Becoming A TopStep Trader 2020

Turns out my TP target of 3000 would have been hit.
Shame about the deep retrace before. Glad to have got out when I did and taking the money is always a good thing.

Today's levels bought to you by range range expansion and return to the 50% level
I had to break a rule today - oops

I received some questions, so i'll do my best to answer them.
1. How do you go about filtering noise? For example, some days there would be whipsaws at the market open?

Trading the market Open is one of the most volatile times of the day - every trading day.
Over the last few months I have attempted to trade the US open and I have now decided not to.

I tested how well I could do with the opening range - which is the 1st 1-minute close. The high and low of the 1st minute on the ES is quite a special range. A lot of business gets done within it and this is visible at the size of the Volume candle on any chart from any broker. For a while, I was attempting to trade 1 tick either side of the range. With the first move as the direction, the market would head in for a few handles. This works on trending days. It also filters itself as you have to ask yourself a few questions. Where do I put my SL? What is the next level that is going to be a roadblock? If the opening range is 10 points (I exaggerate) this would be a very long drawdown should the market reverse. So what would be an optimal size opening range? When you find that size, you just need to sit out the wider ranges.

Roadblocks that could also act as support and resistance and give you a reason to trade the break of the opposite side of the range, could be Pivots, Psyco levels (00, 20,50,80)


Because I wanted to reduce the risk, I tried waiting for a break of a range and then trading the pullback into some Moving Averages. This also worked for a while.

All of the above felt like a great idea when it worked but the consistency was not there as I was trading manually. If I were on Sierra charts, Ninja etc. I would set up an EA and get the computer to do it with more accuracy and see how these ideas played out. Then if the % of winners and the reward to risk was great enough, I'd definitely trade the Opening Range on the ES.


The next way I tried to limit the whipsaws was to mark out the middle of the range and then trade the pullback into that. That would then still leave me with 50% of the range + a tick as Drawdown, so again on wide range days a bit of a problem.

Now I am choosing not to trade the 1-minute opening range but I am monitoring the initial balance. Which is the 1st hour of trading. The range is high and low of that. This then becomes a clean breakout and retest, or failed breakout and then a case of selling old support and buying old resistance. From there you can usually get a reasonable size risk by placing an SL above or below a swing low and the smaller the time frame the tighter that can be.
It also means I am not trading in the middle of the Initial Balance and I am only flirting with the prices at the edge.

Other than the intraday Initial Balance this is what I am looking for.


The idea is that price leaves the grey box range,
IF it goes from Green to Red, I look for a Bullish trend to resume
IF it goes from Red to Green, I look for a Bearish trend.

This forms my bias, but obviously if it doesn't do what I expect that is also information to me. The must be a different type of sentiment in the market.
Looking at the Moving averages gives me a sense of whether the market is counter trending, or creating new ranges.
Looking at the USDJPY gives me a clue to whether the Market is Risk On or Off, same for looking at the US 10 Year Yields / Notes.

Maybe there is news out and the market is moving to a level to wait on that, or maybe it is at a level and is creating a smaller tighter range, in anticipation.

Opening Range - Popped out to the upside, maybe signalling bullish momentum/sentiment


Market Open just before some News.

I will wait for the news to pass

USDJPY is ranging, with a slight bias to the upside.
A weak Yen is good for stocks as traders are feeling riskier and moving out of safe haven/hedges into yielding assets

US10 Year Yield ranging and not looking currently likely to go higher - bad for equities and risk assets.

First Lot of News is out and the ES breaks to the upside of the Opening Range

Second set of news,
ISM under 50 is bad but it depends how the market views the future which will determine the direction, if the market is paying attention to manufacturing right now.
China is more of a concern. Even more so than the riots.



Initial Balance is likely to be between 3020 and 3050 and maybe the opening range low is the Initial Balance Low too today. Which will add to my Bullish idea

Initial Balance, just below the 3050 - which means that could be resistance.

should go to 3080 - I just may not survive if they keep pulling back to take the weak hands (like me) out

Next Question I Received:
2. Do you generate your signals solely from time-based or volume-based charts? I'm currently exploring the use of tick charts to basically paint price changes solely based on volume. The way I see it, a huge candle on a 5-minute chart could be a range on the 1,000 ticks chart.

