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Auction Market Theory and Market Profile

  • #3,081
  • Aug 15, 2011 10:42pm Aug 15, 2011 10:42pm
  •  s7c
  • | Joined Mar 2011 | Status: try and fail but don't fail to try | 289 Posts
Hi, after I read steidlemayer book on market profile now I'm reading dalton James second book. So I struggle to get the most of it and add'it into my trading style in the way that fits me. Being mostly a day trader in currencies haw I would decide if we are in trending or bracketing mode? If you look at the last trading days the value area kept moving higher so I would say we are in trending mode, but if you chose to see the whole month of august we are kind of bracketing...so yesterday even we had an up day it was on low volume so bracket has small chance to be breaked. So based on this and because it seems Tokyo session is inside of the ny session means the buyers from yesterday topped and the right choice will be to look into shorts? By the way I find the ideea, to buy below value area and sell above value area, kind of hard sometimes if you are a vsa trader...I would appreciate your view
Thank's, sorin
  • #3,082
  • Aug 15, 2011 11:09pm Aug 15, 2011 11:09pm
Quoting s7c
Hi, after I read steidlemayer book on market profile now I'm reading dalton James second book. So I struggle to get the most of it and add'it into my trading style in the way that fits me. Being mostly a day trader in currencies haw I would decide if we are in trending or bracketing mode? If you look at the last trading days the value area kept moving higher so I would say we are in trending mode, but if you chose to see the whole month of august we are kind of bracketing...so yesterday even we had an up day it was on low volume so bracket has small...

Sounds like a reasonable assessment to me. I would think the same thing too. The current monthly profile looks pretty balanced to me. I would expect initiative selling from that tf. I would like to think well retest wvpoc (last weeks poc) or current months poc. I have a bearish bias till we get below the months va.
Markets are not efficient, rather they are effective - Jones
  • #3,083
  • Aug 15, 2011 11:29pm Aug 15, 2011 11:29pm
Quoting alexm
Hi Evak,

I sent you a private message, did u received it?
Got it, is this the one u ask?

FYI http://www.forexfactory.com/showthre...61#post4865361
  • #3,084
  • Aug 15, 2011 11:33pm Aug 15, 2011 11:33pm
Quoting alexm
Man you always managed to find good trading location, I try to fade the market during US open, I was fried.
Wasn't really fading but waiting & waiting to let the market test those session highs & lows as it got mark up or down when pit session opens for European. We all got fried all the time but i guess with practice & patience we can get it reduce. JD always advise if u not sure don't venture....

Now i m watching the low of NY pit session, getting some absorption here..
  • #3,085
  • Aug 15, 2011 11:37pm Aug 15, 2011 11:37pm
Quoting mzvega
Great charts and analysis!
tks, just my typical ponder.

I am still waiting for the regulars to post more often else it would be a very ghost town here...
  • #3,086
  • Aug 15, 2011 11:40pm Aug 15, 2011 11:40pm
Quoting s7c
Hi, after I read steidlemayer book on market profile now I'm reading dalton James second book. So I struggle to get the most of it and add'it into my trading style in the way that fits me. Being mostly a day trader in currencies haw I would decide if we are in trending or bracketing mode? If you look at the last trading days the value area kept moving higher so I would say we are in trending mode, but if you chose to see the whole month of august we are kind of bracketing...so yesterday even we had an up day it was on low volume so bracket has small...
Typically after a strong moves like yesterday price will balance abit & if u see current session opens within previous VA then perhaps wait for it to tip the balance b4 u make any decisions...
  • #3,087
  • Aug 16, 2011 4:28am Aug 16, 2011 4:28am
Can someone help me with ay-TPOChart-session.v.1001 indy please??
1. Is that latest indy that show us TPO on chart?
2. IF it is, how can I get 24 hours letters?
3. What to do to get bigger letters?
4. What is best time frame to get accurate demonstration of TPO??
5. IB is little pink line in big blue line? Why is blu line wider than price of particular session or day??
IS there any manual for that indy??
BIG THANKS for someone who answer those queastion.
Cheers!
  • #3,088
  • Aug 16, 2011 7:08am Aug 16, 2011 7:08am
Quoting pilatus
Can someone help me with ay-TPOChart-session.v.1001 indy please??
1. Is that latest indy that show us TPO on chart?
2. IF it is, how can I get 24 hours letters?
3. What to do to get bigger letters?
4. What is best time frame to get accurate demonstration of TPO??
5. IB is little pink line in big blue line? Why is blu line wider than price of particular session or day??
IS there any manual for that indy??
BIG THANKS for someone who answer those queastion.
Cheers!
1. Is that latest indy that show us TPO on chart?

ans: For TPO on chart u have to use this http://www.forexfactory.com/attachme...02011%204:05pm
No letters just historgram.

