clmacdougall

UB, good to see you posting again!!! Your indicator is not based on the speed of buying/selling, the volume of buying/selling or even the impact of volume on price, you must be focusing on a slowing of momentum then, an understanding of resistance as a slowing of the imbalance of trade. Please reply.

Neil, I was new to it 3 years and 100 books ago, I have read thousands of articles and created dozens of binders full of my own studies. Spent night and day studying for 2 years and have spent only 8 hours a day for the last year studying and can tell you this, keep your money in your pocket and keep studying. Trading interferes with market understanding, it puts you through emotions you should never be facing before you're ready to trade. If after you've read your 50th book you discover your not really interested in market understanding than just walk away and no harm done, elseways your gonna go through some serious pain up front and potentially not find what works at all. Don't let anything get in the way of your studying, it's a key to breaking through.

Just one more question UB, would it be fair to say that your weighted index is far more tuned to price reversals than a delta footprint chart and could you please give your opinion on the delta footprint charts usefulness. Thanks again.

Thank you UB for the time you took to answer my questions. Could I ask, do you begin the day with a slant towards the short or long side of the market before you even apply your market generated information, or do you simply apply your weighted biases indicators and run with them? Thanks again.

One other question for you Urma, when you mention order flow in your previous posts, has it now become the medium to which you apply your MP methods both old and new? Through reading your posts there seems to be an abandonement of concentrating on price and a real energy in your posts concerning order flow. Is order flow your core concentration when applying the balance to imbalance understanding found in MP teaching? It seems that you are able to indentify and take advantage of any buyer - seller imbalance, is this the most profitable and repeatable application of MP understandings?

Urma, this thread is fascinating. Please help me to understand why volume is better than time at price when understanding value. Doesn't time at price remove the problem of the daily "U" shaped volume profile in the ES, or even worse the problem of increasing volume as the night session ends and the day session of the ES is about to begin. Don't these and other volume irregularities remove the value of following volume to find value rather than TPO's? The problem I've had with volume is it seems to lie about value and instead points to panic areas of buying or selling at market openings and closings. It seems that most volume can be attributed to portfolio balancing when at either the start or end of the RTH large commercial traders are handed the present reality of price and react to it. Would it be fair to say that time at price, no matter how weak in volume during the night, rotated/moved due to massive volume being traded in stock markets or forex markets on the other side of the planet. In this way doesn't using TPO's allow for a proper valuing of sentiment which occured throughout the night or simply at a low volume time? Any help you can give would be greatly appreciated. Since finishing all there is publicly available to read concerning MP, your threads have been so refreshing and thought provoking. Please continue to share some insights on the new understanding of Market Profile out there today.

Got it a week ago and almost done it, a pretty good read, I've read every book and article there is on MP and this did add an ease and flow to understanding how to use other market generated info along with MP in order to look for good risk to reward entries. Ultimately you are going to have to put the greatest importance on his key phrase " do the work for yourself." He encourages self study and your own angle of applying MP. Did a free week on his website,and thought it was really good. Hope this helps.

This is really great stuff, thanks for even posting Urma. I've read every article and book there is relating to Market Profile and knew that it was just the start of being on the right track. The next step was to throw away most of it because it leads to nowheresville. But what's left is the beginning of market understanding. Urma, could you please recommend some books or articles for the steps after Market Profile, and for an introduction to understanding the multi timeframe weighted biases approach that you are proficient in. Thanks again

Thanks for the input guys. I appreciate it. I've got another weird observation to throw out there, please tell me what you think. Here goes!!!!! "Volume is irrelevant!" Here's the theory: Markets are 24 hr a day instruments. With this in mind all price movements are equal unless they overlap which makes them more valuable ( or at least more telling as places of value). The reason being that what happens around the world to influence price movement in the ES for example, is happening in various world stock markets and dollar relationships at potentially high volume but as most ES traders are asleep it is unfolding as low volume areas on the ES profile, fooling traders into thinking that certain price areas are not valuable due to low volume. Notice that all night profiles are skewed towards the end of the night session as volume is picking up, making a volume based night profile completely and totally useless, and proving a rotation based profile as far more valuable. The only incorrect assumption of Market Profile by Steidlemayer may have been his first, that TPO's are a proxy for volume, instead of possibly being more valuable and telling than volume. Please let me know what you think.

