Jan I've read this before but still not clear about this. For bottom rotation/supply takeout why do consistent lows also improve symmetry/quality? What's the significance of orderflow behind that?
Jan I've read this before but still not clear about this. For bottom rotation/supply takeout why do consistent lows also improve symmetry/quality? What's the significance of orderflow behind that?{image}
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i asked this question some time ago. Jan said, symmetry means the legs in structure should be similar in size and shape.
Additional to that you have a precise level that held many times, which improves the odds of your trade.
-no clear downtrend to the left, choppy
-spread too big for current volatility
-overhead supply
-SL too big, should be placed below micro shelf
-no decisive momentum into supply
{quote} not really a valid setup at second view -no clear downtrend to the left, choppy -spread too big for current volatility -overhead supply -SL too big, should be placed below micro shelf -no decisive momentum into supply
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The other one on the left was pretty clear to me tho not sure if you saw it.
Jan I've read this before but still not clear about this. For bottom rotation/supply takeout why do consistent lows also improve symmetry/quality? What's the significance of orderflow behind that?{image}
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From order flow perspective having a clean symmetrical lows means that there is higher chance that more longs will still be in positions. Thing is that huge portion of traders uses lows or highs as their guide for risk management, which means that if some level holds precisely good, it will usually mean more longs are still in active order flow (in case of lows) which means that sellers need to try harder when it comes to defending the highs of supply as more positions need to fly in to overhelm the buyers.
This can be nicely observed on level 2 order flow data on equities when clean structure will appear, however it does take a lot of patience to spot such setup to really observe and notice changes on how order flow behaves when it comes to "clean cut" trough supply on such symmetrical structures.
So there are two good scenarios that you want to have in structure for it to be A quality play, and both scenarios are kinda opposite to each other. One is to have clean symmetrical lows in supply takeout structure and momentum move into supply which increases odds of that supply to not being able to hold the price as the bullish orderflow out-weights the sellers, or scenario two where you have symmetrical lows but they are cleared out by clearout liquidation a targeted move, which from order flow perspective shifts things into completely opposite direction because now majority of longs are cleared out and now potentially sellers could easily out-weight buyers but what counts in this case is that if clearout was clearly targeted (heavy move from middle of structure, exposing a large market order going in) then you basically are trying to figure out ahead that this buyer who cleared all the longs out will actually push the price "itself" into supply and do most of work itself, so overall the thesis is the same.
In first case scenario you have longs that are clearly strong at active participation that backs the thesis of potential supply to be cleared, in second case you have exposed intent of some market maker that just used the longs to fuel his rocket (on sell side) which gives a chance that price will be pushed into and beyond supply.
USDCNH potential short term flip of a trend, classic ending of up trend where trend is fully consistent but ends with strong volatility bang in opposite direction. Also from a micro scale if selloffs are strong but bull legs are weak its classic behaviour of bear trend. Will look for some micro plays on bear side of USDCNH for today and perhaps tomorrow especially due to US market close. This is just short term macro play, long term CNH is expected to weaken more. {image} {image}
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USDCNH down trend target baked. As pointed yesterday its likely to see over next 2-3 days that the strong momentum shift will bake a short term down trend, which actually completed target very quickly.
Now that target is baked, short term macro view is removed and placed at neutral state. All back to micros only.
And Turkish lira baking another superb setup, all 3 of them have been missed at least on my side. 3 solid pullback legs on accumulation. Two major ones were baked on Istanbul / London overlap which has been pointed out few times before that this time loop is usually when its to expect the shorts to pile into TRY the most as the libor short term liquidity sets the weight on TRY.
GBPNZD potential short term bottom bake, eyes on M1 micros but this pair trades on high spreads and low ticks so.... not worth putting too much time into it.
And Turkish lira baking another superb setup, all 3 of them have been missed at least on my side. 3 solid pullback legs on accumulation. Two major ones were baked on Istanbul / London overlap which has been pointed out few times before that this time loop is usually when its to expect the shorts to pile into TRY the most as the libor short term liquidity sets the weight on TRY. {image}
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And for long term view on TRY, why situation is very dire - price is basically at the same level that weeks before where the urgent rate hike was initiated. Shorts and inflation have not been scared by the moves of central bank, which pretty much puts the TRY is a very problematic situation. At that point there is very little more than can be done. If 5.000 is breached (which is only matter of time not if) then at that point there is no moves that can be done to stop the hyperinflation or at least strong economic depression is central bank decides to go berserk on rate hikes (unlikely).
(binned per thread starter's request) Market bottom rotation trad
