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Unified Support And Resistance Theory: real mechanical levelsBefore we start: Wave Auction Theory and many preceding posts concerning the levels are now considered legacy. It’s an absolutely working entity, but it’s just a ‘model’. Volume & signed volume & volume delta would be used interchangeably; Timeframe = ‘rolling’ amount of data we utilize, e.g. weekly, intra-week. Resolution = aggregation frequency we use to represent that timeframe, e.g 30m. E.g a daily (intra-day) timeframe on CME can be represented as 276 5min bars, 46 30min bars, 12 2h bars, or 1380 1min bars, etc. (Yes btw, that's your seasonal windows you heard from me). Support and resistance levels are exclusively based on (aggregated) tick data, not on orderflow, not on liquidity. Liquidity and CVD based level are structural levels, they form ‘before’ market and limit orders meet, before ticks even emerge. For gaining this information mathematically, you need these 2 scripts: volume analysis & liquidity analysis . Prerequisites: Uniform / Sagitta grid , these grid levels would be later referred as anchors or seeds. We would be finding & using only the closest real levels to these anchors. How levels get positioned & cleared aka consumed aka broken. The same logic would apply to other kinds of levels, not only price-based ones. The main rule stays the same: a level can be positioned with new bars ‘only’ on the same resolution it was located initially. How to separate (aggregated) tick data into analytical units aka auctions (also briefly mentioned there ) (optional) knowing what Bias-Variance Tradeoff is. I think USART is not a model, good chances are this is the endpoint source entity. It explains the deepest low-level nature of support & resistance levels, which is tightly linked with information theory. Ironically, the nature of support and resistances is much closer to DSP (Digital Signal Processing) then all this endless variety of custom time-domain filters. Let’s start. 3 Methods of discovering S&R levels Mathematical method (the blueprint of reality): this is the most general way. Represented by what I called MBAD , QBAD , and PBAD . - Performs best when market activity is typical or decreased - Performs ok when market activity is increased - Performs bad when market activity is extreme Mechanical method (‘the’ objective reality): these are the real actual levels, this post is focused on them. - Performs best when market activity is increased - Performs ok when market activity is extreme - Performs ok when market activity is typical or decreased Representation/learning/intuitive/”by feel” method (what objective reality Wants to be): a quick & compressed grasp of reality. An experienced organic would just take a look at the data and ‘feel’ where the levels are. In code, it can be done with a proper clustering algorithm & a couple of other things. The idea is to match the way an organic brain does it. Another script and/or post would be made for this one. - Performs best when market activity is extreme - Performs ok when market activity is increased - Performs bad when market activity is typical or decreased Also, knowing the 2nd and 3rd method would save you if for some reason your quant math is unavailable atm. Like imagine you rely on MBAD for your objective trading signals, but need to trade / make a decision fast without TV nearby. Mechanical (real) levels Signal = information = change In (aggregated) tick data, supports and resistances are simply locations of change events in (Price & Time & (signed) Volume) field. This is it, the most general and complete definition of what S&R levels really are, mechanically. These change points carry & reveal & prove information. Imagine a counter example, you have a perfect straight diagonal line (not necessary price movement, any process) that goes on and on forever. There are no distinct points of interest to detect, no S&R levels there, because nothing changes, it just keeps going as it goes. Now once smth changes, e.g it reverses, now we have a point of interest at that reversal. How to define changes in price, time, volume (necessary for final levels) Given tick data (aggregated, say 5min chart) has 3 types of fields i.e Price, time, volume delta, we have 3 types of levels as well (we’ll need all the types, but won’t need every individual level). Choose correct data resolutions first The mechanical method requires 3 distinct resolutions for each type of level over the same timeframe. Say our timeframe is intra-week aka inter-day, on CME, we need: High resolution: last 230 30min bars, for price-based levels. High variance, low bias. Medium resolution: last 60 2h bars, for time-based levels. Medium variance, medium bias. Low resolution: last 20 6h bars, for volume-based levels. Low variance, high bias. ^^Me I like to display all 3 resolutions on the same chart Price-based supports and resistances ^^ When the direction of price movement changes, so simply pivot highs and pivot lows, a couple of examples are marked. Note: when the first or the last datapoint in a triplet is NaN/na, 2 points are enough to detect a pivot high/low. E.g: na, 45, 67: 45 is pivot low; 76, 11, na: 