Enigmatics

Looks to me like divergence of volume and price at similar lows. That is your thesis for the long correct?

1. Price makes a higher low at 160.22 (previous was 159.86) 2. MACD was making a lower low 3. That means "hidden divergence" aka trend continuation 4. Notice also when we tapped the 1 month POC, the sell volume had been declining. This was a textbook bear trap.

Check it out Humbled .... 1. Price makes a higher low at 160.22 (previous was 159.86) 2. MACD was making a lower low 3. That means "hidden divergence" aka trend continuation 4. Notice also when we tapped the 1 month POC, the sell volume had been declining. This was a textbook bear trap.

You know, on a SPY 60min chart it pulled back on a negative divergence .... but on the dip it put in a higher low at 160.22 (previous was 159.86) and the MACD (5,13,1) put in a lower low. This is what is called "hidden divegence" and is considered a trend continuation pattern. Up we go.

Got some charts to post. But first a thought. You know, on a SPY 60min chart it pulled back on a negative divergence .... but on the dip it put in a higher low at 160.22 (previous was 159.86) and the MACD (5,13,1) put in a lower low. This is what is called "hidden divegence" and is considered a trend continuation pattern. Be back shortly with the charts.

Check it out .... 60min shows the 1 month POC support. The first candle was also a stop volume. The 10min shows that today's opening selling climaxes were absorbed. Three stop volume candles formed. If they can't drive price down, naturally price will go up. Target? The previous day's POC. Why? Because again, it was the largest previous intraday "auction".

Yet another day and another reversion Humbled. This morning's selling was absorbed. Support of the 1 month POC held. Order flow was to the upside and a reversion took place to yesterday's volume POC at 161.20 (also previous close).

That's what I was getting at.

Perhaps advanced was the wrong word. I just meant that it takes what is normally taught to retail traders and flips it on its head. It takes a while to really sink in and begin trusting as it is a huge departure. Once the green light has come on in his head and he's seen what you've written about, then it's safer to trade it. I share many of the same principles as you, but I am nowhere close to your level that's for sure.

Humbled .... Definitely read what DB writes, but honestly it's very advanced material. I wouldn't even try to use it to trade for some time .... until it sinks in and really makes sense.

Actually, don't use TPO. Those are "Time Priced Opportunities" otherwise known as MarketProfile. They act similarly, but are not based on volume. The one you want is called "VolumeProfile" and it's in the same "Profiles" section as where you found TPO. Then you can go into the settings and make sure POC's get color coded. The pillars of "Market Auction Theory" were originally applied to MarketProfile, but you can use it just the same on VolumeProfile. As a reference point I'm always paying attention to: - Today's VPOC - Yesterday's VPOC - The 2 Day VPOC - 1 Week VPOC - 1 month VPOC - Quarterly VPOC - 6 month VPOC - Yearly VPOC Obviously when you're day trading all of those are not always going to be serviceable, but it's up to you the night before to know if they're going to come into play. The SPX and SPY will each have their own volume profile makeup, but on most occasions should be very similar.

Ya, you can definitely look at it that way. The volume POC is a non-directional congestion point. It's the price where volume happens the most often i.e. "the mode". It can act as support/resistance and generally speaking is not the easiest place to take a trade from unless you're good at spotting the visual cues of when new value is being sought out.

Here you go Humbled. The day's bounce trade off the bottom..... - There was a clearcut sell climax (exhaustion) at today's bottmo - A massive demand volume bar kicked in at about 2:50pmEST, which overcame supply - Trend line was broken and held with higher lows - Price reverted back to yesterday's POC at 161.25 I actually screwed this one up though. I took the trade on a break of the 160.88 level. It moved up to 161.07 then dipped on me below my entry. I bailed and then of course a stop volume candle occurred and it put in a higher low. My sell was naive because nowhere in the dip did the selling pick up to outside that big volume demand bar. I should've showed more patience in waiting out a higher low.

Another way to look at it is ..... this is an "auction" process. Volume POC's represent where the most buyers/sellers "agree" on price in a current auction or a previous one. Naturally, if demand or supply run out while it's being bid up or bid down, at what level is the most interest going to strike back up again?

I stay the hell away from 1mins. No thank you. IMO that's a professional scalpers chart. Guys who use it are a cut above the rest and really know they're support/resistance levels. It requires operating with air-tight precision. Again, the mindset with using volume POC's is that they act as magnets if you know which side has the control of the orderflow. It's why this market spends quite a bit of time performing "mean reversion" after an "extreme" has been reached when buyers/sellers run out of ammo. Picture it like throwing a ball into the air. It's going to come right back down to you if you don't figure out a way to build something (i.e. support) so as to go catch it at a higher level.

Ya, no system will be able to supercede the "user" using it. There is an ebb and flow to movement that tests the very fabric of patience and trust ..... especially in this day and age with algo's doing 85% of the yearly trading.

Helping people is not "blurting". Having thousands of posts and not actually helping anyone make money is (not referring to you specifically). If people aren't understanding someone's explanations, then they're not doing a good enough job of connecting with the reader. But again, I don't get the impression that it's really about helping anyone. There are just too many paranoid posters who believe that they hold the holy grail and if anyone else gets their hands on it, it will fail to continue making money.

