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DbPhoenix

Market Wizard
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Everything posted by DbPhoenix

  1. DbPhoenix
    I'd like to be spot on enough never to miss the trade. Unfortunately... For me, the most important point you've made regarded MP providing information on the structure of the market rather than trading signals. Knowing where to look for the potential trade is perhaps more important than most people realize. How to take it is of course important, but a failure-prone focus if one is looking in the wrong place. Or, if one wanted to put it as a riddle, when is a reversal not a reversal (or a breakout not a breakout, etc)? The whole nail the entry thing can make the trader feel like a dog chasing his tail. The theory is that it doesn't matter. Practically, however, it does. But the trader has to decide how wide or tight the stop should be (and goes back and forth over this), whether or not and how he should try again if the first effort fails (and goes back and forth over this), how to tell if he's "right" or not (and goes back and forth over this), and the less he understands the nature of the market, or the less he trusts what he knows regarding the nature of the market, the longer he will spin round and round. Incidentally, your post #12 should be printed out and pinned to the wall.
  2. DbPhoenix
    Perhaps not. But then they don't have to. Whether or not you do may depend in large part on how much you're willing to allow the trade to go against you once you've entered. Sometimes we just have to let them go. But seeing what they then do provides us with additional information that may make or break the next trade.
  3. DbPhoenix
    Do you truly believe that big money players are sitting in front of their screens, drumming their fingers, waiting for a 5m bar to "complete" before taking a position?
  4. DbPhoenix
    Unfortunately, if one is waiting for the same signal that everybody else is waiting for, he is opening himself up to exactly those conditions which more experienced traders fade. As for where and when large players buy, it is unlikely that they are waiting for a retracement since they created the breakout in the first place. This is not to say that those who are following this system are unsuccessful with it in real time with real money. But the system itself may be tangential to their success, as with VSA or MP. My post above was made in response to the comments about cherry-picking and using the same bar interval that everybody else uses. I suggest that the assumption that "everybody" uses a particular bar interval is the best reason for avoiding it. But then this is the advantage in trading price action rather than trading bars.
  5. DbPhoenix
    I don't know about "cherry-picking", but if I were looking for setups that "trap other traders", I'd want to be in the trade before the 5m bar "completes". By doing so, those who are waiting for it to complete will either propel me into profit or, if they are faded, enable me to get out at breakeven or better. The last thing I'd want to do is trade using what everybody else is using.
  6. DbPhoenix
    I found this post on "Re: Trading with Market Profile" interesting and have nominated it accordingly for "Topic Of The Month August, 2009"
  7. DbPhoenix
    As you pointed out yesterday, S appeared to be at 65. I then offered a possible explanation of where that support might be coming from. Today, therefore, the long trade could be anticipated at or around 65, which turned out to be the case. First potential R is at 86. If you were not in and you wanted to enter on the dip to 80, you'd have to find something in the price behavior to tell you that we were going higher. Given the ho-hum reaction to the oil report, there was no reason to suspect that an hour-plus later, oil would suddenly take off. But it did. And price blew right thru R at 86. If you knew the reason for the upmove, in this case oil, you might have had the confidence to go ahead and take the trade at that hesitation you note. But note also that the WTF trade was several minutes earlier, at 1153, when price was booted up to the 87-87.5 level on strong vol and hesitated there for a full minute. If you had noticed that, the reason for the upmove would not have been relevant. Note further that all of this takes you to the next level of R at 1600, where price comes to a screeching halt. BTW, when posting charts, could you use something other than gray on black? I find them extremely difficult to read.
  8. DbPhoenix
    Whether it's a potential entry or not depends on your criteria for entry. And your criteria for entry will depend at least in part on how aggressive you are, as well as on whether or not you are in a short trade when this "opportunity" presents itself. Looking at the chart you posted yesterday premkt, you noted that 72 was a potential level of support. You could therefore anticipate that price would do something there. And it did. Repeatedly. All the way to 1100. Below that, you find your next range of activity, the busiest area beginning at or about 64. Is the activity around 65 close enough to 64 for you to be aggressive about going long here with little else to confirm your analysis, particularly if it involves exiting a short and reversing your position? If not, then the hell with it.
  9. DbPhoenix
    When price remains in a range for an extended period of time, weeks in this case, you're going to develop multiple smaller ranges within the larger range, some of them persistent, and consequently multiple S/R levels, some more important than others. At some point, one may begin to trip over his own lines, at which time it helps to look past the lines and even the price swings and focus on the VAP distributions. These are, after all, where the bulk of trades are taking place. In your chart, you have two, and you may be better off looking to those to provide your range highs and lows and "midpoints". They may also provide an anchor, a focal point for your analyses, a place to begin. In any case, they will at least offer a different perspective. Since we dropped to the bottom of the mother range this morning, the ranges in your chart would seem to be moot. But they will act as support and resistance again as price moves its way back up.
