Auction Market Theory and Market Profile | Page 143 | Forex Factory

Options

Go to
Permalinks
Print Thread

Similar Threads

Auction Market Value Theory & Analytics 1,757 replies

market Theory 101 Supply and Demand,Market Cycles 7 replies

Market Profile And Volume Profile MT5 7 replies

MarketProfile/Volume Profile/Auction Market Theory indi? 17 replies

Market profile trader-Merged profile 0 replies

Attachments: Auction Market Theory and Market Profile
Exit Attachments

Auction Market Theory and Market Profile

  • #2,841
  • Edited 12:39am Jun 8, 2011 12:27am | Edited 12:39am
With yesterday's poor high causing price to consolidate again.

The Long inventory of NY's have been tested with responsive seen on NY's low.
Asia inventory is short now. Next reference will be NY's POC & Current Asia high. Perhaps by European open in 30mins time, we could see initiatives again like yesterday. #acceptance of Asia high is critical.

Attached Image
  • #2,842
  • Edited 2:48am Jun 8, 2011 2:35am | Edited 2:48am
GU's have not been able to stay above friday fair value today & price have been heading drifting south & now experiencing a LLB like EJ, which is the follow up of yesterday top heavy P formation short covering rally...hence inventory was deem excessive. As JD puts it, "the market have gone too short too fast" indicating inventory re-adjustment.

Attached Image
  • #2,843
  • Jun 8, 2011 6:07am Jun 8, 2011 6:07am
Quoting Evak
With yesterday's poor high causing price to consolidate again.

The Long inventory of NY's have been tested with responsive seen on NY's low.
Asia inventory is short now. Next reference will be NY's POC & Current Asia high. Perhaps by European open in 30mins time, we could see initiatives again like yesterday. #acceptance of Asia high is critical.

Attachment
EU did not even bother with Asia high, rejecting NY POC, & traded back to its opening price indicating lack of confidence. Current price tested on previous London open which is spike base & now we are already in 2xRE with absorption volume. But if demand still weak next reference would be previous London's VPOC.

Attached Image
  • #2,844
  • Jun 8, 2011 8:35am Jun 8, 2011 8:35am
Quoting tgwhbb

the bottom of today's profile has some anomalies as well...but the top is not complete IMO either.
looks likes the LUA is being worked on to solidify the base. daily and monthly profiles have poor highs, and upper distribution of monthly profile looks better distributed now vs yesterday. still long bias for me.
Attached Image (click to enlarge)
Click to Enlarge Name: EU TPO 2011-06-08 at 9.32.46 AM.png Size: 160 KB
Change is the only constant
  • #2,845
  • Jun 8, 2011 9:06am Jun 8, 2011 9:06am
This post should help.

http://www.forexfactory.com/showthre...60#post4550060

hmm looks like the original post was been deleted...
Change is the only constant
  • #2,846
  • Jun 8, 2011 9:15am Jun 8, 2011 9:15am
Can you please elaborate more on absorption volume please?
Quoting Evak
EU did not even bother with Asia high, rejecting NY POC, & traded back to its opening price indicating lack of confidence. Current price tested on previous London open which is spike base & now we are already in 2xRE with absorption volume. But if demand still weak next reference would be previous London's VPOC.

Attachment
  • #2,847
  • Jun 8, 2011 9:37am Jun 8, 2011 9:37am
Quoting tgwhbb
This post should help.

http://www.forexfactory.com/showthre...60#post4550060

hmm looks like the original post was been deleted...
Thanks ..Tgwhbb -
  • #2,848
  • Edited 11:17am Jun 8, 2011 11:05am | Edited 11:17am
Quoting skyscraper
Can you please elaborate more on absorption volume please?
At the time of the writing in my post EU tested the spike base I've marked on my chart as a potential reference. The market pause the down move in this case with supporting volume.

In order flow context, it is refer to as "responsive buyers meet the sellers." Hence the down move was absorb. Basically what happen in that bar was that all the sellers hitting the bids was being absorb, momentarily.

But I also mentioned that if demand is weak we could still see further down moves. Again in order flow context, even though we have seen absorption, we need to see buyers "initiating" but we did not as the next few bars gone up with low volume indicating very weak demand or lacking initiatives.

