 Good morning traders welcome welcome one welcome all to the bookmap channel My name is Charles I run a YouTube channel called pirate traders were a community of traders who trade the ES The NQ and we look at the market through what's called a two-way auction process So that's what I'm going to talk about here this morning How the ES and the NQ move through that two-way auction process to give us some kind of clue as to how to trade it intraday, okay? So last week we talked about earlier on in the week the market was pegged around the 4400 level My guess as to that was that the options market earlier on in the week back up in here The options market put on a lot of hedges a lot of puts were bought And so the market was pinned waiting for Friday's options expiry to come along and You know unpin the market well somebody asked me they said what happens if just so many people Go long or short can they break that pin? Can they is it possible to get away from the market being stuck at a certain level and the answer is yes? It turns out war in the Middle East is all it takes to finally break out of that pin So Thursday and Friday. We started to make a move lower. That was very bearish Okay, then we had Friday's trade Which then brought in the the end of all those options So we are now in what jam croissant would call The window of weakness for the options market, which basically just means there's a whole lot less Stuff baked in right there's a lot less Hedges there's a lot less Market makers hedging against options that they've sold and so on and so forth. So there's just less leveraged and there's less Like bracketing pots in the market to kind of keep it in one place so the longest short of it folks the markets free. It's free It's free as a bird it can go anywhere at once it can do anything at once we can get a massive move So for that reason, I don't assume today is just going to be a slow grindy sideways day I do assume the market is either going to continue the excess to the downside This will just be the beginning of the momentum or We'll turn around and try to backfill some of the weakness that we left behind on the move down yesterday so likely today the market is either heading up for the weak references at 4270 and then to backfill the base of the single prints around 42 87 and we would monitor for continuation higher from there or they are likely heading back down to the overnight low at 42 we'll call it 42 15 and Potentially monitoring for for continuation lower from there, right if they get down to that overnight low and they get new selling man They could really take the market much lower So I do believe we're going to get some kind of momentum today, but I don't think we know what that momentum is yet I think the fact that everyone on Twitter is convinced that the market is going to drop You know a hundred points today is exactly the reason why it won't So I will be looking at this morning the same way I look at any other gap down I will be asking myself the question what happens at the market open The first order of business for the market is going to be to try to get back up to yesterday's low at 42 47 Okay, so that attempt to fill the gap is the first thing that I'm watching for If the market cannot fill the gap if it doesn't even try if it just immediately starts going lower Or if it tries to fill the gap, but it can't it gets smack back down lower Either of those scenarios would be the most bearish to me Also, if the market was able to fill the gap But then it was not able to spend very much time inside of yesterday's range So for example, it moves up to 42 48 pokes into yesterday's range spends just a few minutes in here and then it dips back below again That would also be a gap and go to me which would be bearish for further downside continuation Okay, only if the market pulled back up inside yesterday's range, so they filled the gap they got back up into yesterday's range and they spent time and they brought in volume if they were able to do that I would look for the market to head up and test the overnight high So spending time bringing in volume inside of yesterday's range increases the odds of a test of the overnight high if They get to the overnight high we look for support there for continuation higher or a look above and fail to come right back down So the market could make a big move today and if that move is going to be to the upside It will be very easy to see because first they'll fill the gap Then they'll spend time inside yesterday's range Then they'll push above the overnight high and they'll spend time above the overnight high That is signal after signal after signal after signal After signal telling you the market is not going to continue going lower It's gonna turn around and start back filling some of the weakness we left behind Right lots and lots of chances for the market to tell you hey, we're not as bearish as we look So pay attention to those signals, right if the market gets above that overnight high And if find support it is looking to head back up and start back filling the weakness Okay Now let's say instead the market opens and it immediately starts to trade lower Let's say we straight up get a gap and go the market opens. It pushes down To me this wouldn't be something I'd want to trade Generally speaking a gap and