Trading Blueprint

TRADINGRIOT.COM
Table of Content

Price Action AMT and Orderflow

● Introduction – is trading worth it? ● Is trading orderflow trading just another marketing catch?
● Conventional wisdom ● Trading different markets
● The market as an advertising mechanism ● Auction Market Theory
● Market Structure ● The 5 Auction Market Theory Rules
● Orderflow and Liquidity ● Market Profile
● Trading the SFP/Sweeps as the road to disaster ● Volume Profile
● How I trade Support and Resistance ● Volume based Support and Resistance
● Supply and Demand Imbalances ● VWAP - glorified moving average?
● Trading the FTR ● Everything Delta
● Trading the O/U ● Footprint Chart
● Trading the V-shape ● Trading SFP/Sweeps with Footprint – much less disaster
● Is Price Action Enough? ● Other Price Action setups with Orderflow and Volume confluence
● Problem with swing trading ● Key levels, trading routine and pretty much how I trade
● My swing trading strategy ● Conclusion
● Price action trading things I didn't know where to put
Price Action
Introduction - Is Trading Worth It?

Welcome to the Trading Blueprint. First, I would like to thank you for purchasing this guide. What is trading all about?

Although there is still a chance that I didn't crack a “secret Forex iPhone millionaire” code, it
In the next following pages, I do believe that I am going to be able to shed some light on
is pretty safe to say that real trading experience is very different from how it is presented
trading, which should eventually result in improving you as a trader.
online.

Before I start to cover the trading strategy I use, I would like to say a few things about I never really counted how many hours I have spent learning or just staring at the charts,
trading as a whole and my general experience and thoughts. but as I have been sitting around 10-12 hours in front of a computer with at least one screen
related to trading, it will be a lot.

In the last couple of years, I spend a lot of time trading or doing things connected to Moreover, the market is random. There is a great 4-part series by Mark Douglas about it on
trading and financial markets. Youtube as well.

The strategy I will show you in this guide has a very logical approach and (at least for me)
Was it worth it?
makes a lot of sense, but that doesn't change the fact that every trade is just a coin flip.

I ask myself pretty frequently as the actual trading is the straight opposite of what you see The edge comes from a long-term positive expectancy, but the outcome of every single
on social media. trade is purely random.

This is why there are going to be trades that you categorize as an A+ opportunity, which will
There are very few industries that have worse imagine than trading. go straight to the dumpster the minute you enter.

This is thanks to people who portray trading as something you can easily do from your
phone sitting at the beach.
Introduction - Is Trading Worth It?

And there are also going to be trades that you will doubt a lot or skip entirely, yet they will But with all this being said, trading is a unique and rewarding thing to do.
play out perfectly.

Although it becomes boring after some time, which is good, I enjoy coming to the market
Thanks to this randomness and added the fact that you will spend the majority of your day every day and looking for opportunities, patterns, and watching the behavior and intention
watching charts. of different participants in the market.

Trading can be pretty exhausting as losing days/weeks, and sometimes even months can The goal of this introduction wasn't to turn you off.
happen.

But everyone who wants to make it in trading should be prepared to sacrifice a lot for it and,
So, why trade? most notably, if everyone online is telling or showing you something too good to be true.

Everyone has different reasons; for most of us, they involve money, freedom, traveling, etc. Don't trust them

If you didn't get it by now, there is not much freedom and traveling involved. One last thing that is worth mentioning is that there is no superior strategy. You can have
someone who trades moving average crossovers or harmonic patterns to outperform
someone with any complex and advance trading strategy.
At least if you decide to focus on intraday/intraweek trading, it is your best chance to make
it anyway.
As there is no right or wrong in the market, trading is all about finding what works you and
what suits you.
I will talk about this little later on.

As I already said, this strategy I am about to show you have a very logical approach and
works for me, but it is not sure that it will work for you.
Conventional wisdom

Like I have already mentioned, the trading space is full of shady and not genuine Is trading so much about psychology, meditation, and all that?
advertisements.

I spend my fair share of time exploring the side of trading psychology, mediation,
We all know that now. mindfulness through different books, podcasts, articles, and courses.

But how about things that are praised by “respected” traders with many followers that I am aware of the fact that we are all different. Still, in my opinion, you can go sit out to the
seem legit at first look corner of the room and meditate for how many hours you want. Nevertheless, suppose you
do not have a bulletproof trading approach, and you don't know what you are doing. In that
case, any amount of meditation before the trading session won't help you.
I'm pretty sure that all of our path in trading was more so the same.

All that matters is the strategy you are using.

At the start of your trading journey, you quite often hear things such as “Trading is 80%
psychology and 20% strategy.”, “Meditation is everything.”, “Never risk more than you can
afford to lose.” If you dedicate enough time, spend enough hours watching the screens seeing a few
handfuls of patterns to repeat over and over again.

From these three statements, I 100% agree with the last one.
You will eventually gain experience and confidence in what you are doing.

The sum of money you put into trading should never put your personal life, your family, or
close ones to the risk. There is no shortcut for this, no trading psychology book or meditation will give you this, only
the screen time and practice.

Even though we all want to make it, you cannot put yourself to the situation when the next
trade decide if you can afford rent for the next month or not. The book Flash Crash and the podcast with John “Rambo Moulton are great examples of
breaking conventional trading wisdom.

But how about these two prior statements?

Market as an advertising mechanism

The only purpose market has to advertise prices for buyers and sellers. Something that probably never gets old in the trading industry is the whole idea of “Market
marker running retail traders stop losses and manipulating the whole market.”

It facilitates trades through what is known as the dual auction process.

If you never went to this rabbit hole, type “market maker” or “forex stop hunting” on YouTube,
and you will have quite a lot of crazy content to digest.
One of the things you might hear quite often when the market sharply moves to one
direction is that there were more buyers than sellers in the market.
When I was looking at this myself recently, someone called his YouTube video, “This is How
Market Makers STEAL YOUR MONEY!” and put a picture of George Soros in the thumbnail.
This is not true since, for every buyer, there has to be a seller and vice versa.

When the price goes up or down, there is no supremacy on either side, but the amount of
aggression or willingness to buy/sell for higher/lower prices.

In other words, the market is always seeking fair value based on supply and demand
dynamics. This is how crazy these people are.

This doesn't count only in trading financial markets, but the same mechanism of auction Their sole purpose is to sell you something as concepts for market manipulation, and
works at every market in the world. beating the large players are indeed good marketing terms.

This whole process is called Auction Market Theory, which I will cover later on. Although I'm not the biggest fan of Macrohedged and Macrodesiac, this video gives a great
explanation of market-making so if you want to learn more about the topic, give it a listen.
Market as an advertising mechanism

I don't know your trading account size, but I'm quite sure that you are not sitting on So why your stop-loss always gets hit before the move you have anticipated play out?
multi-million dollar fund money; therefore, your orders have zero impact on the market
movements.
As everyone tends to put their stop-losses or other resting orders at undeniable places, the
market likes to revisit those before any significant moves. There is enough liquidity to fill
Thus, retail traders, both you and I cannot do much about the market movements. large order sizes. I will talk about this more in-depth later on.

Markets are moved by institutional traders, banks, funds, and whatnot. You can have a look at this heatmap chart. As you can see, the most significant amount of
orders is always resting below support and above resistance, which is represented here with
the yellow lines.
As I already mentioned, the popular opinion is that markets are constantly manipulated,
and every large institution is hunting the retail traders' stop-losses.
There is no secret market manipulation voodoo but basic human behavior.

I will let you be the judge if you believe it or not, as to understand my strategy, and this
guide is not important at all.

On the other hand, what is essential is that institutional traders have a disadvantage
compared to retail traders.

They cannot enter the market anywhere they want because they would experience
significant slippage.

