What is going on guys? So I want to elaborate a little more on splits and how we're going to find these splits and how we're going to use them to scalp these levels that we are looking for. a split is the difference between an imbalance and then again just to clarify very quick an imbalance is an area with no price action right so we don't see price action at a certain level uh that creates an imbalance and the split is right under so the time The time frame that we find these splits on, it's always going to be a five minute time frame.
Okay? Always, we're always going to find out a five minute time frame, nothing else, nothing more. All right.
So if we take a look here, what we're really trying to look for, and let me just pull this up here so we can have more clarity on, on what a split is. We're going to go into our whiteboard tool and we're going to discuss it on our whiteboard. That way you guys have a clear understanding of what a split is. all right so when it comes down to the split what we're looking for right is pretty much right you guys understand how we have candles okay in the market okay we have candles that come into market like this right I'll try to be very specific okay and then The wicks is what we're kind of paying attention for when we're looking for a split, right?
So we have candles that are falling down right falling down, but then all of a sudden, okay? We have to understand that in these candles on a five minute time frame so I do want to write here a five minute time frame just so you guys understand five minute time frame because this is the only place where we look for splits nowhere else and you don't look for it on a 15 minute you don't look for it on anything else just a five minute right so we have candles like this and then obviously continuation is down right we don't have anything else on this candle all right meaning that when we see these candles, there's no price action in here. There's no price action in here.
There's no price action in here. This is what is called an imbalance. This is what makes. Now, what splits that imbalance is what we call a split.
So if we were to look at this and all of a sudden. We create another down candle like this, right? There's no price action in here because there's no green candle, right? And all of a sudden, we want to bounce like this, right? And now, so check this out now, right?
We're using this wick right here as a split, right? We don't know that that's going to happen until we form something like this, right? So we start forming a green candle.
Now, all of a sudden, we have another red candle. And we start to understand that price action is now by... Buyers are stalling at this level, right?
So you see how buyers are stalling at that level and there's an imbalance above, right? That's what creates the split. So these wigs count as an imbalance, okay? So we would mark it from the body, okay? This would be our imbalance, okay?
This would be our split, sorry, right? Because we have the imbalance up here that we have to fill. And this is where buyers are struggling to break above to continue to fill that imbalance. So... that's what makes the split okay so that's what makes the split when we look at this we want to have a we're only looking for this on a five minute time frame and then a lot of times you're going to have another candle for example behind this that has again you might have a green candle before this right that kind of balanced out like that right and then and so on okay um so then this would be the end of the split right here okay so you would have now do you see how this is basically the imbalance i would call it iv right this is the imbalance right no price action red candle no price action red candle no price action red candle that is what creates the imbalance in the market okay so we have to completely understand that that's what creates imbalance now let's let's talk about another example because i i think it's very important for you guys to understand a little more about splits and how we're gonna look for them because a lot of times you're gonna have situations where you have something like this right and then people ask me why is this split there okay so look you're gonna have like for example like the candles coming up okay candle coming up okay and all of a sudden this gets filled right like this right that little about this gets feel like that okay and all of a sudden we start to have that movement Yeah.
Now, let me ask you guys. Maybe you guys are aware of what... What's going on here, right? And then we balance out again, right? So we have this candle, we have a candle that's going like this, you see that?
What's happening here? And then we begin to drop like this, right? So it's very unorganized, I would say, right?
like that so where's the split here right the split ends up being at the body again the higher body this is the imbalance that needs to be filled where does this split stop because a lot of you guys would say that this split stops where you guys would say here right so the split does not stop there the split actually ends here okay and number one again because that's a demand so I'll play even if this candle let's say for example okay was all the way over here delete that and let's delete this for example was all the way over here so why would it stop there okay even it was there the split would end here you see how the split ends it doesn't end up there it ends down here okay so this would be a split okay and and the reason for that is because these two candles are very conjoined together right so they're almost like the same size they're they're they're the green and then the red right together okay so meaning that they're not that far apart like this one is far apart like there's nothing behind these you know i mean that's why there's an imbalance there's nothing behind these you know i mean so there's something directly behind it then we would consider it a split, but there's nothing behind these. So this is very easy to break through, but this is so recent that we consider this to be safer, we consider this to split, right? Because these are so close to each other that we want to be very careful.
Now we break through this, we fill this. You know what I mean? That's kind of the way that we wanna look at it.
