Overview
This session covers the final homework for Phase One and introduces a systematic approach to analyzing overnight trading sessions. The focus is understanding how Asia and London market signatures (trending vs. contradicting) determine probability edges for New York trading, including specific times and levels most likely to be hit.
Phase One Homework Requirements
- Record video starting at 9:30 showing complete re-engineering workflow
- Begin with daily profile and execute all four steps in sequence
- Walk through 05s, hourly quarters, three hours, and daily classification
- War game decision points for false vs. true scenarios
- Demonstrate dump pouch usage and explain its importance for trade management
- All three homework assignments due by next Friday; incomplete work results in probation
Market Signature Framework
- Asia and London each produce true or false signals (long/short) creating 16 total possible overnight outcomes
- Eight signatures represent trending markets (both sessions aligned directionally)
- Eight signatures represent contradicting markets (sessions oppose each other)
- Trending markets increase probability of overnight low/high holding
- Contradicting markets increase probability of RTH (Regular Trading Hours) low/high formation
Trending Market Signatures
| Signature | Asia OU Break % | Mode Time | London OU Break % | Low Day Support |
|---|
| Long True / Short False | 75% | 9:30-9:45 | 87% | 18:00 overnight |
| Long True / Long True | 59% | 2:30-3:30 | 73% | 18:00 overnight |
| Short False / Short False | 91% | 2:30-3:30 | 86% | No support |
| Short False / Long True | 76% | 9:30-10:00 | 75% | 18:00 overnight |
- Long True/Short False offers highest probability for 9:30 Asia OU break
- Short False/Short False creates "full firecracker" taking out all levels without overnight low day support
- Mode times indicate most likely period for level breaks within the session
- Trending markets favor positioning near P12 low to ride upward momentum
Contradicting Market Characteristics
- Generate range-bound overnight conditions rather than directional moves
- Higher probability of broken/broken status (both Asia OU and London OU hit)
- Once broken/broken occurs, shift to expecting RTH high/low formation
- Support 3:00-4:00 PM low days more frequently than trending markets
- Create "goalpost" scenarios where whichever level hits first determines the day's range
- 945 reversals and four-step reversals become critical entry points after one side completes
Level Probabilities and Timing
- Asia OU probability ranges from 59%-91% depending on overnight signature
- London OU probability ranges from 73%-87% with most mode times between 7:30-10:00
- 9:30-10:15 window critical; levels not touched by then decrease in probability
- P12 mid and previous 12-hour footprint act as additional support/resistance zones
- Four-step reversals off these levels validate entry points for directional bias
- Live price elements override statistical probabilities when reversals fail to materialize
12-Hour MAE Settings
- Use 6:00-18:00 or 18:00-6:00 time periods based on trading bias
- Set to 5-day median type with Session 5 selected
- Apply 90-100% MFV target zone for high probability areas
- Use 50-day lookback period for historical context
- Display on 15-minute chart with 12 hours ahead visibility
- Shallow MA to deep MF provides entry zones aligned with P12 low/high
Practice and Skill Development
- Conduct variable drills with teams using random overnight signatures
- Practice identifying trending vs. contradicting markets without profile access
- Back test 10 days per hour focusing on workflow speed, not accuracy collection
- Coordinate team practice sessions in dedicated rooms for continuous drilling
- War game each scenario: determine decision points before price action unfolds
- Combine statistical edges with live price element confirmations for final trade decisions
Action Items
- Complete video re-engineering homework by next Friday (15 minutes maximum)
- Study Monday's session covering bearish trending market characteristics
- Practice speed drills with teammates identifying market signature characteristics
- Build game plan notepads for each signature type noting expected level breaks
- Review re-engineering session recordings to understand workflow execution
- Coordinate with squad leaders to track homework completion and avoid probation