That is why they have to be matched with enough liquidity to execute their orders.
Market as an advertising mechanism

The only thing that market is doing is seeking fair value.

It moves from areas of balance, where buyers and sellers agree on prices,

to an imbalance where aggressive buyers overcome sellers and vice versa.

These moves are caused by supply and demand imbalances.

When demand exceeds, the supply market tends to move up.

When the supply exceeds the demand, the market moves down.

Learning how to trade both balanced and imbalanced markets and spotting genuine
breakouts of the balance is one of the essential skills every successful trader should have.
Market Structure

Market Structure is a fundamental topic that everyone learns somewhere at the beginning Are things simple like this in actual trading? Of course not.
of their trading journey.

If you look at the image that shows the actual chart, you can see that things can get rather
Yet so many people can get it wrong. messy.

The image at the right shows the textbook example of a trending market. Although the market structure is not always clean like the chart on the left, I often use the
textbook behavior assumption.

Higher highs and higher lows represent the uptrend.

One of the most crucial things is the trend changes.

When the last higher low, which made the highest high, break, and the market makes a
lower low, we can assume that trend was broken, and the market structure shifted. This is where several of my price action patterns come to play.

After that, downtrend is represented by lower highs and lower lows. Being able to spot a trend change on the lower timeframe in the higher timeframe direction
is one of the best ways of growing any trading account.

The trend is relative on a timeframe you are trading as we can have a trend (imbalance)
on a lower timeframe but range (balance) on a higher timeframe for the same instrument.
Market Structure

The uptrend is broken once we have a candle close below the swing low that made the The downtrend is broken once we have a candle close above the swing high that made the
highest high on the time frame we are trading. lowest low on the time frame we are trading.

I know that you probably didn't sign up for something as simple as this, but understanding
market structure changes have to become second nature before we can move forward
Market Structure

Candle close above the swing high which made the low,
we can assume that trend changed.

Last price move which caused the low in the

market.

We have to close above the swing high that Retest of the origin of the move.
caused the low to shift a trend direction
Market Structure

O/U Entry

Swing low that led to the high,

once market close below it, we
can look for short opportunities.

Close below = change in market structure.

Market Structure

O/U Entry

Close above = look for longs Swing low that led to the high.
We can look for trend change
once we close below it.

Close below = look for

shorts

Swing high that led to the low. We can look

for trend change once we close above it.
O/U Entry
Orderflow and Liquidity

If you are open your broker's trade window, you will always see two different prices for your
instrument.

They are called the bid/ask.

The ask (also called offer) shows the lowest offer price which the market is willing to sell at,
and for you to buy.

The bid shows the highest bid price which the market is ready to buy at and for you to sell.

There are two types of orders, “market orders” and “limit orders”.

On the right side, you can see an example of the Trading DOM, which shows bid and ask at
different price levels.

At the 3163.25 level, 46 lots are sitting at the offer.

It can be one seller advertising 46 lots, or it can be 46 sellers advertising one lot.

It doesn't matter. What matters is that it has to trade through these 46 lots first for the price
to move.
Orderflow and Liquidity

As I already mentioned, there are two types of orders, market and limit orders. Big market participants are moving the markets by consuming orders.

The limit orders are called passive order flow, also known as liquidity. Their orders generate buying/selling pressure (momentum). Pushing the price in its
direction, consuming smaller orders until it stops (slows down).

Limit orders are often the heavier hand in the market as larger players typically use them
to prevent slippage. If you are using a limit order, you are liquidity maker as you put Because they have a hard time getting filled on their positions all at once, they stack their
liquidity to the order book. orders at the levels where they moved the market in the past.

If you execute the market order, you are liquidity taker as you take liquidity from the order This is the called order-stacking. Orders are stacked at the areas of supply and demand
book. imbalances.

Everyone can place a limit order into the order book and advertise the prices for which For significant market participants to move the markets, they need enough liquidity to do
he/she is willing to buy/sell. But until the order is executed, It does not mean anything. that.

Once the order is executed, it becomes a part of the active order flow. The order flow and market microstructure are complex topics. If you want to learn more
about it, here are some additional resources.

Stop losses and stop orders that serve to get trader in or out of the position play a vital role.
Financial Market Microstructure Lecture by Egor Starkov

They are considered limit orders, and when they are executed, it adds pressure in the
opposite direction. Why is order flow so persistent? By Bence Tóth and others

In other words, when you are long, and the market goes against you, you are going to use How markets slowly digest changes in supply and demand by Jean-Philippe Bouchaud
a sell stop order to get you out of the position, which someone can use as liquidity to fill his
long at the lower price.
The Significance of Timerame - Great video by Young Tilopa
Orderflow and Liquidity

If we talk about liquidity, we are talking a passive order flow, also known as resting orders. These liquidity gaps tend to get filled, and because they were used as a point of origin for
big traders to accumulate their positions, they are often reused once the price comes back.

As we know, for every buyer, there has to be a seller and vice versa.
In context, this can be a great area to enter the position.

This is considered a stable state of the market as it creates a balance between supply and
demand. All you have to do is seek high momentum candles. These are where liquidity gaps / low
volume nodes are created.

When we have an imbalance in the supply and demand dynamics, any given instrument's
value starts to change. The position is then entered upon filling the liquidity gap.

The balanced state on a chart is represented by consolidation in price, and a high Without context, these are mediocre trades at best, but you can easily spot those high
volume/momentum candle presents the imbalance. momentum candles and build a trading idea around it.

Once you see a high momentum candle in the market, we are entering a low liquid state.

These happen due to order flow imbalances once buyers overcome sellers (vice versa)
and market moves.
Orderflow and Liquidity

Liquidity gap
filled

Liquidity gap
filled

Liquidity gap

Liquidity gap
filled

Liquidity gap

Liquidity
gap
Orderflow and Liquidity

If you go back a little bit, you can have a look at the heatmap chart posted.

With the resting orders below support and above resistance comes the colossal topic of
liquidity pools.

Not as huge as necessary, but huge as it is used by everyone to sell you the idea of evil
market makers trying to hunt your stop-loss.

As I already mentioned, this is not true, but the areas with resting liquidity are essential
nonetheless.

So what are liquidity pools? These are just areas where the market is going to meet a lot of
resting orders.

We can find these areas above/below daily or weekly highs/lows, double tops or bottoms,
general s/r levels, etc.

As these areas bring a ton of attention, you will have many resting orders there in the form
of stop losses, but also stop market orders from traders anticipating a breakout.

As you can see, the market made an apparent attempt to break the support area, but
aggressive sellers got absorbed by passive buyers.

All of this happened in the liquidity pool below the lows. To shed a little more light, we will take
a look at a footprint chart.
This is the chart of the e-mini S&P 500.

As you can see on the candlestick chart on the left, we had a

short-term support area, which was briefly broken below, but the
market quickly pushed back up.

Thanks to the footprint chart, we can have a look inside the candle
to see what happened in the wick.

In this case, we can notice that most trading happened inside a

wick with sellers' attempts to push the market lower.

This situation doesn't happen that often, but it provides a very

reliable trading signal once it does.
One more trading example on Ethereum.

The market went above the daily high, where many orders were resting.

Buyers tried to push above this level, which is signaled by buying

imbalances (green boxed) and positive delta (blue profile).

They got absorbed by heavier hand (sellers) that used the liquidity to push
the market lower.
Trading the SFP/Sweeps as the road to disaster

As I already mentioned in the S&P 500 example, the situation where the footprint chart
shows actual absorption doesn't happen at every false break of support/resistance.

The most popular trading setup I see online is the Swing Failure Pattern (SFP), also called
Sweep of past swing points.

