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Break outs
In this example ES started building volume and accepting prices lower after moving lower in A period. B period then breaks the low of A period and volume starts picking up. If we have correlation with ADSPD also breaking out of range this is a good setup to go short out of the breakout with a good R:R given that we have a lower target (HVN, GAP, VPOC, Previous High/Low, etc.)
Reversals
In this example B period was inside A period and C period was attempting to break out to the upside. As soon as we see a lack of new buyers and C period coming back below the high of B period we can take a reversal short with a stop above C high targeting the VPOC resulting on a 1:4 R:R trade.
100% Overnight inventory reversals
100% short inventory simply means that all of the volume on the overnight session was traded below the previous (RTH) close.
In this setup we look for a counter auction towards previous day’s close at the open. Failure to move towards correcting inventory invalidates this setup.
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