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Auction Market Theory and Market Profile

  • #3,701
  • Nov 19, 2011 10:47am Nov 19, 2011 10:47am
most of the times, there is a small breakout in the right direction... then a test of the opposite VA level occurs. in your case, it was a break through upper dynamic vaH, then test of the lower dynamic vaL before heading back up.
i took both trades (break and test) with tp at 3590 (which was the breakout point of lower dynamic vaL on monthly... and i knew it would get tested again).
very useful tool , thank you again

Quoting bandung
still hold that one k? nice entry there
I'am in at second bus..
Nihil Sine Deo.
  • #3,702
  • Nov 20, 2011 10:32am Nov 20, 2011 10:32am
Hmm. not sure I fully understand this AMT thingy but those colourful charts are fascinating. I'm gonna have to delve into the subject and read back the older posts but if it's half as profitable as it's a pleasure to the eye then I'm gonna be a millionaire boy soon.

Thanks for sharing guys.

Quoting s7c
i took a short just before pit session opening based on the next considerations:
1-the tail from london right at the VAL from last week
2-i entered somewhere after TPO nr 2 breached the low of the previous confirming the failed up auction from the previous TPO + some VSA stuff...
3-i was sure about my entry when i saw the excess made in TPO nr 7 being filled confirming the price rejected second distribution.
i am very curious if you use fixed stops or you analyze the bars in order to proves you are wrong
*edit-we just got established the NY IB...
forget about tomorrow, just steal away into the night
  • #3,703
  • Nov 21, 2011 12:17am Nov 21, 2011 12:17am
Perhaps a likely insideday scenario here were we could find rotional play capped withing the Value area. Note also the anomalies which could also be revisited given the more obvious LUA above friday's control price.

TK open within range & still hovering around control. Nothing to do now till price get out of range...

http://img13.imageshack.us/img13/988...3nov211411.gif
  • #3,704
  • Nov 21, 2011 9:20am Nov 21, 2011 9:20am
  •  s7c
  • | Joined Mar 2011 | Status: try and fail but don't fail to try | 289 Posts
we got a nice opportunity to get short in frankfurt, when the bracket formed below VAH from friday braked below, i wasn't at the computer...
i had a long after i see the price got in another bracket right above last weeks low and the london it could not extend the IB. a good entry would have been at TPO nr 0 right at the low of IB but we have weakness on daily chart so i wanted the bracket to be breached so i enter somewhere in TPO nr 1 when i got that confirmation and the excess formed by a double distribution started to make double prints.
i closed the trade for a small loss after the bearish view after pit opened, now i see it got rejected again by london's low. i'm not sure now haw to play this, i think i will go with US range extension...
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  • #3,705
  • Nov 21, 2011 11:32am Nov 21, 2011 11:32am
Quoting s7c
we got a nice opportunity to get short in frankfurt, when the bracket formed below VAH from friday braked below, i wasn't at the computer...
i had a long after i see the price got in another bracket right above last weeks low and the london it could not extend the IB. a good entry would have been at TPO nr 0 right at the low of IB but we have weakness on daily chart so i wanted the bracket to be breached so i enter somewhere in TPO nr 1 when i got that confirmation and the excess formed by a double distribution started to make double prints.
i...
Frankfurt short on break would have been a logical call given that there was a hint of neutral profile given the failure to rx & reverse back down of the TK profile b4 it spike down prior to UK open.
  • #3,706
  • Nov 21, 2011 11:42am Nov 21, 2011 11:42am
I only have time for NY today so did one trade after some responsive activities occuring out of range of the daily, prior to NY pit

Given the failure to rx during the UK session, my expection would be an inventory adjustment back up. Entry was taken as price mark down during "A" period & reject onto UK VAL.

Now the LUA could suggest furthur inventory fills within the ledge of todays prominent double distribution.

I be closing my trade soon since price is back up to TK POC. I will try to hang on to my remaining to 3550. initial risk was 13 points.

http://img215.imageshack.us/img215/9...2nov220126.gif

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  • #3,707
  • Nov 21, 2011 2:23pm Nov 21, 2011 2:23pm
  •  s7c
  • | Joined Mar 2011 | Status: try and fail but don't fail to try | 289 Posts
Quoting Evak
I only have time for NY today so did one trade after some responsive activities occuring out of range of the daily, prior to NY pit

Given the failure to rx during the UK session, my expection would be an inventory adjustment back up. Entry was taken as price mark down during "A" period & reject onto UK VAL.

Now the LUA could suggest furthur inventory fills within the ledge of todays prominent double distribution.

