(binned per thread starter's request) Market bottom rotation trad

I did extensive research on perfect trendlines and condensed structures last few days about 500 examples (i know its not enough). I found that a specific combination of two parameters (1. developing structure at top/bottom 2. Left side of the chart) produce parabolic reactions in our favor. It is possible to estimate the strength of the move and what is the maximum retraces we can expect before going in our favor. And no, that is not support and resistance I understand finally what Jan meant by "i need every candle". I was always using these (i used to call them compressed) structures in my trading, but never paid specific attention on every candle on the chart. candles are like puzzle pieces. You have to put all of them in the right order.

Please note following examples do not use micro shelfs and takeouts (not in line with Jan rules). I just want to put emphasis on the structures.

182,5 FB longed. Behaviour change.
5859 USDCAD on watch , likely a takeout of supply, strong HL is there, strong ticking into supply.

EDIT: EURAUD not USDCAD.

FB sold at break even, turd is chopping around.
GBPAUD 7777 longed, EA should follow if squeeze is there.

ETFC too early too let yet, but bulls are showing some initiation if supply is taken out thats a long play. Line in the sand is clear where the shorts have control.

Bit annoying there, got into LEN, got alerted on ETFC tried to quickly close 50% of LEN on BE to open ETFC, then was 3 seconds too late as it didnt let me get filled as price just went straight on. Lost on initial break of ETFC -1R, LEN sold at BE, FTI got 2R gain.

LRCX looking for long fill on 212,6 strong takout of supply this one should run.
LB 42,10 likely to be taken out, looking to scale in slowly and add on takeout.

44,10 CSCO in clean long play.
QCOM B quallity play on 62,08 on long side if supply is out. Still needs a proper takeout.

LB quite a struggle on this one, bulls were clearly showing attempt to clear out short sellers, but 42,12 was just a nest of stubborn players holding it down. Took an exit of -0.7R loss, and relonged after bulls reunited with formed stronger shelf. Took 1.5R gains on second one.


No fill on LRCX solid squeeze play, missed it by 1 tick on pending long after break.

Flagship setup of the day, and the setup of the whole week : JAGX. Massive short squeeze, 120 milion shares traded today on as hard short squeeze as it gets.
Did not track this one on daily which might have been mistake since in February gave me a blast trade when initial short squeeze was traded on 16th. Short squeezers tend to short squeeze again, thats the nature of stocks that are "for sure to go bankrupt".
Catching single short squeeze like that pays for whole month of trading. Example was February even though that it was no where near the size of squeeze we got today.
Now that long play is over, next is to figure area where to short and let it collapse all the way where it came from.

CI someone just filled large long at 172 ish area, looking to play long if supply is retaken on 172,54.

Nice squeeze directly from the supply line.

For last trade of the day tracking EURUSD (partially also EJ) for potential long if supply is absorbed. Preffered another LL with strong bounce from macro demand and strong push into supply for long.

First of all hats off for doing historical research thats how real trader approaches the market. It is correct that those two parameters you described is a powder keg to create squeeze situation as it was clearly explained on takeout patterns on previous pages, there is no secret sauce to it why is that. It is simply the fact that the further and stronger the downtrend progresses the more shorts pile in and the more longs are consistently squeezed out forming liquidity gap and further pushing price down but as long as order flow is fresh, shorts are in at a scale which if you are short is the last thing you want (only important for sharks that play with large size as they have difficulty exiting then such position without causing a domino effect against them).
So the stronger the impulsive droping is the stronger the imbalance on short side will be (or the sell side also), then you throw in the mix condensed structure with clean exposure of sellers at extremes of structure and once those highs are taken out and everyone can see it (add to that SLs also cleared) thats when the avalanche starts.



