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Auction Market Theory and Market Profile

  • #1,161
  • Mar 28, 2011 4:35am Mar 28, 2011 4:35am
Ive added a short @1.4140 to my original short position from fri @1.4190. with a tp @1.3970. I have a sl @1.414.
Attached Image (click to enlarge)
Click to Enlarge Name: london session.jpg Size: 193 KB
Markets are not efficient, rather they are effective - Jones
  • #1,162
  • Mar 28, 2011 4:35am Mar 28, 2011 4:35am
Quoting kave
Initial session indicates moderates responsive buying in EU on current extreme & centering of price around 4050 or the low point of previous 2 days.

Strategy here is to play the corrective recovery to target of 4150 (or VPOC of 4170). I remain cautious..

Cautious Long on London 7am open, target to 4100 & 4150. Initial risk at 4015.

Attachment
Price have been stalling for 3+ hours, reduce exposure with cutoff of +22 pip, remaining stop at 4035..
  • #1,163
  • Mar 28, 2011 6:58am Mar 28, 2011 6:58am
Quoting mzvega
Ive added a short @1.4140 to my original short position from fri @1.4190. with a tp @1.3970. I have a sl @1.414.
nice entry from 4190

Just curious what is your rational in your entry decision for both 4190 & 4140 in AMT speak?

U hold trades over the weekend? even with negative swap?
  • #1,164
  • Mar 28, 2011 7:03am Mar 28, 2011 7:03am
Quoting Kang_Gun
Kave, what do you think?

KG
Yeah those single print is looking yummy since this is initiative buying within.

I may still look for a break later. My trading rules forbid me to hold pending orders if nothing happens for 3+ hours...

PS: I think someone turn off the lights in your charts bro )
  • #1,165
  • Mar 28, 2011 7:09am Mar 28, 2011 7:09am
Quoting kave
Price have been stalling for 3+ hours, reduce exposure with cutoff of +22 pip, remaining stop at 4035..
SL hit with -22 pips net zero pip gain but net positive dollar...now back to my original short bias.
  • #1,166
  • Mar 28, 2011 7:12am Mar 28, 2011 7:12am
Quoting kave

PS: I think someone turn off the lights in your charts bro )
i don't know how to turn on the light in my chart

KG
  • #1,167
  • Mar 28, 2011 7:31am Mar 28, 2011 7:31am
Quoting kave
SL hit with -22 pips net zero pip gain but net positive dollar...now back to my original short bias.
agreed, doesn't look like 4120 will be attacked today, but note how the DIBH for london is 4121...have now changed to short bias, looking for entry around 4070. Where are you looking for short entry? That would be negated by signs of strength near 4070, at which point i'll go back to long for the 4120 target.
Change is the only constant
  • #1,168
  • Mar 28, 2011 7:46am Mar 28, 2011 7:46am
took this short... banking +20
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...
  • #1,169
  • Mar 28, 2011 8:19am Mar 28, 2011 8:19am
Quoting tgwhbb
agreed, doesn't look like 4120 will be attacked today, but note how the DIBH for london is 4121...have now changed to short bias, looking for entry around 4070. Where are you looking for short entry? That would be negated by signs of strength near 4070, at which point i'll go back to long for the 4120 target.
On the VSA front i m keeping my eyes on this trigger@ 4066. It was rejected just now but sort of having some mini shakeout just now..
Attached Image


As for AMT wise. I am not shorting today, I think the RMA (robin mesch) context may play to fill the LUA (low usage area which i posted a chart earlier)

back to the question which i ask about the expected POC for today for EU. Monday typical balancing day i suspect is gonna end with normal bell bell curve that center around 4050
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Click to Enlarge Name: ScreenHunter_12 Mar. 28 21.23.gif Size: 38 KB
  • #1,170
  • Mar 28, 2011 8:20am Mar 28, 2011 8:20am
Quoting bandung
took this short... banking +20
Nice trade!
  • #1,171
  • Mar 28, 2011 8:21am Mar 28, 2011 8:21am
anyone watching eurchf...