Tom Dante first come up with SFP, and even if you take a look at this short video on
Youtube, you can notice that he is very picky with the SFPs he traders.

I don't want to describe his exact strategy, but he uses the ATR, length of swings, and other
filters, so he ends up with very few SFP trades.

Opposite of this are people who took SFP's concept and started to trade every single false
break at swing highs and swing lows.

If you decide to trade every false break above the level, as I often see people do on twitter
without any other context.

You will end up with inferior results.

This is why I never trade these failed swings blindly with only information provided from a
candlestick chart.
Trading the SFP/Sweeps as the road to disaster

If I can use a footprint chart where I have a detailed look at what happened inside the bar.

I trade them blindly.

An example of this would be from those two previous screenshots I showed you already.

The S&P 500 chart was a 60-minute chart, and ETH was on a 30-minute time frame.

With the clean footprint confluence, you don't need much more to get into the trade,
anyway, I will explain this later on.

The second use of SFP is to base the trading ideas on higher timeframes.

This happens when I look for swing trading opportunities but also day trades.

An example of this would be.

SFP on Daily/H4 Time frame followed by one of my entry setups on 30-minute time frame.

Or 30-minute SFP followed by one of my entry setups on the tick or lower timeframe chart.
How I trade Support and Resistance

Before I show you the actual setups, there are two more theoretical concepts to cover.
Real Market

The first one is support and resistance.

The prevalent misconception is that with more touches, S/R level “firm up” and are more
robust.

Truth is the opposite as the orders resting at S/R levels get consumed with multiple
touches. The aggressive participants are more likely to break the level once they don't
have to deal with a huge amount of passive orderflow.

My biggest problem with simple horizontal support and resistance is that things are very
rarely simple in trading.

Therefore you will very rarely get this perfect support that flip and turn resistance.

That being said, there are two ways how to trade support and resistance.

From the same side (support tested as support/resistance tested as resistance) or on a

flip side (support become resistance/resistance become support).
Textbook
How I trade Support and Resistance

When a price is testing a level from the same side, I never look for blind entry. Limit orders can be set once levels flips and you trade the flip side of the level.

Why? Because of the liquidity pools that are often below/above the levels. As we all know, broken support becomes resistance and broken resistance becomes
support.

One of the worst things that can happen is to enter the trade to see it hitting our stop loss
before going our direction. In order for the level to flip there has to be a significant imbalance between buyers and
sellers that cause levels to probe.

That is likely to happen once you trade a level from the same side.
These levels offer a great opportunity especially when we put them together with a supply
and demand dynamics.

Resistance

Turned support

When you are trading a level from the same side, you always anticipate the price visiting a
liquidity pool. Because of that, you never set up a blind limit order at the level.
How I trade Support and Resistance Traded above the high, but closed below.

My approach to support and resistance is a bit different so that I do not mark out levels
using price action but rather a composite volume profile.

These levels I use as my higher time frame map, and then I look for patterns and other
factors of confluence to my entry.

I don't pay too much attention to how the levels line up with candlesticks on the chart, but
rather look for acceptance/rejection at high volume nodes' edges.

This will make much more sense a little later on.

If you decide to stick with mostly price action, there are only two rules.

If you are trading the level from the same side, always wait for the market to trade at the
last swing high or swing low. If you see a rejection with a wick closing above the low or
below the previous candle high, it is “swept”.

Trading the opposite (support turned resistance and vice versa), I use FTR that I explain
later on. But you can place a limit order at the list high/or low before the breakout.

On the flip side, I use FTR which is low/high of last structure before the
break.
Supply and Demand Imbalances

Every market is being moved by supply and demand dynamics. In the previous chapter, I showed you a screenshot with liquidity gaps and explained how
price enters the low liquidity state due to an imbalance in the order books.

Buyers represent the demand, and sellers represent the supply.

If the market strongly moves to the upside, we can say that demand overcame supply. At
the origin of that move, we can find the demand zone.
Thanks to ongoing auction between those two parties, the market is moving.

Demand Zone - Down candles before an illiquid move up. The move has to be significant
When they agree on prices, markets tend to be balanced (ranging).
enough to break the market structure. (Closing above the previous swing high.)

But when there is more demand than supply, the price of any given product will rise as
The opposite is also true when the market makes a strong move to the downside; supply
demand exceeds supply.
overcame demand.

When there is more supply than demand, any given product's price will fall as supply
At the origin of that move, we can find our supply zone.
exceeds demand.

Supply Zone - Up candles before an illiquid move down. The move has to be significant
As I already mentioned, in the areas where supply exceeds demand and vice versa, we
enough to break the market structure. (Closing below the previous swing low.)
can find stacked orders.

These stacked unfilled orders then provide a reaction once the market returns to the level.
Supply and Demand Imbalances

You can add many other factors, such as how strong the market left the level, how it came Demand Zone
back, how far it went before it went back, how many times the level was tested, and so on.

As I am not a supply and demand trader, I like to keep things relatively simple, so I follow
only two rules.

First, I only trade the level on the first time back; on second or third touch, I look for an SFP to
happen, and I am not bothered by supply/demand.

Second is that I never trade V-shape reversal to the level.

Market Structure broken - higher high was made.

Market comes here and miss the level by Test of the demand zone
Last down candle before low few ticks. and SFP
liquidity move up
I consider this to be tested and require
SFP to the Demand on second test.
Supply and Demand Imbalances

Supply Zone
Last up candle before low Test of the supply zone = short
liquidity move down. entry opportunity.

Supply broken = becomes

demand

Market Structure broken -

lower low was made.
 Supply and Demand Imbalances

Lower probability trade which you can see

on a weak selloff from the zone,

FTB - First Time Back = our We could still profit from Failed Swing setup
best trading opportunity (explained in Trading Setups)
Last move up before low liquid
move down = supply zone
formed

When a Supply/Demand gets tested multiple times, we know that the

zone will eventually break sooner or later.

Market structure broken

Once we see a break from a supply zone, we know that buyers did buy
there; therefore, we don't consider this zone as Supply anymore, but
instead, we consider it to be a Demand zone now and vice versa for a
broken Demand zone.

Supply became Demand or Demand became Supply; this is also called

a flip level, same as with support and resistance.

If the level was broken strongly, we would look to buy/sell it from a flip
level when the price comes to visit the level.

This is also the FTR.

Supply and Demand Imbalances

One of the main problems with Supply and Demand Trading is that
everything becomes a supply and demand zone with enough imagination.

This is why I watch or mark out every supply and demand zone in the chart,
and I'm only bothered with those that fit the overall context.
Trading the FTR - Failure to return

I have learned a lot of things I know about price action from different threads in the forex Failure to return happens when the market starts to pull back at the resistance, making a
factory. move down first to create a demand zone before breaking the resistance to the upside.

Back in the day, there was a someone who runs the thread called RTM. FTR is created when the market starts turning before the key support/resistance area to lure
buyers/sellers in. These buyers/sellers are used as liquidity by larger players to push the
market to the opposite side and breakout from the key area.
I am wont to go the details of the cult following he built around him and the fact he stole a
lot of his stuff, which he started selling for 15,000 pounds later on.
Once the breakout is complete, plenty of traders are trapped, which we often see with a
high negative/positive delta (explained later).
But as he focused on supply and demand trading, I learned the term FTR there for the first
time.
When market retest those levels, these offside positions use the opportunity to get out for
break even/slight loss that adds fuel to the move.
Over the years, I adjusted it to my liking, but as I never change the names of concepts
when I learn them, the name FTR stuck with me.

So why “Failure to Return”? Once the price hits key support or resistance area, you expect it
will return and go the opposite side.

For example, a market that is in a downtrend and starts a rally to the resistance area is
more likely to return to the downside once it hits this resistance level.
Trading the FTR - Failure to return
The market approaches the key resistance area, and we can notice
sellers stepping in, anticipating a return to the downside.

