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fed2008, I am referencing the relevant posts where I commented on that. Basically, when a rotational day is expected, as suggested in Post #14 and #17 below, the strategy is to fade the extremes and trade in both directions. Go for singles and doubles, no home runs.

Not sure if this has been reported yet, but I noticed that the "Views" count for a particular thread has stopped updating.

Here is my ES analysis for Sept. 3rd. The chart below reviews the relevant balance areas on the daily chart. Yesterday, we broke down from the higher balance area and we continue to trade within the previous balance area between 1016 and 975.50. The odds favor testing the balance area low at 975.50. By the way, there is a gap that hasn't been filled yet between 975.50 and 975. It's important to review the bigger picture so that you're aware of what's possible in the market. For example, if the market trades down to 975.50 tomorrow, not saying that it will do that, will it catch you by surprise? The next chart shows today's profile which contains a poor high and a very prominent POC. The two trade scenarios I will be considering for tomorrow is to (1) buy below value since the odds are high that the prominent POC will be revisited and that the poor high will be taken out. This does not mean that we have to trade back up through the single prints from 9/1. (2) Sell above value since the prominent POC is likely to be revisited, the current auction is down, and the destination is still 975.50. I would prefer to see the POC revisited and the poor high taken out before heading lower since that would provide more confidence in the down move. Here's another perspective I'd like to share (see chart below). If you combine the lower distribution from yesterday's trend day and today's profile, you have a pretty tight balance area ready for a breakout. The balance area high would be around 1002.75. If we get accepted above 1002.75, we could start to retrace the single prints from 9/1. I like to have that scenario in mind so that I'm not so focused on the short side. Be cautious of a failed breakout to the upside though, where the market looks above either today's high and fails or looks above 1002.75 and fails. The move in the opposite direction could be dynamic.

Well we got a decent break considering today's 8.75 pt range. Here is the final MP for today.

The width from high to low of the fat part of the P-formation is only about 4 points - not worth trading. The up auction does not look complete to me as there is still a poor high. Let's see if the longs today have to liquidate by the close in order to go home flat. I'm done for the day.

Yes, this is the focus of this thread, not the trade signals. I'm trying to demonstrate how I use MP to understand what the market is trying to do, identify good trade location, keep me out of the bad trades, and keep me from overtrading. For those who have been reading this thread, please focus on the decision-making process. EDIT: Also important is using MP to monitor trade continuation. For example, I think the risk of long trades is significant and any short-term long trade should have been liquidated by now. That doesn't mean that the market can't go higher, but that the risk on long trades is high based on market structure.

Db, I was thinking along those lines as well, but it really helps to hear it from other traders. I think you're spot on with this. I will continue doing what I'm currently doing since I have to manage my risk as you stated, which means I'll miss some trades. C'est la vie...

Here's what I'm currently looking at.

I'll share with you one of my mental issues. I currently have a short bias and think that we could see a liquidation break. Sometimes I get hung up on trying to find an exact or optimal entry instead of just getting short, which is probably what I should do right now. I have found that always looking for exact entries and exits in trading is not the right thing to do. I don't think that long-term, successful traders look for such exactness in trading. I think I will miss my short trade because I'm looking for the market to take out today's high.

I'm starting to feel like short-term traders are getting too long here. The profile is starting to resemble a P-shape with a poor high. A poor high could also form because short-term traders are too long and they are feeling the anxiety of being long. Everytime the market trades near the high, short-term traders sell. I believe longer-term traders may be taking the other side of their trade and a long trap is forming. If I'm correct, we can get long liquidation break later in the day. Getting this kind of market feel is still something I'm working on. I'm still looking for a short opportunity. Note: At 2pm EST the FOMC minutes will be released.

On a rotational day like today, my preference is to fade the extremes (responsive trade) as opposed to take an initiative trade. I'm hoping to get a short opportunity near the day's high and then have the possibility of the market taking out the day's low. It's just a matter of trading style I think. Thanks for your post.

As today's POC widens, the more difficult it becomes to get away from it. To get away from a wide POC you need force - manifest in volume - otherwise the POC will most likely be revisited.

Thanks Frank. Your stats seem to be providing you with a good framework for today's trading. So far I think we're both in sync although we may have arrived there differently.

As of right now, F period 1 ticked today's high creating a poor high (i.e., no selling tail). Currently, today's high is 999.75. I don't think the high is in yet for today. If the ES goes down from here, it will go without me.

By the way, there is no attempted direction today since the ES is rotating, therefore, volume is not important today. In fact, I will not use it at all, but I always look at it anyway. If the market is rotating up and down to which direction would you attribute the volume?

