I know that everyone on FinTwit always buys the exact bottom and top, how do I know this? Well it’s simple, they always brag about those 0 MAE trades :)
Selling the exact high and buying the bottom tick sounds cool and all but there’s a better and repeatable way to find a better R:R trading opportunity that doesn’t require the stress of catching the top or bottom tick.
In the trading community we hear and repeat many things that are widely accepted as fact, without anyone really challenging the view.
Here’s an example:
”Markets stay in balance 80% of the time and trend 20%” of the time"
Lets talk about it...
I certainly believed that too and I have seen this repeated and repeated it myself over the many years I have been trading. In fact I designed most of my trading approach around this simple idea that I should be “fading the edges” and trading from “extreme to back to the middle (balance)”. I also know that many of you do the same.
Would you be surprised if the data said differently? If it said that trend moves are more frequent, so much so that they occur just as frequent as balance days or non directional days? When I dug through the data at the beginning of the year I certainly was and it has informed my trading and many others that I know in a significant way.
A simple market profile concept you can utilize without being a market profile purest.
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#NQ_F #ES_F #futurestrading
2/ Market profile AKA TPO charts are essentially a 30 minute candle chart organized by using letter sequences that represent each 30 minute period. For example the RTH open would start with the letter A then 30 minutes later the letter B so on and so forth.
3/ A single print is a period inside of the session where there is no overlap to prior periods.
Delta is a simple measurement of ask volume minus bid volume, many traders use various forms of delta to infer who is the most aggressive participant in the current auction.
2/ Today I’ll walk you through how I use Delta to identify a very simple trade setup which I will refer to as a liquidity zone.
3/ Before diving in, let's cover some basic methods that one might find delta on a chart.