Everything stay in the way of the plan - LDTP #15
Let's do the point !
Back to business, I think there is many things to clarify after yesterday's candle and which reaction it causes to some traders.
In the many updates I did on the last idea, I said that we was inbetween two stop hunt pattern on hour timeframe (both have been executed) inside a lateralization pattern on daily timeframe. Standard structure was the pullback inside the broken support area that I had put aside thinking that we would continue directly to the bottom of the spring area because of the lateralization pattern. Market show that I was wrong but that don't change anything in the plan. Long time that we didn't spoke of what happen inside market so that a good opportunity to do it now :
LATERALIZATION =/= RANGE
Most of people will call, wrongly, the lateralization state of market like a range movement. It's mostly a mistake of timeframe analysis. Where the range is a breath in market inbetween two areas of interest, the supply and the demand, in a goal of distribution / accumulation / redistribution / reaccumulation. The lateralization is a suffocation inbetween two strength of opposition inside a single area of interest. That why, like I already said about it, it's a place for continuation. Take a look at this :
I tried to illustrate it showing multiple examples. First, to understand the timeframe mistake you can see that lateralization examples are way more longer than ranges, but they occurs in the same timeframes. They can be horizontal or not, to the difference of ranges. And that why I think I see this mistake actually, because it is horizontal here. To the difference when I exploit a range I will use Wyckoff Patterns because it provide a structure. On the other side in lateralization I will use volumes profiles and the exploit of it that I already showed in another LDTP.
So now that I clarified that Lateralization isn't a range, it's time to understand that it is VERY USEFUL to identify it inside a range. It's one of the best way to identify incoming breakouts. Like I said lateralization happen when to strenght of opposition fight inside a single area of interest. So, in a range when you see, for example, lateralization inside your demand area that mean your selling strenght don't wait anymore the supply area. And so if you take the basic logic of the range which is buy the demand and sell the supply, when you see sellers inside the demand that induce you the incoming breakout. Buyers will be suffocated by sellers until their will be overwhelmed. (First illustration of LATERALIZATION on chart)
What happen when sellers don't succeed in the overhelming of buyers ? Exactly what you can see here, an exhaust. Exhausts candles that I use in entry signals happen in trend but this one not. Sellers get away, giving space to buyers. This give a candle with volume, with imbalance, and erase the buying power of the support which can be retest and (usually) easily broke. (Second illustration of LATERALIZATION on chart)
This is strong to understand to read the market and use it in construction of plan and chart analysis because there is only few failure in it. As it's not a consolidation movement it (usually) don't provide delayed bottom, as it's not a bottom structure it (usually) don't provide trend movement. So even if it fail in the breakout and provide an exhaust you can expect a quick retest of the levels without a deep movement.
Speaking of bottom, I also read many people speaking of flat bottom here. I'm not of this opinion, even if I'm saying wrong about lateralization, flat bottom is easily characterized by an horizontal buying / selling pressure, which is not the case here.
Another thing, yesterday's movement happened on an holiday, most of this days don't provide movement (like weekend for example) and when it happen they are usually redraw in the opposite side in the next few days (like FOMC sessions for example).
To finish, another thing that confort me in my plan is the contrarian spirit of retailers that we can see : in bull trend every red candle is an opportunity to short and in bear trend every green candle is an opportunity to buy, feared by the fact they could miss the movement, convincing themselves that it's the right time to invest. You never take the entire movement in trading, nobody buy the dip and sell the top, when you arrive to do it it's moslty luck and, if you do that, the amount of loss you took before, on other attempts, prove it (care to premiums who do that or promise that in any form of payable content).
So saying all of that, my plan stay unchanged on daily timeframe. I always expect a strong selling movement to reach the bottom of the spring area, it take time for the moment and if we go for the pullback with this exhaust it will take even more time. But if I'm wrong here we will see increasing buying volumes leaving imbalances where the pullback should happen (over $33,000), else we will face strong selling pressure on the broken support or before.
🛑"Making money in trading is math and respect of strategy, so never let your emotions guide you in uncomfortable positions"🛑
👉 Like, follow or comment* if you like, I need it to continue !
*Come ask questions, come share your point of view, come debate, I need to feel that my without counterpart work is usefull for some !
Back to business, I think there is many things to clarify after yesterday's candle and which reaction it causes to some traders.
