Transcription
All right, that's good. Okay. All right. Good morning. Good afternoon. All right. Sounds good, guys. Yeah. Good. Cool. All right. Did it hit record? Yes, I did. Did I change the screen? No, I didn't. Uh, bear with me. I feel a little under the weather. Uh, mentally, I feel like there's mental acuity present today. Um, but uh, I woke up this morning. I wasn't sure if it was the uh, ceiling fan. Like, you ever sleep with the fan on or just the air on and you wake up feeling a little bit dry? Wasn't sure if that was it. And then I got that like nasty taste in the back of my throat and I was like, "Nope, must be something. Must from being, must be from being around little children. Bringing my daughter around other little children. Children are like petri dishes. Petri dishes for disease." But uh, yeah, I feel good though. I'll probably sit in the sauna and I, I, I when I feel sick, I try to attack it right away. I'm like drinking bone broth today. Um, I make this u tea from um, uh, pineapple skins. It's like, uh, there's bromelene in pineapple skins. I throw a bunch of pineapple skins in a big pot. I boil them with some pineapple, oranges, lemons, garlic, uh, basil, turmeric, pepper, cayenne. Um, I forgot what else. I, I let that boil for an hour or two and then I let it steep and I drink that and I tell myself that it's going to make me better. Like, try to read these uh, for find these like witch doctor cures. But um, apparently this one's kind of well known for its effects on inflammation. Yeah. So, and then drink a bunch of electrolytes, but here we are. I feel fine, but my voice is, as you can, I don't know if you could hear it. I got a little bit of a sniffle, too. Um, you guys can see the screen clearly, right? Cool. Yeah. Um, hopefully everyone has had a good day. I had my daughter in the office this morning, so I couldn't do a morning call and then I'd spoken so much in chat, I figured whatever. We're going to be streaming today later. Anyway, um, I have a, I definitely have a lemon on my hands in terms of uh, one of our cars, but I don't want to waste anyone's time going into more personal stuff, but um, yeah, great, great day. Few setups across the board. Um, Soul just on an absolute tear. Um, what else? Tesla had a really big day. Obviously, BTC and ETH um, just, just enough going on today and over the last few days um, to remain excited about, right? Or to stay excited. And again, it's, it, it just, it feels different now that we're into the latter portion of the year. Does everyone else kind of feel the market has like a different energy? Maybe it's just me. Maybe it's just me, Gusto. Yeah. Yeah. Feels good. And and you know, we're going into obviously FOMC. Um, you know, we're clearly, we're be going into a, a, a cutting environment. So, I think you have to keep a real eye on the stock market to make a case for anything else doing anything bad. Um, and it's the stock market isn't like, there are things that are doing really well, like Oracle the other day put in like a multi-standard deviation move. Um, Tesla performing exceptionally. I mean, across the board, there's a bunch of opportunities. Um, I think we want to obviously, we want to keep an eye on the stock market because like I said, I think as long as the stock market is doing well and then you have another narrative as well that can suit BTC specifically, gold, it's hard to, I mean, why the imagine a case where it would be a really bad sign if it persisted because it happened briefly. There was like a, there's a couple times over the last week and a half, two weeks where there was like a little bit of a decorrelation between BTC and equities, but a correlation or excuse me, there was more beta to the downside and there was no beta to the upside, which is not the relationship you want, but that is uh, I mean, kind of a spurious short-term trivial change really. Reality is that like if the stock market keeps going up, if gold keeps going up and the stock market keeps going up, this asset class is going to continue to go up. So, I think we're right on time going into the end of the year and having hopefully a, you never want to think, you never want to assume that you have like months of runway. I never want to make the mistake of saying that too firmly because it always feels like when everyone is in agreement about that, it's really just a matter of weeks. And that's fine because a couple weeks, three weeks of just hyperactivity and a ton of upside and a ton of opportunities, it's really all you need. You just need to be able to press the gas pedal, swing at setups whenever things are really good, and then know that, all right, all right, there's a little bit of a change now. Let me be a little bit more reserved. Let me be a little bit more conscientious, a little bit more calibrated and uh, wait for the next, you know, set of waves in the time being. Stay warm, get your reps in, continue to trade, right? But don't make the mistake of, you know, really pressing on the gas pedal as the weather changes, right? Drive really fast and the when the ground is dry and it's hot and the tires are sticky, but um, too many analogies, right? Um, but when it starts raining, like a be a little bit more cautious. Um, so yeah, low on se on on September on the 1st, very interesting, right? So, usually I say come back literally after Labor Day. Um, these things are not like, listen, there's tendencies, but you can't just apply what has happened in the past moving forward with like any really strict sense. I, I think it's been useful to identify these tendencies, but it isn't sharp. So, you have to be willing to adjust. Rhythm is different. Yeah, 100%. Gusto. Good way to put it. Um, okay, cool. So, take a look at charts, answer questions. There's um, as I said, so by the way, going into next week, um, I, I thought about this, so this is great. Um, and like apologies for coming to this realization. It might seem like, you know, I should have thought of this earlier. Um, but doing instead of doing the morning calls, right, starting next week, doing an afternoon, 2:00 p.m. Eastern time, afternoon call, and running for this, running with this for at least a month, doing a survey, getting feedback. Uh, again, starting next Monday, we won't do a morning call. I'll be really active in the chat all morning. I kind of like that, to be honest. I, I personally don't. Yeah. Yeah. Uh, Fig, I already was going to get to your question first. Um, so, thanks for the reminder. But the uh, it's nice to kind of start the morning and and listen, it's no matter what, like running this pod, running this community, trying to not make sure, you know, make sure that my life is uh, detached from it and you guys don't have to experience like the things that happen in someone's personal life, right? But reality is like that's just, that's the way it is. And in the morning uh for me to like be hyper-focused on my own trading, my family, getting up, doing my sort of morning plan that my I was beginning to deviate from my own morning plan and really just try to expedite and get into the call. And then I found that I was just trying to expedite the call. So the the morning wasn't starting off in, I think the kind of with the kind of energy that is, I think best for everybody. And I find if I'm talking in chat for a little bit, first couple hours of the day, it's, it's a better way to like, just lube up the session, to be honest. And then reality is that while the New York session is great if you're trading single names or if you're trading, you know, being ready for action at 9:30, if you're trading single names, if you're trading, you know, equity indexes, futures, yada yada yada. Um, there's like five people that primarily do that here. The rest of the people are trading crypto. And the reality is that the New York open, there's going to be times when it has a larger impact on crypto than others, but for the most part, it's not doing the bulk of the driving. So, putting things later into the day, I think, allows me to give plans that are a little bit more reasonable in terms of them not, you know, them being actionable. Um, so talking at 2:00 about things that, you know, might be setting up and the Asian session is doing a lot of work lately. I just think it'd be a better uh way to prep everybody. But uh, the point of all that is that now we have a window of time where you I can spont uh spontaneously insert live trading sessions. You know, 10 minutes before the open, hop on, connect. Hey guys, what's going on? Blah blah blah. This is what I'm looking at. And then we're just going to be on stream and then just trade and that's it. Not like I, I want to make sure that I can do this myself though where because I have this tendency to, you know, say all right, this is the plan, this we're going to stick to, I'm not going to backtrack, I'm not, I'm just a, that's not me. Like I'm a person who's got, you could tell I'm like thisquacious person, I'll talk a lot, I've gone sidetracked and I want to make sure if we do those though that it's just, there's no expectations that I'm going to come on and talk a ton about XYZ that's happened, you know, what's happening next week. We just keep it very in the moment. Um, I think that's the, the way that it has the best chance of succeeding. Uh, and then sometimes we'll, you know, something's worth talking about earlier, we'll hop on voice. But moving forward, um, good. Glad everyone's happy with that. Uh, big XPL price discrepancy on Hyperlid versus Binance. Yeah, I started averaging into it. I, I feel like, um, so on, uh, over the last week, I've been talking about this. There's no spot markets yet and reality is like I think this might be the kind of thing where by the time a spot market comes around, this is much higher. Um, so buying a little bit on buy bit, buying a little bit on hyperlquid, spreading out a little bit across venues, I think makes sense to to not have like any single venue risk and, you know, you're going to be paying a funding, you're going to be paying the cost of carrying that. Um, but I want to start to build a position in this pre, you know, spot markets going live because I think by then it might be much higher. Um, and again, I think it's a project that has um, has a good fundamental uh, narrative right now and it's a new, it's, it's birthed at the right time. You know, BTC ET moving up, best time to come out, right? Everyone's confident, right time of the year, back to the business. Um, all right. So, uh, as