The Confession & The Secret

Tracking volume in FX is virtually impossible. Lots traded on various platforms would yield various market profiles (footprints) with differing assumptions. Unless you can track all platforms at all times and synthesize that data into a reliable footprint for volume accumulation, then I'm not quite sure how else it would or could be done. We don't have central clearing in FX and there is no Time & Sales data that is relevant to every pool of liquidity in FX.

Yes you are right about no central clearing in FOREX. A while back a ran several experiments on FOREX and Futures charts. I plotted a market profile on a futures chart of the Euro using the volume data. I then plotted that same futures chart using just the upticks and down ticks. The MP was virtually identical. Same with the Emini contract. I have the Euro futures chart open right now next to the EURUSD chart and the ticks are a pretty good proxy of volume in aggregate. Maybe this will help you on your idea.

One is tick data the other is volume. Can you tell which is which?

Interesting pic. The great thing about drawing a horizontal line is that you can use anything - absolutely anything that gives you an edge on finding points in the market that contain high probability for a Swing with Momentum. That's the dirty little secret.

In glancing at your profiles, I can see potential places for drawing horizontal lines, but I'm sure you know your data better than I know your data. I have an old saying: Whatever works, works.

Now, if you want to move beyond single dimension market profiles and really turbo-charge your profile views, trying creating a Bar Footprint. Instead of merely capturing tics per bar, try capturing tics per dimension of each bar.

Each bar of data contains five (5) primary dimensions of movement, or price action: Open to High, Open to Low, High to Close, Low to Close and Open to Close. I call it something else and have created a basic indicator out of that data. But, my indicator only calculates the delta (in pips) between each of the five (5) dimensions.

A true Bar Footprint would contain these additional dimensions of price action, which are typically hidden from the novice trader. Having such data, gives you insight into not only "volume" - but how total volume is being distributed within the bar itself. With that data, you can see the true underlying tendency of price action within each bar. You can then run additional calculations on that data to derive Dimensional Footprint Forecasts, which comes before the Market Forecast.

I designed this indicator many years ago, for my prototype Directional system. It has been a very reliable indicator for quite a while now.

http://www.freeimagehosting.net/t/4be2b.jpg

Yes, we are on the same page. I cropped off a similar thing from the bottom of my charts to prevent other inquiries so as not to further derail what you are up to in this thread. Keep up the good work.

Here's another view of the Bar Footpirint for M15, showing embedded real-time performance indicators inside each "toe" of the "foot." You can distinguish the real-time performance bars, because they are inside (embedded) within the larger footprint bars. All of this measures performance in: OH, OL, HC, LC and OC.

http://www.freeimagehosting.net/t/15e8c.jpg

A clearer view of the footprint:

http://www.freeimagehosting.net/t/c256a.jpg

Note, a third V-Trigger established itself today at 3893 (2000 hrs GMT -1).

Remember, they are Non-Directional. I typically enter on the Close of the bar where the V-Trigger is set and in the direction (long or short) of the Close of that bar. Of course, I'm already in recovery mode in another trade, so I won't be taking this particular V-Trigger:

http://www.freeimagehosting.net/t/3b24c.jpg

Of course, if this were being traded trigger to trigger, I'd book the +46 pips now and enter on current V-Trigger for the next Swap Cycle for an Always-In posture on the market.

To add to this - I can see that hourly volatility is collapsing and going to sleep for the session. So, that might be a 'filter' that tells me to stay away from such V-Triggers. Recall, that a good V-Trigger has Swing and Momentum potential. If H1 volatility is going down, then the Momentum side of the equation will go with it on the M15.

Can you post a screen shot of how you get the average for the daily/weekly range and how that is tracked?

I have a custom indicator that does that. I don't divulge specific code on those. However, given the way I use it with line trading, it is very much like ATR, so you can use that instead.

My custom indicator is calculated differently than ATR, and is more dynamic than ATR. So, under different market conditions, I'll get a different range value for each bar than you would under ATR. That is valuable for my Directional system. However, for trading the line, the dynamic aspect of my custom indicator for range is not needed - so ATR can be used for that purpose just fine.

