How To Improve Your Trading Edge Introduction

In this blog post, we will discuss how to improve your trading edge. Every trader seeks the edge. Trading edge is what gives you the ability to make money in the market. On the surface, we all understand the idea of edge, but we consider the edge to be something static. We consider the edge to be a particular setup but if it were so easy everybody would be making money. There is a distinction between market setup and edge and that difference lies in the deeper understanding of all contextual nuances. That’s why trading as a discipline is closer to art rather than flying a plane for example. Also, a great way to improve your edge in the market is to understand your strengths and weaknesses.

This post is based on the video down below.

Understanding Your Trading Edge

As we have laid out in the introduction, trading edge is not as straightforward concept as it seems. We should be aware that all chart/orderflow/market profile patterns just formalise market behaviour. They provide abstraction into composable clues. That abstraction is great on one hand, because it gives our brain ability to quickly recognise patterns. On the other hand every abstraction introduces compression a simplification of a very dynamic system. Just because you are able to highlight pattern that form a setup, it does not mean you have an edge. Here is the list that Richard has wrote on the topic of edge vs setup:

• Edge comes from your implementation of strategies in specific environments
• Edge differentiates you from others
• A setup can be learned and follows specific rules – it can have a statistical edge if taken every time it’s available
• Edge comes from a deep understanding of context and how your market is moving – this gives conviction in direction of a market and a greater probability of certain setup working
• A setup occurs and gives an opportunity to execute your trade in line with your conviction

Great analogy Richard used was the one from tennis. Imagine you are great at hitting forehand down the line. Just because you are good at hitting that specific stroke, it does not mean you can hit it every time and expect a winning point (red X down below in the image). Position of your oponent matters a lot, therefore that forehand down the line should be used only when odds are in your favor (blue X). The same applies to trading.

Now, lets have a look at specific examples in Euro and Bund.

Improving Your Trading Edge

Euro And Trading Edge

Down below we can see on the right side the blue zone. That zone is a key reversal zone. We have a crucial location in which we want to observe orderflow and price action.

We can see that market breaks strongly through, but closes below. This can be considered a double top with strong exhaustion move. Our edge is in the execution the move down towards first support. If trader recognises the lack of buying and increased selling back below 73 level, you can enter the trade with the favorable risk-reward.

The point of this double top trade is to show you that the crucial location we have chosen, the excess it has created and orderflow all came together and created a trade with edge. The setup in Euro was the double-top, but other contextual nuances effectively created the edge of the trade.

Bund And Trading Edge

Now if we compare it to the Bund trade, where market reached important location, the context is different. Yes, market produced double top but the bullish structure from last two sessions clearly suggest that the point at which we want to initiate our short (see below line “confirmation point”) might become difficult for shorts to push through.

If you compare both Euro and Bund, they tend to share double top setup, but contextually both are very different. It is the nuances that essentialy create the edge, not just a pure abstracted pattern. Think about this concept in trades you usually take and ask yourself what can elevate the setup to a trade with edge.

Thanks for reading. If you liked this type of content, you might check these videos as well:

• Junior Funded Trader 2020 Performance Review
• Lessons From My Biggest Trading Loss
• Trader Training: How Long Does it Take a Trader to Become Consistent and Profitable | Axia Futures

If you like our content and would like to improve your game, definitely check one of our courses that teach you all the techniques presented by AXIA traders from a market profile, footprint, or order-flow. If you are someone who likes to trade the news, we have a great central bank course. And if you are really serious about your future trading career, consider taking AXIA’s 6-Week Intensive High-Performance Trading Course.

Trade well.

JK

Trading Breakout Using Market Profile Structure Introduction

In this blog post, we will review how to trade the breakout trade using the market profile structure. This is gonna be an example of using multiple market perspectives such as candlesticks, correlations, time of the day, and market profile. We will break down an example of a DAX trade and explain the logic this trader used to not only enter a trade but also to manage his stop and size throughout the trade. If you are a fan of breakout trades, check out our previous post about tips on how to improve your breakout trade execution.

Trading The Breakout

Daily Market Structure

Starting from the daily chart, we have first identified the trend and the skew. When you look at the daily chart, the trend is up, and the block in which the market currently trades put on a nice rejection candle. Although daily candles are a poor predictor of the next step, they tell a story about market participants during that particular day. In this case, the tail (rejection, see down below) in the balance structure in the uptrend tells us, that buyers stepped in strongly and reversed the down day in V shape format. This gives an additional tailwind to our breakout idea.

Given the daily direction, let’s have a look at market profile clues and the time of the day that played a crucial role in our breakout.

Market Profile Structure

What you see down below is the weekly market profile. Highlighted in red, you can see a VPOC of last week’s profile. But let’s ignore the VPOC for a moment. What is more important is the location of the value, time, and the skew.

You can see that majority of value has been built over the last two weeks above 131.30, with VPOC being at 131.50. For the last two weeks, we have spent both time and value between 131.70 and 131.30. The market is ripe for the opportunity. This area has been auctioned, it’s time to look for new value.

The last thing to notice that is not so obvious is the excess at the previous week low. This gives us additional skew towards the upside.

Managing Target And Stop

What is adding fire to the fuel are now the vulnerable highs that will serve this trader as targets. As we open, we are opening and holding above last week’s value, building an initial balance. The moment market breaks the initial balance, the trade is on.