11 is pivot low. Notice that we use bar highs and lows, these points are recorded by price rule (highest and lowest print of a bar). Time-based supports and resistances ^^ Basically open-close pairs between the bars: closing print of a bar & opening print of the next following bar. If the previous or next bar is na, like when a session starts/ends. We then use only one print. Study the screenshot pls. After it is clear if a level is becoming resistance or support, we can get rid of one of the prints and choose the final print representing the level: the lowest out of 2 for supports, the highest out of 2 for resistances. Only then levels are considered as formed. Notice that we use close and open here, these points are recorded by time rule (earliest and latest prints of a bar). Volume-based supports and resistances ^^ When (inferred or real, depending on asset class) volume delta switches from negative to positive, both bars (say the last with positive delta and the first with negative delta) would provide us 2 levels each: price of the largest sell tick and price of the largest buy tick. This info is unavailable in retail trading platforms, but good news we don’t need it for the assets where we prefer inferred volumes vs the real ones, so equities, bonds, FX. There. Both largest sell tick price and largest but tick price would collapse to bar midrange. ... The process Once we know how to locate the levels, we need to pick the ones we need: Put/imagine the anchors on every finished analytical unit aka auction, and on currently on-going auction. In this post we’d separate market activity into auctions by trading sessions. Always recall that each anchor has a predetermined lifespan (levels do Not exist 4ever if not-broken): ^^ in mechanical method we don’t use limit levels After a level is formed (a session is finished): - Basis lives for 1 more session - Deviations live for 2 more sessions - Extensions live for 3 more sessions - We don’t use limit levels in mechanical method Look when a new auction opens. We need to find supports below and resistances above. Find the closest real levels (both positioned and not-positioned ones) to anchors, priority is always: price > time > volume. This way, each anchor would be represented and objectified by 1 or several nearby real mechanical levels. That’s what fibo traders are missing: instead of locating the real price-action based levels ‘nearby’ dem fibo levels, they use the fibo levels like the endpoint truth. ^^ levels for the next sessions Final hard stop loss & take profit for each level is the level itself +- 1 volatility measure, which is ~ the auction range divided by 3.4641 (aka sqrt12)., of that auction that originated the level. I can explain more how to make it absolutely data-driven and real on request, but it's a negligible improvement. Improved stop losses: if a level is already positioned (tested), it has a native soft invalidation point. If it’s hit, you can keep the final hard SL but try to exit at breakeven where you’ve entered. It doesn’t mean that the anchor level itself is broken, remember, we can represent each anchor with several real levels nearby. Improved take-profits: in any doubts, in questionable context etc, 1:1 Risk:Reward is the rule. Because from info perspective, when price leaves the field of a level (remember +- 1 vola measure), it loses contact with it, now it’s outside of the influence area of that level, it means our position also loses the connection with the level from info perspective. Otherwise, if there’re some supporting factors, you can keep the position, but remember, now you're doing long-n-hold or short-n-hold. One of the supporting factors can be when liquidity and volume imbalance are ‘both’ favoring the hold. ... ∞
COMEX:GC1!Education
by gorx1
2
Professional Fibonacci Trading GuideMost professional traders use Fibonacci for one reason It defines where risk and opportunity are asymmetric Fibonacci levels highlight where pullbacks tend to pause before trend continuation Not because of magic Because order flow and trader behavior cluster there The Only Levels That Matter ✓ 0.50 psychological balance ✓ 0.618 highest probability continuation zone ✓ 0.786 trend validation level These zones are where professionals wait Not chase How It’s Used ✓ Identify a clean impulse move ✓ Draw from swing low to swing high ✓ Wait for price to retrace into 0.50 to 0.618 ✓ Enter only after price shows acceptance ✓ Stops sit below 0.786 ✓ First target is prior high ✓ Extensions project continuation targets Why Daily Timeframe ✓ Filters noise ✓ Aligns with institutional flow ✓ Cleaner structure ✓ Better risk to reward ✓ Less overtrading Lower timeframes distort Fibonacci Daily charts reveal intent Key Rule Fibonacci is not an entry signal Price reaction is Wait for price to reach the level Then wait for confirmation That patience is the edge RB Trading Education only Risk management required
NYSE:BRK.BEducation
by RB_T
