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Auction Market Theory and Market Profile

  • #181
  • Feb 8, 2011 10:14am Feb 8, 2011 10:14am
Quoting HIFX
These are my live trades for today and yesterday,based om AMT &VSA.Targeting 3700/30 and above next 24 hrs? S/L 35806.

Good target. 3688 is the double initial balance high (DIBH) for today, so with some over shoot 3700 is likely. As for next 24 hours, I'm still thinking higher, but it will depend on reaction at 3688 area as that area is a trigger number based on NFP (thursday and Friday wide spread down bars on UHV).
Change is the only constant
  • #182
  • Feb 8, 2011 10:20am Feb 8, 2011 10:20am
Quoting frankkn
I will post some as soon as the issues get straightened out with the TOS indicator. These are 24 hours profiles starting at 5pm each day, but the levels change depending on what time frame you're looking at. The futures isn't so bad but I'm still waiting on some confirmation.
I learned from some webinar that they use values from MP created on 30 min chart in 5 min chart...same idea like in Murray Math lines ( lines from 60 min TF used in 5min or 15min TF)
The Market pays you to be disciplined
  • #183
  • Feb 8, 2011 10:30am Feb 8, 2011 10:30am
I am also looking for a strong close above 3668 (and as i speak it is )printing above) 3688 is weekly H3 ,so a strong close above and a test from the 3700/30 area down and i will look to accumulate for 3842 god willing.The attched chart is Broco futures,
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hifx
  • #184
  • Feb 8, 2011 10:34am Feb 8, 2011 10:34am
Quoting HIFX
I am also looking for a strong close above 3668 (and as i speak it is )printing above) 3688 is weekly H3 ,so a strong close above and a test from the 3700/30 area down and i will look to accumulate for 3842 god willing.The attched chart is Broco futures,
sounds about right longer target is 3940-70 area for me as that is a naked monthly POC from october. but that will obviously depend on reaction at the levels you indicated.
Change is the only constant
  • #185
  • Feb 8, 2011 10:43am Feb 8, 2011 10:43am
Something to keep an eye on inverted head and shoulders forming on dollar index ?
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hifx
  • #186
  • Feb 8, 2011 10:56am Feb 8, 2011 10:56am
Quoting mima
I learned from some webinar that they use values from MP created on 30 min chart in 5 min chart...same idea like in Murray Math lines ( lines from 60 min TF used in 5min or 15min TF)
Thank you very much for that, in that case here is a 5m with levels and a 30m with levels. Check out the price axis, the levels are highlighted in yellow and red.
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  • #187
  • Feb 8, 2011 11:18am Feb 8, 2011 11:18am
Quoting frankkn
Thank you very much for that, in that case here is a 5m with levels and a 30m with levels. Check out the price axis, the levels are highlighted in yellow and red.
Thank you Frank, Now I know what are my upper and lower lines...On 30m is very close to what you have but this MT4 MP indicator doesn't have capability to show 30 min MP in 5min TF...maybe someone will make it...

Well these (yellow and red ) numbers of MP that you have on 30min TF, I think, must be the same on 5min TF or 15min...but they are very close...good.
The Market pays you to be disciplined
  • #188
  • Feb 8, 2011 11:33am Feb 8, 2011 11:33am
Quoting mima
Thank you Frank, Now I know what are my upper and lower lines...On 30m is very close to what you have but this MT4 MP indicator doesn't have capability to show 30 min MP in 5min TF...maybe someone will make it...

Well these (yellow and red ) numbers of MP that you have on 30min TF, I think, must be the same on 5min TF or 15min...but they are very close...good.
Not sure i follow...what do you mean by using MP values from 30M chart on a 5M chart? on my MT4 MP indy from iPolo, the general shape of the general shape of the profile is the same. What is really more important on the different TFs are the POC/VAL/VAH - and those values should be the same regardless of the TF you are looking at for a specific time.
Change is the only constant
  • #189
  • Feb 8, 2011 11:54am Feb 8, 2011 11:54am
Frank,

Is that Think or Swim you are using or NT ?

