roztom

KHamore1: I was responding to MightyMouse but I took your quote in there by mistake.. and read them as part of the same post... :crap: I edited my response.. Regards, Tom

MMOUSE: I think you may be mistaken on this. High horizontal volume is acceptance... equilebrium the market stays in an area...buyers/sellers agree on price it has achieved a fair value or acceptance... thus the price does not move out of there until something changes... Horizontal volume is not the same as vertical volume. I think this is what you are thinking. Low Volume on a horizontal plane indicates urgency since price moved away from it quickly if up the bids were stong and the price moved away and not much got done at those prices and there was competition so the market did not stay there..that is what creates speed..or directional movement.. the same at a top: low volume except it can be no bids and then the offers come in as price rotates down and volume increases as price moves back across the range... You can see this on the profile at the edges or extremes where there is low horizontal volume development... Think about it..if the market is going up the high tick doesn't have high volume but almost no volume.. the bids dry up - buyers stop buying.. At the top the volume drops off. Remember Horizontal not vertical... If it is a top then depending on your timeframe you can see a high volume "bar" as sellers come in and reverse it but not at the high ticks... In the ES you can see contracts traded..or any market...pull up a Volume profile - you'll see what I mean. On a bar chart..you will see high volume on range expansion or reversal bars but you are seeing the volume for the entire bar. On the profile/price you will see inside that bar.. and each tick and the cumulative horizontal volume at each tick.. I think that is the difference. Regards, Tom

I have not watched or read Steidlmayers latest interpretation... I already have a process that works.. I suspect I should...but I find my weakness is not in my tools but only in myself.. I have a toolbox that works - for me. One problem of integrating MP into my trading process is that it cannot be backtested.. My interpretation is subjective...pattern recognition.. "sense of smell" This is a dilemma since I cannot strictly define or program my methodology so I do not have the comfort of a stictly mechanical process that can be backtested with the typical statistical support that we all like to lean on to define our edge. I am a daytrader but I do not ignore where the market is and what it appears to be trying to do... The market is either range bound/bracketed or testing/moving to a new level.. Of course I can see the same thing on a chart but adding the profile adds where the longer timefram traders were active... I want to detect their activity as soon as possible and try to determine which side of the market the strong hands are active in... Like any tool it does not predict the day but develops and allows me to see the behavior of the participants in the auction process and who is dominant and when/if the balance shifts see the opportunity develop. Again this is not in a vacumn I integrate this with other tools... When the market seem to stairstep it will often pause/rest and rotate/consolidate. In MP terms this is a new balance area or distribution.. On a counter rotation, I can see where stops would have built (Swing H/L) and where the volume was low, indicating there was competition for price and price jumped away from that level... The market will take those stops (unless a one-way freight train - low probability which would be evident by the shape of the profile - a Trend Day in MP - I think it is an 18% probability but I don't care) and then at the low volume level where there was previous competition at price - will they show up again?... Just one way to use it...IT is really no different then watching stops get picked off under a recent Swing H/L... but the volume at these levels can reveal what behavior might be expected if the market is going to continue in its initial direction... after the weak hands pockets are picked by a few ticks. Just one way to use it... As far as longer term.. for me the longer term charts allow me to overlay previous areas along the same concept as the interday developing High Volume/Low Volume Areas. I look at it as internal support/resistence.. Depending on the type of volume (High or Low) tells me what kind of price behavior to anticipate at a specific level as we revisit them... High Volume was previous price agreement - the market balanced there and everyone tended to agree on price.. These are obstacles but behave differently than Low Volume Areas. Low Volume is where there was competition for price.. the market moved away from there quickly.. there was competition at that area. Who moves the market? Not us - not retail but the big $. At Low Volume Areas will they show up again...? I always want to try to align with the Big $ that is what moves the markets directionally and creates range expansion, IMHO. These are integrated into my more recent daily profiles with the longer term nodes going back to that Crash low since that is the last signifigent swing low.. I also use the most recent swing that we are in to creat another level of minor nodes... While this may seems complex the minor nodes are only important when thry are close the the Major ones.. This is just one aspect of it but one of the most signifigent parts to my trading. Sometimes the market stops within a tic or 2 of the levels - other times after a pause it will go to the next..no different then Supp/Res. For me these are targets and I scale along the way... They have given me a high level of confidence to enter a trade at these levels when price action is confirmed with other tools. One thing I don't do is "predict" the day. I was quite good at that for swing trading back in the stoneage when you had to hold for several days :haha:- 30pts was a big day in the Dow but in the day timeframe I am often wrong.. as to how it will develop. For example I think the market will go down on a day. It opens head fakes down, then squeezes early shorts, rallies and then sells off in the afternoon .. so I let the market tell me and I usually wait for the market to come to me at a key node or let the daily profile develop so I can see how the participants are handling the auction process and how I can participate on a rotation while targeting the nodes. Let me apologize in advance if this comes across like Voodoo or something. This of course is only a general conceptual explanation and not a specific set up or anything but an attempt on my part to share some of how I integrate auction theory and volume into my trade plan and also the limitations and potentially lack of duplicability of how I use it... maybe there are others here who can offer a more specific mechanical approach tp setups. While there are some mechanical aspects to it for definitions.. Market behavior and the integration with other tools is what makes it viable for me. It was not an easy process to integrate and is not a quick study, imho.. It is not an indicator one can slap on the screen and use tomorrow. I hope this helps shed some light on MP. It really depends on how one trades... I shoot for ranges and will trade maybe 4 - 8X per day if the market offers it... my activity is dicated by what the market offers.. I wait for the market.. I am a big believer in trade location - if I miss it I wait for a rotation to align myself with the strong hands (assuming they will still be there) or if not - there is always another bus coming by.. Regards, Tom "I have met the enemy and it is me"

