The setup was textbook. I followed my trading plan, which included using 2 key levels to trade off of. The first level was the value area low of the previous day. The second level was the VWAP, which lined up with the VAL. It’s a key area I wanted to see if sellers were able to push price lower. At this level buyers had taken over control of the action.

I used order flow to confirm my idea that large buyers were taking up all of the sell orders at these levels and absorbing them into their positions until they had enough buying power to move prices higher. Once sellers couldn’t take price lower and buyers stepped in, it became clear that this was a solid buy position for me to take advantage of.