Using Weekly Profiles for Daily Bias (Simplified)

Summary

In this video, the presenter introduces a systematic approach to trading using weekly profiles. The method focuses on identifying three main weekly profiles: Classic Expansion Week, Midweek Reversal, and Consolidation Reversal. By leveraging these profiles, traders can predict daily market biases and make informed decisions throughout the week. The video also outlines a four-step weekly protocol for optimal trading, including avoiding Mondays, analyzing high-impact news, using higher time frame price levels, and observing changes in market delivery. The overall goal is to simplify trading, making it accessible and efficient for traders of all levels.

Takeaways

• 😀 Weekly profiles are a method to determine daily market bias by analyzing the weekly open, low, high, and close. This allows you to predict the market direction throughout the week.
• 😀 The video explains three main types of weekly profiles: Classic Expansion Week, Midweek Reversal, and Consolidation Reversal.
• 😀 The Classic Expansion Week occurs when Monday or Tuesday forms a reversal, and price expands in the opposite direction into Thursday. This profile provides bias for Tuesday, Wednesday, and Thursday.
• 😀 The Midweek Reversal happens when Wednesday forms a reversal, and price moves away from this point for the remainder of the week. It provides bias for Thursday and Friday.
• 😀 The Consolidation Reversal occurs when price reverses on a Thursday and expands in the opposing direction through Friday. This profile offers clear bias for Friday’s trading.
• 😀 A key element in using weekly profiles is avoiding trading on Mondays. Mondays are typically consolidation or reversal days, and you lack sufficient data to determine the weekly profile.
• 😀 Trading should begin after high-impact news events, which typically occur later in the week. Preceding days are often more consolidated and less volatile.
• 😀 The economic calendar plays a vital role in understanding which days are optimal for trading. Focus on significant high-impact news events like the FOMC press conference or CPI data.
• 😀 A key trading rule is to avoid trading on days before the first high-impact news release of the week, as the market tends to consolidate beforehand and expand afterward.
• 😀 To apply the weekly profile method, identify higher time frame PD arrays (price levels) and wait for price to engage those levels with a change in state of delivery (price action confirming the reversal).
• 😀 The video encourages a systematic approach to trading using weekly profiles, simplifying the process for traders by focusing on specific days and price patterns rather than intricate analysis.

Q & A

What is the main concept behind using weekly profiles in trading?

The main concept behind using weekly profiles is to analyze the weekly candle structure (open, low, high, close) and break it down into daily movements to generate a daily bias for trading. This method helps traders to predict market behavior and make informed decisions.

What are the three weekly profiles that the presenter focuses on?

The three weekly profiles discussed are: 1) Classic Expansion Week, 2) Midweek Reversal, and 3) Consolidation Reversal. These profiles help identify the price action and market behavior for specific days of the week.

What characterizes a Classic Expansion Week?

A Classic Expansion Week occurs when Monday or Tuesday forms a reversal and the price expands in the opposite direction into Thursday. This profile provides trading bias for Tuesday, Wednesday, and Thursday, and avoids continuation on Friday due to the TGIF setup.

What is a Midweek Reversal, and how is it used in trading?

A Midweek Reversal happens when the price reverses on Wednesday and continues expanding for the rest of the week. Traders use this profile to predict that the market will move towards its weekly objective after the reversal occurs midweek, and it provides a trading bias for Thursday and Friday.

How does the Consolidation Reversal profile work?

The Consolidation Reversal profile occurs when price reverses on Thursday after consolidating earlier in the week. The reversal happens at the external high or low of the consolidated range and the price expands towards the weekly objective, providing bias for Friday’s trading.

Why is trading on Mondays advised against in this system?

Trading on Mondays is discouraged because Monday often doesn't present clear market expansion; it is typically a consolidation or reversal day. Additionally, Mondays lack significant data or high-impact news to make informed predictions about the weekly profile.

What role does high-impact news play in the weekly protocol?

High-impact news plays a critical role in determining when to trade. Traders should avoid trading before the first significant high-impact news release of the week. The period before high-impact news tends to be more consolidated, whereas after the release, volatility increases, making it more likely for the market to expand.

How does the economic calendar help in the weekly protocol?

The economic calendar helps traders filter out unnecessary news and focus on high-impact events, which are key to understanding when volatility will drive market movement. Traders use this to avoid trading during low-impact periods and focus on high-impact news events that align with their weekly profile.

What is the significance of the TGIF setup in the Classic Expansion Week?

The TGIF setup signifies that traders do not anticipate continuation of the weekly range on Friday. This setup is based on the tendency for markets to consolidate or slow down by the end of the week, making it less likely for significant price expansion to occur on Fridays.

How is the 'change in state of delivery' used to confirm a reversal?

The 'change in state of delivery' refers to a shift in market behavior, confirmed by the combination of time (the day of the week), price (reversal occurring at a discount or premium level), and the close of specific candles. For a reversal, traders look for a close above (or below) prior down-close or up-close candles, signaling a shift in momentum.