Mac: I am a user of MP and would not trade without it... One of the things I have observed over many discussions re: MP is that in it's most stictest rule based definition I would also dismiss it. Notwithstanding when I first learned about it in the early 1980's that's how I tried to use it. I did not succeed with it and dismissed it. You mentioned the 70% Distribution, etc. for me that is not important.. I guess the best way for me to describe my interpretation of it is that I learned the tool and then deconstructed it and found the elements that integrated with my view of the market. We all live at the right side of the screen and MP is another view... it is just another way to organize data.. It works for me and I'm sure if it fits the psycology of the individual and adds an element of realtime market generated information which can be integrated into an overall process then it is a good tool to have in the box. For me it is the horizontal view of price.volume and the integration of VOlume generated price information over Market Swings from most recent swing high to swing low to the March Crash Low... to current high. These swings with horizontal price/volume creates nodes of high/low volume. The market seems to come back to these volume levels which were signifigent in the past just like support and resistance but they are not price based but volume based... This part of the MP process is cumulative volume nodes and they were not part of what I learned originally - no volume was available at that time. You did mention charts, etc. When I started out that was all I had... Studied Edwards & McGee, got a new chart book weekly, pencil and a ruler did them daily by hand. Charts still are important to me..I can't imagine anyone who uses MP not also having charts up. I especially like 15 minute candles along with other timeframes for the interday picture..let's me see where the stops are piling up and where the market will probably rotate to get them or in MP lingo - facilitate trade. Good discussion.. Regards, Tom

Josh: When individuals tell me that MP/VPOC, etc doesn't work and they come up with all kinds of technical reasons..I just roll my eyes... I see it work everyday... I sometimes don't work everyday but MP does... Regards, Tom

I took the microscope out and scalped around the DVA and got myself back to a small loss for the day after being in the hole... I can't believe that there are those who say MP is a worthlesss tool. It certainly doesn't stand alone for me. Alone I would lose $ with it like when I first studied it in the early 1980's. I assume when someone makes a statement like, MP is a worthless tool or a fad, it is only a reflection of differtent tools for different traders.. COnsider Gann or Elliott Wave eventhough I have studied and used them in the past.. If Gann or EW fits someones trading then that is great for them..doesn't work for me but I do know successful EW practitioners - once again within the context of a toolbox and different timeframes.. One of the toughest parts of being a succesful trader is the integration of the proper tool set that fits your psychology and resonates with your logic. MP, IMHO is not a panacea. For me it was not easy to learn/interpret, does not stand alone and outside of the classical definitions - is a subjective tool. I have learned to integrate it into my trading toolbox and it is a major factor in my success... Regards, Tom

