 Good morning traders and welcome to the pro trader webinar series today. We have Tom B So new entry here Tom is a futures trader. You're probably familiar with him in our discord chat room Anyway, Tom's going to be talking about integrating book map and auction market theory together with volume profile in the interday developing timeframe Let's go over a little bit of Tom's background here He's been trading both professionally and individually since 1980 He focuses primarily on the ES and NQ futures markets his trading process encapsulate encapsulates the use of book maps order flow tools within volume profile and auction market theory Tom analyzes the larger market structure and executes within developing intraday timeframes There's some contact information for Tom if you're interested first off. There's going to be a new book map discord live market narration room with Tom Tom will be going through Just periodically throughout the day You guys are probably familiar with him already if you're in the discord room He's been doing this for a while via text. So we're going to give his fingers a bit of a break There will be two rooms here. There will be a voice room so that Tom can go through it using his his microphone and guide you guys through with a with a screen share as well and then to You know, you'll be able to reply via text and a Related a text channel as well that'll be right there. So under the same name both are under the same name there And you can reach out to Tom on discord right now under Tom be and then you've got his number there as well And then also his Twitter handle at Ross Tom If you want to look at many of the images that he's going to be presenting during this This session here. I've got to go through the risk disclosures and then we'll turn it right over to Tom General disclosure all book map limited limited materials information and presentations are for educational purposes only and should not Be considered specific investment advice nor recommendations live trading executed in simulation demo is Is in simulation demo paper trading mode and strictly for educational purposes live trading executed in simulation cannot accurately represent? Realistic trading performance. I don't think Tom is trading live, but we're just going through the disclosures nonetheless risk disclosure Trading futures equities and digital currencies involves a 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 nor 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. We do have the hypothetical performance disclosure here. This is mostly though for Automated trading You can take a look at that if you like and I can put it into the chat if you want to read through it as well Anyway, without further ado, let's turn it over to Tom and let him Take it away Okay, so Yeah, Tom, you should see the button there you go. Perfect Okay, can you see my full screen? Yes Okay, let me just Not a destination isn't that the truth Well a little bit about me and I want to thank everyone from You're taking some time and coming to visit with us today. I hope you're gonna get some value from this I'm gonna be moving very quickly It might feel like you're drinking from a fire hose So please feel free to review this again if you find anything that might be helpful or resonate with you I started in 1980 as an off-floor screen trader The first thing I did was learn classical bar charting. I took a course at the Chicago Mercantile exchange And of course, you know learned the things we all do when we start out head and shoulders Triangles pen and flags, you know, all the wedges At the time our technology was a very robust. It was a ruler and a pencil So that's where I was this was pre computer pretty much other than terminals At the time also technical analysis was looked down upon it was very much fundamentals or you were into voodoo and You're in the corner with some bones that you were shaking on the floor. So that was pretty much the view around 1982 I met George Wayne Now so, you know George invented stochastics. I think invented might be appropriate here Did he created stochastics and those of you are interested understand oscillators know what those are that kind of predated? developments like CCI RSI MACD's Bollinger's and all the volatility and moving average Concepts you guys have probably done there, right 1985 I heard about a new process called market profile and What got me interested in market profile was the concept of auction marketing Market theory the auction and that resonated with me and I had always thought previously of the market as an auction process but this actually put it into some context in the sense of someone else was talking about it and eventually this got licensed by the Chicago voter trade and the person who created it was Peter Stottelmeyer And he created something called the market logic school and I went to that school to learn market profile And he taught the class so I actually learned from the creator. It was very interesting and Along the way, I was managing money and I just want to say that there was some more things going on 1987 I thought you know, it would be nice maybe to have a system You know trying to be a discretionary trader with all that was going on using indicators and all there was a lot of conflict in that so the first iteration of System writing shall we say for the Non-program oriented individual was a DAW space system and it was designed where you could write a system was based on daily bars And you could back test and this was my first introduction To system writing and I did a bunch of work with that because I was interested in swing trading trend following at that time I mean the SMP at that time be would Let's say in the mid 80s, you know, can have a five or six point range. It was the big SMP's $250 a point Which can give you some indigestion Anyway, you're actually right now if you have heard of trade station and quote easy language System writer was the chassis that trade station was built on that was Bill and Ralph Cruz out of Miami 2000 I got interested in Elliott Way fibs fib projections all this kind of thing and start creating my own hybrid indicators And I worked. I mean, this is the journey, right? Have we all been there? Unless you got hit by lightning and woke up as a natural trader This is kind of typical. I think of the things we do we're looking for something that can resonate and What happened in 2009? was I heard about the Initiation of volume available with price of profiles, but instead of being time-based Which they previously were because there was no real volume available. It became volume-based Also in 2009 I met other traders and from one of them I adapted the concept of multiple time frame profiles before this and I always thought of them in a daily time frame multiple time frame is basically when you have overlapping Days and that creates something called a composite or micro composite same functionality as the developing time frame the Interday time frame, but this is a multiple higher time same thing. We all do right except this is represented by volume And then of course 2016 I was an early adopter of book map. I looked at a lot of tools which were out there on the market and based on What I observed book map seemed to be the best tool for me And it might be one of the best decisions I ever made to be able to get down to the granular level when it comes to Actually initiating in the market based on the context Just a moment having just a little trouble here. We go Okay, so I'm gonna ask you to do be a favor and I apologize if I oppose upon you Please grab a pen and a piece of paper take a