Attachments: Manipulated Markets: A Strategy To Profit

Manipulated Markets: A Strategy To Profit

#41
Edited 4:21pm Dec 14, 2023 12:29pm | Edited 4:21pm

makingmoves
Joined Jun 2022 | Status: Evolving | 236 Posts

A trade on EURUSD from yesterday (Wednesday 13th December 2023)

Hello everyone, I didn't have time to get round to posting this trading setup and analysis process yesterday, as have been quite busy. On another note, as I was warned, the idiots have arrived! As the most respected FF members have said, just ignore them and that's what I'll do, I wont go into it any further.

On Tuesday, EURUSD created a rough but tradeable 'D' distribution volume profile. There was also other aspects of my trading that led to me being interested in this particular price area, I went over it on the Auction Market Theory thread last night. The trading levels and ranges derived from value areas via market profile coincide with the volume based levels of this strategy! I will not go into it further (maybe ill save it for another topic later on) for the sake of simplicity.

The balanced 'D' distribution volume profile usually tells us the market is in equilibrium (consolidating) and as such, per the rules of this specific profile, I begin by looking for mean reversion style trades. Specifically, by being aware of high volume clusters/areas (HVA) around the top and bottom of the profile, then looking to confirm a potential bounce of said level via the use of order flow. If anyone is confused about the tools, names or rules, I recommend going back to the start of the thread (only 3 pages deep so far!) to see if its been answered and if not, ask away!

Attached Image (click to enlarge)

I hesitated trading the first HVA (first dashed line on top) due to the fact by the time confirmations came through, we were almost towards the middle of the profile already. Very quickly after price sold off a few pips more, some of the most bullish confirmations I have seen on order flow for a long time appeared!

Although the why is not too important, it is interesting! I assume this was (obviously) smart money getting in for the best prices of the day, ahead of the PPI, Fed Funds Rate and FOMC Statement/Commentary which turned their positions massively profitable. This in itself has sparked many ideas for myself about the use of order flow alone, heading into significant economic news/data releases, maybe it will for you too!

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So lets discuss order flow confirmations, as price came down, the first textbook confirmation came through. That being large volumes on the bid, likely passive participants entering where the HVA is, stopping price from going further. Next each bullish candle was an engulfing candle, that had many imbalances within, signifying pure buyer aggression! The entry trigger however came after the 10:50AM bullish candle with many stacked imbalances and a very strong delta as well as cumulative delta turning positive on the day.

This was directly on the high volume cluster(s) we were interested in, in a market we suspect is in equilibrium (mean reversion price action is expected), with the added propensity to the trade from the order flow confirmations we now have a very strong trade setup. Lets talk about the plan.

The stop loss is to be placed under a high volume area, ideally behind the HVA price reacted to however, this is not always possible. The take profit, as per the rules of this profile, goes at the previous day's P.O.C. However, a minimum of a 1:1.75 risk-reward ratio is required, so it was stretched to meet criteria.

Exit the trade just before any significant economic news/data releases, to eliminate that tail risk.

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Here's a plain chart showing the correct stop loss and profit target position and where the trade was entered and exited, just ahead of US PPI and Core PPI for a small gain of 0.5%.

Seeking Fair Value

#42
Edited 7:07pm Dec 15, 2023 3:13pm | Edited 7:07pm

makingmoves
Joined Jun 2022 | Status: Evolving | 236 Posts

Quoting makingmoves

Disliked

{quote} Trades from the start of 2023 (#6) Here we have another couple trades, these are some perfect, textbook trades! We are very nearly at the start of a new week, with new opportunities and as such will take a break from these old journaled trades. I'm thinking of what other aspects of the theory/strategy/execution/confirmation to continue the thread with after, I think a present day, real-time trade walkthrough would be valuable, so I'll keep an eye out for a high probability setup! 06/03/2023 - 11:15AM +1.75% {image} Context: At high volume...

Ignored

Trades from the start of 2023 (#7)

Hello to all those following the thread, I hope you've had a great week so far! Here is another batch of trades from my old journal, following straight from where we left off! If you haven't already, go check out the previous trade run-throughs (1-6) to get a better understanding of what we're doing on each trade.

At some point I want to go over how this strategy does and doesn't relate to Auction Market Theory (AMT) trading in general and how they can be used together very successfully! As well as in the future other threads on other aspects/strategies of my trading and AMT.