I be closing my trade soon since price is back up to TK POC. I will try to hang on to my remaining to 3550. initial risk was...
i got into a short right after i saw the market fails to auction higher at tokyo high...i'm still in, for now...
  • #3,708
  • Nov 22, 2011 7:19am Nov 22, 2011 7:19am
  •  s7c
  • | Joined Mar 2011 | Status: try and fail but don't fail to try | 289 Posts
yesterday (from US close to US close) we had RF=-9, made on lower volume on overlapping value, adding at this the range extension on down side and the selling composite we get the market tried to go lower but without success so today market auction higher in order to find more sellers?
  • #3,709
  • Nov 22, 2011 7:39am Nov 22, 2011 7:39am
I had enough time this morning to do this:

Given the weakness and indecision of the Euro market, we may try and fill today's gap, rotating down for the remainder of the day. Remember low-liquidity holiday trading this week so caution is advised. A topside break out of balance is a possibility but I don't know if we'll see it due to the holiday trade. Buyers are responsive ahead of the bottom of the range and sellers above leaving behind excesses. So far we've tested the upside breaking out of the range twice before being sucked back in by those responsive sellers. I dunno if this signifies strength or weakness but I am noting the second test out of balance was rejected much quicker than the first.
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  • #3,710
  • Nov 23, 2011 8:17am Nov 23, 2011 8:17am
  •  s7c
  • | Joined Mar 2011 | Status: try and fail but don't fail to try | 289 Posts
i missed the entire move down, it was predictable... but after currency futures market opened i got into a short, we have a poor low for now, meaning a low level of confidence for buyers. i got in right at the top of the bracket with very small risk...
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  • #3,711
  • Nov 23, 2011 1:42pm Nov 23, 2011 1:42pm
Which indicator is this?

Quoting Bilstein
I had enough time this morning to do this:

Given the weakness and indecision of the Euro market, we may try and fill today's gap, rotating down for the remainder of the day. Remember low-liquidity holiday trading this week so caution is advised. A topside break out of balance is a possibility but I don't know if we'll see it due to the holiday trade. Buyers are responsive ahead of the bottom of the range and sellers above leaving behind excesses. So far we've tested the upside breaking out of the range twice before being sucked back in by those...
  • #3,712
  • Nov 23, 2011 10:35pm Nov 23, 2011 10:35pm
  •  s7c
  • | Joined Mar 2011 | Status: try and fail but don't fail to try | 289 Posts
i have a question... we had a down trend day, usually after a trend day the market need to balance, meaning the local traders need to reevaluate their trades. k, but we had a different trend day, the market balanced after every entry of OTF seller and in the end we didn't had a tail, in fact the market closed on the low on higher volume making the value to overlap lower. in conclusion, the market still favors the long term sellers.
finally comes the question, haw do we chose the place and motive to get short again? the long term traders are already long so we not gonna need a tail, we need just a lack of short term buyers?
it seems like when evak takes a break i'm alone here. you wanted some time ago people to participate with ideas, questions, charts...i didn't have to much to ask or offer then, but i do now...what changed?
  • #3,713
  • Nov 23, 2011 11:25pm Nov 23, 2011 11:25pm
Quoting s7c
i have a question... we had a down trend day, usually after a trend day the market need to balance, meaning the local traders need to reevaluate their trades. k, but we had a different trend day, the market balanced after every entry of OTF seller and in the end we didn't had a tail, in fact the market closed on the low on higher volume making the value to overlap lower. in conclusion, the market still favors the long term sellers.
finally comes the question, haw do we chose the place and motive to get short again? the long term traders are already...
Ah me won't be trading much this week due to heavy then usual workload in the office.

The real change was when price took out the previous range low or the low of monday. We have a agressive sellers on that spike down yesterday. so spikebase rule applies here.

Yesterday's distribution was split 3 ways with 2 prominent void that could be filled. Assuming the price adjustment back to control as the basis, we could see at least a retest of the spikebase if not the POC. The seconday POC which is an anomaly could provide a pause if price where to correct up. So these are the immediate reference.

This morning we have an asymmetric opportunity were price took off from unfair low after an excessive short day. It seems to be fillling the lower void for now.

Alternatively any attempt on the spikebase could also mean an attempt on Yesterday NY high (just below spike base) of the session profile, so could be worth a note.