And it's the same thing for an upside split, right? When we see a zone coming upside, right? No price action, no price action, no price action, right? Now with the.
the split be formed here, well we'll start creating something like this. You know, up candle, right? And we start to realize where are the sellers trying to break and where are they failing to break?
Okay, they're failing to break this side, right here. This is the level they're failing to break. Once they break this, they get to fill this imbalance down here. And that's what I'm looking to fill. A lot of times when you guys see me trade, you guys are like, damn, why is Danny trading in the middle?
This is exactly why, because I'm looking for those fills to be split. And we'll just go and talk about. splits here so let's just go some random time I'm not even gonna look I don't even want you guys to think I'm looking here okay okay one two three boom okay so basically put in perspective okay we're not looking we're not even gonna mark our zones okay we're just gonna see what happens here all right so this is kind of the way that I would play okay now especially now that you guys understand the concept behind the split um this is the way that I would play right so we have the levels being formed okay do we have any balance so you you guys might say like okay danny we have any balance down here okay but i'm not gonna go for a 11 ticking balance bill i'm looking for something valuable like this this is a good split right here so if we break this this will be the split right so you can mark it i would mark it here right because this is small right but this would be my split okay and then this needs to get filled like this oh this is perfect oh i'm going for that one you know what i mean because look maybe it feels around 50. ticks right there into the red remember what we talked about the red so that's good right here we fill into there that would be a nice little 50 tick move even if i catch 40 ticks on that that would be pretty nice solid okay so let's see what happens here and again you can even take the bounce on the split too so let's see if we get anything here okay okay nope i don't see anything no oh oh oh oh sun sun sun here we go we're at the split we're about to fill that imbalance and we break through so these are circumstances that we need to pay attention to okay we're right at the split okay obviously with replay mode it's gonna move a little differently but here are my decisions here this is a split to fill the buy side imbalance this is the buy side imbalance because it's green and you see how on these candles there's no price action right these wigs count as part of the imbalance so we have to understand a couple things here okay we might bounce at this spit bounce at the split okay that's one thing that could happen another thing that can happen is fake out the bottom and then shoot up okay so we can fake out the bottom here go like into here and then shoot back up above the split if that happens i'm taking the long for sure right i'm taking the long for sure um the other thing that can happen is we break depending on the momentum i might take the short we break momentum to to to downside excuse me and then fill them balance okay so what I want you guys to understand is when you're training especially splits there has to be no fear in taking a trade because you're gonna lose right because your goal here is to take the trade very close to the split, you know what I mean?
That's the goal here, right? So if I'm looking at this, I'm trying to take the trade, you know, somewhere at least in this area, right? So if I think long, depending on all the tools that I have, I need to take my short here, you know what I mean? That way I can at least get a decent move into that short, and I can have a very tight stop loss, right?
I don't even have to have a wide stop loss. Okay, so let's see kind of what happens here. Okay, so, oh, at this point we have to wait for a retest because if it dropped that much that's already halfway filled so at this point we have to wait for a retest because our our entry goal should have been up here right we're going to take the short so let's see what happens okay there's the retest too that's where entry should have been okay that's where it should have been there okay this is where our entry should be again that's our entry right there filled we don't care Yeah, Danny's trades, baby.
Yes, sir. And that imbalance eventually gets filled. Now, there's gonna be situations where we have to understand, not all the time are these imbalances gonna get filled all the way to the downside.
Okay, sometimes we might have situations where the imbalance only gets filled. For example, we didn't hit our line word for word because the market's not perfect, right? So we have to be able to take profits close to, at least into that area.
You know what I mean? We're not trying to take profits perfectly in there or breaking through that area, unless we actually feel that it's coming. So we need to be able to take profits as soon as we can.
Anyway, if we break down, we have another split right here. Look at that. This is split number two.
There's another split. So that split already got filled, so this is not a split no more. But what ends up being a split now though, guess what?
We have a split right here. To the upside now. Okay, so we form we already filled that split. This is a new split This is the amount that needs to be filled and then we have another split So this is not a split This is this was the end of a split because under this if this was a split then we would have to have like a Big imbalance below and we don't what ends up happening is we have a balance here Okay, so this would be a balance So this is a balance here, right? Because again, it's like kind of like an area where we're just like like try to form that split and we just kind of flatten out right but there's no imbalance here the imbalance starts here oh that could be good or we could take the bounce one or the other so anyway we end up coming down we already filled oh we're breaking through that split so let's forget this okay because we already got filled And this is really where it starts to come into place, right?
