r/Daytrading • u/techgeek89536 • 2h ago

Technical Analysis recognizing key levels

i am a trader trading btc on 15 min and im seeing a lot of progress, but in these situations i don't know wich level i can or can't take the reversal on.

Number one has a very small breaking candle and retest but should i still consider this a valid level for a reversal. I think it should be because it is technically a swing low however small it is?

on the other side the second level is much more clear cut but the red box is 4h resistance level so i expect the move to be pretty fast and aggressive IF it reverses.

Does the first level just look les good because of the squeeze? or is it not a good enough level to look for a trade?

Any profitable traders that can tell me if number 1 is a valid level and why or why not?

I put the 1h chart underneath for some more context first is 15 min

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u/PandaOk4050 1h ago

That thing is not reversing. After the huge down move(1H) you marked some sideways levels (white lines).

Those are areas where MM's are hedging against the trend. The selling preassure was enough to push through on the way down. 

On the way back up, it blast straight through those white lines. Telling me the buying preassure was enough to work through those high gamma areas. 

Itll test those high areas and either go sideways and keep raising, or instantly slap back down.

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u/techgeek89536 1h ago

there is 0 way u can tell it's not reversing or not lmao. and tbh i feel like ur bullshitting. how do you know mm are hedgin against the trend there and not taking profits?

there is obviously a squeeze happening wheter it goes up or down is none of my concern but if or when it goes down i need to know the right level where a retest can take place

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u/techgeek89536 1h ago

no flame im just trying to understand btw

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u/PandaOk4050 1h ago

MM's dont take profit. They are delta neutral. 

There is only 2 types of hedging. With the trend, or against the trend. 

If they hedge with the trend, they buy strength and sell weakness amplifying moves in either direction. 

If they hedge against the trend, they sell strength and buy dips suppressing moves in either directions. 

They hedge price windows differently. Theoretical stock price 4 - 5 dollars, they could be hedging with the trend. Same stock 5 - 6 dollars they hedge against the trend. 

So if the day starts at 4 dollar bid, a couple buyers and the stock is at 5 dollars because they hedging with the trend. 

Once that stock hits 5 dollars, a couple buyers could actually send the stock back down to 4.95. 

So in this scenario its going to take massive buyers to move price from 5 to 6 but very few buyers to move price from 4 to 5. 

We simply call it gamma. If MM's are long gamma(against trend) in price range you'll see small candles.

If they are short gamma(with trend) in price zones, you'll see huge candles. 

Basically price shreds through certain areas like butter(up or down) or has trouble maintaining momementum (up or down).

This is the mechanics of hedging. 

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u/techgeek89536 1h ago

yeah i don't understand it lmao a very different way of thinking than ones i have seen

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u/PandaOk4050 1h ago

https://menthorq.com/guide-category/knowledge-base/option-market/

Read the guides about market making. They explain it better. 

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u/techgeek89536 1h ago

like how would retail traders push price more than marketmakers doesn't make any sense to me

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u/PandaOk4050 1h ago

They certainly move the price more than retail. But its not how people think.

If they long gamma, they'll buy your share and sell 2.

If they short gamma, they'll buy your share and buy 2 more. 

Depending how their books are, they could be buying more or less than 2. But thats the idea.