1D M1 VWAP, 1D M2 VWAP, H12 Bearish LIS, H6 Bearish Trend, Lower DOL, M1 Entry, M2 Entry Loss, Mo Bearish Trend Shift, VWAP Short,

Key Takeaways from Today's Trade of the Day Setup

1. Trend and LIS Analysis:

   • Entered a long trade during a setup that should have been taken in the opposite direction.
   • Misalignment due to the H6 trend not flipping, which is crucial for counter-trend trades into the H12 LIS.
   • The trade would not have been executed if the H6 trend flip was awaited, avoiding the incorrect long entry.

2. Timeframe and Execution:

   • The trade of the day setup played out on the 1D 1M VWAP middle band, suitable for 1-minute and 2-minute chart execution.
   • Chose the 5D 5M WEEK VWAP for the trade based on a prior successful trade at the upper band extremity.
   • Misjudged the lower band extremity as a high possibility for a swing low hold and bounce.

3. Volatility and Price Action:

   • Experienced tricky price action with significant volatility.
   • The draw on liquidity was lower following the monthly trend shift, which should have been factored into the analysis.

Adjustments and Rule Implementations

1. Counter-Trend Trade Rule:

   • New Trading Rule: To execute a counter-trend move into the H12 LIS, the H6 trend must be counter-trend to the H12 directional bias/trend.
   • This rule ensures alignment and avoids premature counter-trend entries.

2. Trend Confirmation:

   • Always wait for trend confirmation on the H6 chart before executing trades against the prevailing H12 trend.
   • This confirmation helps in avoiding trades that go against the overall market direction.

3. Timeframe Consistency:

   • Execute trades on appropriate timeframes that align with the identified setup (e.g., 1D 1M VWAP middle band for 1-minute and 2-minute charts).
   • Avoid using custom or less relevant timeframes that could lead to misalignment and increased risk.

4. Price Action and Volatility Consideration:

   • Factor in recent trend shifts and the potential impact on price action and liquidity draws.
   • Stay cautious of tricky price action and avoid making trades based on assumptions without confirmation.

Summary of Adjustments and New Rules

1. New Trading Rule:

   • For counter-trend trades into the H12 LIS, the H6 trend must be counter-trend to the H12 directional bias/trend.

2. Trend Confirmation:

   • Wait for H6 trend confirmation before taking trades against the prevailing H12 trend.

3. Timeframe Consistency:

   • Use the appropriate timeframes for trade execution based on the identified setup.
   • Avoid relying on custom or less relevant timeframes.

4. Price Action Awareness:

   • Be aware of recent trend shifts and their impact on liquidity and price action.
   • Exercise caution in volatile markets and avoid trades based on unconfirmed assumptions.

By implementing these adjustments and rules, you can improve your trading accuracy, avoid misaligned trades, and enhance your overall trading performance.

 

 

 

 

Today we took a long at the exact moment this 'Trade Of The Day' Setup played out. So i got in the wrong direction at the exact moment I should of went the other way.

The reasons I think I got this trade wrong, was mainly because, the H6 trend never flipped, which seems to me now, to be a major factor with my H12 LIS thesis.

***NEW TRADING RULE***

In order to play a counter trend move into the H12 LIS, going against the prevailing directional bias as we state in our 'Line In The Sand', the H6 trend must be counter trend to the H12 directional bias/trend.

__________________________________________________________________________________________________________

I believe if I had waited for the H6 trend to flip, it would have kept me out of the long side trade, because the long order would have never got filled, and I could have located the counter direction move and looked for levels and opportunites according to it. 

The trade panned out on the 1D 1M VWAP middleband. And the trade could have been executed on both a 1 minute & 2 minute chart.

I executed the trade on a 5D 5M WEEK VWAP, because the prior day, I had an amazing trade that came from the upperband extremity, and today we were trading the lowerband extremity, and I thought there was a high possibility that the swing low would hold, and that we would bounce. It was very tricky price action. 

And the draw on liquidity was lower after the monthly trend shifted. 