few notes I'm gonna be giving you a few numbers not much and I promise It won't be an imposition, but it might be helpful for what we're gonna be looking at some of the terms and descriptions Used are derivative of market and volume pro a file terminology those of you who are familiar with it You know what this is, but others you others that are here today might want to just write these down So you you'll have a understanding what they what they did fun And also we're gonna have some other terms that are my own definitions that I've developed and they're probably not gonna be in The common literature Okay, now I'm gonna attempt to share as much detail as possible and I'm gonna be drilling down to micro timeframes So I'm going to be going you might say inside out So I'm gonna be showing you Intermediate time frame and how to potentially work Inside starting from the micro time frame and I mean with the scalpel on And I hope you can follow and I apologize in advance if this you know Was a little bit overwhelming because I have to move quickly, but I do hope you'll review it if anything resonates with you So here's the process. I'm a process oriented individual. So auction market theory How does the market work volume profile the optical representation of the auction the time frame? We operate in what is the context of that time frame and then book map is the tip of the spear So what kind of trader are you? Are you an intermediate time frame trader swing trader day trader? What fractal do you trade in you do you trade inside? The time frame in other words, so where are you in this? Do you like to trade? Three point swings four point swings or do you want the eight or ten point them referring to ES? Well inside of all of these fractals You can have a trend if you're a three-point trader. That is really a micro trend or if I point Trader, I hope you're following with me. It's all the same. It is generic now one of the obstacles Is defining context and this took me a while to understand? You know a lot of us when the market moves We kind of shift into a gear the markets going up and all we do is buy buy buy right and that's nice And it's a trend right because that's really what you want to do but what happens when the market becomes rotational if we use the same process that we use when the market was Expanding its range and we just keep doing the same thing when that context or behavior changes We're going to potentially give back what we gained earlier Or if the market context does not range expansion, but balance know what's trading both sides We have the potential to not have a good outcome That's what context is about it's about Recognizing and the other thing is in an intermediate timeframe the trend can be up, but we can be short Right because we're trading a counter rotation. So the thing about time frame is you select your sandbox Okay, and in that sandbox you define That time frame and you operate in that sandbox so it's kind of breaking it up when we say fractals into chunks and Depending on your time frame and this is really a function of risk reward things of this nature the range you need to operate in You know execution Obstacles, you know for scales targets all of this however you define that that's your sandbox and this sandbox can change Based on range. So there's a number of variables here Now I want to mention something about auction market theory if you're not familiar with it the market Wait, where what is the concept of the option? Well, what goes on in auction buyers and sellers come together? Price is set through a process and it's called price discovery Buyers and sellers will continue to move the market one direction or the other until the opposite forces motivate The market is going to go up as high as it needs to To find the sellers or as low as it needs to in order to motivate the buyers and this happens in all time frames That's the fractal nature of this and another way to think of this in the way Mentally I process this thought is the market will continually check prices similar to a grocery store because after all Grocery store they call it the market, right? So if her product goes on sale buyers will buy it up just ask my wife how Now if her product is priced too high it can shut off the buyers think about it yourself Something goes on sale you buy a few extra they put the price back up and they keep raising it raising it at some point You're saying I'm not going to pay that well, that's the auction. That's how the auction works So what's going to happen is at some point this market's going to find balance between the buyers and the sellers as a Seller or manufacturer you want to sell as much product as possible and make a profit and as a buyer You're going to buy what you perceive to be a fair price and that's where that inner section of Price and volume takes place and that's called a high volume note in profile language In addition and this is something I based my process on and I'm going to demonstrate it to you The market can revisit other previous areas of balance or high volume to check if the current Price is too high or the previous lower High volume price is still too low and I call this a price check in aisle three Have you ever heard him say that the supermarket or the store price check in aisle three Well, the auction process works the same way Now what about volume profile? I want to touch on volume profile. What is this? Why what's it used for it use? It's used to gauge the auction process and the thing that really impressed me about volume profile And that might be the purest real-time representation of value Since it doesn't rely on backward-looking lagging indicators now There's nothing wrong with it a lagging indicator if it works for you But I want to be just like with bookman. I want to be at a granular level. I want immediate input I don't want to be looking waiting for something to cross over In the markets already moved away That's my personal process. So the auction process represents the current auction Discovery process and the profile helps me identify potential locations to engage with the market and then Bookmap is Really the tip of the spear So what does book map do well book map works across futures equities and crypto? What I found about book map that really helped me was seeing the real-time behavior of the liquidity And that's represented in the heat map those of you use the product to familiar with this So that liquidity is a limited order book and we can also see algo behavior that might influence Temporarily influence or impact the market It has and these are some of the tools I use that really are great a Stop an iceberg detector Absorption stop sweeps because that is giving me insight to who the participants are You know when we see a bar a price bar or even the price going up and down It's not the same if it's just stops. It's not the same as new buying. Does that make sense or do selling? Also session volume Delta and of course the volume profile is part of it and for me having this insight Gives me an edge over lesson foreign traders. Just think about if you're a new trader Chances are you're not aware of order flow yet or even though the tools like book map and the other thing about book map is They're continually innovating and there's always they have great education, which is really helpful, obviously So that's our basis. That's my process. So Here's how I think about it. I Think about this as the volume profile and you would think about it as your charts or indicators Whatever you use, that's the chassis that you run your trade on That's the underlying support to help you identify