around and goes back down It turns around and goes back up. It turns around and goes back down. It turns around and goes back up Now why am I putting so much emphasis on the fact that the market is in balance? Well the fact that we had Lower highs lower lows and value overlapping to lower on Friday increases the odds That the market is going to continue lower today However, the fact that we're in balance means those odds are not as good that there's a pretty decent chance We may turn around and work our way higher this week. So We'll start by just giving ourselves some perspective We're going to zoom out and take a look at the monthly and see if there's any insights there on The monthly time frame this month still has higher highs and higher lows than last month So that momentum could absolutely continue That being said we've had a lot of Momentum on the monthly time frame and the market does love to balance off momentum So we may need to spend some time going sideways or getting a pullback, but neither is confirmed yet Let's zoom in and take a look at the weekly time frame. So we are seeing ignore these trend lines Ramp ramp ramp So we are seeing on the weekly time frame that the market has rolled over, okay We had a lot of momentum on the weekly in here The market went sideways to balance off that momentum and then it continued once again So the question we're asking ourselves is is this more sideways on the weekly time frame or do we need a larger pullback with price? Okay, so then we zoom in and we take a look at the daily time frame And we start to say to ourselves. How do we know which is which? How do we know if the market is trying to turn around and head lower on a weekly time frame or Is the market just trying to go sideways on a weekly time frame? Well today the market should tell us if we get a continuation on the daily candlesticks of lower highs and lower lows Today that will increase the odds that the market needs a larger pullback with price If we do not if we either have an inside day today Where the market just trades inside Friday's range or we are able to turn around and get above Friday's high That would be bullish to see at least short term that would tell us we are balancing with time So let's zoom in we'll take a look at the market profile chart And we'll figure out. What are the important levels to keep an eye on here today? Well first and foremost we are opening inside the previous day's range opening inside the previous day's range Increases the odds that the market is going to go sideways first thing in the morning and it is likely to chop around Now the fact that we're in the upper end of yesterday's range We've still got you know 25 minutes till the market opens so we could easily pull back down But the fact that we're in the upper end of the range to me is a little bit bullish to see Okay, so my assumption would be If we can open up here and again still got 25 minutes to go so anything could happen But if we open up here, we should In a what should happens? We should be able to turn this area here between 51 97 and 51 87 into support so as the market opens and it begins to chop around We should be able to turn that into support Okay, if so if we turn into support and turn around that would be bullish to come back up and Test yesterday's high at 52 19 if not We need to continue to go sideways inside yesterday's range and it would be much more bearish to see Okay, so if the buyers want to reverse the market this morning and they want to get above yesterday's high They really need to turn this area between 97 and 87 into support if it continues through there The the bears will chomp. They will they will jump on that opportunity and try to take the market lower So the bulls would really need to defend this area now if we open between 97 and 77 Then it's not the same thing if we open between there the chop zone is between those two large nodes You see from the overnight and we just have to wait and see which side will break Okay, so it will depend where the market opens as to what is the exact support and resistance levels we're watching Either way if the market can find support here inside the overnight range and get back above the overnight high and Find some new buying above the overnight high it can test yesterday's high I would not get bullish unless we got new buying above yesterday's high. Okay a look above Yesterday's high that fails and pulls back down into the range is not bullish It is neutral It is increasing the odds the market is gonna go sideways inside Friday's range all day long Okay, if we look above Friday's high and find new buyers up there though Well, then that's bullish as can be and we can look for continuation to the upside Okay now as far as the downside is concerned I do feel like this area right here around 51 77 is a deal or no deal level for the buyers for the bulls today If they let that break this market is likely heading much much lower Okay, it was a base of single prints Which means it was an area where something changed on Friday and the momentum broke lower The market spent a lot of time and brought in a lot of volume down there So if the market opens this morning and it gets back down below 77 You are gonna liquidate all these buyers everyone that was buying at the end of the day on Friday Everyone that's been buying all weekend long. They are all gonna start to get squeezed below 77 So pretty much any momentum below 77 is very bearish to me for continuation lower The first stop would be Friday's low, but I think it would go even much lower than that Okay, so all in all, what am I expecting this morning? A lot of chop a lot of sideways a lot of grind What do I got to see to get really bearish? I mean, sorry really bullish. We I got to see new buying above Friday's high What do I got to see to get really bearish the market get below 51 77 in between those two sideways, baby Chopping sideways, I've marked this level at 51 96 as a potential balance area low It's not a great level right now because there's been so much chopped through it But what the market loves to do and an area like a balance area low is just go sideways and just spend time Burning theta. Okay, so I could easily see the market just grind sideways