(binned per thread starter's request) Market bottom rotation trad

Nailed.

ok, thanks

TMSR waiting patiently for this to reach parabolic phase and then hammer it. Borrows are very expensive, 0.1 USD per share but it has heavy range so its gona be worth it.

Sorry, Janpec,

I found this example very interesting for a little bit wider observation.

You wrote after the first couple of pin bars, "no soaking yet" and only just after next pull back "bids start to soak offers"

Can you please explain a little bit closer what does that exactly mean?

How did you know that the first time is not good enough?

What you exactly mean by "soaking"?

Sexy bounce on EURNZD. Didnt take it.

Hey, yes so basically for that to see in first place you need futures and look at Pound (GBP) and observe the tape to see that (for this supply takeout example). You can also spot soaking trough just using MT4 and FX but it takes years of observing price before you are really getting good at that, you can spot rejections trough MT4 but seeing real soaking where limit orders are soaking market orders will be very hard to tell even if you use volume on MT4, its something that futures show more clearly. Its doable in MT4 aloane, but only on few examples here and there, as active trader you might find only 1 play per day if that, if you are doing it only trough MT4. And even with that you are more or less doing guessing.

So to break it into smaller pieces, why do you want to see limit soaking around the bounce point of supply takeout play rather than seeing just buy market orders coming there. The reason why is becuase it shows stronger intent of the market maker (or bigger side player) to establish floor there. If someone is pushing only with market orders around that price then there is always a free room for sellers to push price down with fresh sell orders, which shows that that buyer is not really willing to set the floor there, because he is leaving price to go down if it wants to.
But if he places big buy limits there, then it shows intent that he is willing to soak any sellers that sell into him and set floor there for where new market order buyers eventually come in and push the price of from there. That is why when you see someone with stronger limits soaking there, it shows strong intent that he is willing to defend that price and establish bounce point for longs, which is why i loaded stronger size. And mind that is just a textbook example, it doesnt mean that this rules of price will apply to every stack of stronger limits, as many limit stacks will just get overrun by market orders. You need to fit all the right variables in right place.

Soaking stands for concept where bigger player is willing to eat up the counter order flow from market orders with his limit orders. Simple example would be, if if you have soft bearish market where sellers are throwing 10 lots sell, 10 lots sell, 10 lots sell but large buyer has big 500 lot buy limit set at that price then sellers will be eating his limits, he will soak / absorb the sellers and price will not move pass that point until that buyer is completelly eaten up OR scenario 2....market buyers come in and push the price up from there.

Best market to learn that concept are stocks, especially low float stocks where tape is easier to read. Futures tape is way too much balanced, you want to have asymmetric tape to get that concept. Especially good is looking in pre market on tape of active low float stocks.


To learn that concept best tool to use is Bookmap which has deepest display of liquidity for any market out there, you can see it all there, limits, market orders, spoofing, soaking, stacking....all of it. But you need someone to tell you what to look at, otherwise its easy to get lost.

In the end its all about strenght of intent. Thats why paying attention to strong stacks of limit orders is always important in market, much more than market orders, because in market orders its too hard to tell if there is 1 player or 1000 players doing it, unless you can read the tape very well.

The example of orderflow on GBPUSD example from before would look like that:


You can use tape / level 2, or time and sales (orders that went trough the asset in last minutes) to confirm the soak. For example lets say you have average market trading action of 500 mkt orders buy and 500 mkt orders sell, and then all of sudden price starts to print heavy sells in time and sales / tape 1000, 1000, 1000, 1000 sells but price doesnt do anything, it just stalls or moves very little, that behaviour change likely indicates that some hefty limit is soaking it up.
And then you need to look into details, because it could be someone offloading on that limit, could be some retailer with big order, basically you want to confirm the aggression, you want to know that that player means business, and for that you want to see that player to keep refreshing his order and adding back size on that limit (will show in level 2 / tape) and that will only happen in specific cases.