behavior and potentially Locations to interact with the market now. Here's something I found Because I initially in my trading career was at the opposite end of the spectrum. In other words use minimum consistent non-random inputs very important Initially, I'm risk-adverse. I wanted to squeeze risk out My perception of squeezing risk out was more more inputs more indicators I wanted, you know more information and that's just because I'm an analytical individual But the fact is more creates conflict Inconsistency and if you're trying to create something that can give you a positive Expectancy you need to have consistency So I don't even use indicators at this point because I have the profile and then I have book map to help me get to the Greater level and something else that many don't Accept unless you've been trading long the outcome of anyone trade is random So I work mentally in a state of I know I don't know it really lets me off to hook to need to be right I can detach myself emotionally from the outcome. I even though I get emotional, you know, my Streams are pulled, right? I do experience some fear and doubt I do experience some euphoria when I get a 20-point run in the ES that is going to happen But I know that that I'm wired for that but I know I cannot allow it to influence me I have to just put it aside. I can't I can't stop experiencing it because we're wired But I know that that doesn't belong in the trading business. So I accept randomness when you anchor Your inputs and minimum without conflict Then you can determine if your process can create a positive Expectancy over a large sample size sample size means 30 to 50 iterations Now if you don't anchor you have random inputs in a random market as far as anyone trade you're going to get chaos Now most of us I would accept since we've been trading for a while or even if we're new we understand That as retail traders We put our stops in the same place We tend to behave Kind of like a small herd running around right especially initially But I think like a retail trader, but I don't want to act like a retail trader So think about it. We trade in the daytime frame usually. Who are we typically trading against? We're typically trading against other traders like us unless a higher time frame Participant comes into the market. So if you're on the other side of your trade, what would your Behavior be what would your emotional state be where might your stop be clustered? Do you think it might be with everybody else? Where might you bail if you're on the other side of your trade where might you anticipate the opposing force coming in? Let me give you an example trade, you know trade the mid right trade mid pullback trade the mid any of us raise your hand Right. We all done this. All right. Well, we know if the market's going up that there's a possibility That there will be let's just say buyers at that mid What can we anticipate at the mid a counter rotation at least and then where do the stops get pulled? Don't they get clustered behind the mid new initiators at the mid trailing stops getting pulled up to the mid Are you following me? What is under that mid fuel? Now if you're short Would you might possibly target the mid because you expect retail behavior at that location you And expect isn't the right word you there's potential Be counter rotation that'll happen because of the automatic bid buyers If the mid fails then your trade will go on if it rotates off You just might want to scale in front of the mid or if it makes sense Maybe reverse and get long at the mid subject to the context So the way I think in my process is if this then that and the way I do this is I stay in the flow by Narrating I strongly recommend that you narrate because it's the easiest way to stay in the context and recognize when it changes and Changing context is really where not only you can take advantage of an opportunity. It might present itself because Other retail traders are going to be offside But you can also use the change in the context to protect yourself get out of the market reverse Look for continuation many different things. So I'm always thinking in if this then that if This then that if it comes back to the mid and reverses Then that if it gets to the mid and it doesn't do it then what what does it mean? It's very much like playing chess You make a move you anticipate the move from the other side if they don't make that move then what's going on? You following me so it's really strategy But since we understand retail trader behavior, we want to be thinking from both sides So this way we can recognize when we see behavior. That's not aligned. And so what do you do? You adjust your plan or you have a different setup for the Context that's developing or you just wait for alignment in your time frame. That's all subject to your trading plan I hope that makes sense So we are going to look at a couple different contexts today, and I'm going to be moving quickly through it So forgive me In advance. Okay, we're going to look at the micro time frame fractal alignment within an intermediate time frame We're going to also look at another sequence How to recognize change in the context from a directional move to a counter rotational phase and how you might use this And then if we have time in Bruce, you'll let me know if we if I take too much time We're going I'm going to share an advanced concept. It's called the closing swing trade It's like a special team. Give me bring out the kicking team It's for one play and if there's time permitting we'll do that and also I'm going to offer you an invitation Later on so I'm going to ask you here. Please write down a few terms and numbers And then we'll get started. So grab that pen and paper And forgive me for imposing This is really more for those of you who are not familiar with the terms market profile and volume profile plus a few terms that I've created So first of all volume point of control. It's called the v pock v poc It is the highest volume location Where the volume is traded For the day Now the thing about the volume point of control. It's not stationary it moves around and That gives you information also and I'm going to be showing you how that works My own term is called a variable high volume node V hvn you'll see them on my chart. So please write them down V like Victor hvn variable high volume node and what this represents is the Migration of that v poc. So as it moves around during the day the volume is shifting. I'm going to track Where it was previously does it move away? Does it come back? What does it do? Remember price check in aisle 3? Right the market goes up There's a price and it may come back and check a previous price. Those levels are important to gauge the auction Then there's the migration of the v hvn of that variable high volume. Which direction is it going? What might it tell us? two other Definitions low volume node. It's called an L V and all that is is a separation or a low volume area Where price didn't stick around it traded there. There wasn't much volume. It moved away It defines a separation typically between a balance area, which is another term So you're not confused of consolidate its consolidation, but in profilage It's called balance and there's one more. It's called the initial balance high or initial balance low Initial balance and what that is is the first hours high or low and this evolved because when Peter Stottelbauer created market profile Most volume runs through in the first hour of trade Multiple part time frame participants technically do business and then they all go to breakfast I mean, this is how it used to be over at