Video Transcript:
Now, today can just be a pause day for all we know. Anyway, for today what we are going to do is just trade based on what we rely on—the signatures. This is 119.18, and the next macro is still quite far from where we are. We just need to look for some structure to develop, something that gives us a bit more confirmation. On a day like today, I would also check how the volume profile is stacking up. If we look at it, this entire area is a big volume node. Obviously, we can’t wait for the price to move all the way up there because by that time, I bet NQ would take out the high and we’d be in some sort of bearish divergence. So, there’s no point in waiting for that because if NQ pushes up even slightly, it’s likely to take out 180 before we realize it. That’s the dilemma I’m in—figuring this out. The only signature we have now is this macro inversion, a macro bullish inversion that happened during the 10:50 macro. A lot of sell-side has already been taken, and now it would also be interesting to see if an SMT shows up.
For example, if ES takes the low but NQ holds, then we have divergence. Personally, I’d be okay with some risk at that point. Generally, I’d put on half my usual risk and go long with a stop here. The premise of that trade would be that there’s an SMT, meaning a bullish divergence, and I’d be risking a small amount with the expectation that the low stays intact. Given we’re in a strong bull trend, I’m okay risking this much for a potential gain many times larger. That’s purely math. It’s not so much a signature, but an SMT would be a powerful one. Otherwise, would I wait for everything else to be done? No. Why? Because if I take a trade here at the SMT, and since it’s in the direction of a bullish trend, I’m not trading against the trend. It’s a 1:9 or 1:10 risk-reward setup. I’ll take that all day long in the trend’s direction. Sometimes you need to be creative in how you navigate, and this is one such option. If there’s no SMT, we’ll just have to wait. But that’s the kind of thought process I’m working through—I want to engage, but I’m looking for the right signature with a solid risk-reward. The problem with waiting for perfect confirmation, given the structure and volume profile, is that the risk-reward can quickly shift from extremely favorable to unfavorable.
So, in scenarios like this, I don’t mind risking a small amount on an SMT, hoping for potential expansion. If I enter a trade like this, even with a partial position, the risk-reward is lucrative. For example, right here is the SMT I was talking about. You can see it—if you really ask me, I’d go long here. This isn’t a recommendation, because this isn’t the strongest signature, but from a risk-reward perspective it works. So here, I’m long. My stop would be here, and I’m fine with that. The risk-reward is extremely good. I’d then add more once I see further confirmation, like a breakout. The reason I’d enter here with a partial position is simply because of the SMT. It has run the 4-hour low, as well as the others—the Asia, London, and yesterday’s PM lows. And with the overall bullish trend, this makes sense.
Hi, this is a post-market review of the trade we talked about in the live session. If you remember, we were looking at this SMT and going long. On the minute chart, you can see it clearly—there was an SMT, then an expansion, and we went long here. The idea was that all the sell-side liquidity had been run in every session, and with ES showing a clear SMT, and given the strong bullish trend, it was a great risk-reward trade. We went long here, aiming for this target. Around 10:50 a.m. New York time, it nearly hit. That was about a 1:7 or 1:8 risk-reward trade, and it worked out.
The takeaway for you, especially if you’re new to smart money concepts and liquidity, is this: first, always know the trend direction. It’s much better to trade with the trend, while moves against it are often just manipulation. Second, trade in the moment. Look for even the smallest algorithmic signatures and build your trades around them—especially when the opposing liquidity has already been taken. That’s what we did here. Today was a slow market, so price just ground higher instead of moving fast. But as long as you have a great trade location, whether price grinds or spikes, it doesn’t matter. Only the time it takes is different.
Anyway, that was the trade. If you enjoyed this video—hey everyone, it’s Dale here. I hope you enjoyed it. If you’d like to trade alongside me and our team of funded prop firm traders every day, click the link below and hop aboard. We look forward to trading with you.
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