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  • #381
  • Nov 13, 2015 7:18pm Nov 13, 2015 7:18pm
Quoting dljonesFan
Hi mzvega, my strategy yesterday was: 3 or/and 5 day bracket for breakouts and responsive buying/selling. For example 3 bracket breaks on LLBracket I go short, but the price comes back into bracket and takes my stopp loss on bracket LO. I go responsive long on bracket LO, but got stopped out again on bracket LL. Net flow was directionaly down, but no activity. I thought the news would bring enough activity for breakouts. But that was not what happening. It was more confusing price mov. stopping me out (range extension). So you are looking for what...
Whether you are a day trader or a swing/position trader, begin with the swing approach that you see in the text (VBPT). The longer term view, 5 to 20 days, is the source of the market condition. You need to know market condition to swing trade and to day trade. .

The Overlay Demand Curve displays the market condition. Markets can be either (1) balanced or bracketing, (2) testing the bracket for breakout, (3) trending, or (4) ending a trend. These four conditions comprise the market cycle.

Market Condition. Whether the market is balancing or trending (or in between), market condition gives one a sense of direction. This quantitizes one's day trading strategy. Market Condition is the base for all trading decisions. (as stated above 5 to 20 days, is the source of the market condition)

While breakout/trend trading is easiest to understand, many traders get started with intra-day or Responsive trading. The specific risk per trade is lower but so is the Potential. And trading costs become much higher. Responsive trading is much more nuanced, the signals are less defined. We want you to take the easier road at first. Later on you will see material on Responsive trading. For example, see: Responsive Trade.

The FOM data we discussed how to use it for "proof of principle" of your trading strategy. We did it for breakouts. Test your strategy for "proof of principle" for responsive trades on a 3day. (Cisco did the research for us)

In all the material the 5day determines condition. One reason the 3day is not listed in the bracket screen or used in their database for potential opportunities is because the distance between the UL-UO is usually narrower than the VTY. That means both your entry and your stop are placed within the volatility envelope. And if the 5day is used to determine condition, by trading the 3day your assuming that somehow the condition of the market has now changed. If the 5 hasnt changed, neither has the condition. The 3 day is not listed because risk per trade is lower but so is the Potential. So they dont even provide the information.

Being that we have the data available doesnt mean we should trade it. (we do have the option not to see it on the chart).

This is very difficult for me to answer. I keep things pretty much text book. I also dont post any info unless it can be supported by a published reference.
I have yet to find any reference that suggests we should be trading using the 3day. Only all potential trades start with a 5day bracket.

However, I cant say dont trade the 3day, But I have yet to find any material that thats supports doing so. If you follow the rules: If you keep your stop is outside the volatility envelope, because of the smaller 3day TF you wont find many opportunities where the distance UL-UO is greater than the vty.
The risk outweighs the potential. Another reason Cisco doesnt provide 3day brackets for potential trade opportunities.
There is nothing that says you cant, but if you do you should understand the risks associate with it.

If you were using Cisco data exclusively, you wouldnt be using the 3day to look for potential trades, the data is not provided) all potential trades start with a 5day bracket.

On occasion Evak and I do, we both understand the associated risk involved, but were using info about the 5day. The assumption is a change in the condition of the 5day, but strategically on occasion I use the structure of the 3day for early entry. My trade decisions & reasoning (responsive or initiative) is made based on the 5. If the data supports a high probability trade on the 5, I may enter earlier using the 3day if the data supports it..................
Markets are not efficient, rather they are effective - Jones
  • #382
  • Nov 13, 2015 8:27pm Nov 13, 2015 8:27pm
Quoting dljonesFan
Hi mzvega, my strategy yesterday was: 3 or/and 5 day bracket for breakouts and responsive buying/selling. For example 3 bracket breaks on LLBracket I go short, but the price comes back into bracket and takes my stopp loss on bracket LO. I go responsive long on bracket LO, but got stopped out again on bracket LL. Net flow was directionaly down, but no activity. I thought the news would bring enough activity for breakouts. But that was not what happening. It was more confusing price mov. stopping me out (range extension). So you are looking for what...
Auction Market Analysis is not about going long or short on lines of the indicator. Its about the Analysis.

You've done all this work on analysis, and from what I read in your post, it sounds like you just chucked it out the window

the Net flow is down, but less activity

It did not say that the direction has reversed; it may have paused, slowed for many reasons. Maybe it slowed because of upcoming news, profit taking, etc. Our analysis tells us the trajectory is still down. We want to go with our analysis and the market. Being that the market has slowed, it doesn't mean the condition of the market has changed and will reverse course.