I said, for these streams, I'd like people to come prepared to questions. I don't want to, you know, not going to repeat the same thing I've said the last couple weeks. You guys have read the announcements. Um, uh, there's a couple questions that were in the uh, questions for horse channel. That's great. Gives me time to at least take note of them if I need to do any kind of digging. There, there aren't really any questions in there right now that require any digging. But, you know, some people ask, "Hey, can you show me a perfect example of a delta flip reversal?" It's like, "All right, let me scan the chart real, real quick right now." Right? So, for those things, it's nice to have a little bit of time to pull up like, you know, five or six examples. Um, but Fig had a really great question. Um, this uh, let me just read it. Oh, he wrote it um verbatim again. So, less technical question uh but on the next stream, can you talk about this phenomenon? Perhaps others feel this too. I 100% I'm sure most of you here feel this. Um, starting the day with a big win resulting in wanting to play safe by being averse the rest of the day, trying uh, shying away from trades. Um, so this is definitely a uh, something that everyone has experienced, right? Uh, it's, I can't say it's something that I don't experience and it might not be, it might not be in the beginning of a session. It could be the way that you start a month. Um, it could be the way that you start a week, right? Uh, it's the idea though of like, you know, you, you, you, you start crushing it early, right? Um, and if it's not due to randomness, right, that's great. Okay. There's a few ways that you could look at this. One, like the very simple answer is if you're um, and this is again, a lot of the answers to some of these questions, like some of the more behavioral questions, the all kind of the same thing or or one answer is always the same and it's, you're trying to be as systematic as possible even though you're a discretionary trader. So, as long as things are satisfying your well-formulated ideas, setups, criteria, etc., etc., uh, you should look at them as kind of they just are or they're not and you should be willing to take setups regardless of your performance up to that point because it's the same idea as, you know, no coin flip has an impact on a future coin flip. If you've had a successful string of trades in the morning and you're consistently applying the same setup, unless there's some kind of drastic change in conditions, like, you know, some kind of major change in the tape, headline driven, catalyst driven, um, you should be willing to continue to take these well-formulated ideas or setups as many for as many as arrive to you. Uh, that is something that's obviously easier for a computer to do rather than a person. Uh, completely understandable. You develop that muscle over time, you know, being able to remain disciplined to consistently execute regardless of, you know, what you've done um previously up to that point. Obviously, this is something you want to um aspire to, right? To be able to kind of trade more like a robot, right? But I, I think it's an impossible task to ask someone to be completely divorced from feeling happy, right? From trading well and then wanting to like secure the bag. And I think there's like a well-known um uh behavioral bias uh or some some psychological phenomenon. I think it's called it's called loss aversion, right? Um, or may might be loss aversion. Don't quote me. Um, so there's a few other things though that might be more uh, I guess formulaic rather than like relying on your own mental strength. Uh, one of them I mentioned before and it might not have mentioned this light, but um, one of them is to just like block out your P&L any way you can. Um, if you're trading your setups or one of the best ways to get you to trade your setups, period, is just to block out your P&L, right? So, a lot of platforms actually allow for this now. They um, they allow for the like obscuring of P&L like blurring it out or, you know, putting the asterisks over it. That's great. I would go a step further and say like that's half good because even when they do that, you notice that they like let you know that you're in the green or you're losing, right? So it'll, if you're in a long and it's going against you, you might not see how much you're losing. That dollar value has a obviously a more pronounced or visceral uh impact on you, but you still see it's red, right? No matter what, like red is programmed in our psyche as being like negatively connotated, right? Stop, bad, warning. Um, so you see that and it's still like, okay, I'm losing a [ __ ] trade, right? And and if you're up already into that morning, you see a loss, you might be, you might start to get a little bit more pro protective, defensive, and and trade outside of your system. You know, fall victim to style drift. You know, try to close it out early, etc., etc. Um, some things require drastic measures. If if you're you have your setup, right? My setup kind of stays the same uh all the time. My right vertical monitor is only execution. There's no charts on it. I have it gritted out. It's got my DOMs. It's got my Encilico terminal. Uh, my Encilico terminal has no charts, has nothing. It just has order entry template uh, order entry template, current orders, and then my positions are my positions are scrolled away from so I can't see any of the positions I'm in. Uh, if you have an exchange uh front end, right, or whatever you're using, like I've in the past taken electrical tape and I was taught this from people before me. I don't know where they've been taught it, but it's a well-known thing that's practiced in the industry for a long time. Like people just have tape on their desk. You block out the portion of your This is more like found in This is more so found in like arcade prop environments, not like Jane Street, right? Um, but uh, blacking out the area on your screen, you know, that you're, I mean, you're going to leave a residue on your screen, but hey, if it [ __ ] works, it works, right? Um, if you have to use duct tape to save your life, use it. So, if you have an area on your on your screen where your P&L is visible, like your screens are always the same, just put some [ __ ] tape over it, okay? You won't be reactionary at that point to what happens, whether it's going in the green or whether it's going in the red, right? Early on in the day, if you're if you're on a heater, like you should be pretty blind to your P&L. You should be looking for opportunity after opportunity. Now, the there's there's something that I think needs to be said about the idea that if you're doing well early, don't back off, go harder because it implies like if you have a good setup that sets up, you just got to go find another one right away. I, I think there's a mistake with that because clearly that's just not the case. Like today, someone said like, "Oh, it's kind of a slow day." Horizon might have said that. And I said, "Yeah, but there were like, there was like four setups that were really rock solid setups." Um, or just, you know, Tesla was just a breakout new highs day. Uh, new highs setup. Okay. Just continuation play. Um, ETH was was an easy long this morning. I pointed that out. Um, what else? Um, Solana, I remember not Solana. Um, what else am I thinking? Um, might have been two other things I can't think of right now. But either way, there's no like saying that because you're on a heater to start the day, it has to continue. But usually it's the case that like maybe not over a session, but over a couple days or over a week. There are periods where you could tell the market is on or it's off, right? Where conditions are good and where they're not so good. So the idea is like when conditions are good, if you're hitting, try to seize the day, right? Because the market usually offers a lot of returns in a short amount of time and then we go to that boring period where we're all in chat like [ __ ] what's going on. Um, like trying to seek out setups at that point. So you don't want to back off when you're doing well. And it's not because your setups are guaranteed to arrive. It's because yeah, conditions might be better for you to find them. Okay. Um, so one thing that you could do though, I sorry, I started talking about something that's formulaic and I got into the taping it over your screen. Um, one thing you could do is is, you know, this comes down to your plan, too. So, if you have a fixed plan early in the day, I'm going to take these setups if they arrive. Great. You've identified setups you're going to take. If they're still arriving, you should take them. But then two, you can come up with some kind of daily loss limit, right? But not um necessarily a um a percent value. You could say I'm going to have like a trailing stop, a trailing give back amount on my daily equity curve. Okay? Um, which implies that you're going to be looking at your performance, but this is you have to operate under the you have to the assumption is that you're going to be willing to look at it, but you're going to have this set rule in place that, you know, you made, you made $1,000, you know, first couple trades in the morning, you made 500 of the next couple trades. Okay? So, now you're up, you know, $1,500. Your daily give back amount is 500. Okay? It's going to continue to trail up. Okay, it's not going to adjust down though. So, it's, you make another 250, your trailing stop is at uh, you know, let's say it, it moves up $250. You know, if you lose $400, it stays where it is, right? So, you're kind of stopping yourself out of your daily performance, but you've defined this in advance. Thong the lines of what you find in a profit environment. You'd have a daily loss limit, you have a trailing loss limit, you know, a give back amount, um, whether it's a predefined amount, whether it's a trailing stop out amount. But this implies obviously you're going to be willing to look at your P&L, which might give you that sort of again, sort of visceral response. Um, the a couple other things um uh, let's see, just some other things you could, you, you could break up your day, right? So, you could say, "I am going to continue to trade my setups, right, as long as I get them. I'm going to break up my day, though, and do midday reviews, right?" Maybe it's you're trading um, you know, you're trading uh 9:30 till 11. Maybe it's like you break up the morning. So, um, you know, in my own experience, I