4D 5M WEEK VWAP Upperband Extremity, H1 Bearish Orderblock, H1 Bullish to Bearish Variation, H6 Bearish Trend, LIS Target (Bearish), Lower DOL, M5 Bearish Confirmation Close , M5 Bullish to Bearish Variation, Positioned Shorts Key Level,

For some reason, this journal isnt letting me manually tag the trading patterns for todays setup, so I will type them below vvv

(PATTERNS)

- 4D 5M WEEK VWAP Upperband Extremity

- M5 Bearish Confirmation Close Level Marked for 'Positioned Shorts)

- M5 Bullish to Bearish Variation Price Action (REACTION) at key level of interest (Same Timeframe)

- Bearish Tape on Time & Sales at key level (Above 10 contracts)

- Overnight H1 Bearish Orderblock & H1 Price Action REACTION response, validating the M5 Bearish Confirmation Close Level

- Weak Pre Market Low

- Lower Draw On Liquidity

- H6 Premarket Bearish Trend Shift

- Trend Below 1D VWAP Lowerband

 

 

Trade Analysis and Summary:

Key Points from the Notes:

• Pre-Market Analysis:

  • Woke up early: Ensured readiness before key data drops.
  • Mixed overnight session: Close to an H1 Order Block (ODB) level but not fully tapped.
  • H12 Uptrend: The Level of Interest (LIS) sits at 19344.25.
  • New monthly candle: Opens with a slightly bullish trend from the previous month.
  • Sell signal on WEEK VWAP Upper Band: Noted potential short opportunity if the signal holds.

• New Trading Rule:

  • If a setup goes past the level of interest, the trade is invalidated.

• Data Drop (Jobless Claims):

  • Bearish interpretation due to increased jobless claims.

• Main Trade Idea:

  • Sweep of the PMH into an untapped M30 Bearish Order Block, aligning with WEEK VWAP Upper Band.
  • H12 LIS: Awareness that the trade idea goes against the H12 LIS but aligns with the H6 bearish trend.

• Trading Execution:

  • Gut feeling: Bears in control due to trading below the overnight mean.
  • First trade: Stopped out but identified manipulation and re-entered with confirmation.
  • Second trade: Successful entry with confirmation of A-side setup and multiple confluences.
  • Result: Ended with a P/L of $419.

Analysis:

1. Pre-Market Preparation:

   • Thorough preparation by analyzing multiple timeframes and potential trade setups.
   • Clear identification of key levels and order blocks.
   • Integration of a new trading rule to avoid invalid trades.

2. Data Interpretation:

   • Correctly interpreted jobless claims data as bearish, influencing the decision to lean towards short trades.

3. Trade Execution:

   • First Trade: Identified manipulation and quickly adapted by re-entering with a better setup.
   • Second Trade: Followed all criteria for an A+ trade, including confirmation on the same timeframe and trailing the trade to lock in profits.

4. Risk Management:

   • Effective use of stop losses based on recent swing highs.
   • Managed to keep losses minimal on the first trade and maximize gains on the second.

5. Outcome and Reflection:

   • Overall successful trading day with a solid profit.
   • Identified the reasons for success, including proper analysis, following the new rule, and waiting for confirmations.

Conclusion:

Combining the Data Drops:

• Jobless Claims: Bearish due to higher-than-expected claims, indicating potential labor market weakness.
• Productivity and Costs: Bullish due to significant productivity gains and lower unit labor costs, indicating economic strength and controlled inflation.

Net Outlook:

• Despite the bearish jobless claims data, the productivity and costs data provide a stronger positive outlook. This suggests an overall bullish sentiment, particularly in terms of economic growth and inflation control.

Trade Reflection:

• The successful trade execution against the H12 LIS worked due to multiple confluences and adherence to the new rule.
• This trade likely represented the "Trade of the Day" due to its alignment with identified setups and successful execution.

By combining thorough pre-market analysis, disciplined execution, and effective risk management, you were able to capitalize on the day's trading opportunities successfully.