I see 1.3000 as a test target...
Attached Image(s) (click to enlarge)
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  • #1,172
  • Mar 28, 2011 8:34am Mar 28, 2011 8:34am
Quoting bandung
took this short... banking +20
Interesting chart & interesting hourly strategy, nice chart & i have never seen any thing like this in MT4. as always..
  • #1,173
  • Edited 8:58am Mar 28, 2011 8:44am | Edited 8:58am
Quoting bandung
anyone watching eurchf...

I see 1.3000 as a test target...
Yes i have, but i have my hands full now with VSA trades now...so i skip this one. It is very similar to EU..

But i m not basing this on AMT but rather VSA...

In my TOS monkeybars is more like an rejection at 1.289 but the volume is relatively small. BUt in your scrabble chart it clearly shows initiatives.

Oh ...reminds me of something...the mptext i wonder if the coloring can be base off VOLUME rather then session.

I recall Peter Stedlmayer's s/w illustration that somehow have the ability to differentiate volume change with color test as either blue or red, i presume it meant high or low volume..

It would be neat to have something like a 3 or 5 level volume color code....

ok i m asking too much...

PS: Bundung, I m confusing my read on Swissy futures with eurochf..my appologies.. damn i need to take a walk..
  • #1,174
  • Edited 10:22am Mar 28, 2011 8:52am | Edited 10:22am
Quoting kave
On the VSA front i m keeping my eyes on this trigger@ 4066. It was rejected just now but sort of having some mini shakeout just now..
Attachment

As for AMT wise. I am not shorting today, I think the RMA (robin mesch) context may play to fill the LUA (low usage area which i posted a chart earlier)

back to the question which i ask about the expected POC for today for EU. Monday typical balancing day i suspect is gonna end with normal bell bell curve that center around 4050
Attachment
the current daily profile lacks buying and selling tails. If those do not materialize by the end of the day, then we would end up more with a non-trend day vs normal day.

From VSA, strength seen at 4070, break out of VAH on good volume, followed by backtest/absorption and continuation up to NY DIBH and break of LO high. 4120 back on the table IMO.

Agree with you on filling the LUA. see attached weekly profile.

EDIT: it appears the profile now has a buying tail, which i didn't notice before. So indeed a normal day is in the works.
Attached Image (click to enlarge)
Click to Enlarge Name: EU TPO W 2011-03-28 at 9.46.42 AM.png Size: 122 KB
Change is the only constant
  • #1,175
  • Mar 28, 2011 10:15am Mar 28, 2011 10:15am
EU showing an anomaly in the profile around 4080. It should be very likely price revisits that area to smooth out the profile. Would be a nice place to go long it the VAH is rejected.

I took a small long off the bounce on DIBH, was aiming for 4120 but closed with the stalling price nears friday's low before the late afternoon drop. Waiting for weakness to show itself more convincingly before attempting a short with the 4080 target.
Attached Image (click to enlarge)
Click to Enlarge Name: EU TPO D 2011-03-28 at 11.10.23 AM.png Size: 115 KB
Change is the only constant
  • #1,176
  • Mar 28, 2011 10:39am Mar 28, 2011 10:39am
I wanna get my mits on those mini profiles! I'm watching the "bc" gap in today's distribution for an opportunity to go long. In it's entirety, last week saw lower volume with higher value during a downward attempt. The last three days of last week saw decreasing volume - consecutively - with relatively unchanged value on two down days and one up day, all of which is indicative of strength and balancing. Kind of feeling we may retest the last week's highs this week.

My alternative scenario is rejection from where we are now - distributing within Friday's gap ("g" period) before rotating lower targeting 3970-3925, another big gap in distribution from 3/17.
  • #1,177
  • Mar 28, 2011 10:55am Mar 28, 2011 10:55am
Quoting Bilstein
I wanna get my mits on those mini profiles! I'm watching the "bc" gap in today's distribution for an opportunity to go long. In it's entirety, last week saw lower volume with higher value during a downward attempt. The last three days of last week saw decreasing volume - consecutively - with relatively unchanged value on two down days and one up day, all of which is indicative of strength and balancing. Kind of feeling we may retest the last week's highs this week.