Why the Reaction Matters More Than the Level!!!Most traders spend their time hunting for the perfect level.✖️ Support. Resistance. Demand. Supply. They draw the zone… and assume price must react. But professionals know something crucial: The level itself is not the edge. The reaction is. Here’s why. 1️⃣ Levels Are Common Knowledge Everyone sees the same support. Everyone sees the same resistance. If levels alone were enough, everyone would be profitable. A level is just a location.📍 It doesn’t tell you who is in control. 2️⃣The Reaction Reveals Intent What matters is how price behaves at the level. Ask yourself: - Does price reject immediately or hesitate? - Are candles impulsive or overlapping? - Does price leave the level with strength or drift away slowly? A strong reaction tells you: ➡️ One side stepped in aggressively. A weak reaction tells you: ➡️ The level exists… but conviction doesn’t. 3️⃣ Clean Rejections Beat Perfect Levels A slightly imperfect level with a violent reaction is far more valuable than a textbook level with no follow-through. Professionals wait for: - sharp rejections - momentum expansion - structure confirmation They don’t assume... they observe. 4️⃣ Failed Reactions Are Warnings When price reaches a level and does nothing… that silence is information. Failed reactions often lead to: - level breaks - deeper moves - trend continuation The market is telling you: ➡️ “This level no longer matters.” 📚The Big Lesson Levels tell you where to look. Reactions tell you what to do. If you shift your focus from drawing levels to reading behavior at levels, your trading instantly becomes clearer and more objective. ⚠️ Disclaimer: This is not financial advice. Always do your own research and manage risk properly. 📚 Stick to your trading plan regarding entries, risk, and management. Good luck! 🍀 All Strategies Are Good; If Managed Properly! ~Richard Nasr
Education
by TheSignalyst
28
How To Trade Off Liquidity Levels Following A Structure BreakoutGrasping how to trade around liquidity levels is crucial. The fundamentals of technical analysis revolve around identifying and leveraging these points. One common mistake that new traders make is not choosing the right price levels for trades. This can lead to inadequate risk-reward setups and inconsistency in trading results. What Are Liquidity Levels? For large institutions and traders needing to execute substantial orders, locating sufficient liquidity is vital. A market’s liquidity significantly influences price volatility. When major players enter the market, they aim to achieve the best possible prices. However, due to the size of their orders, they need ample counter-orders to fill their trades while minimizing slippage. If a trader attempts to enter a position in a low-liquidity area, the resulting volatility can negatively impact their average entry price. Conversely, entering at a high-liquidity level usually means less price fluctuation, leading to a more favorable average price. So, where can you find these liquidity levels? Look at where stop-loss orders are likely placed. This is where the concept of “stop-loss hunting” comes from—large players need liquidity to accumulate significant positions, which makes these areas of interest since they help reduce slippage. A liquidity level arises from an initial imbalance in supply and demand, forming what we know as swing highs or lows. As more traders take positions, these levels become historical reference points for placing stops. When these levels are revisited, a decision point occurs, leading to either a breakout or a reversal. A useful guideline is to watch for rejections that don’t reach a 50% retracement of the previous high or low, as this might indicate a lower-quality liquidity level. Strong rejections tend to indicate better chances of holding during retests. I personally look for rejections that result in a breakout into new highs or lows. Other factors, such as market conditions (risk-on/risk-off), broader market structure, and relevant economic data, also play a crucial role in assessing whether a level will hold. Trading EUR/USD Using Liquidity Levels To illustrate how to identify potential buying or selling opportunities based on liquidity levels, draw a horizontal line from the latest wick or swing high/low and extend it until it meets price again. In the EUR/USD hourly chart example below, I selected a month’s worth of data, marking blue lines for liquidity levels that led to market structure breakouts (higher highs or lower lows) and red lines for levels where retests failed to break the structure. I recommend a strategy of targeting a 2:1 risk-reward ratio, setting stop-loss orders at half the size of the previous swing, moving to break even at 1:1. By the end of this exercise, it should be clear that trading on liquidity levels with a breakout condition (blue lines) significantly increases your chances of success compared to trades that go against the prevailing market structure (red lines). If you focused solely on the blue levels, you might have experienced 6 winning trades and only 1 loss at a 2:1 risk-reward ratio. By combining this approach with additional factors like aligning with higher timeframe cycles, considering fundamental analysis, and practicing disciplined risk management, you may find this strategy aligns with your trading style. I encourage you to explore this methodology through your own backtesting and see how it can enhance your trading arsenal.
