Auction Market Theory and Market Profile

any chances of volume strip on this indicator too ?

trading is not about one custom indicator ...Those who knows to trade Moving Average is enough as many traders already said it...

I thought since it does have market profile structure in it, It could be expanded to have that too. and NO I don't know how to trade with MA and I have no intention to learn. thanks for the reply

What I said was in plain English and I believe in that ...My point was that understanding trading is essential rather then to search for certain custom indicator...I have no intention by any means to stop you in search for what you are looking for...

We will be forever gratefull for your autorization to pursue our search for custom indicator. In return, you have our permission to join the thread of understanding trading...

I believe that a firm understanding of the "Auction Market Process" is the basic foundation for trading. However, I do encourage others to READ the thread. Again, "volume strip", believe it or not, the attachment list contains a file called just that, "volume strip". If you took the time to read the thread, or even if you just looked at the pictures, you'd see many such examples of what you might be looking for.
also, if you took alittle time to read the thread, you'd also realize that I find it somewhat offensive to address me as "Man", "Dude", "Bro", etc. Dont get me wrong, I have nothing against men, (maybe those with an inability to read, problem solve, or navigate an attachment list), however, male is not my gender.
I have no problems assisting others in the thread, if others would try to help themselves first........
Anyway here are a few examples of what you might be looking for.........

Thank you ...I am very much interested in to learn about market profile. No need sarcasm...We (retail traders) are just part of market makers's business...Everyone has different personality and therefore different way of trading and understanding trading...My previous post you could understand on positive way as it was intended but you chose to attack me. We have no power over each other and maximum we can use is to put someone on ignore list...Please go ahead and put me on your ignore list.

This hopeless could not find where the ignore list is. Please be so kind to do as you say

Possible sell at least until 11/14 poc level although there is a tpo level before it get's there let's see how it go

oh yeah don't mind the core harmonic patterns it's just something I've been trying to combine.... auction market

harmonic trading profile theory I like to call it!....

Click on my profile and then click on "Ignore" ...

Sorry about the " Man " ....

I'd skipped some pages since I knew the concept... I used to trade with Jchart, which had same methodology but with different calculation of volume profile.
anyway... I must read this topic again...
any chances that I could get a short quick answer that why ###Vstrip is not loading. have about 1month of 1min history and the dll...

once again, sorry about that... thanks for your help.

I'm not sure what the problem could be. you may try downloading data in the history center of your mt4 platform. Is the p01.dll in the "libraries" folder?
Do you have the "allow dll imports" box checked in the "common" tab of the indicator? and the last possible solution is to install Microsoft Visual C++ 2010 Redistributable Package (x86) found here.........
http://www.forexfactory.com/showthre...65#post4500065

Problem solved. ( VC++ )

the colours in volume strip, ! do they have any meaning ?

thanks )

Glad to hear you got it worked out.........
Last time I checked, I believe the details were posted along with the indicator. I usually find that most details about indicators are posted along with the file itself. And the majority of questions are asked & answered in the posts immediately following.

This thread has been pretty dead so Id thought Id start a topic of discussion. I often see in other threads others post & display these so called S&R levels using Daily POC & Daily VPOC. I would hope to think someone wouldn't blindly accept those types of levels without actually seeing the chart used to arrive at these levels. In order to quantify, you need to know "relative to what?" I wanted to share an article from Cisco -Futures (Cisco is is the "Jones" who helped author "Mind over Markets & Markets in Profile". He is also the author of "Value Based Power Trading". He has done extensive research & testing of the concepts of the Auction Market Process. Its Called the "Three day Rule". Its goes into the definition of "Value". In order to define value you need a POC. However, MP levels are only valid in a "balanced" market. You cant define value in a "trending" market. Those who use Daily profile references POC, etc. those areas are not valid or carry much weight, unless unless the market is in "Balance". And if you read the article balance is a "minimum period of three or more days forming a single distribution containing the close". So as far as Daily POC's or VPOC's as some type of S&R levels, as far as Longer TF participant is concerned, technically those daily poc's are simple "Run Pause" patterns to a larger distribution of prices that have already been acted upon (no longer valid). To use past Daily POC levels as S&R levels would be somewhat equivalent to trading "lagging data". You need at least 3 days of combined data to find true value, hence the POC. So, use those Daily POC levels with caution, Larger TF participants determine where the market is headed, not the Day traders or scalpers. Majority of daily volume, day traders are in and out of the market that day. That daily vol & activity doesn't mean much to the Larger TF participants still holding positions. What happens in the Daily TF, is not a reflection of what Larger TF participants with alot more "Skin in the Game" are doing.........