At this point, I am sitting at the sidelines since there was no SFP on

any major high or market structure broken on the move upside.

1.

2.

Once price revisits this area, two things

are going to happen.
Failure to return was created
here where demand First, there will be stacked orders from
overcome supply. larger buyers that pushed through the
level the first time.

Second, the shorting traders and were

trapped start to unwind their short
positions at break-even, which will turn
their shorts into longs.
Trading the FTR - Failure to return

2.

Same example, price stall before the significant resistance area, which creates a
Market probe resistance higher.
selling pressure.
As this happened, there is a long opportunity at the FTR, which is in this
As there is no SFP or any other signs of weakness, there is no reason to short his
point demand that led to a break of structural resistance.
market.

1.
Trading the FTR - Failure to return

2.

Same example, price stall before the significant resistance area, which creates a
Market probe resistance higher.
selling pressure.
As this happened, there is a long opportunity at the FTR, which is in this
As there is no SFP or any other signs of weakness, there is no reason to short his
point demand that led to a break of structural resistance.
market.

1.
Trading the FTR - Failure to return

The previous example was from ETH/USD from the 10th of September 2020.

As I already mentioned, FTR should be confirmed by a high negative delta.

I know I am getting a little ahead of myself, but this means that aggressive sellers overcome buyers by a
lot as 1M was a high relative number on ETH at current market conditions.

Because of that, these sellers are going to be more than happy to exit their position once FTR gets tested;
this is an optimal level to get long.
Trading the FTR - Failure to return

I will end this with one last example. All of a sudden, this looks much messier.

I have recently taken this live trade. I know that lot of things can be faked, but If you ever used Sierra Chart,
you will know that purple and red arrows are signaling entry and exit with a grey box at the upper left
corner showing this as a live account.

Although my point is not to prove something, this is just another example of FTR trade I have taken in the
overall market context. We were trading above the previous day Value Area Low, Daily VWAP, and
composite POC.

All these are going to get covered later.

Trading the O/U - Over and Under
Bullish QM
I believe that Paracurve first introduced the Quasimodo/Over and Under setup in 2009.

Since then, it becomes a trendy price action setup used by a lot of people.

It is probably the one I have been using the most in my trading. The fact that it can be used
in both trending and mean-reverting environments make it pretty unique.

The simplest explanation would be that O/U pattern is very similar to the head and
shoulders pattern, but instead waiting for the break of a neckline, we will be trading the
right shoulder.

Over/Under occurs when the market breaks out the support/resistance area but cannot
sustain the momentum and falls back in a manner strong enough that causes a break in
the market structure.

When we are trading O/U pattern, we are looking for entry at prior support/resistance level
before it was broken (also known as the left shoulder).

Your stop loss goes above/below the high/low(the head). And our target is a new high/low.
Bearish QM

Later on, I will show you how I use it with order flow confluence, but I tend to use O/U a lot as
my mean-reverting swing setup.
Trading the O/U - Over and Under Entry at the level where original
resistance (left shoulder) formed,
Break above the resistance but price
Stop above the high (head)
could sustain the momentum (head).
Last resistance before the Target the new low.
break (left shoulder)

Price then fall back below the

resistance and broke the market
structure = O/U confirmed.
Trading the O/U - Over and Under

Price then fall back above the

support and broke the market
structure = QM confirmed.

Entry at the level where original support (left shoulder)

formed, also FTR at the bottom.
Last support before the break Stop below the low (head)
(left shoulder)
Target the new high.
SFP at the low give
Break below the support, but price could early signal of
sustain the momentum (head). possible change in
direction.
Trading the O/U - Over and Under

O/U is quite often signal at big market

tops and bottoms, like this top on Bitcoin
at end of 2017.

This is why I prefer to use it as my swing

price action setup.
Trading the O/U - Over and Under

Or the absolute bottom of the S&P 500 after the dotcom bubble.
Trading the V-shape

This is not a pattern per se but rather a specific market behavior that happens quite often. If the price finishes the V-shape reversal, it provides the opportunity to trade its retest.

With three price action setups I trade, I use limit order in two of them, and even with SFP, I It usually looks something like this.
usually watch for them on higher timeframes and then look for either FTR or O/U on LTF
where I once again place my limit.

There is only one situation in my trading where I use a market order, which I will show you Top of V-shape is broken.
later on. This is signal to go long in this case.

Anyway, the point is that my trading revolves a lot around waiting for the market to show
me signs of strength, and then I get in on pullback.

What I have found out is that not only the impulse move is essential, but also if the market
accepts new prices or not.

I started canceling my orders when the market got back “too-fast” to my entry line.

There are no exact rules for what I consider “too-fast,” but usually, when the market is back The Limit sell order is canceled
to my entry after breakout within 1-3 candles for a given time-frame I trade, I pull the order here.

out. The market usually gives a small

reaction but then continues to the
upside.
Entry at the area where market gave small reaction
before.

This is FTR that acted as both support and resistance.

Trading the V-shape

Entry at FTR

Once the blue level is broken, the

argument can be made that this
is a decent short opportunity
once we pullback to the last The market makes V-shape reversal to the level.
structure before the breakout. Instead of sticking to short, the smarter play would be
a wait if we can get above yellow, which is last swing
high before low was made.
Trading the V-shape

Enough Space

As I already mentioned, what would be enough space or too-fast pullback is very

subjective. Very little space, failed short gives
opportunity for long.
This is why I tend to get stopped out often because I leave my limit orders when I feel
retest had enough acceptance. If you start using Market Profile, 2 TPOs usually signal
the acceptance, but it doesn't work all the time.

Because of that, what I find more important about V-Shape is not to be safe 100% times
with pulled order, but rather the opportunity to get into the opposite direction once
proven wrong.
Is price action enough?

Now that I did my best to explain price action trading or at least part of it that I use. I have spent a decent amount of time trading Forex, where I used only price action.

The question is if you need anything else. Although you probably see many people on twitter always bragging about big winners, the
reality is usually slightly different.

This is a subjective topic as I know people who only use price action with great success,
and it is not so hard to build a price action system will be more than enough. The winners happen, but the strike rate is usually very low.

One of the worst things you can do is go pattern-spotting and try to trade every FTR, O/U, As I moved to futures trading, all the things I will show you next gave me a much more sober
or SFP you see without looking at higher timeframes to get an idea of what environment we look at the market.
are and what market tries to do.

More importantly, my strike rate increased with the number of trades I take decreased as I
This is where utilizing volume and order flow can help with different tools such as Market was much better at filtering out the worth pursuing opportunities.
Profile that help organize data.

Footprint chart or cumulative volume delta can give you a valuable inside to where traders
are trapped or how strong the recent move that just occurred, which can help your
decision-making either if you are going to trade it.

Composite profiles can be used as higher time frame analyses, which are much less
subjective than drawing support and resistance based on personal feelings.
Problem with swing trading

Do you know what you are going to do in the next 10 minutes? Your chances of price moving your favor for a short period are relatively high as there is not
so much to go wrong in this shorter window.

I am sure you do.

Of course, someone can come in at any time, unloading some huge position, and the
market can go against you like nothing, but is this more likely to happen when your
How about the next 1-hour, 10-hours, 1 or 3 days?
exposure to the market is in a matter of minutes/hours or days/weeks?

I think you have a decent idea about all of these, but you are less and less confident with
Targets are also quite an exciting thing.
additional time as things can change.

I target price inefficiencies, structural swing highs or swing lows where stops might be
For example, if I have planned a vacation for tomorrow, there is a decent chance that I will
resting, or different market profile structures. I know that a change in that market might visit
wake up tomorrow morning and go on vacation, but if my holiday is planned in 2 months,
those in a short window of time and after those areas are hit, I wait for a new structure as I
quite a lot of things can happen.
usually don't know what is going to happen next.