The bottom line is that when trading the line, given the immediate losses that are almost unavoidable during the Swap Sequence, there has to be enough remaining range in D1 to cover the loss caused by the need to Swap, plus enough to generate a decent profit at the end of the Swap Cycle.

So, the key is to track the Swap Cycle losses and make sure they do not exceed the limit for profitability using the remaining D1 range available. It is a very simple calculation:

D1R - SCL = P2

(D1 Range) - (Swap Cycle Loss) = Potential Profit

So, you can see how important it is to keep SCL under control. If SCL grows too much, it turns P2 negative. Negative P2 will require Recovery.

A pic of the Weekly Harmonic now underway:

http://www.freeimagehosting.net/t/76182.jpg

I like Harmonics because its always the same exact set of questions:

- Will C hold between AB
- Will B be extended and hold between XA

After B is set, these two questions usually determine the direction of the issue. Prior to that, only XA is firm and the question is different:

- Will B hold between XA

A total of three (3) core questions can be derived from all Harmonic Patterns before they complete. You can draw some good lines using that pre-pattern completion information.

Harmonic leading to Harmonic on Weekly chart. All providing good line locations. Same can be applied to charts in smaller time-frames:

http://www.freeimagehosting.net/t/b3b91.jpg

Probable M15 V-Trigger analysis using Harmonics:

http://www.freeimagehosting.net/t/82b29.jpg

Same M15 potential Harmonic V-Triggers in a cleaner format:

http://www.freeimagehosting.net/t/72770.jpg

Of course, as always, drawing horizontal lines to trade around depends entirely on whether or not the line contains good Swing potential and good Momentum potential in the market.

- The Harmonics (being one source) provide the Swing potential information.

- The D1 range and H1 volatility provide the Momentum potential information.

Today, was a good day for the V-Trigger in general. Three (3) V-Triggers were set with the first two being successful. I was only able to trade the second and that put up over 50 pips before falling back to the current close level. The third V-Trigger was encumbered by falling H1 volatility which pushed the market sideways for the remainder of the day.

Including the intentional padding to produce enough pips to require a recovery strategy, I'm still about 35 pips away from a full recovery.

This recovery requirement will be in the 75 pips range and that puts the required price level in the 3930'ish range. So, that's about 35 pips above the current close.

Just for the purposes of continuity, I'll place a limit order at 3930 and a stop order at 3837 (simulating the next Swap trade).

In the meantime, I'm going to call it a day, get some rest and come back early tomorrow morning for Thursday's trades.

*** Just created an OCO order for both Entry Orders and will post the pick in the Trade Journal ***
*** See OCO here: http://www.forexfactory.com/showthre...29#post5075929 ***

A bit faster than me getting away from the computer - the recovery is complete.

http://www.forexfactory.com/showthre...64#post5075964

It actually came out to being about +23 pips more than what was needed for a full recovery.

In the final analysis, if I remove the forced losses to produce the stress test, I get about +40'ish pips back, as the actual Swap loss was about -29 pips. So, in actually trading, this V-Trigger would have been worth about +93 pips total thus far, assuming I stopped trading at 3930. Its been a long day, so I would mostly have stopped at 3930 and called it a night.

Looking forward to tomorrows stress test.

One last note worth mentioning. If you go back over my posts here today, you will see the pic where I demonstrate the probable Harmonic V-Triggers. Note that the pop in the EURUSD came directly on top of the Harmonic point "B" that I annotated in one of the pics above. That price level was 3920, as seen by the horizontal line at point B in the same pic.

It turned out to be the CD leg which had not yet formed in the pic I provided. This shows that you can use the Harmonic legs and its ratios as probable V-Triggers for lines that you can defend. That Harmonic V-Trigger has been good for 40+ pips thus far and will probably only get bigger as the night moves on.

This was the pic:

http://www.freeimagehosting.net/newuploads/72770.jpg

http://www.freeimagehosting.net/newuploads/b385e.jpg

It looks like there would have been zero Swap trades to make on that one at the time of this post. So, a clean 40+ pip run off the Harmonic B V-Trigger.

long time no see, Jettrader...