Balances: Three Day Rule

Donald L. Jones, Nov 11, 2007

CISCO Futures 2007

The TPO-Value Area, as defined in the Meta-Profile(a CISCO copyright), has come into wide use. This value calculation relies on a balanced market condition for it's validity (as does the much less used cleared-volume based Market Profile). Measurements of market condition such as the CISCO Bracket Screen and the Advice Engine show that markets are in balance only about one-third of the time.

Little or no effort is made by most data providers to offer market condition information to their profile value subscribers. Consequently, the unfortunate fact is that calculated profile value areas are incorrect most of the time and the user has little way of knowing which are correct and which are not. Thus, trading decisions based on value are often made with flawed data.

This article illuminates the problem and proposes a solution for non-CISCO users, the Three Day Rule. This rule says that if one is to trust the profile value calculation the market condition must be balance (congesting). In the absence of a measured balance like the CISCO Bracket Screen or Advice Engine Tables, a good estimate can come from visually joining (overlaying) the last three days of profiles to form a rough Overlay. If this rough Overlay shows a cohesive group, a single distribution, you can trust the value area calculation. This is the Three Day Rule.

The Market Profile works of Peter Steidlmayer and the CBOT introduced the trading world to a manageable and logical way of finding the value of a future (and likely all auction market instruments) (references 1 and 2). The method is based on a bell-shaped (gaussian) distribution of volume over the price range of the trading day. It simply locates the central 70 percent of volume by price using cleared data from the CBOT. The count starts at the price with the peak volume (Point of Control). Work at CISCO found that TPO's are a valid surrogate for the volume, opening up the non-CBOT trading world to value analysis (reference 3). (For those unclear on profile nomenclature, an explanation is at: Introduction to Day trading).

In the original writings (ref 1, 2) it is clear that the value so found is for one (pit) day, or other trading period in 24 hour markets. In our studies we have found for most cases that the pit day time frame still has the bulk of trading in US based markets. Foreign exchange is an exception. There, a 24 hour market can be defined. But, pit hours or longer, value definition remains a day-local concept. For longer, multi-day periods, we developed the Overlay Demand Curve to find the collective value (value region) for the longer period (ref 4). Overlay Demand Curve Intro

The subject of this study goes to the heart of the definition of value. When is the 'value' calculated by the 70 percent formula valid? In references 1 and 2, validity appears to be essentially assumed for all cases. i.e. if you have a profile you can use the formula to get an answer--all you need is the middle price (Point of Control or POC) and then collect either TPO's or volume until you have added in 70 percent of the day's total.

The 70 percent formula can easily be shown to fail. Simply imagine a market in which price rises steadily, at the same rate, throughout a day. There will be the same number of TPOs at each price. Such a distribution has no POC with which to start the count. More to the point, what is 'value' in a trending market? Value comes from a consensus in a bell shaped distribution. There, some traders believe value is higher than the POC; an essentially equal number think value is lower than the POC. This stand-off explains the quasi-bell shaped curve of the profile in congesting markets. Moving markets generally do not have a bell shaped distribution. In the non-balance situation the snapshot calculated value is misleading at the least. At worst, it can lead to trading for the wrong reason.

So the the key is that valid value can only be found when the market is in a balanced (congesting) state. Consequently, a precondition for valid value determination is balance; so then we must define what balance means in market measureable terms. Single day pattern recognition will not help; a quasi-bell shaped profile can and does often occur as a one-day pause in a strong trend.

Guidance is found in the definition of balance in reference 4. In the studies that led up to that finding, these steps were followed:

1. It is understood that markets swing from balance to imbalance and back to balance, etc., as noted e.g., in reference 2, p34 and many other sources.

2. There is a point in the balance-imbalance cycle at which balance begins.

3. Volatility makes the start of balance very difficult to pinpoint in real time. There must be a look-back period available to find the start.

4. The required length of the look-back period varies with the state of the market. In an active market, normally three days are needed to confirm congestion. In a quiet market it can be as little as two days.

Congestion or balance, as defined here, is a minimum trading period of three or more days forming a single distribution containing the close, which produces a stable upper and lower limit. Prices moving above or below the limits are considered alerts for the potential start of a trend. A 'false breakout' is one in which the day ends back in balance. The balance limits can and will move a small amount from day to day as a balance continues. A true breakout will result in an end to congestion and the start of a trend.

The trader without access to the Advice Engine table can estimate whether or not there is enough balance to trust the value calculation by posting the last three completed day's profiles on a single price axis and eyeballing for balance. While this may be a bit of a chore, it is far, far better than making trades on the basis of bad data.

