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Auction Market Theory and Market Profile

  • #3,161
  • Aug 24, 2011 6:02pm Aug 24, 2011 6:02pm
Hi everybody!

From my humble point of view, the EUR/USD pair seems to be in the process of finishing a normal distribution. Something tells me we're getting close to something big happening. The market was at first chock-full of initiating activity - mostly buying above value. Now, we've been reduced to responsive activity - buying & selling both above and below value. This is the last 8 weeks worth of profiles. It seems to be bottle-necking.

Just looking at the last 8 weeks it seems that any attempts made by responsive sellers have been met with competition from responsive buyers. There's no innovators out there for the selling side of the equation. Last week and this week are both sporting selling tails (this week = 20 pip tail) - evidence that a responsive seller still exists. Prices are riding up a very discernible line here; I have a feeling if that line is breached, we may be in for some corrective action on a big scale. On the flip side, if we can breach 1.45 and meet some more initiative buyers, we may be due for some new yearly highs.

One thing I'm keeping in mind is this; 1.45 is a stiff barrier and the this week's range is only about 50% of the average range for this 8 week period so, given the selling tail I'm wondering if this week's low has actually been established yet OR if this week will be neutral.

Missed you all!
Work, moved (got a house, YAY!), and needed time to "find my center and realign my chi"

Attached Image (click to enlarge)
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  • #3,162
  • Aug 24, 2011 11:08pm Aug 24, 2011 11:08pm
We are clearly in the upper part of a range. We have seen many buying and selling tails. Looking at those profiles alone and considering the fact that we're about to move higher with the monthly POC and the fact that quarterly MP looks bullish (buying tail), it has a bullish tone. But considering the very low volume we had the last ten days, by moving higher, it makes me quite unsure, additionally to the fact that equities are not coming to their old highs, and dollar index is very tightly sitting at a bearish trend line and penetrating it. Maybe we're just missing some big events to move these markets (QE3, European Debt issues (Italy?), etc.).

Summary: we don't trade analysis, but markets. If good setups come we take them. Otherwise markets should do what they want.
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  • #3,163
  • Aug 24, 2011 11:12pm Aug 24, 2011 11:12pm
Thanks a lot for your explanation. Took around the same place the short yesterday but only because it failed to break such an important level. But it failed to break that 1.44 level, so I took it out.

Quoting Evak
Daily profile:
Today daily profile base on UK open is still trading within with an inside-day range as it developing still b4 NY. So the strategy is still to hinge on the extremes of yesterdays range as to trade the yesterday balance back to control at the very least. Basically today sideways action is a continuation to balance further.

Session profile: (Even if u dont consider the daily)
UK inventory was Long & with a P-formation I expect another round of reversal like the pass few days,when NY comes in, to eventually distribute lower again...
  • #3,164
  • Aug 25, 2011 4:11am Aug 25, 2011 4:11am
JD's blog of yesterday make reference to ES' short covering rally on Tuesday & also his afternoon pullback low, both of which was his shorterm reference leading up to yesterday's push up on NY. FYI

@Alex, i have included my chart here for comparison which was set to what i have told u previously on Broco. FYI


ref:http://jamesdaltontrading.com/blog/
http://img835.imageshack.us/img835/1...4aug251702.gif

http://img692.imageshack.us/img692/2...3aug251701.gif
  • #3,165
  • Aug 25, 2011 4:35am Aug 25, 2011 4:35am
Took ashort again this time, My reference again was to see the reaction as price approach yesterday UK high since it fail to auction higher with only one lonely print on my chart during NY. This is something i learn in Wyckoff which is known as preliminary supply - referring to the previous UK high. I am not expecting much extension here as previous UK low indicate excess & 4400 could also be further pickup point. Now i need to know the sweet spot to get in b4 EU makes a strong move out of this dreadful range.

Note also TK opens provided an opportunity as it show responsive activity when approaching unfair level of NY..

http://img842.imageshack.us/img842/5...5aug251728.gif

Uploaded with ImageShack.us
  • #3,166
  • Aug 25, 2011 6:20am Aug 25, 2011 6:20am
Just wanted to drop in and say hi. I'm nearly caught up on this thread (been reading through it the past few weeks). Enjoying very much your commentary, Evak. Look forward to contributing soon.

