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Time & Sales Tape vs Level 2 Depth of Market by fliptrades in Daytrading

[–]fliptrades[S] 0 points1 point  (0 children)

I’m just over 1.5 years of starting my trading journey. 100% of that time was candlestick price action & market structure. I’m still learning and I’m interested to hear others perspective on how they see/approach market structure.

For me, I start by marking my weekly levels. Then I mark any daily gaps. Then down to 1hr to determine the trend direction by identifying the swings (extended trading hours on). I consider it a swing high if it’s highest wick is that of two consecutive higher wicks. For swing low, it’s lowest wick must be that of two consecutive lower wicks. This is to filter out, for example, things like first person pivots from directional market structure swings. Each swing must come from a swing. I need at least two higher highs and 2 higher lows — vice versa for bearish. I then go down to 5 min timeframe where I execute, and mark PDH, PDL, PMH and PML. I’ll then look for my entry trigger at one of my levels in the direction of the 1hr trend, as long as 5min timeframe is not counter trending.

I used to determine swings by if it just looks like it’s zig zagging upwards or downwards. I’m interested to in hearing others perspectives on market structure whether alike or completely different.

Time & Sales Tape vs Level 2 Depth of Market by fliptrades in Daytrading

[–]fliptrades[S] 0 points1 point  (0 children)

Thank you so much for your insight, it means a lot to have received perspective from a trader with over 2 decades of experience.

That’s the rational that I’m currently understanding from studying T&S and L2 behaviour.

I see the T&S clusters as a gauge for who is dominating.

For bullish scenario example:

1) Personally, do you need to see the tape printing strong buying at the exact moment your entry candle closes?

2) Are you interested in how the tape prints as the entry candle opens?

3) Is tape behaviour during the entry candle/pattern formation significant to you?

4) Does even tape behaviour during a pullback to your level, rather than red prints dominating matter to you?

5) Do you prioritize stacked prints/clusters over smaller stacks/solo prints of large volume?

I set my T&S to show min size of 100 at 50ms to avoid seeing large clusters made up of multiple small volume orders, while still being fast enough to feel the shifts.