We're about to feel that next split, okay? So let's see kind of what happens here, okay? Because, again, in my mind right now is if we break that, we can feel that split. But if we don't, we'll just play the upside once we break this split.
Like, I'm not going to try to play the, like, if I miss the bounce here, then I miss the bounce. You know what I mean? I'm not going to try to play it.
Ooh, ooh, retest. And what did I say? Okay, so. this is where we have to start paying a little more attention and start to realize that certain things can happen here so in a situation like this where for example uh we ended up coming out this is now since we're above the split this is now considered a fake out okay so i want you guys to understand that this is now a fake out okay so let's say you would have taken the short you wouldn't wait for the retest right you're more of an aggressive trader like me i would have probably been at the breakout taking the short right um Where would your stop loss have been on this?
Your stop loss would have, if you would have taken the short at the breakout, your stop loss would have been right above the split. So it wouldn't even have been at 50 ticks. It would have been somewhere around 25 ticks, I would say, at most. And you would have been stopped out. but see you have to have an aggressive you're gonna have an aggressive approach you can't be scared to lose but you gotta keep your stop stop losses very tight okay in this situation we this is considered fake out we're now above the split we're easily taking along and we're gonna easily take that long at least above into this area so this is all balanced here so we want to at least play into that area and we want to try to at least get to that split if we can continue to hold past the split great and if we can't well then we can't okay so let's see what happens here because now if we're above this split i'm taking the long okay um okay Okay, so it looks like we're retesting that split again.
Okay, perfect. This is a fake out. It looks like it's coming up. Okay, so we hit the split at this point. What I would do is I would at least take profit and see if we break this split now.
Okay, I wouldn't take a short here. I wouldn't do anything. I would just kind of leave it and wait to see what happens. we get back in here, okay?
So I would not react right now, okay? Now we have an aggressive move to the downside and we're breaking that split. What I would definitely consider though is, I don't wanna play that fake out.
what I would consider is most definitely moving my split down here, right? Because it wouldn't make sense to have it there at the fake out area. So I'm gonna consider this my split now to fill the imbalance down here.
So this is my new split, okay? I'm gonna use that and let's see if we can break that new split. Okay, so we're here right now and we're bouncing with this kind of momentum. All I'm gonna wait for is a break of this, calculate my risk and say, okay, if I go in this long here, right? Because it keeps bouncing out of the split, I can have a stop loss right below the split.
at 50 ticks because that's the most I want to have my stop-loss at and we can target you know a 50 tick again move one to one and if we break that and we can catch a lot higher okay but first I'm trying to 50 ticks so we're bouncing at the split a lot of momentum and we break this I'm going in okay so we break it on okay and then we break the downside then we're gonna go into short we'll see right now the might have gone faked out here okay Let's see what happens here. It looks like it filled the imbalance for sure, though, because we got the imbalance bill right there. Let's see what happens here.
In this case, it keeps bouncing at that split, guys. Oh, and eventually we're going to break that split. Check it out.
Okay, now we're still bouncing at that split. Yep, eventually we break the split. Look at what happens after we break the split.
Imbalance gets filled. Easy money. So in a situation like this, though, if you were able to...
were to get an entry all the way up here though yeah you would kind of just be stuck in bad luck because you wouldn't want to have a a 60 tick stop loss unless you really had to so you would kind of have to just find a re-entry right if you got in all the way up there yeah when it comes to training especially with this style you kind of want to get your entry as close as you can into the split not that far off into split so we would have only gone in and we would have gone on the breakout so for example uh we didn't get the breakout obviously so we wouldn't have gone in but in this situation i would have gone in here because we got the breakout and we might have been stopped out over here you see what i'm planning So, but we filled the imbalance, right? So we would have been more self-aware. So it would have been something like this where we would have broken, right? We would have probably put our stop loss right under here, around 20 ticks. We would have gone for that split.
Obviously didn't feel you would have gotten stopped out. We come back down into that split. And at this time, once we break this, I would have taken it here. So now I have a better entry, right? With a 50 tick stop loss.
