A Dive Into My Swing Trading Approach (+setup)

LionLazzari Updated   
CME_MINI:ES1!   S&P 500 E-mini Futures
This video was a short synthesis of my swing trading approach. For the amount of information I presented, I'm not expecting to successfully being able to convey my means and ways in one short video, but I'm glad if I could at least show a different perspective.

Some important things I forgot to mention:

- The tolerance for identifying a visual weak liquidity pattern is 2 ticks, 3 ticks during highly volatile days (for the ES). This can change from one market to another. Anything more than 2/3 ticks is considered a move of conviction supported by strong liquidity, a market that has the confidence to see what's beyond a certain point to then either sharply reverse or move forward.

- Using this method I CANNOT know what the market makers are exactly doing, there is no way to know, they will always be a step ahead of any brilliant retail trader. However, we can understand their logic and the weak traders' logic, the latter is the type we want to trade against.

As I said, I favour a short trade, but as of today I have to remain on the sidelines. During this times is important to be flexible and change ones bias if that's what the market is suggesting. I will post my set up (if any) in due course.

I had the impression that the market has been making some kind of bet in the last couple of weeks. The rally that goes from the 26th of July to today has left a weak structure both in terms of liquidity and volume. To me it seems the market is rising due to recent optimism which hasn't been justified yet.

If justified today, we could see a market which will be keep rising for next weeks. If not aggressive selling pointed towards the 4000 area is to be expected.

I'll be watching the market closely to see what price the news will provide us with. Best case scenario for my analysis = some good volatility resulting in a test to this month high and potentially a more favourable price to short the market later on

CPI numbers proved me wrong in the end and fully justified the last few days market strength. On the other side, I believe it’s still too early to claim that inflation is finally cooling down and that we are starting to see the light at the end of the tunnel.

However, I can’t ignore the recent bullish market conviction, therefore I decided to wait for the S&P to auction a little higher, to then reconsider a short position around the 4300 zone. A very important zone where we have some weak liquidity, daily highs that have been sold precisely. A good initiative movement over that area which then ends to be a strong rejection could be an entry signal.