16/03/2023 - 8:25AM (1 Trade) +1.75%

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Context: At the VAH of yesterdays ‘I’ (trend) profile, testing it from underneath.

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Confirmation: As price approached the value area high (VAH), volumes started to increase including the candle that touched the VAH, had immense volume within, this can be seen in the volume bar (highlighted at the bottom) as well. This is likely accumulation taking place. More specifically, at the tops of the candles before price stopped and turned, there were heavy volumes on the ask. These are large limit orders.

There was also some inverted imbalances (aggressive sellers) however not many and was overshadowed by the general heavy volumes.

17/03/2023 - 11:50AM (1 Trade) +1.75%

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Context: At the P.O.C/ high volume area of yesterdays ‘D’ profile after breaking above it and retracing back.

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Confirmation: Large volumes on both bid x ask (possible accumulation) the moment we come into contact with the high volume area (HVA) and 2 imbalances at the reaction area itself, it took a few candles for a positive delta for entry, there had also been 7 imbalances in candles since them showing aggressive buyers are now present. Significant volumes throughout as highlighted on the bottom!

Notes / Warnings: Breakout trade so a fixed 1:1.75 RR Ratio to be used.

20/03/2023 - 8:35AM (1 Trade) +1.75%

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Context: At a significant high volume cluster at the bottom of yesterdays ‘D’ profile.

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Order Flow Confirmation: Price falling, delta rising! That is price - delta divergence, price should turn and follow delta. Many imbalances appear throughout the chart however in the bullish candle (PA confirmation) had 4 imbalances inside representing relatively large aggressive buyers.

Notes / Warnings: TP at P.O.C coincides with a 1:1.75 RR Ratio.

Seeking Fair Value

#43
Dec 17, 2023 2:51pm Dec 17, 2023 2:51pm

makingmoves
Joined Jun 2022 | Status: Evolving | 236 Posts

Quoting makingmoves

Disliked

{quote} Trades from the start of 2023 (#7) Hello to all those following the thread, I hope you've had a great week so far! Here is another batch of trades from my old journal, following straight from where we left off! If you haven't already, go check out the previous trade run-throughs (1-6) to get a better understanding of what we're doing on each trade. At some point I want to go over how this strategy does and doesn't relate to Auction Market Theory (AMT) trading in general and how they can be used together very successfully! As well as in the...

Ignored

Trades from the start of 2023 (#8)

Here we have another batch of trades, starting from where we left off last post, with volume profile context and order flow confirmation screenshots for each one! I hope by now, those new to this type of trading, can start from the beginning and go through and get a good idea of what's going on.

That aside, have a great week, trade safe.

22/03/2023 - 8:35AM (1 Trade) +1.75%

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Context: At the P.O.C of yesterdays ‘P’ volume profile after breaking above it and retracing back.

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Order Flow Confirmation: Large volumes started appearing on both bid x ask (possible accumulation) as price came down. 3 large imbalances appeared in the bullish candle and delta was positive also.

27/03/2023 -2:40PM (1 Trade) -1%

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Context: At 2nd high volume area of yesterdays ‘b’ profile (downtrend).

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Order Flow Confirmation: Price came up and hit the HVA, bullish candles = negative delta - warning of a turn! Then price turned and within the bearish entry candle (PA confirmation) there were 5 inverted imbalances, showing aggressive relatively large sellers are present. Delta was negative.

Notes: Entering against a strong trend (large bullish candles, no wicks and heavy volumes) however this becomes very subjective as to what is a strong trend or not so I resorted to the objective strategy rules.

29/03/2023 -8:15AM & 1:30PM (2 Trades) +0.75%

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Context: First trade at a bottom high volume cluster of yesterdays ‘D’ profile and ended in a 1.75% gain. 2nd trade was a breakout trade after price had broke out of yesterday's profile and ended in a -1% loss.

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Confirmation for trade 1: As price sold off, heavy volumes on both bid x ask started to appear. This itself was not bullish, until, bullish candles with imbalances within broke and closed above these heavy volumes (aggressive buyer strength). Delta turned positive.

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Confirmation for trade 2: Ultimately same as trade 1's confirmation however something to note, there was much more aggressive selling before price turned.

Seeking Fair Value

#44
Edited 3:05am Dec 18, 2023 12:41am | Edited 3:05am

MichaelSch
Joined Dec 2015 | Status: Trader | 2,586 Posts

Really good written and clear enough to start study.
What timeframe you trade? I think I have miss this?
Thanks for letting new trader or trader who want to get a insight to that art of trading. Thanks a lot.

