Traders,

If you got chopped up this week, you're not alone. Market's been pounding highs for weeks, then suddenly dips Tuesday. Bears celebrate for a hot minute before we rocket back up. Classic.

But while everyone else was getting wrecked, I was eating. How? Simple. I watch the tape every session, every minute. Not a single lot gets filled without me knowing.

Remember when I shorted Monday's close? Most thought I was crazy. Then BAM - Tuesday's dip hit. But that's old news. The real magic? Flipping long Wednesday to catch the next bull train.

Now I'm gonna break down exactly how I did it. Pay attention, because this is the kind of alpha that separates the pros from the wannabes.

Stocks to Watch

First, let's check on some SetFeed gems:

Why I Went Short

Monday's tape was screaming short, but most couldn't see it. I'll let you in on a secret: Jay already explained it when he talked about TWT’s 3rd Tenet of Orderflow. If you haven’t already, read his babble about it so you understand what I’m about to say.

The more advanced piece he didn’t cover however, is the double distribution. TWT members are already intimately familiar with this idea, but I’ll explain quickly. A double distribution occurs when the market forms two distributions that span adjacent ranges, separated by minimal TPOs or volume.

It might just be easier if I show you:

The above profile is actually the structure of the market after the closing bell on Monday. As you can see, the market formed a nice double distribution, and we were sitting nicely on top of the second one.

Caveat: Yes, I know the upper distribution isn’t quite filled out and this looks almost like a triple distribution. This newsletter isn’t the right medium to discuss this level of nuance, but it’s something we love diving into during our educational sessions. For simplicity, I’m going to consider this a double distribution moving forward.  

For the eager SetU students: if we apply TWT’s Tenet #3, that the market trades in distributions, we already know that it is quite likely the market will auction from one end of the distribution to the other. In the case of a double distribution, the same rule still applies. We’re just looking for the area between the two distributions to be revisited. In this case, that’s a target of 5850 on the e-mini.

Guess what? That was the low to the tick. This is why you pay attention to order flow.

Why I flipped long

Now here's where it gets juicy. How'd I know to flip long? Short Answer: I let the tape talk.

The long answer is a little more nuanced. So bear with me if I start to babble.

In TWT, we have rules for trading double distributions. One of the key ones is as follows:

"Market goes up or down, genius!" Yeah, I hear your sarcastic quips.

If we stick to TWT Tenet #3, we know the market will trade according to a distribution. But in the case of the double distribution scenario, we just have to know which one. So how do we do that?

Of course, we could flip a coin and pick one. In all honesty, that’s not the worst idea, and because of the disproportionate risk to reward, it’s likely a positive EV (expected value) trade.

But I think we can do even better. How? Here’s the edge: order flow tells you which.

If we see sellers step on the gas, I’m singing “Makeba” on the way down to new lows. But if we see them cover their shorts instead? Well, “Kiki” has shown her hand.

Thankfully, the bots were here to help. Wednesday open, price hits 5850. Order flow bot lights up:

The TradingView VolBot confirmed the bullish bias, followed by a second entry opportunity when the order flow bot’s entry price was retested:

Pro tip: I use these alerts as levels, not gospel. They are indications of shifting order flow activity. When price accepted above 5858 and came back to retest it, I expect the same buyers who bought there initially to want to buy more. And well, you know the rest.

So back to the trade. Admittedly, I was a bit slow to adapt. Sue me, I'm human. I was looking to see if the absorption area from Tuesday’s session would serve as resistance for another leg down. But as soon as I was proven wrong, I flipped fast.

Flipping bias ain't easy. But remember: there's no “Team Bull” or “Team Bear”. Only “Team Money”.

Want real time breakdowns? 

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Can’t Wait?

Want more now? Hit the Discord. It has my free chart book with the exact market profile setup I use to spot that tricky double distribution.

Questions? Complaints? Memes? Reply to this email. Like Jay, I actually read everything you have to say.

Until the next SetJournal bombshell,

Adam Set