  10. DbPhoenix
    Just as a heads-up, since this is an application thread, and the point of posting these charts is to plan one's trades for the following day, if no plan for the upcoming trading day is presented prior to the open for the HSENG chart, the posts will be moved to the general S/R thread.
  11. DbPhoenix
    As explained in the opening posts, the thread is about locating S/R for the coming day. What is anticipated is that price will find S/R at those levels. The focus is not on what price did but on what price will do. If you read the charts in hindsight, then they are of course no longer foresight charts. Keep in mind that each chart is posted in advance of trading, not afterward. There are occasional recap posts, but only with regard to what was posted ahead of the market action.
  12. DbPhoenix
    FOMC Statements Becoming a Non-event? Later today the Federal Reserve board meets, and as is the ritual, the FOMC statement will be scrutinized word by word, comma by comma. However, as we noted after the last FOMC meeting, the Federal Reserve has been known to withhold some information from the statement, opting instead to release details of new programs or tweaks to old programs a day or two after the FOMC meeting. This last occurred on June 25 (one day after the June statement) when the Federal Reserve announced extensions and modifications to various liquidity programs. At the time we asked: Could it be…that the Federal Reserve was afraid that the “teenagers” would misinterpret its meaning? If so, does this mean that the FOMC statement is now devoid of real information? Are we now all reduced to watching the “What’s New” page on the Federal Reserve’s website in the days following the FOMC meeting to find out what they really discussed? To be sure, this is not a unique occurrence. Below is a quick laundry list of similar announcements which came on the heels of an FOMC statement: Two days after a relatively uneventful April 29 FOMC statement, the Federal Reserve announced that CMBS would be added as eligible collateral under the TALF One day after the March 18 FOMC statement which announced quantitative easing, the Federal Reserve announced four new categories of ABS would be added as eligible collateral under the TALF Two days after an uneventful January 28 FOMC statement, the Federal Reserve announced several exemptions for bank holding companies in regards to their use of new liquidity facilities One day following the December 11, 2007 FOMC statement, the Federal Reserve announced the creation of the Term Auction Facility (TAF). Between January 29, 2008 and the December 16, 2008 FOMC meeting, the Federal Reserve held nine meetings, changing rates and making extraordinary moves many times in between meetings. During this period, changes to monetary policy were a regular event even outside of FOMC statements. Our fear is that the Federal Reserve has purposely rendered the FOMC statement a non-event. They will tell the market what it wants to hear for fear that anything less will be misinterpreted. More often than not over the past year, the juicy details of the FOMC meeting are released a day or two after the statement. We’ll be watching over the next few days to see if the same happens after this meeting. -Jim Bianco, Bianco Research
  13. DbPhoenix
    This is an example of when I find incorporating the volume component of Wyckoff to be helpful. Given the "air pocket" that was created yesterday above 1602, I fully expected price to drop back to 1602. However, a lot of volume came in at 0950, then again at 0955. When price tested the 10 level a couple of minutes later, volume pretty much disappeared. This along with the TQ divergence suggested that this was going to be the bottom, not 1602. This is also an example of when it is important to consider not only what price is doing but also what it is NOT doing, i.e., in this case, at 10, it isn't falling. The Dog That Didn't Bark. Granted it's a lot to think about within a span of a minute or two. All the more reason to trade without distractions, at least when price is at or near an important level. Edit: BTW, you have your VAP distribution covered, but I suspect it'll show you that 10 is the limit of the distribution for that range.
  14. DbPhoenix
    Don't know about the TICK. I use the TICKQ. It updates every two seconds.
  15. DbPhoenix
    And that's something you're going to have to think about long and hard: given that price not only came back to 10 not 5m later but that it did it so abruptly and quickly, would you have had to change your underwear? If you were stopped out, or stopped yourself out, would you really have had the presence of mind to re-enter and rake in all the profit from a good trade? Trading in real time is a whole different ballgame from "trading" hindsight charts and from reading posts about trading ("here's this fabulous trade of mine from this morning"). But knowing what to look for is quite a hurdle. Now you have to work on trusting that you know what you're doing.
  16. DbPhoenix
    As I said a hundred posts ago, Could be five years. Could be never. Depends in large part on how many detours the wannabe takes, how many dead-ends he winds up in, how susceptible he is to the con. If he's blessed with common sense, a finely-tuned bullshit detector, and a basic understanding of what an auction is, shouldn't take more than a couple of months. As for the quickest and cheapest way, click the link below left. You could also follow the progress of thalestrader's nine-year-old daughter.
  17. DbPhoenix
    Stephanie Pomboy of MacroMavens observes: “Judging by the giddy delight investors have taken in ‘better’ earnings news over the last two weeks, we expect they will positively wet themselves when they get a load of the new saving stats. I mean the prospect that dis-saving was never as bad… and that current saving is even better … surely ranks as more compelling than having a handful of companies beat beaten-down expectations by a penny. Particularly when those beats were accompanied by NO…or uniformly grim…guidance and, in the case of financials, were achieved by dint of increased risk-taking. Label me “prudish”, but beefing up prop trading and reducing loan loss provisions (precisely as the Alt-A/Option ARM reset wave begins and the Commercial Real Estate losses mount) doesn’t exactly blow my skirt up.”