Perfection is the enemy of good enough!

#45
Edited 10:48am Dec 18, 2023 9:41am | Edited 10:48am

makingmoves
Joined Jun 2022 | Status: Evolving | 236 Posts

Quoting MichaelSch

Disliked

Really good written and clear enough to start study. What timeframe you trade? I think I have miss this? Thanks for letting new trader or trader who want to get a insight to that art of trading. Thanks a lot.

Ignored

Hi Michael, thanks for participating in and supporting the thread!

I apologise if I haven't made that clear previously and thank you for bringing it up. The overview look at the market using daily volume profiles, on my charts in accompanied by 30 minute candlesticks. However, I do not trade the 30 min chart itself, I just use it as context. What's really important is the daily volume profile, so you could use a 15 min chart or 1 hour chart for this!

When a setup had been identified and price is at a HVA, ill use order flow on EUR Futures (if I'm trading EURUSD) to confirm entry (using 5 minute footprint charts) that 100% positively corelates to spot EURUSD. I will then enter, manage and exit the trade based on the 5 minute chart however, I do not trail stop loss or mess around with it and its originally based upon daily volume profile charts (to see high volume clusters).

I don't adjust stop loss position because in a market with ever increasing noise, you'll find you get stopped out a lot before a move continues. I let it breathe but I understand this is down to trader preference and risk tolerance etc.

Any other questions just let me know, thanks again for the kind words, trade safe.

Seeking Fair Value

#46
Dec 18, 2023 12:07pm Dec 18, 2023 12:07pm

shahasd
| Joined Apr 2015 | Status: Trader | 19 Posts

Hi, how do we get the following on the chart? Are they available on mt4? Would appreciate if you could answer please. Thank you,

To set up:

A fixed period, daily volume profile, showing (In detail) the volume clusters within the day’s trading range.
Order flow (numbers bars) showing bid x ask volumes, delta, cumulative delta etc.

#47
Edited 3:38pm Dec 18, 2023 12:51pm | Edited 3:38pm

makingmoves
Joined Jun 2022 | Status: Evolving | 236 Posts

Quoting shahasd

Disliked

Hi, how do we get the following on the chart? Are they available on mt4? Would appreciate if you could answer please. Thank you, To set up: A fixed period, daily volume profile, showing (In detail) the volume clusters within the day’s trading range. Order flow (numbers bars) showing bid x ask volumes, delta, cumulative delta etc.

Ignored

Hi shahasd, thanks for checking out the thread!

This is where a greater knowledge of markets and key tools may be required to reliably trade the strategy however don't be discouraged, anyone can do this! Unfortunately, while kind of possible, MT4 cannot handle this type of software/detailed analysis of volume data, its just too old and basic. I am hesitant to recommend any software/service as I don't want to be seen as an affiliate etc.

I will just tell you what I do and the generic names of the tools, so you can look further into them and make your own decision.

To start, for the daily volume profiles and order flow, i use a software and service named Sierra Chart. It is a paid for service however, trading is my business and as such I take it extremely seriously and want the best tools and software etc so it's a small price to pay for me. I am certain most people won't want to pay a lot of money for anything relating to trading, that's were high quality trading like this can become more difficult for retail traders. Unfortunately, there is a barrier to entry to this type of trading/analysis, those being data feed costs and software service costs.

I recommend you try and look for the following tools for as cheap as you can find however beware of the quality of cheap tools.

1) Order Flow / Footprint Charts - Using Level 2 Futures Market Data.

2) Volume Profile / Volume By Price - Ideally using futures data as well for the most accuracy.

I know Trading View has volume profile functionality however it does not support order flow (footprint) charts.

As far as data feed costs, I use CME FX Futures data for my volume analysis. The CME has a monopoly on futures markets and as such you either pay them a monthly fee to get access to this valuable information or don't get it at all. It really sucks but they own it, its their game. If you fund a futures account with a broker that works with the CME, you get a big reduction in the amount you pay each month.