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  • #3,714
  • Nov 24, 2011 12:10am Nov 24, 2011 12:10am
Quoting s7c
i have a question... we had a down trend day, usually after a trend day the market need to balance, meaning the local traders need to reevaluate their trades. k, but we had a different trend day, the market balanced after every entry of OTF seller and in the end we didn't had a tail, in fact the market closed on the low on higher volume making the value to overlap lower. in conclusion, the market still favors the long term sellers.
finally comes the question, haw do we chose the place and motive to get short again? the long term traders are...
Remember, bud, for some of us it's a holiday week. I work retail so I have very little time to trade this time of year. I spend more time documenting my own observations than i do sharing them. As well as funding my account further. When it comes to auction market theory and market profile, it won't tell you where to sell again. It's just painting you a picture of market activity. Some here use VSA to judge entry point, some us supply and demand zones. Heck you can even compliment profiles with RSI. Market profile is excellent for risk management. The decision to enter is our to make. Look for low volume attempts at establishing daily highs. Remember your reference points; daily, monthly, weekly highs, lows, control points. Remember your day types. We are definitely in a selling environment. Look to sell rallies (unless it's a trend day, lol) and manage your risk carefully.

Low volume markets can be tricky.

  • #3,715
  • Nov 24, 2011 1:22am Nov 24, 2011 1:22am
could not help but enter a trade on this pullback riding on top of theTK session asymmetric opportunity as it dip back to dval of session.

I have my expsoure reduce at 26points, now on risk free to spike base of around 3425 on auto.

I will be off to a 3hours meeting soon & more work there after..... Good luck all..

http://img18.imageshack.us/img18/991...5nov241515.gif
  • #3,716
  • Edited 1:44pm Nov 24, 2011 1:39pm | Edited 1:44pm
Here's an example of how you can choose an entry point.

Given the low liquidity holiday trade, the chances of the market making a considerable move are pretty low. Usually, markets tend to establish a range and just drift around within it. There's been a little bit of action today that provided us with some opportunity.

We have a topside reference from the previous few day's balancing period and a downside reference, yesterday's low. What we want to do next is see how price reacts when we reach these reference points. Having broken out of balance to the downside, I'm more prone to looking for opportunities to sell so the lowest-risk place to do that is near my topside reference point. Reference points are very important as they allow us to quickly ascertain when we are wrong thus minimizing risk as risk is the only thing you can control, heh.

I chopped in a little image of what my 30 minute candlestick chart was showing to exemplify what I'm talking about. The long wicks (excesses) scattered around today's high, at the very least, give us evidence of a good degree of selling pressure entering the market. As opposed to the action at the lows which is moderate-to-weak at best.

Evak mentioned the spike base as his target for a long trade. He had a reference point for a target and for entry which is key to determining your limits in terms of risk. I agree in terms of price returning to the base of that spike, I just didn't think it would happen today as there's really no strong conviction during holiday markets. Though I will admit, today has provided a fair share more activity than I thought it would. A risk-free trade is better than no trade at all!

*EDIT*
There was no trades for me today. This is just an example of how one can plan a low risk scenario.


Good trades!
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  • #3,717
  • Nov 24, 2011 6:07pm Nov 24, 2011 6:07pm
  •  s7c
  • | Joined Mar 2011 | Status: try and fail but don't fail to try | 289 Posts
nice charts, guys... fortunately we gonna get more action tomorrow and get some well done turkeypips
  • #3,718
  • Nov 25, 2011 12:09am Nov 25, 2011 12:09am
Quoting Bilstein
Evak mentioned the spike base as his target for a long trade. He had a reference point for a target and for entry which is key to determining your limits in terms of risk. I agree in terms of price returning to the base of that spike, I just didn't think it would happen today as there's really no strong conviction during holiday markets.
Good trades!
Nice chart Bil, keep it coming even though u would be busy with black friday's rush..

Personally i treat the spike as a Gap zone. The base or the top of spike represent the extreames either which price would meet it's SR point.

Anyway i chicken out & play safe to target to rn of 3400 instead..too bad no time for reverse trade...
  • #3,719
  • Edited 11:07pm Nov 25, 2011 10:54pm | Edited 11:07pm
Quoting Bilstein
Here's an example of how you can choose an entry point.

Given the low liquidity holiday trade, the chances of the market making a considerable move are pretty low. Usually, markets tend to establish a range and just drift around within it. There's been a little bit of action today that provided us with some opportunity.

We have a topside reference from the previous few day's balancing period and a downside reference, yesterday's low. What we want to do next is see how price reacts when we reach these reference points. Having broken out of...
thanks Bil, great post.

btw, i look through period converter script, and some ideas popup... to create custom offline chart for MP, this way we can see the profile alignment nicely with chart time, and our manual objects(tl, hl, text etc) will always sync with profile.
dont know if it will work out for good or bad , it just my weekend ideas that usually come after i have a good sleep..

#1 image :
right side: tpo chart overlay on MP custom offline chart
left side: tpo chart overlay on regular mt4 chart

#2 image MP custom offline chart
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...
  • #3,720
  • Nov 26, 2011 2:16pm Nov 26, 2011 2:16pm
  •  s7c
  • | Joined Mar 2011 | Status: try and fail but don't fail to try | 289 Posts
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