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Auction Market Theory and Market Profile

  • #4,061
  • Feb 3, 2012 9:24am Feb 3, 2012 9:24am
Quoting Evak
All the stuff u need is in the 1st post now with link to various materials. So do have a look

Merge profiles is a concept that was well explain by Robin Mersch Strategy

Previously we have a versoin that can do fix time frame like daily Weekly & quarterly but we can merge...so...

Reason one would like to merge a profile is to ascertain a balance profile or access any lack there off. e.g to achieve as...
Thank you for your quick reply..... I'll have the whole we...to give a first look to all these stuffs...
  • #4,062
  • Feb 3, 2012 9:31am Feb 3, 2012 9:31am
  •  s7c
  • | Joined Mar 2011 | Status: try and fail but don't fail to try | 289 Posts
Quoting Evak
My previous post on EU roughly sums up my expectation on the day timeframe basis

Yesterday, UK session went Neutral in which it trade back into the IBR, then US trade within the UK session but the upwards attempt was reverse back into control with a b formation & then today's TK basically finish off on the lower extreme what US session have left off....combine these 3 profile we have a balance...the expection for UK open would be an opening drive. which it did. And all this to prepare for tonites NFP? hmmmm

]
an open drive it always defends the open price. the london had more like an open auction inside of previous london session range, so the price movements should be limited. at least that's the theory...
i opened a long in the b period of pit session after became more certain the price fails to initiate below yesterday's low and we got responsive. we have an open auction again, outside of previous NY range, this should increase the chances of a good move up...
Attached Image (click to enlarge)
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  • #4,063
  • Feb 3, 2012 9:48am Feb 3, 2012 9:48am
  •  s7c
  • | Joined Mar 2011 | Status: try and fail but don't fail to try | 289 Posts
Quoting tgwhbb
I particularly like the fact that ES broke out to the upside, and hence a true move.
possibly, but since this up move started it didn't had a decent continuation before it came back to balance. that's a sign of a weak move, no? till now we have more like a no buying pressure day, it gout ouf of balance but the volume it didn't validate the move till now.
  • #4,064
  • Feb 3, 2012 9:59am Feb 3, 2012 9:59am
Quoting s7c
an open drive it always defends the open price. the london had more like an open auction inside of previous london session range, so the price movements should be limited. at least that's the theory...
i opened a long in the b period of pit session after became more certain the price fails to initiate below yesterday's low and we got responsive. we have an open auction again, outside of previous NY range, this should increase the chances of a good move up...
As price is still bracketing between 3200 & 3100, I place my bet on NY opening price itself, after seeing a response off the spike base which is still a reference unless there is a chg. Limit my risk with a fix 15p & quickly move it up to NY low after the opening drive up. My exposure is reduce now with a 31p. Price have not RE yet as we speak...

http://img841.imageshack.us/img841/6...8feb040005.gif

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  • #4,065
  • Feb 3, 2012 10:23am Feb 3, 2012 10:23am
  •  s7c
  • | Joined Mar 2011 | Status: try and fail but don't fail to try | 289 Posts
Quoting mzvega
imo, yes...... based on the chart in your post....any break of that va on increased vol.
If I was trading based on that chart, id be looking to get short. Again, my opinion is biased, Im just not comfortable getting long above value unless I am already holding a long that I bought below value, that way Im already in profit, and Im still in profit if I run into resonsive selling after a false breakout. I try to keep in mind that Im a "Value" trader, my goal is to buy below value & sell above. I leave the break outs to "Price" traders who look...
nice view. i have a newbie question, which was asked before.
when do we consider the present value, the value which is still developing? from what i saw the normal is to refer to previous value of the month, week, day, session... when we act regarding it. but i see some of you use the unfinished value in your decision. i will really appreciate your insight regarding this.
evak, i like the spike base idea. it's a JD term or? i keep watching the failed attempts of extending the range and don't know what to do...
  • #4,066
  • Feb 3, 2012 10:32am Feb 3, 2012 10:32am
Quoting s7c
possibly, but since this up move started it didn't had a decent continuation before it came back to balance. that's a sign of a weak move, no? till now we have more like a no buying pressure day, it gout ouf of balance but the volume it didn't validate the move till now.