talk about this like let's say 8:30 to 11 o'clock. You're only going to look at what you've done P&L-wise up to that point, right? Or excuse me, at that point, take notes, reevaluate your session, go back to complete blindness to P&L. This is all kind of around being blind your P&L, by the way, so you're not responding to changes in it. Uh, other things are reset, you know, using like um, some kind of reset ritual, right? So, you, you know, you're on a heater. Every time that you're you make a few hundred dollars, you do this like you, you maybe you get up and stretch, maybe you go outside, get a brush of breath, you know, a breath of fresh air instead, a breath of fresh breath air. Um, maybe you just do something to like interrupt that moment, right? Uh, not enough to where you're like, you're going to be blind to maybe some of the opportunities that you're are maybe available to you, but it's like you're interrupting, you're kind of like breaking, breaking the energy in that moment, right? Um, it's like um, a gating process. Okay? Maybe stepping outside of the room, spending a little time away from the computer, a couple minutes, you know, sit, have some coffee, whatever. I don't, there's a million things you could do, right? Um, but just a break in your process to reset. Could have a, you could have a a totem, you know, maybe you, maybe you love um, Inception and you have one of those tops. You spin the top. Make sure that you're still in base real, you know, b, you're still in reality. Um, there's a lot of things you could do, but I think the most important thing is you can't let your, you can't let your performance be the trigger for, you can't let your good performance be the trigger for you getting out of the market. You could absolutely let your bad performance take you out of the market, but you can't let your good performance take you out of the market, right? Um, you can miss a ton of setups by doing this. You can miss great days by doing this, right? And then even worse, if you're if you don't stay connected to the market as a shorter term trader, there's something you lose with that. And then imagine if you arbitrarily, you know, not arbitrarily, but you know, you say, "Ah, I'm doing so well today. I'm done." And then you just, you know, you come back a few hours later and you're like, "Wow, everything's doing really well. I got to I got to get back in everything." And then you just buy back everything you sold earlier. You were trading with a plan earlier and now you're like, "Fuck, everything's ripping. Like I'm just going to buy it and hold it." There's a, there's a lot of ways that you could ruin a good process by introducing randomness. And and again, this comes back to one of the core ideas is like, have a plan going into the day. Stick to the plan. A lot of your success is going to come from sticking to your plan, right? There's a ton of magic in finding an edge and, you know, getting consistent and developing market intuition and, you know, being lucky, right? Being around being lucky. But I, if you don't have a plan that you're willing to stick to, if you don't have that little bit of mental, you know, fortitude or um, you know, just discipline, then nothing really has a chance. So, if you're getting setups, continue to take them. You know, you never, you're looking at a great day, it could be your best day ever. You know, you're, you never know your your worst day and your best day. Your, your, I always say this like, your best, your worst day in the market is probably ahead of you and your best day in the market is probably ahead of you. You want to say your best day is ahead of you, but it could be today, right? So, just make sure you, you're able to show up by not um Whoops, my screen just blacked out. One sec, you guys uh, you still with me? Okay. Um, I don't know. Does that make sense? And the um, Oh, I mean, are you, if you're, you would size down though if you're losing money, right? I wouldn't size down if you're doing well. I would size up. I would do the exact opposite. But uh, well, no. So I'm talking to someone who obviously has a little bit of a issue with it. So sizing down is reasonable. Whatever you have to do to get comfortable staying active and then seeing the day through and then maybe hitting your draw down amount or maybe you, whatever you have to do to stick to a system and then you could comfortably raise that bar again is is fine. Whatever you could do to trick yourself into not psyching yourself out is worth doing. Um, I was gonna, I for something came to me. I forgot it. Uh, I don't know if it, if it comes to me, I'll, I'll think about it. I mean, obviously [ __ ] [ __ ] if it comes to me, I'll, I'll mention it. Uh, all right. Of course. Uh, okay. If you were to start trading again, you could only scalp. What are the things you would avoid doing? Knowing what you know now. Um, what would I avoid doing? I'd probably avoid, this is super hard to do now, but I would probably avoid paying attention to anything but the window space. The area I'm looking to trade like that, it's a, it's a thing that if I like, let's say I was just just scalping right, uh, it would definitely be a thing I, I would be required to 100% um, do again. Like at this point, I'm far more of a generalist, which means uh, I could see probably a lot more opportunities than I definitely could see a lot more opportunities than I did when I was starting out. You start out, if you try to be a journalist in the beginning, you have no chance. Um, it's just way too ambitious. I'm going to trade in, you know, I'm going to trade uh, gold. I'm going to trade, you know, this positioning setup in alts. I'm, it, that is like u, impossible task. So, a, a lot of people that have been trading for a long time, they develop a little bit of a, a generalist approach. Unless, you know, you're hyper specialized systematic trader, you're not going to, you know, be a have a generalist approach. But if I just started and I was just scalping, and this is required of people that are just scalping, um, I think I would not pay attention to anything else besides what uh, is affecting my market literally in those moments. And that's it. I wouldn't be zooming out. I wouldn't be looking at the high time frame trend. I probably would not be looking at any news source that was not that did not have like a really high impact uh, effect on my market. You know, squawk with only things that are relevant to my market. Um, but I would, I would make sure that I wasn't looking at really anything else because once you zoom out a little bit, I think you lose the frame that you're supposed to look at the market through when you're scalping, which is um, one that requires you to be super mechanical, not have you're you're trading like more of a market maker. You should not allow really much into your view at that moment. Um, besides just short-term flow behavior, which does not necessarily have higher time frame implications. Um, and yeah, I, I'd probably reduce the things that I paid attention to by a considerable amount. I would not be on u, I would not, so I mean, this is kind of silly to say now, but I would not be on Twitter. I would not be reading about my market. I would, I, if like, let's say you're like, I want to um, trade uh, treasuries, right? I trade ZB. Okay. Um, or even just the ES. I'd pay attention to the when the data releases are, right? And if you're a scalper, I, I wouldn't even necessarily concern myself with what the expectations are. Maybe expectations, right, versus reality because you could from that maybe model some amount of volatility, but I really wouldn't pay attention to macro. I would not pay attention to anything other than this could have an impact on how wide the market moves versus what direction the market's going. Does that make sense, Farmer? You, you have to become way more of a machine and totally zoom in. And that's why you find like a lot of like scalper scalpers, they're used to staring at maybe um, you know, treasuries next to you know, the ES next to you know, maybe the the 30 like they, they look at the same thing every day. They just have a feel for the how these interact, what the relationships are between them, what the expected volatility levels are, what the expected behaviors are. And there's really very little considered outside of that small view space. Um, let me know if I should drop this into questions for horse if it's wrong timing. I have a different I, so Farmer, that's good though. He says, "Yep." Okay. If you have any other questions, just drop them in. This uh, jerky is so good. It's from Whole Foods. It's super soft. It's like this blue and black bag. It's garlic and pepper. Um, let me know if I should drop. Okay, so I have a question about using a different approach to stops for varying scenarios. Namely, when ATR stop is preferable versus stop at an S&P low high paired with a low time frame bar break. Also, for a low time frame bar break, say M5 or M15, what are the key points of candles you monitor? Uh, and last, with an ATR stop, are you calculating based off entry or the low of the candle that made you decide? And so this is something you have to experiment with, right? And this is where the market is going to give you the best feedback. So the the best answer is plan for all of them, right? Or set your um conditions for all of them. Okay? Take 20 trades using the ATR off of the bar. Take 20 trades off of using, you know, the pivot point or the low or the swing high. See how that, you know, h, how your return, excuse me, what your return profile or what your performance looks like from that, right? Check your sharp against that. Um, I think that, so a few things. I think ATR stops are the best stops. One, for for trading for trending conditions. Okay. I think it's the best kind of stop realistically. Like take profits are kind of silly. Okay. Like a predefined takeprofit of like, I'm buying um, I'm buying at 61 and then I'm selling at 75, right? I think we all like, we, we try to look for reasons and some sometimes they're justified, right? Like uh, why this area might be sticky, why this is a good takerit, right? But there's a lot of times the market just continues to run and then you missed out because you know, it's hard enough to get the entry on something right and then it's another to get where it's going to end. Um, so ATR stops and trending conditions are really useful. Stops like in meanerversion trades where like let's say it's a swing failure