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  • #421
  • Edited 11:22pm Dec 1, 2015 10:51pm | Edited 11:22pm
Quoting Evak
Hi C Just to add... Best to look at TFF with volume in addition to VA range. Interesting though Jone's VGII left out Volume info. VGII only provide 2 days of descriptor if you like to call it, as oppose to 3 day flow which is mainly a tool in the Day Trading Engine (DTE) rather then VG. Ultimately you have to decide which approach suits you best. Flow or no flow. One still have to ascertain the placement of overlay in relationship to the longer time frame. e.g are we still in a confirm up trend, are we in a correction or has the correction turn...
The whole premise of tpo analysis was due to the fact that cleared volume data was not available intra-day in real-time. And when it was available, it was only accessible End-of-Day. If tpo volume is equivalent to cleared volume, is there a need to see the EOD volume report? And in a Market that doesnt report cleared volume, the only option weve ever had was to use TPO Volume.

"Tick volume" is not "market generated data" therefore a "volume profile" has never been a permitted practice in MP or AMVT. A volume profile has nothing to do with market profile or AMVT. (that statement wasn't for you, Evak )

I believe the Glossary defines that when Jones refers to the term "Volume", he means "TPO Volume".
http://www.cisco-futures.com/glossary.html

The VGII does refer to "total tpos", which imo refers to "tpo volume"

Overlay: Is a plot of trading volume versus price for a chosen time period.
The time periods in the Visual Graphic are the last 5, 10 and 20 days.
It is a picture of the prices where heaviest/lightest trading occurred.
The trading volume used is a special type of volume called TPO volume.
The TPO volume at a particular price is the number of different 30
minute trading periods during which that price was traded at least
once.............
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Markets are not efficient, rather they are effective - Jones
  • #422
  • Dec 2, 2015 4:32am Dec 2, 2015 4:32am
I just wanted to touch on a few points about use of Volume as a reference point. It shouldnt be of any greater importance than any of the other 30 refs.
Im still quite disappointed that a bunch of "volume profile" traders turned the previous MP & AMT thread into a swamp of misinformation.
The most popular Market Profile book: "Mind over Markets: Power Trading with 'Market Generated Information'", has nothing to do with a "volume profile". Why? Because, as stated in the previous post, "tick volume" is not "Market Generated Data (info)".

Its interesting that in a forex market, so many traders fixate on the word Volume. I dont think the majority of traders here at FF understand the distinction between volume and real demand. Often I see many traders use the terms interchangeably to mean the same thing.


J.Peter.Steidlmayer Markets and Market logic
Chapter 3 p.15

In order to understand the market's inefficiency, consider the reality of how markets function. A normal preoccupation of the short time- frame participant is to focus on the dominant concern or news focus. The dominant concern causes the market to be balanced in the eyes of the shortest timeframe participants. It is the short timeframe participants who normally transact the vast quantity of total volume. But while the short timeframe participants transact up to 90% of the volume, their presence does not change the market. Thus, this dominant concern may or may not be a dominant concern for the longer timeframe participants, since it may or may not be of major significance to the supply and demand situation in the framework of the total marketplace. It is the focusing of the short timeframe participants on a relatively unimportant piece of news, a dominant concern that is not of major significance that causes price excess. In other words, a minor piece of news - a fact or perception that might be only 2% of the total timeframe decisions of the marketplace -will motivate 80-90% of the day's or weeks trade, since the short timeframe participants, who are the majority of the market, focus on it. Their preoccupation can create an opportunity when it is considered an excess for the longer timeframe participants. This leads one to wonder, how can all prices be equal, and how can all prices represent value when short timeframe overcompensation presents an opportunity for a more realistic valuation in a larger timeframe?