In the many updates I did on the last idea, I said that we was inbetween two stop hunt pattern on hour timeframe (both have been executed) inside a lateralization pattern on daily timeframe. Standard structure was the pullback inside the broken support area that I had put aside thinking that we would continue directly to the bottom of the spring area because of the lateralization pattern. Market show that I was wrong but that don't change anything in the plan. Long time that we didn't spoke of what happen inside market so that a good opportunity to do it now :
LATERALIZATION =/= RANGE
Most of people will call, wrongly, the lateralization state of market like a range movement. It's mostly a mistake of timeframe analysis. Where the range is a breath in market inbetween two areas of interest, the supply and the demand, in a goal of distribution / accumulation / redistribution / reaccumulation. The lateralization is a suffocation inbetween two strength of opposition inside a single area of interest. That why, like I already said about it, it's a place for continuation. Take a look at this :
I tried to illustrate it showing multiple examples. First, to understand the timeframe mistake you can see that lateralization examples are way more longer than ranges, but they occurs in the same timeframes. They can be horizontal or not, to the difference of ranges. And that why I think I see this mistake actually, because it is horizontal here. To the difference when I exploit a range I will use Wyckoff Patterns because it provide a structure. On the other side in lateralization I will use volumes profiles and the exploit of it that I already showed in another LDTP.
So now that I clarified that Lateralization isn't a range, it's time to understand that it is VERY USEFUL to identify it inside a range. It's one of the best way to identify incoming breakouts. Like I said lateralization happen when to strenght of opposition fight inside a single area of interest. So, in a range when you see, for example, lateralization inside your demand area that mean your selling strenght don't wait anymore the supply area. And so if you take the basic logic of the range which is buy the demand and sell the supply, when you see sellers inside the demand that induce you the incoming breakout. Buyers will be suffocated by sellers until their will be overwhelmed. (First illustration of LATERALIZATION on chart)
What happen when sellers don't succeed in the overhelming of buyers ? Exactly what you can see here, an exhaust. Exhausts candles that I use in entry signals happen in trend but this one not. Sellers get away, giving space to buyers. This give a candle with volume, with imbalance, and erase the buying power of the support which can be retest and (usually) easily broke. (Second illustration of LATERALIZATION on chart)
This is strong to understand to read the market and use it in construction of plan and chart analysis because there is only few failure in it. As it's not a consolidation movement it (usually) don't provide delayed bottom, as it's not a bottom structure it (usually) don't provide trend movement. So even if it fail in the breakout and provide an exhaust you can expect a quick retest of the levels without a deep movement.
Speaking of bottom, I also read many people speaking of flat bottom here. I'm not of this opinion, even if I'm saying wrong about lateralization, flat bottom is easily characterized by an horizontal buying / selling pressure, which is not the case here.
Another thing, yesterday's movement happened on an holiday, most of this days don't provide movement (like weekend for example) and when it happen they are usually redraw in the opposite side in the next few days (like FOMC sessions for example).
To finish, another thing that confort me in my plan is the contrarian spirit of retailers that we can see : in bull trend every red candle is an opportunity to short and in bear trend every green candle is an opportunity to buy, feared by the fact they could miss the movement, convincing themselves that it's the right time to invest. You never take the entire movement in trading, nobody buy the dip and sell the top, when you arrive to do it it's moslty luck and, if you do that, the amount of loss you took before, on other attempts, prove it (care to premiums who do that or promise that in any form of payable content).
So saying all of that, my plan stay unchanged on daily timeframe. I always expect a strong selling movement to reach the bottom of the spring area, it take time for the moment and if we go for the pullback with this exhaust it will take even more time. But if I'm wrong here we will see increasing buying volumes leaving imbalances where the pullback should happen (over $33,000), else we will face strong selling pressure on the broken support or before.
🛑"Making money in trading is math and respect of strategy, so never let your emotions guide you in uncomfortable positions"🛑
👉 Like, follow or comment* if you like, I need it to continue !
*Come ask questions, come share your point of view, come debate, I need to feel that my without counterpart work is usefull for some !
Comment:
UPDATE 06/06
Epidermic reaction for me on the middle of the volume area that I spoke, no bottom pattern, no signals, consolidation movement filling the imbalance with a new one, that a tennis match.
We are retesting the last volume range poc actually without signals to exploit on the bear side for the moment.
The question stay always : will we have that pullback or not ?!
Nothing change on daily plan.
We are retesting the last volume range poc actually without signals to exploit on the bear side for the moment.
The question stay always : will we have that pullback or not ?!
Nothing change on daily plan.
Comment:
UPDATE 09/06
Tennis match is over after 5 set, imbalance is now closed and worked with volumes. Let's now to see on which side we will exit, for me, as the range happen under the resistance of the volume range I would bet for a redistribution which could bring to the support but it's not really clear because it don't take place after a clear trend movement.
It's also in the way of the daily plan and of the last imbalance opened by sellers.
It's also in the way of the daily plan and of the last imbalance opened by sellers.