 

 

 

 

 

 

 

 

 

8:06 AM. Woke up early this morning. We have some data dropping in a half hour, also 9:45 & 10AM data as well. The overnight is mixed. Coming a few ticks away from an H1 ODB I market out yesterday, and never came back to tag it. I would prefer if the level was actually hit to play it. Sometime I feel like when levels are barely touched like that, they can act as manipulations to play the opposite way. So if Im going to contemplate going short OTD, I think it will be best for the current PMH (which is ticks away from the first H1 ODB) & of many other bearish ODB's, to be swept so that the liquidity can first be cleared.

We are also in an H12 uptrend, and the LIS currently sits at 19344.25. Because of the other days new rule implementation, I began drawing uptapped supply and demand levels near the LIS. And the only one that remains at this moment, is an untapped M1 demand area right above the LIS. 

This is also the first day of a new month. August 1st, so the new monthly candle opens today, and the prior month was able to maintain a slightly bullish trend, with a higher high and higher low. Also, holding at the untapped Month Bullish Orderblock, which lined up in confluence with the 90D low to high 61.8% fibonacci. 

On the 4D 5 Minute chart, WEEK VWAP. It is currently giving us a sell signal at the top of the range and Upper Band. Theres a chance that the sell signal has already been first because the 4D 5Minute chart Upperband has been sold into and closed below. Prior to a slight trend above. But the trade idea I like most at the moment is a sweep of the PMH, to tap into the untested bearish orderblocks, and wait for the timeframe confirmation & reaction.

***** NEW RULE *****

If the A side of a setup & reaction of a trade, goes past the level of interest from the highest high, or lowest low (depending on if its a short trade or long trade) than the setup is invalidated. 

For example; If Im looking for a short trade at a key level, and that specific level requires an H1 entry confirmation & reaction, but the H1 chart continues trending higher, past the key level of interest, if an H1 bar is created with low that is ABOVE the key level of interest, than the trade is invalidated. The H1 low MUST maintain below the key level of interest, to signal a price action response that there is actual selling pressure stepping in to keep the bar below the level. And if the bullish to bearish variation takes place, creating an A side setup, on the right side of the ^, than that is multiple confirmations for a trading entry. 

8:43 AM: The 8:30 DATA drop (JOBLESS CLAIMS) just came out, with an increase in the overall number of jobless claims, which is a bearish interpretation. 

8:54AM. The main trade that I am looking for OTD is a sweep of the PMH, into the untapped M30 Bearish Orderblock, which would be in confluence with an overextending on the 4D 5Minute WEEK VWAP Upperband. The only thing is this thesis goes against the H12 LIS, but the H6 trend has shifted bearish, so I think there is a chance that this can come back to test the LIS.

My gut is telling me that long side plays wont be as easy or feasible OTD, as we are currently trading below the mean of the overnight. Which is currently telling me that bears are in control. 

11:12AM. Wonderful, amazing trading day. I ended the day with a total P/L of $419 dollars. As I stated just before this, I had a gut feeling that shorts would play out OTD. It seems that the early 9:30 shorts got too eager, and were squeezed at the PML, although the alert was never triggered below the PML. 

When I looked at the 4D 5M WEEK VWAP, I noticed that during the overnight session, we were trading above the VWAP Upperband, suggesting an Overextenstion/Extremity to the upside from yesterdays move. So I decided to market the 'Overnight Short Close M5' level, as it was the first level to close below the Upperband, suggesting that would have been an ideal short entry from the overnight, and also suggesting that shorts were positioned at that exact level of 19631.75. Because of this, I took my time at the opening, simply getting a feel for price action, by marking alerts as the price action developed, from the trend analysis perspective, and draw on liquidity perspective. 

I saw at the start of the trading session that the 1D VWAP could have played against the 4D M5 VWAP, because we were trading towards the lowerband, but I took the birds eye view & larger timeframe analysis, and gave it more weight. 

The first trade I entered, was stopped out, it felt a bit manipulated, but it cleared the gap to the M5 bearish orderblock that was created from the confirmation move, instead of the confirmation close level, so with a micro mistake, I was stopped out of the first trade, but got in a second time, when the A side setup was still presented at that level, with M5 lows holding below the key level, and getting a bullish to bearish variation A side setup, as my new rule suggests. Stops at the most recent swing high prior to the move, and I took it to the next draw on liquidity which was the M1 demand created off of the LIS.