Education
by TaylorDeMario
A+ Trade Set ups All From Respecting Simple Levels! We identify high-quality trade opportunities by focusing on key support and resistance levels. By respecting these fundamental price points, traders can enhance their decision-making process. Support levels act as a floor where buying interest tends to emerge, while resistance levels serve as a ceiling where selling pressure usually mounts. Recognizing and adhering to these simple levels helps traders pinpoint entry and exit points more effectively, increasing the probability of successful trades and improving overall trading performance. AMEX:SPY
AMEX:SPYEducation
by ThePrintingRoom
5
Support And Resistance Lines Are Not Real: Prove Me WrongIn this video, I draw random lines on the chart to prove a point. I think we need to ask ourselves the following questions to become better traders: How will I define support and resistance consistently ? How will I use support and resistance in my trading? Do I need support and resistance in my trading? Is support and resistance a reliable measure for markets? Are the lines that I have been drawing for so long actually meaningful?
NYSE:CVSEducation
by JoeRodTrades
2
Is it your strategy or you???What is your strategy? If asked, could you explain it to one of your friends or family members? More importantly, does it make sense? Is it clear? Teaching or Sharing your thoughts & methods leads to a deeper understanding of the content. If nothing else, speak aloud and hear your reasoning out of your own mouth before taking a trade. My current strategy is to take a defined structure from Swing High to Swing Low or Swing Low to Swing High and use it as the basis for my analysis. Naturally, the structure will indicate a trend, and I would need to decide if that trend is in alignment with or contrary to the broader market. Either is fine, but this distinction is essential when assessing targets and risk. I have to constantly remind myself that I don't know what the market will do. Since I don't know what the market will do, it follows that I should be open to changing my mind and also safeguarding against my ignorance. With this being said and firmly in mind, there are three levels that I like to pay attention to. They are: Breakouts of previously established key levels. The .618 Retracement & 1.618 Extension (current and previous structures) Between the .786 & .886 Simple enough. I'm sure that your strategy for entry can be explained in layman's terms as well. The issue typically doesn't lie in the analysis it lies in the trader's ability to follow said analysis and follow it consistently. Does this sound relatable? You spend hours or maybe even days conducting your analysis, waiting for the market to make its move and give you some indication of what might happen in the near future. As time passes, things seem to become more clear, and you see your opportunity coming. Sure there are a few unexpected movements that happen along the way but that's just how markets move. Price approaches your entry but not yet. Hell, it may not actually reach the level at which you established as a good entry. So you enter early and let the candles fall where they may. If you have fixed stops, now your levels are thrown off. If you don't, then any concept of risk that you had in your mind has been altered and you now bear the task of making mental adjustments to compensate for a completely different trade. Because that's exactly what it is, a completely different trade, with new numbers, figures, distances, R&R ratios, and new implications of risk. The market moves in your favor, possibly even nearing your predetermined target. If it's a fixed number of pips, then that number has changed. If it was a fixed target then your projected profits have changed. This may not seem like a big deal but for beginning traders who are establishing their system, this means everything. Every decision you make against yourself has future implications on your equity curve, but also on your confidence and understanding of what you are doing in the market. In order to be consistent and profitable in the market we must learn to trade in a consistent manner with a strategy that will prove to be profitable over time. The market continues to move but it has taken a sudden turn against you, whatever profits you had are quickly erased and price action now edges toward your stop loss. You've been stopped out only to learn that if you had been patient at entry and kept your original strategy in place, you wouldn't have been stopped out, and price action would have ultimately gone in your favor reaching your target. The point of all this is to illustrate that we unconsciously make changes to our