Considering what happened this year with the pandemic situation, you sure know how
If you are swing trading, there is absolutely no way can be in the trade for several weeks
rapidly things can change.
and upon this trade reached your profit target, you will say with a straight face that it was
only because you traded these support areas nine weeks ago.
And markets are not different.
You might argue that price is fractal and what happens on a daily time frame is the same
When you enter the SFP trade seeing a clean absorption on a footprint chart, meaning that as what happens on a five-minute time frame.
one side is clearly trapped.
This is true, but your ability to predict short term movements is much higher than long
Or you get into the FTR after the structural level was broken, we accepted into the new market swings which are usually based on long term fundamentals.
area.
My swing trading strategy

With all that being said, I still swing trade. From time to time, I find setups that I like, or I
want to buy something that I believe has fundamental value, and I use the chart to narrow
my entry.

First things first, I mark out HVN support and resistance, but I only focus on the major ones
compared to my day trading approach.

This will make more sense later on.

Besides that, I use a set of indicators on Tradingview, which I link in the resources below.

They are yearly vwap with 4 stdev bands and Cuban's Reversion Bands.

Both of these give me an idea of where the market is and If I should look for a trend or
mean reverting move.

Once I have a location-based on the HVN S/R and the indicators I use.

I look for one of the three entry patterns - SFP, O/U or FTR.

A good example can be short on DASH/USD I posted on my twitter while ago.

My swing trading strategy

As you can see, this market significantly dropped below the yearly VWAP (blue line), and
although the argument can be made that we just tested support.

For me, this is too big of a drop to say we are still in an uptrend.

The zoomed-in picture also shows clean FTR where I can enter my position.

After that, I just defined the lower levels to use as take profit, which are edges of HVN and
standard deviations.
My swing trading strategy

By the time of me writing this guide, the trade is still running, but you can see the reaction
from FTR and selloff.
Price action trading things I didn't know where to put

So you are made it to the end of what can be part 1 of this guide. Other things I frequently use are pivot points. I use only daily and weekly pivot points and
never look at lower timeframes.

I hope you like what you have learned. I know that for some, this might be relatively simple
stuff. These are straightforward as they can be. They are horizontal support and resistance areas.

But although I use much more than price action trading nowadays, these different price For both my day trading and a swing plays, I tend to check Renko or Heikin-Ashi charts that
structures are still key for me as a directional trader to figure out entry, stop-loss, and exit smooth out the trends; this helps me stay longer in trades as I cut out a little bit of noise.
points.

One last thing I am using is ATR bands made by Ticino trader. You can find them at his site
Anyway, before we jump into the second part, there are some things that I didn't cover. for sierra chart.

Same as horizontal support and resistance, I use diagonal support and resistance as an I'm sure there is also plenty of Tradingview indicators.
extra factor of confluence.

I use daily ATR bands for both targets once I am in trade and a fading point when the price
I only use these as flip levels, so they are not traded from the same side. gets past its ATR for the day, something I learned from Tom Dante.
AMT/Orderflow
Is Trading Orderflow Just Another Marketing Catch?

When we look at a general trading scam, you usually have kids sitting in Ferrari and trading Same with the order flow, which even though it seems complex at first, once you understand
on MT4 on his iPhone. the basics, it is much more about screen time and given instrument than chasing some
hidden secrets in thousand-dollar courses or software.

These kids usually sell cheap signals or courses to massive audiences on social media.

Things are a little bit different with Auction Market Theory and Orderflow.

As these strategies are used in more proprietary environments, it gets this more “prestige”
look and because no one questions these courses, which cost thousands of dollars.

During my learning curve, I have probably seen all of these high-end courses, and in my
opinion, no one was worth the money.

There is no single thing from these pricey courses that haven't read in books, free pdf,
blogs, or education under $500.

So, although I am very happy and confident with my trading style, it gave me a lot of
confidence in my trading.

Do not expect that if you pay for the Market Profile course thousand dollars, it will have
more value than Dalton and Steidlmeier books, which you can get for around a hundred
dollars.
Trading Different Markets

With the price action strategies, I showed you there were no limitations on the markets you Forex, as the OTC market, does not provide the volume in the first place. Even though you
can trade. can watch currency futures, you are watching such a small part of the market compared to
spot that you will often get very misleading information from footprint chart or delta.

With the market profile, volume profile, and order flow, things change a little.
This is why I do not recommend trading currency futures with these methods. I did for a
while on 6E (EUR/USD), and although it works, there are much better markets you can focus
First of all, profiling methods and order flow are two utterly different trading techniques and
on.
are not dependant on each other.

The legacy futures market is always the right choice; if you decide to go this way, I would
As a market profile is not even a strategy but a way how to organize data, you can use it
recommend starting with more liquid markets such as ES, FESX, or FGBL compared to thin
on anything you want.
markets such as FDAX, GC, or NQ.

I remember Dalton mentioning in some webinar that he uses it to organize data for
Simply because as they move slower, you will have more time to make intraday decisions,
property in his area.
and you will also be able to monitor more things at once without panicking.

Using a charting platform like Sierra Chart, you will get access to all markets such as
Lastly, crypto is what I currently trade. I trade BTC on Sierra Chart as my main market.
crypto, stocks, forex, or futures to use market and volume profile.

Although order flow is different on every exchange, which can be a confusing fist, I am
When you want to use tools such as CVD, Footprint chart, or DOM, things are a little more
getting data from BitMEX that are usually pretty clean for my short-term traders.
complicated.

If you are trading crypto, I recommend getting Exocharts where you can get MP, VP, and
In stocks, whole order flow trading is about watching Level 2 in the options market; this is
Footprint for a lot of different crypto markets.
something I don't have experience with, so I won't talk about it further.
Auction Market Theory

The Auction Market Theory breaks down the market's primary purpose and how its Stock prices are a straightforward example.
participants interact to fulfill this purpose.

Let’s say that right now, Samsung stock is trading at $50.

Trading is no different from any other auctions where there are only two main goals to be
achieved.
A New Samsung phone comes out, and it's bad; the battery is not working, overheating, etc.

● Facilitate trade and act as a place where buyers and sellers meet
Because of this event, Samsung stock starts to dropping on its value until it finds new buyers
● Seek for fair value
at let's say $30 per share price.

When prices are too high/low, and below/above fair value, the buyers/sellers are expected
This is where is the new value area created.
to push prices back to the fair value; this is called responsive activity.

After some time, phones get repaired, and the price of the stock starts to rise again. Where
Then market trades above/below fair value, buying/selling is not expected, it is called
is the market likely to stop? Previous value area around $50.
initiating activity, which is when we can see markets to trend until it finds new fair value.

This is eventually what every market does as Market participants negotiate prices between
As in every auction, volume confirms or rejects new prices.
balanced and imbalanced values.

Auction Market Theory defines an area where 68% of the volume has traded as a Value
Area.
Auction Market Theory

There are 3 key components of Auction Market Theory:

● Price – Advertise opportunity in the market

● Time – Regulate price opportunity
● Volume – Measure the success of failure of the auction. Volume is variable and
represents the interaction of market participants at different levels.

To sum the Auction Theory up you always have to understand the context of a given
market as there are two types of auction.

Trending market - When market is trending up/down we can see a fair value constantly
moving in the direction of the trend.

Ranging market - Balance between buyers and sellers that is represented by overlapping
values.

The general rule of thumb is once the market is inside the value it will more likely stay in
balance and explore inside the range of the value.