Cheers
hifx
  • #190
  • Feb 8, 2011 12:14pm Feb 8, 2011 12:14pm
Quoting tgwhbb
Not sure i follow...what do you mean by using MP values from 30M chart on a 5M chart? on my MT4 MP indy from iPolo, the general shape of the general shape of the profile is the same. What is really more important on the different TFs are the - and those values should be the same regardless of the TF you are looking at for a specific time.
Yes, MP values (POC/VAL/VAH)... As I said , on one webinar I learned that they use POC/VAL/VAH created on MP on 30 min on 5min TF (chart)...similar logic on Murray Math lines indicator...

I-Polo MP has only POC..no VAL and VAH...If he wants to fix it...
The Market pays you to be disciplined
  • #191
  • Feb 8, 2011 12:31pm Feb 8, 2011 12:31pm
Quoting mima
..Now I know what are my upper and lower lines...On 30m is very close to what you have but this MT4 MP indicator doesn't have capability to show 30 min MP in 5min TF...maybe someone will make it...Well these (yellow and red ) numbers of MP that you have on 30min TF, I think, must be the same on 5min TF or 15min...but they are very close...good.
Yes, the values will very a bit from a 30 minute to a 5 minute or 15 minute. Traditionally one would place the 30 minute numbers on a 5 minute chart. Today, however, most would simply use one or the other as the difference should not be that much.
Without VSA, you're playing checkers while the Smart Money plays chess.
  • #192
  • Edited 1:53pm Feb 8, 2011 1:42pm | Edited 1:53pm
I got a PM with a couple of questions. I think all might benefit from the answers.

Answer #1: Take a look at the chart below from yesterday.

Since most here do use VSA, we can speak a bit more about what VSA is telling us. The Responsive selling at the unfair highs mostly comes in the form of UP bars. VSA tells us that weakness (supply) usually enters on UP bars and strength (demand) usually enters on DOWN bars.

Notice that in this example we had high volume up bars and low volume up bars. The high volume up bar has normal range-too small for the volume associated with it. A good sign of supply hitting the market. Then we see some up bars on volume less than the previous two intervals. These are No Buying Pressure type bars. The BBs are not actively buying. Lack of BB participation is a sign of weakness in this case.

There is a Hidden Up Thrust to "cap" it all off as well. This is a down bar but the weakness in the background brings it to life.

Once we traverse the Value Area, we see that the initial sign of Responsive Buying comes on a DOWN bar-Stopping volume.

Frankkn put it best-VSA is the Yang to Auction Market Theory's Yen.

Answer #2: I got distracted and wasn't able to post the outcome. My first target was the Developing Value Area High. I was really looking for a test of the high @ 1.3645. We nearly hit the Value Area High on the bar that got me in. Then we had a harsh Shake Out that did not shake me out. Three bars later, I got out @ 1.3645.

There was another Developing Value Area play later, but I wont get into it since I didn't "call" it earlier.

So the answer is that you can play both the established (prior day's) Value Area as well as the Developing Value Area. Today it was pretty clear that the market found value higher than yesterday. There was a nice Test on the daily yesterday. The chart is in the VSA thread too tired to post it here.

Hope that helps.

**EDIT** Another way of saying that it was pretty clear that the market found value higher is that the market found acceptance above yesterday's value area.
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Without VSA, you're playing checkers while the Smart Money plays chess.
  • #193
  • Feb 8, 2011 2:05pm Feb 8, 2011 2:05pm
Quoting HiddenGap
I got a PM with a couple of questions. I think all might benefit from the answers.

Answer #1: Take a look at the chart below from yesterday.
Hi HG,

Your chart time looks like its eastern time, so i took a look at my chart at the same time to compare your VAL/VAH lines with my initial balance lines (and double initial balnce lines). There is a very nice correlation between the two. For example, your VAL line at 3540 is identical to london session's DIBL. Similarly your VAH around 3610 is identical to the IBH for the london session.

That makes a lot of sense really since the previous day's value area guides the next day's movement unless there is a breakout above or below value.

What is even more interesting IMO is that the IB range gives a very good indication of the type of session we will have. Take yesterday for example, the asian IB as 10 pips, narrow even for that session. Narrow IB generally means a breakout will occur during the session. and that's exactly what happened yesterday/sunday night. Yesterday's US IB was wider than normal - 53 pips - which tends to lead to a range bound session. Which is basically what happened yesterday as well as the NY session didn't get that high above the IBH or below the IBL. Today's US session IB was 35 pips - about average, and we had a good range but did not breakout of DIBH nor DIBL.