strategies as we are deploying them. These changes have a compounding effect on the outcome of our trades. Even if you are made a winner by these changes you've made, you will have reinforced a bad habit that will undoubtedly lead to many losses in the future. There is power in understanding the unique set of tendencies and preferences that make you the type of trader you are. If you continue to ignore this, you will rightfully take your place amongst the other 90% of failing traders. When you start to pay attention to your own uniqueness and figure out what concepts, ideas, strategies, tools, and methods resonate with you, then you will be on your way to developing a system that you can trade consistently. Losing is a part of the game. You may as well lose in a manner that produces feedback that can be learned from. Are you losing because your strategy needs adjusting or are you losing because your psychology needs adjusting? It should be stated that any given trade, from start to finish, can be, and typically is, more nuanced than what I've just described. Its simplicity should not overshadow its intent. The chart attached to this post shows that there are multiple opportunities for entry for mine and, quite possibly, your strategy. All a trader needs to do is be patient and allow the market to tell you what it is doing. Along with entries are maintenance and exits. Targets are just as important as entries if not more so. Your unique perspective as a trader will heavily impact the decisions you make in all three phases of trading. Levels of Development LLC is providing this material for this site and any other related sources (including newsletters, blog post, videos, social media and other communications) for educational purposes only. We are not providing legal, accounting, or financial advisory services, and this is not a solicitation or recommendation to buy or sell any stocks, options, or other financial instruments or investments. Examples that address specific assets, stocks, options or other financial instrument transactions are for illustrative purposes only and may not represent specific trades or transactions that we have conducted. In fact, we may use examples that are different or the opposite of transactions we have conducted or positions we hold. All investing and trading in the securities market involves risk. Any decisions to place trades in the financial markets, including trading in stock or options or other financial instruments, is a personal decision that should only be made after thorough research, including a personal risk and financial assessment, and the engagement of professional assistance to the extend you believe necessary.
BLACKBULL:US30Education
by LevelsArchitect
Higher resolutionHigher resolutions aka lower timeframes have several uses: HIgh res levels 1) For more precise entries past the positioned levels. You have a level on your current resolution, a level you want to use, let's call it "X". You turn in higher resolutions, and scale in around the levels there, past the X; 2) For precise entries during positioning. You have a level that you expect to be positioned 'that way', let's call it "Y". You turn in higher resolutions, and scale in around the levels there, past the Y. An example on the chart is exactly about that. Suppose we expected a 1M level (red line) to be positioned as support. We've opened 1W chart and scaled in at 1W levels below the level; 3) Overridden levels. Forgot to mention, just as overridden waves, overridden levels do exist. It really concerns an imaginary level called value aka fair price. Usually, when you have an overridden wave -> value level in the middle of this wave, the real levels around value exist only deep in higher resolutions, and are already cleared, long time ago. So, they kinda "reactivate" again inside an overridden wave, near the value; 4) For scaling out. When offloading risk, you don't want to do it at the levels that You, yourself, expect to be cleared xD. And that includes the levels from the high ress. HIgh res waves 1) To fine tune the location of back levels. Positioning of a level on a given resolution is a so called pattern seen on higher resolutions. I can't say much about the predictive power of dem patterns, but can say for sure that fine tuning the back levels by finding boundaries of these patterns is a good idea; 2) Simply monitoring the action on higher resolutions gives information about what's happening around your levels of interest. Everything explained in "Current resolution" can be applied there. You may come up with more uses. The main part is to understand what higher resolutions are: less data in greater detail. Now how would you leverage this info?
