Auction Market Theory and Market Profile

He wrote only 2 books. Mind over markets, Markets in profile: google them. Best L.

PS: read them in the correct edited order. Mind over markets: first, Markets in profile: second.

Ty!

how can i get the indicators which is being used in this topic

Thanks for the interesting indi, what is the function of the red line on the right??
http://www.forexfactory.com/showthre...77528&page=297

Hello Beyondprice and all others,

unfortunally i can not write private messages so i ask here.
i like the indicator for marketscope. i trade also with fxcm.

can you say me where i can find it or share the lua?

merci and best regards

lux

Hi all,

Can someone point me to where I can get the updated version of the ay-MarketPrifileDWMv1.31 rev1.mq4 indicator that can compile with the latest MT4 build? A link to it was posted in here by Frocus but the link is dead.

Thanks.

hopefully its what your after

Thank you very much kraven. Yes, that's what I'm looking for but do you have the riv_ay-MarketProfileDWM.v131-2.mq4 version to share?

Thanks.

had a look and that's all i have. have this market profiler too but not as good.

Thank you very much kraven. Basically I'm trying to figure out how to extract MP values such as POC, VAH, VAL, etc to use in a filter and scanner. Now I'm looking at the from the MP indicator posted here by LOCK named TPO LOCK 2016 09 11.zip to see if I can access the ay-mplib.v102.mq4 to extract the MP values. If anyone knows how to use the ay-mplib.v102 in this way then please let me know. Thanks.

I was asked a while ago if I read the updated version of Mind over Markets. It was the exact same book, with the additional chapter (and appendix).
For anyone who hasn't read the updated version, may find the addition of appendix 2 to be of some value.

Mind Over Markets: Power Trading with Market Generated Information Updated
http://onlinelibrary.wiley.com/doi/1...59724.app2/pdf

By James F. Dalton, Eric T. Jones and Robert B. Dalton
Copyright 2013 by James F. Dalton, Eric T. Jones, and Robert B. Dalton

TPO versus Volume Profiles

Humans have a fascination with numbers. We crave exactness and abhor ambiguity; if we cant comfortably comprehend a piece of information, we often discard it in favor of contrary indicators that match our preconceived notions. Yet it is precisely in moments of uncertainty that the experienced trader identifies opportunity, like the savvy angler who looks for a subtle ripple in the slow water below a snag.

Consider volume, which can serve to validate market opportunities. You must constantly ask yourself, Is volume validating the current market direction? Volume profiles (not to be confused with Market Profiles) show you exactly how much volume including relative volume occurred at each price, as well as the exact number of contracts for the entire session.
See the example in Figure A2.1.


FIGURE A2.1 Volume Example

To reiterate, the three main components of the auction process are:

1. Price advertises all opportunities.
2. Time regulates all opportunities.
3. Volume measures the success or failure of advertised opportunities.

Its important to note that what the volume profile does not show is far more important to the way I trade that what it actually displays. I believe it is the more ambiguous combination of time and volume rather than volume alone that provides the most timely, relevant insight (when considered within the larger market context). Volume is important, but so is time, because a price that is not accepted over time is, in fact, rejected.

All traders know the psychological pressure of time (tick, tick, tick). Being in a trade that begins to stall can create serious psychological doubt. And the longer a trade fails to advance in our favor, the longer we have to sit there imagining what might be going wrong. For example, the late liquidation or short-covering rally in the pit session may be the result of time running out for day traders, rather than a lack of volume. The most likely scenario is that these situations are caused by a combination of both factors.

Single Price Level Distortions

It is not uncommon to witness much higher volume at or around a single price level. For example, the previous days high or low, or the overnight high or low, is likely to attract above-average trade. Additional examples include the opening and the halfback. When viewed on an absolute-volume basis, these levels may appear to be far more important than they deserve to be. Therefore, its imperative to view volume in relation to time, which is more likely to smooth out these prominent levels, allowing us to better maintain a more complete overall perspective.

End of Day Total Volume versus Ongoing
Volume throughout the Day

Markets often develop a direction, or tone, for a single day. This direction may not be confirmed by volume, however, even while the auction continues until the close. In many instances, the movement is corrected the following day due to lack of volume. In other words, there is often a delay in the effect that such a low-volume move may have on a market.

Anomalies

An anomaly is a single price or price level that lacks symmetry, which creates an unusual shape in the Market Profile. Anomalies represent structural weakness, and they're created through a combination of time and price and therefore may not show up on volume profiles. In fact, volume profiles alone often identify false anomalies, such as the previous days high or low, as discussed earlier. These points of structural weakness are often revisited during the current or following trading session.
The graphic in Figure A2.2 will help make this point.


FIGURE A2.2 TPO Profiles Next to Volume Profiles

Its hard to believe that these two charts are from the same market on the same day. The difference is revealed by combining volume and time. In a conventionally constructed Market Profile, volume is estimated by multiplying price x time--- the greater the number of TPO's reading from left to right, the higher the estimated volume. While this method isn't perfect, I believe it offers superior insight to volume in a vacuum.

The Market Profile with its extremely visual, pattern-forming TPO's enables me to better answer pivotal questions about how volume is being distributed throughout the day:

Is volume being distributed within a rotational market?
Is volume being distributed as part of a trend?

I start a new Market Profile anytime I think that a new directional auction is underway. That way, I can compare the new volume to the old volume within the context of distinct directional movements.