Today, trading against the LIS happened to work. It was a counter trend trade before the full confirmation, but thats because I had multiple confluence confirmations to trade against it, and back to the daily mean. 

11:25AM. As it currently stands, but LIS was broken, creating a technical downtrend unless proven otherwise. 

 

***Overall***

The reasons why this trade worked

- I Identified a macro extremity on the 4D 5M WEEK VWAP

- I saw overnight confirmation of a break and close below the VWAP Upperband

- I marked the close of the M5 candle, in the same timeframe used to spot the trade, as where 'shorts are positioned'

- I waited for the A side setup, and price action confirmation on the same timeframe used to spot the trade

- I followed the trend and indentified the likely area for price to reach towards, whcih was the H12 LIS in confluence with the 4D 5M WEEK VWAP middleband

- Trailed the trade on the same timeframe I entered 'M5" to lock in profits incase of a reversal (which didnt happen)

- Let it hit my take profit

All of this meets the criteria for an A+ trade, and I think I likely hit the 'Trade Of The Day' setup. We will know by the end of the day. 

 

2:14PM. I just noticed, todays win was a major adaptation to the $600 loss from the other day. It wasnt the exact same setup, in terms of opening between the middle and upper VWAP band, but it was a fake break higher with a nasty short opportunity off of a bearish orderblock. Money trades today baby.

1PM Sell SIde, 9:30 Open Downside Drive, H12 Bullish Trend Failure, H12 Line In The Sand, H12 Range, H6 Bullish Order Block, Higher DOL, Lower DOL, PML Short, Trend Below Lowerband, V Shaped Recovery, vwap bounce, VWAP Lowerband To Upperband, VWAP Upperband short, VWAP Upperband To Lowerband,

Trade Details:

• Entry Time: 8:17 PM
• Status: Closed
• Asset: /MNQ
• Type: Short
• Patterns:
  • 1PM Sell Side
  • 9:30 Open Downside Drive
  • H12 Bullish Trend Failure
  • H12 Line In The Sand
  • H12 Range
  • H6 Bullish Order Block
  • Higher DOL
  • Lower DOL
  • PML Short
  • Trend Below Lowerband
  • V Shaped Recovery
  • VWAP Bounce
  • VWAP Lowerband To Upperband
  • VWAP Upperband Short
  • VWAP Upperband To Lowerband

Notes:

• 9:27 AM: Short bias due to H12 downtrend. Expected no significant bullish trend shift until breaking above 19380.
• 11:40 AM: Initial losses from failing to act on short entry signals at PML, chasing shorts, and not taking profits on scalps. Added to a losing position, increasing risk.
• 3:38 PM: Managed to recover losses and finished the day up $1200 by shorting after a failed H12 bullish move. This trade capitalized on VWAP Upperband rejection in an extended range.
• General Observations:
  • Day began with mixed signals, leading to initial losses due to mismanagement and aggressive positions.
  • Recovered by identifying a strong short setup based on multiple confluences: H12 trend, VWAP levels, and range top.
  • Emphasized the importance of defining and respecting the 'Line In The Sand' level for future trades.

Key Takeaways:

• Right:

  • Successfully identified a high-probability short setup and executed it effectively, recovering from earlier losses.
  • Recognized the significance of multiple timeframe analysis and VWAP interactions.

• Wrong:

  • Initial mismanagement of trades, including chasing positions and not cutting losses promptly.
  • Over-leveraging on initial trades led to significant drawdowns.

Outcome: Closed the day with a $1200 profit after recovering from initial losses.

Overall Summary: The trading session was challenging due to mixed signals and initial mismanagement. However, the user was able to turn the day around by sticking to their analysis and executing a high-confluence short trade at the VWAP Upperband. The session highlighted the importance of defining and respecting key levels ('Line In The Sand') and managing risk more effectively.