Seeking Fair Value

#48
Edited Dec 21, 2023 6:45am Dec 20, 2023 3:12pm | Edited Dec 21, 2023 6:45am

makingmoves
Joined Jun 2022 | Status: Evolving | 236 Posts

Quoting makingmoves

Disliked

{quote} Trades from the start of 2023 (#8) Here we have another batch of trades, starting from where we left off last post, with volume profile context and order flow confirmation screenshots for each one! I hope by now, those new to this type of trading, can start from the beginning and go through and get a good idea of what's going on. That aside, have a great week, trade safe. 22/03/2023 - 8:35AM (1 Trade) +1.75% {image} Context: At the P.O.C of yesterdays ‘P’ volume profile after breaking above it and retracing back. {image} Order Flow Confirmation:...

Ignored

Trades from the start of 2023 (#9)

Continuing from where I left off, here is another batch of trades, with volume profile context and order flow conformations for each one! At this point I have posted a lot of trades and general context/analysis for you, the reader and trader, to understand. As such I am going to do one more batch from old journaled trades to make it an even #10 and then go from there. As with every batch of trades thus far, they are all solely on EURUSD (EUR Futures).

I've been thinking ahead for the future of the thread and as I said in a previous post, I want to dive deep onto how this strategy can be traded harmoniously with an Auction Market Theory mindset/trading structure, as well as other avenues to make the strategy even more powerful! Some of these avenues may lead to new threads depending on how much time I have. I also want to do more real-time trades and deep analysis on the thread as well as further discussion and testing on optimal position parameters/rules etc.

03/04/2023 -11:35AM (1 Trade) -1%

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Context: At the bottom high volume cluster of yesterdays ‘D’ profile after breaking below it and retracing back.

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Order Flow confirmation: Delta started stalling n falling, heavy volumes on the ask within the wick show passive sellers at the top. Five inverted imbalances started to appear especially in the entry bearish candle (PA Confirmation), these represent aggressive sellers.

04/04/2023 -12:35PM (1 Trade) +1.75%

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Context: At the ‘P’ most significant high volume cluster of yesterdays ‘P’ profile after breaking above and retesting.

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Confirmation: Price began to stall, imbalances started to appear, had to wait for a bullish candle (PA Confirmation) with a positive delta.

Notes / Warnings: A fixed minimum of 1:1.75 RR Ratio used.

05/04/2023 - 4:05PM (1 Trade) -1%

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Context: At a large volume cluster to the bottom side of yesterdays ‘D’ profile.

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Order Flow Confirmation: Price falling began stalling - delta rising. Imbalances started to appear and the entry bullish candle (PA confirmation) had 2 imbalances inside.

12/04/2023 - 7:50AM (1 Trade) +1.75%

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Context: At the top of yesterdays ‘P’ profile after breaking above it and retracing back.

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Confirmation: Volumes started making inverted imbalances on the way down, looks like aggressive selling until it just stops and more confirmation comes via bullish candles and imbalances plus positive delta and cumulative delta.

Seeking Fair Value

#49
Edited 4:07pm Dec 21, 2023 1:34pm | Edited 4:07pm

makingmoves
Joined Jun 2022 | Status: Evolving | 236 Posts

A In-depth Trade Analysis & Breakdown On EURUSD Today (Thursday 21st December 2023)

On Wednesday, EURUSD's trading range by the end of the day, was that of a standard distribution / 'D' profile day. Knowing this we can now categorize it and look to the specific rules / trading style now required in response to the change in market conditions. The balanced 'D' distribution volume profile usually tells us the market is in equilibrium (consolidating) and as such, per the rules of this specific profile, I begin by looking for mean reversion style trades. Specifically, by being aware of high volume clusters/areas (HVA) around the top and bottom of the profile, then looking to confirm a potential bounce of said level via the use of order flow.

Attached Image (click to enlarge)

During early Thursday, price initially started ranging until it sold off and came into contact with the most significant High Volume Area (HVA) on the bottom side of the prior day's 'D' profile. The first touch was not confirmed via order flow and as such no trade was placed until further confirmations came through. I think this is very important and I will go over it more in the future as very often, knowing when not to trade, is just as important as knowing when to trade. The screenshot below shows why I did not enter the trade at first:

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The highlighted red numbers are inverted imbalances, ultimately being aggressive sellers, not a good time to buy! Even within the bullish candles, there was still inverted imbalances within which is a red flag. As there was no other significant confirmations, it was a clear 'no trade to be taken yet.'

The following screenshot shows the bullish confirmations that led to me entering long. Shortly after entry, price went against me and got close to my stop however, as we use high volume clusters as S/R in-between our entry and stop loss level, price eventually found support and turned before stopping me out.

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Price made a textbook breakout, a big bullish candle with many imbalances within (highlighted bold green numbers) and a strong delta / cumulative delta along with it. Price shot up and closed far above the heavy, aggressive sellers. This is the 'footprint' of large & even more aggressive buyers.

The size of the stop loss was 22 pips, so the standard dynamic target of the prior day's Point Of Control (P.O.C) set out in the rules (for this specific profile) did not apply to this trade and so the minimum fixed Risk-Reward ratio of 1:1.75 was used.

I exited the trade just before today's important economic news/data (the safest and best way to manage news tail risk) for a gain of 1.22%. After the news had come and gone (Final US GDP & Unemployment Claims) price had setup for a breakout style trade that was confirmed via order flow, in which is still open as I type!

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1) Price breaks above the prior day's 'D' profile and holds (1-2 30 min candles above the profile).
2) Price retraces back into the most significant HVA at the top of the prior day's volume profile and Value Area High (VAH).
3) Price touches the level(s) and bounces however, price has since started consolidating and the trade remains at breakeven.

The order flow confirmations for the breakout-pullback trade are in the screenshot below:

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A big sell off candle (with a positive delta) was immediately bought up, full of imbalances, showing continued aggressive buyer strength. Due to the lack of a nearby Low Volume Area (LVA) for the stop loss, the SL size is quite large, at 33 pips.

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Here's one last view at the trades on a plain candlestick chart, the last trade will be covered ahead of market rollover if neither TP or SL is hit.

Update: 2nd trade was covered 5 minutes before rollover for a gain of 0.70%.

Seeking Fair Value

#50
Edited 1:42pm Dec 22, 2023 9:50am | Edited 1:42pm

makingmoves
Joined Jun 2022 | Status: Evolving | 236 Posts

Another in depth trade breakdown from today (Friday 22nd December 2023)

Hello everyone, it's been a busy run up to Christmas, I have another complete trade breakdown and analysis for you that took place earlier today. That aside, I hope you all enjoy the rest of your Friday!

On Thursday, EURUSD trended upwards and met weak sellers at the high, creating a 'P' shaped volume profile. Just before market rollover, price convincingly broke above the weak seller rotation/range period! As the day progressed (Friday), price slowly but consistently sold off until we came into contact with the start of the most significant volume cluster of yesterday's profile, as per the strategy rules/steps, look to confirm a bounce via order flow.

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As price came down into the High Volume Area (HVA) it initially looked bearish until, in the span of one 5 minute candle, price created a bullish engulfing candle full of imbalances showing lots of aggressive buyers are present! The order flow confirmation screenshot is below, with imbalances highlighted:

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The stop loss placement was on the opposite side of the HVA the trade was based upon, this allows the whole price zone of which the volume cluster is located, to become support for the trade. If price doesn't hold at the HVA area, I want to get out as the trade has then been invalidated, so the stop loss placed at a Low Volume Area (LVA) the other side of the HVA we are trading off of automates this for me.

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The above screenshot I attached to provide some further clarity on what I'm talking about in regards to stop loss placement. Due to the size of the stop loss, there was no nearby areas of significant volume to place the take profit ahead of and as such the standard fixed minimum risk-reward ratio of 1:1.75 was used. Lastly, here's a trade overview on a plain 30 minute chart:

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The trade was a success, took profit (as my rules state but this may be different for you) just before important economic news/data was released, today's US news was 'Core PCE Price Index m/m', for a gain of 0.95%.

Seeking Fair Value

#51
Dec 22, 2023 10:02am Dec 22, 2023 10:02am

MichaelSch
Joined Dec 2015 | Status: Trader | 2,586 Posts

I will make a PDF with all your posts to study. You make it happen. It now make pleasure to dive deeper to learn and that in past no material so suitable. If I have next year's questions I will for sure ask. Wish you silent Christmas and hope you are well.

Greets

Michael.

Perfection is the enemy of good enough!

#52
Dec 22, 2023 11:11am Dec 22, 2023 11:11am

makingmoves
Joined Jun 2022 | Status: Evolving | 236 Posts

Quoting MichaelSch

Disliked

I will make a PDF with all your posts to study. You make it happen. It now make pleasure to dive deeper to learn and that in past no material so suitable. If I have next year's questions I will for sure ask. Wish you silent Christmas and hope you are well. Greets Michael.

Ignored

Hi Michael, its always great to see you on the thread I appreciate your support my friend.

I think that's an amazing idea! Although we shouldn't have to worry about it in the near future, if Forex Factory ever shuts down and we have pdf version, we won't lose all the value this thread (and others) can provide.

Thank you for your wishes and kind words, I hope you have a great Christmas and I wish you all the best.

Thanks again,
MM.

Seeking Fair Value

#53
Dec 22, 2023 6:12pm Dec 22, 2023 6:12pm

flashpaul
Joined Sep 2013 | Status: Trader | 424 Posts

This thread is very evolute and difficult. It is necessary to read it more than one time.

#54
Dec 23, 2023 4:04pm Dec 23, 2023 4:04pm

trublu
| Joined Sep 2008 | Status: Trader | 308 Posts

Nice thread, couple of questions.

1) I assume you're using footprint and volume profile that comes with Sierra Chart? I know there are some 3rd party options.

2) How come only on the EU? I assume you get enough trades only trading the EU but this type of trading should be viable for many instruments.

Thanks.

#55
Edited 7:34pm Dec 23, 2023 6:32pm | Edited 7:34pm

makingmoves
Joined Jun 2022 | Status: Evolving | 236 Posts

Quoting trublu

Disliked

Nice thread, couple of questions. 1) I assume you're using footprint and volume profile that comes with Sierra Chart? I know there are some 3rd party options. 2) How come only on the EU? I assume you get enough trades only trading the EU but this type of trading should be viable for many instruments. Thanks.

Ignored

Hi trublu, thanks for checking out the thread!

To answer you first question, yes I do use Sierra Chart. Their footprint chart (numbers bars on sierra) and volume profile are highly customizable, possibly the most customizable publicly available. The old fashion look of the software and its complexity is very intimidating for new users, but you learn to love it.

You are also correct, there are several third party options available. All with varying degrees of quality / customizability and of course, all costing different amounts of money however as with most things, you get what you pay for. If I had to choose a different service/software I'd most likely go with ninjatrader platform. I do however, recommend everyone do their own thorough research around anything in regards to trading.

As to your second question, I have no one reason as to why so i'll give a few. In this type of trading, it sometimes requires discretionary trading when analysing volumes etc. To do this most effectively and to become really efficient in a specific market, I focus day in day out on one currency pair and its subsequent futures contract (EURUSD - 6E). I do also actively analyse/trade and monitor USDJPY (JPY Futures - 6J) as well as continually back/forward test my strategies on other markets and look to improve them, just to stay busy but productive when not trading as to not waste time looking for bad trade setups etc.

EURUSD is also the number one most liquid and actively traded currency pair/market in the world, so the original theory behind the strategy itself aligns with picking this market to start. That's to say, your absolutely right, this specific strategy but also this type of trading/analysis as a whole can effectively be used in many other pairs/markets and I think there is huge potential there.

Lastly, I have other strategies that I actively trade, all very related to each other but others are more related to Auction Market Theory. I trade EURUSD (and 6E) primarily on these strategies as well, so naturally I choose EU as the first market to test/trade any strategy as I know it best.

I hope this helps clear some stuff up,

MM

Seeking Fair Value

#56
Dec 24, 2023 1:45am Dec 24, 2023 1:45am

netsrac
| Joined Jun 2018 | Status: Trader | 103 Posts

Already one of the most informative and detailed threads on ff.
I don't know your long-term results, but I've been looking at the market/volume profile for some time and know that it can provide valuable information. I also know Trader Dale and have been following his ideas for a long time. I myself try to get by without trading data from the futures markets, as I consider the costs to be very expensive. At the moment, however, I can't judge whether doing without it will cost a lot in terms of performance. Perhaps you will be able to answer that for me.
Thank you very much for your thread and the effort you have put into it. Subscribed.

#57
Dec 24, 2023 8:36am Dec 24, 2023 8:36am

makingmoves
Joined Jun 2022 | Status: Evolving | 236 Posts

Quoting netsrac

Disliked

Already one of the most informative and detailed threads on ff. I don't know your long-term results, but I've been looking at the market/volume profile for some time and know that it can provide valuable information. I also know Trader Dale and have been following his ideas for a long time. I myself try to get by without trading data from the futures markets, as I consider the costs to be very expensive. At the moment, however, I can't judge whether doing without it will cost a lot in terms of performance. Perhaps you will be able to answer that...

Ignored

Hello netsrac, thank you for the support and the kind words, I hope you have an amazing Christmas!

No doubt, volume and market profile alone are extremely powerful tools. Trader Dale, although he shoves promotional content down your throat, does actually provide a lot of value.

I know that it is possible to trade this way without futures data however, to put in bluntly, you'll be less accurate. I do fully understand you, especially during the testing phase, it seems crazy to month-over-month pay fee's to get data just to backtest and so on. It's all down to your personal preference / trading style etc. That's to say, depending on your trading timeframe, it may not be necessary to have detailed futures data. The longer/larger timeframe you trade, the more accurate spot FX volume is, especially between individual brokers.

We can get a good idea of what this actually translates to on the charts. For example, when the market profile was being created, volumes were not easily accessible for all market participants and were only reported/updated once, at the day's close. Instead they came up with an equation being 'Time x Price = Value' instead of what we can use today, simply being 'Volume = Value'. Yet amazingly, if you overlay the same day's volume and market profile, more often than not they will have the exact same distribution areas/curves. However if you look closer there is much more detail in the volume profile at every price level. For example, where the market profile shows just one TPO width, the volume profile shows 5 different significant volume bumps that depending on your trading style, may be very important.

So it ultimately comes down to not only your preference when testing (profits pay for fee's when live) and if you actually need the highest quality data to start off but also your general trading style and strategy (scalper, day or swing trader for example) should dictate the data you need.

To round up, if you trade over a long time period, it wont effect performance too much. If your a short term trader, it unfortunately will negatively impact performance, to what extent is impossible to know.

Thanks again for stopping by and the nice words, any other questions or queries just let me know,

MM

Seeking Fair Value

#58
Dec 25, 2023 4:41am Dec 25, 2023 4:41am

giselle1723
| Joined Jan 2019 | Status: Trader | 459 Posts

Hi,Makingmoves

Your method is very similar mine.
It's a rare textbook Gold chart/trade on 12/22.

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#59
Dec 25, 2023 11:23am Dec 25, 2023 11:23am

makingmoves
Joined Jun 2022 | Status: Evolving | 236 Posts

Quoting giselle1723

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Hi,Makingmoves Your method is very similar mine. It's a rare textbook Gold chart/trade on 12/22. {image} {image} {image} {image}

Ignored

Hello giselle, thank you for stopping by and showing us your style of trading!

Looking at your chart screenshots, I definitely see the similarities on how we trade in regards to order flow. Its always amazing to find another order flow trader, thank you for reaching out my friend!

While the chart is very well labelled and I understand what the horizontal lines represent, It would be awesome if you could briefly go over how you trade and what you are looking for in terms of context/analysis/confirmation etc. I think that could be a great post and addition to the thread for everyone to read.

All that aside, I hope you have a great Christmas/holiday/break!

MM

Seeking Fair Value

#60
Dec 25, 2023 5:55pm Dec 25, 2023 5:55pm

giselle1723
| Joined Jan 2019 | Status: Trader | 459 Posts

Hi,Makingmoves

I'm kind of a reversal trader. What I check out before starting trade is:
1.previous day's volume/delta profile(POC,HVA,etc.) 2.previous day's high/low,Tokyo session high/low,weekly's high/low
3.privious day's/today's cum delta numbers(I forecast the daily direction based on these data) 4.supply/demand zone

And what kind of data I check/confirm before entry/exit is:
1.buy/sell imbalance 2.imbalance stack 3.stucked imbalance 4.finished auction 5.volume/delta numbers 6.delta %

The most important data is buy/sell absorption.From my experience,there are 4 patterns order flow candles/6 combinations appearing when the swing starts/ends.
1.buy/sell absorption > 2.double-bar absorption > 3.price divergence > 4.delta divergence (strong signal→weak signal)
1.absorption+absorption > 2.absorption+double-bar absorption > 3.absorption+price divergence >4.absorption+delta divergence
>5.double bar absorption+price divergence >6.price divergence+delta divergence These combinations appear when the price retest a specific level/zone.

When a over 100~150pips swing ends,climax volume/delta, exhausted volume/delta and then absorption appears.

I wait for the price to reach a specific level/zone,then check/confirm these data above.
This is my own understanding about market mechanics and order flow,so don't take it so seriously...

G

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