Following my Oil Post From Yesterday....
You can see how accurate the calls were from the day before. I told you that the 44.94 area was very powerful. Indeed it was. Now as you look down at where I marked the candle. What does that mean?
Well it is a pretty powerful indication of order flow. What happened is shorts were drawn in as the market moved down and then it quickly reversed on them. Now it did not quite hit my 44.15 level but about 35 ticks off. That was your cue to go long. Traders were trapped at the bottom and the 44.94 level held solid. Just enough to shake out the weak longs and to trap the traders at the bottom selling into the weakness.
How many were trapped? Don't know. You can't know unless you have access to all order flow all over the world on the big oil exchanges where they trade billions. You don't have access to that as only the market makers do. The move occurred after hours (past 1430 when the oil market closes) where liquidity was at its thinnest. That tells you something. Traders left positions on and the pros went after them. Likely without stops and likely over leveraged. However after this I knew what was going to happen today. UP!!! It was worth 50 ticks of four different trades for me. This caused me to liquidate my remaining shorts and now I am looking up. However you can see how I knew where the stops were (below the 44.65 level) and what was likely to happen once they were cleared. Once again if you used "to the tick entries you missed it".
Now because risk to reward is neutral you don't want to chase price here. Anything can and will happen between here and Friday (which is NOT a good day to trade as weekly options are being settled, liquidity is thin and stops are run).
So yet another free market strategy for you and a learning opportunity to how you need to view the market place. Cheers!
Well it is a pretty powerful indication of order flow. What happened is shorts were drawn in as the market moved down and then it quickly reversed on them. Now it did not quite hit my 44.15 level but about 35 ticks off. That was your cue to go long. Traders were trapped at the bottom and the 44.94 level held solid. Just enough to shake out the weak longs and to trap the traders at the bottom selling into the weakness.
How many were trapped? Don't know. You can't know unless you have access to all order flow all over the world on the big oil exchanges where they trade billions. You don't have access to that as only the market makers do. The move occurred after hours (past 1430 when the oil market closes) where liquidity was at its thinnest. That tells you something. Traders left positions on and the pros went after them. Likely without stops and likely over leveraged. However after this I knew what was going to happen today. UP!!! It was worth 50 ticks of four different trades for me. This caused me to liquidate my remaining shorts and now I am looking up. However you can see how I knew where the stops were (below the 44.65 level) and what was likely to happen once they were cleared. Once again if you used "to the tick entries you missed it".
Now because risk to reward is neutral you don't want to chase price here. Anything can and will happen between here and Friday (which is NOT a good day to trade as weekly options are being settled, liquidity is thin and stops are run).
So yet another free market strategy for you and a learning opportunity to how you need to view the market place. Cheers!
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