But if the market is an imbalance, it will often drift higher/lower until it stops which is usually
inside a previous value area.
Auction Market Theory

Balance

Acceptance
● Bell shaped distribution
● Symmetrical
● Buyers and sellers agree on prices
● Liquidity resting above and below the balance

Failed Auction

Balanced Profile
● When price comes outside of the value and does not gain acceptance
● No increase in volume on breakout
● No changes in delta
● Obvious rejection - I often look for SFP or O/U on price chart

Acceptance

Failed Auction
● Large increase in volume
● Strong price action through the area
● Major change in delta
● Price are accepted with time and space
● FTR or V-Shape are often seen as breakout patterns
The 5 Auction Market Theory Rules
If the price accepts into the balance area, its
likely to revert to the other side.. Price often
retest the edge of the balance area before If the price react strongly from POC, it
traveling to the opposite side. can disrupt the rule #1

I
IV
Price inside a balance is expected to
reject the edges and is choppier.

II
If time/volume build at the edge of a
balance, price is likely to push through.

V
Once price accepts outside the balance,
is likely to become imbalanced and seek
new value - oftentimes POC of older
balance area.

III
Market Profile

Market Profile, also known as TPO (time-price-opportunity), arranges separate trading At the end of each session, all the letters will line up how there is no space left between
sessions to the so-called profiles instead of classical chart representations. them.

In one trading session, the time is not separated by the position of elements, but only with This way, the Market Profile (last picture on the right) is finished.
a typographical separation for different trading periods. These are called TPOs and one
TPO usually represent 30-minute period.
From the TPO profile, we calculate POC (point of control) – line with the most amount of
numbers and VA (value area) – 70% of letters around POC.
The principle of TPO can be represented with this picture.

Market profile is not a trading strategy. It is only the way how to organize data.

And this is how I use it. I have read the CBOT Market profile guide, Daltons books, and seen
some of his webinars, but I am not a market profile trader.

I have a market profile chart always open because it gives me instant information on where
the value is, where we are trading and what anomalies we have at the chart.

I also believe that volume is more significant than time; I have all my settings based on
volume instead of time.
On the left picture is a typical 30-minute timeframe chart. Individual candles are replaced
by letters of the English alphabet, in the above example – starting with a letter D (picture in
the middle). To not make this guide an extra 20 pages longs when you buy a 400-page book where you
will learn more about market profile from someone much more educated in the manner
than me.
In the first period, Letter O highlights the opening price, and symbol # represents the price
close in the last period.
I will quickly explain the market profile glossary and point out things I look at daily.
Market Profile
Volume Profile
Outline

Value Area High

Initial Balance

Point Of Control

Single Prints

Market Profile
with Letters Value Area Low
 Value Area High

Volume Profile
Outline

Point Of Control

Initial Balance

Single Prints

Poor Low

Value Area Low

Market Profile

Initial Balance - First two TPOs (first two 30-minute candles) of a day. Every market has a Day Types - Normal Day, Neutral Day, Double Distribution Day, Trending Day.
different initial balance.

There are even more of them; should you learn about all of them? Yes.
CME products differ from different indices and commodities. ES for example opens at 9:30
EST.
Do I use them in my trading? No.

Eurex products at 6 AM UTC.

Trending and double distribution days are trend days, with trending day having the highest
market conviction. You will often see one-time framing when the TPO doesn't trade below
Crypto at midnight UTC, the previous TPO's low. In other words, the 30-minute candle doesn't trade below the low of
the previous 30-min candle in an uptrend. The opposite is true for the downtrend.

Forex can have pretty much anytime, such as 1st hours after London open, New York open,
or whole Asian range. Double distribution has a lower conviction with a single print in the middle and two single
distributions.

I use initial balance as basic S/R lines; generally, you want to be long above and short
below IB to stick to the day's trend. If the price is too far from IB, you can play a mean All the other days for me signal range days and balance, which built up for a bigger move in
reversion to it. Initial Balance, for me, is a factor of confluence, not a standalone entry the future.
decision.
Market Profile

Opening Day Types - Open Drive, Open-test-drive, Open-rejection-reverse, open auction. Excess - Excess generally indicates the end of the auction and the start of another.

I don't pay attention to these at all. They hold value when you can recognize them early on, Excess is seen in the extremes of the profile with a strong pullback.
but in my opinion, you don't need to.

On the candlestick chart, you see this as a candle with a long wick.
Poor Highs / Poor lows - Two or more TPOs at the same price point at top or bottom of the
profile.
As you can see, on this day market was trading lower until the U period, where it made
excess to the low and auction reversed.
On a 30-minute chart, these are the double tops and bottoms. These signal us the
unfinished auction, which is often revisited to complete the auction.
Because a candle signals excess with a long wick and rejection, I prefer to watch a
30-minute candlestick chart and footprint to see if anyone is trapped in the wick.
I use these as both targets and fading points.

Because of that, I don't pay too much attention to excess on the MP chart.
Market Profile

Single Prints - these are the same as excess but in the middle of the profile leaving Low
Volume Nodes.

These show that the market might have been too quick to move in one direction.

They often leave liquidity gaps, which tend to get filled, and because of them, I use these
single prints as both target and entries.
Volume Profile

There are two ways to display an auction, with volume and price. To recap this, when the market is in HVN, we expect more of a range-bound environment
with price bouncing from the edges.

Which one is better? It's up to you to decide, but my personal favorite is a Volume profile for
showing Value Area and Point of control. When the market enters into the LVN, we can look for more trending environments.

Value Area (VA) - 68% of the highest traded volume in the volume profile
HVN

Point of Control (POC) - Level of the most traded Volume. Naked Points of control bring the LVN
Value Area High

most significant as they are untested.

On the right side, you can see a volume profile representing one trading day; besides
Point of Control
Value Area High, Value Area Low, and Point of Control, we also recognize the High volume
nodes and Low Volume nodes. HVN

High volume nodes (HVN) - areas where price found acceptance in the past, so they
should act as support and resistance areas in the future; we want to use edges of these LVN
HVNs as our entries and exits.

Value Area Low

Low volume nodes (LVN) - areas where price moved quickly through. Because of that, we HVN

can find liquidity gaps there.

Filling these LVNs brings us at the edges of High volume nodes where we want to execute
trades, as I already mentioned.
Volume Profile

Composite Profiles are all profiles that consist of more than one trading day. It can be
days, weeks, or years.

Take a look at Dax Futures' composite profile from the start of a drop in late February till
bottom made in late March with a red line marking out the end of the composite profile.

We can use our auction market theory knowledge on HVNs and LVNs to find future
support and resistance levels.
Volume Profile

Another popular way of making a composite profile is by putting together multiple days
with an overlapping value like this example with ten days of range.

There is no right or wrong when deciding if you merge the profile or not, but I would say
those value areas should overlap and not move too much.

This is not my preferred way of doing things, but you will more so going to get the same
results with the way I will show you next.
Volume Profile

Watching this ten-day composite.

After impulse move, we came back to, and the Point of control held the prices for
another leg higher.
Volume based Support and Resistance

I do not use price action to mark out support and resistance areas as I already mentioned
before.

Many traders that are using Market and Volume profile mark out key levels using profiles
with fixed periodicity such as Weekly or Monthly profiles. I don't do that either.

What I do is something I observed first from Paracurve, and that is marking the composite
profile from the price legs that are not dependant on any fixed time.

I generally set two composite profiles on both sides, showing me all the data I have in the
chart.

The second one with a closer look showing only a visible range.

After that, I mark out all Points of control and HVN tops and bottoms.

This way, I can see where we had an acceptance and rejection of the past.

This is going to be much easier to understand with the chart example on the next page.
Profile on the left shows the visible range of bars that I have in the screen right now.
The range environment inside the HVN is expected.