And eventually this trade breaks the split and you're able to catch that move that you've been waiting for. to fill that imbalance to the upside. So, there's a lot of opportunities, especially when you're playing the splits.
Because look at these splits. I mean, it works perfectly. You know, you just got to find that entry. Now, my suggestion to find that entry is to play it as close as you can into the split.
You can always reverse your position. You can always go from long to short. That's completely dependent on you, though.
You know, let's go for another example. Okay, so that's a good example of how we would play that. Let's go to another one.
So, we're going to use replay mode again. Okay. And we're not going to look.
We're not going to look. We're not. Right there.
Okay. So, okay. Same thing, right? We're only talking about splits right now. Let's find a split here.
Perfect. I found it. Okay. Width count as imbalance. This is my split here.
Okay. Starts right here. I know some of you.
you guys say why do you mark it like that I don't know I just like so I want to count that weekend so that makes me feel just more comfortable okay it doesn't matter where you put just understanding where the split is that's the important thing so that's my split if we break this we're gonna fill this to the bottom, my goal is to get as close as I can into this entry, and then this is the end of the split. So I have to be careful there. Okay, and then we have a split right here as well.
Okay, so this is my split here. Once we break this, we're gonna fill this imbalance, right? So I have two splits right here, okay? And these are the ones I want to focus on, okay? So check it out.
Simple concepts, right? Why is this a split? Because there's an imbalance over here.
Why is this a split? Because there's an imbalance down here, all right? So let's see what. what we do here. Okay.
Oh, oh, oh. Lots of stress, lots of momentum in this situation. this for sure this could be a fake out but again because I'm an aggressive trader I would definitely buy long okay and to fill the split obviously split is about to get filled oh like it gets filled it would keep bouncing right easy money right i could do this all day i mean you guys see me do it all day especially in the live training sessions okay i see the split i go for the split kill especially based off the strength and momentum of the trade that's what i'm doing right so and when we start going like this what do we do in this situation right we're not going to try and go into an overextended move what we're going to try to do is wait for price to balance out and then form another split so great pretty much boom split form right so this split is done this got filled and now we have a split and we got to fill down here to the downside so i'm going to wait and see what how we react to that split here because this one just got formed it's confirmed look at it we have a red candle everything balanced out down here buyers want to come in here so i'm going to pay attention to this area right because buyers seem to want to come in here.
Let's see what happens. Okay, okay, boom, back at that split. It's also a split and it's also a five minute demand. Boom, perfect. So I'm interested in the longs.
Why? Because there's also a lot of strength to the upside. Now we break 50%, we break the split, we're taking short.
It's common sense. See what happens. We're at that 50% level, we're just bouncing here.
Ooh, ooh, I would probably take long first. So check it out. We might have to reverse this position.
So with this much stalling at 50% and split, I would just take long. Okay, I'm not gonna let it stall. Like if shorts were to come in, they would have came in. That's my opinion. Okay, and we might get stopped out.
Nope, we won't. We won't, maybe. Choppy.
Okay, we pumped. 50% split, boom. But let's say we would have been stopped out, right?
What would I have done? Okay, I would have closed down my position and then gone into short and caught a bigger. trade covering my losses it's just such a simple thing to do like it's just reading like a book you know I mean you're in you're out you're in you're out you're either long or either short right we're playing fast market same thing over here right look at our P&L okay boom boom boom we just formed a split okay got it I just don't like okay perfect yep I like that split now split right here fill in balance to the downside this is the balance that needs to be filled so what are we gonna do we're just gonna watch it and see if we feel okay we ended up balancing I'm gonna wait for it to come back oh another split form okay right there feel that balance but I probably take the short here because I don't want to catch such a small imbalance you know I mean because again this imbalance like let's say we do play a short I'm not oh that's actually might be good nevermind it's 60 ticks let's see what happens here okay nope we just keep bouncing so now I gotta look for another one sometimes you're just gonna have to wait Might have taken entry over here. Might have not.
There's another split over there. Another split right there. Okay, boom. Okay, we're probably going to this split.
Okay, that's a split right there. Get out, because there's an imbalance below. Ooh, this is a split too. Ooh, I might take long here. Split right here.
So we break this, we fill that imbalance. Let's see what happens, because again, there's a split, but look, you might want to take the long, but this is why you need to be paying. attention what do we have here a zone okay don't be don't be trying to take long oh because there was a split into the zone come on be patient okay we might fall short and we can play the short side split break split come on bounce at the split okay right under okay 50 50 here so now okay we broke this we came to the top we're at 50 okay split It played out perfectly, never got filled in balance down here.
