Top Three Strategies Every Trader Should Master Introduction

In this blog post, we will have a look at the top three strategies every trader should master. Even if you would not be an active trader in one of the strategy domains, being aware of how the strategy works can improve your own trading. This post will be about picking the best articles that provide enough details for you to build strategies based on these concepts. We will focus on the breakout, reversal, and macro trading strategies. Let’s get started.

Top Three Strategies Every Trader Should Master

Breakout Strategies

When it comes to breakout strategies, usually you have one big advantage: tailwind. You are ideally going with the momentum and trying to attack a vulnerable spot. The problem with breakout strategies is, that you might get chopped to pieces before your break finally goes. What are the clues that can help you stack the odds in your favor?

• energy build-up – has there been enough intraday positioning built prior to the break?
• breaking volume – are we breaking on an increased volume?
• velocity/pace increase – has the velocity increased, the pace changed?
• large orders in the opposite direction – don’t produce the anticipated move
• large orders in the direction of your move chase price – such as 500 lot chasing prices down

Have a look at how trader Harry executed his Gold trade and how 500 lots chasing the market could have helped you get bigger in your trade.

There is also another way to play the breakout. For a very short-term spike. How?

Here is the list of clues:

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

Do you like breakout strategies? Here are other resources you follow:

• Trading Clues In Market Profile Structures
• How To Trade The Squeeze Pattern In S&P500

Let’s have a look at the opposing strategy, a reversal strategy.

Reversal Strategies

When we go against the primary momentum, we must be sure that we are truly at the inflection point and our main objective is the unwind of those that have positioned towards the breakout.

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).

Here are a couple of clues that should get you an idea, if the reversal has a chance:

• 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.

In order to use these clues efficiently, check the detailed explanation of how those clues can be practically used.

Do you like reversal strategies? Here are other resources you can have a look at:

• How To Trade a Failed Break Pattern
• Reversal And Continuation Scalping Strategies

Now let’s move on to News strategies.

The News Strategies

Trading the news is a beast on its own. The key is knowing when to hit the news, what to do while you are in the trade and when to sit tight and not do anything.

There are four main principles that Elite Axia Trader follows:

1. In with size quickly, out with small clips laid on bid/offer
2. Never hold full-size offside
3. Aim to stay with a trade until exhaustion
4. Front run denial if signs of exhaustion/news is ‘TGTBT’ (too good to be true)

What is the actual application? Read How To Execute Like AXIA’s Elite Trader.

Here are the best resources to get you started trading the news:

• How To Trade Geopolitical Conflicts
• Elite Trader Price Ladder Scalping In Bund
• Elite Trader Price Ladder Scalping
• Trading Moderna Vaccine News Across Multiple Markets
• Global Macro Trading: How to trade the ECB Rate Decision
• Trading the Fed Rate Decision

Thanks for reading.

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

Best Practices To Step Up Your Macro News Trading Game Introduction

In this blog post, we will focus on the best practices to step up your macro news trading game. Over the years we have released a ton of material to the trading community about trading the news. Those who watch us closely know we have Elite Traders that specialize in this domain. But not just the Elite Traders. Junior traders are picking this game as well. It takes time to build real proficiency in this specific domain of news trading, but it is the one, that has definitely the edge if you have patience and dedication. This post will try to revisit and summarize some of the key nuances of the content we have published. We will look at trading blog posts, YouTube videos, and Instagram and try to locate golden nuggets from this macro news trading domain. Let’s get started.

Key Trading Clues From The Macro News Domain

#1 Peripheral Vision And Correlated Markets In Macro News Trading

When you trading specific themes, be it Brexit, Italian Elections, or Vaccine news announcements, have your correlated markets next to each other. Build that peripheral vision. Build it so you have the best insight into the pulse of the market. Not always you will be fastest on hearing the news in a squawk or reading it of the Bloomberg, Reuters, or Twitter. Use this peripheral vision as a pulse. In the case of Brexit, traders that normally did not trade the Gilt, brought the Gilt price ladder on the primary screen, next to their Pound and Bund price ladder. Same for the Italian elections. Have your BTP price ladder up next to the Euro. Use that correlation in your trade management and deepen your understanding of broader market dynamics.