inside yesterday's range even all day today Let's flip over. We'll take a quick look at the NQ So the NQ in a very similar situation to the ES the market is balancing Okay, and again same thing very large ranges last week Lots of volatility But the difference between the NQ and the ES is that the NQ doesn't quite look as bearish They've got a lot more support below So for me to get bearish on the NQ, I would need to see it get below the overnight low, which is around 18 150 and get continuation lower from there It would need to push below come back up get resistance before I'd really be bearish that we're making another large move to the downside What makes more sense in my mind for the NQ is that it tries to get above yesterday's high and see if it can bring in new buyers Okay Again, both markets are set up to do a lot of chopping a lot of grinding a lot of sideways today If the NQ can get above yesterday's high find support find new buyers I would look for a continuation up to 18 408 So expect some chop Now you say to me you say Charles. What about the war in the Middle East? Shouldn't we be thinking about that? No In times like this the best thing you can do if you are a day trader operating in the market is to just Use the market generated information Where is price? How much time is it spending where it is? How much volume is it bringing in? Okay, because it doesn't matter what people's opinion is it doesn't matter if people think the stock market should go down If too many of them buy puts the market makers will hedge those puts and the market will go nowhere Right if they start covering guess what the market will do straight up So don't worry about the news Don't worry about macro stay focused on price time and volume That is what will give you an edge this week in the market Now like I said for the ES it's a little more bearish because of yesterday's range because of Friday's range I expect us to go sideways and then we'll see if we continue lower for the NQ. It's pretty neutral They could break either way So we will just have to wait and see what price does once that opening bell rings in about 15 minutes Any questions for me from the chat looks like we got 87 people hanging out. Please smash that thumbs up button. I sure would appreciate it. Good morning to will Cool bean says our makies NAP is here Debbie B. Good morning to you Cool bean says I like the triangles. I'm a simple man me too. I generally only like channels and trend lines in the ES But this is catching my eye touch after touch after touch So this this line right here at 51 69 that is working as support right now Tom gun. Good morning to you Fred in the house Fred says I'm presuming that Friday's sell-off was geopolitical. Does that play into your thinking at all? So again, I mean I kind of already answered that question, but why the market does what it does does not interest me. I Find the more effort I put into trying to explain why the market is doing what it's doing The more wrong I am right. So I just don't mess with that To me. What is important is what is the market doing? If geo politics was gonna take the market lower, why the heck is the overnight inventory completely net long? Right, what does that imply? Well, it implies that people are covering shorts from Friday All right people that were bearish at the close are getting out of those trades and speculators are speculating long They're thinking the market's gonna go up So why are they making those decisions? That doesn't bother me. I don't care. I just want to know what's happening Trevor good morning to you Jay in the house smash that like button. Yes, please Little thumbs up for the pirate never hurt anyone Costs you one click of your finger Percy in the house. Good morning to you. John is here. Hi y'all Ike what software do you use for the single prints? So the market profile software that I use that's the one you see on the left is called window trader Window trader window spelled without a W at the end gin. Hi to you David V in the house Cool bean says how about that corn? You must be talking about that big corn. I Always love how every time crypto has like a major bull run as soon as it starts to fall apart Everyone acts like it's the end of the world. I just think you're obviously new to crypto So the corn is balancing on a much longer time frame right now I Would pretty much just draw this like a straight-up good old-fashioned horizontal balance area The fact that they tested the low and turned around and headed higher instead of Continuing lower is bullish to see at least short term that the market could head back up it, you know towards like 72 73 thousand okay The thing to watch will be Friday's high. I'm sorry. I guess Saturday's high Yeah Saturday's high at 67 928 That is gonna be an area where the market might reverse That's halfway through the balance area So the market might get there and then shit the bed But the higher probability in my mind is that we're heading back up towards that upper end of balance Just like it did here Same thing On the bit corn now, where do you want to start to panic? Well, if you get back down below 62 if you get back down below the lower end of that balance area Well, then you're pulling back down to test, you know the 50s We're talking 54 to 50 So they got a hold it But it looks like they certainly can We got 11 minutes till market open hit me with your questions What do you want to know? I don't speak any Spanish. Sorry Hola, como estas? That's it. That's all I know Ross do you put more importance on a value area on the TPO or on volume profile? So what you're asking is is which is more important a value area based on time Which is what the TPO's are measuring or a value area that's based purely on volume and the answer is I don't have a good answer. I use time. It's just what I've always used but if you have, you know volume profile and it gives you a Value area based on volume it will look almost identical There was a while where I had both of them side by side and it's like they're very similar So I don't really think one's better than the other Just pick one and watch it every day and study how it moves and become a master of that The point of understanding value value essentially represents