hmm, but ES has not come into balance yet as it has not stopped one timeframing up. It has stalled at the weekly DIBH as is to be expected, but is still OTF up and now has a poor high. Since the break out there has been an almost equal continuation up. Breakout (ie gap fill) is from 1325, initial breakout up to 1336 = 11 points. pullback on NY pit open to Gap support at 1332 (immediate successful test is another sigh of strength) and currently at 1339 = 9 points with poor high.

EDIT: in my previous post, I was comparing the "news" move on ES vs EU. Generally, if the move is news driven (and therefore prone to failure), generally risk assets will move in the same way. In this case thy did not, which is generally a sign that the moves are not correlated and emotioanlly driven, and hence are more prone to be successful.
Attached Image
Change is the only constant
  • #4,067
  • Feb 3, 2012 10:36am Feb 3, 2012 10:36am
Quoting s7c
....
evak, i like the spike base idea. it's a JD term or? i keep watching the failed attempts of extending the range and don't know what to do...
It is a JD term, I would have thought u'd know by now. Obviously u have been lazyboy & not reading his materials....
  • #4,068
  • Feb 3, 2012 11:55am Feb 3, 2012 11:55am
Quoting s7c
nice view. i have a newbie question, which was asked before.
when do we consider the present value, the value which is still developing? from what i saw the normal is to refer to previous value of the month, week, day, session... when we act regarding it. but i see some of you use the unfinished value in your decision. i will really appreciate your insight regarding this.
evak, i like the spike base idea. it's a JD term or? i keep watching the failed attempts of extending the range and don't know what to do...
Its hard to explain, as with anything MP, everything is personal preference, and discretionary...............................

I always monitor the unfinished/developing profile, to see How price is developing. Its more of a gauge. The previous profile data I used use for reference areas, (places where I might need to react) when I do reach those areas of reference. I use the devloping profile to support my decisions at those reference areas so I can act according. Using the developing profile in conjuction with the previous profile, helps me to refine my analysis and entries.

The sessions profiles is action that is really confined within the daily profile. Its like trading in a vacuum if youre not aware of your OTF surroundings. There are no real immediate reference areas, other than the previous session, which is very subjective and open for wide interpretation. I use the developing profile in that situation, for aggressive order entry. Others may use it differently.
Markets are not efficient, rather they are effective - Jones
  • #4,069
  • Feb 3, 2012 2:24pm Feb 3, 2012 2:24pm
  •  s7c
  • | Joined Mar 2011 | Status: try and fail but don't fail to try | 289 Posts
Quoting tgwhbb
hmm, but ES has not come into balance yet as it has not stopped one timeframing up. It has stalled at the weekly DIBH as is to be expected, but is still OTF up and now has a poor high. Since the break out there has been an almost equal continuation up. Breakout (ie gap fill) is from 1325, initial breakout up to 1336 = 11 points. pullback on NY pit open to Gap support at 1332 (immediate successful test is another sigh of strength) and currently at 1339 = 9 points with poor high.

EDIT: in my previous post, I was comparing the "news" move...
you're totally right, i forgot to mention i meant my analysis from long term view. as i said for now i trade just options and not intraday on ES, that's why...
in the chart attached you can see what i meant in my previous post, but the value was established higher though in january and now we have some initiative buying. next week it will clarify, maybe
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  • #4,070
  • Feb 3, 2012 4:08pm Feb 3, 2012 4:08pm
I think someone mentioned that the book links didnt work. Ive updated the links and they are working now.
But if you want to understand AMT and MP concepts they are a must read!