Cisco-Futures (Jones)
Demand: Day Traders and Swing/Position Traders:
A (day) trader who is out of the market by the close generates no lasting demand. One who holds for an extended period does create demand. Within a day, the local-member may be in and out fifty times, long or short with equal probability. No demand created there! Public traders often act directionally. They buy and hold. Their actions are often due to chart formations (with which the members are also familiar!). Within a day, the public can drive prices away from the balance so prized by members. If the public is successful, a trend begins. More often we fail, leading to an aborted trend or a failed breakout which quickly crumbles. (Commercial members often have quite a lot to do with the failure, called commercial capping. Capping is discussed in detail in the text Value Based Power Trading, pg 33 - 47). http://www.cisco-futures.com/Auction_Market_Theory.html

When 90% of intraday volume, doesnt contain the volume demand that moves the market, you may want to revaluate how heavily your trading analysis revolves around volume
Just a little food for thought............
Markets are not efficient, rather they are effective - Jones
  • #423
  • Dec 2, 2015 12:03pm Dec 2, 2015 12:03pm
Took a GU trade after a sharp correction in the currently trending 10day....................
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Markets are not efficient, rather they are effective - Jones
  • #424
  • Dec 2, 2015 1:02pm Dec 2, 2015 1:02pm
Quoting Evak
Hi C Just to add... Best to look at TFF with volume in addition to VA range. Interesting though Jone's VGII left out Volume info. VGII only provide 2 days of descriptor if you like to call it, as oppose to 3 day flow which is mainly a tool in the Day Trading Engine (DTE) rather then VG. Ultimately you have to decide which approach suits you best. Flow or no flow. One still have to ascertain the placement of overlay in relationship to the longer time frame. e.g are we still in a confirm up trend, are we in a correction or has the correction turn...
Hey mzvega and evak
thank you for sharing your entries, I too picked all that pairs for my personal observation because of thier behaviour. That told me, I have understood something I took a day off yesterday, I have a cold.
And I have already noticed earlier, that you (evak) like to compare the overlays. Today I created my own statistics with all the data 20,10,5,1 day overlays. May I in the next days notice some correlations and principles Jones always mentioned in his articles.

Thank you!
  • #425
  • Dec 3, 2015 10:03am Dec 3, 2015 10:03am
Quoting dljonesFan
{quote} Hey mzvega and evak thank you for sharing your entries, I too picked all that pairs for my personal observation because of thier behaviour. That told me, I have understood something I took a day off yesterday, I have a cold. And I have already noticed earlier, that you (evak) like to compare the overlays. Today I created my own statistics with all the data 20,10,5,1 day overlays. May I in the next days notice some correlations and principles Jones always mentioned in his articles. Thank you!
I hope you feel up to par soon..........
Markets are not efficient, rather they are effective - Jones
  • #426
  • Dec 3, 2015 10:04am Dec 3, 2015 10:04am
In a recent post I made reference to Steidlmayers first book "Markets and Market Logic". My first read was years ago, and I forgot just how profound of an impact it had on me in understanding how Auction Markets and it's various Participants operate. Of the few published materials available I believe his first book is the most underrated. Probably because its the least technical. Because Mind over Markets focuses mainly on the MP indicator, I think the majority, gloss over the material, and only focus on the technical (the indicator) and ignore info that explains the fundamental principles of how Auction Markets and it various Participants operate.

Ive covered and made reference mostly to Jones work which as a prerequisite assumes you are already familiar with fundamental principles. Theres much talk about "Random Walk" & "Efficient Market Theory". Most traders that frequent FF belong to one or the other of the two camps. Steieldymayer's first book Markets and Market Logic, from an auction market perspective, allowed me to understand the mindset of the 2 theories and how they dont quite fit with the way Auction Markets actually work. (that is if you believe that all markets are an auction). Ive belonged to the "Auction Market Theory" Camp ever since.
Just as I have posted Joness material, I think I will start to post some of basic fundamental principles found in Steidlmayers first book..........
Markets are not efficient, rather they are effective - Jones
  • #427
  • Dec 3, 2015 10:20am Dec 3, 2015 10:20am
The key to understanding market-generated information lies in organizing the seemingly chaotic, seemingly random market activity into meaningful, measurable data segments which can be captured, defined and then monitored. This provides a sound basis for interpreting the price data and allows a person a sound decision-making process to act or not to act. Thus, market-generated information is nothing more than a time-series plot of transactional data: price data plotted over time, formulated into a format which lends itself to statistical measurement and comparison. (In our case, we have chosen the bell curve, normal distribution. The following graphic, attributed to statistician W. J. Youden from 7he Visual Display of Quantifiable Information, says much about why the bell curve is significant to a market understanding.)