setup. There. This is where again, the market can go tighter or further from one trade to the next and it's really difficult to model what is acceptable and what isn't. I think best practice is to if you're going to use a stop off of let's say a swing failure, at least account for some level of volatility of what has been the norm over the last couple days, right? Using a multiple of 30-day ATR if it's a SP from like a 1 hour time frame, whether it's a 1.5 or a 2x and then this would be, I think that this would be at least at first, you should be using um, a wider stop, right? So having a stop outside of the the um, swing point. So outside of the low, outside of the high. Not right where you enter. Okay. And this, you know, the response might be, well, that's like such a wide stop. Well, okay, that's good. That's why we use our, our, that's fine. We'll work on things over time and and look back at how our performance or what our performance says about this. But whatever the stop is, that gets that that plugs into the formula that determines our position size anyway. So, it's not like we're, oh man, that's a wide stop. I can't lose that much money. It's, it's like, well, no, if it's a wider stop, it's just going to be a smaller position size, right? Um, and this is, you know, this is something that's defined in advance. You're not just arbitrarily deciding how big positions are and then setting different stops based on the same values. Um, but I, I think the ATR stop is no, no matter what, incorporating some level of volatility, which is ATR, right? ATR is one way of judging that, is preferable versus, you know, a swing failure setup where you're just like, I'm just going to put a stop slightly below the low. I would at the, in the beginning at least, just start to work with the ATR stopped, right? Which means your position sizes are probably going to shrink a little bit. If you've been kind of doing things a little bit wingish or randomly or without being as informed, you might realize this, you're suddenly trading a little bit smaller size because you're like, "All right, I don't get a perfect entry, but the optimal stop placement, the invalidation of this trade isn't exactly where my entry is." Um, as far as low time frame bar breaks, M5, M15, I talk about M30. Obviously, as you go further up, it's later and later. These are again, this is a good price action signal because what a bar break is, is it's a sign of a turn, right? It's a very crude sign or it's like the most basic sign of a turn. The market has taken back levels in the opposite direction. This coupled with evidence either of absorption or exhaustion, market getting stuffed, is a good package to put together for a shift in direction, behavior, right? Intention. So, bar breaks are I think a good like very basic signal. Again, not like a wow, this is like the, you, the bar break changed my trading. Well, maybe it did, but realistically, I think it's just okay. This is not me just saying it feels strong. It's like, all right, by some unit of time, you know, we've taken back the last three hours of progress with one single 30-minute candle, and this is this is the current bar break. Um, but it's off of off of closing through the prior bar, closing through the prior bars range, not closing through the prior bars high or the prior bars, you know, the excuse me, not closing through the prior bars open, right? It's closing through the prior bars range. Now, by the way, this is this is what I've looked toward. It's not and and this is like at this point, it's, it's nice to add up multiple pieces of confluence, especially if you're doing, if especially in environments like this where it's like, all right, um, the juice is flowing right now. I mean, I don't want to be one to say like, let's bastardize our system and not put a magnifying glass to every setup, but you visually the feedback is right there, right? Okay. Oh my god. You see like it, it should jump off of you when there's an engulfing candle. If you're looking at a daily chart and you see an engulfing, you're like, I see it right away. Bar breaks kind of the same thing like the and this is like um, kind of basic but maybe take for granted the faster that you could get to an opportunity or react, the better. So for a discretionary trader looking at candlesticks, I mean, we're going pretty slow at this point, right? Truthfully, I mean, this is a kind of a again, kind of crude methodology compared to like some HFT, but you by having this qualifier probably will be able to pick up on these a lot faster. So again, now you have this one other thing that you're flicking through charts. You know, you're still flicking through charts, looking for setups, and then bang, I see right away, you know, hype, 30-minute bar break off support level, off prior value area high, holding VWAP, holding moving averages. This looks good. It's a sweep and a 30-minute bar break. Good qualifier. Okay. Um, but I, I think again, maybe I, I'm beyond at this point running a bunch of or running an experiment and saying, "Hey, maybe it'd be better supported if I look back at the bar breaks now as just a break through the prior days or prior levels open, right? Taking back the open." I think you get a shift in a lot of times you get a shift in very like basic momentum trend following algos when price starts retrading back prior levels on a closing basis um because some of these are written with like very, I don't know, basic language in that sense, but I haven't run that so I am operating on just at this point having used this a lot more a longer time ago and I think it's more to take back more, right? So, if you're trading and you take back a prior range, you know, it's kind of a good think about it as like the market saying [ __ ] you. Um, like the ultimate [ __ ] you is an engulfing candle, right? Um, but the uh, at So, are you calculating ATR stop based off the high low or off the entry point? So, this again goes back to the the uh, what do you, so ATR. Oh, by the way, so the ATR, the the one that I like to defer to is the 30-minute ATR, which and this just comes from a habit of having used TPO for a long time. So again, it's like I'm also guys, I'm not like at this point, if it ain't broke, don't fix it. And if it's not bleeding or leaking water, I'm not investigating much. So, this is old practices at this point, me using the 30-minute because it's so common for me to know the 30-minute ATR from looking at TPO charts. So, I know on average what today's TPO chart, 30-minute range is, I know what it is over the last week. Um, as in taking the 30 minute adding, no, that uh, the ATR is at a minimum the stop distance. So, put it that way. Uh, 30-minute ATR here. Fastest way you could get it either EXO has it. I don't think um, I don't think uh, Market Monkey has it, but it's your ASPR, right? You could use a TV, you know, pull up at ASPR or no ATR or um, uh, average range of percent if you want to use that. Um, the average for the last couple sessions is around $320, right? Um, this is, I would say, think about it this way. Think of this as the minimum stop distance. Is the stop based off the low or the high from the entry? No. It's based on it. It's that is the minimum distance you're going to have for at one from your entry. Think about it that way. The minimum distance your stop is going to be is that from your entry is that like at a minimum, at a minimum, we're saying like, okay, we count for some noise, but you know, this is we're going to try to reduce our exposure to getting swept, right? And this is going to get swept, by the way, man, it's not, it's not going to be perfect, but we're trying to like apply some best practice of assessing what the current volatility is, taking that to account and it's kind of like if you're trading a trend, what you're trying to do is say the invalidation for the trend is this shift in the behavior that that defines the trend, right? Whether that's a um, some level of momentum that's quantified, whether that is the market, you know, from a just basic market structure standpoint, higher highs, higher lows, whether that is re relation to moving averages, VWOPs. Um, again, it could get far more sophisticated than this, right? If you're trading at from man or uh, you know, any other super um, you know, sophisticated hedge fund, it's not, we're not talking like this, right? So the uh, I think that's a minimum distance you need to incorporate, but if you're trading structural setups, like I said, I would, if you're trading sweeps, if you're trading sweeps and re-entries, probably start with this as the distance to your stop is below that, that low, not your entry, but the low, right? Give yourself the best chance realistically at at one. It's going to reduce your position sizes. It might make trading a little bit less exciting, but I, I, I think it'll elicit a better response from you over time. Um, and then what you're doing is you're trying to tighten things up after again, running the script multiple times. So, you've applied this consistently over a period of months and now you're like, I wonder if there's some fat to trim, right? I wonder how I can optimize my entries because, you know, this is what it looks like when I'm using this stop distance. Let me run the tape with, you know, trading off of uh, structural stops off of the bar break. And I have the stop, right? I have the stop placed outside of the bar versus the the pivot where the turn is. Oh, so if the low of the candle is more than the 30-minute ATR, if the low of the candle is more is more than the 30-minute ATR, then you could just use the low, right? So, if you entered and you're saying the low of that candle that you entered in on is lower than that. Yes. Yes. Yes. I mean, 100%. As far as again, best practice, think outside of where you're that range, no matter what. If you're looking at a 30-minute candle and you're and you're entering on behalf of that 30-minute candle and your stop is within that or in that entry within that or excuse me, within that bar. I mean, yes, that's, yeah, I think you always want to think at least in the again, before you start really cutting things up, meaning refining your process, refining by looking back and seeing, okay, this is how many times I'm stopped out. This is how my trades look that are favorable. This is how my trades look that are unfavorable, right? Before you dig in, start zoomed out. Start more in terms of extremes. So having the stop outside of a local extreme, not necessary.