go would instantly get me bearish for continuation lower So if I saw the market open and it couldn't get back up there and fill that gap I'd almost always be short to uh to test that overnight low looking to take profits down there Today, I will not be just to be cautious Okay, so for me to truly be bearish that the market is going to head lower today I'm going to need to see new selling at that overnight low Otherwise what I am more afraid of is the highest probability The most likely thing to happen is gap and chop Which means we'll basically probably spend the first few hours today just grinding around inside this range Below yesterday's low But above the overnight low And that gap and chop scenario to me is the most likely of all So I'm not going to get super bearish right away if we don't Fill the gap because we may just need to chop for a while before we do But if we fill the gap then there's instantly something to do Can we stay in yesterday's range or do we fail? Okay Good morning to ebb and flow welcome Top gun is here The book map says good morning charles and pirates. Good morning book map Madge good morning to you Trading for a living is here. Good to see you David g in the house j is here. He says thank god. It's monday and the casino is open. I agree Allios Good morning to you. Welcome Gino and jack good to see you All right, so let's take a moment right now and we will zoom out And we will do our top down jim dalton's top down approach To give us some perspective on the market We're going to start looking at the monthly charts And see if this recent change in market behavior has brought in any clear changes on the monthly chart Okay, so What are we seeing on the monthly chart? Well first things first we have momentum Down on the monthly chart Okay, we have three candlesticks in a row that have lower highs and lower lows We also are building a bit of a channel in terms of the shape Of the move so that is bearish to see that is a sign of momentum down But we are also pushing in as we have been pushing into previous support So we could get a bounce here So on the monthly i'm paying attention to a channel low Probably somewhere around 4200 for a bounce On the monthly. All right, let's go to the weekly So on the weekly what stands out to me is that Same as with the monthly we have momentum clearly to the downside Okay Last couple weeks have been balancing We have now broken out of that balance to the downside So that tells me if we do get a gap and go this morning if the market opens It stays below yesterday's low and it continues lower from there That is extremely bearish to see as balance Often leads to excess So if we are breaking out of balance on the weekly time frame That could lead to excess on the weekly time frame to the downside That would be bearish to see In the same way though that same thing must be thought about if we don't so If the market pulls back up Into friday's range And it starts to spend time and it starts to bring in volume there It's exactly the opposite signal. It's very bullish that the market is going to head back up Towards that opposite end of balance once again So on the weekly time frame the gap this morning is very important Do we get a gap and go continuation lower or do we pull back up into yesterday's range? And then head up and start to retrace the excess to the downside The weakness that needs to be backfilled And then let's zoom in and take a look at the daily The daily to me is telling me the story that we have re-entered this previous balance area That we literally spent like two freaking months in You guys will recall April and may of last year That was quite a vicious balance area And so that increases the odds that the market is heading down to test the lows From that balance area Downed at around 4200 as well So looking at the monthly the weekly and the daily all of them are telling me the market has momentum down And that before it's ready to reverse it likely needs to test 4200 With the exception of the weekly which if we got back into yesterday's range, we could get bullish Another thing that jumps out at me right away looking at the daily chart right here Is that the market does not often have more than a few days of excess in any one direction It often needs to balance off that excess Sooner or later So you might see a move here where you have like two days to the upside and then four or five days of balance before another one two three four five days to the upside and then Six days of balance balancing that off with price Okay, then another four days five days to the upside Another four days of a pullback This was a good long push quite a push Which lasted one two three four five six seven eight nine days And then led to two four six eight nine ten days of balance to the side And so on and so forth you can see the way that this this works when you have a big move of excess on the day time frame Where the market is moving very very hard in one direction Afterward you get balance You get some kind of balance And there's two ways to balance off price one One is to pull back with price Repairing the weakness the other is just to go sideways at lower prices Okay, so while we have you know five days of momentum down last week We know that momentum is likely coming to an end soon. They will likely need to