When it comes to soaking its all about the context, just like anything in trading. Think of it like fuel. How much fuel did it took price to get to there, and then how much fuel did it took it now compared to how much it took it before in recent history? Thats how you determine supply / demand imbalance.
If you have 500 orders driving price up 100 pips in 1 hour, and then you have 500 orders driving price up 10 pips in 2nd hour, what does that tell you about potential stacks of limits, about initial stacks of limits, about initial demand imbalance and about current sup / dem imbalance.

Just because player is soaking it doesnt mean price will hold, but it does mean that he is at least giving it a solid go. Thats why it matters.

And take all above with grain of salt couse i am not an example to learn tape from, not my strenght point, needs lots of experiance.

GBPJPY long.

Scratch break even, B quality play not gona force it there. Done with FX, last play on equities TMSR .

Hey Janpec, thank you bro for such thorough and generous response.

Everyone who can understand your observations certainly can have a lot of benefits from them.
The world needs such honest and great people.

God bless you, man.

Of she fades. Closed shorts, small gains, went small size, not the play i did research on thus keeping it small, only to pay for pizza and borrow costs.

I was surprised it held up as well as it did. Gap n Go sure made a killing on it.

Agree, expected faster selloff.

Play types

Overview of all the plays that were / are traded over years and researched with established edge. Each of those plays requires month or more of dedicated study and research time before trader has concept of executing them with consistency. Added infos on the approach to research each of those plays so that it helps to know where to look.

-Supply takeout


Market: FX and big cap stocks.
Research procedure: Pull up historical charts and go trough miles and miles of charts while focusing on only down trends, and try to keep eye on structures that have 2 or more highs that are aligned at same price (supply even). Especially pay attention to structures with 3 or more highs that are aligned at same price that also have higher lows progressing towards right side. Focus on clean downtrends (not choppy) so that when the structure appears there is no chop zone in front (left) of it. If you just scrolled trough 10 miles of charts and only found 1 such structure dont worry, its normal, its not about seeing the play every second every where, its finding it where it really fits all variables. Keep observing structures with 2 highs in it, and those with a lot more highs in them and denser structures, observe and note what happens once supply is breached, how far does price go usually, and if it doesnt where it fails, keep note for fake breaks, the rejections, the bounces.
Keep note what happens once supply is breached and price runs, and then it comes back to the flip zone if it bounces is there any indication on price (stall, rejections, volume). Research TF should be M1 on liquid assets and on lesser liquid M15. All key variables to what to look on play have been explained over and over on the thread, make sure that every structure you find fits at least 70% of those variables.
Research procedure has to be step by step otherwise its just chasing the rabbits, break the research process of finding those structures on historical charts this way:
-only look on overall downtrending price
-structure needs to have 2 highs minimum, but rather focus on 3 as minimum
-highs are all aligned at same / similar price
-supply is breached with strong pop candle
If above 4 variables are followed the research will be straightforward.

Positives: Very frequent play, very mechanized approach to finding and searching for it, consistent play. Not a day passes that at least 1 play is present in liquid markets.
Negatives: Could be too easy to see this play everywhere if too much focus is given only on PA. Make sure all variables are respected to only focus on A grade ones (liquidity, spreads, is MM driven, clean symmetry, momentum pops....).

-Pullback leg

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Market: All markets from trashy penny stocks to most liquid assets like EURUSD.
Research procedure: First focus on having bullish impulsive move or up trend. This condition has to be met otherwise no point seeking for the play. Focus on historical charts on looking strong bull impulsive pops, and then try to find structure after them. How that structure looks has been explained many times on thread, progressive LHs, tightening towards right, accumulation process of buyers. Those conditions have to be met when looking for those on historical charts. For those with not much PA experiance its going to be nightmare because traders often struggle to define which price extreme is low and which is high and which is not. It comes with lots of data grabing to tell that its all about context. If you are bad at defining key highs and lows better to skip this play.

Positives: Present in every single market.
Negatives: Not a high edge play, needs tight SL management otherwise unprofitable. Also for traders without much miles of charting could be hard to tell which highs and lows are the one to keep eye on.