  18. DbPhoenix
    The offense comes from your assumption that everyone who posts here -- or anywhere else, for that matter -- is as poor a trader as you are, "poor" being defined as someone who allegedly has traded for forty years, then craps away half his trading account in the last six months fiddling with something he doesn't understand. There is enough posted in the Market Profile Forum alone to generate as much income as one is willing to work for. But you, like so many traders who have failed at one thing or another, assume that because you can't do it, whatever "it" may be, it can't be done. If you're so sure that you're surrounded by others who can't trade, why bother posting?
  19. DbPhoenix
    I neglected to point out yesterday evening that you may want to go back to 7/23 and include the 1605 level in your consideration of support. Though we love round numbers, 1605 hasn't done too badly, and looking at the S level here as a zone will help you to avoid waiting for that last push to hit the limit of the range. Again, don't forget that the range is defined by the location of the bulk of the trades as well as by the limits. The VAP plot helps to drive that home.
  20. DbPhoenix
    Remember that a trade is made up of several elements. I don't recall when I mentioned (in chat) the swing low after the open on the 31st, but I did point out that when price drops below the anticipated S, you need to back up into older charts to find new S. You can keep the bar interval the same, but expand the timeframe. In this case, you'd have had to expand it to four days. Along with that, you have price taking two plunges down, like a ball bouncing down stairs: the first to 4 and the second to 2.5. That along with the climactic volume and the lighter volume on the test (even though it was less than a minute later), the relatively quick rejection of 2.5, and the TD together give you your trade. This is a lot to think about in real time, but there's nothing wrong with writing it down. These are, in fact, the elements that will make up the tactics you'll use to make these entries. If you don't know what to look for, you won't see it, and if you don't see it, you can't trade it.
  21. DbPhoenix
    So where did we end up? You pegged the range as 1600 to 1632. Price dropped at the open from 1631.25. It then fell to today's VAP midpoint of 20, then to the low of yesterday's range at 17, then tested 20 from the underside, and continued its descent, eventually reaching 1602.5. This was 2.5pts from anticipated S, but it coincided with Friday's opening swing low (see inset). Whether this coincidence is anything more than that remains to be seen, but it's interesting. Price then recovers to the "midpoint zone" between 17 (Monday's VAP midpoint) and 20, or 18.75. Not bad.
  22. DbPhoenix
    Keep in mind first that support and resistance are created by price, not by the trader. Price really couldn't care less about the lines the trader draws. It is up to him, rather, to take his cues from price. Midpoints, for example, are not the low of the range plus the high of the range divided by two. There can be considerable flexibility in placing them, but, again, one has to take one's cues from price. Yesterday, for example, I pointed out that VAP --which is created directly by price without any interference from the trader -- pointed to 17 as the midpoint, which was slightly higher than the calculated level (the accuracy of which depends on how accurately the low and high of the range are pegged). Next, it is important not to get too wrapped up in the drama of the extremes. This is easy to do since the extremes are easy to find. But what matters more is where the bulk of the trades are taking place. It should be clear, for example, that price is being turned back far more often at 28 than it is at 32 or even 30. Therefore, if one waits around for price to hit 30/32, he may find himself immobilized and wondering WTF when price instead reverses at 28. If it does in fact reach 30 or 32, as it did yesterday, this makes for a very high probability reversal. One can see price being stretched and snapping back in real time. Third, if the midpoint is tested repeatedly and if price repeatedly finds support or resistance there, then it is likely that traders are creating a new trading range. As I've pointed out, the trading ranges have been shifting higher, like stacking shoeboxes. The VAP helps to confirm this, and it should not be overlooked. If traders are -- and they are -- shifting the trading range higher, the bottom becomes 17 and the high becomes 28, the midpoint of which -- arithmetically -- is 22-23. The midpoint of VAP is 20-21. The trader, therefore, must be open to reversals anwhere in that area. This means watching how traders behave as they approach these levels.
  23. DbPhoenix
    Even though I stopped trading at 1015, the anticipated levels at 17 and 30 certainly served the afternoon trader well.
  24. DbPhoenix
    I find it funny that people will insist that there are no edges to be found here. Or anywhere. That no one who claims to make money on message boards is actually doing so, that they're making it all up. But while it's true that many if not most of those who post to message boards lead full and rich fantasy lives, it is also true that one can show them where the money is, even paint a big red X over it, and none but a very few can be bothered even to bend over and pick it up.
  25. DbPhoenix
    Don't ignore the midpoint of your VAP plot, which is now around 17. VAP shows you where the bulk of the trades are taking place within the upper and lower limits of the range. Incorporating this helps to avoid being surprised when price reacts to a level that is slightly above or below what you had thought was the midpoint.
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