balance that off Because we're inside of a previous balance area That increases the odds they will do so using time Not price So all of the things that I just described in combination make me feel neutral to bearish today The only thing that changes my mind intraday is support inside yesterday's range And then support above the overnight high Otherwise, I remain neutral to bearish assuming the market just wants to get smacked down And continue down to 4200. Let's jump over and take a look at the nq So it's pretty much the same read on the nq, but for slightly different reasons For one thing the nq had already entered that previous balance Last week and they worked their way to that balance area low On friday They then spent a lot of time and brought in a lot of volume during the overnight over the weekend Inside that previous balance area So it's the same exact thing for the es and the nq If the nq Fills its gap gets up to friday's low Around 146 50 Okay, if it gets up to friday's low and it gets rejected It's a gap and go and that is bearish to see and we look to test the overnight low at 14 5 Call it 30 14 5 30 Okay But if we push up into yesterday's range and we stay inside yesterday's range Then I would look to test that overnight high If you can stay above that overnight high. Well, then guess what just happened a look below and fail of a previous balance area low Increasing the odds you're heading to the previous balance area high Okay, and you got tons of weakness that needs repair. You get a weak high. You got single prints so Both markets basically have a potential to make a big move today either a continuation lower Or a pull back up to backfill some of the weakness left behind And both markets the gap will tell the tale whether we fill the gap and then what happens when we do Actually a pretty simple morning for a day trader Although I suspect it will be an emotional one Any questions from the chat? We got 10 whole minutes till the market opens Let me know if you have any questions Good morning to Rui past 29 10 And bust a move welcome bronther Says what are those 19 k and 2 k? Indicating at the bottom of book map It's a great question I assume you're talking about these numbers down here At the bottom of the screen So basically what that is showing us is the liquidity that is above and below price So over here the column on the right That's the current order book right there And so the 17 000 that you see up here That is the number of short contracts that are above price that are waiting to get filled And 1300 is the number of long contracts below price waiting to get filled And this is the divergence between the two So the fact that it's red just tells us that there's 4000 more Contracts to go short then go long In the current order book And then over here, it's the same thing Only it's whatever section of the chart you have Filled in here. So watch i'll just zoom in a little bit And you'll see those numbers start to change Because less and less contracts traded right here as traded in, you know, that whole space So it's just showing you whatever is currently visible Good morning Percy Courtman in the house Courtman says what's the impact of the 10 year yields? Well, that's just not my forte Whatever is going to happen based on the 10 year yields. I'll see it in the s and p 500 So here's my question Does the market fill the gap? If the market fills the gap Does it stay inside yesterday's range or does it bounce off? If it stays inside yesterday's range, can it test the overnight high? If it tests the overnight high, can it find new buyers? The reason why won't matter to me It's just is it a gap and go or is it a gap fill and what comes next? And that's not me saying that there isn't wisdom to be found in studying the 10 year The point is just it's not something I personally look at Pass says low of the day was taken in european session. So is not strong Do you mean the low from friday or do you mean the overnight low was made in the european session? Um, I would agree with you that the overnight low is not strong if we head down there. We're likely going much much further We have a lot of momentum Like I said, I don't think we're gonna go straight down I don't think we're gonna open and immediately go to the overnight low and immediately sell lower I suspect we're gonna get some gap and chop here first But yeah, I would consider consider there to be a lot of momentum To the downside And what does that mean when I say that well the buyers down here They're not gonna they're not strong hands if the market starts coming down for it. They will all get squeezed Brave as they may be brave as they may be Monta says Can you see what is prep buying and what is spot buying on the same screen? Yes, so The Liquidity that you see in the order book. Okay, so that's again this column over here on the left Okay This liquidity that you see those are the orders that are waiting to fill Okay So you can see I mean if you want to I don't have it set up to show But you can see the exact number of contracts that are there. Um, I don't care. I just go by size That's the only thing that matters to me. Um, the the dark how dark the color is I'm purely visual, but you could look at the exact number that's there Anyway, the point is you've got a certain number of contracts that