where a majority of the days trade took place Okay, so you could look at Thursday from last week as an example of this the value area Was completely engulfing the previous day's range So that tells us we don't want to be bullish or bearish. There's just complete uncertainty in the market Well, then what happens as a result with price? Well price pushes all the way up here and then pushes all the way down here. You know what I mean? So you didn't really want to be bullish or bearish in there You wanted to recognize that the the market had uncertainty and that it didn't know what comes next Well, that is not the case with Friday Thursday to Friday that value is definitely lower, which means the momentum has shifted to the downside So if they can keep that going that means lower highs Today they can keep that momentum going and they can take price lower as well and create lower lows but If the market can get above Friday's high Well, then it can change then short start to cover new full mobile buyers start to pile in and before you know it But we're right back up So that's why for now we're bearish, you know sort of bigger picture bearish Assuming the markets gonna go sideways inside yesterday's range and waiting to see what happens at these key levels For those of you just joining The first key area of support is gonna be between 51 87 and 97 Can't give you an exact level, but if the market can push down into that and then turn around and come back up It is bullish to try to test yesterday's high. Okay, if not more sideways Okay, and the important level to watch for the downside is 51 77 If the market breaks that they are likely heading much lower and the bulls will need to find buyers above. Yes above Friday's high 52 18 Nothing wrong with that opening bell rings with just watching this market go sideways for a little bit and waiting for some kind of certainty Our piece is how do you define a weak high or low? That is essentially where the market reverses in the same place that it did as a previous TPO So there was one here at the e-period from Friday, I deleted it because we're opening above it Now there was a couple of them. So the e-period high reversed exactly at the c-period high That made that e-period high weak it increased the odds that at some point the market was gonna come back up through it Okay, same thing with the f-period f-period high was weak because of the d-period high Same thing with the g-period it was weak because of the c-period low So the fact that we're gonna open above them means they're they're all already repaired the market has already passed through them If the market were to sell off and we were to open down here We'd mark them once again as important references It's important to remember that the market is like a monster. It's like a living breathing creature It's like a shark that can smell blood in the water. What is the blood the shark can smell? Liquidity right it can smell where the market will do business and any time the market reverses at an exact level like that There are short-term traders with stops right above it And so it will come back to chew up those stops like the shark that just smells that blood in the water So that increases the odds the market will pass back through that level again at some point in the future Ike says any coupon Any coupon coupon for what brother? You tell me what you want to discount on I'll get it for you Tom Gunn joking crypto winter now. I know the people freak out so fast. It's hilarious But I'm telling you bit corn is just balancing It's just spending the time it needs to spend to bring in the buyers To break the all-time highs Now do I know it's gonna head up to all-time highs from here? Of course not right? We could get another one of these where you get the bounce and it comes back down and then it starts to head higher We could easily get that But to me the fact that they're defending tells me they want to head up and test, you know 71 72 Find out what's good with you squeeze the weak hands bring the strong hands Change momentum and flip it like that Good morning to Grizzly Bowl Ken says when liquidity in book map above polls like it did at 1250 right there What do you take away from that? A lot of the liquidity most of the liquidity that you will see in the order book is not real buyers and sellers It is computers and they put liquidity at different levels to try to become a magnet for the market So it's not just traders like you and I that see that liquidity sitting in the order books It is also algorithms and there are algorithms that use the liquidity above the liquidity below How far away it is how much it is and they calculate people will be on a second-by-second basis? What to do as a result of that? Do they buy do they sell do they take profits? Whatever right? They use the liquidity in the order books to make those decisions So there's other bots be That are putting liquidity in and pulling it out and putting it in and pulling it out to try to Trick those other bots into going long and short and of course to trick traders as well so Generally speaking Unless it is a humongous note of liquidity I don't worry too much about that when it disappears if a very large note of liquidity disappears It should catch my attention because that will likely lead to a change in the market so let's say The market is working its way higher this morning and All the sudden all of this disappears out of nowhere poof. It's just gone Well, then the market is likely either gonna just boo shoot straight through or boo Crash right back down because something just changed and it's those changes in the market That give us an edge using book map. You can't ever know is it gonna get to the liquidity or not? I promise you that that's totally random You can never know whether that liquidity will fill and actually become orders in the order book I promise you it's totally random But what you can notice is When there is an abrupt change in the liquidity and an abrupt change in liquidity will bring a change in prices movements So that is the most important thing to watch out for You don't know what games they're playing, but you can see when they're playing those games But little you know little sections little yellow sections