This document discusses reference points that traders can use when analyzing the market, including previous days' value areas, volume composites, and Fibonacci retracement levels. It also outlines tricks that large institutional traders use, such as setting traps by advertising a direction before pivoting, fading initial moves on economic reports, and accumulating positions near low volume nodes. The document stresses the importance of trading with institutional flows rather than fading their moves.
This document discusses reference points that traders can use when analyzing the market, including previous days' value areas, volume composites, and Fibonacci retracement levels. It also outlines tricks that large institutional traders use, such as setting traps by advertising a direction before pivoting, fading initial moves on economic reports, and accumulating positions near low volume nodes. The document stresses the importance of trading with institutional flows rather than fading their moves.
This document discusses reference points that traders can use when analyzing the market, including previous days' value areas, volume composites, and Fibonacci retracement levels. It also outlines tricks that large institutional traders use, such as setting traps by advertising a direction before pivoting, fading initial moves on economic reports, and accumulating positions near low volume nodes. The document stresses the importance of trading with institutional flows rather than fading their moves.
This document discusses reference points that traders can use when analyzing the market, including previous days' value areas, volume composites, and Fibonacci retracement levels. It also outlines tricks that large institutional traders use, such as setting traps by advertising a direction before pivoting, fading initial moves on economic reports, and accumulating positions near low volume nodes. The document stresses the importance of trading with institutional flows rather than fading their moves.
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Trade Location and Reference Points:
The better the reference points are defined, the better your market understanding and the better the control of risk. At each reference point the market has a high probability to either pause or pivot and reverse direction at. Upon each reference point is where the tape or order flow comes into the equation. Look for volume imbalance to confirm that you are trading with the institutional traders. If they don’t show up for whatever reason, hit eject. Anticipate a trade at each reference point by watching price and its reaction to each level (for example, on the downside, look for the bids to sequentially lower until the buyers shut off the sellers) Shutting off looks like a 2 X 0 or equivalent on the bid ask footprint. If there is a 2 X 6 for instance that suggest that the auction is not finished and the prices are not complete. The market may trade away from these areas initially only to return. Hint: Reference points are more valid when they are aligned with Low Volume Nodes ● Previous Days Value Area High ● Previous Days Value Area Low ● Look for overlapping periods/days of value. ● Previous Days Point Of Control “Fairest agreed upon price” ● Overnight Hi ● Overnight Low ● Previous Days Close ● Current Day Open ● Current Day First hour Hi and Lo “Initial Balance” ● Volume Composite (multiple days, weeks of accumulated volume) 1. Identify Low Volume Nodes (Rejection Areas) ● Look for Fibonacci Golden Ratio 61.8 retracements and its inverse 1.618 extensions.
Tricks & Traps by Commercial and Institutions: Each trick will be shown in real time replay or live market. Large traders use their knowledge of value to enter balanced markets at extremes. That being said it is important to note at the trade location and the time of day they do their activity. Below is a list of tricks that I have adopted and tailored to my trading. They occur in all markets and all time frames. (1) Trick: If during the opening first ½ hour of the markets open the price opens outside of yesterday’s value area and continues in that direction with velocity it is wise to step aside and do not fade. The Commercials and Institutions are privy to trend changing news events and
andreybbrv will act accordingly. If during the last ½ hour to the markets close price runs away from the days developed value do not fade the move. Its better to trade with the institutions than against them. If the market is breaking outside of a balanced situation, continues commercial activity will show up in the order flow as volume imbalance of 200-400% relative to the other side. This is strong evidence for the start of a trend. (2) Trick: Let the news event or breakout occur to show its direction then wait for a 38% Fibonacci retracement and go in the initial direction. (3) Trick: When the market has a major economic report such as Fed minutes etc… Fade the initial move, for up to 50% retracement on average. Do not hold that position too long. (4) Trick: When observing the order flow footprint and a specific price or level keeps refreshing and absorbing large orders, watch for a “Flush” of the price to occur. The market will initially trade away from the level to return and break through clearing stops and creating liquidity for the larger traders. (5) Trick: As price is coming into a level watch for the candle to “advertise” that it is going to go in that direction indefinitely (extremely bullish or extremely bearish candle). In almost all cases, each trend will end with the last 2-3 previous bars suggesting that the trend will continue. Large traders will always make the candle look inviting just before it pivots and reverses. (6) Trick: When price comes into a level watch for the last bar to close and the next bar to open and trade a few ticks beyond in the same direction, just to get “rejected” with a volume imbalance, wick, or “small capping” of the tape (For example: 0 X 2). Take the trade in the opposite direction. (7) Trick: If you notice an abnormal large bid or offer near the end of the footprint (for example: 156 X 0) You can expect a trap is being set and to take a trade in the opposite direction and place stops just beneath the price the trap was set. (8) Trick: Once in a trade use the COT (Commitment Of Traders) price as a blocker. Hide behind that price by 1 tick and follow in the direction and let the market stop you out. If the large committed trader is not willing to defend that price then you stand no chance defending it by yourself. (9) Trick: Watch the footprint for a confluence of large block trades surrounding a specific price within the same time frame or over a period of time but at the same price. This is evidence a large fund has an order to be done.
andreybbrv (10) Trick: All of these tricks and trades work best in a Low Volume Node on a volume composite. When considering day trading and investing, do not invest money you cannot afford to lose. Day trading is highly speculative and unpredictable. Financial and commodity markets expose you to risk due to factors such as slippage, volatility, liquidity, leverage, order execution speed, and seemingly random fluctuations in price. With significant losses exceeding your trading account’s margin, you may be responsible for paying back these losses. Past performance is not indicative of future results. Hypothetical results are not indicative of actual live trading results. We offer no guarantees of profit or loss. Our testimonials have not been independently verified, nor are they indicative of future results. Our products and services are provided solely for educational purposes. Our written and verbal statements, including those provided on our website, by staff members, testimonial individuals, affiliates and clients, are personal judgments and should be regarded as such. These written and verbal statements do not constitute investment advice. Online trading systems are subject to a variety of technological problems including (but not limited to) software, hardware, and Internet connection failures. We are not responsible for these technological failures or delays. We are not liable for any loss or damage, including without limitation, and loss of profit, which may arise directly or indirectly from use of or reliance on our products, services or written or verbal statements. The contents of this Cheat Sheet are subject to change at any time without notice.