Being that it has slowed, you might want to exercise precaution, it might not be a good idea to take the Initiative (aggressive) short on a BO. If you were where following your analysis and only looking to short with some caution, A responsive short/sell would have one, offered you a better position of selling at higher prices. Two, confirm your analysis (trajectory down) as Price would have had to fail at an attempt to go higher and three , a responsive sell might have generated more LTF participation, cause who doesn't like to sell at higher prices

You went from using the data from your analysis to make a trade decision, to trading the indicator (the picture of the profile). You looked at the indicator and decided to go long, nothing in your analysis supported a valid reason to do so. You were right in attempting to short, however you could have approached it differently. Had you traded a responsive sell, would the outcome have ended differently?

One of the hardest things for me to learn is learning to trust in my analysis.
The Analysis should dictate your trading decisions, not the indicator.
Markets are not efficient, rather they are effective - Jones
  • #383
  • Nov 16, 2015 11:04am Nov 16, 2015 11:04am
Hi mzvega, I studied the whole weekend. Today I tried to figure out the movement/behaviour of the brackets. I think one of the most important things are the tests and the behaviour of the market flow at these certain testlevels (BracketLL/UL). I also worked on a new flow table. I increased the range to compare the historical behaviour of the market (to learn from it) and added some studies. I want to understand the whole thing and get rid of bad dessions like last week (get trapped by fake Bracket breakouts)...

greetings
c
  • #384
  • Nov 16, 2015 12:48pm Nov 16, 2015 12:48pm
Hi c

Sounds like a good idea to slow things down a bit. Even with all the rules I try to stick to. A break out doesn't always play nice & can revert to bracketing immediately the next day & the next on subsequent break out. So choose your weapon wisely.

Refer to your previous question on trading on news & VTY stops. Best to avoid major news if you can & only place your trade after it as price will eventually calm down & spread returns to normal. I have mentioned on VTY stops b4; Use either LO or LQ but it should be not less then 2 or 2.5 times of VTY. You can use the 20 day value.

MY trade for today;
UJ responsive trade; Monday I usually avoid trading breakout. But here goes a responsive trade instead.

Flow down for the last 3 days but value contracting on top of a larger uptrend move; 5day correction vty is less then 20day avg. I waited for an internal balance or pause as shown in the blue box, prior to entry.
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  • #385
  • Nov 17, 2015 2:11am Nov 17, 2015 2:11am
Thank you evak for that responsive long example and the explanation. That helps me on my learning!
  • #386
  • Edited 4:50am Nov 17, 2015 3:07am | Edited 4:50am
Quoting Evak
Hi c Sounds like a good idea to slow things down a bit. Even with all the rules I try to stick to. A break out doesn't always play nice & can revert to bracketing immediately the next day & the next on subsequent break out. So choose your weapon wisely. Refer to your previous question on trading on news & VTY stops. Best to avoid major news if you can & only place your trade after it as price will eventually calm down & spread returns to normal. I have mentioned on VTY stops b4; Use either LO or LQ but it should be not less then 2 or 2.5 times...
"5day correction vty is less then 20day avg [...]" (Evak)
If the VTY would be higher, then its a sign for breakdown?

"Flow down for the last 3 days but value contracting on top of a larger uptrend move[...]" (Evak)
How do you analyse your value data? Or do you only use VA range data?
Do you mean the 5 day value? Because the 1 day value just turns around:

5 day Value High/Low chart USD/JPY
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1day Value High/Low chart USD/JPY
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  • #387
  • Nov 17, 2015 4:40am Nov 17, 2015 4:40am
Quoting dljonesFan
{quote} "Flow down for the last 3 days but value contracting on top of a larger uptrend move[...]" (Evak) How do you analyse your value data? Or do you only use VA range data? Do you mean the 5 day value??? Because the 1 day value just turns around: 5 day Value High/Low chart USD/JPY {image} 1day Value High/Low chart USD/JPY {image}
"Value" can only be calculated in a bracketing market.
If a TF is not Bracketing there is no "Value area"
70% VA is a MP concept, AMVT the value area is the area between UQ-LQ

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


We aren't trading with the daily profile. Were only concerned with the "Data" for analysis of reference points
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Markets are not efficient, rather they are effective - Jones
  • #388
  • Edited 10:09am Nov 17, 2015 7:50am | Edited 10:09am
USD/JPY
3 day net flow/ Diret.: UP, Act.: DOWN