 

 

 

 

4o

 

 

 

 

9:27 AM. Currently short biased. H12 is downtrending, and for it to trend shift, would be above the 19380 area. And even if the market does happen to shift from our candles perspective. The move actually wouldnt be provided until tomorrow because the daily is still downtrending. As well as the weekly, which has another DOL lower through more buy orders.

11:40. I fked up today big time, didnt take the short entry signal at the break of the PML, chased short way to low. Didnt take profit on the scalp I should have. Didnt cut a multiple signals. Added to a losing trade when the A side of the setup was invalidated. All because I wanted to be a dick for a tick. 

3:38PM. WOW. traded my way back to positive, and also finished the day up $1200. Faded the upward break attempt of the H12 candle at the top of the range, and shorted all the way back down, I got a sell signal from the upperband of the daily VWAP. And although I was risking a squeeze, I thought it was less likely because we were at the top of a very extended range.

Todays trading day was very back and forth, alot of stress, and I spent most of the day trading at my screen. My brain is fried. The market opened in the center of the VWAP and top band, Since it was obviously in the center of a range, I decided not to short off of the open, but I came into the session short biased because of the overnight DOL and the lower DOL on higher timeframes. I was also aware that there are alot of buy limit orders below, and I figured we would spend another day driving into all of that liquidity to the sell side, and yet again trapping longs on the day somehwat like yesterdays price action.So the market fell below VWAP off of the open, and because the top wick of the next M2 candle was slightly below the VWAP, I knew that there was a chance that my buystop long trade at the trend reversal on M2 could fail. So i was anticipating that I would at minimum have to wait for the bar to close above the VWAP on the reversal if I was going to take the market off of the open.It porceeded to drop lower,and came back to the the VWAP, in my mind I was thinking it was a good place to short, but I decided to pass up on the trade. At the spot where it says 'missed short' was a trend confirmation entry to the downside, which I figured was a continuation trap on longs from the bottom VWAP band. But I passed up on the trade. I didnt know if it was going to rip against me. Like a dummy, I chased short, and what do you know. it ripped against me. I also was in profit on my chased short, but stupidly did not cover profit at a clear take profit level. The trade went against me, stopped me out, I re entered short at what I thought was the bottom of the range, but what do you know, complete V Shaped recovery. The worst part about this loss wasnt the stopout, It was that I went it too heavy and lost more money than I should have.I collected my thoughts, and seen a simple easy money trade setting up at the VWAP as it was ascending higher, and got my M2 confirmation for an entry. My target was the top of the VWAP band at 19320.Above that, was and H12 candle that has yet to break its trend, with the line in the sand being 19380 on the session, and I actually spotted this level the day prior, and told Paul about the entry. Well, since it was the top of the range, and the next chart over from H12 on the daily trend was very far away, with it also aligning with my prior day analysis, at the top of an extended range from the top VWAP band, I decided on taking the short.It was a very uncomfortable trade, and I was likely sized a bit heavier than I should be, but it just felt like a very A+ trade that I didnt want to pass up on.There were so many confluences. H12 top range, over extended market, VWAP Upperband setup, still downtrending on daily, weekly and monthly charts. Spotted day prior. Was waiting for potential 1PM sell side, which I stated in group chat.With that being said, I think I can for sure with confidence, officially define the 'Line In The Sand' on each trading session, with the H12 high or low depending on its trend. We will now implement this in the future. 

Oh, and I could have waited for the 'Line In The Sand' Level to have triggered, and waited for the turn of M2 and M5 to go short. It was also a technical stoploss level, because it was risking a squeeze higher. In the future I will have to remember to implement this concept so that I can avoid getting in the trade too early. The 'Line In The Sand' could have acted at Buy Side Liquidity for this trading session, signaling that early shorted could get squeezed before the liquidity is ran. The moment it hit the level, ran the liquidity and had a price action response off of the level, could have been our trigger to get short with new HOD stops. 

30D Low to High 61.8% Fibonacci, H1 Bullish Trend Shift Failure, H2 Bullish Trend Shift Failure, H4 FVG, Lower DOL, M1 Demand Entry, Pre Market Open Retest Short,

Trade Notes: July 19, 2024

Trade Execution

1. First Trade:

   • Outcome: Solid winner.
   • Setup: Based on the 30D low to high Fibonacci (61.8% level), entry was supported by the lower DOL (Daily Open Low) and demand entries on the M1 chart.