NORMAL

LAW OF ERROR

STANDS OUT IN THE

EXPERIENCE OF MANKIND

AS ONE OF THE BROADEST

GENERALIZATIONS OF NATURAL

PHILOSOPHY it SERVES AS THE

GUIDING INSTRUMENT IN RESEARCHES

IN THE PHYSICAL AND SOCIAL SCIENCES AND

IN MEDICINE, AGRICULTURE AND ENGINEERING

IT IS AN INDISPENSABLE TOOL FOR THE ANALYSIS AND THE

INTERPRETATION OF THE BASIC DATA OBTAINED By OBSERVATION AND EXPERIMENT


With the bell curve organizing data, reading and understanding market activity simply calls for being able to understand how, where, when and under what conditions participants use the market, then being able to isolate or key in on factors that are important at that time, while filtering out those factors which are unimportant. Reading the information generated from the marketplace as it is generated allows anyone to relate price against value, applying this knowledge of the present to his particular situation.


THE MARKETS PRINCIPLES
Beyond understanding the importance of knowledge of the present and the importance of arranging transactional data into the bell curve, the approach to markets advanced in this book incorporates two basic equations. The first is used to break down and define market reality. The equation is simply: price + time = value. This statement is known and even obvious to most intelligent persons; subconsciously we accept a known product's price as value as we repeatedly are charged that price over time. The equation also holds true for the most complex markets. It captures and defines a market's range of activity, creating a distinction between prices which are accepted as fair value and those and those prices which the market rejects as temporarily unfairly above or below value in the current timeframe.

J.Peter.Steidlmayer Markets and Market logic
Markets are not efficient, rather they are effective - Jones
  • #428
  • Edited 11:19am Dec 3, 2015 10:36am | Edited 11:19am
SOME THOUGHTS ON THE RANDOM WALK AND EFFICIENT MARKET THEORIES
There are a select few who regularly profit from their involvement in organized markets, and there is the great majority of people who do not. Among the points which distinguish successful traders and investors on one hand from the vast majority of market participants and most of the academic community on the other, are the acceptance by the latter group of the notion of organized markets as a random walk, and the ability to distinguish organized from unorganized markets because of the so-called efficient market theory.

The most important yet simplistic implication of market logic is that anyone can now locate value in an organized (or in fact any) market. Thus, one can determine when price is below value, at value or above it. Armed with this information, so long as one has the other requisite characteristics, one can join the ranks of the few who make money consistently in the organized markets. A secondary implication of market logic must therefore be that it refutes both the random walk and efficient market theories currently in vogue among the majority of the academic community. Consider each of these long-accepted theories regarding market activity.

Random Walk
The theory of price fluctuation as a random walk (and the term itself) has been used for centuries. There are numerous definitions of random walk, and each definition varies in shades depending on who is doing the defining. According to Robert Hagins Dow Jones-Irwin Guide to Modern Portfolio Theory, random walk is a term used in mathematics and statistics to describe a process in which successive changes are statistically independent. A random walk implies (that the market's price displays) no discernible pattern of travel. The size and direction of the next step cannot be predicted from the size and direction of the last or even from all previous steps. The serial correlation is (functionally) zero. In other words, the random walk theory holds that it is impossible to predict tomorrow's price changes based on what has occurred today.

J.Peter.Steidlmayer Markets and Market logic
Markets are not efficient, rather they are effective - Jones
  • #429
  • Dec 3, 2015 10:47am Dec 3, 2015 10:47am
All markets operate similarly and are motivated by the same principles, and that anyone who can understand these principles plus observe and record the individual characteristics of the specific market and can employ a sound trading strategy and discipline himself, can profit handsomely from any market. Thus, a central thesis of market logic is that there is little distinction between organized or exchange-traded markets such as stocks, futures, options. etc. and all other so-called unorganized markets where no federally regulated exchange floor exists. (Certainly the exchange-traded markets often offer a narrower bid-ask spread, thus creating a higher degree of liquidity and hence lowering transaction costs as compared to those of unorganized market...

