For a more In Depth Post Check out my Substack!
As we trade into ATH’s it gets really interesting to try and find structural areas to identify for short trade ideas. This is why in my opinion it is crucial to use the Depth of Market (DOM) to spot seller strength before attempting to identify sell side opportunities in the market while its ripping into all time highs.
The easiest form of short trades in an uptrend is to simply short “weakness.”
Obviously Rick why would I short strength?
Well.. That’s exactly what I did on 7/3/2024 on my live stream and was reminded of this very concept upon a journaling session after end of the trading session.
So with that in mind, the concepts of my trade philosophy in terms of short trades will derive simply from price acceptance below structurally important levels of interest which is what I will be discussing in todays blog post before we dive into the plan for 7/5/2024!
The idea when waiting for “price acceptance” is generally a trend continuation trade idea and the confirmations are going to be as follows below:
A visual example will be provided as well just below!
- Price moves meaningfully in any direction up / down
-
The asset breaks above / below a key strong level defended previously a few times
-
Once the meaningful move has happened price will attempt to reclaim the broken level and “fails.” This generates interest!
-
Ideally Price will come back to its previous bounce area and attempt another retracement into the reclaim zone, sometimes it will even break the previous high of the previous reclaim attempt, but ultimately fail. This is the trigger
-
From there price will usually losses all momentum and full move in the direction of the meaningful move direction and continue its trend!
The Visual Example was provided from a previous pre market plan given for the ES using the 5526 level as the zone of interest in this post! The walkthrough of price action was provided via the discord server when the trade idea triggered with entries and take profit zones during this overnight session trade took place!
-
ES moved meaningfully in the down direction.
-
ES Broke a key level outline by Pre Market Plan on ES 5526
3.ES attempted to “reclaim the broken level 2x at 5526
-
ES came back to its previous bounce area and attempt another retracement into the reclaim zone 5526, as mentioned price overshot the previous high to 5527, but ultimately failed. This is the trigger
-
ES broke down and continued the move in favor the meaningful move! Profit was taken on levels annotated on plan via resting limit orders!
For Engaging Content Check out my Twitter!
Want to use my Order Flow Software I use to gauge these Levels?
Code : TradewRick for a 10% discount!