Transcription
I was ranked three times in the World Trading Championship, Day Trading Division, and I was vice champion for two times with a total performance of 350% over 9 months. And here are the best trades I took in the competition and why I took them.
So let's start from the beginning of the session. And we can see that, uh, before the starting of the session, it was almost, uh, 12, uh, Central European Time. We had some kind of balance here. The market was really trying to understand where to explode. And also on the upper part, the profile was, was really clear. We didn't have a, a clear direction here. We had the market trying to break out on the upside, to break out on the downside. And if you only use price action in this moment, you are pretty confused. You think that nothing interesting is happening, and you, you just think that you need to wait. But volume was telling us something different.
And I want to start today, uh, letting you understand the power of the cumulative volume delta and the concept of the volume spread analysis. This is one of, one of my most profitable trading sessions that I had in the quarterly World Cup of Robins, and it's a super directional session. And I just capitalized on the market collapsing on NASDAQ. And I will let you understand why there is a big difference between watching only price and adding volume to your narratives.
Let's start with the situation we are in from the price action perspective. We can see that the market is balanced at this time. And if we plot a profile for the current situation, we can just see balance, and there is the fair value in the middle. There is no clear direction. But let's start with the first leading volume indicator that is cumulative volume delta to try to understand if in this moment we were building some kind of pressure.
Let's start with the cumulative volume delta and let's compare the two. So the market was balanced at this time, but as you can see, the direction from the pressure of the market and cumulative volume delta is pretty huge, even before the breakout. So the market is clearly building pressure down. This is the delta of the volume, and the, we are in a condition of accumulation and distribution. This, in this specific case, this is a distribution.
Now, I receive a lot of inquiries and questions. "Fabio, can you please clarify this? How can I diversify and understand if you are in a condition of accumulation and distribution?" This is the way because the volume is leading the price. So the volume is showing us that we were distributing and we were ready to explode short. But this is not enough. This is only the first milestone for my trading model. So I will add the second confirmation that you can get from this.
I will remove the cumulative volume delta and I will go inside the deep trades model now. So, big trades, it's an indicator that we are developing in our proprietary platform, and it's something that is really giving us an edge in understanding where the big players are pushing the price. So what we can see at this moment is a clear balance condition in the market. And the first moment that we had some kind of follow-up on volume and confirmation from price was exactly this candle. This was my first position because the market told me, "Fabio, we are going down. The volume pressure is down, and we have the price action that is following up." So I have the first position here.
Now, for those who follow me and understand my strategy, my way of trading is keeping drawdowns really low, building, uh, the profit for the day, and then risking again the profit. So what I'm seeking and what I'm searching for the session is explosion in market movement. And this is exactly what I want. This is the first confirmation that we are in a condition of out of balance. We, we were in distribution for all the session. Now we are starting to go down. This was my first position, exactly this one. And this was, if I'm not wrong, this was December 30th. So, we were on the final days of the competition. We were head-to-head with Nazaran. And the first position went to break even immediately. So the market exploded in my direction, and I put my stop loss to break even. The first stop loss was here. So the risk-to-reward was pretty huge on this position because if we can consider that I closed this position, the first position was closed around here. It was, uh, almost 1 to three, even more, 1:5 risk-to-reward ratio. Uh, this is one of my ways of managing position sizing. Is when the market is giving me another confirmation that the sellers are pushing the price down, I put my first stop loss to break even, and I can consider to close the first trade and open a second one with the profit of the first one, or just continue to add to my position in the direction of the trend.
Then I was, uh, in live commentary with my business partner. And this was the first position. This was the second position. This was the third position. And then I closed all these trades here in the second accumulation phase. Why? Because I started to see that the big trades are not pushing anymore the price down. We are in a redistribution phase. And this is another concept that is not well understood by traders. They try to guess if we are in an accumulation or distribution only using price action. And this is something that is not really convenient. So from this moment, I waited, and I took some profit, and I used half of this profit to risk again. And again, as you can see, it is as clear as possible. You see again the, the price action breaking down. You see again big trades in the direction of the trend because we studied auction market theory, and we know that this is a sell model day, and we continue to sell. And this was another huge take profit because I used part of the profit in this position. So we already commented, like we already had a commentary of five different positions that were trailed as the market was moving.
Another position, because I closed the session around four. Another position that I took was this position, and this is another model that I use. As you can see, the market is breaking down. Okay. And I see that the big trades are holding, that the price is trying to retrace, the buyers are trying to take control of this market condition, but the result is almost zero. So to do this kind of analysis, I usually use the delta profile footprint. So we will now open the profile footprint and the cumulative volume delta, and we can just zoom in on what was happening at this moment. And as you can see, I was using volume spread analysis. So the direction of the pressure of the volume and the result of the price in this exact moment, this exact candle, the result of the price for a pressure in by delta was almost zero. So this is a confirmation that the buyers are punching a wall, and I want to be short in this position. So this was again a short position, again a short position. And as you can see, as soon as the market approached the all-time low for the day, you see big traders sell continuing to push down. This is your opportunity to put the risk to zero, to put your position to zero, and again, the market collapsed. I took profit for this position at this level. That was the low of the day, and I was sitting at a huge profit for the day. So I didn't continue to load my position during the evening. But this was my most profitable session on the World Trading Cup.
So, if you like this video, let me know in the comments if you like this kind of content.