I haven’t posted trades in a long time and was thinking about sharing some for discussion.
Here’s a new position I just started building in mini soybeans (May '21) ticker /XK.

This is how I use price action.
Basis is impulses and corrections with trend following.
Going to explain my analysis from higher level to more granular.

Overall, you see a bullish breakout pattern (2 black lines).
The pattern originates from leg A -> B, with a retest @ H.

A- Origin point w/ impulsive move from 1260 to 1430
B- Double top and establishment of overhead supply zone
C- Higher low
D- Corrective pullback (channel) within larger breakout structure
E- Prior support now acting as resistance
F- Consolidation triangle
G- Resolution of triangle w/ impulsive breakout into prior resistance (E)
H- Restest of initial overhead supply zone
I- What I’m calling a shakeout. Market trying to ditch weak hands prior to trend resumption?

Point I also printed a retest of the key supply/demand zone (blue horizontal box). If that holds, the breakout should continue. Stops are prob. clustered and you’ll see a move that is roughly equal to the size of the breakout pattern @ the 50% mark- basically, draw a vertical line at point D from the top of the pattern, to where it meets the ascending trendline and then move that line to point H and that’s a rough estimate of how far price can go.

More consolidation would equate to a more explosive breakout. Violation of the support zone (blue rectangle) would cause me to likely exit the trade. Right now, my average price is 1408 (I bought the initial headfake yesterday above 1420) and I’d probably bail under 1390. Clearance of 1412 and then 1435 would indicate the breakout is intact.

Hope this helps someone.

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Updated chart:
Breakout formation in tact.
“The longer you base, the higher in space”.

Focus on the box- the 20EMA is acting as dynamic support, further compressing price action to the pinnacle of the breakout formation. The more doji’s that form and the tighter the compression (w/ price respecting the 20EMA) the higher the probability of an explosive top.

This is where trader patience is tested. My sell limit is @ 1480. Current position is 14 contracts w/ avg. trade price of 1395- I was able to improve my cost basis by 13 handles.


Good stuff! I went long yesterday once it exited my demand zone:

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Great timing and execution. That’s the thing about these patterns-- they are very easily identifiable and when market participants see it they’re hard pressed to take a position against it. Each day that the D1 20EMA is respected and continues to dynamically provide support just adds to the probability of a big upside breakout.

I like where your sell limit is-- not exactly at the top of the move is the safest bet (especially if spreads widen) - which can occur around sticky price points.

Thanks for sharing, and keep us updated. I’ll continue to post my updates as well but for now, as stated, it’s just a game of patience. This is a perfect example of “letting a trade work out”- something that many newer folks struggle with, especially at the sign of it moving slightly against you. Quick to close out for a loss and quick to close out before profit targets are hit.

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You can see earlier where it just about hit my SL, then turned back. I usually set my TP just before it reaches my zone, in this case supply. However, depending on how price acts I might cancel it and just move my stop up to take advantage of a potential break. I always try to set a TP, mostly so that I don’t miss a spike at night when I’m sleeping.

That’s the fun part of trading! haha. Market always looking for liquidity.

Smart to always have contingencies. Or, “If, then” statements (I trade every position w/ at least 3).

Exactly! I also like to queue orders up as quickly as possible to try and get in front of the line.

How do you define S/D zones?
I was a big Sam Seiden follower for about 2 years and still apply some of his basics to my tech analysis.

One retest, violence of moving out of newly established zone, time between retest etc…

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I look for large, stand-alone bars:

I also look at Gaps. Gaps tend to act like a vacuum and eventually suck price back in to fill them.

We’re roughly 98% on the same page. Have you looked into Sam Seiden’s way of trading? If not, you might be able to pick up a couple extra tools / sharpen your blade. However, if it ain’t broke, don’t fix it - right?

The “3 smaller bars preceding” is a HUGE aspect of Sam’s strategy. You don’t want to see price chop around- that would invalidate the zone. Basically, 3-5 bars and then a violent (and far) move away from the zone.

Happy to see other people out there that understand scale invariance for price action / technical analysis. Please keep me updated on your trade.

We’re getting closer and closer to the apex of the breakout pattern. I’ll be watching intraday for the remainder of this week. Could we see another quick shake out (opportunity to load up more)? IDK, but, I have gut feeling that the breakout is going to happen overnight. So, keeping those limit orders GTC :slight_smile:

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Volatility finally showing up— looks like they might try to bid it up this AM.

I have read some of Sam Seiden’s stuff, but am not following anyone in particular. Just pulled out pieces here and there from all over that made sense to me, and appear to be quite effective so far. I’m sure Sam’s method makes up a good part of this strategy.

