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Coach's Playbook Posted by Team Topstep February 3, 2022

Lets Talk Levels!

There are literally thousands of tools and techniques you can use to pick out trading levels. The biggest difference between them is how obvious those levels are to spot on your chart. Trading is very visual. If any trader, regardless of skill level, can glance at a chart and see a potential area of importance, the more likely it becomes for price to make its way there. 

Funded Trader Shoutout

This week’s Funded Trader Shoutout goes to Kershner B., who stayed patient and rode out a $1,600 winner on a two lot trading the E-Mini Russell 2000 (RTY) index futures! The RTY has a single tick value of $5.00, which means Kershner held on to this position for a minimum of 16 full points.

As a day trader looking for 3-5 trades a day, it’s not always easy to wait all day for a single trade to play. So, Kershner, if you’re reading this, we salute you for staying focused and sticking to your guns!

Let’s Talk Levels

First, when we talk about levels, we are referring to zones or areas that we feel the market could be targeting. These zones can represent any number of things, such as former areas of congestion, previous swing highs or lows, or an unfilled gap, just to name a few. The point is we’re identifying these zones as potential areas of importance, and if you’re going to use them for the purpose of trade execution, then you should feel confident in the methods you use to calculate them. 

For example, in the video, Coach Hoag talks a little bit about how he comes up with the Weekly Kickoff Levels that we share with you each week. Of course, he doesn’t give away all of his secrets, but he does tell us that one piece of his formula includes studying the Market Profile for identifying areas where “inventory could be forced to adjust.” By this, he is alluding to invalidation points where traders may need to liquidate long or short-term positions.

And remember, as the market approaches a 200-day moving average, there’s a pretty good chance a lot of other traders are watching the same thing you are. So the game now shifts to how the market will react and how we will trade around that area as the market gets there.

Trade Well!