right off your entry. So, for example, just to give you, let me make this clear. Okay, let's open all these up.
All right. So, let's say that your entry, let's say early in the session. Um, again, talk about strong trend days: don't look to fade, or don't look to, uh, after really strong days, don't expect you're going to get an immediate reversal. So, one of the easiest opportunities after a really strong day is getting involved right around the low volume node if you have singles or ledge. Um, so, getting involved on a trip back down to what would be, if this was a balanced day, the lows of that value. If you considered a trend day is multiple periods of value, if you were going to dice this up and say, "If these are three periods of value, where's the value area within each?" talking about the lower portion of the structure.
So, meaning after a day like this, don't get bearish right away. If it starts trading the opposite direction, at least give it this LVN.
So, let's say you say, "Okay, we sweep it." We're sweeping early. This is the sweep setup. This is a sweep. This is now a reclaim. I'm long on behalf of this.
I would initially, if you're using a stop, have a stop regardless of whatever multiple of ATR you're using, incorporated around this point, right? The rejection level, not necessarily the... Hold on one sec. I just set up my hotkeys for the drawing again, but for the sake of, uh, not trying to remember them. Not okay. This is a sign of the rejection. I'm entering in here, and then I'm placing my stop 30 minutes out, or not 30 minutes, one 30-minute ATR outside of this entry point. So, it's around here. No, no. I think you want to look at this as the... we're looking at again a sign of the market rejecting a level, right? A sign of demand stepping in. The snappiest part of this is closer to the well, right? That's either where sellers really exhaust, that's where buyers really start to step in. That is like the line of... that is the, the, the defense wall at that point, right? That is the, uh, the battle line.
If we start just trading closer to that again, it's not necessarily... it shouldn't stop you out of your trade, right? Um, if you start trading closer to it and we're accepting, it's a different story. And over time, you start to apply a little bit more nuance to that.
But I think in the beginning, if you're looking at, let's say, even a swing failure setup, market's bouncing on its way down, sweeps a level, and now you're looking at an SFP, right? This is your swing failure. Even if this is your entry down here, right? I think initially what you want to do is have a stop and incorporate volatility off of the main level. So, that the low, and then over time, you're going to end up... yes, you're going to absolutely end up playing these things and trying to rather tighten them up as much as possible. You want to tighten up as much as possible and, one, see that there's a level of consistency there, right? But two, I mean, but you want to do this so you could try to maximize your returns, right? Have a tighter invalidation. Take a full position size. Not like, "All right, in the beginning, yes, we're going to be sizing down because my stops are wider." I'm trying to get a feel for this. You obviously want to get away from that at some point, but I think in the beginning, you want to work off of extremes. I guess the distance from the... and, okay. Yeah.
Does that make sense, Will?
Um, and something worth touching on right now, just while we're here. AVAX.
So, on a breakout, I think most people would be better off if, let's say, like a big technical breakout like this, right? Where this is, on average, an extremely rewarding trade, like where it has, at this point, we're talking over a year plus of a range established, you know, February 2025. Um, excuse me, not a year plus. We're almost... it's under a year, but it's a very long range. Um, this is something that is often, uh, it has weight to it. It might be slower moving initially, but the fact that we could accept above this range is a significant sign of... is a sign of a significant shift.
Um, this is not something I think you want to micromanage too much, right? So, let's say that you arrive to this and you're wonder, you know, you arrive and your signal is based off of a major contextual shift, and it's the high of the highest order. So, like a daily close, like you're requiring the most high time frame, or one of the most high time frame, candle closures as a confirmation. Okay, you might be a little late. Um, is it realistically that late? No. I mean, we're only 7% off the highs. This candle was over, over two digits, right? Excuse me, two digits, double digits. Um, big day, 13% day. If this is going to trend, it's going to go far more than 13%.
I think in the beginning, for setups like this, just to take setups consistently and not get... I think you should leave the party having had somewhat of a good time, right? Don't be too strict in the beginning. Try to make sure, try to maximize good experiences, good practices, just consistently taking trades as much as you can. So, if you are looking at something like this and you're looking at and you're think, "Oh man, I have to be... my entries have to be surgical. You know, now it's 7% through the level." I would take these trades, and with something like this, I would initially take the trade and form a position. And I think you should absolutely do this in the beginning with a stop and a position size based on the low of this bar break for a daily. So, bar break through the level. I think you just want to do this in the beginning. You again, it's going to be, "Hey, maybe it's a tenth of your average position size to establish something."
But I think what you want to do is set a... just get into a, a, um, uh, a build good habits, right? And this is about like taking setups. So, you could say a good habit or a bad habit, depending on how it ends up. Um, but I think with something like this, just to talk about stops. This is a case where I think you should at least have a position on that has... at least take something that has an invalidation outside of this low, because this can chop around a bunch. Sometimes you get deeper pullbacks than others. Sometimes you get really tight responses that lead to much further reactions. Sometimes you get deeper pullbacks that lead to muted reactions. But more often than not, this type of setup leads to a continuation move. Maybe it's just a 20% move above the highs. Maybe it's a 50% move above the highs. But you want to be able to, like, you... you want to be able to get that right. You want to be able to take advantage of this easy setup so that you could see, "Oh wow, there are some easy setups out there!" Now, let me dig in and see what separates them. I'm taking them. I'm... I'm doing well with them, but now let me see like what separates the wheat from the chaff, right? What really defines the awesome breakout setups that I know, "All right, I'm going to ride this with a really tight stop." You know, if you're looking at this on like, you know, the initial consolidation right here, some kind of really tight structural bar-based stop, right?