References
1. CBOT Market Profile Manual 1985
2. CBOT Market Profile Manual 1991
3. Determining the TPO Value Area, Don Jones,
Market Logic School Alumni Letter, Apr 13, 1987
and
Estimating Market Profile Value Area for Intraday Trading, D.L. Jones
Stocks and Commodities, Sep 1987
4. Overlay Dectection of Long Term Market Condition, D.L. Jones
The Profile Report, Vol 2, Oct 1988
and
Locating Value with Auction Market Data, D.L. Jones
Stocks and Commodities, Jul 1989

Full Article & Examples

http://www.cisco-futures.com/balance..._day_rule.html

in this post, 2 pages of mind over market.
http://www.forexfactory.com/showthre...277528&page=56

left side mentioned : "ATTEMPTED DIRECTION"

what does this mean ? initial trend ?!

You're probably not going to want to hear this.........but it has been recommended that in order to gain a basic understanding of the Auction Process, one should educate themselves on the subject. On the very first page of the thread there are links to many resources. There's not many books on the subject, however "Mind over markets" imo is the best for gaining a basic understanding......

Directional performance analysis is a combination of "Attempted direction", "value area placement", & "volume". mind over markets, it explains how to use data in conjunction with volume and value area placement to determine directional performance relationships Mind over Markets pp177-194
here's a link to the book (you can find the link on the first page of the thread along with other resources)
http://www.4shared.com/office/ivp7jU...r_Markets.html

I have no idea what you mean by "initial trend"....I don't see that phrase in the post

The last version of the book is said to contain some changes...

Hello Muntu,
You're right, things have evolved somewhat, however, I've read & both steidylmeyer books, "Mind over Markets" & "Markets in Profile" (Dalton & Jones), one by Alexander (not very impressive if you're already versed on the subject), and Value Based Power Trading (Jones). I've also spent almost 5 years navigating the Cisco-Futures site, and by far the Cisco site has made the greatest advancements through actual testing. Mind Over Markets, although older than the newer, does go into limited analysis of reference points. The newer one lacks such analysis of reference areas. Auction Market Value Theory (AMVT) is an indepth analysis of reference points. The site has paid courses & data services, however he also provides the same educational tools & formulas to calculate data yourself or to educate yourself. He provides a an outline for those who chose not to take his course, to educate themselves, he provides an outline but you have to do the work to find that info on the site. Believe me, its an educational site dedicated to research, however there is definately no free lunch over there, you really got to work for it. But none the less, the data and resources are free. Regardless, if your taking a paid course or not, or reading his book or not, you'll find he suggests "Mind over Markets" as a minimal prerequisite for reading his book' using the site, or taking the year long course.

Value Based Power Trading (Jones) is the only book written about the Auction Market Value Theory (AMVT) approach - not a Market Profile approach. This book is written by Donald Jones, who for the most part, has evolved Market Profile to AMVT and continues to teach students AMVT today.

While AMVT did evolve from Market Profile, it goes a step beyond. AMVT does not attempt to use a generalized Market Profile shape to classify a Market day and base trades on that generalization. The markets have changed since the days of Steidlmayer using Market Profile.

AMVT approach has a trader reviewing several or more Market reference points (similar to Market Profile), a Meta-Profile and Overlay Demand Curves (Merged Profile). How these reference points and charts are constructed and applied are different from Market Profile. This book explains what the differences are and the how and why AMVT applies to modern and changing Market conditions.

This material is not a simple approach and may take several reads and finally many applications to really "get it". No Market is simple, this book does a wonderful job of providing the first steps to a better understanding of trading markets.

I am providing a link from the Cisco site that does a review on the latest book "Markets in Profile" its a great review. He goes indepth with extensive testing of the concepts, and provides statistical data of what stands as valid and what's statistically not true.

What's a better way to explain what I'm trying to say?...............
It doesn't matter if you're using excel 97, excel 2007, or even excel 2010.........
it doesnt matter what version of excel you're using , if you cant do "Math" what's the point?????????:nerd:

"Markets in Profile" Review http://www.cisco-futures.com/marketsinprofile.html

if anyone whose really interested in understanding Auction Market Process/Theory
I don't care which book one reads, JUST READ SOMETHING !!!!

Hello mzvega how do you feel about marketdelta and what is your opinion about the quality

of work over there concerning this auction market process? thanks for your view I hold what

you say in the highest regard for I see that you know your way around the markets profile

auction theory so any input on and about this source that you may know of will help me in

knowing whether I should spend any time over there and I will most definitely check out

cisco in the meantime thanks have a great weekend mzvega