TRDR - How to use Orderbook Depth as Scalper, Day Trader & Swing Trader

Summary

This video tutorial delves into the intricacies of trading strategies using two main templates for the AUD books, focusing on scalping and swing trading in the cryptocurrency market. The speaker emphasizes the importance of backtesting, understanding thresholds, and leveraging data from order books to make informed trading decisions. By analyzing the impact of spot and perpetual markets on price movements, traders can anticipate and capitalize on market trends, optimizing their trading strategies for profitability.

Takeaways

• 📈 Understanding and using the two main templates for AUD books is crucial for scalper, day trader, and swing trader strategies.
• 🧩 The first column of the template focuses on 0-1% price movement and is used for scalping and intraday trades.
• 🔄 Intraday trades are usually closed on the same day and often involve range rotations.
• ⏳ The second column is also useful for intraday and day trades, with day trades potentially lasting more than one day.
• 📊 The third column helps identify medium time frame trades which can transition into swing trades if held for over one or two weeks.
• 📉 Spot markets significantly influence price movements, with a focus on limit orders and walls.
• 🔍 By analyzing thresholds and pressure in the order books, traders can predict price stabilization, rejection, and potential ranges.
• 🔁 The importance of heavy backtesting is emphasized to determine effective thresholds for price stabilization or rejection.
• 🗓 Historical data and previous reactions to thresholds are crucial for making informed trading decisions.
• 💼 Understanding the interplay between spot and perpetual markets can provide a clearer picture of market conditions and potential price movements.

Q & A

What are the two main templates discussed in the script for trading AUD books?

The script discusses two main templates for trading AUD books. The first template focuses on column thresholds for Bitcoin, while the second template provides a more visual representation of bands and data.

Why is backtesting important for a trader?

Backtesting is crucial for a trader as it allows them to test their strategies against historical data, helping to identify effective thresholds and strategies. It provides an objective analysis without hesitation, hope, or guessing, ensuring that the trader knows what to expect from the market.

What is the purpose of the first column in the template?

The first column in the template is focused on zero to 1% range, counting walls and limit orders 1% to the upside and downside from the price. It is used for scalping and intraday trades, which are usually closed on the same day.

How does the second column in the template differ from the first column?

The second column is also good for intraday and day trades. Day trades can take more than one day, unlike scalps, and are not considered swing trades. This column helps in understanding how the price is affected over a slightly longer period.

What is the significance of the third column in the template?

The third column has the power to give medium time frame trades, which can take a few days. It can transition from medium time frame trades to swing trades, which are trades held for over one or two weeks.

How does the script suggest using the templates for trading decisions?

The script suggests using the templates to understand how each column affects trading decisions. Traders can use the thresholds and data to anticipate market movements, manage risk, and decide when to enter or exit trades.

What role do spot markets play in the trading strategy discussed in the script?

Spot markets are very powerful in the trading strategy as they often limit or support the price. They are stronger than perpetual markets and need to be paid attention to for effective trading.

What is the significance of the 66k threshold in the script?

The 66k threshold is the start of the higher time frame resistance on the Bitcoin chart from a five-month range. It is a significant value area where people try to take profit, and it can influence market movements.

How does the script describe the role of perpetual markets in the current trading scenario?

The script describes perpetual markets as the main reason why Bitcoin is still holding in the current trading scenario. They capture all the drops and provide support at the bottoms of the range, preventing a significant breakdown.

What advice does the script give for trading based on the thresholds and market conditions?

The script advises traders to secure money for stop loss and secure take profit one, and let the winners run while cutting the losers quickly. It also emphasizes the importance of having the books on your side when trading.