The trader is also monitoring correlations that are working in his favor and is ready to attack this trade. The price ladder trade replay starts here, so don’t forget to check the actual trade management.

In a nutshell, this trader was aware of the rotational nature of DAX during the breakout. Therefore he was not spooked by the DAX retracing and held his initial position. The moment market started to gain traction while moving through targets, he increased his size and captured the entire breakout move.

Breakout Trade Summary

To summarise the trade, the trader relied on several clues that appeared in this trade. Specifically:

• daily structure in terms of direction and recent price action favoring break to the upside (daily tail)
• correlations – other markets supporting the risk-on character of this move
• vulnerable highs that can be attacked (daily highs tacked up together)
• initial balance value build just above the weekly VPOC
• market profile skew

After all the clues stacked up, a great trading opportunity was presented to this trader and it was all about the execution. If you want to learn how we perfect our trade execution strategies don’t forget to check the free webinar we are running at: https://www.elitetraderworkshop.com.

If you liked this type of content, you might check these videos as well:

• How To Manage & Exit A Failed Breakout Trade
• Sign Of A Breakout About To Fail – Price Ladder Trading
• Market Profile Trading: Better Breakouts with Context and Volume Profiling

Do you like what you have been reading? If you would like to improve your game, definitely check one of our courses that teach you all the techniques presented by AXIA traders from a market profile, footprint, or order-flow. If you are someone who likes to trade the news, we have a great central bank course. And if you are really serious about your future trading career, consider taking AXIA’s 6-Week Intensive High-Performance Trading Course.

Thanks for reading again and until next time, trade well.

JK

How To Build Exit Trading Strategy Introduction

In this blog post, we will focus on how to build a robust exit trading strategy. One of the common pitfalls of trading is that we tend to overweight our momentary feelings over rational reasoning. Our ability to reason diminishes when we have to face an open trade, it is at that time we are prone to make irrational decisions. If we are aware of this pitfall, we must ask ourselves what can we do to prevent our emotions interfere with our reasoning process. The answer is fairly simple but not easy. We need a detailed, intimate understanding of our plan prior to opening the trade. Before we enter a trade, it should be clear to us what we want to see and what we don’t want to see at critical junctures of the trade. There are more risk management techniques that should help your trading and if you want to improve in that aspect, don’t forget to check our previous post Prop Trading Risk Management Tips.

How To Manage Your Exits

As we have stated in the introduction, it all comes down to two questions:

• what do you want to see?
• what you don’t want to see (invalidation criteria)?

If you don’t have these, you don’t have a trade. Full stop. Entering just because you have an entry point is not sufficient. You need to have a strong reason for the overall trade, not just the entry. Having the access point, stop and target is a good start. Even if you trade for a runner, you should have a target in mind. Why? Because it narrows down your focus to places of resistance. If the market gets there, it should not surprise you what to do next. `

Speaking from personal experience, it is good that you understand yourself as well. In general, how well your brain operates under time pressure? Because essentially that is what trading is about. The market gets from point A to point B, now you need to evaluate. You can’t stop the time and deal with the situation, new prices feeding the tape constantly putting you under time pressure. Some people are better than others under time pressure, so you need to be honest with yourself. Ask yourself the above question. The less good you are, the more you need to double down on your plan and maybe even a time horizon.

Knowing what you want to see / what you don’t want to (expectations) see and understanding how well you deal with time pressure are three important steps towards a robust exit strategy. The next step is the evaluation of your expectations vs reality in real time. The expectations come down to what are SIGNIFICANT factors that can change your mind. Many times we exit a trade because we “did not like” the tape. Or that “the correlation was breaking”. Ask yourself:

“What are the SIGNIFICANT factors for me to change my mind?”

Incorporate those factors in your general trading prep. Be as specific as possible. Also, name a list of INSIGNIFICANT factors that usually interfere with your decision-making when you are in the trade but are not relevant for your trade.

For example, lets conside the long trade that was initiated by a breakout:

The vaguer you are in your reasoning, the more prone you are to make a decision-making error.

Be as specific as possible. Dig deeper, monitor your thought process in your trades, and write down all vague ideas about why not to be in the trade anymore. Look through your journals.

How To Manage Your Exit In Gold Trade

Now let’s zoom in on the Gold trade example. In the Gold trade, the market broke the vulnerable low and immediately reversed. This excess created a burst of new participants while pressuring the old participants to exit the trade that were short hoping for a breakout lower. This fuels further move up. Time for a breakout move to the other side.

Now zooming in on the breakout, we are getting to the expectations you are setting for the trade. In this case, you are setting the expectation for a short-lived move, with a moderate target while the sellers that are being stopped out providing you a bit of tailwind. For the move to keep continuing, you need to define what else you want to see beyond the point of first exhaustion move up. What are the significant factors, you want to see in the market?

• volume building up higher -> be specific
• LVN keep holding -> be specific

Now looking at your move, you have a stretched move and TP1 was hit. What significant factor you dont want to see? Look below. Stretched move, strong delta flip. Now it is all about holding and building value. This is a first significant factor signalling, that this move might be over.

Now with market building the ledge, not willing to re-enter previous excess zone it becomes more and more obvious, that market is more likely to reverse back. The skew works against you now. These significant factors for what you “don’t want to see” are signs for you to exit the trade.

