10-17-25-typical-friday

Trading notes for 2025-10-17

TL;DR

Friday delivered typical end-of-week behavior as the market balanced orders from last week's sharp drop. After forming a double bottom at the weekly lows during London session, price reversed sharply back to the daily open and ran exactly to the weekly VAH as anticipated.

Market Context

This week showcased classic market mechanics following last Friday's significant drop. With no major news driving price action, the market spent the entire week in a balancing phase, methodically mitigating the previous week's sharp decline.

Thursday brought a swing failure high, which then led to continuation toward the untouched weekly lows from Tuesday. The movement was straightforward - simple rotations from mitigating balances to running liquidity lower, exactly what you'd expect in this type of environment.

The timing wasn't coincidental either. October options expiration was in play, and historically the week of and week before expiration tend to bring increased volatility, which we clearly witnessed throughout this period.

Thesis & Plan

The setup became clear as we approached the end of the London session. Price was testing the weekly lows, and the key question was whether these levels would hold as support.

My thesis centered on the old weekly low potentially acting as significant support. If this level held, I expected a sharp reversal that could carry price back toward higher-timeframe reference points, specifically targeting the weekly VAH (Value Area High).

The plan was simple: watch for signs of support at the weekly lows and position for a potential run back to more significant resistance levels if the reversal materialized.

Entries & Exits

The execution window opened during the London session close. Price formed a textbook double bottom right at the weekly low support level, providing an excellent risk-defined entry opportunity.

The reversal was sharp and decisive. By 9:00 EST, price had already traveled back to the daily open, confirming the strength of the bounce from support. This rapid move validated the thesis that the weekly low would indeed hold as support.

The target was the weekly VAH, and the market delivered exactly as anticipated. Price ran cleanly to this level, providing a textbook example of how well-defined support and resistance levels continue to matter in today's markets.

What Worked

Several elements came together perfectly on this trade:

• Level recognition - Identifying the weekly low as potential support proved crucial • Pattern recognition - The double bottom formation provided a clear entry signal with defined risk • Target selection - Using the weekly VAH as the target was spot-on, as price traveled there exactly • Timing - Understanding that Friday behavior often involves these types of balancing moves helped frame expectations

The market's behavior was textbook, moving from one key level to another in a logical sequence. The sharp reversal from support followed by the clean run to resistance demonstrated how technical levels continue to provide actionable trading opportunities.

Risk Management

The double bottom formation at the weekly low provided excellent risk definition. The stop would have been placed below the established support level, giving a clear invalidation point for the thesis.

The risk-reward setup was favorable from the start, with the weekly VAH target providing a logical profit-taking level that offered multiple R of reward relative to the defined risk at the support level.

Lessons Learned

This trade reinforced several important principles:

• Respect weekly levels - Weekly highs and lows carry significant weight and often provide reliable support/resistance • Options expiration awareness - Understanding the calendar helps frame expectations for volatility and market behavior • Friday patterns - End-of-week behavior often involves balancing moves that can create good trading opportunities • Simple is often better - The cleanest setups frequently involve straightforward moves between well-defined levels

The market's tendency to migrate from one significant level to another remains a reliable source of trading opportunities. When you combine proper level identification with pattern recognition and appropriate risk management, the probabilities tend to work in your favor.

Most importantly, this trade demonstrated the value of patience and preparation. Rather than forcing trades during the week's balancing action, waiting for the clear setup at the weekly support level provided a much higher-probability opportunity with well-defined risk and reward parameters.