are above and below price Those are in the order book right now waiting to fill What book map lets you do is book map lets you see how the market interacts with those orders when it gets there Right, so let's say the market pushes back up. We know we've got an iceberg waiting at 42 37 50 So what happens with that iceberg? Does it fill or does it just disappear? Does it fill a lot of contracts? Does this person get short hundreds of contracts or do they just get short 25? Right, there's information in that. So let's say it keeps going and it heads up to this note around 42 40 Okay, well then we can ask the same question. There's a lot of contracts to go short up here What happens when price gets there? Do they fill? Do those people actually get short or do they spoof? Do they instantly disappear? so Being able to see what's in the current order book And then compare it to what happens when price interacts with it is very important information So here's an example just looking at this morning Where you had tons of liquidity sitting here at 42 36 Okay tons of liquidity Price comes up to it. What happens it disappears. We can zoom right in so you can see Do you see that it's sitting there? They're trying to get to it trying to get to it They lower it down trying to get to it trying to get to it trying to get to it. Boom finally They get to it Right there and what happens to all that liquidity? Whoosh, it just disappears right So that tells us That these weren't real sellers waiting to go short right here They were just trying to pull the price up. They just wanted to get it up to here first They weren't looking to get short there so If I was feeling bearish If I was watching the market in here And I'm feeling bearish. I'm thinking we're going much lower and I'm looking for resistance to sell I'm watching that note and when that note fills I'm like, oh fuck. I gotta sell. Here we go But when it spoofs I go, okay, they're not trying to push the market lower the market's going nowhere This was just a magnet to pull the price back up And then they disappeared it it was fake So that's basically what I do with book map all day every day is just compare the liquidity in the order book to what actually trades when the market gets there one minute To market open never mind one second to market open. All right So we have a gap down That is bearish to see The first order of business for the market is to try to fill the gap to try to get back up to 42 47 If they are not able to The first thing we assume is that they're going to just go sideways for a while down here in the lower end of the overnight range And that that would be bearish for the market to break lower later in the day as a gap and go If they get to yesterday's low, we see what happens next. Do they reject off of there or do they stay inside yesterday's range? Both markets It's a gap, baby Okay, so as of now we tried to fill the gap And pass back through the opening price So this is technically a gap and go But as I clarified, I don't suspect we're going to get a big huge move first thing in the morning I suspect we're going to chop inside a range here for a bit first So that gap and go first thing is bearish to see It does make me feel more bearish like the probability that the market will go lower today is higher Than the probability that it will go up But I do think we got to go sideways for a while first So I'm looking for support between 42 26 and 42 22 To pass right back through that opening price again and then try to fill the gap So another way to explain that is on a shorter term time frame I think we're going to find support and push back up But on a longer time frame, I think we're going to get smacked right back through Once we get resistance at the gap fill got one of those funky icebergs We hate these It's like a glitch in the matrix. It just follows price just hovers above it All right, no support at 26. I'm now looking for support at 22 for a bounce To head back up through that opening price If not, then it's bearish to head down and test the overnight low All right, no bounce at 22 So that tells us we are likely heading down to 42 15 to test that overnight low And look for new sellers there So that will be a look below type of level where once the market pushes down there There's going to be stops For people that are going along right now The stops are going to be down there. So you'll get a little pop a little bit of a liquidation And then what happens afterward gives you a signal of what comes next So do we just look below that overnight low and then fail and pull right back up? Or do we look below and get new selling down there new selling down there bearish for continuation lower A look below and fail is still bearish as long as it's below the opening price As at this point as long as we're below the opening price. This is a gap in go, which is bearish only if we can pass back through the opening price at 42 32 only if we get back through there can it can we go back to a gap fill So until then the bears are in charge and we're just trying to see how far They can push it first stop overnight low Okay, so here's the test of the overnight low So once again the question now becomes Does the market get new selling down here? Or do we just pull right back up into that overnight range? New selling is