Mind over Markets
http://www.4shared.com/office/ivp7jU...r_Markets.html

Markets in Profile
http://www.4shared.com/office/86LvWx...__Jones_E.html
Markets are not efficient, rather they are effective - Jones
  • #4,071
  • Feb 3, 2012 4:14pm Feb 3, 2012 4:14pm
Updated resources in the first post all you lovely AMTers
  • #4,072
  • Feb 3, 2012 4:16pm Feb 3, 2012 4:16pm
Quoting frankkn
Updated resources in the first post all you lovely AMTers
Much Appreciated!!!!!
Markets are not efficient, rather they are effective - Jones
  • #4,073
  • Feb 3, 2012 6:12pm Feb 3, 2012 6:12pm
Mr. Peter Steidlemayer is founder , originator of Market profile and his work has to be called reference...All others are his students and their "books", "videos" are sometimes poor derivatives of Mr. Peter Steidlemayer work, teaching, discoveries...
Some might say that books written by Dalton can be recommended for learning market profile but never can be called References.

The Market pays you to be disciplined
  • #4,074
  • Edited 3:18am Feb 4, 2012 2:46am | Edited 3:18am
Hi,
I've some tech questions and I made some (newbie) considerations.
If someone of you, most skilled guys here, could help me in my hard road to knoweledge......
I've decided to become a MP trader, and I'm reading Steidlmayer & Daltons book, & following exclusively this thread.... but sometimes I need some feedback to see if I'm understanding the things right...

First of all, I'd like to know if my Indis are set correctly, and profile appears like yours...
Second, in the Daily (EU) profile I see IBtf H1, but IBnumbars 4...... Is IB the "Initial Balance"? If so, shouldn't it be just the first 2 half hours of the day? Anyway, the value of yesterday's IBL indicated 1.3114 which is the lowest value of the 5th 30 min candle....!?!?
The DIB value indicates 1 std of IB?

Newbie Considerations:
Can friday be called a Neutral (center) day? And a well balanced day? I see an almost perfect bell distribution... TPO's count is slightly bullish
Friday & Thursday POC have the same value.... Does it means something? Specially considering we are clearly in a Flat and price is still ranging (insid/outside daily bars & inside weekly bar after a downbreak of weekly LReg Channel) or at least (as Evak said some posts ago) an ascending flag..... I.e. something must happen......


Regarding Weekly MP...is it enough well balanced? Is TPO count bearish?

What about RF? Daily indicates bullish & weekly is slightly bearish? Or RF is related just to the developing MP?

Newbie dumb questions:
When we observe the developing MP, we must relate it's movement to previous day (expecially VA)... or must we consider also the previous days?

If price breaks previous day's (or previous week's) VAH/VAL is it right to follow immediately (at least for scalping) initiative action if there is enough space until previous extremes? I.E.: if price breaks VAH/VAL does it means it will retest extremes (expecially if there is a tail)? Or better wait for a confirmative bounce from those VA levels after break? Or, a responsive sell/buy coming back into the VA?
The same rules should apply for the weekly profile too....isn't it?

Thanks!
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  • #4,075
  • Feb 4, 2012 3:01am Feb 4, 2012 3:01am
Quoting Aztrader2
Hi,

