$BTC
Let's do a bit of hindsight analysis on the SFP last night and see -
Assuming you were aware of the level, how could you have entered the trade intelligently?
Where could you have taken profits?
And learn - how can I do better next time?
1/
Let's do a bit of hindsight analysis on the SFP last night and see -
Assuming you were aware of the level, how could you have entered the trade intelligently?
Where could you have taken profits?
And learn - how can I do better next time?
1/
As you can see, the Daily S/R at 58999.5 was on my chart
So this is a level I would set an alert at and want to watch for a reaction
Played 100% perfectly, it gave a quick 4.5% move to the downside
A great move for any day trader
So - how to catch it?
2/
So this is a level I would set an alert at and want to watch for a reaction
Played 100% perfectly, it gave a quick 4.5% move to the downside
A great move for any day trader
So - how to catch it?
2/
First, let's clear all the other crap off the chart
I know there was a lot going on with the boomer markets but let's ignore that for now
We're trading the BTCUSD chart in isolation
So we have a Daily S/R we're looking for and a potential SFP level
3/
I know there was a lot going on with the boomer markets but let's ignore that for now
We're trading the BTCUSD chart in isolation
So we have a Daily S/R we're looking for and a potential SFP level
3/
If we look at the order flow, we can see we were increasing in price, overall, on an increase in OI (the red/blue) and increase in Net Longs (the green/grey)
So we can say that we are approaching the level on strength
This means we don't want to just step in front of it
4/
So we can say that we are approaching the level on strength
This means we don't want to just step in front of it
4/
Then we come into the level and what do we see?
- Longs opening into resistance
- Shorts opening and pushing the price back below resistance
Not the cleanest scenario but decent enough for an aggressive trigger - good number of longs to trap
Short - stop above the highs
5/
- Longs opening into resistance
- Shorts opening and pushing the price back below resistance
Not the cleanest scenario but decent enough for an aggressive trigger - good number of longs to trap
Short - stop above the highs
5/
If you'd used a hard stop right at the top of that first wick, you would have got stopped out
I would usually put a hard stop with some space ($100-200) or a soft stop (WAY more advanced)
Because we often see what happened; a second attempt followed by a bigger rejection
6/
I would usually put a hard stop with some space ($100-200) or a soft stop (WAY more advanced)
Because we often see what happened; a second attempt followed by a bigger rejection
6/
But this is aggressive, very aggressive, for an entry
What would be a more relaxed entry?
- Lose level
- Backtest
- Change of local MS
So let's look at that on the chart
MS Break = Short and hard stop above high
In this case take the high again and you'd want to be out
7/
What would be a more relaxed entry?
- Lose level
- Backtest
- Change of local MS
So let's look at that on the chart
MS Break = Short and hard stop above high
In this case take the high again and you'd want to be out
7/
So now we can look for our targets
Remember we talked about "What kind of trade am I looking for?"
- A short down to $0? Not realistic
- A short down to range lows? Makes sense
If you zoom out a bit you can see we are in a range between 3 Daily S/R right now
8/
Remember we talked about "What kind of trade am I looking for?"
- A short down to $0? Not realistic
- A short down to range lows? Makes sense
If you zoom out a bit you can see we are in a range between 3 Daily S/R right now
8/
With that in mind, we can use the range and the Fixed Range Volume Profile to find some targets
1 - POC/Mid line of range/VWAP
2 - VAL of range
3 - Range lows (56K)
9/
1 - POC/Mid line of range/VWAP
2 - VAL of range
3 - Range lows (56K)
9/
These are just suggestions, there are so many ways to play this kind of trade but I wanted to talk through a simple and replicable way you could do it
Now, next time you see a similar set of PA playing out, you can try it for yourself and see what happens!
/end
Now, next time you see a similar set of PA playing out, you can try it for yourself and see what happens!
/end
UPDATE
I know there's a lot of advanced order flow stuff in here
You can strip that out and just look at the volume on a LTF when approaching the level and watch the PA develop
Both entries would have been possible without order flow, the safer entry doesn't need it at all
I know there's a lot of advanced order flow stuff in here
You can strip that out and just look at the volume on a LTF when approaching the level and watch the PA develop
Both entries would have been possible without order flow, the safer entry doesn't need it at all
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