Yes, volatility picked up a bit after doing nothing all night, and you see how it broke out of that current S zone perfectly, proving it is still valid:

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Looks like you may have been filled- are you completely out? Or, was that TP a % of your position? Nice trade!

I’m still in, +14 contracts.

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Just about. 1:2 RR:


Now I’m out. We might see a bit of a pullback from that S area, if so I’ll probably re-enter.

Good luck, I hope it just breaks right through there for you.


Possible-- I’d argue that at this point (being so close to the apex) - it’s make or break. As long as HLs continue to print and the formation is intact, the pressure will continue to mount. I’d like to see the breakout and close at the highs of the day, but, also not against another couple days of sideways/to slightly up as that’ll just add more fuel.

This is what separates beginners from more advanced traders. Even if you MADE money or LOST money on a trade, you can always still re-enter either with a new bias, or, be more convicted in your previous stance.

I was thinking trying to find a way I could pseduo/hybrid gamma scalp a potential pullback.
I ended up w/ a butterfly on the ZS (big Soy contract) after thinking that there might be some back and forth here and I could take advantage of elevated implied volatility (active contract is currently @ ~63rd percentile).

That position is on the APR 21 contract-
10x 1390 puts
20x 1420 puts
10x 1450 puts

Vega exposure is a bit high @ -121 and theta is @ 53.
I do not plan on holding this through expy, it’s more of a hedge if price chops between 1390 and 1450 for the next few weeks or so. If there’s an explosive move in either direction, I’ll take this new position down.

It’s times like these I see the advantage of having two accounts. The mini contracts don’t have options, so I can’t put on a short quickly. Buying puts doesn’t make sense (anticipating vol to go down), so my only option (no pun intended), was to try and squeeze some theta.

BE’s for the butterly w/ 3/27 EXPY are 1395.25 and 1444.75.
Max profit is @ 1420.50.

Updated chart showing progression of trade.
I feel this type of visual can help newer folks better understand the power of price action analysis and how positions develop over time.

My original analysis still stands- nothing from a price action perspective invalidates the breakout formation. If anything, the continuation of upward momentum and pressure mounting further underscores the potential for an explosive breakout.

You can compare the Feb 25 originally provided chart against where we’re at today.

I asked this question a few days ago, and, it looks like that’s exactly what we saw.

The market touched the recent highs, Powell opened his mouth and inflation fears took down almost everything - regardless of sensitivity to rates. It’s feeling like that may have been the final shakeout for weak hands.

With the new triangle pattern above (orange trendlines), we’re looking to see a break above the ceiling, which would essentially put us at a retest of the supply line. The D1 20EMA continues to provide dynamic support and has not been violated. Also, extension of the original trendline provided support for that sell-off during Powell’s speech-- this is critical to the integrity of the pattern.

D1 20EMA analysis:
Box 1: Market trades 3% below EMA
Box 2: Market trades 1% below EMA
Box 3: EMA provides dynamic support

KEY: What does this tell us??
Each time sellers tried to take the market lower, buyers stepped in and progressively bought up the market at higher prices, defending the 20EMA. Sell-side will eventually have to concede their line in the sand (~1430), as buyers conviction is stronger. Sell-side stops are clustered at the top of the formation. When the market trades up there, it’s a rush to liquidate WHICH PROVIDES FUEL TO THE BREAKOUT.

SELLERS COVER = Buys at market


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Original chart:

(Go to 1st post in this thread for definitions of markings: ABCD etc)


What has happened?
-There definitely was a shakeout when JPOW spoke last week.
-We traded higher, broke out of the pattern on Mon the 8th and then sold off again.
-The sell off since Mon has seen nearly 2x higher volume on up days vs. down days.
-The market came down and tested (and held) the underlying trendline (yellow circles)

I’m reading that as yet more shaking out. The corrective nature of the retracement underscores this.
The pullback from 1460 has been orderly- unlike the prior 2-3 from highs which have all been very impulsive.

We’re basically sitting @ the D1 20EMA of 1402.
See image below. You can see that each time there was an impulsive sell off day (black arrows) that threatened the D1 20EMA, the next day a reversal was printed (blue underscores) and the trend essentially resumed shortly thereafter.


I loaded up on additional contracts right before the close, near the lows of the day.
I’m happy that today is Wed-- if it were a Fri and you saw this type of price action things could get a bit dicey/questionable come next Mon.

