The goal: to exploit reverse progression (larger amounts at lower prices) and identify fake walls or real resistances through order book (DOM) analysis and trade book analysis.
Analyze the DOM and detect possible fake DOM walls (Depth of Market). The order book displays depth on the demand (buy) and supply (sell) sides. A 'wall' corresponds to a price level where the cumulative volume spikes (e.g., 0.10 USDC with 50,000 PYTH on the buy side).
Fake walls: Some traders place massive orders to influence perception, then withdraw them before execution. To distinguish real support from a fake wall, we look at the trade book: if, as the target price approaches, few PYTH have actually traded, we suspect a discreet cancellation.
Strategy: Reverse Progression Principle. Instead of buying everything at the current price, we split the capital into several levels that descend towards the bottom of the market. The highest amounts are placed at the lowest price levels. Thus, in case of a drop, we achieve a very advantageous average cost.
Example of levels.
— Level 1: 0.149 USDC (small portion)
— Level 2: 0.136 USDC (uncertain wall, caution)
— Level 3: 0.125 USDC (confirmed support)
— Level 4: 0.110 USDC (strong support)
— Level 5: 0.100 USDC (massive, to be verified)
— Level 6: 0.090 USDC (bottom of the DOM)
The largest lot will go to 0.090, the smallest to 0.149.
Multi-threshold selling (Take Profit) After acquiring PYTH at these levels, we practice reselling in several steps. For example:
— 40% resold just below 0.165 USDC,
— 30% towards 0.185 USDC,
— 30% towards 0.205 USDC.
We gradually secure gains and leave open the possibility of benefiting from a larger rally.
This staggered purchase strategy combined with fake wall detection allows:
— Effectively averaging down,
— Eliminating order book illusions (fake walls),
— Maximizing sales based on real resistances.
It remains of course indicative: everyone must adjust their own levels and volumes according to their capital, risk tolerance, and the daily evolution of the DOM.
By following these principles, we attempt to seize opportunities offered by the order book while reducing the impact of market traps.
Note: This article is provided as a pedagogical example and is not financial advice. Always do your own research before taking a position in the market.
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