2. Second Trade:

   • Outcome: Loss.
   • Mistake: Entered after observing large buy orders, which led to a sudden market drop. The decision to size in more aggressively and the resulting market movement caused a loss.
   • Issue: The trade could have been more profitable if the exit had been executed at the top, instead of getting faked out by the tape.

Setup Analysis

• Initial Entry:

  • Reasoning: Entry was based on a significant imbalance and the next draw on liquidity being the prior month's low. The setup aimed to capitalize on a potential “monthly turtle soup” scenario, where early longs were swept out.
  • Outcome: First trade was successful, validating the use of the setup.

• Subsequent Entry:

  • Reasoning: Aimed for a continuation based on the earlier setup, but market dynamics changed with a massive buyer’s presence and subsequent market tanking.
  • Issue: Lack of exit strategy led to unnecessary losses.

Key Insights

• Tape Reading: Relying solely on the tape can be misleading. It’s essential to align entries with broader market context and confirmation from other indicators.
• Setup Testing: Testing new setups like the monthly turtle soup provides valuable data for refining future entries.
• Fibonacci Levels: The 30D low to high Fibonacci levels have shifted. The 61.8% bounce is no longer relevant, but marking previous levels can aid in tracking future reversals.

Future Considerations

• Liquidity Zones: Continue to monitor significant liquidity zones and Fibonacci confluence areas (e.g., 90D 38.2% and 30D 78.6% Fibonacci levels) for potential bounces.
• Exit Strategy: Develop a clearer exit strategy to avoid losses due to market volatility or misleading tape signals.
• Refinement: Adjust trading strategies based on ongoing analysis of setups, particularly in identifying and managing risk more effectively.

Action Items

1. Track Setups: Continue to track and refine the use of Fibonacci levels and liquidity zones based on historical performance.
2. Monitor Tape: Use tape reading as a supplementary tool rather than the primary basis for trade decisions. Validate tape signals with other indicators.
3. Refine Strategy: Incorporate the lessons learned about entry and exit strategies into the trading plan.

Updated Checklist for Trade Entries

1. Setup Confirmation:

   • Validate with multi-timeframe analysis.
   • Check Fibonacci levels and liquidity zones.

2. Execution:

   • Prefer high probability setups with clear entry and exit criteria.
   • Avoid sizing in aggressively based on tape reading alone.

3. Exit Strategy:

   • Define exit points before entering trades.
   • Use trailing stops or predefined targets to lock in profits and minimize losses.

4. Post-Trade Analysis:

   • Review trades for compliance with strategy.
   • Adjust tactics based on market behavior and performance data.

 

 

 

 

I took 2 trades, the first was a solid winner, the second one could have been avoided, by taking the profit at the top, rather than sizing in & getting faked out by the tape. I seen massive buy orders coming in, and the moment I pressed the buy button, the market tanked. It was likely a big buyer that was building a position that could potentially take off next week.

The entry I decided to take was based on a massive imbalance for the next draw on liquidity lower, which is the prior month low, which is very far away. And the break of a prior month low, with a 20-30D fibonacci long entry. My thought process was that there is alot of potential for the early longs to have been swept out of the marketplace with stops below the prior month low, and we could have seen a monthly turtle soup entry. This was my first time testing the entry, and after the move chooses a direction, I will have more data on more confirmation for the setup. 

The 30D low the high has changed with a slightly higher low now after the following day, so the 61.8% bounce is no longer in play. But i marked the prior 30D low to high, so that if the market does happen to reverse in the future, I can track the timeframe in which the entry occured to avoid senseless losses in the future.

For now, we have confluence between the 90D 38.2% fibonacci & the 30D 78.6% fibonacci, so with liquidity drawing lower, I think it is likely that this confluence area will be the next potential bounce play. 

I guess the takeaway will be for the loss of profits on this trading day. DONT SOLELY TRUST THE TAPE.