Thread by @Tradytics

🧵 IMPORTANT THREAD - ALGO FLOW & HOW TO AVOID BAD PLAYS 👇

So it's been over a few months since we've all been using the algo flow. It's an amazing tool but it definitely fails at times. How to avoid that? I'll note a few things I have observed and tested 👇

1. First of all, just don't go against the market. That will save you so much trouble in your trading journey. Try to follow the overall trend the market is in and you'll do much better.

Some people are good at reversals but for newcomers, try to play trends.

2. For instance, if markets are going up and you want to play a bearish divergence, be sure there are a lot of confluence factors before you play them.

OR

Wait until algo becomes bullish & we have a bullish divergence, and then play that. $AAPL did that today.

3. Look at some history and see how the stock behaves with the algo flow. For instance, unless the algo is going straight up for $TSLA, it generally doesn't work that well. It mostly works when there's a large bullish divergence, so just play it. Ignore other setups for $TSLA.

4. If you see algo lagging behind the price, ALWAYS wait until the algo leads i.e goes above the price in case of a bullish setup. Then wait for any divergence to form and make your play.

5. To put everything in a nutshell.

YOU HAVE TO BE A SNIPER

Only make selected plays, do not go into every single divergence that you see. For instance, there's a famous pattern where price and algo goes straight up, price dips, algo doesn't, price goes up again.

6. You should find your own setups that work for you and trade them again and again. That's all.

Finally, as always, it's always a good idea to get some confluence from the following tools.

1. HEATMAPS
2. WHALE TRACKING
3. SUPPORT RESISTANCE LINES
4. ANCHORED VWAP LEVELS

7. One final note, be aware when playing indices. I still see people blindly playing them - their algo is not that reliable because indices are often used for hedging and that can show misleading charts on the algo side. It only works for intraday, that too not perfectly.

End.

Hope this helps you make better plays from now onwards. Feel free to ask any questions. Thank you.