Profile on the right shows profile for all bars in the charts which go few years back.
The trending environment inside the LVN is expected with peaks in volume (yellow POCs) as
possible stopping points.
Yellow lines are Point of controls.

Although these might seem like many lines, because I use the lower timeframes, they offer
Red lines are tops of HVNs. Blue lines are bottoms of HVN. optimal intraday levels.
If we are going to have a look at lower timeframes you can see how often market prints one
of the price action patterns around these lines.

These HTF levels will give you good context of where we are right not and where we are likely
to go (Rotation inside the nodes, or price exploration to the next node)
Chart of German 10-yr Bund showing range we have been since early 2019.

Every market I trade, I adjust these levels every morning before trading, but they rarely need
any significant adjustments.
Once again, on a lower time frame, you can look at price action patterns, and I also added
the 1-day volume profile for more confluence.
Volume Weighted Average Price - VWAP

Although the Auction market theory or order flow did not yet get hyped up by YouTubers
and different trading gurus, VWAP indeed did.

Being advertised as the next trading secret, VWAP is nothing more a moving average, but
instead of being based on time, it's based on volume and price.

Although having a bad reputation, it is a pretty good indicator to use.

Besides the yearly VWAP with stdev bands I use for my swing trading, I also use the daily
VWAP for each session.

If you have a problem with always trying to catch tops or bottoms in the market, try to
implement a rule where you will only long above VWAP and short below VWAP.

If this is too much, you can use 2-std dev bands, which I use, and they act as developing
value through the day with the same AMT rules as before.

Price is likely to rotate inside the bands or reject them during the trend, with the median
(VWAP) being the most crucial level.
Volume Weighted Average Price - VWAP

VWAP is frequently watched by a lot of traders and that is the reason you should be
watching it as well, don't trade it blindly, use the patterns and overall context when trading
around VWAP.

The FTR which will be in this case break and retest works best.

As you can see on the trading example market is staying below vwap through the whole
session.
FTR at VAH and vwap st.dev. band

This can save us from trying to catch a falling knife and focus rather on shorting.

Later in the session market got accepted inside the st.dev band where we got the
opportunity to trade it back to vwap.

V-shape back into VWAP bands gives

opportunity to long back to VWAP
Everything Delta

There are two types of orderflow. Active (market orders) and Passive (limit orders). Passive order flow is the advertisement in the book, the resting bids and offers.

The Active Orderflow is usually called the aggressor as they don't want to wait so they Large players typically use them, and they determine the market structure.
execute their orders at the bid or the offer.

More often than not, they are a heavier hand in the market, making the liquidity.
Market orders are typically used by smaller players because they don't care about the
spread that much.
In a healthy trending market, you want to market and limit orders come in hand, but they do
not agree quite often, which is where you can find an edge in the market.
If you are for example open 1 lot on German Bund $FGBL and get in at the market, the one
tick you pay in spread is worth 10€.
Cumulative Volume Delta shows us a running total of finalized executions at the bid and
ask.
Trading only that 1 lot, 10€ spread is something you can live with, but if you want to execute
100 or 500 lots, you won't be so happy to pay few thousands of Euros just in the spread.
If the cumulative market volume delta is rising, buyers are more willing to trade into the
offer then sellers hitting the bid. And vice versa,
Once you hit market order, you are taking liquidity from the market, during high impact
news, for example, markets tend to get driven by the market orders, that means high
CVD is not leading price but shows us where we can find out absorption areas, which will
volumes and low liquidity, cause high volatility.
present as divergences in the chart.

Those traders that use market orders to get in the market are usually the weaker hand as
they are less patient ones.
Everything Delta
O/U

SFP

Market makes a higher high but delta makes lower

low = No interest from aggressive buyers to push
prices higher
Market makes a lower low but delta makes higher
high = No interest from aggressive sellers to push
You can also notice the O/U which is great
prices lower
confluence between price action and orderflow.
Trade can be entered as SFP.
Everything Delta

Another is the delta attached to the daily volume profile.

This shows us price levels where large buying and selling occurred.

As you can see in the example, we had two areas with very high selling pressure displayed
with long red delta bars during the down day.

In these areas, there are also FTR levels we can you can use as entry levels.

Because there was high selling pressure in the past, there are likely to be stacked orders,
which will add more selling pressure on a retest.
Everything Delta

Not only that, but also the opposite can be adding a confluence as well.

As you can notice, we have a big selling delta right at the VWAP, where the market formed
over/under setup.

Because someone sold significant size there, he/she is currently sitting underwater and will
gladly use the opportunity to get out for break even or small loss.

This will add fuel to the upside as the sell order turned the market buys as he/she exits.

The point of watching delta on the y-axis of the volume profile is the anomalies of high
buying/selling.
Footprint Chart

The footprint chart offers us a look inside the candle with volume traded at exact prices. Buy/Sell Imbalance - Happens when buyers overcome sellers by more than 400% (due to
my settings). Once we see the imbalance in our footprint chart, we can say that
buyers/sellers are dominant in the market and move will likely to continue. You will see a lot
You can watch a footprint chart on the monthly chart down to the tick chart.
of imbalance at the footprint chart. Thus, I only care about the situation where you have
three imbalance above/below each other. These are called stacked imbalances.
Thanks to the footprint chart, we can see where sellers and buyers are interested and
where they are trapped.
During the breakouts, I use this to see how genuine the breakout was. If the breakout candle
had high delta and stacked imbalances, price is likely to react on the retest where I enter at
You can see sellers hitting the bid on the left side and buyers lifting the offer on the right FTR.
side on a footprint chart.
Volume Imbalance - I use this one with SFP. It happens once you have a pin bar looking
Because I will not waste ten pages to show you everything about footprint here, I published candle with a long wick, and most of the volume was traded in the wick. This means that
a more comprehensive guide on my blog; if you haven't read it, go check it out. there was an attempt to continue to the original direction, but the aggressive participants
got absorbed. The ideal case is when you sell imbalances in the wick as well.

Here I am going to talk about the strategies I am using.

Finished/Unfinished Auction - These happen at tops and bottoms of candles. The
unfinished auction occurs when you have both buying and selling at the top/bottom of
candles. This means that market has unfinished business there and is likely to revisit the
area in the future.

I don't use this blindly as there is often not a price action structure for me to enter, but this is
a great correlation for the trading ideas.
Footprint Chart

Three red numbers below each other. Selling was 400% higher than buying and created
imbalance, we can use this level for entry and trend continuation.

Buy/Sell Imbalance
 Highest volume traded in a wick - traders attempted a
breakout but got absorbed.

Look at previous high/lows to align Volume Imbalance

with the SFP.

Volume Imbalance
Finished/Unfinished auction

118 hit the bid, 150 lift the offer at the 2 hit the bid, 0 lift the offer = finished auction.
low = unfinished auction, market is
likely to revisit. No interested from sellers to move market
lower.
Trading SFP/Sweeps with Footprint – much less disaster

If you were paying attention, this would be just a simple recap of what I just showed you.

When I trade the SFP, my number one confirmation tool is a footprint chart.

The SFP can happen at a reasonable level with the deep swing, but I rarely take it without
confirmation if I don't see anything on the footprint.

So what I want to see in the footprint chart when trading SFP?

Volume imbalance is a must. There must be high participation inside the wick compared
to the body.

Besides that, the sell imbalance or finished auction are extra points.

If the footprint is clear, I enter the trade with stop loss 2-3 ticks below the low.

If I am unsure of the setup, I go to lower timeframes and look for Over/under or FTR.
 POC and Buy imbalance at top of the candle
H1 SFP at the high signals trapped buyers.