Remember, it is all about how specific you can be with your trade execution. Any vagueness during the planning process makes it impossible for you to make good decisions when under pressure.

If you want to learn how we perfect our trade management strategies don’t forget to check the free webinar we are running at: https://www.elitetraderworkshop.com.

If you liked this type of content, you might check these videos as well:

• What Markets Do You Select When Trading – Price Ladder Trading
• Key Observations To Stay In A Trade – Price Ladder Trading
• 3 Reasons To Get Into A Trade – Price Ladder Trading

If you like our content and would like to improve your game, definitely check one of our courses that teach you all the techniques presented by AXIA traders from a market profile, footprint, or order-flow. If you are someone who likes to trade the news, we have a great central bank course. And if you are really serious about your future trading career, consider taking AXIA’s 6-Week Intensive High-Performance Trading Course.

Thanks for reading and until next time, trade well.

JK

Best Trading Setups For Trend Day And Liquidation Day Introduction

In today’s article, we will focus on the best trading setups for trend day and liquidation day. Each day in the market offers us a unique structure that reflects market participation. Understanding the participation on the day gives us great insight into what might happen next. We will be looking at the difference between trend day and liquidation day using price action and market profile and design strategies accordingly. Both days have their own set of characteristics such as when the move starts, what type of participants are driving the move, and what the move should and shouldn’t do in order to be a liquidation or a trend day move. All these clues can position us well into the next move that might happen within the given structure. If you are interested in a market profile, don’t forget to check our previous post Trading Clues In Market Profile Structures

This post is based on the video down below.

Trading Setups For Trend Day And Liquidation Day

Introduction

According to the market profile theory, every daily structure can be categorized into a different day type. In this specific example, we will focus on two different day types that have very unique characteristics. Distinguishing these characteristics can lead to strategies that you can include in your own playbook.

Looking at the table down below, the first main difference between the liquidation day and trend day is the market participation. In the case of trend day, mainly new positions are driving the move. In case of the liquidation day, it is the old positions exiting. Typically this creates a large impulsive move early when it comes down to the liquidation move. With trend day, the move has generally a quiet start and moves steadily throughout the day. Many traders lose their money on trend days because they do not recognize it is a trend day and they try to fade it. Rules to spot the difference between liquidation move and trend day need to be implemented to prevent these losses.

Apart from the steady move maintaining volume throughout the day, the key distinguishing factor for a trend day is that it leaves single prints behind and pullbacks that are generally small. Adding this rule to your checklist can give you a hint that maybe today is not the best day to fade the market.

Let’s have a look at a couple of trading examples and identify what clues could give an early warning of what day type you are dealing with.

Trading Examples Of Trend Day vs Liquidation Day

Liquidation Trading Strategy

Starting with the Bund, we can clearly see that the moment we broke below the blue rectangle low, the market offered hard. This offer is aggressive, a lot of accumulated longs have to exit their positions. At this stage, we do not know yet if we are dealing with the liquidation day or a trend day, but given the large early move and structure above us, we have a first clue that we are dealing with the liquidation move.

Zooming in, what happens next is that the next pullback is not shallow. The next pullback takes the previous support turned resistance and reverses creating a deeper pullback. Plus, the next leg down after a deeper pullback happens on a low volume. This is our indication that trend day is most likely not in play. Connecting the dots between the large early move and the inability of the market to maintain single prints, tells us, that we are dealing with liquidation day. What would be the best strategy on a day like this?

• a) you can play for the failure of the bottom of the move – play the double bottom
• b) you can wait for a deeper retracement and play a fade once the short-term trend breaks with a clear target for a continuation to the previous lows and exit there

Trend Trading Strategy

Given the clues we have learned, we can identify a couple of characteristics that this move in Bund has. The move starts steadily but offers us early on with one key clue:

staircase structure

This staircase structure is about the way how previous resistance turns next into the next support. It is not enough to say, “yes, this is a trend day” but gives us an early warning.

Now, as the market makes a steady move higher, the volume builds, and single prints are left behind. Now we are onto something. First, we know we should not fade this move. Second, we can use the shallow pullbacks and staircase to design our trading strategy:

• a) fade single prints that start to hold
• b) fade previous resistances that turned into support

Remember that you need to stack up several clues together to get a sense of what type of move you are dealing with. Then select the appropriate strategy that fits this day type.

If you want to learn how we trade the markets using day types like this, don’t forget to check the free webinar we are running at: https://www.elitetraderworkshop.com.

Thanks for reading.

If you liked this type of content, you might check these videos as well:

• How To Manage & Exit A Failed Breakout Trade
• Sign Of A Breakout About To Fail – Price Ladder Trading
• Market Profile Trading: Better Breakouts with Context and Volume Profiling

Do you like what you have been reading? If you would like to improve your game, definitely check one of our courses that teach you all the techniques presented by AXIA traders from a market profile, footprint, or order-flow. If you are someone who likes to trade the news, we have a great central bank course. And if you are really serious about your future trading career, consider taking AXIA’s 6-Week Intensive High-Performance Trading Course.

Thanks for reading again and until next time, trade well.

JK

How To Trade The Overnight Positioning Introduction

In this blog post, we will discuss how to trade the overnight positioning. Overnight positioning is something we should all consider in our morning analysis. Our goal is to understand, where the overnight market participants took the price in relation to yesterday’s close and yesterday’s value and how did they auction that activity. It is all about the intention of smaller timeframe participants that don’t have deep pockets to hold strong opposing flows when the European or US cash session opens. Let’s have a look at four examples where the character of the positioning played an important role during the open.

