clmacdougall

Hi gosu Being a small lot retail trader in my opinion puts you in a position where you can easily move yourself into and out of the markets with nearly no "unwinding" necessary. One of the few things I've read and held onto from Steidlmayers books was the idea of "trapped money." Essentially you are identifying a large participant on the wrong side of the market having to unwind an errant position. This type of activity is identified in the book, "Trading & Exchanges" by Larry Harris as "Dealers lose to well informed speculators because they end up being on the wrong side of the trade. Prices tend to move against their positions before they can trade out of them. All traders try to avoid trading with well informed speculators." He goes on to identify the successful speculator as an "informed trader who finds less well informed traders that are willing to lose to him" The retail trader has many more strategies and methods available to him just due to his sheer lack of size. A large trader has to add a liquidity factor to his method search that a small trader never has to worry about. In effect the larger the trade the more necessary the, "hoping." A retail trader never has to include liquidity in his method search and can always count on the market providing an optimal exit strategy regardless of success or failure. Unwinding a large trade can never have predictable results, it always effects the market around it and can lead to a loss even with a successful entry after calling the market right. More and more HFT has no effect on the retail trader. This game is being played over our heads, it's a liquidity game that has nowhere to go as more HFT enter the market. The only player effected by this would be someone who takes the DOM too seriously. Posting and then removing an order before getting filled has gone up nearly 400% over the last 10 years, why? Because more and more HFT are relying on the DOM as "expected liquidity," it's a stupid game of fruitless "hope" known as "quote flickering". It's a quick posting and removing of orders in order to confuse the algo of another HFT. Essentially confusing a computer by placing "expected liquidity" in front of another stupid computer and waiting to see them take the bait and become part of a much smarter algo trading strategy. The retail trader doesn't need to trust in the DOM because he will never need that type of "expected liquidity " in front of his trade. He can always enjoy a mastery over the other players who need to "hope" in more elements of the market working in their favor in order to make a profit.

Bob, there are little to no similarities between the electronic markets and auctions. I worked the auction circuit locally for a year to help put me through college when I was a kid. The electronic markets are in no ways similar. You can't compare two way markets to an auction based one. The seller and the buyer search out one thing in common, the speculator. The retail speculator is the best positioned of any participant to win at this game. The smaller your lot size, the greater the odds are of you consistently winning, it works exactly to the opposite for holders of a large lot size. The futures markets are built consciously or not to benefit its smallest members the most. Take advantage of that position in ways no other traders can. You are the most nimble and agile element in the market. Armed with knowledge your edge is unbeatable.

Auctions look for 1 thing, buyers. The markets accept sellers. An auction drops the price looking for buyers only. The markets initiate selling activity. I wonder if the definition of the markets as an auction wasn't always misplaced. Another overly simplistic definition of a complex matter that we accepted for some ridiculous reason.

I've read all 3 of Tom Demark's books and Jason Perl's book on Demarks work. I love it and can't wait for his new book to come out next year. He is a well thought through student of the market.

esignal supports PnF. You can change the box size and reversal size or whatever the inputs are for it. It all works in real time.

Here is what I do. I refuse to risk money without a viable understanding of the market in terms that are simple and meaningful to me. I refuse to believe in someone else' "rushed to print" understanding of the market. What I desire, is to learn market principles that don't change because the markets are somehow "different now" when actually the markets have never changed. Look at Pete Steidlmayers video,somehow now because the "markets have changed" his MP structure no longer works. Truth be told it never did, it was behind its time in its day because it was a misapplied science best suited to statistics and judging the average height of an american male and not useful for understanding something as dynamic as the markets. We accept or create simplistic models of the unknown because it's easier than creating our own, or working hard to find the truth. Answers are easy to come by,it's the right questions that are hard to find. Trades and transactions define market bias. Following the trail left by both uncovers the leaning of the market. Although trades and transactions seem like the same thing they aren't. The balance/imbalance they have on their own and share in comparison with each other is a meaningful understanding of orderflow. This is what I am doing, studying the changes in those items as price changes.

