Welcome to part 2 of the TPO series.
Prerequisites for this module are the completion of the Footprint and Volume modules, as these are extended on within this lesson.
In part 2 you will review balance profiles and begin to understand the ST (Selling Tail) and BT (Buying Tail), and how they translate on candlestick charts such as Tradingview.
Upon reviewing correctly a trader can use TPO Balance Profiles to identify how balanced a trading session actually is.
When analysed with the right context ST and BT's can highlight SFP (Swing Failure Patterns) and acceptance into a range or trend.
As mentioned before; additional confluence will further reinforce your trading ideas.
Time Stamps
2:38 – TPO BALANCES
- The market moves from balance to imbalance
- During balance, the market agrees on price (fair value)
- Above and below the balance is where we look for a SFP or acceptance (balance is between VAL and VAH)
- A picture-perfect balanced day is when we see a semicircle. Buying and selling tails with the majority of the volume right in the middle of the day
11:57 – TPO TRENDING DAY
- Fair value is moving up with the direction of the trend
- There is an imbalance between aggressive buyers and sellers
- The aggressive volume is increasing with each imbalance wave of the move
- An example of a 3-piece trending day. You have to remember the context of the previous day. There was a buying tail and the second buying tail (strong SFP) before this day opened. Then this day opened with a volume injection and increase in price. This signifies that price will very likely be trending this day
- It is advantageous to look at the footprint also to see volume and delta
- With each move from balance to imbalance, we need to see increases in volume and OI
- If there is no increase one looks to fade the move (SFP setup)
- If there is an increase in volume and OI, ride the trend or wait for weakness
- If price gets accepted above the prior range, continuation to the upside is accepted
19:18 – THE 6 CC RULES
- If price accepts into an old balance it is likely to retest the other side of the balance (VAL acceptance = test VAH)
- Price inside a balance is expected to reject VAH and bounce from the VAL
- Once price moves out of balance to an imbalance it will generally move to an old balance range (when you have a nice channel, never remove it)
- If the price rejects from an old range POC, rule number one can be invalidated and the price will reject back to the previous balanced area (that is why we mark naked POCs – if price rejects there, it is likely to move all the way back to the previous range)
- If time, delta and OI build at the VAH or VAL of a balanced profile it is likely to break through (consolidation at the S/R)
- If there is no increase of delta or OI and it is the first attempt to break the balance, Daniel personally looks to trade a SFP
37:57 – Q&A
52:42 – SUMMARY