ES, Juniors Trade Ex

06-15-17 Thursday Daily Lesson 1

What Turns an Algo On
Seeing where the Algo trades ‘Kick In’ using Bookmap

2
Algo Switch
• The relationship between Volume and Liquidity cause Algo’s to switch trade
direction.

1 2
Increase in Volume with Liquidity
1 above : Look for the long squeeze.
Buy on 1 tic, 2 tic back pressure.
Liquidity
Above Lack of Volume with an increase of
2 Liquidity below : Look for a short, Sell
on 1 tic, 2 tic back pressure.

Price Liquidity
Below

3
Volume
An Algo Switch

1 2

4
Reading the Tape for Squeeze
For a Long Trade
• Watch for :
Good Liquidity
• Good Liquidity Above
• Build in Green Volume
• Red Volume drops (Sell volume
decreases)
• Empty Down Bars
• Buy it with 1 to 2 tic back
pressure
For a Short trade
• Watch for :
• Good Liquidity Below
• Build in Red Volume
• Green Volume drops (Buying
volume decreases) Green Build
• Empty Up bars
• Sell it with 1 to 2 tic back 5
pressure
Red Drop
Algo Green Light
• When you add Order Flow to your overall view of the market,
of wanting to be long due to the fundamental or intrinsic view.
• Financial stocks being Bought
• Utilities being Sold
• Goldmans being bought and DUK being sold
• Melons being bought
• Once you see that the Algos are starting to buy the down tick,
you have your ‘Green Light’ for a long trade.
• AND ….. You can add to your trade.

6
Anatomy of a Stop Run
Most Stop Hunt (Liquidity Grabbing) Algorithms are setup to take 2 tick profits
with 1 tick stops, 80-100% winners.

Price
Failed
Auction
Aim of the scalper is to get
higher and a better entry
Price for the Sell Trade

Sell 1 tick before

Sellers start at +1, BE
breaking the
and below the market
level with a Sell
Pivoted at -1,-2 = Stop Run
Stop Order
Every Buyers that came in
here can see the same
Few buyers here due
thing, a failed auction and
to failed Auction
would normally have their
stops at BE+1 If there are any Buyers they will be
below the last fractal edge by at
least 1-10 ticks.
Particularly if Value is to the upside 7
High Probability Asymmetrical Trade, with Momentum.
 1st Trade Exercise ERF, Widening
HH & LL

• Break out trade with Momentum

• but they have to get in before the break out Sell
• Must understand value building Zone
• Look for a change in overall shape and direction Breakout
• Where are the
• C-Liquidities Breakout
• Failures
Entry for BO

Breakout Entry for BO

Price Up Volume
Down, Price Down
FTR Volume Up
Entry for BO
Price Up Volume
FTR Up, Price Down
Volume Down

FTR
Price

BUY SELL 8
Volume Pressure Pressure
ES 30 sec Chart
FTR Entry Need to trade
• Either on the bottom tick price
FTR
Entry • or 1 tick above bottom price

FTR
Entry
FTR

Successful
Entry Rotation

Every trainee has a target Entry

of 2 ticks per trade, so

they can fully understand Pivot Buy Box
the asymmetrical risk on Point
C-Liquidity into
a stop run the 50 level
Widening
9
Add Pay Cheque Levels

Pay cheque
Pay cheque

10
Widenings and Reversals
• Widenings and reversals occur off top and bottom edges, always
mark them up as there is often a rejection reaction off these areas

11
ERF, Widening
LL & HH
Long Accumulation
Long Accumulation into
Previous Bottom Edge
As price is in a Widening Process and is
Compressing down for a Long HH
Accumulation.
The FTR through the key Reference area Flip Reversal
confirms that the HH is telling us that Paycheque
for Squeeze
they are going to push for a LL.
Top right hand hold
= high probability
Top Edge Squeeze

FTR Key Reference area

for Bulls to Hold

3 Compressions
Long
Compression 1 Accumulation

Compression 2 FTR

Compression 3
12
+ C-Liquidity LL
Look for Hidden Liquidity

Hidden
Liquidity
FTR

FTR
FTR
FTR
FTR

FTR

13