that pop up and disappear and pop up and disappear. It ain't no thing Like watch you can see right here. There was this yellow up here as The market was coming up as the market started to head down. What do they do? They disappeared it, right? But then the market started to come back up again. What do they do? They brought it right back again So they're trying to turn 52 20 into a magnet to pull price up there Will they really fill that liquidity? Probably not. It's probably just gonna spoof All right, the market is open. Let the chop begin Cuz it's a chop zone And they'll chop it up right out the gate. We have a very weak high Okay, that high is weak because they reversed Nearly at the overnight high and they have bad taper at that high So that increases the odds the market will come down find support and then come back up through that high Increasing the odds of chop Cuz it's a chop zone So the first potential support that's jumping out at me is around 5200 that is the base of some single prints from the overnight a Great place for the market to backfill and then reverse to the upside The next is this node right here around 95 that is the next potential support and then this node down here around 92 So first thing this morning if I'm expecting the market to go sideways I'm expecting it to chop. I know it's got to build up some momentum if they want to get to yesterday's high This is an area where I would expect those buyers to step in Let's see what happens So just a few moments ago. We were talking about the liquidity in the order books one tool that the bots use to decide whether they should go long or short is they look at the Actual orders sitting in the order books Another thing they watch are these iceberg orders. So the fact that there remains an iceberg at 51 90 Decreases the odds that the market will run away to the upside Unless it first gets down there and either tests that iceberg or in going sideways Above they just delete that iceberg and get rid of it. So as long as you see that iceberg at 51 90 You should assume they're not going to run away to the upside That even if they get to yesterday's high if that iceberg is still there They will likely look above and fail and come right back in because those day trading bots They won't want to run too far away from that liquidity waiting at 90. Good morning. Pavel Danny says do you ever take a trade at the open during the initial balance? Oh, no almost never Because if we're inside the previous day's range like we are today, I know the market's gonna go sideways But I don't know which way it's gonna go first when that opening bell rings Is it gonna go up and test the previous days high? Is it gonna go down and test the support from the overnight like which direction is it gonna go? I don't know. So how do I know whether to go long or short? All right, so now let's say I think it's time to go long or it's time to go short. I don't know exactly where the market is gonna reverse So I can't really get in with low-risk opportunities, right? Because there's unlimited risk the thing could keep going sideways It could make a big move and then turn around and come back up So the way that I trade I must first know which way the market's gonna go I must know at least by my own belief that it's gonna go up or down The second thing I need is a place to get long if I think it's gonna go up Or a place to get short if I think it's gonna go down with low-risk Meaning a place where I can get in and I'm risking the distance between my entry and my stop is significantly less than my potential reward So you don't often get those when you're opening inside the previous days range It just it doesn't happen that often now if the market were to push down to 5190 right now And I were to see something in that moment that were to convince me the market was finding support. I could go long Okay, because we left behind that weak high Up here at the high and because I see it as a chop zone if once we're down here I see a signal that the market is bullish I could get long risking very little to make potentially quite a bit coming back up through the weak high Okay, but I couldn't know that when the market opened I couldn't have known it's gonna make a weak high and I can't now know whether or not it's gonna find support down here so Patience is key when you open inside the previous days range and I just don't risk money when there's uncertainty Because at some point today there will be certainty at some point today The market will do something that will make me extremely confident I understand what it's doing and it will give me an opportunity to enter a trade with very little risk And so until that happens. I don't want to try to force trades. I don't want to try. Oh my god I have to be in a trade. Oh the market's moving. I got to be in a trade I don't want to be like that because then that creates biases in my mind that then clouds my ability to read the market So if when I see the market opens inside the previous days range I say to myself, I'm just gonna sit back relax and enjoy the show Then the market can speak to me The trades just come to me suddenly. I see the opportunity because I'm clear-minded I'm open to the market doing anything That's called being in the flow of the market and for me personally the way I trade it is absolutely essential for success Is that openness to anything being possible? Willie T. Good morning to you. Sergio says you think it's going for long I think it's going what I think it's going sideways for a long time. Yes I think we're probably gonna bounce around Inside yesterday's range. Maybe even all day today I'm talking all day But let's wait and see if they can crack 50 51 77 If they can get back down into these single prints from Friday, they can liquidate this market much lower If they can get above Friday's high and find some new buyers. They can get some short covering to take this market higher But until one of those two things happens. I think we're in for a sideways day And how long it'll go sideways, brother. Don't ask me. I got no crystal ball. Just got to wait and see Good morning, Phillip Jose says is it possible you could leave your charts open in the YouTube for the rest of the session? Unfortunately, it