CME_MINI:ES1!Education
by gorx1
Lower resolutionMore data on lower resolutions, smth that others call higher timeframes. Low res waves While being on a given resolution, the lower resolutions are mostly used to understand the trends within the overall fractal. In general, you want to trade along with the strong low res wave, and don't trade against an exhausted low res wave. While being on given resolution, you're interested in all the lower resolutions, not only in the first adjacent one. So if you operate on 1H charts, you also need to consider 6H, 1D, 1W etc, not only 6H. For example, imagine being in a strong up trend on 1W chart. It won't go 4 ever. There's no exhaustion in 1M wave. But here we go, and exhaustion on 1Q chart. And "suddenly", the levels on 1W chart start to position as resistances! Before that, the overall trend on 1Q surely showed some weaknesses, but there was no evident evidence. This kind of info could've been only gained from more data. Low res levels Now that's really interesting. As I mentioned somewhere before, while being on any resolution, ALL the levels from ALL the lower resolutions should be monitored. That's why people say that it's harder to trade on lower timeframes (higher resolutions), simply because they don't know that simple fact I just mentioned. They see a reversal "in the air", but, as you already know, there's always a level. So, a level from 1Y chart does matter on 1 minute chart. Yes, it does. How? The action around low res levels are somewhat common with the action around option strikes. In a sense, it's a microstructural phenomena as well. Without further analysis, what you know 4 sure is that low res levels might produce reactions, even if a level is from 1Y chart and you are on 1 sec chart. In general, they allow rapid price moves to come through, and produce reactions when prices approach these levels in normal way. Why? As you know, it becomes cheap/expensive PAST the level, never before. Now imagine price comes to a level in a usual manner, or even slower. Chances for a deep dive past the levels are low. What you do? You scale in closer to the level. And now imagine price flying fast. It'll make sense to scale in deeper with a bigger size, to get better prices, to reduce risks. Why not if the market activity allows it? It's a 1H chart on the screen there, and the yellow level is a support from 1W chart. Take a look how the 1H action unfolds around that level.
CME_MINI:ES1!Education
by gorx1
Microstructural phenomenons: pre-testOn the chart, Oct '94 is a pre-test of 92.26 I'm not sure it's a good example here, but it'll suffice to explain this easy concept. Again, it's not the system's behavior principle, the reason of this microstructural phenomenon is all of us. Forgot to mention before... There's no such thing as, "A new wave started after "almost" hitting a level". NO. In 100% cases, a level should always be touched. because cheap/expansive is always 1 tick past the level, the main responsive activity will be concentrated after the level, never before. However, some of us sometimes gets a lil heavy handed in scaling in/scaling out of the previously acquired position. That's why prices start to react (sometimes quite strong) in front of the level. The main things to learn from here: 1) Pre-tests are not the systemic events, if you're responding at a level / a lil deeper past the level, nothing had changed for you at this points; 2) If you started to scale in before the level and got caught in a pre-test, just simply close your position with whatever revenue this pre-test offers a lil bit later and start scaling in again like nothing happened; Caution: pre-tests are also a part of the recorded market activity as everything else, during which the things may change or may not change. Pre-tests should be taken out of the context and be processed as independent entities.
GEducation
by gorx1
Microstructural phenomenons: option strikesThere's no such thing as round levels , instead: 1) You open the option chain of given vehicle; 2) You notice the step between the strikes that have significantly higher volume/OI than the other ones; 3) for example on ES dem would be xx50.00 and xx00.00; Without further analytics of the option chain, the very general rule is that these levels usually stop & repel the sharp jumps in prices, and allow the average activity to pass through em with a little stuck around em. Again the reason is microstructural, some of are hedging current & anticipated option positions on good prices. Usually market allows to do it right after economic releases. About the example, if you have any platform that offers a liquidity heatmap, try to find that reversal on ES & correlated assets, that moment in time that I market with a circle, you might be surprised.