Um, you imagine how this might change based on what you're looking at early in the cycle, early in market moves where everything is just starting to retake levels, something that has a hot narrative. You might look at this kind of situation and say, "I'm placing a tight stop here. This might be a major runner, right?" Versus something that you guys know, like, you could probably do this to some extent. You could probably look at a pair and know, to some with some level of accuracy, how likely is it, if we had a multi-month breakout in this pair, how likely is this pair to respond versus a pair that hasn't had a narrative, that has been a dinosaur coin? I mean, arguably, if I continue to qualify it as being kind of unfavorable, it might have a bigger reaction because people just might have not paid attention anymore, might be completely underallocated to. But you can start to guess like, "Oh no, this is a breakout a little bit later after everything's already broken out." Might be people forcing the setup, but it might take a while to resolve, versus this is a really exciting, crowded move. This is going to launch.
Um, but you don't... I think you, in the beginning, stops are wider, always, is the best way to put it. Beginning stops are always wider. You always have to have wider stops and be willing to take the smaller positions that, um, that come with that. Does that make sense?
Today, reaction off single print, off of these single prints. Uh, so I was looking at this early this morning and saying, "Like, the market has to hold this, otherwise you have that Dalton setup, right?" So, you would have had something like this. I could have easily seen, well, not the extent of that, but you have a Dalton setup that maybe trades back down to this. Uh, but for a stop placement off of this, so a simple... the fact that we swept it and then we reclaimed early. I mean, I think your stop at least has to be... one second, collapse this again. Let's move these two together actually, so we could just pull up a regular chart. So, here is... let's draw this situation like this, where you're basically at prior day value. I think this is when you have a... you're setting up possibly with a really binary... not a, I don't want to say really binary setup, but it should be a relatively clean setup: a sweep and then reclaiming this. I... I think a situation like this, you could get away with a tighter stop, right? Because here is the previous day value. You don't want to give price too much room to run back into prior day value. This was somewhat balanced already. You came off of a really strong trend day. You know, market's probably at some point going to range a little bit longer, develop value before continuing to push up.
So, I think something like this, it was similar to, um, to the ETH long. So, the ETH long that I took this morning. So, it's a perfect example. Extremely tight invalidation, right? There's... there's basically just... I called it a very binary trade, right? And that when I say that, that's usually like, "H, you should probably take this." It's... it's... it's kind of cut and dry. Like, this is a previous... at this point, we're looking at, um, uh, one sec. This is a prior weekly, um, weekly val... excuse me, prior weekly high retest, right? It's... it either is above the prior weekly high and holding, or it isn't, and you're right at the level around then if you're... you could, you could start, you know, if you're close to the level, right, that is giving you a definable setup. The closer you are, the probably the tighter the stop you could be... you could put. So, if it's a support and resistance flip, that level is only one level, really, right? So, if your trade is contingent on, "Hey, this is a week," you're looking at a weekly breakout. Last week's high is only one level, right? So, sometimes you get, again, you could error on the side of a tighter stop.
Cool. What else, guys? Any thoughts? Any general thoughts on BTC TPLO location?
So, one, just high time frame BTC, because mentioned this yesterday or the day before. I think, uh, there's not a whole lot of like levels right now that stand out besides 175 highs up to, I think, 18. So, realistically, a move through, you know, we haven't had any kind of significant push back yet. Uh, ETH looks like, and I... I think I saw someone sharing a gamma profile for ETH: there might be a lot of short gamma between, I think it was like, 47 or 4650 and 5200. Uh, and the way this move was moving earlier had me thinking, "All right, maybe that... maybe ETH is literally in a negative gamma pocket."
Um, BTC trading obviously much differently than ETH today. BTC is up 50 basis points. ETH is up 450 basis points. Um, so ETH/BTC is just not... it's not like ripping, right? It's continuing to mosey up and trade way more institutionally at this point. Um, so I think 1751-18 is probably a good level to, if you've been long at this point, right? Or if you're continuing to long, I'd be very mindful of this high. Other than that, I mean, I think the way this is looking right now, 125, 13 level reclaim reflipped, I don't see why this doesn't trade back up to this window up here.
So, locally, in terms of just where we sit, you've had a really strong trend day, and then you've had two days of complete value migration. So, strong trend day, great base, right? Really great base built. Another breakout, right? Singles left into the close. Another... this is... these are well-built structures, right? So, you know, you're thinning out a little bit as you move up, but we're migrating value higher. It's not moving in like an unhealthy manner. It doesn't... it doesn't appear to be moving on like an absence of spot activity or broad market activity. Stock market's looking good. I would look for, again, it after you have two days of value, excuse me, complete value migration like this. I... I don't know. I think you're probably one, two days away from forming another composite.
So, I would start to look for how we trade into the Asian session. And if we start to see, maybe we get... we probably get a Dalton setup, like if I had to guess. Um, it's five o'clock now. You know, figure three, four hours from now, Asian session starts. We start to see some not weakness, but just not necessarily picking up the ball and running with it. I would look for the Dalton setup. So, I would look for a trade back through like 157. And listen, this is the kind of environment: it might pay to completely overlook short setups. And there's nothing wrong with that. So, it might mean getting out of the way of the market if we start trading back. You know, let's say we attempt to make a new high early in the session. We're starting to trade back within today's value. You're probably going to end up trading back down to today's lows, right? And then maybe we're looking at one of the signs that, or one of the things you are... you're trying to keep an eye on when you're looking at TPO, is how value is shifting relative to previous days, and if you're starting to go from a period where you didn't have any overlap to starting to have overlap again.
Um, so that's why this kind of transition, where you have a really strong trend day to the beginnings of balance, the move back down to the lows at any point during the session, is a really reliable fade. It's... it's very rare that you're going to have just one day of complete value migration to balance and then complete value migration down, or a transition lower. So, I don't know. I think that you look for probably early in the session, going into, again, the weekend. Uh, what is the pattern so far? Holding prior day value, basing out, building good structure. If we start trading 157-156 early in the session, I don't know, probably look towards 148, and then maybe we start to form a big composite between the 13s and the 16s. It doesn't... B... Bitcoin doesn't look like it's, again, the re... the, um, a lot of this, uh, past few months has been like: strong move, a bunch of sideways chop, you know, balance building, range building, platform building, strong move, no immediate continuation.
Um, so this is good because we're migrating higher, but I would expect that we begin to form some kind of... I... I think we'll probably form some kind of, um, pullback at some point back down to this level. And if it... if history is any reference, it's usually a little bit deeper than people like to deal with, right? If we're looking at like, um, this, uh, was the zone I said we... we switched it, the zone on the way down was 125, and then last week we started saying we had to retake this, uh, prior week's highs, right? So that is 13, that was like 134. So, if we're looking at this area, you know, maybe let's... where's the low of the composite going to form? Are we going to get, um, a balance area that forms down to 135? I don't know. I'd be prepared for this to trade like 12 again, right? Freak everyone out. Put in a, you know, a, a, um, buying tail down here and excess, and then base out hopefully back underneath the, uh, or back inside of this range. You have a poor high in the session. Um, and you're building.