#2 Trapped Energy

During highly anticipated events such as FOMC or ECB, record what happened on the day of the event and the day after the event. Build an understanding of the structure that leads to the event. For example, if the event resulted in the congested, inside day, this is a signal that a lot of energy and volume has been trapped in that day and will be released once we broke out of the range. Watch where the energy has been trapped and what weaknesses have been left behind after a day like this.

#3 Be In A Game All Day

A lot of the news announcements don’t come in a planned form. These trades if accessed early are not overcrowded trades. If you want to seize the best RR, you simply must sit at your desk and be ready for those opportunities. There is no other way.

#4 Prep Is King

What goes in the prep? Here is the small excerpt from the Junior Axia Trader and his prep for a particular news announcement:

• Go through the markets you want o trade ie: SPOO (ES), STOXX (FESX), BUND (FGBL), GOLD (GC), OIL (CL)
• Ask yourself what markets will offer you the best risk-reward
• Understand the current market structure for each product you are planning to trade. Why? Because news can be a trigger leading momentum into a bigger picture technical landscape.
• Be aware of how the news can come out and what form (the form/format can have different variety):
  • Squawk
  • Twitter
  • Article (usually captured by Bloomberg/Reuters)
• Organize your workspace with your ladders to the event that is coming up or support the theme of the market you are following
• Set the correct clip size
• Which product is underperforming. In this case, Spoo and Stoxx’s relationship where Stoxx is underperforming over the last days and weeks can give you a better opportunity for market movement than Spoo.
• Define specifically what keywords you are looking for in the release. In this case, Harry trigger words were: “refrigerated temperatures”, “shelf life” and “% success“
• Adjust your expectations about the velocity of the move. In this case, Harry expected that the move won’t be any more such a market mover than the initial Pfizer vaccine news. Why? Read our article about “Diminishing value of news“

How do you best prep for the week? It starts over the weekend. Read our in-depth article: “Macro Preparation For The Trading Week Ahead” about the prep leading into the week ahead.

#5 Hitting Early Primary Markets And Shifting Focus To Secondary Markets

Watch the legendary trade of the Elite Axia Trader hitting markets across the board starting with equities and moving to bonds. The order-flow starts from here and I want you to pay attention to what markets this trader hit first. If you have watched the video, the trader understood in his prep what markets he needs to hit first. He is aware of the time when the possible announcement might come and he is ready to attack. Let’s not forget that this announcement was not planned and he has done his own research to find out when can possibly the announcement hit the wires. His primary market based on the analysis for this specific news is equities. So he is starting with Spoo (Emini S&P500), hitting it first. Moving on then to Dax and Dow Jones. Once he is well onsite, early in a trade, he is looking to get aggressive in the Bond space as a secondary market he wants to hit due to the significance of the news. Hit early, understand what to hit first and what second.

#6 Understand Your Number And Access Strategy

Check how this trader executed on the CPI number (by clicking on the image below) and then continue reading questions and commentary below:

Understand what number or information you are looking for. Have a strategy for outliers. Have a strategy for the consensus number. Based on the number, have a specific strategy in place how to hit the market. If it is an outlier, what is your access strategy? Is it gonna be passive access or aggressive? Debrief previous announcements so you understand what to expect in terms of reaction and structure after the reaction. Design your access strategy according to the previous market performances. In detail. And then execute your strategy with no mercy.

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

• AXIA Junior Funded Trader Remains Composed After Missing Vaccine comment Live Trading
• AXIA Elite Trader trades Gilts & GBP On Bank of England Rate Decision
• AXIA Elite Trader Attacks 4 Markets On July 19 FOMC Rate Decision And Presser

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 The Multiweek Range Gold Breakout Introduction – Part I.