CME_MINI:ES1!Education
by gorx1
Microstructural phenomenons: re-positioning 4 real, levels can't be re-positioned, but there's a lil detail. As explained in "Real levels: positioning and clearing", positioned levels can't switch direction, ie once a level was positioned as support it can't become a resistance, once a level was positioned as resistance it can't become a support. A positioned level can only be cleared with time, price or volume. However, there are things that do exist and not based on the ways of the system behavior, but rather on some lil details how the sub-systems and the super-system work. Aye aye, easy, a level can switch directing for a very specific and short period of time, but not due to the principles of how things work, rather by a microstructural reasons. The reason is all of us & common sense. When we scale in near a positioned level, but shortly after it becomes obvious with evidence that a level was consumed/cleared (ie there's no more level anymore), in most occasions there's no reason to take a loss right away, it makes sense to try scaling out at around break-even. 1879 was positioned as support in the end of march 2022, the same time 1788 was discovered as a back level of 1879. Point 1: we enter @ ~ the level; Point 2: the level gets definitely proved as a cleared one; Point 3: we leave at break-even, concentrating the liquidity around 1879 (~ when we've entered); Point 4: we see the result, a pop. If we would've dropped much deeper than 1788 (technically said, if we would've contacted another deeper level), that phenomenon would've never occurred (there would've been no1 to scale out at breakeven).
COMEX:GC1!Education
by gorx1
Imaginary levels: fair price aka valueIntro So called "value" or fair price is like limits in math, can be infinitely approached but never reached. We can model it, anticipate it, imagine it , but it doesn't make it real. In double/dual auctions fair price is an idea. We can surely say that some prices are too cheap and too expensive, these are real levels that can proved with evidence. The only thing we can surely say about value is that it's somewhere in middle between these 2, everything else ain't better than just making projections or extrapolations. Neither time nor volume profile won't magically calculate you a fair price buy finding mode of the distribution, it's not better (and probably worse) than just taking an average. None can prove a price to be fair for both buyers and sellers. It cannot even consistently exist due to the nature of double/dual auction. We have bid & asks, not just bids. A simple illustration is GE futures, that can trade at 2 neighboring ticks for ages, in order for a fair price to even appear for a second, bid should move one tick down or ask should move one tick up, so a free space will be created, only at this point a fair price starts to exist. But guess what? You can't make a trade at this price while it's fair, because in in order for a trade to happen there some1 should place a bid or ask at this free space, at this point the fair price disappears. You're automatically quoting CL futures at 19:00 Chicago time, BBO is 89.56-89.57. An imaginary fair price of 89.565 can't neither exist nor be traded due to tick size of 0.01. There's a buy action and a sell action, there's no action in the middle. You can place either bid or ask, the're no "in the middle". We can go for ages logically proving that fair price is always imaginary, but what we know 2 things: it's in the middle between cheap & expensive, and it appears when there's widening of prices. The same principle applies to all the resolutions due to the fact that recorded trading activity is quasi-fractal (quasi because fractals go infinitely in both directions, it's not our case exactly). Howto After an exhaustion/overexertion a wave should stop and produce another wave in the opposite direction, whatever the size. Sometimes due to other factors it does not happen, and an already overextended/exhausted wave continues to go much further. This wave can be called an overridden wave because this kind of event happens due to an exogenous (not in the data analyzed) event. This event "overrides" the exhausted wave and fuels it to continue. In every overridden wave, its middle aka fair price aka value is an imaginary level that can be used. A wave that started at 337.89 became overextended/exhausted in both price and time when it reached ~450. After hitting 450 it didn't stop but continued and went really far. It has finally stopped in year 2000 and a sell wave emerged. Knowing that we witness an overridden wave, we start to consider value as a temporary legit level. Imaginary, but still a level, ain't no options aye? And again, we use imaginary levels when there's nothing else, but a decision has to be made. Statistically, overridden waves are the structural breaks. A serious change. Fair price is supposed to become new cheap or new expensive.
SP:SPXEducation
by gorx1
Imaginary levels: wave exhaustion priceCan't explain this 4 real until I explain how to properly locate levels & distinguish buying & selling waves. I KNOW I'M MESSING UP WITH ORDER OF INFO SUPPLY, SORRY. Still... Pretty soon you'll understand that 3393.52 and 2191.86 are the levels, and there's one buying wave between em. Point 1 is the wave start. Point 2 is the wave end. When 3393.52 get cleared, another buying wave starts originating @ 3393.52 & point 2. All the details & questions will be explained & answered later. Now just focus on the wave exhaustion prices. Every wave becomes exhausted in terms of price when it's range exceeds the range of the previous wave in the same direction. Not a lil bit before, exclusively past the threshold value. So after getting past this level and considering the other conditions that would be explained later the current wave becomes prone to end and consequent start of another wave in the opposite direction. Just as with partition levels (that are imaginary as well), these levels don't make much use any more when the real price activity start to emerge there. Imaginary levels are used when there's no alternative, but a decision has to be made.
