Luckshury Profile picture
Aug 7, 2023 11 tweets 3 min read Read on X
Forming a Daily Bias

a thread 🧵 Image
In this thread, I will cover the following:

- some MS points
- using stats to help my bias
- directional bias through liquidity
market structure

2 timeframes

- 1h
- 15m
(depending on the type of trader you are)

uptrending
downtrending
rangebound

identifying swing points can be done either using manual lookback or via williams fractal indicator (set to 2 on either side of the swing high) Image
market structure (2)

notes -

majority of the time price will be within the "rangebound" category.

breaking that "rangebound" environment then deciphers the trending move you are given Image
high hit rate levels

- level(s) that reset after a certain period (generally daily) which gives me some form of directional bias whether they are below or above price when printed. Image
high hit rate levels (2)

confluence

the most powerful thing is to use this with is Market structure, below is an exact example of how I would do so.

on a day as such my directional bias would be to look for longs. Image
liquidity

resting liquidity is important

if I see there is more resting liquidity on one end of a range over another I would favour that direction for my bias. Image
poor highs/lows

routine check - simply I check my 50tick BTC/USD TPO chart

if there are more than 2 or more blocks at either a high/low then i classify that as a poor H/L

This is typically part of my liquidity routine and these levels have a higher likelihood of being tested. Image
combination

resting liquidity - below price
high hit rate level - below price
poor highs/lows - below price

I would be favoring shorts that day

and visa versa
finding high hit rate levels

in the future, I will share some of mine, currently they do give me too much of an edge to release

what I suggest is to think about levels you generally feel would be revisited then put the work in and get direct figures on a trial-and-error basis
hope you found this valuable, likes and retweets are appreciated

Let me know below what thread you would like to see next 👇

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More from @Luckshuryy

Mar 9
open interest (simplified):

a thread 🧵 Image
open interest vs price:

price ↑ with positive OI: New longs pushing price up
price ↑ with negative OI: Shorts getting squeezed

price ↓ with positive OI: New shorts pushing price up
price ↓ with negative OI: Longs getting squeezed

when new positions, whether long or short, drive price, they add the dynamic that if pushed offside, price can squeeze in the opposite direction.

example - new shorts pushing price ↓Image
early positions:

positions opening too early, can be a good reason for trend continuation, hence I will not fade a move prematurely if oi rises too quickly.

when new positions open too eagerly it creates new stops either above or below the continuation pivot.

example ↓ Image
Read 7 tweets
Feb 28
Auction Market Theory (simplified)

a thread 🧵 Image
what is auction market theory:

a concept (not a strategy) which discusses how buyers and sellers interact within the market.

using a combination of:

- price
- volume
- time

we can determine which state of auction the market is in, either balance or imbalance. Image
balance:

where price has found acceptance, and where buyers and sellers are willing to trade within a fair value range.

fair value can be identified as the value area, where the majority of transactions have been occurring (68%).

deviations outside of the VA can be viewed as a premium/discounts to the current fair value price.

in a balanced (efficient market) you will tend to see:

- slower price action
- thicker booksImage
Read 7 tweets
Feb 21
delta: a clear understanding

a thread 🧵 Image
what is delta:

in trading "delta" is the difference between the sells & buys.

there are 2 common ways to watch delta:

1) traditional bottom row indicator which tells you the delta on a per candle/time basis. (like the cover image)

2) footprint chart which shows a per price view & time view of delta. meaning you can view at which time the delta came in & which price.

Identifying delta per price I find to be more valuable.

positive delta - more market buyers
negative delta- more market sellers

example ↓Image
when to look at delta:

- resting liquidity
- high volume nodes
- point of controls
- other horizontal s/r levels

upon price breaking range high/lows there has the potential to be excess delta left behind for false breaks.

example ↓ Image
Read 7 tweets
Feb 14
orderblocks (simplified)

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what are orderblocks:

- the last up/sideways movement before an illiquid down move
- the last down/sideways movement before an illiquid up move.

illiquid typically can just mean a strong one time-framing move where there are no pullbacks.

example ↓ Image
how orderblocks work (theory):

orderblocks are where there has been a clear sign of significant previous market activity, meaning a revisitation of this area could act as a stop gap.

for example:

the last down move before a significant up move is being revisited.

there are multiple reasons for price to react from this:

- offside shorts from this zone → closing positions at breakeven
- any new longs who entered here → defending their existing position

these zones are primed with liquidity (thicker books), allowing for larger players coming into the market to increase the chance they get orders filled.

example ↓Image
Read 6 tweets
Jan 20
trapped traders: a clear understanding

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what are trapped traders?

when new positions enter and are placed in an offside position, they will naturally want to close, squeezing the market in the opposite direction.

this natural outburst of breakout traders being caught offside can be a great reason to look for a reversal.

example ↓Image
identifying trapped traders:

requires an understanding of open interest and delta, as open interest will categorically tell you if the majority of positions entering are new ones.

open interest increasing = new positions
open interest decreasing = positions closing

positive delta = longs
negative delta = shorts

breakout traders only appear when there's an increase in open interest; otherwise, most positions you see will be closing.

1) identify the candle in which new positions have largely entered
2) identify a level in which those new positions would be offside
3) trade in the direction of the new positions unwinding

example ↓Image
Read 6 tweets
Jan 10
forming a daily bias:

(stats included)

a thread 🧵 Image
candle formations:

engulfing candles - I look for a candle to wick below the previous candle and close at least beyond the 50% mark the previous candle (bullish engulfing).

I find this to be as effective as waiting for the entire previous candle to be engulfed.

the following day will be biased towards the direction of the previous day engulfing candle.

shooting star - my favourite daily formation, these often result in better entries to much larger moves, failure to extend above/below previous day and end up mean reverting.

example ↓Image
one time-framing:

the most basic thing I always check for - an aggressively trending move.

daily timeframe, for a bullish example - is the daily candle printing 3 or more consecutive daily highs in a row whilst not wicking below previous day.

yes = I will only follow that direction for the remainder of the day should i take any trades.

no = move to next step

Its a simple and effective way to not get caught offside against an aggressively trending market.

example ↓Image
Read 7 tweets

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