Would it be too strange to consider that a volume based profile would be exactly whats wrong with trying to decipher and find trading rules for Market Profile? It's a fact that the opening of a market and the end of that same day are times of incredibly high volume everyday. Already then, the volume profile becomes a strange endeavor, leaning more towards these high volume times then towards the truth. Can we trust that the truth is found in looking for more information (ie volume) while discarding the past (ie rotation). Because something seems simpler does not mean that it is. A rotation based profile evades the daily routine of the volume "U" formation. If you trusted in the volume profile, it would almost be akin to trusting the open or close of each day as the center of your bell curve, due simply to the height of volume at those times. Thoughts anyone???

Blowfish, you have a good point, here's how I worked around that issue. I came to the conclusion that trading had two major principles, the first is, "only play follow the leader," the second is, "never trust minor league stats." I may be wrong in this next statement but so far I have found that commodities are follower markets. No matter the talk about how far they've come, they are ruled by the movements of either the dollar or the stock market. So I avoid the commodity markets on the premise that you cannot trust them to fulfill moves which they start as they are closely watching the bigger markets instead of trending on their own merit. Of the markets left to trade I've so far found currencies hard to apply MP to so I avoid them. Leaving me with only the stock market of which when trading futures contracts the ES most resembles the leader. The next question is inevitably, "between what hours do I trust the MP development to most represent the concensus of the day?" The answer is simple and that is 8:30 - 15:15 cst. Volume proves this the only reliable time of the day to draw the MP from. This falls under my second rule. The stats of a minor league pitcher can look great until that same pitcher faces major league batters and is quickly torn to shreds. I think the overnite market is the minor leagues, so I pay no attention to it for any MP info at all. In this way volume does play a part, but only as the starting and finishing pistol for your reliable MP formation through price rotation during the hours where the major league players are clearly visible. Just my opinion so far, I'm open to learn otherwise.

I find it helpful to think of the value area as a place where price is most likely to return to or trade through, but it's value is in it's proven magnetic ability. Using a volume spike to determine it's center would be akin to deciding that because a man spent $30,000 at a car dealership that he would return to that spot the next day as he had spent so much money there the previous day. It's far more likely that he would in fact be at Wal Mart the next day as the pattern of rotation between his house and Wal Mart is a proven rotation based upon his historical back and forth pattern between those two points. The discovery of the power of "price rotation," to display future probabilities of where price may next be is in my mind what Market Profile is all about but I am still a student and do so appreciate both the Dalton books, the Steidlmayer book and the little known gem "Value Based Power Trading" by Jones father, Donald Jones of Cisco.

I am in no way trying or meaning to be disrespectful towards the accepted understanding of a value area as everyones opinion is valuable. But I think that volume vs tpo when calculating the value area is truly apples and oranges. Imagine how important this measurement is to many traders. A measure must be proven worthwhile in order to be leaned on when trading. There is no way that the central point of your bell curve when measuring your value area could simply be an elongated volume spike at a singular particular price tick. This could simply be the result of an institution choosing to buy or sell with no thought of price, in fact that could simply be a time based decision. The value area has one definition, "acceptance," and the only way to prove this is through price rotating across a range over time. This graphically demonstrates acceptance and value. No disrespect meant, simply my opinion.

I've found that a TPO based value area is an excellent measure of price comfort and popularity in a price range. Because it is formed only when price rotates back to a specific tick value it proves an accepted price range on the day. In essence it graphically displays price popularity. The drawback to a volume based value area is that it's POC is derived only through a, "point," of greatest purchase action, instead of a constant rotation through it throughout the day. In essence you are choosing action over popularity when deciding the most important point of measurement when figuring your value area.