Yesterday's POC at 1000.75 and the overnight high at 1001 may provide resistance on the way up. Will be looking at the 1001 to 1002.75 area, if we get there.

I'm out at 999. Looking for a shorting opportunity somewhere around yesterday's afternoon rally high at 1002.75, not sure if it will get there though.

I will probably exit the entire long trade a point or so below yesterday's POC around 999. I also moved my stop to below yesterday's low. I don't have high expectations for this trade given the low confidence market today.

Tested the 989.75 area and currently rotating back today's distribution, would not want to see it get accepted below 989.75. Overlapping-to-lower-value is building in the ES so I would like an opportunity to sell above value. It would take a lot of work to get higher value today relative to the body of yesterday's lower distribution. Trade value not price.

ES action in the first 15 mins on 9/2: ES opened out of balance below yesterday's range. Opening was 993. Gapped open lower. Traded 1 tick from overnight low to 992. Traded up thru open. Gap closed. Traded 1 tick off yesterday's settle. Traded back to the opening price. Traded back up into yesterday's range. This indicates a low confidence opening and the likelihood of a rotational day. Will trade on both sides of the market (long and short). So within the first 15 mins of the day, the tone has been set as to how I would probably trade the rest of the day. If the range stays narrow, could see a breakout from that range later in the day (preference to the downside). We'll see how it pans out.

Hi DaKine, Thanks for your interest in this thread. A poor low is when there isn't a buying tail at the bottom of a profile. A buying tail is when you have at least 2 single prints at the bottom of the profile and indicates rejection on a short-term basis. The lack of a buying tail usually indicates a poor low and that the low isn't in yet. Compare today's low with today's high, where the high was a good high, i.e. there was a selling tail at the top of the profile indicating rejection at 1027.75. Poor lows are usually put in place by short-term traders mechanically buying the low and are not a sign of rejection. If a market trades near the lows for more than one 30min bar, that is not viewed as rejection. Hope this helps. EDIT: I should have added that today's poor low is not necessarily short-term traders buying the low, the market simply ran out of time (i.e., market closed at 4:15pm EST). Regards, Antonio

I don't pay attention to the IB, but I think that that would have been the second entry, if one didn't get in as we traded back into yesterday's range. The reason I like that area around the IB low is because that coincides with the re-entry back into the previous balance area around 1016 and near the 6-day balance area low at 1013.25. I also would have had an exit nearby. Personally, I don't like that entry. Price was too far down for me and I didn't have an exit nearby. Just not my style, it feels like I would be chasing the market.

Here is my analysis for tomorrow (Sept. 2nd). The ES broke out to the downside from its 6-day balance area and is now trading within the previous balance area between 1016 and 975.50 (see chart below). The attempted direction for today was down on healthy volume. The expectation is for downside continuation with the destination being the previous balance area low at 975.50. The market doesn't have to do that, but that's what the odds favor. Today was a trend day down with one-timeframing down since C period (2nd period), except for K period which had a high of 1002.75. For tomorrow (9/2), I will be focused on 1002.75, the rally high in the afternoon as a short-term reference to the upside. If the market is to continue lower, that reference should hold. If the market is accepted above 1002.75, that indicates change and we could trade back up to 1013.25, the low of the 6-day balance area and near the balance area high at 1016. Given the poor low today and the good donwside volume, I expect downward continuation and the rally high to hold, if we trade there. There is support around 989.75. However, if the market starts trading down there, lower value will be building there making long trades a bit risky. If we get a rotational type of day, which is usually expected after a trend day like today, that trade is do-able in my opinion. The destination that I'm focused on is around 975.50, the previous balance area low. So my bias for tomorrow is short, but I'll see what happens in the overnight session and where the market is going to open tomorrow morning.

Hi Frank, I agree with you here. I think the big bar has to be taken in context though (i.e., make sure it isn't traders throwing in the towel which might create a spike signaling the end of buying/selling), but today was a go-with the market. I think you had two opportunities today, the single prints out of balance in B period (also a big bar) and the D/E period as you pointed out. As you said, these are tricky trades because these are cases where you simply have to put the trade on and then monitor for continuation. With this type of urgency in the market, the market doesn't provide exact entry points. Although, once the market re-entered yesterday's range for the second time in D period, you knew the market would go for the lower gap next and that the potential for an outside day was high. Just put the trade on and monitor for continuation. At the very least, if a trader is not comfortable going with the market, the trader should have at least stayed away from fading the market. The next destination for this week should be the balance area low at 975.50. The market doesn't have to do that, but that's where the odds are pointing. Regards, Antonio