Nice Josh.. Today was quite a bit different for me... from yesterday.. Yesterday all winners..today chop except a long @ 1306.75 which I already exited for a small gain... These tight range days are difficult for me to trade... and I get chopped when there is not enough range.. When we failed @ the IBL I got long but it was very tenuous and I bailed out ahead of my targets HOD and VPOC since the shorts seemed very passive and we were heading into lunch... That's it for me unless there is a rotation worth trading but this isn't a good market to trade at least for me..I need more range. Best to all..have a great weekend.. Regards, Tom

I suspect that is the point of this thread... would you like to share your experience with MP and the shortcomings you found with it. I'm sure we would all appreciate your input. Regards, Tom

Before anyone gets a club out and beats me, I learned MP in the early 1980's from Pete Steidelmeir at the CBOT. The only thing important about that is I worked with it for about a year and then abandoned it - couldn't make a dime with it.. It was TPO based and even when the CBOT introduced volume - they called it Liquidity Data Bank (LDB) in T-BOnds I just couldn't use it but the auction theory resonated with me.. I had been using the auction concept myself but had never heard it explained that way..that was my major takeaway from it at that time. However, with the availability of volume it changed everythiing.. Today I wouldn't trade without it. It is not a system but price, volume and time at price is signifigent market generated information.. Some observations and how I use VPOC.. (I basically ignore the POC - time based) It is true that a shift in VPOC is not a specific directional signal but a sign that high volume is taking place at a new price point in the current timeframe you are measuring. What happens after the VPOC shift along with Delta can be a signifigent clue as to what the volume represents. If the market has been trading higher and then churns at the high end of the profile then price is being accepted and the VPOC can shift up. this can mean the end of the upmove, temporarily if sellers are absorbing the buying at the higher level (responding to higher prices). This would basically shut off the market from going higher and it would rotate down to look for buyers.. If the buyers aren't there then it will go lower. On the other hand when the VPOC shifts the sellers can be absorbed at the high volume and after rotating in a tight range or balance area which can be seen on the profile the market will move higher. Ofcourse context and where the market is in relation to the bigger picture is important. Eventhough I am now a daytrader I always put the daily profile in context with longterm profiles and Cululative High VOlume and Low Volume Nodes based on previous longterm swings. It fits together like a puzzle. I hope this doesn't sound too vague but until you see the behavior of price and the shape of the profile and for me the Delta..you can't tell what it means but it is an alert to expect the market to set up for a move out of the area..how far? This is another subject but volume nodes are inside the market from previous levels and the market typically goes back to visit those area thus targets are available to work with. There are a number of excellent threads & videos that go into this. Like everything there are many ways to use the tool. I am not expert by any means. I have just found ways to use the information generated to fit my trading.. I hope you find this helpful. .. Regards, Tom

Good Links for all who want a better understanding of VPOC Shift/VWAP interaction.. When these align with profile structure it can be a signifigent spot to position - subject to overall market structure.. Tom

Nice work... I do not watch the NQ\I traded it back in 2000 - 2001 timeframe..it was the place to be... now just ES... Josh: I know how you feel... I had another long in there right after the cash close and got stopped out.. scratched..Dem Bums:doh: Always another bus coming by... though...You had decent trade location and good risk management...that's the only thing we can control.. Regards Tom

Good trade I was long in there to... 08.50 like you said it kept banging its head on the CHVN @ 10.50/VPOC so I took a point and called it macaroni... will watch cash close... Tom

Sure was...wish they all worked that way... I have minor resistence at 1311.50... I got my scale off at HOD 1311.00 but now am a bit "perplexed since it is lunchtime it may rotate again..I am trailing a tight stop to protect a few tics and will reposition if it rotates and the internals look ok if I get stopped... :crap: Regards Tom

12:06: Observation: Mkt Held VWAP/& CLVN @ 1307.5 & most important, IMHO IBH @ 1308.25... I positioned on that rotation to scale at HOD and also target next CLVN 1313.25... so far this is classic profile trading... helmet on... :missy: BTW: There is a naked close out there 1314.75... we could close that today..so I am shooting for the next CLVN 1313.25ish. Regards, Tom

