AgeKay

Try looking at a point&figure chart to see S/R, large time frames (>30 min ) might swallow S/R points.

Jerry, what contract do you to base your VWAP on? Do you always use the contract that was the front month contract during that time for VWAP calculation or do you use the current front month contract only (going back 1 day, 1 week, 1 month and 1 year in that contract). I guess the former, since contracts trade only for 9 months so that 1 year would not even be possible. Could you please enlighten me?

The most realistic simulator out there is X_Trader run in a demo account. You can even use working orders, because it calculates your (worst-case) position in the limit queue (called Estimated Position In Queue or EPIQ) to determine when to execute limit orders. If you know how FIFO limit order books work then you will appreciate that it doesn't get more realistic than that. Slippage is also no problem since you can see in the their DOM (shown in MD_Trader) the number of limit orders on each side. The only thing that it does not take into account is your commission, but you can easily calculate that yourself. You should only trade with real money after you have tested your strategy until you feel confident that you can make money consistently with it.

also known as "buy and hope".

What does 'rotational' mean? How does it define the low and high of that dynamic profile? Could you please elaborate or do you have a link where I can see it? Thanks!

Yes, I absolutely agree. I argued this in another thread some time ago, but it was basically me against everybody else because they did not want to understand that much of what is taught about the MP is arbitrary like the value area pivots.

BlowFish, I am glad you mention this. I always wondered why MP traders don't use volume@price instead of MP since it is more accurate since time@price was only used as approximation because they did not have real-time volume information when the "father's of MP" created it. And the MP approximation for volume falls short when there are times of constantly low volume like the last 4 hours of trading in the European markets. Or do you think time@price has another significance? I was also talking about volume@price when I showed that the sweater analogy is non-sense and the time period does not matter since still only those traders care that have an open position.

Jon, could you please explain what RET means? i've never heard that word before...

I never really like steidlemeyers examples in his books. They make sense when you read them, but they don't make much sense in the futures markets. The margin requirement does not change when the price goes up (unlike sweaters), so the actual prices of a futures contract does not matter to anyone. When you enter a trade, do you care that it's now so much more 'expensive' since it is 100 points higher than last week? No, you don't. The only people that care are those that have a position in that market because they are account is currently up or down based on that price change. Volume can show you where traders entered their position. Ammo, gave a great example in the previous post how you can interpret that volume. Another difference is that when you buy a sweater in a store, you don't have to sell it back to the store, but in the futures markets you do (eventually).

I'm a programmer (sorry, but i am not taking on any projects right now) and I would make sure the programmer you hire already knows the API and has already done what you want him to do. This will save you time (and money), because the programmer won't have to learn the quirks of the API and thus make less mistakes (less debugging = A LOT of time & money saved). If he has already done what you want him to do, then he can reuse that code base and that will save him more time and you money. Also it is a good idea to have him program in a programming languages that is widely used, productive and still supported (e.g. Visual Basic is not supported by Microsoft anymore) such as C#, so that you can easily hire somebody else (for whatever reason) for maintenance or extension. A C++ app will for example take 5 times as long to program and will be harder to maintain and don't get me started on debugging this crap for memory leaks. While scheme and other functional languages are great, you won't find many developers that understand them and they will probably be more expensive. Anyway, you can't go wrong looking for a C# programmer (especially since LINQ and WPF hit the street).

The problem with 'edge' in trading is that you don't know you have one. The casinos know they have an edge because it is set in stone mathematically, but in trading you can only quantify your edge after the fact. You have an edge if you can consistently make money trading, and you obviously don't have one when you're losing money. The problem with that is that there might be more reasons to you losing money then not having an edge, which makes it even harder to quantify your edge. Even if you do think you have an edge, it might change or go away since the market is dynamic while the casinos edge is constant and never goes away.

Well, which one? Or do you mean both?

BlowFish, thanks for your comment. I have one more question: What do you mean by 'pure volume' or 'simple volume'? Do you mean the volume histogram that is shown on the bottom on bar/candle charts where there is a volume bar for each bar/candle or do you mean volume per trade that is shown time & sales?

Let's say the front month contract has just expired and you want to create a MP of the last 3 months, on which contract would you base your MP chart on? Do you use the data of previous front-month contract until the expiry date of that contract and then the new front-month contract data or do you only use the data of the new front-month contract, which has obviously been trading for longer than 3 months? In both cases, could you please state your reasoning. I don't want to argue, I just want to know which makes more sense.

First of all, I love how you use terms of a woman's chest. Plain and simple. Which contract do you use for longer term MP charts such as your ytd chart. What I mean is, if the front month contract has just expired, do you use the data of the previous front-month contract or of the new front-month contract?

I think this is no problem since you can buy tick data directly from the exchange, at least this is the case for CME Group and Eurex, which is always time stamped correctly. I don't see what you need the inside market for to create the volume distribution. Even if you don't have that information, using up-ticks for trades at the ask and down-ticks for the trades at bid is a very very accurate approximation. Blowfish, what is your general opinion on this volume analysis?

One more reason not to buy their software. I am currently developing a program that will display this kind of information since I have to make sure this is implemented correctly using actual volume of each trade.

Mighty, thank you for your response. I don't think you should either. I said in my initial post that I am not interested in their software/chat room/brokerage. I just read that thread and found their ideas interesting and that's why I wanted to hear feedback from other traders on it.

I found this post on "Re: Edge VS Mentality" interesting and have nominated it accordingly for "Topic Of The Month August, 2008"

I found this post on "Re: Edge VS Mentality" interesting and have nominated it accordingly for "Topic Of The Month August, 2008"

I found this post on "Re: My First Journal a 20yr Old's Venture into the NQ" interesting and have nominated it accordingly for "Topic Of The Month August, 2008"

Sorry, I don't understand what you mean. Do you want more information from me?

First of all, thanks for chiming in Steve. Your kind of response is what I was hoping for. Regarding the quoted piece, I've read all the MP boooks, but I could not confirm the validity of the concept of "time at price". For example in European markets like the Dow Jones Euro Stoxx (FESX) you will see that during lunch hour and especially in the last 2 hours price might not move that much and thus stay for a long time at certain prices, but that's not because the participants accept that price, it's because most participants have gone to lunch or home. You can see this because there is usually a lot less volume, the sum of the volume from 17:30 to 18:00 is most days as much as during 18:00 and 22:00 o'clock, that's 30 min vs. 4 hours.

I am not sure what you mean exactly with quality, but if you meant the image quality on the other 2 monitors, then there is no noticable difference. I've done a lot of research before I bought those external graphic cards and they are really the best on the market. They work so seemless that you can even run a video and stretch it over all three monitors and you won't see any lag. If you meant the laptop, all I can say, is this is the first laptop that I am fully satisfied with (which is a really hard thing to do), but I would recommend also purchasing this device for 4 extra USB 2.0 ports since it has only 2 build-in if you use it as your main workstation.

Actually the volume distribution shown on the right is based on volume of past last year, so I do not understand why you think this could not be applied in real-time since this information is available bevor the trading session has even started. Could you please elaborate? I might be missing something...