Comment:
UPDATE 10/06
So, it was well a redistribution pattern, my personnal target ($28650) isn't reach for the moment, we are in the demand area actually and we will observ, I think, an epidermic reaction on the POC as there isn't buying volumes for the moment.
To remind you, the main objective of all this idea is now to see the breakout of the last daily bottom without resistances before, to confirm the lateralization pattern presented before.
Daily plan always unchanged.
To remind you, the main objective of all this idea is now to see the breakout of the last daily bottom without resistances before, to confirm the lateralization pattern presented before.
Daily plan always unchanged.
Comment:
UPDATE 13/06
So this is the final update, objetive have been completed, we broke the last daily bottom without resistances which confirm the lateralization pattern and what I explained in this LDTP.
The fun facts is that I wrote a full LDTP during hours yesterday to say that we had a signal and that it was a false signal. But market fall during I was writing it and so I didn't found interest to post it anymore. I post you here un extract of it (screenshot prove that it was before market fall) :
"It's time to speak of what bring the chart to us actually and first beginning with the update of the trading diary : The scalp entry of May 12th have been stopped breakeven as expected. The hourly redistribution pattern reached his first target on the support of the volume range, and also his final target at the same price as the scalp entry/exit.
For the lateralization pattern, volume range has been broke without resistance, bottom of the pattern has been broke without resistance, just one level remain in it : the daily bottom. And we are bumping on a level, with exhaust, with pressure, with volume, which create a buying signal (spoil : fake signal for me) and so this bring me to my next point.
Do you remind what is this line where we are reacting? What could be this level ? Here an indication :
First time I spoke of it ? 29th of MARCH ! And we are back to a topic that I already spoke many times : learn to draw your resistances and supports ! It took near to 3 month to be reach but it never changed and the perfection of it ... hard to do better. I already said and it never as been more true : Learn to draw your S/R, draw it from the past and don't adapt it to what/where you want to see.
What should we expect from this level ? First it's a target for the exploitation of the channel, so we can expect profit taking/epidermic reaction/consolidation movement/lateralization/accumulation/redistribution, and for me what we see actually is : profit taking. Profit taking and a panic reaction due of the amount of orders here (institutionnals orders probably) and the low amount of opposition because we are in the weekend create the perfect spot for jump on emotions for retailers I think. This explain the bounce that we see and the precision of the level (and also why I think the signal we have is a fake signal, in a general way don't give to much credit to weekend signals on more than 1 hour timeframe)."
Now we are around our area of interest, I see always the accumulation in the spring area, it's the moment to see if the level will do his job for a bottom and complete the Wyckoff pattern. In all case wait signals, don't anticipate, rules stay the same.
The fun facts is that I wrote a full LDTP during hours yesterday to say that we had a signal and that it was a false signal. But market fall during I was writing it and so I didn't found interest to post it anymore. I post you here un extract of it (screenshot prove that it was before market fall) :
"It's time to speak of what bring the chart to us actually and first beginning with the update of the trading diary : The scalp entry of May 12th have been stopped breakeven as expected. The hourly redistribution pattern reached his first target on the support of the volume range, and also his final target at the same price as the scalp entry/exit.
For the lateralization pattern, volume range has been broke without resistance, bottom of the pattern has been broke without resistance, just one level remain in it : the daily bottom. And we are bumping on a level, with exhaust, with pressure, with volume, which create a buying signal (spoil : fake signal for me) and so this bring me to my next point.
Do you remind what is this line where we are reacting? What could be this level ? Here an indication :
What should we expect from this level ? First it's a target for the exploitation of the channel, so we can expect profit taking/epidermic reaction/consolidation movement/lateralization/accumulation/redistribution, and for me what we see actually is : profit taking. Profit taking and a panic reaction due of the amount of orders here (institutionnals orders probably) and the low amount of opposition because we are in the weekend create the perfect spot for jump on emotions for retailers I think. This explain the bounce that we see and the precision of the level (and also why I think the signal we have is a fake signal, in a general way don't give to much credit to weekend signals on more than 1 hour timeframe)."
Now we are around our area of interest, I see always the accumulation in the spring area, it's the moment to see if the level will do his job for a bottom and complete the Wyckoff pattern. In all case wait signals, don't anticipate, rules stay the same.
If you don't believe technical analysis you can believe the fundamental recurrences of the market, not for exploit but at least to don't jump into the market on emotions and avoid falses signals which will increase success rate in your trading.
For today, now that we are back in the volume area, two areas of interest : middle of the area (where we are actually = gray dashed line) & demand area + POC ($29,000 - $28,900). If we go for a pullback we should see buying signals around here.
My daily plan don't change, I aim the bottom of the spring area, and if this area break to the south, I will gauge selling strength & buying pressure around $27,800.