Absorption Part II
In the last video / thread we covered the mechanics of what’s happening when absorption is occurring. The DOM was used to help visualize what is happening “under the hood”.
But, do you need a DOM to find absorption?
Nope. 🧵
Absorption when properly understood and executed on is an approach that uses specific criteria to that gives a great trade setup.
You may hear the term “trapped traders” and while this name is fun and catchy I don’t really subscribe to the idea...
Lets' do a run down.
How to make money trading, as a random d!ckhead.
Trading requires us to buy things cheaper than they should be / sell things richer than they should be.
But how could I, some random guy from New Zealand who trades in his underpants, know what things should be worth?
HOW TO IMPROVE AS A TRADER
All of trading comes down to this simple statistical formula
EV = (Win rate * size of winner) - ({1-win rate} * size of loser)
As long as your trades are +EV, your edge will play out over a large enough sample size
Here’s an exercise you should do
6/6 Finally, the left curve approach: we hit a psych price point of 25k BTC/2k ETH. But we did it during a window of weakness (VIX opex), in which vanna/charm flows are going to be muted, and that trapped OI in crypto is no longer getting bailed out every London open or 10am ET