In this blog post, we will be looking at trading the multiweek range Gold breakout executed by Harry. This will be a two-part blog series where we will look at the details of the range breakout that happened in Gold. Our main focus in Part I. will be the structure of the trade and prep leading into the trade. What were the important market profile characteristics and how Harry leaned on correlated markets and their risk-on sentiment after the cash open. This is a momentum breakout type of trade and if you are interested in a similar type of trading, check out our previous article with Oil example.

This article is based on the video made by Harry down below.

Building The Narrative

As the structure of the Gold has been building, Harry, mentions that the longer the structure was forming, the more he was focused on how he could tackle this trade and get big. He was asking himself how he can prepare for this trade when/if this trade happens. A crucial part of successful trading is the anticipation and the ability to build the narrative, and piece out your if/then scenarios. Let’s have a look at how he combined the trading puzzle pieces together to execute this not-so-easy and straightforward breakout.

Overall Structure Prior To Breakout

Starting with the higher-level candlestick chart (down below), we can all identify the range. A general rule of thumb is that the longer the range is being built, the more energy (movement) is gonna be released once broken. The problem with range breakouts is the timing. If you would be selling too early, you would get destroyed by many unsuccessful attempts. Of course from hindsight, it is always easy to pick one particular point when breakout worked and neglect all the previous ones, but if you were actually trading this setup, it is a different story. I personally was watching this breakout as well and on that particular day, when the breakout worked, I hesitated and did not pull the trigger. It cost me a trade of the week. Why hesitation? Because of the fear of being washed like many times when Gold tried to break before and washed the sellers. I have discussed my hesitation with AXIA Elite Trader and this is the advice he gave me:

Now what was particular about this range was how long it was forming and under what circumstances. This structure was formed over two weeks, the daily ranges were getting very compressed and the structure swallowed events such as FOMC. That is a lot of energy to absorb in such a structure. Structure captured also an inside week. Given all these clues, we were set for a good break. The only problem was, … TIMING.

Timing And Structure Of The Lows

As we are nearing the proper maturity of the multiweek structure, the market keeps reacting with buying tails (see red arrows). This is not a structure we want to see for the breakout. We want to see positioning being built near the tails. We need to “bulk it out”.

Structure Of The Highs

Looking at the highs, we are also seeing selling tails. Actually, the quality of the selling tails is better than those of buying tails. This slowly increases our conviction on the breakout to the downside given the bigger picture downtrend we are trading in.

As we are nearing the breakout, we can see that more and more pressure is placed to the downside bringing the structure close to the key breakout level. See down below how both Highs and Lows were forming a full picture view prior to the breakout.

The Trade

On the day of the breakout, the execution was not so straightforward. Being aware of the fake V reactions, we either must hit the market and cover the moment we are getting squeezed or sit through the pullback. The problem with sitting in the pullback is that from previous experience, we know the market can squeeze hundreds of ticks higher with ease given the previous buying tails. There is one clue and that is positioning after we broke the red line. Although we have created a V reaction on a short timeframe, compared to the last time, the reaction is not met with follow-through. This is the first difference, the first clue that is telling us that maybe, this time it is different.

The second clue that held Harry’s conviction high on this trade were the correlated markets. As we were breaking out, the US Equities Cash session just opened in an open drive fashion. Bonds were offering, Spoo was bidding up. The feeling of “risk-on” mood was something that could help the Gold moving lower.

Key Trading Takeaway

We have learned that it is always easy to judge from hindsight when was the best time to enter the breakout. Reality is a different thing. Our guiding light can be the usage of market profile in assessing if the structure is mature enough. And then, when the moment of execution comes, lean on correlation pull the trigger, and suck it up.

Looking forward to seeing you in Part II., where we will break down the execution, debrief, and key lessons from this Gold breakout trade.

