Algorithmic Trading Strategies Explained

What time,

Dave?

What time

will the market run algorithmically?

For the note-taking folks, the ones that are really taking it serious,

learning.

Macros in price action, okay? Unless we're talking

about the last hour between 3 o'clock and 4 o'clock in the

US markets, okay? The last

hour,

3:00 PM Eastern Standard Time

to 4:00 PM Eastern Standard Time,

there are four specific macros in that one-hour time,

uh, frame.

Every single macro apart from that one

is only,

only

10 minutes till the top of the hour to 10 minutes after the hour.

There's a macro in every single hour.

There is no 19 minutes after the hour macro.

There's no 23 minutes after the, uh, hour.

W- listen, folks, I understand everybody wants to have some

kind of marketing ploy,

some kind of gimmick to draw attention to themselves, but if you're saying there's

a macro there, you are BS-ing. A macro only

exists ten minutes before the top of the hour.

That means in this case, what, what time is this?

What time is that right there?

It's seven fifty-one, okay? That's nine minutes

before the hour of 10 o'clock... I'm sorry, 8:00 o'clock in the morning.

So if we take a rectangle here,

and you go to seven fifty

to eight ten,

that is the macro.

See that? What did the market do? We're bullish.

Where's the buy side? Here, 'cause it stopped right where it did over

here on the

fifteen-minute time frame too. That's this candlestick right here.

That candlestick's high on the fifteen-minute time frame is

that individual

one-minute candle right there.

See that?

So what does it do? It drops down

at

seven fifty-one. What is it doing?

It's dropping down to take the liquidity out here on that low.

To do what? To start spooling. Where?

To clear the liquidity above here.

Sorry, folks, you can't talk about being algorithmic

if you don't know what you're talking about, okay?

You can add the word to anything you want.

Algorithmic camel toe pattern. A- you know, algorithmic,

uh,

um, cloudy skies, you know, pattern. W- whatever.

Just because you add algorithmic to the name of something doesn't make it

algorithmic, okay? The markets are doing something entirely

different or decoupled from what retail is looking for. But...

And what you wanna do is when you're tape reading, you wanna s-

spend the majority of your time focusing on what price is doing ten

minutes before the top of the hour to ten minutes after, okay?

What happens is, is the price engine that is the algorithm

many time will spool,

okay, during these times, and it will run to where the stops are,

or it will run to where the inefficiencies are. And what do I mean by that?

Inefficiencies are

gaps, whether they're up close gaps or down close gaps.

One singular candle moving in one direction, that's an inefficiency.

That's what we've been talking about and showing here.

So

this is the algorithmic price run.

This is just the run-of-the-mill scalp. Which one would you rather be a part of?

If you're trying to buy on a day like this, and it's bullish,

and you're aiming for

the levels I was outlining here when we first started our live stream,

which one would you rather be a participant in?

Some random price only entry

versus a very specifi- very specific

algorithmic advantage where price will

absolutely

start s- spooling and reaching for the liquidity based on

time first.

Clearly, it's not e- it's not even a competition here.

Seriously, look at, look at this.

Boom. All the way up to the high I told you it

would run when we first started

streaming.

Okay? So there's clearly something totally

different here that puts you in a

d- different league. You're in a totally different league of

trader.

Your perception about price action is light years ahead

of everyone else when you think like this because you're in

lined,

or aligned rather, with price. You're in alignment with what the

algorithm is likely to do. You're gonna read it sometimes wrong.

Sometimes I do.

Sometimes I, you know, I get all bent out of shape

and feel like I wanna show off,

and I do something that is a little too,

too beyond the scope of what the structure at the time is I'm

trading in. Sometimes I'll do that.

But when it does this here, then we can go back into, okay, what

are we looking for

if we miss this move? Well, what's this low?

Let me take the

executions off real quick,

and we'll go right into tape reading the open range.

We have a low, high, lower low. That makes this up close

candle a breaker.

I don't draw all this stuff on my chart, uh, but you, you should 'cause

it'll help you frame everything. And if you're back testing, this

is what you wanna

annotate on your chart. You wanna have all these types of things

on your chart

'cause it helps you identify it and r- remember visually

what these things look like.

And the market trades down here.

And also, what is it doing here as it trades down

into that bullish breaker there?

This is not support and resistance 'cause support

and resistance would've been,

"Okay. Well, it went above here, so it should stop there

and go higher." That's how

I lost money in the '90s 'cause I thought it was so easy that support and

resistance is gonna be the, you know, the be all, end all, and it wasn't.

I, I lost a lot of money trying to do that stuff.

And

it's the entire range of the up close candle.

The highest up close candle is your, is your breaker.

In this case, it's not even trading down to the low,

but what is it doing

in addition to that?

You see this?

That right there is a nesting

Of two PD arrays.

So this is an old

buy-side imbalance, sell-side inefficiency,

fair value gap that was used right

here,

and it went up. But did it rally above that high here

since this movement here? No, it didn't. It's consolidating.

So it drops back down to it here, and you're still inside that breaker.

So you have to afford, if you're trading long, your stock can't,

can't be so trailed up

to get stopped out prematurely. So that's all factors

of how I would measure where I would move my stock.

So if I was going long down in here, if I went in and bought this immediate

rebalance, which is the open trading down immediately

going back to this candle's

high, that is extremely strong. And I'm not making that up for

the purpose of being here live and it had already happened.

Go back to where I was talking and teaching immediate rebalances.

They are the bee's knees for entries