In this post, we have 3 amazing trade videos from our partner Axia Futures. If you are interested in learning more about this style of trading, check out our Institutional Package - tools, analytics, education at an amazing low price.
Note that in one of these videos, Richard loses his hair. Don't worry - he's absolutely fine!
How To Trade Low Volume Areas With Passive Entries
How do you use a low volume area to stay in or add onto a trade for a much larger move? Richard replays a price ladder recording that shows the order flow of when the EURUSD futures market began an intraday move higher.
When a market breaks out and leaves a low volume area you can look to enter or add onto a move depending on the type of price action seen at the outer level of the area. In this example we see a bid that builds up and buys anything on the offer.
After a quick skip up the market leaves a low volume area with bids continuing to build at higher levels. The opportunity in this trade was to buy with the momentum, but by laying passive orders near the top of the low volume area and a stop below.
This price ladder session with Richard looks at how a move can change your perception and expectations of future market outcomes. We look at an example of how the Bund broke down through a range and resulted in a typical trend-type day move.
Replaying the price ladder recording helps us identify the early clues that led up to this move. We note the drop in delta while prices began to fall and that the offer traded down into bids while buyers failed to step up and lift the offer. We then observe volume building on the price ladder at the lows and prices continuing to trade below these pockets of volume, which is typical of a trend day.
For traders who missed out on capturing some the trend day's momentum, the next day tempts one with FOMO (fear of missing out) on the possibility of missing a second day's continuation and expecting further momentum. However, in contrast to the previous trend day we see delta diverging from price while buying and two-way trade takes place at the lows, which is in direct contrast to the first example.
The lesson to takeaway from this is to limit your expectations after a trend day and look to capture smaller portions of a secondary move, as not doing so can be costly if a false expectation is forced onto the market.
How To Trade A Risk Event With A Technical Bias
Richard takes us through a price ladder replay of the German IFO data release and how to trade this fundamental risk-event with a technical bias. The market in focus is the German 10 Year Bund which has a technical bias to the upside if the market could get back inside the previous week's value area.
After the data came out an entry could be taken on a quick flick back to the starting price which can often yield a better result than hitting the high or low. Later a final jump through the day's high gave a chance to cover some of the position to take profit and leave some of the position on to play far the bigger technical move.