17.11.2015 day flow compared to last 20 day range
Range Ext: UP
TPO Balance: clear Seller, too few buyer
"Vol": Decreasing-> no continuation
Val: UP
ValRange: Decreasing, near 20 low extreme
POC:UP
RF - decreasing, near 20 day high extreme
VTY - decreasing, 20 day Mid-> less activity, may shutdown-> may followed by price breakout
TFF: Rising, near 20 day high extreme -> lack of confidence, Alert for breakout
Buying Tail-> no completed auction
Range: decreasing

8 of 11 Points for breakout: go long on bracket UL

But the picture gets different with the 5d bracket compared to last 20d

Va is moving slightly down (stable)
POC down
POC Dir UP
TPO Balance clear Buyer
VA Range is expanding, near 20d low extreme
VA Dir none-> Congest
RF UP
VTY down, near 20d mid
TFF down
Range increasing
Range Ext none->Congest
"Vol" decreasing

6 from 12 -> Congestion, go short on Bracket UO

I created some 20day range chart to disply some data like ranges, tf, rf ... and I think that helps me to understand the different conditions the market can be in. But wich data should I compare with? I know how to use 3 day net flow, but should I compare 5day data (Value range...) with 20 day data or better using 1day data for that job. I know 1 day data is too short for comparison, but the 1 day flow in the 20 day range can be good compared I think...
Next point is setting the profile data correct. Today I used 100 points and 10 points for calc, but the output is different. In the next days i will concentrate on this problem. It is very important to know wich data set to use for better statistics. I think Jones uses 100 points...

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  • #389
  • Nov 17, 2015 9:05am Nov 17, 2015 9:05am
Quoting mzvega
{quote} "Value" can only be calculated in a bracketing market. If a TF is not Bracketing there is no "Value area" 70% VA is a MP concept, AMVT the value area is the area between UQ-LQ http://www.cisco-futures.com/balance..._day_rule.html We aren't trading with the daily profile. Were only concerned with the "Data" for analysis of reference points {image}
Thank you mzvega! I think that value rule is perfectly proved by the grapihc and makes it visible:

Attached Image


The "value is hunting" the price. Price leads. After the trend, price stopps, value can be calculated.
  • #390
  • Nov 17, 2015 1:06pm Nov 17, 2015 1:06pm
Quoting dljonesFan
USD/JPY 3 day net flow/ Diret.: UP, Act.: DOWN 17.11.2015 day flow compared to last 20 day range Range Ext: UP TPO Balance: clear Seller, too few buyer "Vol": Decreasing-> no continuation Val: UP ValRange: Decreasing, near 20 low extreme POC:UP RF - decreasing, near 20 day high extreme VTY - decreasing, 20 day Mid-> less activity, may shutdown-> may followed by price breakout TFF: Rising, near 20 day high extreme -> lack of confidence, Alert for breakout Buying Tail-> no completed auction Range: decreasing 8 of 11 Points for breakout: go long on...
I appreciate your enthusiasm, however you are putting the cart way before the horse........

"Jones uses 100 points"..............................That's because he's using futures data not Forex the pricing structure is different. You do not need to change the step settings either use 1 or 2, if not you will severely distort your data.

You are also not comparing flow data with other flow data from other TF's. There is just one. The flow data we use is to tell us the Current trajectory of market.
Learning this is a process, you need to have a firm grasp of understanding of each of the reference points. What each one means. In all the cisco examples the data(references) are given to you along with play by play analysis.

Can you tell me "What is the quantitative measure that determines if a TF is Bracketing or not?"

From reading VBPT this is the first basic concept "What defines a bracket". Unless you have a firm grasp of this first basic principle, it makes it very difficult for me to to explain comparing one TF with another. It seems you have alot of assumptions of what exactly the references "mean".

e.g. "TFF: Rising, near 20 day high extreme -> lack of confidence, Alert for breakout".....

can you tell me What does it mean if the TFF is higher than it was yesterday? Can you explain to me what the TFF is? And why do you think it means "lack of confidence"? Can you show me the reference you used to bring you to this conclusion?

This data is available free, The text book used is vbpt, you should also read the background reading section there found there

This may help also.
http://www.cisco-futures.com/month0.htmlx
Markets are not efficient, rather they are effective - Jones
  • #391
  • Edited 2:23pm Nov 17, 2015 1:50pm | Edited 2:23pm
Hi c

What makes a bracket or distribution you'll need is a minimum 4 price line & that makes up of at least 3 tpos, 5 tpos are for overlays of 10 days & above. At least this is specify in the document that Mzvega mentioned or in the TCP package of Cisco-futures. (Try the 2 weeks trial to check out the TCP package & others)
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A price line can be 2pips (price steps) or up to 10pips in size in forex. But base on my estimate; It should be around half of VTY. So if VTY is let say 12, then half is 6 but try to set it to a 5 pip increment. I use 5 for most. Mzvega I believe use value of 2 or the default settings.

