Video Transcript:
All right, Dan from Funded Trader Academy here. We’re going to break down this about 35-point reversal trade on the S&P 500 in total. But before we do that, we’re going to provide a little broader context. As you can see on the daily chart here, let me just zoom this in here. We had a bullish push to the upside here to kick off the week. It ran into some indecision before this day played out here. All right, so coming into the day, we were looking at a very indecisive topping formation after a long, extended bullish run in a downtrending market.
Okay, so as we come into the market that day, we’ve got some levels marked off. We’ve obviously got our prior day high, prior week high, and 7600 marked off. And what we’re really doing is assessing how price is going to respond at some of these key levels. Right? So coming into the day, we’ve got a tight-ranging, indecisive day that we’re coming off of. Right? So off the open, what does price do? It reaches right for the prior day high, fails to hit the prior week high, fails at 7600, and then the sellers come pouring in at the top. Okay? You can start to see these sellers start to pour in at the top. And we’re going to dial into this here in just a second, down to the lower time frames. But you can see off the open, there was a heavy, heavy bullish rush up to the top. A fake move to the upside failed, creating some thin prints in here, creating some imbalance in here that price inversed all the way back down.
So, let’s drop down to the smaller time frames here. Oops. Let’s leave that at the one hour. We’ll drop this one down to the one minute, and we can kind of dial this in a little bit further. Okay. So, as price is moving up here, you can see very indecisive price action through here. A lot of fakeout traps are taking place. And then the bulls start to take over and push price up. Okay. Bears start to creep in at the top here. You can see these red bubbles up here. And then price flushes. Heavy, aggressive sellers right here flush and inverse this 15-minute bullish fair value gap right here at 9:30. Okay, price pops up, chops around a little bit, and then the bears come back in to break it back down.
Okay, this right here was my trigger candle. Okay, so this was the key candle right here that told me price was likely headed lower. Okay, so as this one came in, as soon as this candle closed, I went ahead and took a short. Now, it chops around for quite a bit of time, and then we flush. Okay, the bears start to take back over. There’s really no aggressive bullish push back to the upside. Bears failed here and pushed price back to the downside, where I took partial profits midway. My target this entire time was the London session lows. Okay, so I took some partial profits here, and I let a runner go for the next seemingly hour, hour and a half or so, until we finally got close enough to that London low, where I just called it a day and closed out the rest of the trade right down here, as the bears and bulls were duking it out as to what was going to take place on that next leg.
Okay, so just to kind of recap here, we set up our day using the daily candle. We dialed that in further on the volume profile here, the daily and the weekly. The reds are the dailies, the blues are the weeklies, and we just noticed that off the open, we had some key liquidity levels to the upside of price. And we simply waited to see how price was going to respond there. Once we got a clear answer on that, once we inversed a higher-timeframe imbalance here, this 15-minute area, these thin prints, whatever you want to call them here, up here, as soon as we inversed those and it was clear that the sellers took over and shifted control, then we went ahead and took a position back down to another area of session liquidity. Okay, I hope that was helpful. We’ll see you guys over on the next video.
Hey everyone, it’s Dale here. I hope you enjoyed the video. If you would 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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