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08-14-17 Day 6 - Part 3 - ES - Trading Process Exercise - Lot Management - 2 Lots - 10 Steps
08-14-17 Day 6 - Part 3 - ES - Trading Process Exercise - Lot Management - 2 Lots - 10 Steps
08-14-17 Day 6 - Part 3 - ES - Trading Process Exercise - Lot Management - 2 Lots - 10 Steps
2
Add Fractal Indi IF Needed
• Fractal indicator
• Supports you to be able to see the turning points in price action
and C-Liquidity levels
• Showing where there are trading opportunities
• If price doesn't go through the previous high or low it is a
Failed Auction Fractal
Fractal
Failed 3
Fractal
Auction
Failed Auction Significance
• If price doesn't take out the previous high or low, it is a failed auction
• Below is a failed sell auction, as price hasn’t taken out the previous low
• This signifies that there is still demand in the market and you should be
ready to buy at or near the Auction high
Auction
New Low
4
Failed
Auction
Low
Each Box = an Auction
High
Failed
Auction
Failed
Auction
Failed
Auction ?
Failed
Auction
5
Low
Opportunities
FA
FA FA FA
FA
FA
FA
FA
FA
6
A Momentum Trade
• The Core Idea = a momentum trade in the direction of supporting
intrinsic value
• As price approach's the Buy Order we want to see intrinsic value for
ES in our favour such as :
• Being in an uptick
• Block volume is positive
• Want to see a buyers rotation, so buying Merrill's auction
• Trin is bullish
• Ideally buying before the breakout, but in this exercise we will start
by buying the break. Then practice working the trade backwards so
as to enter before the break out
• Statistically the market stays in a trend 60-65% of the time so you
should be able to get a win rate in that vicinity
• Targeting 1 and 2 ticks
• Stop of 4 ticks
• The end game of this process is you will have a trading system that 7
has a maximum 4 tick stop, minimum 60% win rate.
Exercise Step 1
Only do this on demo as an exercise to learn how to process lots of information quickly
1. Recognising price action: Identifying flow and movement of price. If you miss
a trade on a downtick then through this process you will learn to enter on the
up tick when value is still in your favour. In this exercise you are buying C-
Liquidity hoping you will be involved in the stop run 8
a. Enter using : Buy Stop or Sell Stop orders
b. Helps you recognise the squeeze in line with your trade
c. Effectively buying C-Liquidity for the stop run
Exercise Step 2
Make sure you only add one change at a time and then assess how that 11
impacts on trade performance
Measured Moves for Targets
High
Failed
Auction
Failed
Auction
Failed
Auction ?
measured
move measured Failed
move Auction
ProfitTarget 12
Low
Exercise Step 8
Stop
4 ticks
Sell Limit 3 ticks above high
Target
1 ticks and
2 ticks
Stop
4 ticks
GC Example
17
Add : Levels, Volume and 1 Value (1/DXY)
GC Example
10:30 GC auction
Previous day POC
2:00
Level
21:00 Level
18
Add : Levels, Volume and 1 Value (1/DXY)
Sell Limit 3 ticks above high
GC Example
10:30 GC auction
Previous day POC
2:00 Level
21:00 Level
Low Vol VolP zone
19
GC
20
Technicals
• When Price is in an up trend
• There should be a buy trade on a break
• There should be a buy trade 1 tick before the break
• Failed Auctions give you C-Liquidity buy
• There are trades all over the place not only at the tops or
bottoms
• You need to be able to find these trades
21
Is ES a Buy or Sell
• Look on daily chart first
• On large daily down bars we are only
looking to buy
• Look to see how much hedging has been
put in place
• Where is Value
• Move to smaller time frame for trading
• On a 5 m chart at bottom edge enter using
• failed auctions/wobbles
• 3 ticks limit order
• There are trades everywhere
22
Tape reading : Order Flow
Many different ways to read but always happens around the big figures
When at top edge and we see an edge rejection, we now look at the tape to see when
there is an opportunity to enter through a tape imbalance
All you are doing is
Watch for an imbalance, a reduction in liquidity. If you buy
reading the diagonal,
now price should up tick, giving you a 1 tick look at the market
watching for the
Liquidity above liquidity to get very
the market of 50 thin. Then hit into that
40
offer and lift the offer
50 10/5 50
If you need to get
50 50 off the trade you
Price should
could exit for 0
immediately
except commision
up tick
Liquidity
Liquidity is added to push
price through the big figure, Pulled Added
then the liquidity is pulled liquidity Liquidity
away from above, trying
desperately to get more 00
buyers into the market, when Once they have
in reality all they are doing is Added accumulated
accumulating more shorts enough shorts they
Liquidity flip liquidity
removing liquidity
Pulled from below the
liquidity market and adding
Liquidity is often below price it above the market
and added as it goes up,
trying to encourage buyers 24
as liquidity is behind them