Transcript for:
Understanding High Frequency Trading Dynamics

I have other tricks I got all kinds of stuff I got weapons you ain't never seen before it's a technique for high frequency trading algorithms use that as a entry model boom boom boom boom boom firing in there real quick right if you know the Market's likely go 3864 and you know the likelihood is everybody's going to be squeezed out of their short positions because the algorithm is going to start repricing higher higher higher spooling towards those Bic equility pools that I've outlined on the chart at 54 for my memory search Inc correct and then up at 64 okay so the initial buy side liquidity that was the the first draw and what I'm waiting for is I want to see speed you'll see me say in there I type it out and say okay you're going to start seeing large range candles and the speed study the speed you're gonna hear me talk about this in the live streams you're looking for that that is a signature what does that mean it's something that you should be seeing in price if it's not doing that you're probably offside or it's going to consolidate longer and depending upon the time of day if you're going into lunch you want to cut cut bait don't trade but ICT we watched you trade in New York that's me I'm trading outside of what I've already been willing to share to you I have other tricks and [ __ ] I got all kinds of stuff I got weapons youin never seen before and I'm not g to share them all I'm sorry you can't have all my tech I'm sorry it's not you're not entitled to it I'm not teaching everything I know but what I am teaching what I've already taught is plenty so if you're expecting speed in the direction of that 3864 level what would you want to see a real quick sudden move up just like that right now for the gentlemen out here to have and maybe some of you ladies too that are hot Riders if you have a fast car and maybe you just got your license recently and you took your dad's car out you want to burn some rubber known damn well you shouldn't be doing it but when you sit there and you neutral drop your car I'm not saying that's a good thing but some people do it you burn out and you make a skid mark as the car takes off real quick okay you want to see that in price that burnout that sudden run procharge mop part notes exactly what I'm talking about right now he's already smiling because he's now getting it that that runaway real quick move When You're Expecting speed to come into the marketplace that displacement you want to see it stay open you do not want to see it come back down in when you see that that is a breakaway Gap when we had markets that were not 24 hours okay like Forex is 24 hours and stock indices are not 24 hours but there small window of time where one hour it's not trading but you have a gap opening that gap opening sometimes is useful but when we didn't have electronic trading there was always Gap openings you had overnight Gap risk is what it was Gap risk is always an issue you didn't know where your currency Futures were going to open up you didn't know you know where this [ __ ] was going to open up unless you were monitoring overnight you know in the Globex what was going on and Globex is like the overnight session so I'm trying to teach you to anticipate When You're Expecting a market move to go a One Direction higher or lower based on your bias The Narrative was I left you in the morning session 3864 note that relative equal High because you know that's where we're heading 3:00 hour starts we are finding real support at fair value Gap discount lows and we create a fair value gap on the one minute chart 11 minutes 12 minutes and 13 minutes respectively on a one minute chart on ES that fair value Gap is drawn out for you in the recording it's a little light blue one I move my stop up just below the low of the 3 11 to 313 Fair b g I'm just below that one tick and the whole time I'm recording this I'm thinking to myself they're GNA [ __ ] themselves when you see this and to prove it I went in I bought it again when it went down and touched the bottom of the fair b g Why didn't it go go outside of that that's what you're wondering right Why didn't it go outside that because it had already tapped the low of the fair value gap on the hourly the 15 and the five uh I'm sorry the the one minute fair value Gap it had already touched it twice perfectly and we were running short on time we were running down the clock until 4:00 yes it trades a little bit past that that's not my point the the volume that's going to come in on Market on close orders is 3:40 to 4:00 that little window right there okay days that close with liquidity pools that have not been breached or engaged yet you'll find that that little segment of time is a sweet spot for a model all in it of itself who wouldn't want 20 handles I pulled it out like it was nothing yesterday 22 handles for the people that made fun of just five handles it's 87 ticks per contract so how do I know it's going to stay open just like a burnout okay think about that funny card that that stock card it's real fast and when that green light go it takes off it's gone up the road it's gone you don't want to see it go back to the starting line you don't want to see it do that you want to see it what just keep on hauling ass so When You're Expecting price to deliver and run towards a goal and you have a limited time what would that look like well if you're trading in the 10 o'clock hour 10 o'clock to 10:30 remember 11: to to noon is when things start creating the consolidation for lunch not that it will but my expectation is things start to slow down going into lunch and then lunch usually has a retracement goes for the liquidity you during that hour or prior to it and then it's either going to continue or reverse or stay consolidation and that's a discussion entirely for 2023 because we will talk about that but when I look at the market and I'm expecting uh fair