Every market is an auction market, either passive or active. In a passive auction, the individual does not take part in an active negotiation process but selects from products offered at different prices which make up the range. In an active auction, participants negotiate the range. Whether the auction is passive or active, all markets auction or trend up and down in order to fulfill their purpose, to facilitate trade. In an auction, prices do not develop randomly, but rather to fulfill the purpose of the auction.

The purpose of any market is to facilitate trade. Lack of trade facilitation inevitably causes price to move. This price movement behavior is as true in the organized markets as it is in a grocery store or any other everyday market. Thus, price changes to satisfy the condition of the market and every price is a result of the condition of the market. The fact that price moves for a specific reason further precludes price from developing in a random manner.

J.Peter.Steidlmayer Markets and Market logic
Markets are not efficient, rather they are effective - Jones
  • #430
  • Edited 11:24am Dec 3, 2015 11:13am | Edited 11:24am
Furthermore, prices are not statistically independent of each other. Price, in moving to satisfy the condition of the market, provides an informational flow. In other words markets must generate trade, and in doing so, prices fluctuate, generating information about where trade is being conducted and where it is not. This information is valuable to the market participant as we shall soon demonstrate. But true randomness does not generate valuable information. In other words, in statistically random situations, knowledge of the present is not important for it conveys no advantage. If knowledge of the present structure of a market is important and does convey an advantage as we shall see in later - a market cannot be a random walk.

We shall see how, in a futures market, the day's activity is structured: price moves because of the degree of each timeframe's participation at various levels of price. We shall see why the ultimate structure of a futures market for one day depends on the activity level of the various groups. We shall see that the market develops logically, as price fulfills the need of the market. And, we shall see that prices can be distinguished from one another yielding valuable information.

J.Peter.Steidlmayer Markets and Market logic
Markets are not efficient, rather they are effective - Jones
  • #431
  • Dec 3, 2015 11:57am Dec 3, 2015 11:57am
Efficient Markets
According to Robert Hagin, The efficient market theory is the assertion that in a market with numerous investors who prefer high returns over low returns and low risk over high risk, information is of no value. An investor can attain no more or less than a fair return for the risks undertaken.

In the semi-strong form, the efficient market theory hypothesizes a market in which all publicly available information is efficiently impounded on the price of a stock, and hence a market in or item of publicly available information that can be used to predict future price changes.

An efficient market does not allow price to get away from value, since the theory holds that information is of no value since it is factored into the market, as every price must represent fair value. If price is always in equilibrium of value, then the theory presumes that prices are indistinguishable from one another in all but number. Thus, according to the efficient market hypothesis, all prices represent value, and the market is balanced at every moment: all the needs and concerns of the entire marketplace - participants in every known and unknown timeframe - are brought to the present by a price representing value for all. This seldom occurs and when it does, it is happenstance, and non-discernible except by the lack of activity.

Different participants have different timeframes for buying and/or selling; longer timeframe participants seek to buy low and sell high, and short timeframe participants must transact sooner and cannot be as discriminating. Thus, all markets including organized markets are inefficient from the standpoint that participants with differing time- frames view the most recent price with differing opinions and do not participate at the same time and at the same price. In other words, a given price is not viewed as an equal opportunity for all. The market cannot at any one moment balance all the needs and concerns of the entire marketplace participants in every known and unknown timeframe since the most recent price does not represent the same thing to all participants. In other words, no single price represents fair value for everyone.

J.Peter.Steidlmayer Markets and Market logic
Markets are not efficient, rather they are effective - Jones
  • #432
  • Dec 3, 2015 12:21pm Dec 3, 2015 12:21pm
Rather than being efficient, all organized markets are effective. They are effective from the standpoint that they produce and regulate trade, bringing into play all participants over time. In other words, the market facilitates trade from all participants, not with each individual price, but over a large sample size. The fact that participants with different timeframes exist precludes a price dominated by one time-frame from being fair value for all. The efficient market hypothesis overlooks the existence of participant timeframes.