the CDOT and to see and everybody would go to breakfast after the first Think of a place called. I think it was Manny's down on Jackson. No, it's no longer there. Unfortunately because we don't have four troops so Those are the terms first hour high or low I be high I be low Hey, you with me so far All right, let's take a look at a chart here. Let me just clear something off my screen. That's a little bit in the way Sorry Okay, all right. This is the December 7th, and that's when we had the huge gap up after the heavy sell down This was that 36 point gap higher day now. I'm gonna walk you through this This is a micro time frame. This chart is representing a minute and 45 seconds So you might say this is micro, you know So let's look at what happens now when you get a huge gap like that and The day before the market closed and it looked like it might be in a bullish configuration It looked like a reversal was setting up, but we were still in a balanced area in other words It was overlapping so no idea that it would be this kind of a gap or any kind of gap because we know we don't So but when you get a gap like this, what do we anticipate? Remember if this then that We anticipate what's called responsive selling or profit-taking. I mean if you were long you get a 30 36 point gap I don't know about you, but I might take a little off the table So that's why we anticipate that so Let's look at what happens now. I'm thinking typical behavior If this then that gap higher you're gonna get some buyers Then it's gonna roll over and those buyers who buy breakouts their stops will be underneath the open and they'll get taken out So as they say fools rush in I've heard that term before and maybe you have I'm gonna wait because I'm looking for that that Move down and then I'm gonna look and see what happens because maybe this is just a gap up And then we're gonna fill the gap or we'll go half gap I don't know since I know I don't know I have to stay in in the moment and try to read the context So here's what happens and book that by now. This is where book map comes in. We get the gap higher This is sellers these purple dots are sellers So even though we have buyers this is showing me that there are sellers on the other side of this trade Liquidity comes in right here. I guess what are they doing? Maybe they want to buy I don't know what they're doing. I just want to skew the book. I don't know so they can sell higher I don't know so I'm observing if this then that Then we get some sellers here And that's what by the way these dots the green dot means positive Delta in the volume for that time period It's aggregated or the red dot means sell Delta So I have sellers right here, but the green dots show me absorption. That's interesting And this liquidity comes up. I guess we can assume it was this guy, right? Boom moves higher. No, I don't know for sure But that's how I anticipate what that might mean remember potential. So now we trade into this And even though we see sellers here, there's buyers showing up again. Now. Here's something I want you to look at This little line over here That is the first volume. In other words, that's the VPOC Now when it first opens up not necessarily that relevant, but it's something I look at and I'm going okay. There's the volume We move higher and I mark it. I call it a VHVM. Remember variable high volume note Also, I mark the opening swing. So this is the opening swing well as I see it Market goes up market goes up and then we pull back The VPOC moves up We test the VPOC Okay, these guys are buying. All right still too early because I'm thinking all right now here come the sellers If that's then that buyers Pull back. Where do we pull back to the VHVM? Price check and aisle three. I'm still not looking for it to go up. I'm just waiting to see what it's going to do Now here's something we've all experienced and traded I think it's a one or two tick of the opening swing low So I moved my opening swing low down a little bit, but only 19 stops go up Now that is I call that a stop pick anybody here ever get their stop picked up So that's where the term stop pick came from only 19. Well, that's really low. Don't you think interesting The market comes up to the VPOC again Right here price check and aisle three. What happens? It's still too high Huh? Well, I'm not getting along yet. I'm still thinking it's going to break if this then that But then something changes. First of all, we don't take out that low. That's interesting We break above the VPOC So what did it tell me too low? too low See here how it bounced off See the change in behavior we'd come up Now what we take out the opening swing high That is information that is telling me in spite of my anticipation of it going lower that it's now Going higher and it took out the opening swing high It appears that buyers might be taking control if this then that If not this then what There's the then what and we pull back price check and aisle three we come back This is my over under at the moment. That's a long for me Or if not a long an indication to look for a long Now my first target up here is the overnight high or eth high. I just want you to know that the reason is There's a high probability that that price point will be checked During the rth session and it's over a 90 probability now I don't know about you, but I have a sharp gap open I fail to take out that gap low by more than a few ticks I've rejected the lower price after testing the VPOC Over in this area. I've come back after taking the overnight high if this then that I hope you guys are with me so now Please write these numbers down and they're going to be important This is intermediate time frame numbers same behavior at a higher time frame So let's go in sequence. First of all overnight high 46 56 75. This is our first target The next target is 46 72 50. That is a micro composite VPOC Don't let the term Disturb you all it is is intermediate time frame same behaviors this guy right here except intermediate time frame Then we have a micro composite low volume node And I'll explain what low volume node is remember. It's an area that wasn't traded very much. It wasn't auctioned And that's 46 81 write that down And then we have what's called a naked volume plan of control at 46 98 write that down And what that is is the same as the VPOC Except it's in a daily time frame These are intermediate time frames This one is an artifact that's left behind In the daily time frame Where at auction and it was the most accepted price Previously and the market has a tendency remember price check in aisle three in all time frames It has the tendency to go back To this price at 98 and this price at 72 and as you know, we know we don't know because this is trading We don't know how we don't know if and we don't know when other than that. We certainly know a lot, don't we? So let's go to the next slide and see what happens But how this is going to work is i'm going to try to pick up on the next slide from where we just left off right over here Well, hold on. There we go We pushed the wrong button and there's chaos Okay All right, so this was that long that I was just showing you this is the V pock Here's what happens The market extends off that long and Where do we go? Let's go over here overnight high First statistic is now meant met and there's our target. Is that a surprise? Well, of course it is except that's what the setup was And here's the next thing that's really important to me The v pock moves What is that saying it's saying is volume is following price It's saying that this at the moment is too low It's rejected this price. So now we're