Here is a chart indicating the equal & opposing response. Ny response was actually a "rally high" in this trend day moves, as oppose to pullback low.
Attached Image (click to enlarge)
Click to Enlarge Name: ScreenHunter_118 Jun. 09 00.02.gif Size: 21 KB
  • #2,849
  • Jun 8, 2011 11:10am Jun 8, 2011 11:10am
Thanks for explaining Kave.
Quoting Evak
At the time of the writing in my post EU tested the spike base I've marked on my chart as a potential reference. The market pause the down move in this case with supporting volume.

In order flow context, it is refer to as "responsive buyers meet the sellers." Hence the down move was absorb. Basically what happen in that bar was that all the sellers hitting the bids was being absorb, momentarily.

But I also mentioned that if demand is weak we could still see further down moves. Again in order flow context, even though we have seen absorption,...
  • #2,850
  • Jun 8, 2011 6:06pm Jun 8, 2011 6:06pm
long liquidation vs genuine move...

Guys (and girls), I've been trying to figure out how to identify a long liquidation move vs a real down move. Any thoughts? I'm comparing today's down move to last wednesday's move, and the profiles don't look much alike, leaving me wondering if today's downmove is a genuine move. However, EU is still one-timeframing up, so a short IMO is still risky.
Change is the only constant
  • #2,851
  • Jun 8, 2011 6:11pm Jun 8, 2011 6:11pm
and my second thought of the night....there is Friday's POC below around 4490. Do you consider it a virgin POC given the PA on Friday?
Attached Image (click to enlarge)
Click to Enlarge Name: EU TPO 2011-06-08 at 7.08.28 PM.png Size: 150 KB
Change is the only constant
  • #2,852
  • Edited 7:03pm Jun 8, 2011 7:03pm | Edited 7:03pm
Quoting skyscraper
Can you please elaborate more on absorption volume please?
Absorption = professional side of the market is active, volume is ultra high and the bars are closing near the highs (usually), this may be followed by low volume bars testing the high/close of that bar. If price is pushing through old levles of supply then this price action represents professional buyers swamping any sellers at a given price level. Testing is confirmation, but the key is context. You have to look at the overall price structure in regards to supply and demand in order to put this price action into context.

A more simple way of putting it is absorbing is when pros happily take the other side of your trade because they are expecting price to exceed willing supply at an important level of supply.

The opposite is true for longs, hope I was clear ??
  • #2,853
  • Edited 9:30pm Jun 8, 2011 9:05pm | Edited 9:30pm
Quoting tgwhbb
and my second thought of the night....there is Friday's POC below around 4490. Do you consider it a virgin POC given the PA on Friday?
Interesting question....(not sure I know the answer)……….. The vol for that vpoc day was @120956, each day since then has had @ the same amount of vol each day as value area each day builds higher. Until yesterday, with vol @ 142066, much more vol than each of the days follow the vpoc in question yet failing to build value higher. With that kind of vol without higher value makes me doubt higher prices. The poc yest is where the most trades took place, yet poc is lower and value too. I would like to think price may indeed test that vpoc. Lets see what happens. (not sure if you can see vol #’s in the photo)
Attached Image (click to enlarge)
Click to Enlarge Name: vol.jpg Size: 345 KB
Markets are not efficient, rather they are effective - Jones
  • #2,854
  • Jun 8, 2011 10:46pm Jun 8, 2011 10:46pm
Quoting mzvega
[font=Verdana]Interesting question....(not sure I know the answer)……….. The vol for that vpoc day was @120956, each day since then has had @ the same amount of vol each day as value area each day builds higher. Until yesterday, with vol @ 142066, much more vol than each of the days follow the vpoc in question yet failing to build value higher. With that kind of vol without higher value makes me doubt higher prices. The poc yest is where the most trades took place, yet poc is lower and value too. I would like to think price may indeed test...
Thanks Claudia, nice to see what you are thinking. Here is my current thought... my brokers volume for wednesday is about 30% more than Tuesday's, yet with that additional volume price could not break yesterday's low (one timeframe up still in effect). I also don't consider VA lower on Wednesday as it overlaps Monday and Tuesday. So we have an attempt to go down on wednesday on increased volume but with no progression of value to follow suit.