The assumption of randomness and the efficient market hypothesis" assumes that the market - price movement over time -conveys no knowledge or information. Instead, it assumes that if a trader profits from a market, he has resorted to predicting, and his luck will sooner or later run out. However, one need not predict the future in a market of uncertainty. It is impossible to always accurately predict future events. But we can monitor the market, understand its present condition and how current price relates to the market's current assessed value, and from this, we can logically deduce probable behavior, and adjust our assessment from the new information the market provides as it unfolds. And by extracting bits of market-generated information, we can deduce and change.

J.Peter.Steidlmayer Markets and Market logic
Markets are not efficient, rather they are effective - Jones
  • #433
  • Dec 3, 2015 1:44pm Dec 3, 2015 1:44pm
The Academic Community's Ball and Chain
One rule that most successful individuals and businesses have incorporated into their operating procedure is not to pursue any endeavor in which they face a disadvantage before correcting those things that create their disadvantage. In other words, it is important to continually assess and reassess what is producing successful results, discarding what does not yield success.

Yet, the academic community continues to pursue the refinement or studies based on fallacious assumptions about the market, particularly the random walk and efficient market theories. Gaining knowledge from experience has not been practiced by the academic community, not out of malfeasance, but because in modem society knowledge can more easily be gained from a formal classroom teaching environment. Instead of examining reality, rethinking fundamental market assumptions and seeking a new course of thought. The academic community continues to pursue the disadvantage as taught in the classroom.

This is not meant to be a pedantic indictment of the academic mindset. Clearly, it is difficult in most institutions to gain a true evaluation of reality. It is even more difficult within an institutional setting for the status quo to change, regardless of whether what is accepted is correct or not. The academic community is not guilty of anything worse than not taking a leadership role in thinking logically about markets. But times have changed.

J.Peter.Steidlmayer Markets and Market logic
Markets are not efficient, rather they are effective - Jones
  • #434
  • Dec 3, 2015 2:25pm Dec 3, 2015 2:25pm
Those who understand the condition of the market (where price over time is building value) are conveyed an advantage from which they can profit whereas those who focus on prices against each other must assume randomness and no understanding.

In order to understand the market's inefficiency, consider the reality of how markets function. A normal preoccupation of the short time- frame participant is to focus on the dominant concern or news focus. The dominant concern causes the market to be balanced in the eyes of the shortest timeframe participants. It is the short timeframe participants who normally transact the vast quantity of total volume. But while the short timeframe participants transact up to 90% of the volume, their presence does not change the market. Thus, this dominant concern may or may not be a dominant concern for the longer timeframe participants, since it may or may not be of major significance to the supply and demand situation in the framework of the total marketplace. It is the focusing of the short timeframe participants on a relatively unimportant piece of news, a dominant concern that is not of major significance, that causes price excess. In other words, a minor piece of news a fact or perception that might be only 2% of the total timeframe decisions of the marketplace will motivate 80-90% of the day's or week's trade, since the short timeframe participants, who are the majority of the market, focus on it. Their preoccupation can create an opportunity when it is considered an excess for the longer timeframe participants. This leads one to wonder, how can all prices be equal, and how can all prices represent value when short timeframe overcompensation presents an opportunity for a more realistic valuation in a larger timeframe.

J.Peter.Steidlmayer Markets and Market logic
Markets are not efficient, rather they are effective - Jones
  • #435
  • Dec 3, 2015 10:16pm Dec 3, 2015 10:16pm
Price and Value
Most investors and traders distinguish between understandable market situations where price and value differ, and the organized markets, where price and value are always the same. Unknown to most participants, all markets not just the unorganized, everyday markets -- have a universal commonality: price and value differ in all markets, and the underlying principles which motivate buying and selling are identical. (Most investors and traders in organized markets inherently understand this, but it was most notably presented in Graham and Dodds Securities Analysis.) Further, every market reflects the collective needs and goals of its participants through its range of activity. In order to understand any marketplace, one needs to separate and isolate that part of the range which motivated the activity of each category of participant.


But while most market examinations begin by focusing on the participants, a true understanding of market logic necessitates taking a step back and examining and understanding the real purpose of a market, and the importance which knowledge of this purpose has in all market understanding. Understanding the purpose of the marketplace is the key to being able to benefit from it. However, it is very easy to be misled and confuse the outward results of the marketplace that price is rationing supply and demand with its purpose, the reason it exists.