However, since we still have two full trading sessions, the market will test the bulls (likely tomorrow / before end of week) on their conviction to support buying off the 20 EMA. Today seemed like the final shakeout- lower vol than yesterday.


For full transparency, going to keep updating this thread as the position evolves.

From a previous update:


Here’s how this played out 3 days removed:

To summarize, bulls found dynamic support off the 20EMA for 3 consecutive trading days.

Here is how Friday played out, from an intraday perspective (this is the primary middle pinbar candle that dipped below the 20EMA above).

This is one of my favorite signals. Dual stochastics rotating in a tight pattern- price is compressing and getting ready to explode. With underlying trendline support- I loaded up on additional contracts @ this bottom.

Here is how it played out.


Things have been a bit choppy since my last update. Beans have been showing some tight correlations to CRUDE and CORN. The big CRUDE selloff MAR 18 took the entire commodity complex down. Beans actually showed relative strength and outperformed all AGs (agriculture) the following sessions. However, oil needed to retest those lows around 58 on MAR 24 CRUDE took everything down again. Beans were tight w/ the 10YR (ZN) but that correlation gave way after volatility dried up and rates settled down.

I’ll start w/ some intraday price action analysis for the prior trading week.

(1) The primary focus is the triangle pattern. There are 3 key swing highs and 2 key swing lows (marked by X). these patterns typically resolve in the direction of the primary trend, and lend to pretty explosive price behavior as the market coils up toward the apex / resolution point of the triangle.

(2) The market is currently resting on the 786FIB. A key level in-and-of-itself, however, we also have alignment with an underlying ascending trend line (see FIB in red font)

(3) From a momentum standpoint (using STOCHASTICS) ANOTHER key momentum pattern has played out. (If you remember, the prior post above this illustrated the power of the stochastic coil). This behavior is called the DUAL ROTATION. When both the fast and slow momentum indicators align and fire off either overbought or oversold conditions, traders take notice.

The first alignment occurred last FRI, you can see the two white boxes, joined by an arrow, and the market bottoming at the LOW position. During that trading session, both stochastic indicators were heavily oversold and presented a good buying opportunity. THIS IS KEY: Since that first LOW point, the indicators completed a FULL ROTATION from oversold, to overbought, and then back to oversold - WITHOUT coming back down into oversold territory. That information taken in isolation is semi-powerful, but can be enhanced. THIS IS CRITICAL The market did NOT PRINT A NEW LOW, OR TEST THE PRIOR LOWS. This dual rotation and price action divergence is indicative of underlying buy-side strength. If momentum rotated from OS, to OB, and then back to OS and printed new lows- that would indicate that underlying order flow was stronger on the sell side and momentum is fading.

(4) Focusing in on the PINK text, we can see a clear FAST STOCH and price action divergence. Another signal of strength for buyers. The market printed a higher low, but you can see that price actually moved lower while the underlying momentum rotated higher. This means that relatively speaking, the last 2-3 sessions saw lower prices, but, candles were closing higher / closer toward the highs of the individual candles.

The dual rotation, into the FIB, into the ascending trendline / triangle base, w/ the momentum divergence indicate what many analysts are labeling as profit taking, or simply positioning prior to the most important AG report of the year (released WED).

I’ll take it a step further and provide some analysis of the derivative space for the big contract (SOYBEANS /ZS).

Option activity for the week ending Mar 16.
(1) Most active strike (open interest) was the 1530 call- an additional 2k contracts added
(2) Most active strike (volume) was the 1500 call- 7k contracts traded

At the money volatility analysis
Even with the pending USDA report on WED, ATM implied volatility is actually going down…this is kind of odd to me, as I would have expected VOL to increase prior to the release, and then crush after (VOL CRUSH). However, maybe the real signal here is that historical vol (or actual vol) is basing after increasing. So, it seems like some juice is coming out of option premiums ATM, but the realized vol is not understated and trading closer to implied vol.

You can see the ratio (2nd chart / green area) has been decreasing as well, which support my prior sentence. IV is coming down, HV is increasing- the market is getting ancy and ready to make a move.

Expected range based on VOL
The 1 STD DEV move is +/- 75 points. This is plotted against total OPEN INTEREST and boom- you should see it instantly. The big bar @ 1500 is nearly 19k open contracts. I’ve confirmed that this is the most open interest on a single strike for BEANS in history. This is a big deal. Even moreso because it is outside of the 1 STD DEV move. Traders are making significant bets that 1500 is going to be a key price level in the next 27 days!