up here And but we hit the target. What happens with targets that are common targets and the overnight Stad over 90 percentile is a common target What do I anticipate if this then that counter rotation? Where's my next setup though? Well in an uptrend for me and this is uh past performance is not indicative of future results You guys all know that you got to do your homework and vet your own ideas We pull back to the vwap the vwap volume weighted average price is derivative And it has a similar function To a v pock except it's a longer time frame. Okay, so we pull back to vwap I understand in my setups that the potential to reverse And check the v pock is a reasonable probability And you need to do your research to see what the percentile Probability is that that will happen. So if I get long here If I do where's my obstacle price check because we might come up here and fail or return down here, right? You can do anything so scale obstacle next test of this high Get through Potential to continue. Do I know? No, I don't know So now we pull back and we pull back in test over here Well, if this then that if not this then what I'm anticipating price checking aisle three higher Doesn't do it Now what back to the vwap Now, what do you do with this? Well, depending on your time frame. You're trailing your stop Or once it goes through here, you're out subject to your plan vwap And look at the price check from underneath. We don't get above it Pull back price check. You see the behavior pull back price check And then we finally break out of it But we don't get over this high We still have the overnight high sitting here as a reference selling Now we sell but what do I see here? Markets going down sellers were in here those buyers came in here and bought off the vwap. They were met with sellers So now I don't know what's going to happen if this then that if this can't get back above this V pock right here Then we can come all the way down and wipe out and take those stops right these stops are down below here I know I don't know so if this then that if not this then what? That's what This by the way becomes a low volume node. I want you to see what they look like Over here. This is a micro balance That was a consolidation. That's what represents this volume over here And you see the low volume in here That is where we left this area behind and we moved up To auction this area and these rotations are auctions Up down up down and when the v pock moves up It's saying is this is now Considered the fair price. This was unfair down here And that's what this vhvn represents. This was a previous v pock location that we left behind By the way, and I didn't point this out. I apologize when we pull back to v pock vwap What was that aligned with? The opening swing eye Is that something that might be a give you some insight? We have A pull back to the opening swing pull back to vwap. This is your obstacle V pock scale. Hope that makes some sense So let's look at what happens here. We come back again. Now if this then that I don't know if it's too high or too low We pull back We move up. I still have this obstacle. This is consolidation pull back and then we blow up in here now If you are holding longs from down here, you're just riding through this if you're a scalper You can participate in this if there's enough range. This is all subject to your plan. We pull back we go up Look what happens here And I want to point something out. I didn't mention you see 416. These are buy stops This is a short squeeze. We normally we see a lot of stops flying around in the es But when you see 400 you start seeing big numbers that gives you insight and book map is really helpful for that Because it's saying to me. Wow, we've got a short squeeze going on now buy stops. What are they? buyers So there's support under this market if you're off sides and you're stuck short and let's say you're an immediate player Or even a retail player These rotations you're going to be potentially using counter rotations to cover You're going to be praying for a counter rotation and that actually creates support Under the market and that's why in trend days we we see shallow counter rotations and expanding upside rotations And I know you guys know this So here we go into this liquidity now. This is going to be interesting. What happens right here Now when I see liquidity like this and this is what's different about this liquidity versus this This is resting liquidity. It's sitting in the book. It means more to me Uh, and remember with liquidity, we really don't know what's going on until we know I mean, it could be a spoof. It could just be manipulation in the book. It could be algo activity Uh, but for me if it's sitting in the book It means business to me and I just watch it closely and I want to watch the reactions off of this on liquidity So we have 300 buy stops go into these guys Right. By the way, if you were long, what might you do with that? Might you scale ahead of it? Because it's sitting liquidity Just something to think about So there's the fuel and we reverse off it Now I'm going if this then that now what can happen here. Well, it could reverse out of here We could come back here. We've come we could go it right it can do anything. So I know I don't know but if I'm Following my plan and my plan is to scale I may be out Right, but the thing is I have targets higher up. Remember those numbers we wrote down. We have another target up at 72 72 50 Well, I trade towards targets because I'm trading behavior. So I'm looking now if I get a rotation down I may add if I'm holding longs or I may initiate if I'm not long, you know Again past performance not indicative of future results. That's one of the things that gets in Indelibly printed in your brain if you've been in the industry on the on the professional side So let's look at what happens right here I think of these almost like supporting resistance Resistance pullback And now it breaks through what might you do with that? so Here's that location. There's the by stops. There's the reaction We come back. We check it if this then that if not this then what? It breaks out right here. Can that be a long? more fuel more fuel And now we get a run up to where This all of a sudden this book starts thickening up. I know there's a short squeeze I know the trend is up and I have the next target the micro composite v pock remember same behavior as The vhvm, which is a micro V pock if you will And or the v pock which changes on an interday basis And then the micro composite v pock, which is something left behind From a higher time frame intermediate time frame. So this is a magnet For this to check the price check in aisle three at the super super market But this is my obstacle So what to do here scale ahead subject to your trade plan see the behavior reaction Not surprised are you? But now what happens with it since we're in a trend day going up And we have the shorts off side. What are these guys doing one thing? I my belief about liquidities I really don't know what they're doing. Are they fading it? Are they getting short or are they taking profits up here? right Don't know So since I know I don't know I just keep flowing along could be option hedging up here right around 70 right could be anything So I know I don't know I let it go with that I narrate the auction. This is just the way I do it. So this is what's important. We had the reaction here We pull back to it. Do we fall from here or do we continue? We break out. What does that tell us now? This is my target We break out This is a stop run or stop sweep 717 stops go off and there's the absorption. You see