bearish for continuation lower Pulling back up in for chop sideways Wow, both markets completely in sync with each other and q testing the overnight low at the same time so both Markets did a look below and fail of the overnight low Meaning they didn't immediately bring in new sellers. They pulled back up into that overnight range So that tells us we likely need to go sideways a little bit here to bring in more sellers But the momentum is clearly to the downside So both markets as long as they are below the opening price They are bearish and just looking for new sellers to come smack the market down May have to go sideways a bit first though Ruiz says, how do you use iceberg and stop loss indicators on book map? Do you use them to enter or exit positions? Do you look for both indicators? Um, so I don't have any parameters that I use for entering and exiting positions in an exact way It's just not how I approach markets. It's not that I think there's anything wrong with that It's just not how I do it Um, so for example, I would never say You know If there's an iceberg above price I always go long to head up and fill that iceberg or something like that Like I never know I never ever do anything like that every single signal that I get from the market Um Which is basically all the indicators that I look at right those are signals from the market They all just give me an understanding Of what the market is doing, right? They they tell me do I know what's going on right now or not, right? How how good of an understanding do I have? When I feel I have a good understanding The only thing I need to buy or sell the market is support or resistance So if I am bearish and I think the market is going to go lower All I need to see is resistance to get short. That's it. Like if I think the market's going down I don't need anything special to convince me to get short. I just get short Where the skill of trading is for me for my style Is in not participating when I don't know It's in only ever taking trades when I'm absolutely certain And it turns out I don't need exact parameters If that's the criteria. Okay, so they just deleted that bot that stupid bracketing bot that was stuck above price So whatever that was is gone We are now testing the opening price So if they're able to pass back through the and there they go Then they're heading back up for a gap fill Man Gonna be one of those mornings Okay, so this means it's still bearish But it does mean the market is likely to try to fill the gap once again up to 42 47 And we're gonna get some gap and chop So again on a daily time frame, I am still bearish The momentum is still to the downside But intraday we need to pull back and try to fill the gap And look for sellers So then the question was how do I use icebergs? How do I use stops and icebergs the indicator? Okay um Well, basically when I see an iceberg It tells me two things Right, it tells me first off the market is likely to visit that level again And it tells me who are the participants at that level So if it's a random level, I'm going to assume those participants are Bigger traders who are looking to accumulate a position and they're getting in using the iceberg to slowly accumulate that size But if I see that iceberg at an exact level, so for example the iceberg that's circled right here That's exactly at our high today Right, so we have a low volume high And the iceberg is what's smacked it down So that Significantly increases the odds that we'll want to test it But it isn't bullish, right because likely as soon as they get up there This will fill and push the market right back down I can also use icebergs to recognize like bigger picture Who are the participants doing business today if there's tons of icebergs everywhere Both sides of the market. Well, I know it's just bots playing games fucking with the market But if not, if you just see one kind of random iceberg here and there like we are this morning That's real business. That's real sellers doing real business So these all just give you a clue Got some bot shenanigans here So these bots obviously grinding right here trying to fool a lot of people Get some liquidity above price. Take it out. Get some liquidity below price. Take it out Increasing the odds of more chop in my opinion Chop and broccoli There we go Deborah says, how do you identify bot shenanigans? Um Rewind about five minutes and you can see it So the market made its move up to here fairly Clean, you know what I mean look below and fail of the overnight low Market sort of just drifted its way up and then out of nowhere that bot disappeared That that had an iceberg above price the whole time and as soon as it did They caused this big stop run right here that green dot is sellers getting squeezed Okay, more sellers got squeezed boop boop. We passed back through the opening price From that moment till now Nothing but bot shenanigans So just go back and replay and watch what happens watch how many icebergs suddenly pop up on both sides Iceberg long iceberg short iceberg long iceberg short And we know why they do that. They're grinding and grinding here to get you long get you short get you long get you short So they can come back for your stops All right, we got some resistance here around 43 Looking for the market to pull back down to the opening price