Video Transcript:
Hey guys, Dan here from Funded Trader Academy with my Trade of the Week. Let’s break down this eight-point reversal trade from Tuesday, May 26, taking out a key session level before moving up to target. So, we’re going to look at this setup from start to finish and dial in the specifics using this order flow footprint software over here just to qualify this trade. But before we dial in the specifics, let’s provide a bit of broader market context using the Volume Profile. So, if you go back a few days, you can see the low of this auction range bottoming out near this 7360 level on Tuesday of last week, as well as the following bullish rally leg that took place here after for one, two, three more days. Okay. Then we also had a Sunday night futures opening gap up, a true gap up from that overnight, and then extended into price discovery mode during the overnight. Okay. That gap up left a wide area of interest, including a bullish imbalance, the prior week high, and a psychological level of 7500. So, headed into the day, I was primarily looking for longs. The immediate flow was bullish near all-time highs, with no narrative existing to short. So, what I wanted to see was a fake move lower before heading higher. And the open offered just that. So, let’s dial that down to a smaller time frame here. All right. So, here’s the open right here. This is your opening candle right here. On the way down, we had delta divergence. If we just flip right over to the Order Flow here, we’ll see a couple of key things. All right, so here’s your opening candle right about here. Okay, so do you notice anything different? These are a couple of red candles back here. Delta is negative 638. The differential between buyers and sellers shows that sellers are dominating here. Okay, right off the open, we have this surge of aggressive buying coming into the market. Okay, passive sellers were still able to push this thing down just a little bit, but aggressive buying was taking place nonetheless. You can see it right here, right here, and right here it gets bigger. Okay, so now down here, as we bottom out, as we take out our key area of interest, delta flips, and delta and price flip into alignment. Okay. And we reclaim our New York session VWAP on pretty aggressive bullish flow back to the upside and a pretty good extension back to the upside. So, we’re going to go ahead and take this and call this a failed breakdown for a rotation back to the upside. Okay. And we did just that, right to this nearest swing high, right back to the open and VWAP, for about an eight-point run to this point here before we had another pullback and a rally back to the upside for just a little bit more in a very tight-ranging day. I’d call this a nice base hit. So, to recap, through my morning prep, I identified some crucial levels that I wanted to see price react to, as well as a likely direction. And that opening bell surge gave me the chance to go ahead and assess those levels, or at least the first one that came up was the one that triggered a setup. The setup was formed, numerous signals broke structure, and off to the races to target. Hope that was helpful. We’ll see you guys over in the next video. Hey everyone, it’s Dale here. I hope you enjoyed the video. If you 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’re looking forward to trading with you.
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