2. IF it is, how can I get 24 hours letters?
http://www.forexfactory.com/showpost.php?p=4608586

3. What to do to get bigger letters?
Ans: U have to edit the file & chg the 'MPLFONTSIZE " variable. I think so.

4. What is best time frame to get accurate demonstration of TPO?
Ans: depends on what indi you use. u just have to switch timeframe till it fits nicely & u can view it comfortably.

5. IB is little pink line in big blue line? Why is blu line wider than price of particular session or day?
ans: the line within it is the IB the line without it is the range extension..

IS there any manual for that indy??
Ans: no. once u go thru the main MPbooks u have ever read , it shd come naturally to u. no puns intended.
  • #3,089
  • Aug 16, 2011 7:41am Aug 16, 2011 7:41am
Just looking for a trade after a whipsaw session prior to the Electronic market opens for NY the box indicating the balance session. As price was out of Value area & into unfair low. I notice price struggles to auction lower & when NY Electronic opens it eventually bounce back into value area (box) I make my entry.

my 1st exposure has been reduce at 4400 with renaming to 4450. NY pit session opens seems to indicate a test on POC but price may auction a bit more perhaps b4 it decides to RE. Initial risk was 15pips

PS: Price have taken out yesterday's NY low during European session & now price is stalling just above it. So if price deteriorate, there could be opportunity to down flow to prominent POC at 4300.

http://img402.imageshack.us/img402/1...08aug16223.gif

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  • #3,090
  • Aug 17, 2011 12:17am Aug 17, 2011 12:17am
Quoting Evak
Got it, is this the one u ask?

FYI http://www.forexfactory.com/showthre...61#post4865361
Thanks bro!
  • #3,091
  • Edited 1:07am Aug 17, 2011 12:43am | Edited 1:07am
Yesterdays spike have created a very skewed balance profile of UK/NY. TK session is just a continuation 2 way trade of previous profile which see inventory adjustment back in UK/NY fair price. Note the 45 degree slope.

Waited for UK open to see if i can catch it when it is "off-balance" onto unfair low, so to speak. I did not wait for it to track back up to TK low instead make an entry when my 15mins bar is up.

Initial risk to trade was 25pips, Target to 4400 & 4500. Which could eventually smooth out the spike area of the skew profile to a bell..

PS: TK session opening was responsive in nature, So could be indicative of, or precursor to of what is to be expected when UK opens...just a thought.
http://img809.imageshack.us/img809/8...21aug17153.gif

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  • #3,092
  • Aug 17, 2011 1:40am Aug 17, 2011 1:40am
Just an observation on ES.

The NY pit session see a balance profile after initial selling & later buying on extremes which see a spike occurred in the NY just after-noon which see flow back up. The 2 way trades continues as we speak as the range slowly shrinks, & it looks like it is setting up for a break out from control.

Triangle approximates a balance bell...
http://img811.imageshack.us/img811/9...23aug17162.gif

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  • #3,093
  • Aug 17, 2011 5:53am Aug 17, 2011 5:53am
Quoting Evak
Yesterdays spike have created a very skewed balance profile of UK/NY. TK session is just a continuation 2 way trade of previous profile which see inventory adjustment back in UK/NY fair price. Note the 45 degree slope.

Waited for UK open to see if i can catch it when it is "off-balance" onto unfair low, so to speak. I did not wait for it to track back up to TK low instead make an entry when my 15mins bar is up.

Initial risk to trade was 25pips, Target to 4400 & 4500. Which could eventually smooth out the spike area of the skew profile to...
wish i can analyse the market like u. u mind is ultra sharp.
do u mind to share how u do ur home work b4 uk market open?
  • #3,094
  • Aug 17, 2011 8:03am Aug 17, 2011 8:03am
Quoting alexm
wish i can analyse the market like u. u mind is ultra sharp.
do u mind to share how u do ur home work b4 uk market open?
I start looking at the Daily profile which i now set to UK open. Previously i use TK open & set IB to first 4 hours but i find it is not a good representation since volume & momentum is a requirement at least if i want to know how the whole day going to develop. So using UK open i only need to use the 1st 2 period IB or 30mins x 2. For the whole profile.

Then i look at minus development areas & balance area to see access the capital flow, up or down. It can be single or double prints.

Next to access where price would open relative to VA. If the VA is wide then we could expect a trading range withing range, if narrow then we can expect excursion outside or range with which off balance trade can be had.

I mark or keep in view all the recent highs & lows & the VAL & VAH & Of coz the profile day types.

Here is an e.g of last 3 days profile.

1: Monday we have a double distribution (DD) day. Note the wide VA & the minus development spike as price auction upwards. I keep this in view as the spike may be revisited (bounce or taken out). I also noted the LUA of the DD that may get fill eventually.

2: Tuesday the LUA was eventually fill as price consolidates but it stop short of taking out the Monday spike. (is a good sign). The upper spike is another reference if price were to auction up here. VA is narrow.

3: Wednesday UK open & falls off from VA. I look at round number & also the session profile for reference. Session levels like high & low of pit session reference only. Access inventory overbought or oversold & most importantly to trade top & bottom failures.

