1. Hit liquidity level
2. Internals trending in opposing direction
3. Trade towards next liquidity level
I like this trade a lot becuase its a low resistance liquidity run entry where when the momentum is clear I want to find where the people on the opposing side will be trapped and then I enter in that spot. Its clearly leaning bullish today and not be a small margin. I got a decent 7 point trade there but I think the better scenario on a day where all 3 internals are moving plus we hit a liquidity level, I need to be sizing up into these types of trades. I need to learn how to get bigger when I see an A+ setup like this one. I could have added probbaly on the pullback that I exited on and then targeted the most recent lower high as a liquidity draw. Had I done that this would have been a well over $1k trade and probably more like $1300.
1. No liquidity level hit to downside. Kind of sitting in a free fall zone
2. Internals trending up but only 2/3 so immediately this is already a C quality setup
3. when C quality theres no reason to target any type of liquidity zone because the momentum to get to that zone will be dampened heavily.
- I took 3 really clean scalp long trades here and the reason why I was so willing to take my little 2-3 pointers back to back it simply because all internals were trending higher. Once Weight broke down I knew it was time to get out. I think something I need to make sure is true with this strategy is they ALLL have to be trending in a direction for me to really target bigger trades. If they arent then scalp your ass off and leave.
1. Internals trending down except weight again.
2. No BSL taken out. C quality at best, scalp
3. Cannot target a level when conflicting internals. I think once Weight breaks down at 10:00 its time to look for shorts though, no reason to be trying to go long like I did.
I think I knew I was a little lucky here and I should not have been going long. We had a really clean breakdown at previous lower highs over and over and over again and I shouldve been taking those trade, not the one I took. This was a clear flaw in my system.
Rules:
1. IF 3/3 Internals trending in same direction (with strength) then its an A quality setup. When we swipe out a huge LL then its A+++. Must add at least 1 time and go for the opposing LL as target.
2. If 2/3 Internals trending in same direction its B quality. When Weight finally turns it usually turns into a very good opportunity. If 2/3 then scalping is necessary. Only time to hold these trades is if A quality.
3. If 1/3 internals trending in same direction its D quality. No possible trade to take.
1. Hit ONL liquidity level
2. Internals trending higher but not until 9:50 when VOLD reclaimed the trend
3. Should target 1 point below next lower high.
Problem: If I wouldve targeted the 1 point below previous lower high I wouldve lost this entire position and gotten stopped out before it eventually did that. What can I do to prevent that?
Solution: IF VOLD or anything else other than Weight was trending down or in opposing direction near open and then reclaimed, its not an A+ quality setup. In an A+ quality setup they should all be clearly and strongly trending in the exact same direction with zero retests and zero confusion. In a B quality setup they may start opposing then converge slowly over the course of the first 30 minutes. In a B setup you take your 10 points and run. No reason to try to be bigger in a B trade. I can go for more points yet but adding it not possible. Only add when A+ setup.
I stopped out on the first trade because I was leaning long while the VOLD was below the OP. This was a loss because VOLD was below OP. Had I waited for VOLD to get back above OP then I wouldve nailed this 7 pointer without the $175 loss at first.
Review:
1. If VOLD ADD are trending in same direction there is potential for a setup. How strong it is depends on varied factors
Quality:
- (A+) Did we take out a clear liquidity level to the opposing side? Is Weight also trending with them clearly and strong?
- (A) Did we take out a clear liquidity level to the opposing side? Is Weight trending with them but internals are overall not very strong?
- (B) Internals trending in same direction BUT VOLD or ADD faked out in opposing direction early on in the session. Can still target a level but once 10 points is reached momentum may slow so better to scalp. DO NOT ADD INTO THESE TRADES
- (C) 2/3 Internals trending in same direction but no LL hit, other internal is trending strong in opposing directions. If all over the place avoid
- (D) 1/3 or 2/3 internals trending in same direction, no LL hit, Futures all conflicting. No Trade
1. BSL hit
2. Internals trending in same direction Except Weight (C) This means scalps are necessary.
I am happy with this scalp because I nailed a top and bottom of a clean little move but in general I think I couldve definitely capitalized more on this day. Specifically when the Weight broke down through the open price and held it as resistance throughout the session. At 12:20 all internals were now trending in same direction with strength and as a result the ES dropped 30 points in about 45 minutes. That was the time to be going short and trading this because a C quality setup turned into a B which couldve meant that targeting bigger trades is possible.
This week was one of the best weeks I have ever had trading and I walked away with about 22 points in profits which is great and more than enough to make serious money in the markets. One thing I have changed is the fact that I am scalping when I see ugly potential such as 2/3 internals or no LL hit or VOLD ADD faked out early. Those 3 scenarios are something I am trying to avoid like the plague and when we revert on the 1/3 internal that was not trending in same direction then its time to go for the trade but 5-10 points is more than enough in that scenario. I think next week what I want to do better is be able to identify the quality of the setup and try to maximize the profitability of them based on the factors I stated above. Again
A+ 3/3 internals trending at open or very quickly after open (within first 10 minutes), Plus big LL hit either in premarket or at the open
A 3/3 internals trending at open or very quickly after open but no LL hit
B 3/3 internals trending at open but faked out early on. Can still get good trades but more than 10 points is unlikely
C 2/3 internals trending but Weight is lagging and playing the reversion on weight is the move but 5-7 points is more than enough
D 2/3 internals trending Weight fully dislocated or ADD. Futures everywhere. No trade possible.