the selling. That's what that's telling me. There are sellers on the other side Well, that's pretty significant and isn't it interesting it goes right into my target Now these are not my targets. They are created by the bounding profiles I just read the auction in the intermediate timeframe at this level. So we break above it. We pull back We pull back. Do you see the behavior? We pull back we check now. This is an obstacle for me So in theory, I could be done And considering we started I think at 46 or 49. This wouldn't be a bad day So i'm observing now if this then that I would be flat Why that's my primary target price check in the big aisle. Okay, but let's look at what happens next This is that behavior where we saw the absorption Okay, this is the primary target the micro composite v-pod Watch the behavior except now it's in the intermediate timeframe We break out Now i'm sitting at a target. So i'm not going to initiate this one because we could just come up and fail if this then that So what do we do? We blow past it Does this look familiar to what we do in a shorter timeframe and we pull back? Where do we pull back? Just think of it like another v-pod. This is fractal, right? And this is my over under So Here is a long Where might you put your stop? Under here Under here that's up to you, you know, we know it can be noisy and it can get ugly So you have to determine your risk-reward ratio. What works for you based on the target by the way? What's my next target 81 25? Remember that? That's the micro composite low volume node Which is on a higher timeframe intermediate timeframe. That was a poorly auction area when you have a poorly auctioned area There's a high probability that at some point the market will go back and check it So here we go We right obstacle Break out unfortunately Into a target. So I go, okay If this then that for all I know it could reverse from here and then it could be a short for a counter rotation On a trend day, maybe not so much, but I can mentally Anticipate it and then determine if I want to participate or if it did happen Cover my position and wait for another opportunity to get me aligned if it presents itself. So look what happens here. It pulls back So what we're doing now is we're checking this price. Is this too high? Well, as soon as I see this And here you have some buy stops going off and some absorption right here sellers into this buying And what happens? Goes this way. So long because I'm using this to lean on and I'm long again. Here's another obstacle right here scale Next target here. So you could scale or just go for the target What I do is use fixed scales. So you know how I do it Um, if I'm risking two points or three points, whatever it is, I want to cover my risk I'm more concerned about the risk the profits take care of themselves Because I want to try to get risk neutral. So like buying a ticket to ride So that's how I think of it uh, so here's an obstacle and that's right in front of my Target my next target remember you wrote this down, right? And there's a stop suite 1500 stops ouch I'm glad it's not my stop But that's the fuel I'm looking now at the fuel For the reasons for the market continue up and that's why we had that huge day is because everybody was short on the Omnicron Omicron Concern so the market really had sold down and now everybody was off sides. So it's a great opportunity for a trend day So What do we do? We pull back Test But this comes in now this to me. I call this a disruptor somebody. It's like somebody dropping an anvil On the market, right? And now I'm going well, maybe we're done if this then that this is a another target But I have one more target above and it's around 98 Now, I know I don't know right? None of us know but what I know is I have a disruptor And I have a level So let's go and see what happens and by the way You see this little toothy Behavior here now. This is a little more advanced. See those little high volume little Nodes sitting off These are microbalances now. This is like being at the subatomic level. Don't mean to confuse you but this Is there isn't enough volume here to move the v-pock up But the behavior is the same the market is going. What do we think of this? That's too well What about this one? That's still too well How about up here see so even though What we're doing is this is the auction in micro And depending on how wide these are you can actually develop plans to operate Now I can't trade with the scalpel, but I'm saying is the behavior is generic So let's see what happens next So here was the over under with the stop suite at the MCLVN, which was our target This this comes in and I'm ready to go to the fallout shelter we react respond to it react to it and Are we done? I don't know but let's look what happens here The v-pock shifts higher What is that telling me? Price is being accepted up here volume is transacting But the market is moving higher and this at the moment is the highest volume area There's my obstacle We pull back Where are we pulling back to? this Remember this was an obstacle Then this was an opportunity to get long if it fits your plan or to observe I haven't I have a target up above So I'm thinking if this then that if not this then what this moves up and you know, I like these Now we pull back. Where do we pull back here? Take a few stops out. Thanks For playing we have several parting gifts for you and 413 stops go off. This is retail behavior I mean you trail your stop you get taken out And the thing is even if you got taken out on a trailing stop and of course then you're going ah What do we see happen price check is this too high? Pull back. We're above the disruptor Hmm if this then that price check Are we going to reverse and fail? Oh price check Pull back. VPOT moves higher. This is saying to me in a micro time frame. This is too low long Next potential disruptor Let's see what happens. I think you get the idea Uh, oh, let's let's pick up. There's your disruptor bum Pull back the VPOT moves up. We have the opportunity to get long and where does it pull back? Where to Here here here. Let's look at the behavior long Obstacle here obstacle. See this is where we came down from And the market is saying this is too high price check So all this is going on here obstacle So we had a price check here long back to the obstacle reverses if this then that if not this then what price check pulls back Where we pull back To this one price check the market is now auctioning checking prices Long that's that variable high volume note, which was a VPOT location Long obstacle because we come back here. It may reverse right If this then that And then 98 25 is the target and actually ended up going to about 94 Let's see if I have another slide for that, but you kind of get the idea. I hope so Think in the auction process. What is the market trying to do? Where might it go and check? The volume migration or that VPOT migration, which I call vhv ends can often give you Alignment with actionable locations to observe and what I always say in our in our chat room Try to do is narrate this and In the chat room, we're not saying buy here. So that's not what it's about at all. It's about areas to observe So what happens is when the market gets to a location? I want to observe behavior And if with book map it gives me the opportunity to kind of look down in the granular level and try to determine Who are the participants in In that area And if I can read it And of course like everyone else market doesn't necessarily care what I think But over with consistent inputs over a period of time. I have the opportunity to execute And I understand