value G to stay open I'm anticipating more volatility and velocity in the direction of that run and see the the things that I saw with Chris Lor's stuff he never had that never talked about that nobody else has ever talked about it either I wish there was other books or authors and things that would talk about these things because I could save myself a lot of aggravation because I know it's going to take lecture and lecture and lecture doing this and also show it to you live I have no problem doing that but most of you that keep asking the same questions even when I give you what I believe is the the best I can articul ulate it's frustrating for me because you're you're not going to connect with it because you haven't done other things and for folks that have been with me for a while the analogy of a burnout okay when the car you takes off and you skids its Wheels as it's going real fast forward that run up that creates that big candle one way that's like that like that it's a c it's just finally been allowed to go quick and it peels off real quick those instances When You're Expecting The Market to run hard you want to see that stay open now your question is going to be is okay well ICT have you ever had that instance where you felt it was likely to do that and it went back into it yes if it does I'm G to buy it in fact if you watch the video I'm waiting because there was one time where I thought it was going to dip in there and then that would have been institutional orderflow entry drill doesn't change the bias it doesn't change the fact that it's not going to go higher it's going to go higher it's just giving me an opportunity to buy it at a slightly lower discount but in my logic is it will stay open it will not completely close it might go down just below the top of the fair value Gap that's institutional order flow in drill it's a technique for high frequency trading algorithms use that as a entry model boom boom boom boom boom firing in there real quick that's the other algorithm the the algorithm that is the price engine that makes price go where it's going to go and no buying and selling pressures doing anything about it nothing how much how many contracts cause the S&P to move five handles how many contracts does it take to do that think about that logic for a second how many contracts how much volume does it take to move the S&P five handles oh [ __ ] never thought about things like that did you but the books don't talk about either so it's never come up in in question right you only need one contract to book price one contract one contract one contract it does not matter that's why when you see charts that used to track volume when we were uh futur Trader Market keeps going up the volume bars keep going down what the hell's going on volume ain't it folks that's not how you use volume that's not how you use volume you use volume in the sense that hey order flow is going to increase the velocity of orders coming in and Traders wanting to do something you can time that you can time it certain times of the day it's like well you know at the opening there's a lot of volatility right and that last 20 minute period of the last hour trading you can plan on it again so if you have untapped liquidity pools that are just so obviously sitting right there you know that last 20 minutes of trading that's how you do it you aim for that now what happens if you get it wrong if it doesn't move in your favor and it stops you out or it doesn't move that's trading for folks that's just the way it is you have to have a catalyst for why you're going to go into the marketplace and do whatever it is you're trying to do if you're going to be a buyer what makes that or constitutes a reason for you to be a buyer there has to be some kind of logic that you're following behind you your exercising and inviting risk you can't just well I feel like doing something because I got time there has to be a logic as to why you're expecting it to do it so in short answer when I'm anticipating apps to stay open I have already framed out the logic that it should be a market that should be quick and if I see that then I know I can do what I can trust that my liquidity or inefficiency I'm aiming for will be traded to that's why you see the confidence in my texts that people think it's cherry-picked or that I'm adding it after the video's been done there's no way you can explain all that [ __ ] okay it's being typed through trading view real time and when I type the stuff if it was something added on after the fact like a like a because I can take annotations and type it into a video on Camtasia but when I add it to that like for instance look at my Watermark innercircle trader.com okay that stays in one place that's how you know it's Camtasia that's added after the fact that's an after recording annotation in trading view do this and test it for yourself on Tuesday when the markets are open again go in there and type out something with trading view want a One minute chart and then watch it the annotations tick to the left when there's a new candle opening up you're telling me that I have that much editing ability that I can go in there and I can [ __ ] make 20 different things on my annotations all move in synchronicity the [ __ ] out of here man that you're giving me way too much [ __ ] credit for [ __ ] that ain't possible just accept the fact that I can do this and you're going to see me do it anyway you're going to be able to learn how to do this okay stop making excuses for holding on to dumb [ __ ] that doesn't work well for you okay or maybe you're struggling or you got to worship your hero or he's G to kick you out of your service or whatever [ __ ] get get away from those type of people if somebody's telling you you better rep me in my community or you're getting kicked out of here get the [ __ ] away from that person that's not a mentor that's a nut job okay you don't have to pay anything to be here