Time frame: intraday
Main search engine: Speed Print
Any trading session begins with a global, brief market review.
Open the Market Stat tool, and set the range of 144 or 288 days on the timeframe 1D –1 Day.
Our task is to understand what is happening in the market globally and to understand the dynamics. That is why we evaluate the largest money indices:
We look at the delta histogram and the dynamics of its change. In this case, we see that both indices are dominated by sales (the histogram is red). But on BTC/STB the sales are decreasing over time, as well as on ALT/STB.
Tight long sales or purchases on large timeframes define big trends. On smaller timeframes, the trends are smaller.
Periodic spikes of sales or purchases on big sales are either position fixes or local minor trends.
The same spikes will occur on smaller timeframes. In this strategy, they are exactly the ones you should pay attention to. If there is a spike, it means that the participants have made efforts (have spent money) and satisfied their needs, and therefore, potentially, they will not do it again.
Pay attention to the volume ratio, as participants always pull the market to where there is more money. In more cases, ALT/STB is higher in volume. But more often is not always the case. You must also remember that the market doesn’t always follow BTC/STB, as Bitcoin doesn’t always involve more money.
Therefore, the group with the largest amount of money dominates the market now and will pull the other assets to itself.
The market is most often in balance when supply and demand do not deviate too much. But if one of the parties makes a big effort to buy or sell, it affects the balance. Most often, if the balance changes, the price also changes. The balance sheet helps us to understand the general trend of the volume movement, because there is more and more liquidity in the market and it takes more and more money to move the price by a decent amount of interest.
The balance line is the blue on the delta histogram.
Balance is the ratio of purchases to sales. The market always tends to balance, towards 50%.
So when an asset is far off balance, it means that a lot of money has been spent to shift the balance. And even though money is printed, it runs out in the moment and the opposite party takes over.
If the balance shifts upwards, it means that buyers are spending money to purchases (by market orders). When the balance reaches extreme values - it means that market sales will change the cycle of market purchases.
Our next task is to decrease the timeframe and estimate delta and volume.
Analyzing the delta histogram can be difficult, so you need to switch the histogram to cumulative delta mode.
Cumulative delta is a mode in which past values are added to the current value, so it looks like a wave. This mode allows you to understand the dynamics of the delta indicator change. The difficulty of analysis is due to the fact that it is not easy to calculate the total sum in your head, and not everyone will be able to understand the general dynamics by numbers or multidirectional bars of the histogram.
Set up a preset that is convenient for you. We believe that the best option is to use three cluster charts simultaneously on three different timeframes.
Each of the timeframes must have a data type:
You can open additional charts in the header of the main cluster chart:
You can change the data type in the cluster chart in the cluster chart settings:
You also need to open the order book. This tool is called “Market Depth” on the platform.
I set the range slider to 15.97. This range shows the depth of the order book, sufficient for any asset when trading this strategy.
Additionally, I also have the FTT index open in the “Delta, BTC” mode on the 5m timeframe and the BAS on the 5m timeframe.
It would help if you had these tools as additional markers.
According to the FTT index, we estimate whether there are a lot of assets in the market now, where accumulations have been formed. If there are a lot of assets, it means that there have been synchronized purchases and sales in the whole market. This sign will be an additional argument for opening a position. In this strategy we will be interested in the red bars in the histogram. And the bigger they are, the better they are.
The BAS graph shows the change dynamics of the limit order amounts. In this strategy, the BAS is a rather “slow” indicator. But if the red line is higher than the green one, it means that there are more sellers, which is also a good argument for opening a short position.
The primary search tool for this strategy is Speed Print.
To set it up, we need to filter the pairs we want by entering in the filters:
This means that the table will filter out unnecessary pairs, leaving only those that are on the futures and those that have relatively high volatility. And the parameter “Ratio by deals” will help us filter out those tickers, where there is an excessive and abnormal number of deals.
Then simply review each result that appears in the table.
The Speed Print tool also has a graph. It is also important for us. Initially, it will open in the “Number of deals” display mode.
Number of deals per minute.
We are interested in the increase in activity (growth of the histogram), because it is active participants who will push the price with their market orders.
It is important to note that market analysis according to this strategy does not end at the beginning. It lasts throughout the entire trading session.
We are interested in shorting assets that have been actively bought, pushing the price up, and then the buyers were replaced by sellers.