also where my obstacles are and that's what it is for me is to get to the obstacle and get a scale And then try to get risk neutral Offset my risk and then see if the trade will go on to the next objective The other thing is narrating staying in the flow if this then that to me That's one of the most important things it keeps me engaged with the flow of the market And if it doesn't do something if not this then what? And with book map we can drill down that's key for me Now let's take a look at this if this then that Here's what we have our th opens We get a huge move. See all those green bubbles buying buying buying We have now I have icebergs on here and I didn't have it on previously I just didn't want to clutter the chart for you 1200 icebergs go up somebody likes that But look what happens right here 2375 sellers I have to tell you when I see that I'm going if this then that oh my god, then what? Because I see that and I know there's a seller and that is someone more sophisticated than me They have better tools, but they also might be in a better time frame different time frame than me So the market Bobbles around here and does some volume. Let's look at the v poc here here See it's moving up that's showing me that even though they're selling pressure here that Volume is moving higher as price is moving higher. So now I mark these levels right v h v n Right. This is where the v poc was and I'm watching And I want to see what the behaviors We pull back right here And here the selling volume starts dropping. It's a long for me Market accelerates off Okay goes up A little pullback. Let's look at the v h v n the v poc migration it migrates here And it migrates here. So now I have a price check I have down here. Are we going to come back here? I hope not But now this moved up. It is supporting my trade More sell icebergs going on and it seems They're not getting too far So now we pull back price check Up above the v poc pull back long so longs potential longs longs And here's the i b high. Let me tell you what this is. I'm going to remind you It's the first hour high and low. That's called the initial balance And it's important because since most of the business is typically done in the first hour If we exceed that range either high or low during the day It indicates that the potential for a higher time frame participant moving the market So that and statistically and past performance is not indicative of future results It's in the mid 90 percentiles that either the high first hour higher low will get taken out So this is my target and the first it's this is central time. So it's 9 30 my time So now there's the i b high and since I have a statistic that's pretty good Pull back and what am I going for? this scale And since we had this driving behavior And we're trending up extension And look at the buy stops going off 500 500 500 does this look familiar does this look like our trend day? Let's see how this works So this is about change. So if if if it's this then that if it's not this then what is going on? Well, we're trading multiple contexts in fractal time frames, right? So if the market returns inside the initial balance the first hour higher low, what does it mean? And what can we do with that? Well, it sets up the potential for something uh a counter trend move and When you get this kind of retracement and the market is long Where's the fuel the fuel is all our retail sell stops underneath the market and if you think about it Where's the fuel well going up? We had the buy stops, right? And it looks like a trend day and if we counter rotate, which is not unusual But this is pretty different than the other day. We just looked at right? So that's why you got to kind of stay in the flow with it So now we have the fuel with just the stops and what can we use that information for? Well, depending on your time frame You could get short Because as a retail trader, you know if you were long Where would your stop be and if you didn't recognize the change in context? You're just going to hang out and let your Your open trade your mfe maximum favorable excursion slip through your fingers and that happens, doesn't it? Now, obviously it happens at times that we have no control But at times if we can recognize the change in context we have control Or at least we have options and then it's subject to your trade plan So we can do this we can write the counter trend down Assuming that there's targets out there that make it worthwhile Or we can just wait since it looks like we have a trend going here and there was so much volume and urgent behavior and buy stops We're going to maybe use that counter rotation towards targets that are aligned with the higher time frame fractal. In other words, continuation either right, so the behavior of this is Mean reversion and it can happen anytime, but I want to suggest in es and nq When the volume tends to dry up usually over lunchtime chicago time, you know 11 ish to one ish in there We often see it mid-session because there's no volume and if you can't get those buyers you might get those Trailing stops getting taken out. So let's look at what happens So now we're picking up where we left off the v pox shifted. This is a long by the way and here's the obstacle scale It was a worthwhile to do that basically from here to here 9 points to 17 I don't know about you, but I'm okay with that Now we get what's called range extension. That means we've gotten out of the first hours high or low We break out Now this is when if this then that if we're going to continue Often I don't want to say typically often what happens is we pull back to this first hour high Retail traders trail their stops up under here The stops get picked And if we're going to go higher Often after the stop pick we extend the range if this Then that in fact Depending on the circumstances of what I read that might be an ad for me Not a recommendation just saying because it's if this then that if not this then what? Well, guess what? We broke down. Uh-oh. Now. Here's that v pox and what's the behavior if this then that I'm thinking, okay Uh, we can go back up and check this Right price check. Let's go back to the resistance check And then particularly either come back out or go down. Well, it doesn't do that if this Now watch what happens the vhvn is here Right, that's the price we had just left behind when we migrated up. We pull back We bounce Where do we tag the v-pop? Too low too high boom break, uh-oh If not this Then what pull back to v-pop from below. Does this look familiar break? V-wap break why stops? Anybody here ever trail yourself under a v-wap? Anyone here ever automatically buy when it touches v-wap? However, we check the price. I can't get long here Why because there stops stacked under this swing Does that make sense guys? So where are we gonna go? Well, what's below? Hmm the midpoint 98 quarter now if you're nimble and it's in your trade plan, this would be a short Short scale possibility to come back. You're done Nothing wrong with going to let's say 10 from 17. I'm all right with that So this could be a short and here's your obstacle scale or you're all out It could be a scale subject to your plan break below Warning will robinson check from below. We don't regain it potential to go lower. Where are the stops v-wap? mid now this is interesting Now i'm still thinking uptrend except now i'm looking for a continuation trade Right if this then that well, where are the stops? anybody recall where You used to put your stop and so did i mid under the mid and look at the stops going off here This is your fuel Cascading stops say everybody does the same thing