Positive candle delta on high volume adds

confluence as well.
Finished/Unfinished auction

Delta profile on exocharts showing clean

aggressive buying at the top of the candle
which traded above daily open but got
rejected. This is a short opportunity.
Finished/Unfinished auction

Once again, we have an SFP below the double

bottom on the left.

Significant selling pressure inside the wick

with sell imbalance and the finished auction
is your best-case scenario.

Also, notice the negative delta for the whole

bar with a bullish close. This is the single bar
delta divergence.
Other Price Action setups with Orderflow and Volume confluence

Over/Under - I mostly use this one as a reversal setup.

Because of that I look for rejection at key reference points which are HTF HVN edges and
pocs, previous day Value Area, VWAP stdev bands and daily ATR extremes.

If we are going to imagine the over/under as the head and shoulder pattern, I want to see
CVD divergence between left shoulder and head with high selling/buying into the head
and then quickly bouncing back giving me the signal that shorts/longs are trapped.

Once you are starting to look for over/under setups you will see them everywhere,
especially on lower time frame.

Because of that I am very picky with those I trade, they have to happen at the reference
point and I need to see at least some orderflow confluence.
Other Price Action setups with Orderflow and Volume confluence

Reference - Price couldn't accept below previous day Value

area low, entered back inside VWAP stdev bands and formed
o/u at bottom band.

Confluence - SFP at 30-min chart, delta divergence at both

30-min and 300 tick charts, heavy selling (-2207 delta) into the
low (head) but price quickly bouncing back leaving shorts
trapped, clearly visible at delta volume profile.
Other Price Action setups with Orderflow and Volume confluence

Reference - Price trading at HTF POC (yellow) couldn't establish a

downtrend and bounced back inside the VWAP band. The 30-min
chart also shows the O/U structure.

Confluence - Absorption at the low (head) seen as -4mil delta with

sell imbalance that got absorbed a price quickly bounced back.
Although there is no CVD divergence, this is usually enough for me
to get into the trade.
Other Price Action setups with Orderflow and Volume confluence

FTR - This is my trend setup.

I look at break and retest inside or outside the previous day value area, HTF HVN levels, and
VWAP.

If I see that breakout was genuine, which is often shown with the amount of delta on
breakout bars, I look to enter the pullback at the top/bottom of the FTR.

As my confluence, I again use the footprint chart, CVD, and volume delta profile to see if
any trapped traders will exit their position on a pullback.

I don't categorize V-Shape as a standalone pattern as it is more of a price behavior, and

there is always and FTR or O/U to enter.
Other Price Action setups with Orderflow and Volume confluence

FTR

Reference - Market broke below HTF HVN (red), Yesterday value

area low, and is trading below VWAP.

Confluence - On the delta volume profile, you can see big buying
at FTR, which means someone who executes significant long is
currently trapped and will look for exit around break even. The
footprint chart then shows delta divergence in the lower delta bar
at the top (1185 vs. 161) and 647 lots lifter the offer and got absorbed.
Other Price Action setups with Orderflow and Volume confluence

O/U in trend

FTR Reference - Acceptance above previous day VAL, Initial Balance

High and HTF HVN POC, break outside VWAP bands with FTR located
at VWAP

Confluence - Also, 30-min FTR, this is a very strong confluence for

me. The first drive higher was on decent buying (seen on CVD).

30 min footprint shows 6.75m negative delta FTR which means

sellers are trapped, also up move has 11mil delta, which shows a
genuine push higher.
Key levels, trading routine and pretty much how I trade

As we are coming to an end, I want to talk about my daily routine and how my trading day Because you are looking at things such as yearly VWAP and composite volume profile, you
looks. should use the futures chart (even for forex).

As I already mentioned at the beginning of this guide, I am not very into trading You can then execute on the CFD or spot forex market, by my HTF analysis is always done on
psychology; therefore, I don't have any mediation, particular routine, or anything else. futures.

The only thing that I really believe outside of the trading itself is that anyone who spends The last four markets I watch more closely. For these, I have marked out all the significant
10-12 hours a day in front of a screen doing anything should compensate it with exercise. HTF HVN levels and look for patterns and setups on a 30-minute time frame through the
trading day.

As this is not a fitness plan, I will not tell you what to do, but do something and do it often.
When I spot a trading opportunity on a 30-minute time frame, which gives me a good
risk/reward ratio, I don't look at lower timeframes, but this has to be A++ setups screaming
I trade actively trade and watch ten markets through the day, namely 6E (EUR/USD), 6B
at me to take it without looking at anything else.
(GBP/USD), Crude Oil, Gold, ES (SP500), Euro Stoxx 50, Bund, Bitcoin, and ETH.

An example would be 30-min SFP with clean footprint confluence that happened at a key
The first six of them, I only look to swing trade, which means I am using the indicators I
swing point, the over/under at a significant level or FTR in confluence with undergoing trend
mentioned and watch only the Daily candles at the open and a close.
sitting and NVPOC.

This only takes around 15 minutes every day.

But because I'm not particularly eager to leave limits for too long, I always try to go to lower
timeframes to wait for confirmation.
If I spot something interesting, I focus on a given market and trade it as a swing position
with my 30-minute time frame entry.
An example would be and FTR from 3 days ago on the 30-min time frame. Although the
level is clean on the 30-min chart, the market will be trending down for a day below VWAP,
most likely when we come to it three days later. Instead, I go to a lower time frame and try to
get in on O/U.
Key levels, trading routine and pretty much how I trade

Watching four markets on an intraday basis is not an easy thing. For any given market, I trade with high focus my routine is:

That's why I always focus on one market only that I trade on the lower time frame. ● Start on the Daily chart with a composite volume profile to check all your HVN
tops, bottoms, and POCs.
● Market Profile chart, identify where we are compared to last day profile, look for
Currently, it is Bitcoin. Before that, I was mostly trading Euro Stoxx.
any anomalies (single prints and poor highs/lows), and all naked volume points
of control.
The one market I focus on the lower time frame. I try to find an opportunity every day, but it ● The 30-minute chart to identify the market structure and possible price action
is not given. patterns that can form, this means looking for clean swing points where SFP can
happen, looking for untested FTRs and O/Us
● With all this information, I try to form different scenarios for a then. For me, it is
Also, I have separate risk management for this one pair. always an IF; THEN scenario. For example - If we accept this HVN top, I will look for
FTR or any other pattern. If we trade below yesterday low and see SFP with the
confluence on footprint, then I will either enter on a 30-min time frame or look
For me, they are three attempts on a day with a fixed $ amount as a risk.
lower for confluence.
● I always try to build both bullish and bearish case for a day. I don't care where the
Most of the traders like to use fixed % per trade, but I use money as a barrier and risk market will go, and the last thing I want is to have a hard bias. I react to what I see
slightly different % depending on how much I want the setup. But if I should talk at % risk, I throughout a day.
don't risk more than 3-5% of my day trading account for one day. ● I always keep an eye on intraday, 30-min footprints, and CVD to see where
aggressive participants are and how genuine breakouts or failures are.
● When you are new to it, it takes several months to get used to it, but things get
When I execute a 30-min chart position, I tend to risk more than on intraday scalp, where very easy and smooth once you will. I highly recommend you to focus on only one
the 30-min structure is not so clean. market during your learning period. One market is everything you need anyway.

The intraday periodicity settings I use on Sierra Chart are BTC - 1500 tick, ETH - 600 tick,
FESX, and FGBL - 300 tick.
Key levels, trading routine and pretty much how I trade
Conclusion

As we come to an end, I would like to thank you for buying this guide.

I hope you learned something valuable here.

If you liked or didn't like something or didn't understand anything, feel free to send me an
email at tradingriot@gmail.com or DM me on twitter @abetrade.

I wish you a happy trading

- Adam
Trading Blueprint
TRADINGRIOT.COM