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Video Transcript:
Now,
today can just be a pause day for all we know. Anyway, for today what we are
going to do is just trade based on what we rely on—the signatures. This is
119.18, and the next macro is still quite far from where we are. We just need
to look for some structure to develop, something that gives us a bit more
confirmation. On a day like today, I would also check how the volume profile is
stacking up. If we look at it, this entire area is a big volume node.
Obviously, we can’t wait for the price to move all the way up there because by
that time, I bet NQ would take out the high and we’d be in some sort of bearish
divergence. So, there’s no point in waiting for that because if NQ pushes up
even slightly, it’s likely to take out 180 before we realize it. That’s the
dilemma I’m in—figuring this out. The only signature we have now is this macro
inversion, a macro bullish inversion that happened during the 10:50 macro. A
lot of sell-side has already been taken, and now it would also be interesting
to see if an SMT shows up.
For
example, if ES takes the low but NQ holds, then we have divergence. Personally,
I’d be okay with some risk at that point. Generally, I’d put on half my usual
risk and go long with a stop here. The premise of that trade would be that
there’s an SMT, meaning a bullish divergence, and I’d be risking a small amount
with the expectation that the low stays intact. Given we’re in a strong bull
trend, I’m okay risking this much for a potential gain many times larger.
That’s purely math. It’s not so much a signature, but an SMT would be a
powerful one. Otherwise, would I wait for everything else to be done? No. Why?
Because if I take a trade here at the SMT, and since it’s in the direction of a
bullish trend, I’m not trading against the trend. It’s a 1:9 or 1:10
risk-reward setup. I’ll take that all day long in the trend’s direction.
Sometimes you need to be creative in how you navigate, and this is one such
option. If there’s no SMT, we’ll just have to wait. But that’s the kind of
thought process I’m working through—I want to engage, but I’m looking for the
right signature with a solid risk-reward. The problem with waiting for perfect
confirmation, given the structure and volume profile, is that the risk-reward
can quickly shift from extremely favorable to unfavorable.
So,
in scenarios like this, I don’t mind risking a small amount on an SMT, hoping
for potential expansion. If I enter a trade like this, even with a partial
position, the risk-reward is lucrative. For example, right here is the SMT I
was talking about. You can see it—if you really ask me, I’d go long here. This
isn’t a recommendation, because this isn’t the strongest signature, but from a
risk-reward perspective it works. So here, I’m long. My stop would be here, and
I’m fine with that. The risk-reward is extremely good. I’d then add more once I
see further confirmation, like a breakout. The reason I’d enter here with a
partial position is simply because of the SMT. It has run the 4-hour low, as
well as the others—the Asia, London, and yesterday’s PM lows. And with the
overall bullish trend, this makes sense.
Hi,
this is a post-market review of the trade we talked about in the live session.
If you remember, we were looking at this SMT and going long. On the minute
chart, you can see it clearly—there was an SMT, then an expansion, and we went
long here. The idea was that all the sell-side liquidity had been run in every
session, and with ES showing a clear SMT, and given the strong bullish trend,
it was a great risk-reward trade. We went long here, aiming for this target.
Around 10:50 a.m. New York time, it nearly hit. That was about a 1:7 or 1:8
risk-reward trade, and it worked out.
The
takeaway for you, especially if you’re new to smart money concepts and
liquidity, is this: first, always know the trend direction. It’s much better to
trade with the trend, while moves against it are often just manipulation.
Second, trade in the moment. Look for even the smallest algorithmic signatures
and build your trades around them—especially when the opposing liquidity has
already been taken. That’s what we did here. Today was a slow market, so price
just ground higher instead of moving fast. But as long as you have a great
trade location, whether price grinds or spikes, it doesn’t matter. Only the
time it takes is different.
Anyway, that was the trade. If you enjoyed this video—hey everyone, it’s Dale here. I hope you enjoyed it. If you’d like to trade alongside me and our team of funded prop firm traders every day, click the link below and hop aboard. We look forward to trading with you.