With regards to your question of how i read value. I do want to add that this is an impromptu trade & my judgement takes into account that USDJPY is still in a confirm uptrend, hence the correction. The narrowing of value day by day just indicates that volatility is weakening as it corrects.

Just to add; It also does not mean if the volatility is high one can short instead. The market condition did not indicates that in the overlay. But I can't say if one wishes to take an aggressive stance if the data points it to. As a general rule 5 day bracket will still require a 10 day bracket if market condition is in a protracted pause but it may not apply if market has previously gone vertical & pause & move again. It is also interesting to note that Cisco Advise Engine only list out Contracts that are bracketing in both 5 & 10 day. http://www.cisco-futures.com/htbin/ae_curr
  • #392
  • Nov 17, 2015 2:33pm Nov 17, 2015 2:33pm
Breakout trade of Gchf; Market pause 7 days after the high 8 days ago. we also have 5 & 10 days in bracket.
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  • #393
  • Nov 18, 2015 11:05am Nov 18, 2015 11:05am
Quoting Evak
Breakout trade of Gchf; Market pause 7 days after the high 8 days ago. we also have 5 & 10 days in bracket. {image}
Thank you Evak and MZvega,

Evak I realy like that you share your entries!

I decided to dig more into the details of all the giving parameters. For example how behaves the TFF in balanced situations or in bracketing/trending situations... You already know there are a lot of reference points to study. I think its very important to know how they behave in different situations (conditions) the market can be in. My goal is to get a better understanding of these reference points. So today I started to look back on some historic situations and how the reference points behave. And I think the 14 trail account is a good idea!

Greetings
Chris
  • #394
  • Nov 19, 2015 3:23am Nov 19, 2015 3:23am
NP Chris

Anyway..Here is Gchf continuation trade on an entry made yesterday. The idea here is to hang on to the the initial break out & add to it as risk free..may be time to close though as daily volume reduce.
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  • #395
  • Nov 19, 2015 3:40am Nov 19, 2015 3:40am
Aud pairs are the rave this week. I have some entries made but this AUDCHF is a good example having both 5 & 10 bracketing. My entry was trigger late yesterday. Note that this is a continuation break if you take into account that Wednesday break out as the initial break out for this pair.

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  • #396
  • Nov 19, 2015 9:45am Nov 19, 2015 9:45am
Quoting Evak
Aud pairs are the rave this week. I have some entries made but this AUDCHF is a good example having both 5 & 10 bracketing. My entry was trigger late yesterday. Note that this is a continuation break if you take into account that Wednesday break out as the initial break out for this pair. {image}
Those are some great examples......
I took a break of of the 5&10, I took profit yesterday. I may have missed the best place to re-enter this morning but the vty supports continuation........
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Markets are not efficient, rather they are effective - Jones
  • #397
  • Nov 19, 2015 10:18am Nov 19, 2015 10:18am
Great trade examples! Thank you mzvega and evak!

I had a great learning day today. Some interesting things noticed and understood... hopefuly understood. haha
  • #398
  • Nov 20, 2015 2:47am Nov 20, 2015 2:47am
Nice trade to you too Claudia :

Not so lucky this morning as my Nzdusd trigger a buy but stop out. Better time later perhaps. AUD good choice though

My AUDCAD still in play but i did not add. 10, 20 bracketing in this case just broke out of 20. Initial break out was last Thursday with 5 10 bracketing break. There after price pause on flat base & broke yesterday again a week later.

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  • #399
  • Nov 20, 2015 9:45am Nov 20, 2015 9:45am
Hey Evak, Mzvega,

stopped out NZDUSD? Today? Can you tell me witch day please? It would be good for my studying.
I studied the whole day, looking forward next week, I will present you both my trading ideas, before I start trading again. Please stay close, have a nice weekend!

greetings
Chris
  • #400
  • Edited 10:07am Nov 20, 2015 9:57am | Edited 10:07am
Quoting dljonesFan
Hey Evak, Mzvega, stopped out NZDUSD? Today? Can you tell me witch day please? It would be good for my studying. I studied the whole day, looking forward next week, I will present you both my trading ideas, before I start trading again. Please stay close, have a nice weekend! greetings Chris
I believe it was yesterday.....

p.s. check your messages
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