is not But I do do that for members of the brigade. You can see a link up at the top corner pirate traders.io forward slash join for just ten dollars a month. You can look at my charts And I will be leaving here at 10 a.m. To go hang out with members of the brigade Rideau says our iceberg orders always real. Yes, sir. So for an iceberg order to show up For you to be able to see it. It has to start filling So right now, for example, we have an iceberg at 51 90 There is only one iceberg there. That's what the little one means There's only one computer entering orders there, but the seven is seven actual contracts And so basically what the software is doing is it is recognizing when a single account? Okay, so one person or whatever, you know one account is entering an order Where they put just one contract in the order book, okay? The market comes down and the second that order fills and by second I mean fraction of a second. I mean computer seconds like Miller seconds It it puts another order in and then that fails them But it puts another order in and then that fails and it does that seven times So that is definitely an iceberg. There is definitely a computer at 51 90 that just keeps adding new orders again and again Now we have no idea how many orders it'll fill the market might come down there It'll fill an eighth contract and then it'll disappear or This person might pull that order Right that order that's currently sitting there. They may just say fuck it Let's turn this this off if if that happens. It'll disappear. Okay But as long as it's still there You me and everyone on earth knows there's liquidity waiting there and as I've said those day trading bots They tend not to run away to the upside if there is still liquidity waiting below They tend to find their way back to it So we may get to yesterday's high, but if that's still there it probably becomes a look above and fail Let's see what happens. Okay, the high remains weak Matt L says what is the tool you use on the left side? It is called market profile It's basically like a candlestick chart. It just instead of displaying the information Based purely on time and price. It includes volume Right, so it's just giving you a three-dimensional view of the market and of course, what's the difference Charles, can't I see all that in in Candlesticks, yes, technically if you took a candlestick chart You put it in 30 minute candles you put volume profile next to it you could see The market in 3d, but For example, when you look at the overnight last night when you look at this range What areas did the market spend the most time? You can kind of see it spend some time in here You can kind of see it spend some time in here But knowing the exact level where the market spent the most time is very hard to see Right, but if we look at it in the market profile boom We can see exactly where The market spent the most time And that often becomes support or resistance And I'll tell you guys right now. This looks very choppy to me I don't like the location of the low. It is a good low. It has good taper But I just don't like the fact that it came so close to testing this node down here from the overnight of time And it didn't get to it And we've got a weak high So when you've got weakness on both sides of the market it tends to keep going sideways Um rp says nq looks like it's falling hard. Let's take a look Real quick. No, sir nq is in balance So same exact thing this node right here That's acting as support. So for now it should keep going sideways as a matter of fact It should be able to poke back through the opening price Um If it comes back down through the a period low, I would look for a larger pullback down towards 18 to 30 But for now it should head back up through the opening price Because it's a chop zone and they're just chopping it up So they make you think That the market is dropping like a brick and then they reverse right back up through so they can chew up all your stops Thank you, sir. May I have another And then they do it on the way up. Oh, look, it's going to go higher. It's going to go higher and then Right back through to chew up all the buyer stops And they just chop it up um Marinal says How big is the liquidity of 51 90 and what does 71 mean? So again 71 just means one computer is trading there one account Sometimes it's multiple accounts. Sometimes you'll even see like 10 or 15 accounts trading at an exact level Um, that's a market maker But this is just one account is trading there and so far It filled seven contracts. We don't know how many might fill there It might be 700 like filled right here You know what I mean? It might be 600 like filled right here. It might be 1,300 like filled right there We don't know it might be eight But we just know that someone wants to get long down there And if this market is just a shark Smelling blood that is blood in the water Cool bean says pirates spend most of their time on the open sea waiting for a good opportunity to pillage Yes, sir. That was my original idea for calling it pirate traders to me. That's what being a trader is You're just sailing around looking at the horizon waiting for a ship to come along that you know, you could pillage The plunder and pillage. I mean that's what trading is just waiting and waiting and waiting for that opportunity And then when that opportunity comes You take action without hesitation or reservation You get in the trade once you decide to attack that other ship And steal their goods You gotta go Uh griff says do I ever use the overnight poc? Not exactly It is a level that my eyes will notice as a matter of fact if you're looking right now Where did I put the support level the furthest down support right at that overnight poc now? Did I do it purely because it's the overnight poc? No, of course not right There's three reasons why that was interesting to me First off it was a node where the market spent a little bit of extra time on uh Friday It was a node where the market spent a little bit of extra time On the overnight throughout the weekend And it was the poc Okay, so because of all three of those things in combination that is an interesting level to me for potential support So I would never use the overnight poc by itself to