One aspect of trading I continue to reference is “Structure Precedes Execution”. Meaning it’s important to map out areas of interest that you (the trader) are willing to engage with. What happens when we reach those levels of interest? That’s the question everyone is passive to answer. However, it’s also important to know that there’s “many ways to skin the cat”!

 

For most seasoned traders, activity occurring upon the DOM alongside structural components can suffice. But what about those trying to learn? There are several options…

 

• You can review inflection points and the characteristics of these moves.
• When unguided, it can seem like shooting in the dark.
• It is recommended first off to learn the characteristics of order activity (our YouTube page does a good job of placing foundations upon this).
• You can blindly place trades upon structure (not recommended).
• Ability to read structure comes from experience in understanding the market activity, therefore, if someone has trouble with risk management and has difficulty monitoring structural formation, this can lead to loss and more frustration.
• You can set up a means of reviewing information in a live setting that helps avoid poor trade decisions and acts as an exercise in understanding inflection points.
• Let’s focus on this one!!!

 

At this point it is expected that everyone has reviewed the volume profile material available on the YouTube channel but here are the links for that if you have not:

 

https://www.youtube.com/watch?v=gxLttec7Vz0&t=17s

 

https://www.youtube.com/watch?v=anDCfP7ep8w&t=9s

 

These links provide an understanding of structure as it’s occurring but what about the entry?? How can we gauge entry without a background in DOM:

 

https://www.youtube.com/watch?v=VqTwFluyutA&t=5s

 

Or a background in Time & Sales:

 

https://www.youtube.com/watch?v=ggrFF9kdRDI&t=4s

 

Let’s look at your chart. Whether you’re trading a 5-minute candle, Trade/tick based, or renko candle, you can gauge the Up/Down volume difference. As volume is being built within the volume profile (if you’re still working on T&S and DOM reading) mapping the up/down tick volume difference allows you to see when a player is stepping into the auction. For example, if the market is moving in a downward trend, you’d expect to see continued volume occurring with each downtick. As that shifts positive (consolidates) and lacks initiation activity, a trader can gauge the positioning based upon whether more volume is occurring upon the uptick or downtick sequence. Alongside of the DOM, T&S, and Volume Profile, this is a powerful way to increase the learning curve for entry positioning allowing for tight risk and continuation.

 

Try placing the up/down tick volume difference upon a chart to see these fluctuations and then review them with what is occurring on your Volume Profile, DOM, and T&S.