once again But the shenanigans continue Why says I'm new. What is the software? Welcome. Why happy to have you Um, what is the software the software on the left is called window trader that is market profile software That allows you to look at the market's information in three dimensions So whereas a candlestick just shows you price over time the Market profile chart shows you price and volume over time So it gives you a three-dimensional view of the market And then the one over here on the right that is the book map. So that is what I used to see the liquidity in the market that is the Colors the bars you see over here on the right. That's the liquidity that's in the current order book And then over here on the left. That's what traded at that particular moment Okay, so now as we get some resistance around 43 We're back to looking at the opening price around 32 If they can find support above there, they'll head back up to try to fill the gap once again If they pass back through the opening price again It is bearish as a gap and go once again. And we're heading for the overnight low Oh the tug of war In a gap and chop Why this person shared the correct link it's bookmap.com Gino says this is feeling like a bear trap. I agree As I've said on the day time frame I remain bearish as long as we are below that opening I'm sorry that overnight high so I do suspect that this move to the upside is just to bring in sellers for the next move to the downside But that's the way it works. Sometimes the market has to rally before it can break So as of now as we're printing the b period here We have created a poor high So that increases the odds that the market will first push away from the poor high Heading down towards the opening price But then wherever it finds support it will come back and repair that high passing back through That increases the odds in my mind that we want to fill that gap today for sure because the Repair of the poor high would be back up in the gap fill But I'm not bullish beyond that not unless we spend time inside yesterday's range. The high is still poor So I got to leave. I got to say goodbye. I got to say farewell. I don't want to but I gots to my time has come It's time to head on over to the private stream for the brigade members If you've been enjoying what you've been seeing thus far You might consider joining the brigade It's $10 a month and you get to hear me live stream for the first hour of trade every single day As far as what I will leave you with here today my predictions of what's to happen. What's to come So first and foremost On the day time frame. So throughout the rest of today. I believe the market will either go sideways Or lower Okay, I am bearish on the day today As a continuation of the momentum that we have had on the day time frame I think we need to test the area around 4200 Looking for support in there Once we get in there. I suspect we start going sideways on the day time frame For a while and just bounce around in a range down here I believe that is a more likely outcome than pulling back up with price Although both are possible The balance with time seems more likely to me Because we re-entered an old balance area From back in may Okay, so the market makes this big move back down into balance We're then asking ourselves is it just going to rotate sideways Inside the balance area or does it need to pull back up with price? I'm saying I think the second scenario is more likely down here Okay, however I don't think the market is going to keep going straight down forever I do think we need to balance off this excess I think today will be the last day of excess and we'll need to start going sideways or pulling back up soon Okay, so as far as how I'm going to trade this morning I will only be looking for short trades In between the gap fill 42 47 and this node of resistance right here Around 42 58. I will only be looking for shorts for continuation lower If the market starts to spend a lot of time in here And starts to bring in a lot of volume inside yesterday's range. I will know I am wrong I should no longer be bearish At that point I will assume that we will likely work our way through the resistance and test that overnight high Okay, now again right now at this moment. I don't think that's going to happen I think that's the less likely scenario But what will change What new information will change that opinion is spending a lot of time And bringing in a lot of volume inside yesterday's range that would change my mind But as of now, I assume we're going to get rejection and head lower Okay, but if we spend the time, I'll assume we're going to test the overnight high If we get new buyers above the overnight high Well, then I'll know I'm wrong on the idea of continued momentum and I'll assume we're heading higher from there So I am neutral to bearish on the day And can only be convinced otherwise above the overnight high With that, I will say goodbye Wish you all the best of luck. Happy trading today. Happy trading this week I hope you make lots of money and if you don't join the brigade If $10 is just too extreme a price to pay for insights every single day Well, then we'll see you here next monday morning. Thank you very much. Have a great day everyone. Bye. Bye Still got a poor high still got a gap that needs to be filled