mean anything But if it's got You know confluence with other levels of interest. Well, then I will notice It is also important to recognize how prominent that poc is So this one was 13 letters across that's pretty prominent So they spent a lot of time in this area if there were buyers here Right, that's how we got up to this price. There were buyers there. Well, probably they'll be buyers there again Christopher regards from australia Good on ya Rk just ten dollars You waste that every day on beans and sugar Wait, how much beans do you eat? Oh, you're talking about coffee. Oh, I get it. I get it. Sorry Yeah, you pay ten dollars to join the brigade and then every single morning I give you my insights about the market Surely throughout the period of an entire month. I'll say one single thing That will help you to either Get in a trade where you win ten dollars or stop you from getting in a trade where you might lose ten dollars And then it's paid for itself and the singing is free at that point So just food for thought Danny says ticks still positive Yeah, ticks are not really that reliable in a chop zone Right We got to give the market some time here There are traders from friday that are short that need to cover those shorts There are traders from the overnight that are long that need to take profits on those longs There are speculators this morning that think the market's going to go lower that need to get short There are speculators this morning that think the market is going to reverse and head to the upside that need to get long So best we just give them all time to chop around Get in their bets and then we wait and see which way it breaks So don't worry about the internals just yet They're going to send lots of mixed messages as there's lots of people that need to change their positioning this morning But if we can get above the overnight high we can look to test the previous day's high If we can get above the previous day's high we can look for support there if we get it we get bullish Same thing if we get below the chop zone low Right just take it one step at a time Plenty of money to be made today. You don't have to make it in the first 30 minutes Just the way I do it. That's just the way I do it I know there are scalpers that love this type of market It's just not for me TNK says is the mic off. I sure hope not This would be a very boring stream if the mic had been off the whole time um Org spy says the chart on the left is part of book map. No, sir. Just the chart on the right is book map The chart on the left is market profile Also known as tpo charts Brian says can you elaborate some on exactly what you mean by weak high? I already went over that this morning But the long and the short of it is it is a level the market needs to revisit Okay Because the market reversed so quickly this morning So close to the overnight high It tells me there's a lot of shorts. I'm sorry a lot of stops up there people who went short Right, where did they put their stop? Up there above the high And so as we've been talking about the market is a shark that can smell the blood It knows there's blood up there waiting It knows that if it can just poke above the overnight high it can take out all the sellers so far this morning And you'll see when it happens You'll see there'll be a big red dot up here And the market will make a little noise on the market pole so And we'll chew up those stops and then once we chew up those stops one of two things will happen Right either We pop up there We chew up those stops and then new buyers step in and we continue up for yesterday's high Or those stops get taken out and then comes right back down Right So I believe that is the case both at the high right now and the low I think there's there stops waiting on both sides And if this shark wants to eat all he can eat He's going to head up and take out those stops and then head down and take out those stops And then do it again and again and again and again and again again So if you have the stops indicator In book map it can show you where a single Person a single account gets taken out for a lot of stops Okay, and so we're just I have my settings set up so that we only see the larger accounts But we can just see That they took out 900 sellers this morning when they poked higher in the overnight Okay Then they got everybody long Right, and then they came back down and they took out this is just one account got taken out for 166 stops when they came back down And then they got everyone short at the lows in the a period here. They came back up They took out another contract for 200 stops Right, then they poked up towards the high They passed through the opening price and they took out another per another long for 52 stops Now these are just single accounts getting taken out You better believe that there are thousands of accounts getting stopped out over and over and over again They're just small accounts that we don't pay attention to But they're there brother And as long as these short-term traders keep betting the market's going to go up and keep betting the market's going To go down and keep putting their stops in places that are easy to just swoop back and take out That is what the market will do And that is why we call it a chop zone Because the market will chop it up Cool bean says so book map just needs to add market profile charts and we're good to go Listen if the fine people from book map are listening. I think it's an excellent idea Add some tpo's I think if you could combine tpo's with uh The heat map it would be a powerful powerful tool They'd have to redesign it though because the way that book map is organized It's based on how you're zoomed in and zoomed out as to what time frame you're looking at So like right now it would be the equivalent of looking at like You know hourly candles and then like right now we can be looking at like fraction of a second candles Right, but for tpo's to work time has to be exact Because that's what we're measuring is time So it would it would take a bit of a redesign, but if they could combine market profile with heat map Dude That would be dope Rito says would you share the one and only holy grail with us? Um, I'm not sure if I know what you're asking if