I think I'm also seeing initiative buying at Asia IBH and DIBH as well right now, in addition to a buying tail below wednesday's VA.
Attached Image (click to enlarge)
Click to Enlarge Name: EU 2011-06-08 at 11.36.18 PM.jpg Size: 137 KB
Change is the only constant
  • #2,855
  • Jun 8, 2011 11:24pm Jun 8, 2011 11:24pm
POC for the week is 1.4610 and for the month 1.4625...Pretty much market has to decide where to go from these two signifiant levels...
The Market pays you to be disciplined
  • #2,856
  • Edited Jun 9, 2011 2:00am Jun 8, 2011 11:46pm | Edited Jun 9, 2011 2:00am
Quoting tgwhbb
long liquidation vs genuine move...

Guys (and girls), I've been trying to figure out how to identify a long liquidation move vs a real down move. Any thoughts? I'm comparing today's down move to last Wednesday's move, and the profiles don't look much alike, leaving me wondering if today's down move is a genuine move. However, EU is still one-timeframing up, so a short IMO is still risky.
Time-frame analysis here is important. when, Market goes a bit too high like yesterday & buyers who find it difficult to auction higher will look for sellers to initiate before they decide to liquidated. What follows is a liquidation break. So in JD's term "the attempted direction is higher, but low volume did not facilitate trade at higher prices. ". Of cause daily profiles balance lower then Monday & the wider then avg width of the profile also provide indication...

Question is are we still in a longer term Auction that is still balancing higher (hence your bias as regards to one-time-framing). Looking at the barchart below the answer favour a Yes.

Long Liquidation Break (LLB) or Short Covering Rally can occur either in short & longer term lasting from hours to days...but the main thing is to keep in context of the auction process & 2 question comes in handy. Which part of the order-flow process is the market in? Is it balance (bracketed or in range) or unbalance ( moving out of range or bracket). The chart below should be self explanatory. Hope it helps..

A note about volume: Tick volume in general are less reliable when view on daily timeframe then on lower time-frame so i don't use the volume on daily chart out right, I will still look at 4hr volume to confirm.

EU 4hour chart...note the LLB occurs within a balancing market.

Attached Image (click to enlarge)
Click to Enlarge Name: ScreenHunter_120 Jun. 09 12.21.gif Size: 26 KB
  • #2,857
  • Jun 9, 2011 7:59am Jun 9, 2011 7:59am
  •  s7c
  • | Joined Mar 2011 | Status: try and fail but don't fail to try | 289 Posts
Now that's a initial balance, haw can you deal with this?
  • #2,858
  • Jun 9, 2011 8:13am Jun 9, 2011 8:13am
Quoting s7c
Now that's a initial balance, haw can you deal with this?
1st, if you are/were long, close it and take the loss. That is what I did as I was stubbornly holding a long from a bad position near the weekly POC...

the session is shaping up to be a trend, with increasing volume as it moves down. I am now targeting last Friday's VPOC and WDIBL. in trend sessions, the IB range is not really relevant to identify extensions, just go with the trend...
Change is the only constant
  • #2,859
  • Jun 9, 2011 9:01am Jun 9, 2011 9:01am
Quoting tgwhbb
1st, if you are/were long, close it and take the loss. That is what I did as I was stubbornly holding a long from a bad position near the weekly POC...

the session is shaping up to be a trend, with increasing volume as it moves down. I am now targeting last Friday's VPOC and WDIBL. in trend sessions, the IB range is not really relevant to identify extensions, just go with the trend...
Looks like the weekly VPOC@4400 u ask earlier may turn out to be a significant attraction perhaps..

The session profile for today during London IB is the same as yesterday as both fail to take out Asia POC. That sounds of Alarm bells for me

Just curious thwhbb, are u primary VSA trader & using MP as an augment or both carry the same weight? Basically What is your approach right...?
  • #2,860
  • Jun 9, 2011 9:11am Jun 9, 2011 9:11am
Quoting Evak
Looks like the weekly VPOC@4400 u ask earlier may turn out to be a significant attraction perhaps..

The session profile for today during London IB is the same as yesterday as both fail to take out Asia POC. That sounds of Alarm bells for me

Just curious thwhbb, are u primary VSA trader & using MP as an augment or both carry the same weight? Basically What is your approach right...?
i'm trying to use primarily MP and use VSA to time entries at the levels I identify with MP. i still have so much to lean with regards to MP...
Change is the only constant
8 traders viewing now