This post is based on the video down below.

What Is The Overnight Positioning

When we are referencing the overnight positioning, we are talking about market participants that decided to do their business during the Asian session and European session until the pit session or also called the cash session opens at 1500 CET. The Asian session can be considered the weakest in terms of volume participating in the price discovery. This means, that anyone who has a notable business to do, will most likely choose the pit session, therefore, the overnight session is more about short-term participants, one can even say slightly weaker hands.

During our analysis, we should focus on these clues from the overnight session:

• where are we in relation to yesterday’s value and close?
• what is the overnight range? Are we expanding or contracting?
• who is winning the overnight positioning? Buyers or Sellers?
• where are weak areas that can be attacked once the pit session opens

Sometimes we use the term “overnight inventory” referencing either 100% net long or 100% net short. This statement is all about where the overnight value and time have been built in relation to the previous day’s close. If we closed yesterday and keep on rallying during the overnight session, we are 100% net long. If we closed yesterday and keep on offering during the overnight session, we are 100% net short.

Now let’s have a look at four examples and how we could profit from these four opportunities.

Trade Examples Of Overnight Positioning

The Oil Positioning Trades

In the oil trade below we can see that:

• overnight positioning is net short
  • with overnight grind down (sellers are in control)
• during the Asian session, we are within yesterday’s VA and range
• when the European session opens, we bid higher taking the Asian highs

Now, with a pit session open, we are taking yesterday’s high BUT the fresh flows are unable to hold those highs and follow through – this is a clue that possibly the overnight positioning liquidation (the net long liquidation) will take place.

Now here is the different Oil example, but this time we are looking at:

• overnight positioning is net short
• we have balanced after the initial leg
• anyone who was short overnight feared the pit opening flows that started to bid and the market attempted to close the overnight gap but failed (weak hands that went short had to cover)
• after the gap close failed, the market offered again through the overnight low, this time with the force of the pit sellers

After the market broke the overnight low, it created the second leg of an equal distance to the first leg.

Now what are the lessons we can take away from these two Oil trades:

• the overnight low and high are very important levels to watch
• understanding the positioning: net short, net long, or neutral gives us a clue, about who might have to run for exit if the follow-through does not come with pit session opening
• in general, with pit session opening, we can either have: a continuation move (the follow-through move) of the overnight positioning or the reversal move of the overnight positioning

Let’s have a look at two more examples, but this time, try to identify the clues yourself.

The Dax and Stoxx Overnight Positioning

Here is the chart of the DAX:

And here is the chart of Stoxx:

Now given the information at the beginning of this post, try to answer these questions:

• what is the overnight net long/short status?
• where are we in relation to yesterday’s range and VA?
• what happened when the pit/cash session opened and how did the overnight positioning react?

Leave us your comments under the YouTube video.

If you liked this type of content, you might check these videos as well:

• Thinking About Positioning | Axia Futures
• Where Are The Weak Positions? – Market & Volume Profiling | Axia Futures
• 5 Steps To Trade Against Overnight Positions – Trade Strategies | Axia Futures

In case you are interested in finding out more about trader training to learn how to trade and explore other great trading strategies, check out our futures trading course that teaches you exactly that and more. Or if you want to really maximize your ladder execution, check out our price ladder trading course.

Thanks for reading and until next time, trade well.

JK

Trading Market Profile Reversal Signals Introduction

In this blog post, we will review trading around market profile reversal signals. In detail, we will combine two Axia Futures videos about market profiles and dissect best practices around trading reversal patterns. Specifically, we will focus on the V reversal pattern while using tools such as Volume, Market Profile, and Footprint. By breaking down each step of the developing story, we will learn how an understanding of the “how we got here” plays an important role in “where we might be heading next”. If you like similar articles to this one, don’t forget to check our previous piece: “Trading Clues In Market Profile Structures”

Anatomy Of Market Reversals

When we are dealing with market reversals, we need to understand the risk of playing these reversals. The risk of any reversal lies in our understanding of market participants and their intentions. It is much harder to read the intention of the market when it is driven by a pure initiative move (market selling or buying in a one-directional fashion).

During these market-moving initiative times, we have a massive disadvantage: we don’t have a crystal ball. We do not know what type of players will step in and what size they will play with. And we won’t know that until they do step in. Therefore the first rule of reversal anatomy is:

understand what type of reversal you are dealing with

There are so many ways how a market can reverse. We all like different strategies, but if we can understand a couple of principles, it can give us clues if the market reversal is truly happening. We will explore both principles further down in the article but in a nutshell, here they are:

• How We Got Here Principle – this principle is all about understanding how the market got here. And what has changed since it got here.
• Is This It Principle – build your own variables, that will guide you through the reversals you have researched. Great clues for this principle are:
  • Volume – some traders set 3x or even 5x the average volume as a trigger for their reversal to be in play
  • Delta Reversal – is the aggressiveness shifting from buyers to sellers or vice versa?
  • Tails – are tails being created around reversal?
  • Overlaps – do candles that did not overlap suddenly start to overlapping?
  • Time – how much time we are spending in the territory where price should not get really accepted.
  • Value – where is the value being accepted and is it in line with our expectations?
  • Single Prints – where do we want to see single prints develop?
  • Power Of X – how many times the market has tried to attack a reversal tail and failed. Some metrics-driven traders can set this variable to 2 for example. “I want to see at least 2 failures at retaking the tail in order to initiate my position”.
  • HL’s, LH’s – with an attempt to take the tail, is HL (for bullish reversal) or LH (for bearish reversal) being created
  • Rejection vs Liquidation – is this move driven by rejection or liquidation?
  • Basing/Two Way Trade – where and how do we want to see the basing/two-way trade develop after the rejection has happened?
  • etc.