M[b]y alternative scenario is rejection from where we are now - distributing...
Hi bilstein,

you seem well experienced with these profiles. What is your take on Friday's g period and our current foray back into it? The current profile now lacks a selling tail at the top (inside friday's g period), which makes me biased towards the lack of fresh selling there, and looks more like some profit taking bring price back down to fill todays 'bc' gap.

your thoughts?

EDIT: IMO 30m still looks strong at 4100, but not a good place to go long with Friday's VAL only 20 pips up and could provide some good resistance...

EDIT: today's f period looks likea really nice test of Friday's 'g' period low...adds more weight to the upside scenario IMO.
Change is the only constant
  • #1,178
  • Edited 11:17am Mar 28, 2011 11:09am | Edited 11:17am
Quoting kave
nice entry from 4190

Just curious what is your rational in your entry decision for both 4190 & 4140 in AMT speak?

U hold trades over the weekend? even with negative swap?

Kave, my rational for the trade @1.4190 from Friday was based on my longer term analysis from my quarterly chart in post #1133. As soon as price closed back inside previous Q’s VA @1.41911. I took the short and wanted to see how long I could hold it . No, I normally don’t hold over the weekend. I don’t take large trades so I am able to place a 100 pip sl and if it is hit it doesn’t hurt. It helps me to be able to take a loss, and learn to cut my losses, early and happily. The other trade @1.4140, I treat each session as an individual daily profile. So at London session first hour range and Profile open type was “Open-rejection –reverse” possible normal to normal var day. For me possible neutral to normal var session. the daily profile was looking bell shaped (acceptance of value at those levels ). As I speak the US session is starting to look like the same pattern alittle more P shaped. I apologize for my late response I live on the west coast and it was 3am my time when I took the trade. I closed positive and went to sleep for awhile.
Attached Image (click to enlarge)
Click to Enlarge Name: us session.jpg Size: 192 KB
Markets are not efficient, rather they are effective - Jones
  • #1,179
  • Mar 28, 2011 11:13am Mar 28, 2011 11:13am
From my perspective; auction rotations today are favoring the buyer (+9) so we should definitely be looking for opportunities to buy into the market. Also, from a pure supply/demand point of view: there is obviously more buying going on today than selling and I'd rather be on the dominant side of the market. About Friday's "g" (for gap, lol); typically, with gaps, the market rotates towards them to fill, the trick is deciphering where it wants to go from there. Initially today, I was looking to sell into the market (against my better judgement) short term as, early this morning, the developed profile was expanding more so horizontally than vertically so I instinctively went into "range trade" mode - looking to sell at highs and buy at lows. Obviously, I was wrong, lol.

I agree with you on Friday's LVA, we can tell there was rejection of "wholesale" prices (LVA) by how fast 'g' period exited the value area so indeed, we could find responsive selling if we rotate that high today in which case, there'd be no harm in taking a very conservative short position. As we speak, price is distributing within that "g" period gap from Friday which, as we all know means this price area is gaining acceptance from the market - above retail (HVA) prices.

I look at VSA in combination with market profile not as the ultimate solution but as the best possible way to manage risk I've found. In "Steidlymeyer on Markets" there's a segment called "The Hawkins Approach" where they mention the four stages of market activity:

Step 1 Series of prices in one direction
Step 2 Trade to a price to stop the market
Step 3 Develop around that stopping price
Step 4 Move to efficiency (retracement)

..and if any of us had the time (or patience) to watch an entire profile develop we can witness these steps occurring at high frequency.

I tend to formulate analysis on a day-by-day basis more than an intraday basis but sometimes, I just can't hep but jump in there, lol.

Edit: On top of that, we must also remember that the low spectrum of today's price action has gained significant acceptance by the market already so we must ask ourselves: "If we short now, what are the odds that the price will retrace a significant amount to make taking the risk of shorting worth it?"
  • #1,180
  • Mar 28, 2011 11:50am Mar 28, 2011 11:50am
I just entered short @1.4069. SL @1.414-5. The us session has a wide IB Base. The wider the base the harder it is to tip. The profile doent look elongated enough imo, for more upside . Ill ride this to the poc. I may bail if I see strength as we return to the current vah. Ill also look for a change in sentiment @the london close.
Markets are not efficient, rather they are effective - Jones
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