Forgot to add, another CRITICAL element. The 1500C strike is currently the 15DELTA strike. That means the market is currently pricing in a roughly 15% chance that beans will trade at 1500 on expiration 27 days from now. There is a 30% chance that the market touches 1500 between today and expiration. A very large amount of interest and capital is currently committed to an outcome that has a 15% chance of playing out…?

Nothing fancy here- just some COT analysis
(1) Traders getting more long and building net positions (upward arrow) as of MAR 23. The TUE MAR 30 report will give us some more insight as to what traders did ending this week- I’d imagine they’re continuing to get net long as so much activity went off on the call side around 1500 and 1530. They add 5k contracts.
(2) They took down 1.5k contracts, decreasing the short exposure.

Open interest heat map
BEANS are @ 1400
You can see the 18k open interest at 1500 on the call side. This number has been growing steadily since FEB.


Perhaps I’m oversimplifying this, but the monthly chart is raising a bit of a red flag for me in regards to being long on Soybeans.

It is not so concerning on this chart as it is on Corn, which tends to correlate with Soybeans:

Price is at a S/R area that reacted back in 2012, if that means anything. It might, it might not.

Here’s the correlation on the monthly:

Again, this is just an observation.

@MattyMoney thanks for the insight! The funny thing is that I hadn’t even considered looking at the continuous contract above the Daily. I did last week, almost the same day you replied, and saw that same exact zone. Definitely a key price level. Where the market goes from here though, is anyone’s guess.

I’m out of the position now though.

Here’s an updated intraday chart

After touching 1430 (red horizontal line), I was pretty confident the market would continue higher and the breakout was imminent. However, we kind of just faded off that price into what is sometimes called “stock rot”. Basically, all prior correlations broke down (and trust me, there were too many to list).

J Pow
10YR rates melting up
Crude down 8% in one day
Dollar rally
Crude down again
Suez blockage
Commodity complex getting taken down for no reason

It’s been a very difficult position to manage. So what started out as a series of corrective pullbacks to the H1 20EMA (white circles- which are clearly profit-taking/position trimming), turned into a fire sale. The market started basing around 1385 (blue horizontal) and formed a bearish breakout pattern. Since the overall trend has been up, I was pretty confident that we wouldn’t actually breakdown. The fundamentals, technicals, and even derivatives markets all confirmed this.

However, you can see the liquidation candle (LIQ. in white text). This was unexpected, and, got really ugly for a lot of people forced to sell out of a 7 month bull run. The market couldn’t find its footing.

Prior to the corrective pullback and the liquidation, I had thought the market would have trended sideways, or at least slightly higher heading into the big annual USDA report for WED MAR 31. However, the fact that we started a healthy corrective pull back, that got REALLY messy into the USDA print signaled to me that the next move was indeed more likely to be back up.

Why? Well, heading into this week, I had been talking about how realized volatility has been increasing, and implied volatility coming in. That signaled that traders were actually pricing in the move in the futures market and not positioning themselves in the derivatives space. So- traders were trading the move before it happened. The corrective pullback into liquidation was all a ploy to get weak hands to dump before the print. The liquidation was the straw breaking the camel’s back- trying to force long-in-the-tooth bulls to take down positions and puke out right into the buyers’ hands. Ahead of a big print, if the market has already sold off substantially you’re coming from a lower price level so there would be less incentive for sellers to press their bets. If the market moved significantly higher before the release, the idea being that you “have more room/buffer to fall” even if the print is “good”.

The rest is self-explanatory. The market finished limit up yesterday, so I took down everything at an avg price of like 1430. With my avg entry around 1400, it wasn’t too shabby of a trade. There are 5 different scenarios I can see playing out in my head, 2 where I make a lot more, 2 where I lose a lot more, and 1 where we stay sideways. My original thesis for the trade was to book at 1480, but that false break and touch @ 1460 may have scared folks in the short-term. I think vol is going to continue to come into the market as it is now make or break for beans - do we breakout above the range and continue trend? Or, do we see a massive unwind.

It’s tough to say, because the correlations have been literally all over the place. One day it’s the 10YR, the next it’s crude, then the dollar, or a Fed speech on inflation. I think there might be a good trade here to get long some VOL and trade a straddle- looking to either break out, or down. The problem in my head though is that I can easily see the market needing to digest this recent realized volatility and trending sideways- which literally is the death of the straddle strategy-- your position is decaying if vol goes down, the underlying stays in a tight range, and time passing by. A straddle could work here if you’re expecting a violent move in either direction (thus the positive delta, positive gamma, positive vega nature of the strategy).

All in all, I hope this thread has given some insight to others as to one of the many strategies I deploy.

Stay safe out there,

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