Context & When This Applies
"If there's ever a time when I don't know what side of the marketplace I want to focus on, in other words, I'm waiting for more information, submitting to the first half an hour of the opening range, looking for first to fair value gap, looking for the market to consume 9:45 or 10:00 news. If I'm just really reluctant to do anything until, you know, the first hour is trading, uh, then it's usually going to be as a result of a market that just completely rips off into one direction basically today."
Situations That Trigger This Approach
"I don't know what side of the marketplace I want to focus on"
"I'm waiting for more information"
"a market that just completely rips off into one direction"
"I'm just really reluctant to do anything until, you know, the first hour is trading"
"when the markets are running and they're one-sided and I have to wait for 10:00 news or 9:45 news or I just simply don't trust the direction or I have a you know hardline bias on what I want to trade on, I'll just simply wait for the first hour trading"
The Problem This Solves
"I had no intentions at all coming back to it and just really difficult unless you were expecting higher prices right from the beginning at the opening bell or sooner and just stuck with it. Yeah, it's it was going to run right over top of you."
This describes a scenario where the market moves aggressively from the open, making it difficult to enter without a pre-existing bias.
First Hour Range Structure
"I highlighted the low and the highest high inside the first hour trading. So, at 10:30, go back to 9:30, mark out the highest high and lowest low."
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Wait until 10:30 AM
Let the first hour of trading complete.
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Mark the highest high from 9:30-10:30
"the highest high inside the first hour trading"
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Mark the lowest low from 9:30-10:30
"lowest low"
Gradient Levels
"by having that range, what you can do is you you obviously you have to grade it because all of your key PD arrays are going to form around in close proximity to one of these gradient levels."
Focusing on the Upper Half (Bullish)
"I want to take your attention up into the upper half. So here's that 50% level. Okay? So this first hours range, the upper half, it's going to be sensitive if it's bullish. Okay? So then I'm going to focus on that, not worrying about the lower half."
"the upper half, it's going to be sensitive if it's bullish"
"So now what I've done is zoomed in to the upper half... This little area in here, I'm zooming in on that. Okay, that is just simply half or the upper half of the full 1 hour range."
"right away you can see there's a quadrant level here. There's a or not a quadrant level, a gradient level here, gradient level here, gradient level here."
Finding PD Arrays Near Gradient Levels
"we trade almost to this high here, but then we break that low. So, this is the next one it's going to trade to. Now, in this level here, look just above it. There's a small little gap there, but there's a swing low right there on that level. So, go past that to the left. What do you have? Inefficiency."
"that is a valuable candidate potential candidate for a high probability discount PD array in the form of a buy center balance sell sign efficiency or bissy"
Price Action at the PD Array
"the market trades down to consequent encroachment. Look at the bodies staying in the upper half. The market rallies up, comes back down, touches the gradient level, rallies up, drops back down in, trades higher, and eventually takes out the buy side above these relative equal highs."
Market Maker Buy Model Integration
"You see right there market maker buy model zoomed in original consolidation. First stage distribution second stage distribution down right into that discount by side balance outside efficiency rallies up."
As described in the transcript:
- "original consolidation"
- "First stage distribution"
- "second stage distribution"
- "down right into that discount by side balance outside efficiency"
- "rallies up"
Inversion Fair Value Gap
"There is a inversion for value gap here. Extend that forward. You see that right in here. There's accumulation, second stage, reaccumulation, but in the upper half from this high down to that low, it's still trading at equilibrium. It trades down into that and then rips higher, attacking that buy side."
Bodies Converging
"Notice the bodies here. See how they're all more or less converging around the same level?"
Bearish Order Block Entry
"Change the state of delivery which are these three up close candles. That's my bearish order block. It's the opening price right there. Trades up until it hit hits it. Very quick market hits it and pulls away."
"these three up close candles. That's my bearish order block. It's the opening price right there."
Exit at Consequent Encroachment
"Do this inefficiency here on a one minute chart for March delivery. get the consequent encroachment level and you'll see it trades right to there and my exit price is right to the tick on the consequent encroachment level. That's what that price is. So, it was just simply a limit order."
"ultimately filled out right on the consequent encroachment level right there."
Stop Loss Placement
"The original stop has to be below that low right there. So, buying it here, stop loss down there. It's a little, you know, it's a little wider than you're probably used to because you want like really really small stop losses and they're kind of hard to pull off right now with the level of volatility you have like lots of back and forth sharing the previous candles ranges."
Stop Loss Context
"It's just it's a little bit more difficult." - regarding tight stops in current volatility conditions.
If Price Goes to Lower Half
"If the market was going to stop me out and go lower and go back below the lower half or equilibrium, trade into the lower half of that first hours range, then I would look for the lower quadrant and or complete roll over to the low of the first hours um low of trading."
- "the lower quadrant"
- "complete roll over to the low of the first hours... low of trading"
Daily Chart Context (This Example)
"that was the reason why I used the idea of the upper half of the opening range gap. Oh, not the opening range gap, the upper half of... the upper half of the first hour trading range."
"it certainly looked like it was trying to get to that consequent encouragement of that daily suspension block. um that was a likely candidate to draw up to. So that was the reason why I used the idea of... the upper half of the first hour trading range."
Higher Timeframe Draw
The daily suspension block's consequent encroachment provided the reason to focus on the upper half of the first hour range.
Flashcards
Source
"How Do I Engage Markets When I Don't Have An Initial Bias?"
NASDAQ futures contract for March delivery analysis