We have clear indication that institutional orders are in the market due to these lows and stop runs.
How can we use this to find high probability setups?
Institutional traders act differently to retail traders, retails don't have anywhere near the same size capital so they accept a % loss whenever they place a trade, whereas an institutional player who can have what seems to be an infinite supply of capital won't allow their positions to become losers. This means they will protect their orders but entering another X amount of position as price retraces to their entry.
Another important point is that if they are entering with a large position, they won't get all of their order filled at the same price due to liquidity, so they may get filled part order at a more disadvantageous price. To combat this they may enter 40-50% of their position sizing intiially, and wait then for price to retraee a little before entering the remaining 50-60% of their order.
Obviously this is a very basic overview of what's happening, but if you would like to learn more check out Xclusive Trading and the premium membership plan we offer!
Have a good week everyone!