Five Easy Tapes: Open-Test Drive

Dip'll Do: July 2nd

Each week I review key moments from recent price action in the indices. These instances will be analyzed using three methods: the tape / DOM; footprint; and candle chart. Synthesizing the three allows an understanding greater than the sum of its parts, leading to a complete understanding of the auction process. There are many great resources out there, although I am not aware of any that provide such a comprehensive study guide.

Image 1. Don’t be a sheep

Live Tape

In this and coming examples I will share my screen with the tape and footprint during live trading sessions. Not all of these worked out, the key is to understand what is going on during the session, as well as appreciate when things suddenly change - or your reading was off.

Piece No. 2: the Open Test Drive.

I gave myself an A- on this execution. The thesis was solid, and an important reminder of application of the market profile to that end.

July 3, Bidding an Open Drive

This is a long video (33 minutes) at 1x speed, but I will note key concepts in the timestamps if you’d like to jump ahead. By following along, you will see how my thinking evolves and what cues I’m picking up for the trade management.

Apologies for the video quality/dimensions - this was a live round where settings were off. Thesis and execution are what counts.

Video 1. ES tape / 5m footprint. Trade entry

SETUP: Open test drive.

THESIS: A potential revisit of the prior day value area low (VAL) once overnight weak long inventory was removed shortly ahead of open. Weak initial selling would likely traverse prior day value area.

Image 2. ES profiles, July 1 and 2

OBSERVATIONS: