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London session market profile preps and journal for DAX

  • #81
  • Edited 10:05pm Apr 17, 2018 9:46pm | Edited 10:05pm
Quoting BinChenUt
{quote} I really appreciate the thought provoking question you have posted. This is what I am looking for to join a trading forum. But I have also sensed that you are quite frustrated about trading DAX because you are speaking of a lot of negativity. This is what I have found that most of the retail traders are looking for the big moves, but the biggest most profitable traders I have met in my life are the ones who is trading big positions on a small set of reliable setups for small initial targets. What's paying off are not big moves, but the position...
I guess I was just overwhelmed by what I don't know or didn't know with DAX it reacts differently when it opens with a huge gap or no gap days there's also range bound days where price practically freezes all throughout Frankfurt knowing what you're in first and foremost saves you from a lot of troubles like you said you at least won't be reacting on every move or have unrealistic expectations. Easier said than done absolutely I kick myself every time it happens and at the end of every session it's live and learn situation can't escape it if we want consistency.

As for targets I definitely agree with you ! you have to be quick and precise with your levels I once let a winning position of + 17pips go down the drain into the minus. Never going to let that happen. Sometimes shooting for 5s can also act as a cushion for errors as errors can happen.
...
  • #82
  • Apr 18, 2018 2:02am Apr 18, 2018 2:02am
Yesterday's bullish reaction in DAX was a significant development in the longer term price structure.
I would like to call your attention to this daily chart with yearly TPOs.
Yesterday's big bull bar has pierced through the VAH of the yearly profile and it has taken out the significant daily swing high of 12600, behind which was a big pocket of stop loss order for some big hand short positions.

I haven't seen a flush of big market orders flushing in the market yesterday but in CAC i have witnessed a slew of mega block orders -- 300, 500 lots. It is a confirmation that the European equity has finally completed its 2 months long base building process and ready to move higher. Note that the top was a 2.5 month long top, hence the 2 month long base is nearly symmetrical enough to at least counter balance the bearish pressure.

Given that big picture, how should we devise the daily strategy to take advantage of that info?
Firstly, i would not be all out bullish saying that we are going to make a new high. No i don't really think so. Because the base is still smaller than the top, the best DAX can do is to fill the TPO holes from 12600 to 13000 before it can do anything to challenge the high. On the other hand, DAX is the weaker than the US equity. It is not going to make a new high before the US equity do.

Secondly, I would expect more stop probing price action today that it can probe even higher today or tomorrow to squeeze the shorts. What usually happens is that the price would back down after the shorts are squeezed. Because the market maker would be too short after absorbing those buy stop orders. That is why after a significant long term level being taken out, market never went straight into all out bullish drive. The Market maker is not going to let it go before it balances its inventory first.
Hence the primal scenario for today is Open-test drive and failure.

If we take a look at the profile yesterday, it has quite a poor structure with too many holes. So just anticipating stop runs by the Market maker and watch any significant swing low on a 30 min or hourly chart for a potential location for a test and revesal.
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  • #83
  • Apr 18, 2018 2:40am Apr 18, 2018 2:40am
Half hour later, DAX has not been able to trade significantly higher. The Delta is also gone flat which is saying that there is very little conviction or participation from the day time frame trader to trade the price higher.

I am looking at VPOC of yesterday at 590 as a potential support. If that one failed to hold, then the area behind the double bottom would be a nice place for the Market maker to target for, because there are plenty of stops residing behind.
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  • #84
  • Apr 18, 2018 3:31am Apr 18, 2018 3:31am
Seek and destroy.
The market maker has targeted the 12650 swing level to run a couple more stops.
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  • #85
  • Apr 18, 2018 3:57am Apr 18, 2018 3:57am
This is the failure I am talking about.
After the stop orders are probed. It is time for the Market maker to bring the price lower to liquidate their shorts.
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  • #86
  • Apr 18, 2018 4:12am Apr 18, 2018 4:12am
I don't believe we have bottomed out yet.
I can't imagine the market maker to leave those double bottom untapped. Too many candies down there.
  • #87
  • Apr 18, 2018 4:25am Apr 18, 2018 4:25am
580 liquidity pool behind the double bottom touched.
Look at the absorption at the low by the market maker.
They are happy now taking away their 6 million pnl of the day.
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  • #88
  • Apr 18, 2018 4:41am Apr 18, 2018 4:41am
Long inventory is built below 12580.
I have forgotten that the algo loves 5s.
The real long inventory is built at 12575.
You should starting building your long inventory together with the algo.
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  • #89
  • Apr 18, 2018 4:48am Apr 18, 2018 4:48am
Quoting Piquant
{quote} I guess I was just overwhelmed by what I don't know or didn't know with DAX it reacts differently when it opens with a huge gap or no gap days there's also range bound days where price practically freezes all throughout Frankfurt knowing what you're in first and foremost saves you from a lot of troubles like you said you at least won't be reacting on every move or have unrealistic expectations. Easier said than done absolutely I kick myself every time it happens and at the end of every session it's live and learn situation can't escape it...
Piquant,

i think today's market is a perfect study example of Market maker manipulation that the DAX is not random at all.
If you follow my thread, you can see that I was spot on the open test drive and failure scenario.
Just study the market profile. I have never met a pro who is not using market profile.
I can tell you, there is no other instruments trades better with market profile than DAX. Because the market makers are using the TPO profile and volume profile in their algo.
You will be amazed by how precisely DAX reacts to those levels. Another factor is that the DAX is illiquid instrument, it is probably the easiest to manipulate. Those manipulation is not going to serve the whole trading community, but to serve the pocket of the market makers. But once you understand their game, trading DAX is not going to be a frustrating journey.
  • #90
  • Apr 18, 2018 4:54am Apr 18, 2018 4:54am
Very interesting market profile analysis
Did you do and trades?
  • #91
  • Apr 18, 2018 5:00am Apr 18, 2018 5:00am
Yes, sure.
I am trading actively in and out on both side. Basically follow the algo.
Though, admittingly, I have missed a lot of trades to be honest due to sleep deprivation.

Got to leave now, I have to go picking my baby. Come back to trading tomorrow.
  • #92
  • Apr 18, 2018 3:27pm Apr 18, 2018 3:27pm
Quoting BinChenUt
Yes, sure. I am trading actively in and out on both side. Basically follow the algo. Though, admittingly, I have missed a lot of trades to be honest due to sleep deprivation. Got to leave now, I have to go picking my baby. Come back to trading tomorrow.
Hi
What software do you is for market profile?
Thanks
  • #93
  • Apr 18, 2018 10:20pm Apr 18, 2018 10:20pm
Quoting BinChenUt
{quote} Piquant, i think today's market is a perfect study example of Market maker manipulation that the DAX is not random at all. If you follow my thread, you can see that I was spot on the open test drive and failure scenario. Just study the market profile. I have never met a pro who is not using market profile. I can tell you, there is no other instruments trades better with market profile than DAX. Because the market makers are using the TPO profile and volume profile in their algo. You will be amazed by how precisely DAX reacts to those levels....
that sounds interesting, I will do some reading on the subject on the weekends.
I've seen your attachments and write ups but never really understood anything as embarrassing as it maybe it all seemed "too" professional for me.
nevertheless thanks for the heads up,
I might come back with more "silly" questions next week
...
  • #94
  • Apr 19, 2018 1:33am Apr 19, 2018 1:33am
Quoting BinChenUt
{quote} Piquant, i think today's market is a perfect study example of Market maker manipulation that the DAX is not random at all. If you follow my thread, you can see that I was spot on the open test drive and failure scenario. Just study the market profile. I have never met a pro who is not using market profile. I can tell you, there is no other instruments trades better with market profile than DAX. Because the market makers are using the TPO profile and volume profile in their algo. You will be amazed by how precisely DAX reacts to those levels....
I follow dax for 3 years know and based on what i have been form other people market profile chart i am 100 % with you bin
  • #95
  • Apr 19, 2018 1:35am Apr 19, 2018 1:35am
Quoting wbemsms
{quote} I follow dax for 3 years know and based on what i have been form other people market profile chart i am 100 % with you bin
Poc
Tpo holes
Valh
They all ready and fill sometimes same day but it can take also weeks to fill a hole in the profile
  • #96
  • Apr 19, 2018 1:47am Apr 19, 2018 1:47am
Quoting wbemsms
{quote} Poc Tpo holes Valh They all ready and fill sometimes same day but it can take also weeks to fill a hole in the profile
I use a method called Center of Gravity bases on opening range together with fib extremes
Also very consistent and rewarding
Maybe i will start my win thread
Example from yesterday
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  • #97
  • Apr 19, 2018 1:48am Apr 19, 2018 1:48am
Quoting wbemsms
{quote} I use a method called Center of Gravity bases on opening range together with fib extremes Also very consistent and rewarding Maybe i will start my win thread Example from yesterday {image}
Own thread i meant
  • #98
  • Apr 19, 2018 1:58am Apr 19, 2018 1:58am
Yesterday was a balance day with a bearish tilt for DAX.
That is a typical day when the day time frame player is in control, which is to say the market maker was in control.
The rule of thumb is when the market gaps up/down, it is more likely to be driven by higher time frame player due to earnings or macro factors. Open in range or even in value, it is more likely you are going to see a market maker market. When market maker is in control they are not going to push the price into trend, but just load inventory by running stops and get out at the stop order pool at other side of the market.

Back to today's trading. DAX is opening in the value, hence the primal scenario is day time frame control. Beware of the market maker stop run, which is to say it is likely that the TPO holes are going to be filled and, more importantly, the stops behind yesterday's high or low, sometimes both, are going to be raid. DAX does not have inside day very often. It loves to run the stops behind the prior day high/lows.
If the market failed to find response at the prior day's POC and value low. I will immediately shift my eyes to the raid of yesterday's low and subsequently the TPO hole in the chart.

If it is able to find support and trade above the VAH, then I am going to be bullish to eye yesterday's high as target. Basically, at this moment, I am neutral. I don't favour one side or the other. I will let the market maker tell me which side it would like to raid.
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  • #99
  • Apr 19, 2018 1:59am Apr 19, 2018 1:59am
Hey there pardner. What sort of stats? Like the r:r, positive expectancy and hit rate? Sounds very interesting.
  • #100
  • Apr 19, 2018 2:00am Apr 19, 2018 2:00am
This is the TPO hole in the hourly chart.
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