you've taken one of my courses I teach the holy grail of trading as the conceptual idea of waiting for trades to come to you Right, so rather than you know just sticking limit order in at different levels and hoping that when the market gets there It's going to flip in reverse or whatever You instead just sit and watch the market and ask yourself two questions What is the market trying to do? And how good of a job is it doing of that? If you can answer both questions Right, you will understand what the market is doing And you know, it's doing a good job of it. It's going to keep doing that thing. So say it's trending higher It's going to keep trending say it's wrong. Excuse me. It's rotating sideways. It's going to keep rotating, right? Once you can answer both those questions Then you look for trades and you will have a significantly better win rate The problem with so many traders Is they just want to take a trade all day every day. They just want to be in a trade And then they're wrong all the time and they lose more money than they make If you can just be patient Ask yourself the question. What is the market doing and how good of a job is it doing of it? You will be in way fewer trades. You will spend most of your time sitting on your hands But the trades that you get into will have a much higher win rate And that's the holy grail, baby patience Pays individence I'll try to pile through these questions Rapid fire before we leave for the day NAP says I've been waiting for the opportunity to ask about the origins of pirate traders. Oh, yeah, because I told that story Tib says, what's your win rate? It would embarrass you to know. No, I'm just kidding. I generally do about 50 to 70% win rate You know, so my trick to success is not that I'm always right It is that I'm right more than I'm wrong and that I risk significantly less than my rewards when I am right So if I get taken out of a trade, I may just lose a couple of points But if I stay in it, I'll make 10 points or 20 points or 30 points And then I can lose on the next 10 trades and it's fine Right, so it's not about how often I win It's about the fact that when I win I win more than when I lose This is the way Truman says do overnight single prints Need backfilling like like regular trading hours single prints do no, they don't they don't need backfilling To me these ones right here, you know heading back down to 5200 feel like they need to be backfilled, but that's there's nothing certain in that It's much less probable than regular trading hours And it does have good taper on the low So if the market were to work its way above the overnight high and find new buyers And get above yesterday's high and find new buyers. I would not care about that anymore But to me now it is still a magnet Philip says indeed I make my money in the first hour. Yes, some people they love this type of chop You know, there's scalpers that are just looking for a couple points at a time For me, I can't trade in this type of zone because it'll just drive me nuts Oh my god, where do I get in? Where do I get out? Where do I put my stop? You got to think so fast again and again trade trade trade trade trade And then by the time the first hour is done, my brain is exhausted You know what I mean? And then I got nothing left for the rest of the day when the market makes a 30 point move So for me, I'd rather just chill And wait for that bigger move to present itself Cool beans says I should get a green screen in the background replace it with a pirate ship And then wear an eyepatch I'll do it once I'll do it one time just for fun Uh, Trevor says do I have an average stop? No, so my stops are always based on price Sometimes I might see an opportunity to get long where I have to risk 10 points Sometimes I might see an opportunity to get long where I could risk a point It all depends on the volatility of the day and the opportunity that the market gives me The point is I just have to answer these questions Do I know what the market's doing? Am I confident that I'm right? And can I get in where I'm risking less than my potential reward? So if I'm risking one point to make 10 points, that's an asymmetric trade If I'm risking 10 points to make 50 points, that's an asymmetric trade So it's just about the opportunity and I can't guarantee the market's going to give me the exact same opportunity every day I got to take whatever the market gives me And it differs depending on the volatility that particular day Tricky, I know but it's just what works for me Uh, wick wick tour says what's your edge on the market? My edge on the market is my brain parts The stuff between my ears Right, it's experience I have sat and stared at this chart for years and years and years. I know how it moves So there are times where I'm able to predict what will come next I'm also able to know right away if I'm wrong If what I think should happen doesn't happen. Well, then I know the opposite is happening Let me give you an example Let's say this morning the market were to come down here And it were to be finding some support inside this node as I suspect it will and it were to start coming back up But it couldn't pass back through the opening price Say it gets smacked down again Well, then I know this isn't good support. It's not really going to keep heading higher for the rest of the day So if I were to choose to get long, I'd choose to move my stop above my entry, right? But let's say it doesn't do that. Let's say it comes back up and it passes through the opening price Well, then I know the momentum is likely to continue the rest of the day And not only can I now move my stop above my entry to take off the risk. I can add to it I can look for the next support Maybe at the opening price for the next trade to get even longer And then if it were That I got into two contracts there So the market comes down I get long one contract goes back up pass through the opening price and move my stop above my entry I add a second contract up here and then it were to get to yesterday's high And it were to get new buying up there. Guess what I could do Move both stops above and add another contract and just ride that trade as far as I can With little to no risk Right, but what if instead it gets up there