If you want to learn how we build and work with clues like these, don’t forget to check the free webinar we are running at: https://www.elitetraderworkshop.com.

Trading “How We Got Here” Principle

Down below we can see two examples of market reversals. Main difference? The way the reversal was constructed prior to making the reversing move aka “How We Got Here”. They both produced tails at the reversal point, but the positioning prior to the tail was different. In the first instance on the left, the market was positioned for the breakout and failed to follow through. A positioning unwind happened.

In the second instance, the market was a bit over-extended and reached a point where the stretched tail ended the over-extended move.

Here is the question for you. Using our “How We Got Here” analogy, what market reversal type has Isaac explained in this video starting at 1:51? Was it more of a positioning reversal or base reversal?

Watch the full video if you want to learn more about different types of reversal moves.

Trading “Is This It” Principle

Now, let’s have a look at a different angle of the reversal. This time we will look at the Initiative To Initiative move, sometimes called a V reversal. When there is an initiative, there is very little response from the other side. This creates a big volatile move since nobody is willing to provide the liquidity to that initiative. When the initiative stops, a responsive type of move usually happens. But if that responsive move gets traction, a new initiative can start resulting in a V reversal move. You can read about it in greater detail in our previous post: “Trading Key Market Auction Reversals“.

On the chart above you can see the move we have just described. Very little overlap between candles on a way down (selling initiative). For 22 down candles, the market produced only 3 up candles. Then, the market stopped and produced a two-way trade. Then new initiative started and the market turned from bearish to bullish. How?

After a basing two-way trade, the market broke with 4x volume. Delta supporting this move started a new initiative buying resulting in a V reversal move.

Here is the question for you? What clues from the “Is This It” principle Bran has used in his trading example? Let us know in the comments under the video.

For the full video, watch the episode here.

Hopefully, this was helpful. Don’t forget, that any reversal you will ever trade, should have a clear and consistent plan of execution. There is nothing worse in a trade than not knowing what to do and messing it up. Watch your risk, and trade well.

If you want to learn how we do it, don’t forget to check the free webinar we are running at: https://www.elitetraderworkshop.com.

If you liked this type of content, you might check these videos as well:

• Trading the V Reversal Price Action in the Dax | Axia Futures
• Reversal Entry Trade In The S&P | Axia Futures
• How To Trade The Delta Reversal Strategy [FOOTPRINT CHART]

In case you are interested in finding out more about trader training to learn how to trade and explore other great trading strategies, check out our futures trading course that teaches you exactly that and more. Or if you want to really maximize your ladder execution, check out our price ladder trading course.

Thanks for reading and until next time, trade well.

JK

Trading Strategies Around Poor Lows And Poor Highs Introduction

In this blog post, we will introduce and discuss trading strategies around poor lows and poor highs. Trading around poor highs and poor lows can provide opportunities where the market is skewed in your favor. These opportunities either lead to the burst of trading activity through the poor level or a liquidation away from the poor level. We will discuss how to identify these poor areas, what price ladder trigger points you can look for to manage the trade, and what to do when market signals that the liquidation move might happen soon. We will provide you with three strategies our traders use, to profit from this market vulnerability. If you find these types of trading posts interesting, don’t forget to check our previous post: “VWAP Trend Trading Strategies“.

This blog post is based on the video down below.

Anatomy Of Trading Poor Lows And Poor Highs

How Are Poor Highs And Poor Lows Constructed

When we are trying to identify a poor low or a poor high, we are primarily looking for multiple tests of the same level within one daily interval. These tests should create something that we can also call ledge. A ledge is an area, where the market tested that area multiple times and that happened to be the high or low of the day.

Sometimes we use TPO to tell us if the extreme is poor or not. Why TPO? In Market Profile terminology a TPO represents an interval of 30minutes that is represented by the letter. This letter represents a time when this character was created. A one TPO tail (one latter) can be characterized as a poor level if it was formed either at the high or low of the day (see the first image down below).

Rule of a thumb:

• Poor highs and lows are flat tops or bottoms that lack a tail. An indication that the move is not over and should be repaired at some point in time.

Why Are Poor Highs And Poor Lows created?

As the market goes through the process of price discovery, the auctioning process is halted by one or multiple participants holding the price. Either, one side runs out of steam naturally or stops going because of the high absorption of the other side. When that happens, the market creates a poor high or poor low.

Trading Strategies To Profit From Poor Highs And Lows

Directional Strategies

Now let’s have a look at a practical example of how you can profit from these strategies:

• Step 1 – identify the poor level using the analogy above
• Step 2 – prepare scenarios for either
  • a) taking a level – directional move through the level
  • b) waiting for a failure of that level

My preferred strategy is to wait for accumulation prior to the poor low or poor high and then get on the directional move using a price-ladder in which the break of the poor level will give the market a bit more acceleration thanks to the stops that will be triggered.