So we know the market direction based on MP and the rising or falling POCs, we know the market's boundaries based on VAL/VAH from the previous day, and we know the markets intention for hte current session based on IB. Then we know if those respective boundaries will hold or not based on VSA. Very powerful knowledge indeed! Of course, there are always talking heads to mess things up, but generally speaking this stuff is spot on!

I think i had an epiphany last weekend while learning all this
Change is the only constant
  • #194
  • Feb 8, 2011 3:58pm Feb 8, 2011 3:58pm
good to see someone opened a thread based on market profile! very nice.
while i was reading through the posts i realized everyone is focusing about the peaks of the histogram.
well, my first question is, does anyone know what's going on with the dips and what is their significance - yes, the least activity tick-wise, but what happens when price goes near a dip level?
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Nihil Sine Deo.
  • #195
  • Feb 8, 2011 4:03pm Feb 8, 2011 4:03pm
another question is, if we are working with daily profiles, when can we consider the day to start and to end? forex market opens monday and closes friday, so a daily time frame would only be arbitrary... right?
would really like to hear your opinions
Nihil Sine Deo.
  • #196
  • Feb 8, 2011 4:11pm Feb 8, 2011 4:11pm
Quoting Scrat
another question is, if we are working with daily profiles, when can we consider the day to start and to end? forex market opens monday and closes friday, so a daily time frame would only be arbitrary... right?
as most bank roll-over at 5PM NY time, that is what I use for the start of my day. You can also use 7PM (the asian session open) and there is little difference between them.

As for the low volume nodes (dips in the histogram), as far as i have read so far, that represents a price area where there is no interest from either buyers or sellers. Why exactly i don't know. But what i've read is that those low volume nodes will at some point start getting developed. so maybe they are like footprints of where price may come back to at some point in the future. Just a thought though. I still need to learn more about those low volume nodes.
Change is the only constant
  • #197
  • Feb 8, 2011 5:40pm Feb 8, 2011 5:40pm
Quoting Scrat
another question is, if we are working with daily profiles, when can we consider the day to start and to end? forex market opens monday and closes friday, so a daily time frame would only be arbitrary... right?
would really like to hear your opinions
HIFX- It's ThinkorSwim

Regarding the issue of market open/close in forex, I agree that it is ambiguous.

To me the histogram's POC and value H/Ls are a reflection of the behavior of everyone participating in the auction. This may transcend opens/closes as we're looking for a reference of behavior.

As far as initial balance goes, I would imagine that you could look at that on a per-session basis as opposed to a per day basis. Also a weekly profile would probably be open for IB analysis.

For me, I'm taking this slowly (as I'm a very slow learner by nature--and also limited timewise). Today was the first day I was able to trade using VAH/VAL , so I've only just begun the journey of understanding.
  • #198
  • Feb 8, 2011 5:45pm Feb 8, 2011 5:45pm
Today price bounced off of yesterday's VAH, jumped to today's VAH, next we bounced off the VAL and were met by responsive sellers above today's value area. The responsive selling put enough supply into the market to force us to close below the day's POC.

Speaking of POCs, today's formed above the previous two days', and just below Thursday's. Our VAL matches Thursday's VAL as well.
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  • #199
  • Feb 8, 2011 5:50pm Feb 8, 2011 5:50pm
Quoting Scrat
well, my first question is, does anyone know what's going on with the dips and what is their significance -
They are areas that saw little activity. I recently read in a link HG posted on the topic that price will quickly move through these areas from node to node as there is little structure to stop price.
  • #200
  • Feb 8, 2011 6:00pm Feb 8, 2011 6:00pm
Quoting frankkn
Today price bounced off of yesterday's VAH, jumped to today's VAH, next we bounced off the VAL and were met by responsive sellers above today's value area. The responsive selling put enough supply into the market to force us to close below the day's POC.

Speaking of POCs, today's formed above the previous two days', and just below Thursday's. Our VAL matches Thursday's VAL as well.
Also this is an example of price's tendency to visit the opposite value area extreme after responsive traders force price back into the value area following an attempt to establish trading outside of the value area.
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