This is in a nutshell. Of coz not all the timei got it spot on but i am very selective & patience now & not worry about missing any trades.

http://img822.imageshack.us/img822/8...32aug17224.gif

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  • #3,095
  • Aug 17, 2011 8:19am Aug 17, 2011 8:19am
Straight forward trade.
The UK session inventory is long with a trend-day type, which is rather over extended. Setup here is to watch for inventory correction upon failure to take out the UK session high.

NY pip session open see price struggles to auction beyond & revert on B period. Entry was made

Initial risk to trade is 14pips, first exposure reduce at 4450 & remaining to 4400 (round numbers in 50pip increment.)

http://img695.imageshack.us/img695/2...35aug17232.gif

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  • #3,096
  • Aug 17, 2011 8:28am Aug 17, 2011 8:28am
Quoting Evak
Straight forward trade.
The UK session inventory is long with a trend-day type, which is rather over extended. Setup here is to watch for inventory correction upon failure to take out the UK session high.

NY pip session open see price struggles to auction beyond & revert on B period. Entry was made

Initial risk to trade is 14pips, first exposure reduce at 4450 & remaining to 4400 (round numbers in 50pip increment.)

http://img695.imageshack.us/img695/2...35aug17232.gif

Uploaded...
Nice Kave...
What is periode for the BB?

Thanks

KG
  • #3,097
  • Edited 7:13pm Aug 17, 2011 7:02pm | Edited 7:13pm
Quoting Evak
Straight forward trade.
The UK session inventory is long with a trend-day type, which is rather over extended. Setup here is to watch for inventory correction upon failure to take out the UK session high.

NY pip session open see price struggles to auction beyond & revert on B period. Entry was made

Initial risk to trade is 14pips, first exposure reduce at 4450 & remaining to 4400 (round numbers in 50pip increment.)

http://img695.imageshack.us/img695/2...35aug17232.gif

Uploaded...
Appreciate you share this piece of information, you master JD's trading idea damn well man, but with the current indicator from bandung, how to do u set the day open to UK session? Mind to share?

Just like what JD said prepare for 3 scenario, stay within the range, break above and go, and break above found nothing and check the opposite side of the previous session low. each consist of 33% of chances.

Inventory correction is one of my major entry decision factor, I thought about the same trading strategy yesterday during US open price trying to break out from IB top but found nothing and reverse, I anticipated it, but I watch the price keep on coming down but didn't pull the trigger.
  • #3,098
  • Aug 17, 2011 7:09pm Aug 17, 2011 7:09pm
Kave,
When you get a chance, can you please explain what is minus development?
Quoting Evak
I start looking at the Daily profile which i now set to UK open. Previously i use TK open & set IB to first 4 hours but i find it is not a good representation since volume & momentum is a requirement at least if i want to know how the whole day going to develop. So using UK open i only need to use the 1st 2 period IB or 30mins x 2. For the whole profile.

Then i look at minus development areas & balance area to see access the capital flow, up or down. It can be single or double prints.

Next to access where price would open relative to VA. If the...
  • #3,099
  • Aug 17, 2011 11:29pm Aug 17, 2011 11:29pm
Quoting alexm
Appreciate you share this piece of information, you master JD's trading idea damn well man, but with the current indicator from bandung, how to do u set the day open to UK session? Mind to share?

Just like what JD said prepare for 3 scenario, stay within the range, break above and go, and break above found nothing and check the opposite side of the previous session low. each consist of 33% of chances.

Inventory correction is one of my major entry decision factor, I thought about the same trading strategy yesterday during US open price trying...
Yeah the 3 scenarios are the key. Inventory adjustment or correction are just a term to denote the eventuality of price fitting into a symmetry or coming into balance.

When i view session profile i use a triangle to approximate a bell to visualize the shape. it can be single day or multi-day, since we do not have a profile merger tool.

yesterday session with a single day merge will look like the day profile set to UK.

For day profile just set your DayStartHour to UK open. Of coz I am refering to this indi instead of session.

The yesterdays UK unbalance trend day type have seen inventory adjustment during NY & TK session,
guess where the unfair low is in this case by UK open in 30mins time?
http://img689.imageshack.us/img689/5...37aug18142.gif

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  • #3,100
  • Aug 17, 2011 11:49pm Aug 17, 2011 11:49pm
Quoting skyscraper
Kave,
When you get a chance, can you please explain what is minus development?
Minus development or MD is testbook terminology of peter steidlmeyar which refers to developments or lack thereoff. Mostly are single-prints or double which can be within a profile or on the extremes. JD calls is spikes but he refers to single prints mostly. Selling or buying tails are a form of MD too.

So one look at the direction of the flow, namely the flow of capital. Like during a trend day on tend to witness MD with capital flow. Like the one in UK yesterday with pockets of MD.

Note that this MD's in whatever form they may be are reference points with which price may revisit. Either to probe for acceptance or reject. Another words support resistance.
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