First of all, I'd like to know if my Indis are set correctly, and profile appears like yours...
Yes, but some settings are a matter of preference.
Markets are not efficient, rather they are effective - Jones
  • #4,076
  • Feb 4, 2012 3:14am Feb 4, 2012 3:14am
Quoting Aztrader2
Second, in the Daily (EU) profile I see IBtf H1, but IBnumbars 4...... Is IB the "Initial Balance"? If so, shouldn't it be just the first 2 half hours of the day? Anyway, the value of yesterday's IBL indicated 1.3114 which is the lowest value of the 5th 30 min candle....!?!?
IBtf= the timeframe you chose that will count the bars to use for IB.
If IBtf= H1 then it will be using hourly bars to count for the IB. On the hourly 1 bar = 1hour
So the If the IBtf= h1, and IBnumbar = 4 the IB will use 4 hourly bars
IBtf =30m and IBnumbar = 8 the IB will use 8 30m bars
Both equal a 4h IB range. Again, settings are a matter of preference
Markets are not efficient, rather they are effective - Jones
  • #4,077
  • Feb 4, 2012 3:43am Feb 4, 2012 3:43am
Quoting Aztrader2
Is IB the "Initial Balance"? If so, shouldn't it be just the first 2 half hours of the day?
Its a matter of interpretation, when most of those books were written, there was no such thing as "electronic trading", or 24h markets, and no volume data available to traders, and they traded markets that have a daily open and close. None of the authors traded the Spot forex market, a totally different animal! So, you have to adapt the rules to fit the market your trading. The first hour reference was used for a 8 hr bond market, we trade a 24h hour, I used to use a 4h IB for the daily profile, in the past couple of months, Ive changed it to six. It depends on my mood. Its a matter of preference.
Dude, you really ought to read the thread, this has been the topic of many discusion. Mostly because nobody wants to read the thread, and the same questions get asked over and over again! Youll find more indepth discussions on this subject, other people have different ideas
Markets are not efficient, rather they are effective - Jones
  • #4,078
  • Feb 4, 2012 4:00am Feb 4, 2012 4:00am
Quoting Aztrader2
Anyway, the value of yesterday's IBL indicated 1.3114 which is the lowest value of the 5th 30 min candle....!?!?
The DIB value indicates 1 std of IB?
The profile is dynamic, only the far right is in sync with the indicator! The profile is just using space on the chart. I dont know how else to explain it. This is one of the most frequent questions asked. If you read the thread you may find one of the other explanations, more understandable.

DIB= "double the IB range" the range of the IB added to the IB high and to the low.
Markets are not efficient, rather they are effective - Jones
  • #4,079
  • Feb 4, 2012 4:09am Feb 4, 2012 4:09am
Quoting Aztrader2
Newbie Considerations:
Can friday be called a Neutral (center) day? And a well balanced day? I see an almost perfect bell distribution...
Mind over markets...... page 19 Day types
Markets are not efficient, rather they are effective - Jones
  • #4,080
  • Feb 4, 2012 4:09am Feb 4, 2012 4:09am
Quoting mzvega
Its a matter of interpretation, when most of those books were written, there was no such thing as "electronic trading", or 24h markets, and no volume data available to traders, and they traded markets that have a daily open and close. None of the authors traded the Spot forex market, a totally different animal! So, you have to adapt the rules to fit the market your trading. The first hour reference was used for a 8hr bond market, we trade a 24h hour, I used to use a 4h IB for the daily profile, in the past couple of months, Ive changed it to six....

Thanks for all the answers bro!

You're right one should read the thread, but you will agree that 4000 posts are an enormous number...! And a thread isn't a textbook, with all thinghs written in the logical order to learn..... It's almost impossible for a newbie (of MP trading....) not being lost and find only the useful posts..... Asking questions todays means (at least for me) to receive up to date answers...
Evak has been so kind to give some references to books/webinars & posts....
And you now clarified my doubt about IB.......

I'm sorry to bother you guys with my questions, but I'm receiving more from your 2/3 answers than in a month of wandering in such a big thread...
I'm not a newbie in forex (2 years) but until now I wasted my time following and reading threads which finally discovered as useless. There are thousands here in FF.... but very few can are worth the price (in time spending) to read...
This thread, instead, deals with the intimate nature of markets, and as I see from your posts, your analysis are almost always right. Since I discovered the thread (last week) I threw away each other form of analysis and indis, and try to understand your reasoning. Of course I'm reading the books to build the basis of my knoweledge, also if (as you said) some thinghs are out of date, because of markets changes......
Anyway, hope to become a good MP trader following you guys!

Thanks for your help!
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