joshdance

I looked at the Russell just now and saw that on 3/25 at 10AM, there is nice evidence of demand right around where price stopped its move down today (817). While TF and ES are not identical of course, they do correlate and this may have something to do with where the ES stopped, though I may be talking out of my arse here. But it seems like at least a possibility.

Hi MM, Right now my plan is to look at the situation in the morning-- I would not go short at this moment as ES is at 1304.50 and I think it will go higher before it goes lower. If it returns to 1310 I will be interested in a short, but probably not unless it gets there, though I may also consider 1307.50 as it stalled on the way down, and was previous support, though this is low probability to me. 1310 is not 100% ideal to me either though, as there may still be sellers to be probed for at 1315. If the move up to 1310 were strong, I would step aside and wait for a better price. At that point if the entry worked, I would take the first unit off at 1302, trailing my stop appropriately, and hold the second to 1293. I would look for a different setup at that point if 1283 seemed to be in sight. Mind you, this is just my plan, and I would just as soon go long at 1293 if we go there first, in fact that would be my preference as we are still in a bull mode, IMO. It makes sense in my head anyway, though others may find what I'm saying useless or confusing.

Excellent analysis IMO mead, especially regarding last week's high, as I haven't begun to use these values yet (one thing at a time for me). Also I don't use volume profile as I find it more a distraction, but also good job looking at that. I would not say the supply areas were strong from the 25th or the Globex on the 28th, but one reason I took the short-- low risk, high probability. Top of the range, weak day on Friday, I gave it enough ticks (6) to push a little above, and had I had more than 1 contract I was willing to hold the remainder to 1306 at least. I think it's a stretch the identify the area formed on the 24th at 1300 as a good area that will hold... it's not clear, and if you didn't know that price has held at 1302 right now then I doubt you would use that as a good target area, though the magic of round numbers might give it more strength than it's due. Whether we test 1310 first or not, I will be betting (i.e. trading) that we will see 1293 before we go much higher, and even more likely 1283. Thanks again for posting this analysis--bouncing ideas off each other like this is fantastic!

I'd like to have a go at this, and steve can correct me where I'm wrong. I shorted this at 1314 near the open, but only had 1 contract on so felt obligated to take the profit at 1311, and did not re-enter on the retests of 1312. Wish I had, as the bottom fell out! In fact I went long at 1307 looking for a push back up but got railroaded in the process. I think you are correct that it nudged inside the bottom of the supply level, namely the level from 1313 to 1320 that formed in the globex session late on 3/8 into early 3/9. As to demand, I think it simply has not found it yet. Not enough activity. I expect a retest of 1310, and then a further drop to 1293, where I think a good long opportunity will present itself... either there or 1283. How far we go down I don't know, and maybe we will even come up to test what look to be strong supply levels at 1325 or 1334. I still feel the overall picture is bullish, either way price goes in the next few days. As to defending the open at 1311.50, what is there to defend? Who says the "big boys" are short right now? Perhaps after a decent mark down of price, when it goes on sale, they will buy back and mark it back up. That's just my outlook on it, steve please help me out! :-)

It certainly does help, thanks again steve, look forward to any charts you are able to post while doing your homework, and perhaps I'll post my homework as well and you and others can critique it.

Hi steve, I found your posts here after our discussion on the other thread, and I think this is a better place to discuss the ideas anyway :-) Had I known about this thread I would have read it first before asking those questions.. :-) It looks like in the last few charts that you have 2m, 5m, 10m charts... are these how you time some of your entries? I'm looking at using the 240, 60, and 30 to identify the levels, and then using the 15 for intraday monitoring, with the 3 or 5 minute for timing the entry. Does this sound like a workable scenario in your opinion? One more question: do you trade anything other than the ES? I'd like to apply these concepts across all markets and I'm sure that they will work as supply and demand are universal, BUT perhaps it works better for the indices and markets like the ES and DAX than for commodities. What is your opinion?

Thanks for the feedback Steve.

Thanks Steve-- as you are busy with your own work I have done the work on this daily chart of oil. I labeled the supply and demand areas in the blue rectangles, and the corresponding return to those areas with the arrow and circled areas. Am I on the right track here? Obviously any time frame will have a higher time frame to look for more "established" supply and demand areas, so I assume you pick one and then drill down, say, from daily to hourly maybe, so I attached an hourly chart with these same areas. 2 questions: 1. Would you ever use a non time-based chart, like a volume chart, to identify these areas, or is it important how quickly price moves away from a s/d area, thus using a time based chart would be more effective? (personally I would use hourly and 5 minute charts for my trading as I don't have the risk tolerance for the daily and hourly) 2. As you said above, obviously the important thing to know is WHICH area of supply or demand will "hold". I think price action is a good key here, as I've annotated in the charts in a couple of places, looking for long tails, etc.. but as you can see often after multiple rejections of a level, price will go just a bit further and then reverse (see A2 and B2 on the hourly chart). No one will ever be right all the time, but is there any way I can increase the probability of "getting in" at a good level? As you said, managing the risk is important, and I suspect this is key. I will be happy to do more "homework" and post more charts, but I wanted to get your thought if I'm in the right direction first. Thanks Steve!

Steve, I'm not sure what he teaches, but I'm interested in the distinction. I typically think of a level of "support" as a level at which buyers "supported" price and thus bought, causing price to rise. The only reason I can think that enough people aggressively bought is because the demand of market participants at that price level was high enough to make the price attractive to buy. Can you distinguish the two and correct my combining the two terms?

Indeed steve, can't credit whoever came up with "supply" and "demand" for sure, though Sam credits an old book, can't remember the name, for his understanding of it... Sam Seiden talks about "supply and demand nodes" and has pictures similar to what you posted, that's the only reason I asked. Just curious as I have enjoyed watching his free videos but have never paid for anything personally. It's just simple support and resistance really, though thinking of it as demand at the bottom and supply at the top does put a different spin on it and can be helpful I suppose.

Your terminology and general methodology sounds very much like that of Sam Seiden, for example supply and demand nodes. Did you receive training from him or his group?

Tell me about it--but I just mean that watching the DOM has helped me develop a clearer picture of how price can move. Doesn't mean I can trade using it or that it's helpful to me otherwise.

Thanks for the info MM.

ninja, do you watch the DOM very often? I would encourage you to study the DOM on something relatively slow like ES with lots of contracts, along with opening a level 2 window, and get a visual of the resting limit orders at each price level. I am new to trading and this has helped me tremendously in just getting an idea for how the order book works. While orders can be pulled at any time before they get filled, I visualize that a "strong" level (say, 4000 offer contracts at a known resistance level) will require a very strong market buy activity to "eat through" the contracts. Again, it happens all the time that these orders get pulled, but it helps me to think of a level with lots of contracts as a "thick wall" that must be penetrated (albeit a fickle one that can disappear instantly), and a small number of orders at a level (say, under a thousand on ES) much more "thin" which can be broken through quickly by convicted market activity.

MM, as I'm pretty new to the subject of VSA, what other volumes would be relevant when trading ES?

Agree completely with your post, but for some instruments 12-2 is an okay time!

I believe the lack of an answer would tend to indicate "no"-- pretty charts, no money. At least it seems that way....

What's the most recent on this...? I've abandoned NT as a possibility--I am going to go with either Investor RT or Sierra Chart, which is much faster and intuitive than NT. I'm trying to decide whether to go with a TT feed from Veocity, a Rithmic feed from Optimus/Vision, or to spring for the $80 or so for a separate IQFeed. After reading this thread it seems no service is perfect--the question is, is IQFeed at $80-100 a month worth it as compared to a free Rithmic feed?