If you want to learn how we structure these trades in detail, don’t forget to check the free webinar we are running at: https://www.elitetraderworkshop.com.

Down below we can see two examples:

1. The first was a failure that reversed – the scenario of Step 2b
2. The second was to break through the poor level – scenario of Step 2a with a twist I have described in italic above

Let’s have a look at one more example of a poor high with a directional break. This time in Spoo (S&P500). The market has formed a poor structure over multiple days. This is even better. We are going with the directional break, but this time we are using the price ladder to tell us if we should stay with the move or cover on a jump.

Strategy:

1. Identify the poor high using a market profile or price action
2. Watch the price ladder and look for:
   1. Watch how the market reacts when it gets closer to the poor high
   2. You want to see force breaking higher, ideally, more volume lifting the offer, bigger size
   3. No reloading or very minimal reloading from sellers – a sign that sellers are not willing to defend
   4. Bid holding (bid being sticky), not really backing off – sign that buyers are willing to push
   5. Exit – you can either exit for a couple of handles when the market jumps, or wait after the jump for a bit and if it does not back off, keep holding the move for a bit longer

Don’t be greedy. Identify the level, play it for a scalp, unless you really expect a big directional move.

Reversal Strategies

There is a scenario when the market is really positioned to break the poor high, but after several attempts (ideally 3 or more), simply cannot take the poor level. This clue can be used to your advantage as well. Imagine all the people that speculated that the poor level will get taken. Those short-term traders and speculators will have to cover their positions and the market does a :

LIQUIDATION MOVE

It is all about identifying those failed attempts trying to attack and break the poor level. Usually, the failed attempts are presented throughout the day, but the next day, it is clear to everyone, that if the market did not push through and repaired that poor level yesterday, it will most likely liquidate today.

Here is the more recent example from 16.3.2022. This is the chart of the Oil. Notice how the double bottom and poor low were formed on Day 1. Then the next day market has attempted 3 times to the last minute trying to break it. Then, the next day, the unwind. P shape type of a move on day 3. This is a the liquidation move we have described.

Remember. Identify the poor level, design scenarios for what can happen next, and use the price ladder to read the market for the best execution. If you want to learn how we do it, don’t forget to check the free webinar we are running at: https://www.elitetraderworkshop.com.

If you liked this type of content, you might check these videos as well:

• Poor Value Areas Explained | Axia Futures
• Understanding Poor Highs On The E-Mini S&P 500
• How To Trade Into A Low Volume Node Zone | Axia Futures

In case you are interested in finding out more about trader training to learn how to trade and explore other great trading strategies, check out our futures trading course that teaches you exactly that and more. Or if you want to really maximize your ladder execution, check out our price ladder trading course.

Thanks for reading and until next time, trade well.

JK

Trading Clues In Market Profile Structures Introduction

In this blog post, we will be looking at the trading clues in market profile structures. We will review four different market profiles and try to extract clues that can be later composed into tradable strategies in your own trading. If you are a frequent reader, you might have noticed that the purpose of these posts is to extract value from the Axia Futures videos in the form of actionable clues. If you like this article, don’t forget to check our previous post:”Trading Initial Balance Break Using Market Profile“. Let’s have a look now at DAX, German Bund, S&P500, and Gold.

This article is based on the video down below.

Market Profile Structures

DAX Market Profile

Down below we have a chart of German DAX equity index. From the structure, we can see that market has moved down in the recent sessions and now has put in a V shape formation. This is our first clue (bullish). Second, the day before the current day has created an inside day (ISD). Again, this is a clue about energy concentration. This clue is neutral, but any side that will have a follow-through will have this clue behind as fuel. Now as the day opens, we have a gap up (bullish clue). See the left side of the chart down below. With a tight initial balance after gap-up (bullish clue), we have a possibility for the market to knife through the stops above. It is all about the open and the opening flows. Let’s recap the list of clues you can take away:

• Clue list
  • V shape (bullish)
  • ISD (neutral tailwind)
  • Gap up (bullish if holds)
  • Tight initial balance after Gap up (bullish if holds)
  • Stops above to trigger stop cascade run (bullish if triggered)

Primary scenario: if the market provides above-average opening flows at the open, and is able to break the IBH (Initial Balance High), we might see a directional move higher to trigger the stops above.

Bund Market Profile

Looking at the Bund chart, we have a one-time-framing downward sloping chart (bearish clue). Even though the trend has been broken, we can see that market still attempts to break lower but starts to run out of steam – see the daily tail (bullish clue). Since we are at the daily swing low, this is a critical location for buyers to step in (bullish clue) after sellers might be tired. Judging from the structure, we are nearing two possible scenarios:

• a) reversal
• b) continuation and follow-through

Now let’s summarize the clues and create a possible primary scenario.

• Clue list
  • Downward One-time-framing (bearish)
  • Daily tails at lows (bullish)
  • Location at weekly swing low extreme (bullish)
  • Value not decisively shifted higher (bearish)

Primary scenario: wait and see for a shift in value either lower (break and follow through lower) or higher for the assessment of the next scenario.

