The Correlation Between Prediction Markets and Trading Markets
At 8:50 AM, the prediction market (Polymarket) saw a big buy order for 'yes'. Meanwhile, the trading market (Binance) had a surge of longs entering at 9:05 AM. Is this the interaction between the two markets? Should we also keep an eye on Polymarket when doing trade analysis in the future?
Order Flow Analysis Chapter Four: Specific Trading Strategies
Chapter Four: Specific Trading Strategies Don’t try to trade everywhere. Only open positions in these two scenarios. 4.1 Golden Rule: Background + Setup Analyzing footprints in the middle of nowhere is pointless. Must be used in the following locations, TPO levels (POC, Single Print, VAH/VAL). 4.2 Setup #1: Absorption (Trap) This is the 'King of Setups'. Background: Price hits a critical resistance level. Volume: Huge volume, but the candlestick shows no progress (candlestick size is very small). CVD/Delta: Very aggressive (buyers on the offensive), but price stagnates. Reason: Some limit sell orders (iceberg orders) are absorbing all buy orders. Buyers are trapped.
Order Flow Analysis Chapter 3: Footprint Chart (FOOTPRINT)
Chapter 3: Footprint Chart (FOOTPRINT) Stop guessing. With the footprint chart, you can see inside the candlesticks. 3.1 Interpretation Imagine a cut candlestick chart. At each price level, you have: BID x ASK. Left (BID): Aggressive sellers (market sell). Right (ASK): Active buyers (market buy). 3.2 Diagonal Reading In the market, when you buy, you need to hit the limit orders of sellers positioned above. Be aggressive in a 'ladder' style. To analyze who’s winning, always compare the buy and sell prices at a certain level with those above.
Order Flow Analysis Chapter Two: Market Engine (OI, DELTA, and CVD)
Market engine (OI, DELTA, and CVD) There are two reasons for price increase: strong demand (healthy) or seller panic (weak). Only OI and Delta can give you the answer. 2.1 Volume and Open Interest (OI) Volume: number of trades (activity). OI: number of outstanding contracts (engagement). If price increases + OI increases = long accumulation (healthy trend, new capital entering). Price increase + OI decrease = short covering (liquidation, trend may end). Why short covering? Because rising prices force shorts (traders betting on a decline) to buy back contracts to close their positions, increasing demand and pushing prices higher. However, the decrease in OI indicates that this demand isn't from new longs (traders betting on a rise) entering the market, but rather from existing shorts exiting.
Chapter 1: Market Auction Theory and TPO (AMT and TPO)
Chapter 1: Market Auction Theory and TPO (AMT and TPO) Why do 90% of traders fail? You probably feel frustrated. You drew support and resistance using the naked price action method; then added your RSI or moving averages. Everything looked perfect. When you go long... the market suddenly crashes. Do you feel like the market is targeting you? As if it's waiting for you to enter, then doing the opposite? This is not about targeting. This is about information gap. The fact is, classical technical analysis focuses on the past. Moving averages are based on conditions 20 periods ago. It's like driving on a highway while only looking in the rearview mirror.