In the meantime, here's a video I made a couple weeks ago about a method I use to negatively scale into a position when trading MP. Since I'm still new to knowing exactly where to enter a position, this method helps me spread out my net a bit wider and catch more fish with lowered risk.

Scale-In Video.

Kind Regards,
NeoRio
Sentiment: Short on cash. Long on hope.
  • #3,167
  • Aug 25, 2011 6:48am Aug 25, 2011 6:48am
Took again the same, but failed to take it out properly. Hope you did better.

Quoting Evak
Took ashort again this time, My reference again was to see the reaction as price approach yesterday UK high since it fail to auction higher with only one lonely print on my chart during NY. This is something i learn in Wyckoff which is known as preliminary supply - referring to the previous UK high. I am not expecting much extension here as previous UK low indicate excess & 4400 could also be further pickup point. Now i need to know the sweet spot to get in b4 EU makes a strong move out of this dreadful range.

Note also TK opens provided an opportunity...
  • #3,168
  • Aug 25, 2011 6:51am Aug 25, 2011 6:51am
Neorio,
This is interesting, can you post your excel sheet

Thank you

Quoting NeoRio
Just wanted to drop in and say hi. I'm nearly caught up on this thread (been reading through it the past few weeks). Enjoying very much your commentary, Evak. Look forward to contributing soon.

In the meantime, here's a video I made a couple weeks ago about a method I use to negatively scale into a position when trading MP. Since I'm still new to knowing exactly where to enter a position, this method helps me spread out my net a bit wider and catch more fish with lowered risk.

[url="http://www.youtube.com/user/NeoRioFX?feature=mhee#p/a/u/1/5xSODurbkE8"]Scale-In...
  • #3,169
  • Aug 25, 2011 8:42am Aug 25, 2011 8:42am
Tks Kave,
Will try to compare both chart later, wish i hv d sharp mind like u. Tks alot.

Quoting Evak
JD's blog of yesterday make reference to ES' short covering rally on Tuesday & also his afternoon pullback low, both of which was his shorterm reference leading up to yesterday's push up on NY. FYI

@Alex, i have included my chart here for comparison which was set to what i have told u previously on Broco. FYI


ref:http://jamesdaltontrading.com/blog/
http://img835.imageshack.us/img835/1...4aug251702.gif

http://img692.imageshack.us/img692/2...3aug251701.gif...
  • #3,170
  • Aug 25, 2011 8:46am Aug 25, 2011 8:46am
Quoting Evak
....I am not expecting much extension here as previous UK low indicate excess & 4400 could also be further pickup point. Now i need to know the sweet spot to get in b4 EU makes a strong move out of this dreadful range....
OK 4400 it is. but my buy limit did not trigger

Price react violently as i suspect it have to do with news on Warren Buffet purchase of BAC shares at 5 bil (QE3 comes early,

I was expecting an inventory adjustment back down to previous control price of the merge TK/UK session, as NY forex open close to VAH.

Anyway got in with a mkt order, risk to trade at 15 & i have my 1st exposure out at 4450 & remaining to whatever will be will be. Hope to NY take it easy on me...

http://img838.imageshack.us/img838/1...8aug252130.gif

Uploaded with ImageShack.us
  • #3,171
  • Aug 25, 2011 8:53am Aug 25, 2011 8:53am
it might be good news for BAC, ES NY pit open is selling on good news as it seems as it taking out the overnight long inventory high. The news cause the spike & now the spike could be taken out as we speak...

http://img690.imageshack.us/img690/2...9aug252150.gif

Uploaded with ImageShack.us
  • #3,172
  • Aug 25, 2011 9:04am Aug 25, 2011 9:04am
Quoting Evak
... but my buy limit did not trigger
...
Maybe better. If we come into M VA (VAH 1.4395) and and break that 4380, than it will look stronger for shorts, imo.

BTW: on today's MP I see a 45° line showing downwards.
  • #3,173
  • Aug 25, 2011 9:26am Aug 25, 2011 9:26am
Quoting Bilstein
Hi everybody!

From my humble point of view, the EUR/USD pair seems to be in the process of finishing a normal distribution. Something tells me we're getting close to something big happening. The market was at first chock-full of initiating activity - mostly buying above value. Now, we've been reduced to responsive activity - buying & selling both above and below value. This is the last 8 weeks worth of profiles. It seems to be bottle-necking.