I just took a quick look at your thread... I am looking forward to see what kind of responses you get... Great questions... BTW: Is that topic different from what is discussed here? BTW, as I write this the mkt is rotating @ 11:28 cst... DVPOC shift did cut off the buying for a rotation... it's like the Limbo...how low can you go... ? Regards Tom

What does ST p2 reference please? TX, Tom

DVPOC shifted @ 11:09 cst from 1306.75 to 1310.25.. also the bids dried up - for the moment...so question to me at least is...will we now rotate or will the market push off higher from here? I don't know but we may balance up here for a while - don't know but if it does rotate I will be stalking a trade... Tom

If I was OTF I would not short here but when the market gets too long that is when they will come in to flush it and rotate it to clean out the weak hands... there's paper under the market and it will typically go there to do business before it continues the trend. I find the market does respect levels of former activity by the OTF and will return to those levels... to test - just my observation... Of course the market does it's own thing.. and I try to stay aligned with it.. One thing I've learned is "I know I don't know." Regards, Tom

Certainly see it the same way so far.. I had an entry at 1309.00 level but can't position that close to the 1310.50 CHVN and 1310.75 is a Micro node so they do provide some resistance if only temporarily... The 1310.00 is where I would scale a long but I could not enter 1309.00...so I am looking for a reaction/rotation but it may not happen... so I wait for the next bus to come along... Regards Tom

SO far classic MP... I had 2 short trades covered last just before yest..VAH when Offers dried up.. Did NOT get long...missed that - waiting for a rotation since we had RE... I always try to think where the fuel is... the markets job is to facilitate trade...advertise for buyers & sellers... when we rotate I watch the Nodes, especially CLVN and also where stops will accumulate as fuel for the rotation... Ex. at 10:00 cst... CLVN @ 1307.50 which held the rotation so far but there are also stops at the current 50% retracement under F period and the DVPOC at 1306.75... so these are areas I would watch to potentially position with the current move... However..this is not mechanical..just areas of interest...for me..I'm sure others would interpret it 180 degrees from me... that's what makes a market... Tom

I think the inference is that a VPOC shift can mean either a reversal is imminent OR the market is resting prior to further price exploration in the same direction. N, well put.. thanks for clarifying..Tom

Sorry if that soundeed like it will either go up or down... but a VPOC shift is an important event since it is showing an area of activity that will either shut off the directional move...volume = fair value as you can see on the GBX profile as of 8:19 cst or it will push away from it... When I see that than I look at the Delta to see whether it is buying or not... we had the first rotation down and found buyers and then on the next rotation up to new high we ran out of gas...so this is a new balance area.. at this time... Will it hold? don't know .. I don't know if this is a correct interpretation but that is how I use the maket generated information...until it changes.. Tom

I added some addendums to my 6:50 am cst post re: Globex VPOC shift to 1307.00 and potential rotation down to test 1306.00 area... which we did.. just interesting how profile can be interpreted and used for Daytrading... Tom

Yes got the 1304.00..Stole the 1307.50... LOL... :crap: Still a good day yesterday.. I am a big fan of the profile... Maybe we can chat some time.. I appreciate your technical knowledge of it... Let me know if my posting is not aligned with the thread.. I completely understand what that is all about... Regards, Tom

1307.50 CLVN closed as projected in yesterdays RTH Session in todays 1.19.12 GLobex session and tested 2nd time @ 6:36cst. Break-away Down-Gap from 7.26.11 will close @ 1314.00 , CHVN 1310.5 & CLVN @ 1313.25: areas of interest on the upside. Not a projection - just some sign posts... Good Trading All, Tom BTW: @ 7:08 cst we are getting hIgh volume on the Globex profile and expect a VPOC shift to 1307.00. This may shut off buying up there if we do not hold 1306.25 - 1304.00 ish area. This can change of course as the profile changes.. just a snapshot... and a current interpretation of a dynamic tool... as you say: Cheers Addendum: My observation, at least is when there is a VPOC shift - in this case up - if it happens or a high vol area like we have @ 1307.00 if it shifts then the market will eiter stop there since it is a new area of fair value OR push away from it since selling is being absorbed.. we just shifted at 7:30ish cst...now it will be interesting to observe the rotation down... we rotated to 1306.00 area as projected...