-Heavy short squeeze on manipulated low float stock

Market: Low float, low cap stocks (Biotechs, Pharma)
Research procedure: Focus on stocks with high short interest. Use NASDAQ.com or finviz or shortsqueeze.com other sites and only look for stocks with ss positioning around 5 times of its average daily volume (for example avg daily vol 100k, current outstanding short positions 500k). Look daily chart and see where it ripped hard (50% or more in a day), then depick that price action on M1 (Tradestation) to find how it traded. Look for news ahead if there was flufy PR news, it usuallly will be.
This play is all about focusing on finding how to play it short, all liquidation plays are about playing the 100% correction to whatever happened on the liquidation. Almost all liquidatins will correct fully sooner or later. Not a beginner friendly play, requires study of tape also live so using historical examples is not enough.

Positives: High edge play, very high chance of full price correction for a solid short.
Negatives: Not beginner friendly, every traded play needs to be researched and also watched live on tape to confirm it. Better fit for heavier accounts.

-Rug pull on manipulated low float stock

Market: Low float, low cap stocks (Biotechs, Pharma)
Research procedure: Low float low cap stocks that have massive volume on a day, that are up at least 100% on a day, usually over 200%. Focus on structures after strong bull impulsive pop move that have LHs in them but are holding support clean and well.

Positives: Very high RR play usually above 5 R per default. Once the rug is pulled price will crash hard in most cases. Fun play to trade, as weird as it sounds, this one gets you excited.
Negatives: Not beginner friendly, takes deep research on manipulated low cap stocks.

-Pump and dump

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Market: Low cap stocks and crypto (alt coins)
Research procedure: Find historical high % stock moves in first 30 minutes of NY market open. Focus only on those that moved on no news whatsoever, those are usually goign to be pumps. Find how price behaves, what happens to most of those, front side and back side.

Positives: Easy to learn, easy to identify. Can be approached with very wide SL aiming for 1R and still work okay over long run.
Negatives: Nothing to note.

-Weakness play

Market: All markets, but especially low cap low float stocks.
Research procedure: Only focus on low float low cap stocks. Intraday M1 charts are a must to study this play, no other TF. Find low float stock that run 50% or more in a day, find M1 chart, try to find weakness play. Explanations of the play were given on thread.

Positives: Very high edged play 80% win rate if identified correctly. Not hard to learn, very specific conditions makes it easy to research. Bread and butter play for any trader.
Negatives: Playing those on SSR stocks will yield negative performance, its important to stay very disciplined and not trade those plays on SSR (short seller restriction), because the play on SSR usually does not behave the same.

-Continuation play

Market: All markets.
Research procedure: Historical charts, drawing trendlines on key lows and highs.

Positives: Very easy to learn.
Negatives: Low edge, requires very tight SL management otherwise it will not work for sure. Very easy to overfit B quality plays into A quality because every trader draws trendlines different.

-Inflationary currency play under large foreign currency debt exposure or sanctions

Market: FX exotics (emerging markets mostly)
Research procedure: Economy, markets, politics, history. All that, tons of learning. Dont even bother if you arent willing to put serious learning and research.

Positives: Play that keeps giving and giving, can last for months. Requires no technical analysis knowledge, cowboy approach is okay as long as position sizes are small. Add size, place BE SL once in gains, repeat.
Negatives: Requires huge amount of learning and research, over a full year. Usually those plays are also followed with negative swap rates on FX, traders really needs ballz deep conviction to go to sleep every night with negative swap to stick in a trade like that, makes mistakes double costly.

-Hot sector mania

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Market: Stocks and crypto
Research procedure: New sector, everyone is talking about it, even those who have put only 5 minutes research into it, thats a quick definition of hot sector. Crypto, weed stocks as recent examples. Research that from 15th century onwards, those sectors keep replaying in exactly the same way, exactly the same mentality, the same price moves. Use daily charts. Almost all of them they reach parabolic state, focus on that, research how to long and if so where, research how and where to short (not possible in most cases, but just for research play do it).

Positives: Easy to follow up. Cowboy entry approach is okay.
Negatives: Being too late, catching the tops with longs is often problem. Only seasoned traders/ investors will trade this play consistently, you need to get your hands burned few times to get it.