Just looking at the last 8 weeks it seems that any attempts made by responsive sellers have been met...
Great to see you back!!! Congrats on the house! We all need to to step back and "regroup" once in awhile.
Interesting additions.....something for me to think about. Hope to see more posts!
Markets are not efficient, rather they are effective - Jones
  • #3,174
  • Aug 25, 2011 9:27am Aug 25, 2011 9:27am
Quoting Oxford
Maybe better. If we come into M VA (VAH 1.4395) and and break that 4380, than it will look stronger for shorts, imo.

BTW: on today's MP I see a 45° line showing downwards.
Ah my bad. it was the unemployment claim rather then the BAC news...lol

Yeah 45°, miss to mentioned that even though i have it in my mind...usually very useful as a sign of continuation to balance with which price fall back to control....nice catch..

I am now short (go with break) after seeing ES failure & will see how it goes...target to 4350 & 4300...
  • #3,175
  • Aug 25, 2011 9:34am Aug 25, 2011 9:34am
Quoting Oxford
We are clearly in the upper part of a range. We have seen many buying and selling tails. Looking at those profiles alone and considering the fact that we're about to move higher with the monthly POC and the fact that quarterly MP looks bullish (buying tail), it has a bullish tone. But considering the very low volume we had the last ten days, by moving higher, it makes me quite unsure, additionally to the fact that equities are not coming to their old highs, and dollar index is very tightly sitting at a bearish trend line and penetrating it. Maybe...
Appreciate you posting a chart.... I dont think enough people post their charts or opinions!!!!
Markets are not efficient, rather they are effective - Jones
  • #3,176
  • Aug 25, 2011 9:41am Aug 25, 2011 9:41am
Quoting NeoRio
Just wanted to drop in and say hi. I'm nearly caught up on this thread (been reading through it the past few weeks). Enjoying very much your commentary, Evak. Look forward to contributing soon.

In the meantime, here's a video I made a couple weeks ago about a method I use to negatively scale into a position when trading MP. Since I'm still new to knowing exactly where to enter a position, this method helps me spread out my net a bit wider and catch more fish with lowered risk.

[url="http://www.youtube.com/user/NeoRioFX?feature=mhee#p/a/u/1/5xSODurbkE8"]Scale-In...
Great video, thanks for the share! I will be looking forward to your ideas, opinions, and comments.
Markets are not efficient, rather they are effective - Jones
  • #3,177
  • Aug 25, 2011 9:42am Aug 25, 2011 9:42am
So perhaps all this talk about seeing short covering in P-formation upon another this last few day & with JD's blog even mentioning it perhaps bearing fruition now. Signaling cautious long & need to react when situation reverse...
  • #3,178
  • Aug 25, 2011 9:51am Aug 25, 2011 9:51am
Quoting Evak
Ah my bad. it was the unemployment claim rather then the BAC news...lol

Yeah 45°, miss to mentioned that even though i have it in my mind...usually very useful as a sign of continuation to balance with which price fall back to control....nice catch..

I am now short (go with break) after seeing ES failure & will see how it goes...target to 4350 & 4300...
45°: saw it only after I load a MP on Broco. IBFX somtimes is not good.

I'm short too, target 43 (maybe 4260: trendline breakout on weekly).
  • #3,179
  • Aug 25, 2011 9:52am Aug 25, 2011 9:52am
Quoting Evak
Ah my bad. it was the unemployment claim rather then the BAC news...lol

Yeah 45°, miss to mentioned that even though i have it in my mind...usually very useful as a sign of continuation to balance with which price fall back to control....nice catch..

I am now short (go with break) after seeing ES failure & will see how it goes...target to 4350 & 4300...
Just to put it out there, Evak, I cant tell you how much I appreciate your love of MP/AMT. It shows everyday. You always give 110% to this thread. You are of great value here.

I just thought Id share that with you!
Markets are not efficient, rather they are effective - Jones
  • #3,180
  • Aug 25, 2011 9:53am Aug 25, 2011 9:53am
sure, please see attachment. Original post should also have one.

Quoting mzvega
Appreciate you posting a chart.... I dont think enough people post their charts or opinions!!!!
Attached Image (click to enlarge)
Click to Enlarge Name: eu_daily_mp.jpg Size: 109 KB
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