We would have broken this, we would have most likely broken that. So this is where I'm gonna make a decision at 50%. What am I gonna do? Okay, so look, price is probably gonna go long based off the momentum. Let's see what happens here.
Okay, I'm not so confident taking the long yet. So I wanna wait it out. Okay, so I'm taking short in this situation. Because we're already rejecting, we broke structure, we're trying to fill the imbalance below. Okay, so perfect, perfect, break the split, break the split, boom, split field, I'm out.
okay it's so simple see how 50 we waited balanced it out we saw the breakout and then we got into the trade and we caught the trade we can continue to do this right some days you're just gonna have choppy price action and it's just not gonna work out you know like you're gonna have good days you're gonna have bad days and as a trader you need to understand that and you need to be able to work with that okay um let's see what else we Yeah, do we break this split now? Okay, because this split got filled. So I'm not going to consider that anything anymore.
I'm trying to pay attention to current price action. Oh, broken. I would have gone in the trade easily.
Okay, this is probably gonna get filled to the downside. It's got to get filled into here. Let's see the retest. We can get another entry. okay oh what did i say about this earlier what are we doing here this is now considered fake out what are we doing longing everyone better be longing even if you get stopped out of your longing okay boom split bounce our stop would be somewhere this area so look out of all our profit we'd only be risking maybe 380 yeah we don't want to risk too much for one contract around 50 ticks so we can play it right under that place right there okay we would have been stopped out that's fine okay we gotta look for that next split here okay so we're gonna look for that next split which our next split is down here and then Okay, boom, right here.
Next split, what's going to happen? Let's be patient. Okay, bounce. I want to see the bounce. If we don't, we're going to play it short.
Okay, I'm going to play the long first. Okay, we're going to see if these longs can come in. If not, we'll reverse our position.
That's just a fake out. Just be careful. Split is working out perfectly.
And boom, chakalaka, baby. Come on, go back up. Perfect.
Okay, we covered the loss, catch over 50 ticks, we covered that loss, and from the split we came back up into 50%. So I mean, the last couple of trades, just to show you. you're gonna win some you're gonna lose them right with this strategy it's all about staying consistent on pace you know I mean eventually you're gonna see a green P&L as long as you stay on track and you follow the rules right eventually look once 50% gets broken it gets retested and then we have a huge pump there's just so much opportunity guys like there's so many like unlimited trades with this strategy you can catch so much you can catch so many fire trades you just have to be on point with it like literally splits and imbalances the best thing in the world.
Like right now, we're coming in, you know, this is the market of today. We have an imbalance to fill up here. Does it make sense to try to catch this trade? It's 123 ticks to fill.
Of course, right? Now, you have to understand the rules of this, right? You're not always going to perfectly fill the imbalance to the top.
You might fill halfway and all of a sudden you drop. So you have to be having a TP set, right? So what does that mean? Okay, let's get it. 50 tick TP, 50 tick stop.
That's usually what I do, right? No more. If I gotta go to 60 tick stop, then that's the most I'll ever go to.
Never more, okay? But try to avoid 60 tick stop. You wanna keep it at least maximum 50 ticks.
If you have to go to 60, okay, go to 60, right? Maybe you got a super late entry and you're stuck in the trade and you have to just follow through with it, but stick with it. You know what I mean? That's it, that's all I gotta say to you.
Stick with 50 ticks. If you can find your entry, for example, if I get an entry here, I'm not gonna have a 50 tick stop loss just to be like, yeah, let me just have a 50 tick stop loss. I'm gonna have a stop loss below my split.
So it'd be maybe around 35 ticks, see? I don't need to have a 50 tick stop loss. Doesn't make sense to have it just laying there.
You know what I mean? When I can just limit my loss and I can go for the split fill, this gets filled, you know, I catch maybe 70 ticks with a. very minimum risk you know I mean try to avoid 60 ticks try to keep it as compact as possible when it comes to your stop losses okay try to find those entries very near the split depending on momentum the volume and everything that's coming into the market okay so this is again a lesson about splits I hope you guys like it you guys have any questions let me know I want to elaborate a little more to help you guys understand what splits are