I didn't ask for an account statement. Although that is a typical practice in most professions when people make claims of successful operations. I was referring to the methodology. Hey man if you're making nice money using your strategy that is awesome and I'm happy for you. I just never understood the desire for someone to come to a message board and basically say they've figured it all out, but not really help others do that too. What's the point? This isn't really aimed at you personally because I've seen so many other people do what you're doing. 90% of the discussion around here becomes philosophical. Posters are dancing around each other, sort've "saying without saying" not wanting to give away the supposed "secret recipe". You know what I learned in my time? You can have a system that makes great money, but that does not automatically mean someone else will be able to use it effectively too. So I don't understand the paranoia I see some exhibiting. I know a guy who actually gave me all of his ToS coding .... a special brand of volume profile analysis. He kills it with this thing, his win % is typically 65%-70% and his reward-to-risk is nearly 2.5 to 1. I have yet to be able to use it like he does.

Hey Humbled .... as per your request, here was what I was watching and traded today. 15min chart clearly showed trend line support. So after about 5mins of holding that support and buy volume was steady I entered long with a stop below that TL. Notice it was also a 1 week volume POC. That's what we call chart "confluence". The 5min shows my targets. First target was the trend line. I actually sold my whole position there. Wasn't really using what I considered a position worth scaling from. I re-entered after it retraced back to the TL and tested it for support. Only used half of the position size of my first trade. Next target was the 2 day volume POC. I want to point out something that I've observed. Remember late yesterday there was that vicious sell off from the VWAP down to 161.08 .... look at the candle count. Anytime I see 8-9 straight down candles the first thing in my head is "stop run". Don't base your trading around it, but try to observe it if you ever see it on a chart.

This is just an observation since I've begun participating on this site more ..... but it seems like most (not all) aren't willing to share actual details. Lots of roundabout talk about what people "need" to do though.

Even though I included volume anlaysis in this example for you, there are price action traders who take that trade just based on the 1-2-3 & trend line break. They'd target the upper wick at 161.92 just like I did and clearly the next trend line as well.

Today's VWAP reversion trade and some other observations. Here's the general idea of what I was watching take place. 1. We initially were very bullish on the day. 2. After the initial upside trade I took early in the session, I was only looking to take a trade from the extremes. There was an opportunity to short the day's highs, but I decided to be prudent and just wait. 3. SPY consolidated betwen 162 and 162.48 for a few hours, but then sell volume started picking up at 1:45pm and broke VWAP (the light grey line). Sellers have now taken control. 4. At this point my thought process is to wait and watch the new intraday down trend to form a trend line and only enter on a break of that trend line if the volume confirms. 5. SPY bounces of 161.50(1) on increased buy volume (demand), it tests the trend line at 161.74 (2) and then pulls back, but notice it does not make a new low(3) and the sell volume was low (no supply). 6. Trend line is broken. Reversion to the next trendline (also VWAP) can now proceed. There is an upper wick at 161.92 from an earlier attempt to break the downtrend and it did offer some resistance. I could undestand someone scaling some of their profits out at that point. It was important to note the reaction at VWAP. Buy volume did not continue to pour in and sell volume matched it. That VWAP/trendline area was a perfect place to take a short. First target scale out would be the previous bottom (161.50). Second target would be that lower trend line, which was broken earlier for the upside trade. Not ironically that trend line led all the way back down to Friday's volume POC. Notice how sell volume picked up dramatically to take the action there. Those volume POC's act like magnets for the algos if you know which side has the control.

OK here's the chart .... Here's the general idea of what I was watching take place. 1. We initially were very bullish on the day. 2. After the initial upside trade I took early in the session, I was only looking to take a trade from the extremes. There was an opportunity to short the day's highs, but I decided to be prudent and just wait. 3. SPY consolidated betwen 162 and 162.48 for a few hours, but then sell volume started picking up at 1:45pm and broke VWAP (the light grey line). Sellers have now taken control. 4. At this point my thought process is to wait and watch the new intraday down trend to form a trend line and only enter on a break of that trend line if the volume confirms. 5. SPY bounces of 161.50(1) on increased buy volume (demand), it tests the trend line at 161.74 (2) and then pulls back, but notice it does not make a new low(3) and the sell volume was low (no supply). 6. Trend line is broken. Reversion to the next trendline (also VWAP) can now proceed. There is an upper wick at 161.92 from an earlier attempt to break the downtrend and it did offer some resistance. I could undestand someone scaling some of their profits out at that point. It was important to note the reaction at VWAP. Buy volume did not continue to pour in and sell volume matched it. That VWAP/trendline area was a perfect place to take a short based on the widening wedge pattern that had formed. First target scale out would be the previous bottom (161.50). Second target would be that lower trend line, which was broken earlier for the upside trade. Not ironically that trend line led all the way back down to Friday's volume POC. Notice how sell volume picked up dramatically to take the action there.

Sure thing. Gimme a sec as I watch this close.

Obviously I talked a little bit with you about how I focus a lot on divergence trades using volume profile and volume spread analsysis. You know what "price pattern" I find commonly occurs with it? The 1-2-3. May be something for you to look at if you've got some time. I typically find trades with way better risk/reward.