We don't want to do what they do if we can help it now. Here's something Look what the behavior is you get some front running here of the mid boy there. They really want this It moves up. Where does it go? V-bog What does it do? Bounces off is this a short perhaps? Think about it Comes down now. What's under here stops? stops cleaned everybody out I'm now looking for the long For a continuation trade Bounces off the mid and I see the mid buyers it pulls back these guys are fading. We're under v-pac See this selling That is the v-wap if I had gotten long here the v-wap is my obstacle if I get long here the v-wap is my obstacle Retail traders. I anticipate selling pulls back takes the stops gets these guys long Obstacle see the selling at the v-wap anticipated If this then that if not this then what so I'm anticipating. I got a scale 4100 Ahead of it 4104 50 maybe three and a half points. I'm okay. Stop under here next target V-bog Next I be and so on I hope that makes some sense And I apologize if it's A little confusing because it can be but if you stay in the flow At least you can organize and think about it from an auction perspective What is the market trying to do and when it doesn't do what you think it's trying to do This that'll offer you an opportunity either to manage your risk or to actually reverse position Assuming it fits in your time frame and this is all fractal. I hope this is helpful So let's take a look here at the uh, I called the bonus round the closing swing trade now This is kind of advanced and it is like the special teams Right. So here's the context the market is out of balance without a balance out of balance means The higher time frame is activated. You're seeing big swings big rotations huge stop runs huge icebergs You know when you see it outsize moves Shallow counter rotations It's not so unsimilar for what's going on Currently because we're having to sell off ahead of the fomc meeting So i'm just saying is it's outsized and we're out of balance and Out of balance means that we're leaving a previous area and now we're going to return and check A former area so the area above we broke out of and now we're going down to check the area below Same process higher time for So we look at the uh, the profile and it's pretty much Vertical price discovery in other words, there's really no consensus the market's running around It's trying to figure out what's what's what's a worth right now and it can't at this moment Determine a fair price. So it's auctioning. It's going around But the chances are in the intermediate time frame that's going to go and check a more significant price Participants are off-size. They're being squeezed. You're seeing huge stock runs Icebergs you're seeing large icebergs firing Okay, they might be accumulating positions or fading and what about the retail traders? What would you do? Let's assume you're short and the market's going down. Let's say long whatever it is They have a big move Okay, and I'm going to show you two versions of this along in the short So either way, but it's a big move. You're the retail trader. We are day traders unless you're a swing trader What are you going to do at the end of the day? You're going to get out Right and everyone else who's in there with you is using trailing stops It can create a cascading effect and an outsized counter rotation And this is what we're looking for and this hat can happen usually two o'clock on To the to 315 central time so into the cash close and even behind The behavior so that's why it makes it a specialty trade Now the counter rotation who's going to take the other side of that counter rotation when all of us short time traders are getting out strong hands higher time frame They might accumulate and that's what's behind This trend understanding retail trader behavior understanding higher time frame behavior. Let's take a look at two of them Here we go Here's the time 230 v pox shifts up Price check, what do we do too high pull back pull back sell stops going off V pox drops down. Is this too low? No, we go up Too high So this is the context The we're shifting higher Accepting with potential acceptance. We move down. We're on stops. We move down. We're on stops On stops. Okay by icebergs are stepping in here. We're checking this price We move to the upside it shifts back up price check and aisle three louis. That was too low Up we go Long Pull back if you didn't get it here pull back price check and aisle three. Uh, that's still okay Long Pull back price check and aisle three. This is your overrun Long so what was this worth depending where you got in? 26 to uh, let's say 34 closing swing trade and higher Let's look at one mark This is the market was in a short downtrend big sell-off. It's the end of the day Three going into the cash close the market's coming up on short covering. We're getting out, aren't we? And buy stops fuel fuel Fuel and what's up here? huh V pox liquidity And now we go into the cash close Big sell down they knock it down. We're talking about five six points smack down. I'm looking at this. I'm going Oh darn it. I missed it. You know, I have that trade's done. I'm done So I'm sitting here and I'm watching right and I see it pull back where v pox I'm watching and I see this Short and what's my target v1? 49 36 ish This is the closing swing trade. It's a specialty and uh, again past performance not indicative of future results But the reason I'm showing it to you is it's a special teams And it's all subject to context. This is not mechanical. Nothing I do is mechanical. It is based on auction market theory The developing uh profile how the profile Changes during the day and looking at what I perceive to be actionable locations and staying in the flow I hope this is helpful. So closing bill I know it was a lot of information and there's never enough time, but I want to offer you an invitation book map has A discord futures chat room I do a little trader lab in there And with other traders who offer good insights And I often narrate the developing context and is for educational purposes only It's it's it's not a uh trade room. Nobody calls trades. It's not what it's about. It's about Helping understand context and behavior and potential obstacles I invite you all to come in visit check it out And if you want to find out more about auction market theory and volume profile There's loads of information available online My use of the volume profile and the way I view the market is something that has developed for me and has evolved over many many years Others may have completely different views of it and that's okay too. It's really whatever works for you There's more examples up on my twitter feed at at Ross tom and I want to thank you so much For spending some of your day with me today Thanks for your time and interest All right. Well, thank you tom. Thank you everybody for for coming And look for tom in our discord book map discord chat room and that traders lab It will he'll be presenting in there very shortly as you guys know many of you attending Tom has been doing this work already in the futures room for a while But we want to give him his own room in there So that he can you know further explore and go through this narration process with you in the live market so Yeah, look for it soon and we'll we'll also notify you about that as well So the recording for this will be up on our book map.com slash youtube. Just go there. It'll redirect you to the book map Uh youtube channel and look for the recording if you want to go back and revisit any of these tom. Thank you very much My pleasure. Thanks everyone. Okay. Take care. Bye. Bye