Too Focused on Volume

Of course, volume is only one element to consider during any given trading day. Among the other considerations (discussed elsewhere in this book, and in Markets in Profile) are:

Value developing higher, lower, overlapping, and so on.
Which timeframe is in control (this is paramount).
Rotational trading day.
Trend day.
One-timeframing.
Short covering.
Long liquidation.

Conclusion

After a lifetime spent observing markets, I choose to give more emphasis to the Market Profile with its evolving, multidimensional structure because I believe it provides a more accurate representation of the auction process by juxtaposing volume and time. In addition, it smooths out aberrations when there is high volume at the opening price, as well as other static references, like the prior pit session high and low, and the overnight high and low.

Ultimately, you must make your own decisions as you carefully choose which tools you use and which indicators you follow as you trade. Rest assured that no matter what you decide, there is never a single, simple answer. I suggest you compare volume profiles and Market Profiles side by side, writing down your observations as you see how they mirror and/or contradict each other.
What does the ambiguity tell you?
Can you identify change before your competitors (mostly laggards) transform opportunity into the familiar patterns of consensus?

APPENDIX 2

Hi all,

Can anyone tell me if this MP indicator shown in this SCREENSHOT posted by Evak is an MT4 indicator and if not then what platform is this indicator for and where is it available? Evak included the screenshot in this post.

It doesn't look like it produces composite profiles though, but nevertheless I would like to experiment with this indicator as I like the the data it shows.

Also, based on what Evak says in this post, apparently the indicator in this SCREENSHOT shows limits from a composite 5-day bracket? Is this also an MT4 indicator and if not where is this one available?
Thanks.

The name of the indicator is on the chart and can be found in this thread. (MPFreehand)

The bracket limits on the chart (yellow lines) were drawn manually, following the rules for locating bracket limits for overlay profiles. Not a part of the mpf indicator

If you look at the images Evak posted to my thread, He used a different indicator, but still manually drew the limits.
http://www.forexfactory.com/showthre...50#post8207650

The data in that image is not a part of any indicator.

The data next to the chart image, is an image of Evak's "spreadsheet" used to calculate Net flow Analysis, used in the thread AMVA.

Rather than read the source material on how to calculate the data themselves, many retail traders will spend way more time looking for a "short cut", or the perfect "indicator" to do the work for them.

Even if that was the "perfect indicator", that had all the data calculated for you, wouldn’t solve the conundrum, of what to do with it, how to use it , or even how to read it for that matter.

You could spend years looking for a short cut, and if & when you do find it, you would still have to go back and start at square one, reading the source material on how to use & read the data.

There is a short cut.......... "stop looking for a short cut" (it doesn't exist)……..read the source material, by learning to calculate it in a spreadsheet, you learn to read and use it at the same time, you kill 3 birds with one stone.

That post is over 3 years old………..there was no short cut then, and there is still no short cut now.

You like the data enough to want to use it, but not bad enough to learn how to read, understand and calculate it in a spreadsheet of your own.

Bandung, has showed an interest in creating an indicator that does all the calculations, even so, the data doesn't produce buy/signals. You'd still have to read the source material to learn how to "read" the data.

You could possibly spend the next 3 years lurking around FF waiting for the "perfect indicator", only to be disappointed that if and when you do find it, that you'll still have to read the source material to learn what to do with the data & how to read it……..

What do you think about the application of MP/VP used by TraderDale?

Thank you very much mzvega. I am reading the source material and as you know reading all of it including the Cisco website material will take some time. I vaguely remember reading that you wrote somewhere that it took you years to fully understand all of it. I just thought that it would have been better if we had all the data already calculated for us either via a spreadsheet, database or indicator, so that as we learn about the use of all the important reference points and the data calculated from it we can immediately start to practice applying that knowledge to our trading with critical thinking. We can still learn the details of how the data is calculated as we read and ponder the source material, but with the data already in front of us, we can practice trading with that data immediately. For example, you can teach someone all the theory of how to drive, including how the car works and even how to make their own car, but won't it will speed up their learning process if you simultaneously give them a working car to practice what they are learning? As explained in the book, Mind Over Machine, won't they go through the 5 stages of skill acquisition--novice, advanced beginner, competence, proficiency and expertise--faster? Then as more people become expert faster, very quickly a community of experts on the same page will develop who can discuss with each other, share ideas, increase their knowledge and improve their skills even more while maintaining great respect for their mentors who have paved the way for them.

As I do some mql4 programming myself, I was trying to find an MP/AMVT indicator that allowed me to interact with it via iCustom calls or even better than that, that gave me the source code I could modify to more efficiently interact with the market generated data for market scanning purposes. Rather than doing one hundred clicks, so to speak, to look for trading opportunities, you can program the most essential conditions you are looking for in a high probability trade and scan for those conditions in seconds. Still you will have to understand what conditions to look for, and once found, you will apply more critical thinking to decide whether to take a trade or not. My idea is that it's better not to use computers to try to replace critical thinking by creating a black box trading program because the user of that program learns nothing. Rather, computers can be used to help you use your time more efficiently by programming and automating most of the repetitive stuff that no longer requires much critical thinking. Of course critical thinking was required initially to decide what to do and what conditions to look for before those steps are automated. What do you think?

If you read this in it's entirety, you will find my opinion self explanatory..........
https://web.archive.org/web/20150526...ue_theory.html

Hey guys,

Does anyone know the name of this profile indi?

It looks like you can draw a box as to the area you want it to profile..

There are some text differences in chapter 2 and 4 too, and some graphs no longer needed was removed.
Furthermore the entire LDB chapter was removed.

This - TPO. Look at here
http://www.forexdengi.com/threads/90...4#post14679004

Excellent - thankyou very much