I have currently moved away from Tick charts but I aim to go back to them in the future as I would like to move away from solely concentrating on Time based ranges and focusing on price based ranges. I am just finding it easier to see the Opening Range and Initial Balance with the time-based charts.
When I looked into which Tick Charts would be best to use for the ES I came across this:

https://emini-watch.com/emini-trading/tick-charts/ and it has the best explanation as to why I would use the 500,1500 and 4500 tick charts

My current time frames are
H1 for trend/range distinction
M15 for momentum
M5 for signal
M1 for trigger

I want to see the prevailing moves as a trending one as I am a directional trader.
On the M15 I get to see whether the moves on the H1 are expanding or contracting
On the M5 I want to see a short term pull back, which is then triggered by an M1 signal.

This essentially keeps all your ducks aligned with the higher time frames moves

Question 3. Do pending orders in the DOM help you set a directional bias in any way? If so, how do you go about to handling spoofing or larger orders that have no desire to be filled?

I learned quite a lot from the book https://www.audible.co.uk/pd/Flash-Crash-Audiobook/0008270422? Flash Crash. Quote Stuffing, Spoofing, HTF are all words that I was aware of but was great to read an account of someone that traded against them or with them, depending on your view point.

In TST from Tradovate you can see the orders come in that get filled. via the Tick stream

Attached Image (click to enlarge)

The screen shot shows the blocks that are greater than 20 - if you want to see when a largish order gets done you can up the Vol Filter to 100, 500 etc.
However, the really big orders get broken up (Icebergs) and a clever algo will vary the sizes to cover the trace but you can see the accumulation on certain levels using the Tick Stream.

My 1 lot gets hit every time and trading a 1 lot can be a great way to test the market.
When you are looking at the DOM and you see a rather large order sat at a level, it is usually not anyone waiting to get filled, i would imagine it is a bunch of Stops
The attached shows 297 sat on the 3099. That to me looks like traders wanting to get out before the 100 and when that level (3099) gets taken there would be a speedy flush through.

When that 297 is 500 or larger, it can act as a ceiling but when it goes or gets pulled the market moves fast.
There is 580 sat on the 3100


3098.75 is the high of the day so far, so it makes sense that traders would have a SL above by 1 tick at 3099. However, there is that psycho number of 3100 just above, so if those traders have popped an SL there, it will get taken. Hence why I think it is people taking profits ahead of the 3100. So they get filled.
As we get closer to the open, and the 3100 the orders build up.

5 minutes before the open and the 3100 level gets taken with some hefty orders

We have this data out today plus the EIA at 3.30pm, so going to be sat out for a while

3115 signalled to me that it was doing something



So I went long

I believe that the overnight high will be taken and then price will find itself at 3150

3111.50 was too strong a level POC
they've sold it off and taken the stops.

How I traded the Non Farm Payroll today.

With TST you have to be flat just before the news and then flat just after. The Volumes go really thin on the DOM and you see the thin liquidity manifest in big asymmetrical moves. Generally at algo pace, but in reality the algo's are mostly turned off. It's just markets on vapors.





Watching the parabolic rise I was happy to see 3150 get taken, as it opens up 3180 and ATH's.
However, the continuous stream of rising prices culminated in a >200 lot being thrown into the market at 3162.25 Total accumulated vol. was 678, the largest volume of a price today so far.
When price failed to hold above that line, it signalled exhaustion to me and that buying could have been someone with skin in the game actually getting out. A lot of retail orders may have been piling up and someone used them to get sell into to get out of their position. Whichever way it happened it was a signal that when that much volume (buying) occurs you would expect that level to at least hold. It didn't.

Then on the way back down as similar size came into the market in the opposite direction at 3150 and that level held. So vice versa. Someone got in and out or sold only to re-buy at better levels.

It is not for me to know and understand the intricacies but to recognise the signals.

The 511 lots that came into the market at 13:30 BST on the announcement that the US NFP numbers were much better than expected, started a bull run for the start of the US session.

This looks like it has culminated in prices reaching 3200+

Just imagine if that was one firm, or trader who did that trade. Epic.



London close



this is what I aspire too.

https://www.dropbox.com/sh/0wqulvntr...3T4A0RCxa?dl=0

Some light reading for you all

A larger Picture Idea





A scalp intraday

The big orders on the DOM can be a magnet

Wasn't confident of trading today - was going to burn a trade just to get a trade on the board as FOMC days are notoriously tough as the volatility is either nonexistent or über volatile. Hence why I took a couple of mini scalps after the Open and then tried hard to get a good run after the Meeting Minutes etc.


With Fed buying more Treasury securities I would argue they are un-printing money and happy to argue the toss with anyone who cares to message me.