S&P 500 Market Profile

Given the option expiry week, this presents the first clue. A clue that guarantees higher than average volume flows (neutral clue – tailwind). Looking at the tails/V reversals (blue arrows), these signal a rapid change in positioning and short coverings (bullish clue). With the current location, there is a decent cave to be filled above 4716 (bullish clue if we get there). With heavy close aka close that happens in the 90% percentile of the daily range, this is a bullish clue. Overnight we have built value above yesterday’s close, inventory is long (bullish clue). Let’s summarize.

• Clue list
  • Option Expiry Week (neutral – tailwind)
  • Tails and V shape reversals (bullish)
  • Cave above the current high (bullish)
  • Yesterday heavy close (bullish)
  • Overnight VA build above yesterday close – inventory long (bullish)

Primary scenario: as long as we can open and maintain value above the overnight low, this market is poisoned to knife through higher into the cave zone.

Now given the exercise we have just played with DAX, Bund, and S&P500, go and check the last Gold review here. Write down the clues. Document what you have observed in the video and how you can codify it for yourself and possibly build a strategy out of that.

Thanks for reading.

If you liked this type of content, you might check these videos as well:

• How To Manage & Exit A Failed Breakout Trade
• Sign Of A Breakout About To Fail – Price Ladder Trading
• Market Profile Trading: Better Breakouts with Context and Volume Profiling

Do you like what you have been reading? If you would like to improve your game, definitely check one of our courses that teach you all the techniques presented by AXIA traders from a market profile, footprint, or order-flow. If you are someone who likes to trade the news, we have a great central bank course. And if you are really serious about your future trading career, consider taking AXIA’s 6-Week Intensive High-Performance Trading Course.

Thanks for reading again and until next time, trade well.

JK

Journaling Best Practices In Bund Trade Introduction

In this blog post, we will be looking at the journaling best practices in the Bund trade as an example. This is a continuation of the Journaling series, that we have started in our previous article: Journaling Best Practices In Gold Trade. The purpose of this article is to highlight the importance of making the right journaling notes about the trade or the trading opportunity, that will serve you best in the future. Journaling about the trade is all about getting deep into the dynamics of the trade. But not just a selection of the trade. Everything: from a selection of the trade, through trade management, invalidation price action, invalidation price setting, the rhythm of the trade to trade mapping. Let’s have a look at another example trader Harry shared with us.

This article is based on the video down below.

Journaling Templates

Context Of The Trade

Starting from the Daily chart, Harry has focused on the multi-week balance that has been formed in the Bund. He is highlighting the trigger price that can unplug the move lower, focusing on:

• “These lows are now very key, once broken, we should see a big move lower, nearly a 100 tick lower”

Being aware of how the Bund trades, 100 ticks is a lot. But highlighting first, the accumulated energy (the multiday balance) and what would trigger the move lower (break below the range lows) is an important clue.

Down below we continue with another annotation. Notice how the clues such as the TIGHT BLOCK (pink) and then HIGHER LOWS (red circles) were highlighted. Noticing this creates a clue of a stop cascade. A move through those levels should trigger some form of selling. That’s why it is labeled as a key zone. Failure to break to the upside is another point that lot of energy is being built inside these lower prices.

Now is time to switch gears. A market profile comes into the scene. We will be looking at three timeframes:

• Weekly
• Daily
• Daily with cash and overnight session highlighted via different profiles

As you can see above, the main annotation was about “tight volume”. A lot of energy concentrated in a tight range can produce a nice move once the price escapes the range.

Zooming in on a daily market profile, we can see tails on the wider candle, that engulfs any candle after. The “3 lows” annotation signals, that the moment we start to trade into the tail, we might get a move down. Not necessarily quickly moving down, but a move that should auction to test the lows. The highlight from the journal is this:

“once through the 20’s, we should really see the weekly lows be tested”

With almost an inside day the previous day, the break should unlock more volume coming to the market once we get below the 24.

Closing out on the overall market profile analysis, comes this well-annotated view above. This is the chart AFTER the market made its move. Harry is not only collecting charts after the fact but also what data points he had prior to taking the trade. Observe now for yourself all the consolidated clues he has highlighted into the chart. Is there anything we have not picked up in our analysis?

Trade Access And Execution

Getting now into the execution space, it is all about mapping how the price action acted ideally as close as possible before it broke or at the breaking point (20s zone). These are the clues that stood out:

• small 5-minute range structures
• the relative volume between small 5-minute range structures – higher vs lower volume -> signals possible weak hands that are unable to lift the offer higher when the market came back into the previous tight range

Both of these ranges were possible access points prior to the break. After we broke the key 24 levels. There is gonna be a certain rhythm to price action.

Now it is showtime. We have mapped the trade. It is all about our access and ability to HOLD the trade. One of the hardest things in trading futures. Sometimes we must tame our ego trying to use large size and rather sacrifice the wider stop. Why? Because clearly, Bund won’t necessarily offer a straight-line move and we need to constantly ask ourselves: where are we wrong? If the answer is 10 ticks away from this price, we must adjust the risk. The smaller the margin of error, the more difficult it is for us to hold and any move that will try to squeeze us little, will be an emotionally draining exercise.

Looking at the rhythm of this trade, it is clear that trade management was not easy. The market moved down in a zippy fashion, making a move down, then making a 50% pullback on a swing it has made. If you are not prepared for this, or your margin of error is small, you can get frustrated, be stopped in trade, and lose conviction with the idea. Therefore being honest about appropriate stop size and risk size is an absolute must.

