The Book Of Bonka Bonkanomics Disclaimer - I am NOT a licensed financial advisor—any and all of the latter mentioned information shall not be taken as financial advice. - I bear no responsibility for the losses and/or gains of those who choose to follow my guidance. - YOU are your own financial advisor—ACT LIKE ONE. - What I do is by absolutely NO means a way to ‘get rich quick’. - With that out of the way, time to get into things. Intro - I’m a in Senior in high school - I’ve been trading since I was 15 - I have had to work for every dollar I’ve ever spent, not due to necessity but by choice - I’m going to teach you what works for ME; what works best for me may not work best for all - Although I’m going to cover various technical aspects of daytrading, PSYCHOLOGY IS KING IN THIS GAME My Beginnings - - I had always been more interested in STEM and other ‘nerd-esque’ scientific things growing up I wanted nothing more than to play video games all day while I was growing up. At the ripe old age of 9, I was diagnosed with ADHD—I was impulsive, obsessive, ambitious. This is possibly the best gift God has ever given me. Coincidentally, although it’s probably the most cliche thing I could ever possibly say, I never had much interest in the stock market until my friend and I watched The Wolf of Wall Street while sleeping over his house (thank you Luke). Having been diagnosed with ADHD earlier that year, I was HOOKED. The only question that remained was how would I do it? My Beginnings (Continued) - - Being a child with completely unrestricted internet access, I didn’t exactly utilize the following years to their best extent. I proceeded to watch The Wolf of Wall Street 13 times within 4 years. I didn’t like the money in the movie as much as I liked Margot Robbie. As I entered high school, though, the stock market began to pique my interest again. I joined my school’s investment club and decided to participate in their stock market simulation game. I blew not one, but TWO separate accounts over the course of 3 months with $100k to start on 2x BP margin. Currently, as a Senior, I sit in first place with total gains amounting to 315% (Outdated screenshot →) I just want to help people learn the right way, unlike how I learned at first. What I Will Cover - The Basics - Liquidity/Candle Imbalances Fair Value Gaps Order Blocks Defining Range and Implied Defining Range Indecision Candles Liquidity/Candle Imbalances • Liquidity is often demonstrated though candles with an imbalance in their wicks. • Often found on 1 min, 5 min, and 15 min timeframes. • If a candle’s wick is much greater in size than body, this is often an indication of institutions (banks, firms, etc.) selling off their positions or looking to enter new positions. • Institutions often sweep liquidity at market open to stop out orders from the day before so they can fill new orders at the start of every session. ◦ Due to this volatility, don't trade until 10-10:30 EST, which is when institutions often look to re-enter their positions. Liquidity (Continued) • If points of liquidity (large candle imbalances) on the 5m and 15m chart are the same, then we know that such a point is a strong indicator of liquidity (i.e. institutions often enter and exit their positions at such a point). ◦ Ex) Because our line of support touches the candle wicks at the same point on both timeframes, we know that our marked support level is a strong point of liquidity. Fair Value Gaps • FVG's are found in a 3 candle sequence, with the wicks of the 1st and 3rd candles not completely overlapping the body of the 2nd (middle) candle. ◦ Often found on the 1 min, 5 min, and 15 min charts (with 5 min being the most reliable usually). • FVG's are often called liquidity voids—institutions use them to stop out retail positions and enter or exit their positions. • If there is a retest and rejection off the FVG, then institutions are looking to enter new positions and make money; you should enter to do the same. ◦ If price action (candles) break the FVG when there's a retest, then the FVG is invalid and will not hold up for a trade entry. ◦ FVG's often are rejected off of. • Oftentimes you can use the wicks of a FVG as a stop-loss, as banks take liquidity at such a point for the sake of stopping out orders. ◦ To avoid getting stopped out in such a way, place your SL slightly below/above where liquidity was taken. Order Blocks • Order blocks are large zones where orders are often sold off and/or filled by institutions. • Oftentimes, price will reject off order blocks following a retest. • To find an OB, look for consolidation of price after a trend to either the upside or downside. ◦ Enter position off a break of structure and retest(s) of OB • If price movement doesn't reverse after a retest of an order block, institutions are looking to enter more positions, not sell off their existing positions. Defining Range & Implied Defining Range (DR & IDR) • Used to get a sense for a trading day's trend. • How to find: • Defining Range: mark the wicks of the high and low of price from 9:30-10:30am EST on the 5 min chart. • Implied Defining Range: mark the candle bodies of the high and low of price from 9:30-10:30am EST on the 5 min chart. ◦ If a 5 min candle closes above the DR or IDR, there is an 88% chance that the low of the DR will be the low of the day, and vice versa. Indecision Candles • Demonstrates where buyers and sellers find equilibrium. • Can be used as order blocks after accumulation and break of structure on 5 min and 15 min timeframes. ◦ Mark wicks to act as support/resistance. Fin. (For Now)