-Shocking bearish surprise news catalyst


Market: Equities primarily, could be FX too
Research procedure: Include heaviest news (fires, collapses, earth quakes, explosions, wars, ....) and find assets that were in the mids of that, see what happened to price on Daily, then go to M1 chart and day by day dig trough what was going on with correlation to progressed news or event.

Positives: Creates watchlisted asset for days, weeks or months, providing large sum of plays. The earlier you are ahead of other market participants the more meat to the bone (if market hasnt yet reacted to it).
Negatives: Rare play, every 3 months or so on average. Needs decent research time.


-Mid day offering

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Market: Low float, low cap stocks with troublesome balance sheets (low cash)
Research procedure: Check news of offerings on stocks, then check for those that were in mid day hours of NY time. Check M1 chart what happened once that news got out, you should see big ass red candle / candles.

Positives: Easy direction play, only one way to go especially if stock is in up trend : down for the most cases. Supply increase / imbalance at its best.
Negatives: Keep disciplined focus only on offerings that are mid day on stock that had run up for at least 50%, discard any other offerings. This means its not frequent play, aprox few to max 10 of those per month.

-Reverse split play

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Market: Low float low cap stocks with troublesome balance sheets (low cash)
Research procedure: Many sites that report reverse splits, just go there and youll find dates for each stock. Then look at chart see what happened at that day to stock. In most cases its a pop and then fade. Its easy play to research as its very specific, data is easily avalible, using Tradestation to see historical M1 price moves also helps a lot. Understanding why reverse split happens is important puzzle to build the right framework for entry. Needs research into balance sheets of companies.

Positives: Easy to follow and research.
Negatives: Only 2-4 plays per month.

-Heavy volume stuf on paraboler (or extended runner)

Market: All markets, but most frequent low cap stocks with big % runs.
Research procedure: Focus only on daily chart of assets and find heavy % runs, then go to intraday M1 and see if price has moved in parabolic phase. If it has plot up volume and see if you can see heavy rejection against the move on stuf volume ( heaviest volume in whole move), if possible check if tape confirms heavy offload. Usually that will be the top / bottom. Last candle will usually be the biggest candle in whole move.

Positives: Consistent play.
Negatives: Easy to overfit B quality plays into A quality, making sure to really only focus on strong runners / drops with reaching semi or full parabolic state is essential.

Pick one and start learning, researching and trading it, then slowly adding new ones. For under-capitalized traders you need as many as possible under playbook, for those with larger size 1 might be good enough. Some of the plays have been explained on the thread, and some not so much, its kinda spread all across, i am not an organized person so take what you can get. The most important thing in trading is having realistic expectations that are based upon consistency of behaviour, so research over 100s and 100s of plays that trader is aiming to play on is esential, without it its just a guesswork. I listed the reserach procedure for every play the way to go about it to make sure you are in right place looking from right angle.

Havent given any specific entry rules or reasons to plays above, because thats not the point of this post. The point is to actually doing the research on them and then listening to your data if there is consistent behaviour to them to find what you would want to use as entry and exit.

This is just a shortcut to have given on a plate play that has consistent behaviour to it. Next step for trader is to collect right data to find how to form strategy around it. What happens on the play when price does X? How much DD is on average after play is confirmed against its usual direction? How to know if your early or late in the play? What is the usual direction of a play afer 30 mins, after 200 mins, after 1 day....? Was there a news? Did volume give any hints, did price form any symmetric structure, how are highs or lows flowing usually. Tons of data to gather, that data will be essential to build confidence on play and to have right strategy. You do not pick the strategy, the market does it for you. If you are new to data gathering one thing to remember, most data that you will gather will be meaningless, that is normal. The real edge will only be hidden within 10% of data you collect or less. Its normal, that is because most data will be over-fit or just too general.

gu

EURNZD M30 / M1

looking for a bounce entry on M1

GBPUSD took some. Have alert set for bounce play but wont take it most likely.

Ye watching that one but not going to force anything ,waiting on sidelines for some decent micro setup. Its already going, so now best would be to wait for micro play around 6622 area.

Bounced, didnt take.

eu