Lecture Notes: Turtle Soup and Price Action Analysis

Introduction

• Issues with OBS software caused delays in starting the stream.
• Discussing NASDAQ's trading activity following high impact news at 8:30 on July 28, 2024.
• Charts being used: 15-second, 1-minute, and 15-minute charts.

Key Trading Concepts

Opening Price and Gaps

• Open and close price at 6 PM yesterday is crucial; no gap exists.
• Gaps can indicate potential future price movements.

Understanding Wicks

• Importance of wicks in trading; they are indicators of potential reversals.
• Wicks can signify 'fair value gaps' where the price didn't trade fully to expected levels.
• Fair value gaps represent areas of interest for potential trades.

Observing Market Behavior

• The opening range (9:30-10:00) is critical for observing market behavior.
• Not trying to predict tops/bottoms but rather observing price movements to extract information.

Turtle Soup Concept

• Turtle soup refers to trading strategies where traders sell above old highs or buy below old lows.
• Definition: a reversal mechanism that capitalizes on liquidity runs.
• Engaging with the market dynamics without forcing opinions; being observant.

Market Dynamics and Price Action

Price Action Techniques

• Trading up to the midpoint of a wick is a potential target.
• Not all levels will be reached; market behavior can be influenced by external factors (e.g., news).

Trade Management

• Key focus: managing trades with understanding of entry and exit points based on price action.
• Importance of psychological comfort in trading; emotional management is vital.

Using Previous Highs and Lows

• When price fails to reach expected highs/lows, this can indicate continuation patterns or reversals.
• Relative equal highs/lows indicate areas of interest for further trades.

Advanced Trading Insights

Anticipating Price Movement

• If the market creates wicks without hitting targets, anticipate that the price may reverse.
• Utilize the concept of relative equal highs/lows to gauge potential market direction.

Entry and Exit Strategies

• Utilize stop-loss strategies effectively to manage risk while trading.
• Understanding where to place stops in relation to previous price structures.

Conclusion

• The session covered a wide range of strategies regarding turtle soup and price action.
• Importance of staying focused on the process, observing price action, and keeping emotion in check.
• Encouragement to document and reflect on trades and strategies utilized during the day.
• Reminder of the importance of patience and discipline in trading.