Many readers have asked about market profile software. There are many but ones that have serious emphasis on MP are
- Invester / RT,
- Market Delta and
- windotrader
I use Market Delta with DTN feed. I use their bid ask analysis, PNF and the regular candlestick charting as well. I dont know of any MP course that I can recommend. If anybody has one please do so. There are many good reads on MP. Daltons' Markets in Profile, especially, I have read at least 5 times.
I think learning MP is like internal medicine. I consider myself an intern. Everyday, every mini balance, week, and monthly balance brings new learning. Its a lesson that will never be quite complete. I am a firm believer that the Market is constantly changing and is never again the same. Its human element part of the market that remains somewhat predictable.
Tuesday, August 19, 2008
End of the day Monday
I have been meaning to post the finale but unable to, my TREO 650 had a burial (still waiting for 800w). S&P 500 opened on a clear open drive ( the strongest of the opens ) to the downside. The volume was not big but the conviction was clear. One of the key things in MP is to go with the trend following a balance day. Here was the transition from Globex to CME in the morning
Many market profile experts take their position during the Initial Balance or the first hour of trading and then scale their positions out during the day. This is especially a good strategy on a trend day. The other strategy is to get on a retrace with a position in the direction of the trend. The ideal retrace came right at VWAP of the day or the high of the D period. Retraces like these are tricky in the absence of a strong level like vwap because it can just as easily go against your position. In those cases a PNF chart helps clear the noise.
I was looking for price to get to at least half back to the 98s which never came.
The S/R level of 1278 area had a battle for the rest of the day. The POC we have to remember is also the fair price. The longer it spends their the less action one should expect. It ended with a mild buying, selling then covering. That is the POC area for the last 30 days. It may not be visible on a bar chart but it is where we spent the most time during those days - at a price level percieved as fair.
What concerns me is the structure of the day which implies that the sell structure was broadly distributed down. Meaning that the other timeframe participants did not find it attractive enough to play (given their inventory, macro, geo-politics, stars alignment.. or what have you).
Many market profile experts take their position during the Initial Balance or the first hour of trading and then scale their positions out during the day. This is especially a good strategy on a trend day. The other strategy is to get on a retrace with a position in the direction of the trend. The ideal retrace came right at VWAP of the day or the high of the D period. Retraces like these are tricky in the absence of a strong level like vwap because it can just as easily go against your position. In those cases a PNF chart helps clear the noise.
I was looking for price to get to at least half back to the 98s which never came.
The S/R level of 1278 area had a battle for the rest of the day. The POC we have to remember is also the fair price. The longer it spends their the less action one should expect. It ended with a mild buying, selling then covering. That is the POC area for the last 30 days. It may not be visible on a bar chart but it is where we spent the most time during those days - at a price level percieved as fair.
What concerns me is the structure of the day which implies that the sell structure was broadly distributed down. Meaning that the other timeframe participants did not find it attractive enough to play (given their inventory, macro, geo-politics, stars alignment.. or what have you).
Monday, August 18, 2008
Expanded 30 day profile
An expanded view of the 30 day profile at POC. .25 resolution presents the POC as 77.50 -78.50 area although the high volume node is 77.25. Price has traded in this range for about 50 minutes.
Dalton's Webinar extra
Expanding on the take aways from Dalton's webinar, there are two types of trades. Go with/ and mean reversion. On trend days, one should worry about getting on the trend early not the location. On balance days however, one should worry greatly about the location ( you want to initiate trades in the edges and not the fat part or the mean area) Calculating risk-reward for each trade.
He suggests an exercise for EOD analysis where you can put red and green pins on a printout of the days profile. It will give you a visual idea how you are locating your trades.
He suggests an exercise for EOD analysis where you can put red and green pins on a printout of the days profile. It will give you a visual idea how you are locating your trades.
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