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

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

Trading Moderna Vaccine News Across Multiple Markets Introduction

In this post, we will look at Harry and his trading of Moderna vaccine news across multiple markets. Although Harry executed trades on one type of news (Moderna Vaccine News), there are really two types of execution that deserve their own separate attention. Based on that we will split the video into two posts (Part I. and Part II.). Let’s get started with the first reaction to the Moderna vaccine news that happened at 11:52:12 London time.

This post is based on the video below.

Market Prep Leading To Trading The Comment

Every execution that is happening on the back of news that are expected but you can’t be sure about the exact timing requires two important things:

• a very well prepared execution plan
• alertness and focus to hit the market the moment the news is released

What do we mean by this plan? This is how Harry structured his plan:

• Go through the markets you want o trade ie: SPOO (ES), STOXX (FESX), BUND (FGBL), GOLD (GC), OIL (CL)
• Ask yourself what markets will offer you the best risk-reward
• Understand the current market structure for each product you are planning to trade. Why? Because news can be a trigger leading momentum into a bigger picture technical landscape.
• Be aware of how the news can come out:
  • Squawk
  • Twitter
  • Article (usually captured by Bloomberg/Reuters)
• Organize your workspace with your ladders to the event that is coming up or support the theme of the market you are following
• Set the correct clip size
• Which product is underperforming. In this case, Spoo and Stoxx’s relationship where Stoxx is underperforming over the last days and weeks can give you a better opportunity for market movement than Spoo.
• Define specifically what keywords you are looking for in the release. In this case, Harry trigger words were: “refrigerated temperatures”, “shelf life” and “% success“
• Adjust your expectations about the velocity of the move. In this case, Harry expected that the move won’t be any more such a market mover than the initial Pfizer vaccine news. Why? Read our article about “Diminishing value of news”

Last but not least, understand which product might be the best one to trade. Compound other reasons such as structure (technical landscape), other supporting news, potential RR, the velocity of the move. In this case, Harry liked the Gold not only for the structure but also because of recent disappointment regarding the stimulus.

Trading Execution

Big Picture Overview

Before we have a look at the actual execution on the back of the comment, let’s have a view of how the market reacted to the news. Down below you can see on a left screenshot of the comments that triggered the market movement. On the right, you can see the reaction of the market and the amount of ticks/handles it has moved after the comment was released.

You can notice that Bloomberg / Reuters headline consisted of the keywords Harry was looking for in his plan. An important aspect of the prep game.

Orderflow Execution

Leading into the execution, all things aligned, finally, the news was released. From this specific point, Harry starts to execute his trades.

Harry first hits Stoxx with a clip of 8, then Bund with a clip of 4, waits a bit for confirmation, and adds additional clips into the Stoxx and then Bund. Now having 16lots in Stoxx and 8lots in Bund he centers his focus on Gold to get him the trigger reaction he is waiting for. He starts with the first clip of 4lots in Gold while observing how other markets are behaving. As long as he is onsite, he is aware he has a good position to hold and other participants to join. He is also aware that these products (Stoxx, Bund) might take a little longer to develop the move he is expecting. Soon he sends three clips of 4lots into a Gold getting his size to 16lots. In seconds after he does, Gold is near the low and the market starts to go really aggressively in his favor. He is paying most attention to Gold and starts to scale out a bit on that first impulsive move down. In Bund, he is 5ticks onsite, in Stoxx still around breakeven. Soon after he scales out fully from his Gold trade, Bund and Stoxx finally pick up momentum putting him well onsite. But then the market dynamic changes and starts to squeeze making the position bit more uncomfortable and for many frustrating. What to do in such a situation? Cover or hold? What can one lean on in such conditions? You have multiple options. Something we will break down in our next post, Part II.

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

• AXIA Junior Funded Trader Remains Composed After Missing Vaccine comment Live Trading
• AXIA Elite Trader trades Gilts & GBP On Bank of England Rate Decision
• AXIA Elite Trader Attacks 4 Markets On July 19 FOMC Rate Decision And Presser

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