So, here's a good example, by the way, of a little mismatch in the, uh, TPO. Set this right because we're going to stick on TV. And the volume profile. So, the really strong trend day, strong as hell, building value, closing towards the high; yesterday, balance built the platform, held the platform, based out. Uh, right now you can see there's a nice mismatch, and it's... it's better when you have this being excess, and then you see that stark difference between volume profile and TPL. Um, so there's starting to get a little... buyers might be getting a little bit ahead of themselves up here. And then if we look at this and cross-check this against something like Binance, you know, just to see if the same behavior is there. You're... you're getting a good amount of aggression that came in, and the market is not holding that. Whereas previously in this trend, we've built pockets of high volume and continued to base out above it. So, that's a sign you want to keep an eye on, too. If you're getting... if the market is moving up and you see corresponding live volume profiles building with it, are we still continuing to base out, hold topside of that? That's good. You start to see market coming up that's doing that, maybe thinning out. But then as you continue to move up and you're establishing value, and this thing is just starting to accumulate and build, and you're trading underneath that... well, now you have a fresh area of activity that's just trapped at the highs and underwater, or you can make a better case for it at that point. Um, so it looks like maybe that's happening sooner than later.
Um, you mentioned B&B trades like an equity on Binance. So, how did you... how would you trade it now that it's in price discovery? Thank you.
Um, I probably wouldn't trade, uh, B&B. I think B&B is probably in the same category of pairs. Um, like I... I have in a too now. Not... I've been in and out of B&B, so I... I can't... I have to say with certain things like, "Do as I say, not as I do," but don't do as I say because that's financial advice. But, um, I have a tendency to trade out of position sometimes just because of boredom. That's just me. Um, couple other people. So, Brent Donny's talked about this too. It might be why, uh, him and I connected so well. Um, the what's it called? The... that's just who I am. So, you know, it takes a lot for me to buy something, not look at it. It all... it almost always takes me to... to buy it in spot so that I can't see it as a position.
Um, but B&B, honestly, and there's a lot of these right now where it's like you just can't keep track of everything, and certainly from a capital, uh, efficiency standpoint, you can't be in everything, right? Uh, you can if you use leverage, but, um, I... I don't do anything crazy anymore, but for B&B, I mean, realistically, it... it seems like it has a lot more runway now from a regulatory standpoint. Um, I think the perception is that this is the closest thing you're going to get for retail to get access to it. Like Binance equity, we know it's a token, right? But, um, this, I, you know, I think it's: above highs, don't look at it. Below highs, get rid of it. So, going back to December 24 highs. I mean, this is it. I like there's a couple things I said... pairs I've said this for. A is one of them. I think there's some pairs that are just going to move differently. They're not going to be exciting. They're never going to be front and center anymore. They're not going to do crazy things, but they'll put 20% in your portfolio probably over a couple of months.
Um, so with B&B, I mean, let's just cut it down right here while we're... while we're live. It's a fresh trend on the high time frame, right? At a minimum, I mean, I would apply, and this is the daily right now. At a minimum, I would keep an eye on the 20-period, 50-period moving averages with this 10-period moving average, whatever you have to do, right? So, we'll put on the 10. Now, I'm not a pure MA trader, so it's not like I always look at the 10. I like the 20. I like the 50. I always know where we are relationship to them, and I'm not usually trading a late signal off of them. But something like this, you know, anchored VWOP from the level, 10-period moving average, 20-period moving average, the convergence, divergence between those, you're not going to wait for the, obviously, the, the, the close through, because at that point the market has turned. Although, if you're a trend follower, that's... you're acting on late signals either way. Um, if you're a more basic trend follower.
Um, but yeah, I would give this some breathing room. I would absolutely give it some breathing room. And you could see first few weeks for this market doesn't get to take prior week lows. So, there is a different kind of bid in some of these pairs. It's not an exciting one anymore, but listen, you have a breakout, you sweep the low once, and then we never looked back to a prior week low. So, sometimes you get really lucky. And, you know, some people do use pure bar low, prior bar low stops as just a basic. This either means we're going up or we're going down. If we're giving back ground, I don't want to be in it. As long as we're continue to take ground, I'm happy to drag it up. So, in everything's price discovery, but in making new highs, um, I would use a trend tool for this, and I wouldn't micromanage it.
With singles like these that are literally at the value extremes, do you always like to treat them in a binary manner? And we're going to wrap it up after this, guys, by the way. Um, so, which singles are we talking about? Yes. Good question. So, earlier I took the short in the yes. Uh, I think that was probably like six or seven points. And the idea into the setup was, "Let's open this up to look what we were looking at." The idea of the setup was the pre-market highs into this ledge, right? So, pre-market highs at the, at that time, were right here, prior day ledge, and then you had this excess. Uh, so are you talking about these singles, uh, or this excess that sometimes is people refer to as singles? The singles from the prior day. This. Can you see my mouse? I don't know if I... Wait, I don't see it anymore. [Music] I don't know what farmer's farming. Must be that psilocybin. Yes, it's a yes. Uh, hold on one sec, farmer. One, two, three, or four. Number two, congratulations! You win a Toyota Tacoma. Um, that's a great vehicle, by the way, for the end of the world. Uh, okay.
So, singles like this, with singles like these that are literally at the value area extremes, do you always like to treat them in a binary manner? So, the value area extremes, where are you looking at the value area of this profile? Talking about this one rather than this. So, we talking about this trend A... wait, I make an image. Thanks. Uh, yeah, because I was going to say, as a reminder, a day like this, I don't even think about the value area because it's never... it's... it's market is not in balance, value is being distributed across a range of prices. It's less reliable. I just look at this as a trend day with a low volume region. So, I'm not even on a trend day. I don't think about the value area high or the value area low. Only days I think about value area high or value area low are days that are balanced as goss. You know, if they're Gaussian, that's great. Or they're like a neutral day like this, a neutral variation like this, right? But really no interruption of singles, no gaps, no really strong directional moves, more rotational type of day. Uh, this... oh, the today's profile... so, today, bright farmer, I had two drawn here, so you're talking about this. Am I... Oh, wait a second. This is... No, this is... What's going on? The [ __ ] going on? Armor. What am I missing? Okay, today's Friday, right? This is Friday. Okay, this is Thursday. Okay, this is Wednesday right here. Okay. So, you're talking about Thursday, right? Okay. So, Thursday's profile, this little gap of singles 65-6581. It's right here. Yes. So, what is the question now that we've established the level? With singles like these that are literally at the value area extremes, do you always like to treat them in a binary manner? Uh, in the sense that it's the first level that I look to for a response after a really strong trend day. Yeah. Yeah, I do.
But, um, just again, as a reminder, I don't think about this value area anymore. So, if you meant that this single is near the value area extreme, I don't think about the value area anymore once it's a trend A. Value is really not isolated to one given area. It's... it's, you know, it's transitioning across a range of prices. Buyers and sellers are in disagreement. There's no... if value is not really being established in a way that I think it makes one extreme of value versus like the high or the low more actionable than any other point. Then at... then at that point, other areas within the trend, such as the low volume regions. So, yes, in the sense of coming off of a really strong trend day like this, I absolutely 100%... after a strong trend day like this, this is 100% the first level that I'd be looking to get involved, and it would be extremely binary in that this is going into, almost without hesitation, under the expect... or on the, um, the plan would be to long this, right? Not to say, "Hey, this might be where we accept and then reverse here." So, yes, I think that the first interaction with this (why am I using outside drawing tools?) is one that I would look to step in front of eight or nine times out of 10. And, and again, most importantly, because it's after a really strong trend day, what I would say is that, just to qualify something and I think add a little bit more detail, that would establish this as, um, a lesser version of maybe another... a less reliable version of maybe another. So, here is, by the way, this... these are the singles that this is the drawings, right? So, this is just corresponding to the TPO. So, a great thing about platforms that are... they're perfect, like, like Sierra Chart, just perfect in every way. The... the price of perfection is steep. You must climb an incredible... the learning curve for this is... is, yeah, it's not very friendly. But, um, why, what's wrong with Sierra Chart? I love it now compared to everything else. Oh, what are you kidding? Why is it unusable? Oh, for like crypto and stuff. I know, but there's some kind of, like, I don't know. There's beauty to that. The MS-DOS-ness, something so pure about it. It's like, I don't know. It's like any other thing that's just nostalgia. It's like smoking from a wooden pipe. It's like using a flask that you bought at a Civil War, uh, festival. Um, yeah. No, it's... it's super, uh, annoying, but, um, once you get it working, it doesn't break, and it's just... it doesn't, uh, there's no real issues with it unless you open up 50 million tabs, chart books, and then have all your... all the volume indicators. If you have them all on, that could be a pain in the butt. But, um, anyway, the, uh, what I was going to say, the, uh, these singles would not be as reli... would not be reliable, so this threshold, as it would be if this was a continuous gap and it wasn't separated by this brief period. Um, just from like a, a liquidation gap standpoint. I'd say this more with BTC, but the like bid to cover, I think, is more obvious when there's a pure gap versus these brief periods of consolidation. So, you're more likely to trade back through. So, as you approach this gap, if you trade back to one of these lower volume, excuse me, one of these regions that is lower volume, but there's... there's some value development, you're more likely to force some of that position to... to get involved again. So, either, you know, it's a late closing out positioning, covering at that point, selling. So, I think the... the best case scenario is when you have singles that are pure singles and you have a threshold right between where it begins and where it ends, versus this is a really strong trend day, 100. This is an incredibly strong trend day, but, um, again, throughout it, it wasn't a one-line path higher. I mean, uh, honestly, that's a constructive move, though, because it wasn't a double distribution in its purest sense. It's better than a pure double distribution. But at least I think in terms of the first interaction, the first level response, I think you could more reliably lean on it when there's nothing else there and it's just the level. But either way, I mean, it doesn't... it doesn't matter that much either way, because this was... we ended up filling out this gap. That region ended up being responsive. And more importantly, after a day like this, just don't bet against the market right away.
