Video Transcript:
So, if you look at the order flow here, here’s that CPI release. There was no setup here. I could make a case for right here, but at this particular point, we hadn’t broken through the bullish above yet, which was at 65. I haven’t adjusted these levels, and I didn’t adjust them until I wanted to show you this. So, we had this bullish outside candle here. You could make a case for this with the absorption, -600 positive bullish flow, but there were no imbalances on it. Then this one absolutely ripped right through it. So here is your signal that this is potentially going to be a bullish run-up—2621 on this candle right here. That’s bullish flow breaking through a triple stack imbalance or a quad stack imbalance right at the bullish above, launching prices up, and price never came back. After this candle hit, I was waiting for a deep pullback into here—a wick through or what have you—to hold this level or hold this quad stack right in here. I never got that chance, so this thing had to go without me for a little bit. You’ve heard me say that before. You’ve also seen me watch violent moves go without me. Now we get into the meat and potatoes of this setup.
Price is moving up here. On the way up, you could have made a case for right here, but I also wanted to test this level and see where we were coming at. It’s just a tactic I use trading level to level, even though this is a Fibonacci extension up here. I could have made a case for right here but did not take this trade. I didn’t get the deeper pullback that I wanted. Now look over here—price moves up violently, tags, and closes through my level by a tick. Is that really what I’m looking for? No, not really, so I had to wait another candle. Here comes some bearish flow: 2114 on the way up and through, testing this level. Bearish flow comes in, 1264 to the negative side. And now here’s your failed breakdown. You have 1264 aggressive sellers flooding in on this candle, particularly here, negative 3411. In context, that is one of the most potent candles you’re going to see on the way up or down. This one was 3800, but it didn’t move the market. Again, same context, but the pattern on this candle was much better: -3411. Next candle up—did we eviscerate that? No, we did not. Then here was the next candle: -444. So the sellers were decreasing. There was a one-shot rip of sellers that came through here over a 30-minute period that waned, 10-minute bar by 10-minute bar.
Now the next candle comes through. After this candle closes, what did we develop here? We developed two downtrending highs, and if you break it down into a smaller timeframe, there were more. So this bull flag pattern directly at my level had some validity to it, especially with this wick coming back through and taking out these bullish imbalances. Then we ripped right back through it. The next candle opened violently. My buy stop was up here. As soon as we broke the high of this candle with the velocity, the ramp up, and that flip—this delta flip from these three candles to 21107—if you do the math on this, quick back-of-the-napkin math, you’ve got nearly 6000 to the downside flipping to 2100 for a nice bullish squeeze to the upside. That is a massive flip. The fact that 3411 aggressive sellers came into the market here and failed to rotate and take out lows tells me they were about to get eviscerated, which took place right on this candle.
Now we move on up. I entered right at the high of this candle and squeezed it up for a little bit. As price moved up, I was notching my stop up, and I probably suffocated it. So it was actually a good thing, in this particular moment, to take me out here as we rotated back down. In order to tag target two, I would have had to hold for the rest of the day and sit through the chop, and you know I’m not about to do that. I would have killed it anywhere. Had we come back down, if I hadn’t taken any profits, which I hadn’t at the moment, I may have killed this trade and wiped it out because we went sideways for the balance of the afternoon.
Hey everyone, it’s Dale here. I hope you enjoyed the video. If you’d like to trade alongside me and our team of prop firm funded traders every day, then click the link below the video and hop aboard. We look forward to trading with you.
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