Let’s analyze this example on the FILUSDT pair. This is the picture we saw in RTT:
The first condition: growth on all three timeframes.
The second condition: formation of accumulations at the peak of growth: either one or several large clusters. It is desirable that accumulations are on the delta types in quantity and in volume.
The third condition: we have a decrease in purchases and a decrease in sales in Market Stat.
In general, you need to see that shoppers "get exhausted ". So pay attention to the size of the new batch of purchases. If there are fewer purchases, it is a good sign.
In the screenshot below, you can clearly see that the purchases around 18:00 07/10/2023 are larger in volume than the ones further out.
There is no grail. Therefore, our task is simply to open positions on those assets that pass the checklist. If the condition is not passed, then the position shall not be opened.
We must remember that such deals occur in the market every day.
Not once a year, not when the market rises or falls, but EVERY DAY.
Even on weekends 😁
There can be no perfect entry into a position because we are at least limited by the asset’s liquidity. It is recommended to enter the market.
But within this strategy, you can also use limit orders to enter a position. Sometimes the price is pushed quickly, so you may not even have time to enter the market, and sometimes balance between supply and demand may be at a local maximum for a relatively long time.
The best moment is to enter a position near the local maximum: when buyers’ purchases no longer lead to the growth and sellers’ sales have not yet had time to significantly affect the price decline.
The logic of the strategy implies that:
As they all sell to those who keep buying, large clusters are formed on the chart. And it is implied that new purchases will not lead to further price growth.
Therefore, stop-loss can be placed slightly above the price of large clusters.
The distance from the entry point to the stop loss is our risk.
Our target is 1.5-5 times larger than the stop loss size.
Why isn’t there a clear size, like 1 to 2? This is because the market is about liquidity. Sometimes the market runs very well and directionally, and we can take more than we originally planned. And sometimes it happens that 1 to 1 is all we managed to take. So you can determine the amount of profit along the line.
This approach does not also imply moving the stop loss. It is better not to use trailing stop. Otherwise, it will kill the entire risk/profit ratio at the distance. Moving the stop to breakeven is also not a suitable option.
Can I move a stop after I have opened a position and placed a stop? No, you can’t.
You should identify the stop immediately. Learn to solve these things immediately and quickly.
Remember: the stop is our friend. Even if more than half of the deals have been knocked out by the stop, it does not mean that the deposit will be in the minus. Remember about the ratio.
Below is an example of limiting losses and using the ratio. Even if 7 out of 10 deals will be by the stop, with a ratio of 1 to 3 at the distance will be a profit.
Limiting losses is important. If you don’t, you will pay with your entire deposit.
The rubric: “easier said than done” 😁
The answer to this question is simple and yet complex. The simplest recommendation is to learn not to obsess about the coin and to follow a strategy.
Strategy means a constant search for entry points. Therefore: have found a position => open => look for the next coin.
The rubric: “easier said than done” 😁
It is necessary to divide it into two approaches at once:
If it’s a surplus because we initially took a smaller volume, that’s fine. This way we stay within our risk. But there is a chance to fall short or fail to execute at all.
If you take up as the price goes down:
The best way to exit a position is when the sellers have stopped selling actively and market buyers have stepped in. This way it may be possible to get as much profit as possible. But with this approach, there is a risk of growing (imposing) the desire to be greedy and bargain with the market for a hundredth of a percent of price movement, which at the distance will only lead to the ratio deterioration and increase the number of stops.
You should also keep in mind that when the deposit size increases, the deal itself can influence the price, which makes it impossible to exit at the very bottom, because closing a short position is a purchase market, and purchases push the price upward.
The best exit is to exit at take-profit plus a ratio of 1 to 1.5 to 5
Adherence to risk management is the most important thing in any strategy.
Transaction risk up to 2%
Coin risk up to 3%
Day risk up to 4-5%
After exceeding the risks, you should immediately end the trading session.
This item is the shortest as it contains only 3 digits.
However, observing this very point will bring the desired profit at a distance.
Since a trading session during which the buying potential has not been objectively determined can bring many stops in a row, and even the loss of all capital.
And once again: there will be statistically losing sessions all the time. But it is precisely the risk limits that will help the deposit continue to grow.
If you have any questions about strategies, we are happy to answer them in Telegram chat.
Link to free interactive training: https://resonanceholding.com/ru/edu/mycourse
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