SP:SPXEducation
by gorx1
Imaginary levels: partitionsImaginary levels are used when there’s no alternative, but a decision has to be made. We need something to "snap" to. No, these are not the binary levels like 512, 8912 or 65536 that I'm sure a lot of funny people are hiding or present as super secret, lol no. When there's truly nothing else and just the empty medium, we take partition function, give her all the integers, and get the levels around which the long-term order flow might change direction. Dem are already calculated, called Sequence A000041 , more info there . That's the natural way how to find level in the emptiness. After having the real trading activity at these levels we can forget dem partition levels, ain't no reason to use em anymore. Since the start of 20th century, mainstream text book science seem to forget about the concept of aether (tldr the emptiness is an object itself, and it's not uniform, 'everything' exists in a medium including waves & light, totally obvious if you use your own head for thinking). As usually, the lovely market, as a sub-universe in our universe, is the same, teaching the real stuff & proving fakies wrong.
SP:SPXEducation
by gorx1
BTCUSDT High Time Frame Oder Block In this section we will discuss what a price action order block is and how it is currently relevant to Bitcoin’s price action. An Order Block is a trade location that has a cluster of price action, creating a liquidity pool. Once price action expands from the region, it automatically becomes support or resistance – hence a block, This area once penetrated will act as a range, causing a period of price action oscillation. The Order Block can be dissected into three sections, the high (resistance), the low (support) and the middle (equilibrium). Whichever region price action breaks from will lead to a continuation or a reversal in the overall trend. In essence, Bitcoin can remain trading in the Order Block before until decisive bottoming or continuation structures are developed. Hope this educational peace helps!
Education
by The_Alchemist_Trader_
The Level is Good Until it's Not (A Lesson in Supply and Demand)G'day, Traders! Despite wars and rumors of wars there are always opportunities to be had in the financial markets, particularly the Energies markets.  The purpose of today's trade example is to demonstrate that once a level of Supply and Demand are created in the financial markets, the rule of thumb is that a level is "good" until they are not... that is, until all the unfilled orders inside them are processed. No matter how old a level may be, they do not go "stale".  Let's look at a trade which closed in the opening minutes of the market at 6PM EST on Sunday March 27, 2022: A long opportunity became available to us on the 4-hour chart on Crude Oil Futures in the wee morning hours of Wednesday, March 5 (2:36am to be exact!). That morning (after having the required coffee and bacon as part of one's trading routine) there was plenty of time to evaluate the trade setup using Supply and Demand analysis. When a trade like this appears and meets your rules-based qualification system, you can then give yourself permission to take the trade. The destination (a.k.a, Target) needs to be an opposing level of qualified Supply. The interesting part, and hence the jist of this article, is that no matter how old a level is, "a level is good until it is not." The level of Supply identified was from July of 2008 – almost 14 years ago! It is treasure chest full of sell orders that was created in 2008 and hasn't been touched since! As you can see from the chart, price entered that Target level and ricocheted right away like a cat on a hot stove! If you drill down to the 1-minute chart you can see that price stayed at that level for a full two minutes until all the Buy Orders were exhausted and the sellers were back in control, driving price back down. When trading via Supply and Demand, don't worry about how old a level is... if it meets your criteria of being a quality level, take it! As always, Trade Well!
NYMEX:CL1!Education
by ocaptain
How to trade levels? How to play price? How I made 30x in 2 yrs!In this video: I draw out a hypothetical initial investment. I should how you can multiply your net profit by trading out and back in along the way to your final projected target. This video is all about trading levels, a strategy I have developed from years of experience that has helped my to multiply my crypto profits exponentially. I have 30x'ed my initial cash reserves over the period of 2 years. I think you can too. I am going to show you how I did this.
COINBASE:UMAUSDEducation
by stewdamus
4