Uh, uh, any thoughts on... Yeah, I'm gonna wrap it up after this. On a separate note, any thoughts on funding/predicted funding?
I think, um, I don't know. I think funding is like, um, such an unreliable... it's not... it's unreliable because I... I've looked at funding on and off recently to see if there's any kind of sharp changes in it, but it's so gamed now, and there's so many other forces at play. Um, like this is, for example, like in ETH right here. I think this is a good example of a good break in funding. You have a couple of them here. So, it's not to say that there's... it's not reliable at all. You definitely want to see that longs that are in position when funding are is high, like you want to see that basis compress again. And some of that position come off, because if the market's not going anywhere any longer, and you see that funding is still elevated, and they're paying the cost of carry, like, at some point they're going to abandon positions due to boredom alone.
Um, I mean, I... I have a hard time completely writing it off and being like as dismissive of it as, uh, I don't know, maybe some people become completely dismissive. I think there's some alpha in seeing more in the... on the lower time frames, more in the lower time frames. That's what it really is. And these things are going to smooth out over the higher time frames anyway. So, I think on the lower time frames, it's probably a good, uh, representation of what's taking place between the spot and the futures market if there are sharp changes in it.
So, uh, BTC negative funding, pretty aggressive. Um, yeah, nice. Yeah, I mean, it's, uh, it's... it looks like, like it just looks like, uh, longs closing out, right? So, I don't know if, um... so, think, just think about this for a second. The... if the market is pretty long and the market's kind of reached a point where maybe it's a little bit saturated. Uh, if there's still like fresh demand there, and... and longs come off, they come off into like relatively thick book, and the market should stay in a relatively neutral state back at baseline, or at least funding should, excuse me. But if it... if you're seeing longs come off and funding is going like negative right away, I don't know if that... that is really meaningfully good, or if it's a sign that, "Hey, maybe the market's a little extended." It's also a little thin. So, the longs closing out are swinging the price around the index a little bit more drastically, right? Because funding can go briefly on the lower time frames negative from just longs closing out.
Um, second image, you could just paste them in this chat. Um, oh, predictive funding went negative. Yeah. And that's from 15 to... yeah, I mean, predictive funding is... so that's a little bit more... that's just going to be purely the basis, a little bit more representative of just the basis, and, you know, you're seeing the predictive funding right here, right at play, like this is the funding, but the predictive funding at this point is... that's when it's going... that's when it's starting to go negative. Um, predictive funding is going to make it a little bit more clearly around a different, uh, uh, zero line, right? It's going to be just negative at that point, rather than a period of positive, more positive, you know, declining back towards baseline to negative. Yeah. So, while that's happening... Yeah. I mean, this is an area where I think it makes sense to see some profit taking. So, you're getting some longs closing out. Market's not doing a bad job of holding up. Maybe some people are selling a little bit in advance, anticipating a turn, hedging.
Um, let's see something real quick. Oh, yeah. No, I know you're familiar with that, but in case people in the chat aren't. Um, let's see. I want to look at some real quick to see if this move is being hedged. Let me just get rid of some of this stuff, guys. Hold on one sec. This is usually on my vertical screen because then there's no compression of everything. Uh, so this is coin margined, and you usually... you usually see this picked up, pick up, and it... it... it's almost like the... so, after a trend begins to shift, and I think around some of the more obvious levels where a trend might begin to turn, at least in the short term, this is where some of your BTC holders, um, this is the tool they... the instrument they resort to hedging with. So, you know, this move into the high, seeing a pickup in coin margin, is it likely that suddenly now Bitcoin spot holders are just starting to lever up long right here? I... I'd say probably not. I... I would say maybe this is more some of the selling we're seeing is coin margin hedging.
And then you could probably say the same for, um... hold on, where's the... oh, predictive funding. Where is predictive funding? Let's just use cross-exchange funding, but then we'll use... that's USD per. That's annoying. Okay. So, that's a... I think we just established where this is, right? What this is from right now. It's probably the same behavior corresponding to what we're seeing in coin margin longs or coin margin positioning, which looks like, and this is numerous times this has actually been pretty on point. Um, coin margin open interest picks up off of a sweep or off of a change in market structure, like a lower time frame break, and it's, uh, it's BTC spot holders, a lot of the like bigger BTC spot holders, whales on exchanges, preferring to use coin margin to sell versus, uh, using, um, you know, to get into synthetic USDT rather than selling BTC, or using, um, using extra margin to use a USDT margin. So, you're probably seeing some of that right now. And, yeah, just a little digging just to see where that originated from. Yeah, I mean, it's not a lot. It's like, 1000 BTC, but it might be enough to fuel another little pop. Um, but actually, I mean, if you do a quick eyeball test of the amount of times this has jumped off of moves like this, and it's been aggressive, um, selling, because I doubt this is this way because the spot market is getting really aggressive up here. Um, it's usually been pretty on point. Lots on coin as well. Not on coin as well. Nice. Yeah, interesting find. Uh, the set. Uh, yes. Yeah. H, well, now I'm looking at your settings right here. Those are futures. They're all... They're not linear. Some of them are not linear, though, right? Yeah. Oh, yeah. I wouldn't even really look at quarterly futures on that. I don't think those are not... Yeah, those are not even within view. I get what you're saying, though.
Cool. All right, guys. I'm going to wrap it up. Um, yeah. I mean, some closing thoughts. I don't think you want to, like, micromanage BTC. There's, you know, you can, uh, trade both sides of BTC. Try to be nimble. Try to play the short side. Um, I think BTC is probably trading back up towards 120. I think if you have a... the itch to try to short BTC, just look at some alts instead, because there are usually like four to five alts that are technically sound, setting up, and are... are more reliable from a technical momentum standpoint, at least during these conditions when things get boring and... and more, uh, I'd say no, I don't want to say less certain, because more certain... less certain, because there's never... you can't say that you have turn at any point.
Anyway, all right, I'm out. Everyone, have a, uh, great weekend. I'll check in from time to time, and, um, I'll put out another Sunday update this Sunday evening as well after futures market opens. All right, guys. Adios.