Here is the last view on the Footprint chart. Btw: if you are into Footprints, don’t forget to check our Footprint course, where you can learn how to read it like a pro. Looking at the Footprint, Harry has highlighted several clues. The most important one is the HIGH VOLUME (the first white box on the left). The relative volume is something that we have discussed. That is your ZONE to access the trade early when the volume is light.

The second clue is a clean break of the 31 low is now giving you a chance to sell. An area, where stop placement is above the high of the low volume block.

Trade Clues Summary And Takeaway

Last but not least. In order to internalize the clues that led to this rade, Harry has created this list that summarizes clues about the overall setup (right click and open the image in a new tab to see it better):

It is important to remember, that everyone has a different journaling style, but the key takeaway is this: you journal, you annotate because you want to improve your ability to deeply understand the trades you are taking in the future to maximize your conviction, RR, and management of your future trades.

Thanks for reading.

If you liked this type of content, you might check these videos as well:

• How To Manage & Exit A Failed Breakout Trade
• Sign Of A Breakout About To Fail – Price Ladder Trading
• Market Profile Trading: Better Breakouts with Context and Volume Profiling

Do you like what you have been reading? If you would like to improve your game, definitely check one of our courses that teach you all the techniques presented by AXIA traders from a market profile, footprint, or order-flow. If you are someone who likes to trade the news, we have a great central bank course. And if you are really serious about your future trading career, consider taking AXIA’s 6-Week Intensive High-Performance Trading Course.

Thanks for reading again and until next time, trade well.

JK

Journaling Best Practices In Gold Trade Introduction

In this blog post, we will be looking at the journaling best practices in the Gold trade as an example. When we are choosing the best journaling style that fits our personality we should always optimize for getting the most out of our time spent with the journaling. We do not journal just for the sake of it. We don’t do it because others do it. We should always have a goal in mind why we journal. For many traders, the goal is to create a journal we can always come back to and study deeply our trades. Essentially our ultimate goal is the integration of the patterns we have seen in the past for fast recall in the future.

This blog post is about looking at the journaling style of our Junior trader Harry. He traded Gold and we have picked a selection of chart templates with annotations he has used. We will also comment on the Gold trade itself. So definitely a lot to take from this article. If you like similar types of articles, don’t forget to check “Trading Initial Balance Break Using Market Profile“

This article is based on the video down below.

Journaling Templates

Context Of The Trade

Starting at the high level, during the analysis phase Harry has identified a vulnerability in the market. Poor lows and bulky structure that can get swept once the market gets below a certain trigger price. Notice the annotations:

• Inside day
• Current Poor Daily Low
• No Tail On This Days Low

The red line is the trigger price we have mentioned.

As we have highlighted the bigger picture in the annotation, we are adding one more layer to the context. This time an hourly chart and price action it provides. Again, notice the annotations:

• Target zone (green)
• Key Low
  • once breaks back inside this zone I do feel this low will play a crucial part in this and you should be seeing a quick move lower

One piece of information that has been also highlighted is how the lows “felt” for Harry going into this breakout. He called them bulky. This usually signals that they will get tested and that creates a good opportunity for the sweeping action down.

Now before we will move to the final execution charts, there is an important observation Harry has made. He was confident, that the blocky structure (he called this a tight value area that looks like a block or a “fridge” will be swept. Again, he is using arrows in his annotations to signal what move he was expecting, highlighting again the poor low.

Trade Access And Execution

One thing Harry wanted to improve was his ability to access the trade early. For the future trades, he would like to focus on tight structures prior to the break, that can give him a good RR going into the break. He not only wants to get in on the break, but he wants to get early with a highly favorable RR. In his annotation, he has highlighted little 5 minutes blocks that stack below each other as possible access points for his future trades similar to this one. Again, observe what he has highlighted:

• A very small structure – here you could try
• These 2 boxes give you chances to commit to the trade
• Small 1-5 minute entries
• 8 AM candle (London Time)
• Box tested multiple times overnight – once through here you have a chance to break through the key low and the trade is ON!

Finally, down below you can see a footprint chart. This chart is all about documenting were the big sellers stepped in and how they can help in future references for good RR opportunities. See the white box below. In that box large sellers, for example, 148 x 0 stepped in. This is a signal, that someone big is selling and the price should not rotate above this price much. Something to look for in the future breakouts and a good takeaway into a journal archive.

Trade Clues Summary

Last but not least. In order to internalize the clues that led to this rade, Harry has created this list that summarizes clues about the overall setup:

Key Trading Takeaway

It is important to remember, that everyone has a different journaling style, but the key takeaway is this: you journal, you annotate because you want to improve your ability to deeply understand the trades you are taking in the future to maximize your conviction, RR, and management of your future trades.

Thanks for reading.

If you liked this type of content, you might check these videos as well:

• How To Manage & Exit A Failed Breakout Trade
• Sign Of A Breakout About To Fail – Price Ladder Trading
• Market Profile Trading: Better Breakouts with Context and Volume Profiling

Do you like what you have been reading? If you would like to improve your game, definitely check one of our courses that teach you all the techniques presented by AXIA traders from a market profile, footprint, or order-flow. If you are someone who likes to trade the news, we have a great central bank course. And if you are really serious about your future trading career, consider taking AXIA’s 6-Week Intensive High-Performance Trading Course.

Thanks for reading again and until next time, trade well.

JK