Hey Josh, Seems like you've got a little mix of Wyckoff in your study of volume climax and then it's deterioration on a secondary push in price. Then mixed with some sort of MP or fib support and resistance levels you define as price "reaching a point," along with a VWAP or high volume node as your mean/target price, for your trade to return to. Along with those things you are probably using a trendline break when price is far enough away from it's mean to define when the balance in price has "shifted," and as your entry vehicle into a trade. Does this sort of define your strategy?

So in effect you are attributing all market movements as proof of imbalance at any given moment. How do you add a comparative to this theory? When do you consider price to be away from it's internals and weakening as it continues to move in that direction?

I absolutely love TD Lines, please tell me how extensively you use them and for how long you've found them to be successful? I have studied them in depth and found them to be great trading tools as the last part of your decision making process after you have decided which side of the market to be on.

No, I don't agree Josh. Do you study any internals like delta or such in your trading ?

Don't remember. I used it and threw it away. It's in the efs formula database at esignal. They have a 1. time in bar 2. ticks in bar and 3. volume in bar indicator. Feel free to do a search of their database to find it. It's just as easy to use their bid/ask ratio or their bid/ask analysis formulas to see the information displayed at the bottom of the screen for both cumulative and bar by bar data. Both can be used with either tick or volume as an input and can return you tick bid and ask or volume bid and ask for an output as well as a cumulating inside total as the bar populates.

Hi Tradewinds, You can get the same program for free with esignal. It offers all that Pat mentioned. The program has been around for a long time. It can work with either volume or tick data. I've used it many times before. As to it's usefulness, I guess that's up for debate!!

Volume at price only signals activity, not imbalance. Heavy volume signals commitment, but should not be confused with imbalance when compared to lighter volume activity.

Hi joshdance, I absolutely agree! Conceptually valid, but the "structure" being useless! The markets will never return to being able to be understood on the level of time at price or for that reason volume at price. He needs to go one step further and accept orderflow imbalance as the only way to support trade initiating activity. Behavioral comparative analysis of price to imbalance is the only way forward in my opinion.

Peter Steidlmayer himself only 2-3 months ago at the CME (on a video which was recorded live and runs for about 90 mins)officially negated the usefulness of the Market Profile structure. He put price discovery risk into excellent terms and suggested the use of volume information to help negate the amount of risk inherent in every trade. Watch the video, it is great!! It's on file at the CME

Hi Enigmatics, Could I clear up one thing before we go ahead. Are you confused about trendlines or channels. They are two totally seperate things and I'm not sure we're on the same page when you mention the placement of your trendlines'. You have shown pics of channels and what you consider support and resistance lines but none of trendlines . Please include how you incorporate a trendline in this scenario. I wonder if part of the problem is that you are using your channels as trendlines.

How are you drawing your trendlines now? Please explain how you construct your trendlines and then maybe others can help.

A fantastic presentation. Thanks so much for the link!! Confirms alot as to the present day usefulness/uselessness of the Profile.

I would love a copy if you find one. Thanks

Tams, I'm glad to finally be able to put a face to all that cynical sarcastic behavior:haha:. I would have figured with your wit and attitude that you'd be grey haired and balding. All kidding aside you look like a great couple;) .

Could you please tell me when they last tested esignals feed, they recently did a new build and I'm wondering if things were tweaked. Thank you

Tams, I can watch the cumulative or individual bid/ask per tick using esignal. Would that lead me to believe the feed is somewhat reliable? Thanks

Hi FulcrumTrader, Could you please tell me if you have ever done a comparison with esignals feed and whether or not it shows itself to be reliable? Also, how do you check your feed against Bloombergs? Where would I go to check my info against theirs? Thank you

Thanks Tradewinds, If you use esignal this indicator is easily found along with the volume remaining in a volume based bar if needed.

Hi Tradewinds A few months ago I finished the book, " Future Trends From Past Cycles," by Brian J. Millard, it may interest you if you are looking for an understanding of price oscillation. Just thought it could be of some help as you must be studying about such things nowadays.