Rajandran R Creator of OpenAlgo - OpenSource Algo Trading framework for Indian Traders. Telecom Engineer turned Full-time Derivative Trader. Mostly Trading Nifty, Banknifty, High Liquid Stock Derivatives. Trading the Markets Since 2006 onwards. Using Market Profile and Orderflow for more than a decade. Designed and published 100+ open source trading systems on various trading tools. Strongly believe that market understanding and robust trading frameworks are the key to the trading success. Building Algo Platforms, Writing about Markets, Trading System Design, Market Sentiment, Trading Softwares & Trading Nuances since 2007 onwards. Author of Marketcalls.in

[Premium] : How to Spot High Probability Trade Setups using Market Profile – [Part 2]

52 sec read

How do we understand that smart money is getting out of their shorts? and how the dumb crowd get trapped into it? Here is the high probable trade setup using market profile which explains the context of inventory getting short to too short and the potential risk in holding trade in line with the emotional players.

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Nasdaq Futures breached the psychological reference 7000 levels on wednesdays trading session with a continuous slow and steady slide. However the profile structure says a different story. Notice the profile structure which had made almost 4 consecutive lower highs(numbered in the pics). Smart money always love to do a stealth liquidation of shorts and one of the zone where emotional short sellers pile up.

The longs that hadn’t liquidated felt their apprehension growing, and as the market was nearing the last half hour of the day,
was the anxiety was too much and the laggard longs threw in the towel.

Nasdaq Futures – Inventory getting short to too short

As the emotional sellers pile at poor prices inventory goes short to too short. Which indicates a potential risk in holding longs inline with emotional traders. The end result could be a high probability short covering and testing prev day high in a very shorter term.

Nasdaq Futures Updated (T+3 Day)

Nasdaq Futures updated as on 6th July 2018

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Rajandran R Creator of OpenAlgo - OpenSource Algo Trading framework for Indian Traders. Telecom Engineer turned Full-time Derivative Trader. Mostly Trading Nifty, Banknifty, High Liquid Stock Derivatives. Trading the Markets Since 2006 onwards. Using Market Profile and Orderflow for more than a decade. Designed and published 100+ open source trading systems on various trading tools. Strongly believe that market understanding and robust trading frameworks are the key to the trading success. Building Algo Platforms, Writing about Markets, Trading System Design, Market Sentiment, Trading Softwares & Trading Nuances since 2007 onwards. Author of Marketcalls.in

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