Having micro confirmations and behaviour along side of the aimed path of price is important information to lean on. Microshelfs are bread and butter of high RR trades. Basically there are two types of takeout behaviour (already explained on previous pages), price either goes straight up after supply takeout which is often result of heavy buy order or condensed area of SLs and liqudiiation that begins, second type of move is when price takes out supply but returns quickly and then starts to bump around from the taken out supply forming micro shelf. Microshelfs are great becouse they often allow trader to get filled at best possible price inside shelf, while clear takeouts are often missed if you fish them with pending orders (many examples in this thread point to that). So the straight takeouts are more riskier and one really needs to close trade quickly if price jumps in oposite way since the price behaviour points that the expectation of order flow is not aligned to traders expecations. Sadly thats easier said than done, it usually leads to closing trade in larger than expected loss due to "wait a bit and let price give some time".


But yeh in general trading price is all about fitting current price structure into previous behaviour or context, price action analysis in vacuum has no edge at all, for example plotting two random highs and expecting the breakout to deliver consistency is just a guess with negative performance overall. Orderflow behind analysis has to make sense. Above example of JAGX should be a clean example how precise order flow, key price areas, understanding rotations all matching up can provide real edged price moves.

GBPJPY in potential long play.
113,00 CVX longed, looking for tight play and a squeeze.

CVX closed for 2.5R gains. Those kind of takeouts are the hardest on psychology becouse after initial takeout if there is no directional squeeze trader needs to decide whether to hold in position for micro shelf to hold (as no substential shorts/SLs have gives up) and trust the bulls to pick it up or to bail partially or fully on break even. Especially hard decision on A quallity play to make.
Best case scenario is always after a takeout for price to form direct squeeze or at least forming very and tight micro shelf without having any risk above BE on position.
That is where the actual trading performance kicks in, not in finding the setups but in those micro managment differences.

WYNN could be still worth taking even though the market is coming to close. Probably plenty of nervous sellers there. (Look back for EURGBP example to find the orderflow info/ approach).

And the history repeats. 3R gain on this one and ending here. This setup ties all liquidation and order flow behaviour explained in this thread together, clearout liqudiation of strong structure, strong LL HH rotation, heavy HL prints, consistency of bulls, last HL print before takeout, and a clean squeeze.
Everything in single setup, targeted liquidation event. No randomness here, this is all planned and targeted along the large sharks, one following or believing randomness of markets has no true edge ("at any point trader only has 50-50 chance for price going into ones favour").

Efficient market hypothesis

The most illusive debate / opinion / theory in any science to be ever released. I could go into this for ages and ages, thousands and thousands of empirical examples and studies with solid proves to completly crash any efficient market maximalist. Generally traders who have never found an edge will believe that markets are complelty random on minute to minute /second to second basis and that every information is efficiently priced in every second, therefore there is no edge to gain from price action since markets completly 100% price in every situation in almost perfect equalibrium. In my books if such statement comes from beginner in market that is totally fine, its understandable, but when a trader that somehow manages to pull profits stands behind such theory its just a shameful display at best. Sad. Sad becouse 1000s of properly researched examples can quickly disprove such view just as much as Bible can be by making a quick pick here and there in few sciences. Wall street "veterans" often will be first to rule in favour of efficient market theory becouse simply one makes money there by skinning the top (fees) and getting edge is absolutely not just non-needed but actually not preffered at all.

Any economist will tell you PA follows efficient market theory therefore there is no edge to gain in market as any edge if fully priced in ASAP, any Wall street guy will tell you the same. But what do all those people share in common? No price action trading or historical edge analysis or proper way to research informational patterns, becouse simply there was no need. Trusting into ones opinion without credibility is worst thing a PA trader can do.

Anyone participating this thread is wellcome to share view/ analysis / examples on either way of views. Its interesting that this theory always brings out the most extreme of each participant , noone really has neutral view on this, either one has efficient view (full price, no edge) or semi-non efficient view (semi-non priced/no or semi edge). Just as much religion vs science does, or name another 10 for the matter that spring from the books.

AUDCAD for tomorrow on watchlist, far from the possible entry area, but alert is well in place in case if bulls press on, if so this is flagship setup to watch.
GBPJPY meanwhile in play (previous post).

Great thread Janpec
Thank you for your time to share your insights --- good stuff

Regards