J.Peter.Steidlmayer Markets and Market logic
Markets are not efficient, rather they are effective - Jones
  • #436
  • Dec 4, 2015 2:18am Dec 4, 2015 2:18am
The Purpose of a Market
A marketplace exists solely to facilitate trade. This is its only purpose. And this fact is the starting point and a key concept to grasp when analyzing or participating in any marketplace.

As mentioned above, to understand any marketplace one also must grasp the needs and goals which motivate its participants. In a marketplace, the needs and goals which motivate participants are expressed in their continued buying and/or selling. Thus, observing and reflecting on the inherent needs and goals of a participant aids in gaining a market understanding, but observing his market participation - his buying and selling agenda in the marketplace provides valuable information, which is the foundation for an accurate market understanding and for buy-sell decision making

Whether it is an organized, federally regulated financial exchange, an open air food mart, or anything in between, the sole reason any marketplace exists is not to ration supply and demand, nor to allocate scarce resources, but simply to facilitate trade. Furthermore, all functioning markets generate information while advertising opportunity. Any logical understanding of any market must begin by acknowledging these fundamental principles of every marketplace.

J.Peter.Steidlmayer Markets and Market logic
Markets are not efficient, rather they are effective - Jones
  • #437
  • Dec 4, 2015 2:33am Dec 4, 2015 2:33am
Price
Price, the market component most participants rely on when making trading decisions, is the amount of money given or set as consideration for the sale of a specified item. It is a variable and, as such, it fluctuates. Price facilitates trade by balancing the market, making the situation fair for both producer and consumer over the very short run.

The market, in facilitating trade, uses price to promote activity. Price does this by advertising opportunity, moving up or down in order to make the market attractive for participants to enter. The market continually uses the shifting or vacillation of price between the area where it encourages buying (consuming) and where it encourages selling (producing).

Price, endlessly promoting activity through advertising opportunity in the market in an effort to facilitate trade, does so by testing excess levels. However, the market has little or no trade activity when price moves either to too high or too low an excess. Thus, when price moves either too low or too high, it does not facilitate trade and must eventually change.

To prevent price from moving too extensively in one direction, the marketplace has hidden brakes namely the self-interest of the participants. If price becomes unfairly above or below value, one of the parties to the producer-consumer equation will not trade or will trade in decreasing volume. For example, as price moves up, it advertises opportunity to producers, but may be in an area where the consumers will not buy, or will buy grudgingly and in smaller volume, thus forcing the producers to lower price over time.

J.Peter.Steidlmayer Markets and Market logic
Markets are not efficient, rather they are effective - Jones
  • #438
  • Dec 4, 2015 3:32am Dec 4, 2015 3:32am
The promotional ability of excess price and the hidden brakes inherent in every marketplace can be illustrated by a business custom existing in most western cultures, the post-holiday sale. During this period, most department stores substantially discount merchandise not sold at regular prices during the holiday season, which for the retailer is the period of greatest inventory demand, due to a great supply or buyers. Store management realizes that after the holiday season a shortage of buyers exists, and merchandise not sold at regular preholiday prices will not move quickly. The retailers primary goal throughout the year is to be quickly rid of slow-moving inventory which is costing interest, storage and insurance while always increasing liquidity. Hence, merchandise is repriced downward. Furthermore, merchandise will be sold only if repriced at enough of a disount to attract so-called bargain hunters. Thus, every post-holiday sale is a market's use of a purpose (low excess) price designed to move old inventory not sold during the holiday season. The retailer is willing to promote his leftover inventory through an excess low price, since only the excess price reduction will accomplish the goal.