and it starts to fail and it starts to pull back in Well, then I know I don't want to move my stop up too quick I've already guaranteed my winnings here And so I just wait and see what happens and if that first stop gets taken out Move it up a little more Lock in those gains because a look above and fail Of the previous day's range will likely bring me all the way back down through my original entry So I just play the probabilities in my mind of understanding what the market is doing And what is likely to come next and knowing based on those things How do I personally trade at the best? Everyone's got to find their own way to enter trades a way that's right for you And then you just have to practice doing that one thing again and again and again and get very very good at it Okay, so there is that set of singles from the overnight back filled potential bounce here Nope liquidating the buyers. So next potential support is going to be 51 95. Nope liquidate the buyers You see these big red dots That's everyone that's been going along getting squeezed Okay, so now we're down to the third potential support And we will find out what happens with this iceberg at 51 90 Does it fill? Does it disappear? Does it getting filled reverse the market back up? Let's see what happens Wiktor says if I join the pirate traders, can I talk to you for a few minutes? Wiktor you can talk to me all day In the chat Or email me if you want to jump on a call All right, it seems like we got through all the questions rp says news. Nope liquidation, right? Everybody that's been going long Just got squeezed They were all putting their stops right below that a period low And then look what happened as soon as it passed through there Took them all out Okay, there's your test of the iceberg They canceled it Oh, no, it only had 66 contracts. Okay, so here's where things get interesting at this point Either the market reverses and heads back up for the iceberg at 52 10 Okay, in which case the chop continues or we start to get new sellers here New sellers would be bearish for continuation lower Now is the time to watch the ticks I would also say the size of this liquidation tells me that we are still in highly volatile times Expect large ranges There you go ticks. We got some new selling below the low So now we we are a little more bearish on the day Couldn't hold the upper end of yesterday's range So that increases the odds That if the market pokes down below 77 now This market is going to continue lower today So I would say this moment right here is the last chance for the bulls to reverse it We want to see those ticks turn around and come back up towards the zero But this just tells us the fact that we were in a very tight range And then we liquidated and got such a huge move It means what's been happening from last week is going to continue today. We're going to have very large ranges So we must adjust our thinking To understand that these are going to be large ranges Yeah, that whole move was just taking out stops So the thing about a liquidation break is It often actually strengthens a market Okay, you squeeze all the weak hands And then you give stronger hands an opportunity to buy in at a lower price If those stronger hands buy in right now and the market is able to work its way back up above 96 They will have no reason To get out of that trade no reason to take profits until we get at least to the overnight high Maybe even yesterday's high But if we get new selling now, so a liquidation break plus new selling Well, that is bearish for continuation lower Because you squeezed all the weak hand buyers and you couldn't bring in new buyers And if you can't bring in the buyers here, you got to take the market to a lower price to bring them in there At this point half back Which is this little white line that you see right here Around uh 51 96 is the next level of interest for me If the market retraces to the half back does that become resistance? If it becomes resistance that will increase the odds. They're taking the market lower If not more chop more sideways But Charles I feel super bearish the market moved down so fast don't forget liquidation breaks strengthen a market increasing the odds of the retrace And we still have this iceberg Right up here at 52 10 So we say to ourselves If the iceberg that was sitting there all morning long at the lows All right, this iceberg was sitting here all morning long if we said to ourselves it's probably going to come test that Before it makes any big move to the upside. We should be thinking the same thing About the iceberg above before it makes any big move to the downside Okay This is still just chop inside yesterday's range. Okay, here we go. We're about to test the half back And we will look for resistance there That will be an area if new sellers are going to pile on it should be here at 96 We also noticed that the ticks have returned to the zero line An excellent place for new sellers to pile on if they want to keep the momentum going lower Man, I feel bad because I'm eating into Bruce's time Here on the live stream. I got to switch over to the brigade stream. This is a pivotal moment right here Can the market get resistance at 51 96? If so look for another move down to the low and monitor for continuation lower from there If the market passes back up through 96 Then you're going to look for more sideways inside yesterday's range Okay This is still chop And as of now this liquidation break is being bought up those new sellers haven't piled on yet so Not a great time to end the stream Very little advice I can give carrying forward All right, that is some new selling that is bearish to see Let's take a look at the nq. Oh, yeah, just straight up chop Yeah, so for the nq if they get new selling below 18 to 67 that is bearish for continuation lower And for the es it is 51 96 So I would say it is still a chop zone It is still going to go sideways But the probability in my mind now is slightly larger that we're going to test the lows With that I must say goodbye If you're a member of the brigade head on over to the private stream If you're not head on over to watch bruce's stream right here on the book map channel Thank you guys very much, and we will see you next week Bye