As for this market's hidden brakes: Shoppers perceive these new lower prices as bargains because for the months leading into the holidays, these same items cost much more. For example, a shirt which had sold for $50 for the previous nine months, offered after the holidays for $25, gets participants to react. They realize they're buying price below the value established over the prior months. (Thus, shoppers have an association of price over time equaling value, not as an acknowledged and articulated principle, but rather as a perceived, almost unconscious insight.) The hidden brake which prevents the shirt from selling for $10 is the self-interest or the retailer, who assumes that 50% off will be as much or a price excess as he needs to fulfill his goal in the time allocated.
Thus, while low price excess attracts consumers, high price excess attracts producers. Thus, one of the most important insights that the information provided by a marketplace will provide to both producer and consumer is that activity is being shut off at a certain price. This is a signal that price is not facilitating trade or promoting activity and that this level should be offered only for a short period of time and thus is an excess and can be expected to move. For example, when a new, higher price produces a substantially lower level of activity, it signals to the producer that, for the moment, a lower price (or a corrective marketing strategy such as advertising, etc.) is needed if sales of the product or service are to pick up.

Similarly, if the producer, for whatever reason, lowers the price beyond the point where he can make an equitable profit, he will soon shut off the availability of the product at the unreasonably low price and will raise the price.

J.Peter.Steidlmayer Markets and Market logic
Markets are not efficient, rather they are effective - Jones
  • #439
  • Edited 8:16am Dec 4, 2015 6:10am | Edited 8:16am
Quoting mzvega
Efficient Markets According to Robert Hagin, The efficient market theory is the assertion that in a market with numerous investors who prefer high returns over low returns and low risk over high risk, information is of no value. An investor can attain no more or less than a fair return for the risks undertaken. In the semi-strong form, the efficient market theory hypothesizes a market in which all publicly available information is efficiently impounded on the price of a stock, and hence a market in or item of publicly available information that...
1.So for example 20 day bracket= better for showing long time frame trader action? 5 day bracket=better for showing short time frame trader action? (That would be logical for me) Or in other words: 20 bracket is not the sum of 5 day brackets or 20* 1 day brackets. Because short time frame traders enter and leave the market day by day or trading only for 3-5 days (swing trading, explanation by Dalton) So it would be better for breakout trading to observe the long time frame traders for restarting inituative action and short time framers for stopping the capping operations.

For example eur usd market 20daybracket TFF was very high until 3.12.2015, because the needs and goals of the long term participants could not be archived anymore (shutting down)- so the longterm participation was shrinking and the market was currently under short term trader "control". Is that right?

have a nice weekend!
  • #440
  • Edited 5:25pm Dec 4, 2015 1:38pm | Edited 5:25pm
Quoting dljonesFan
{quote} 1.So for example 20 day bracket= better for showing long time frame trader action? 5 day bracket=better for showing short time frame trader action? (That would be logical for me) Or in other words: 20 bracket is not the sum of 5 day brackets or 20* 1 day brackets. Because short time frame traders enter and leave the market day by day or trading only for 3-5 days (swing trading, explanation by Dalton) So it would be better for breakout trading to observe the long time frame traders for restarting inituative action and short time framers for...
Let me simplify this as simple as possible. A TFF greater than 3.0 usually means the profile is "Bracketing", it is "auctioning", there is "rotation", its "facilitating" 2-way trade. If you know the profile is "Bracketing", you already know without having to look at the TFF, that its usually 3 or greater.

A TFF less than 3.0 usually means the profile is "Not Bracketing", it is "trending", there is "no rotation", its "Not facilitating" 2-way trade, it is a moving market. If you know the profile is "Not Bracketing", you already know without having to look at the TFF, that it should 3 or less.
http://www.forexfactory.com/showthre...60#post8203360

The only time I use the quantifiable TFF # for comparison is for my daily net flow analysis. Anything outside that imo, is overreaching

But yes it would be better for breakout trading, to observe the LTF traders for initiative action. 90% of the intraday volume is created by intraday traders, they dont buy and hold, therefore they do not create the demand needed to move markets. Demand that moves markets is created by the traders who are willing to Buy/Sell and hold.

EDIT: When I do my daily analysis, after I update my database, I print up reports (bracket screen, and the data for each bracketing pair). This is so I don't have to sit in front of my computer, flipping through charts, looking for trading opportunities. I can get out of my office and do my analysis without constantly staring at the computer. A quick look at TFF tells me more about the condition the profile, than if I was actually looking at it.
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Markets are not efficient, rather they are effective - Jones
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