ant

Site looks great and it is faster! Nice Job.

Hi Minoo, Here's my analysis of the ES for today. The market had broken out to the upside from a 16-day balance area between 975.50 and 1016. Prior to today, the market had been trading in a 3-day balance area from 1020.50 to 1038. Today, the 3-day balance area low at 1020.50, the previous 16-day balance area high at 1016, and the lower gap were the reference areas I was most focused on considering where we were going to open. I was also focused on yesterday's prominent POC, which could be revisited. The market opened slightly out of balance to the downside (i.e., outside the previous day's range). The market gapped opened lower and then closed the gap and traded into yesterday's range - a sign of a low confidence market. It then proceeded to traded back and forth through the opening price at 1023.75 - another sign of a low confidence market. At this point, I didn't think we would get a big day (i.e., most likely a rotational day) and didn't think that we would breakout from the 3-day balance area, which it didn't. So the low confidence market within the first half hour and the prominent POC put the odds in favor of the 3-day balance area low holding, if the market tested it. That level was tested and it did hold. That was the trade of the day. As mentioned, the 3-day balance area low held. Once the market traded back into the previous day's range, the outside day becomes a possibility. To get the outside day, we would have had to get good volume and an elongated profile, which we didn't get. The longer timeframe was not dominant today, because if they were, we would have gotten the outside day and at least overlapping-to-higher value. After the number came out at 10am, the market popped and then it just died - it was quite noticeable. At that point, we were building overlapping-to-lower value so I wasn't excited about taking long trades. As a suggestion, when the market opens you should immediately look for whether the market is going to open in or out of balance, whether the market is exhibiting high or low confidence, and estimate what value is likely to be. You should strive to get a feel for the market within the first 15-30 mins to determine how you will trade the rest of the day, and then adjust as the day progresses. Hope this helps, Antonio

DrXray, this is a private indicator that I developed a few years ago.

Hi Mustang, See responses below. As you step back from smaller timeframe charts to higher timeframe charts, your perspective simply improves. As a day trader, my goal is to try and capture the 2-3 bigger moves in the market each day. I need to stay focused on the bigger picture over the price action on a 1-min chart. A 1-min chart can cause me to lose focus of what the market is really trying to do and of the more significant reference areas where the longer timeframe may enter the market. I also think it makes traders more susceptible to overtrading, which could cause traders to miss the bigger trades because they are busy managing small trades or managing a loss in a trade. And as they say, the problem with a bad trade is not so much the loss that you take, but that it keeps you out of a good trade. I trade based on Market Profile concepts so I focus on trading value and not price, because price often misleads. Price is just an advertising mechanism. How many times do traders think that a market is strong simply because it closes on its high when the underlying market structure is really weak? Some traders are just not aware of the amount of risk they're actually taking. Also, if I focused on a 1-min chart, I can tell you that it would be difficult for me to not micro-manage the trade, making it hard for me to hold for bigger profits, which is already hard enough. There isn't an easy answer to this question, it's not that simple. Being able to determine which timeframe is dominant in the market is one of the toughest things in trading. Many times when traders get hurt in the markets, it's usually because they missed the entry of the longer timeframe. Having said that, here are a few things that I do to help identify the entry, presence, or absence of the longer timeframe in the marketplace. I try to identify where the longer timeframe might enter the market. I usually do this by looking for brackets and trending markets in daily, weekly, or monthly charts. The bracket extremes are usually areas where the longer timeframe may enter the market. It is the longer timeframe that is responsible for breaking a market out of a trading range. Shorter timeframes are usually content with trading in a consolidation area, but they will pile on when a breakout occurs. Why do we expect high volume on successful breakouts? Because if a breakout is successful, all timeframes will usually be involved. In a trending market, I will usually look at the daily profiles to see what are the odds for continuation. I look at volume and profile shape. Short covering and long liquidation as seen through the profile shape (P-shape in short covering or b-shape in long liquidation) indicates the absence of the longer timeframe. If new money buying/selling were present, the profile would not be shaped like a 'b' or 'P'. It will be more thin and elongated with healthy volume. I try to discern the behavior of short-term traders vs long-term traders in the market. For example, if a market bounces off the previous day's low, that is usually the behavior of short-term traders - a low confidence market. The longer timeframe does not wait for markets to trade to the previous day's low to buy. That is not the way they trade. They do not care about the previous day's high or low. On low confidence days, there are usually multiple clues that the longer timeframe is not very active. If you understand that the market is being dominated by short-term traders, you can take advantage and trade like short-term traders as long as that remains. Multiple timeframes, short covering, and long liquidation are difficult concepts to get a grasp on, and I recognize that my explanation is oversimplified. My response was not meant to be thorough; I just wanted to provide an idea of what I do in my trading. Hope it helps.

DaKine, You have asked some great questions here. I will do my best to answer them. "Poor structure" is one of those things that is ambiguous and takes a bit of practice to identify it. Sometimes it's easy. A lot of times, there are nuances in the profile shape itself. So when I say "poor structure", I'm referring to the profile shape. For example, on a trend day the profile shape is usually elongated and fairly thin, maybe 4-5 TPOs wide. However, there is such a thing as being too stretched out which is not good as that usually indicates forcing action such as short-covering or long liquidation. Good structure in a trending market has backing and filling. When the profile is too stretched out, you could see 3, 4, or even more distributions in the profile. Those types of days can be taken back quickly. It's important to be able to identify this because these types of days will usually fool traders into thinking that a market is strong, if it is too stretched out to the upside. On a rotational day, the profile will usually get short (from high to low) and wide (from left to right). That is what I was referring to as "poor structure." And then, there are degrees of poor structure, it isn't black or white. I sort of described the extremes of good and poor structure, you should consider structure that falls within those two extremes. Other things to look for in the profile shape are non-symmetric profiles or price levels. For example, you can have a a price level that is 3 TPOs wide and the price above it is only 1 TPO wide. That is not symmetric and if you see that throughout the profile, that too is poor structure. These asymmetric price levels usually get revisited, not always on the same day, but maybe the next. This will take time to get used too and practice. Good question. Jim Dalton's books Mind over Markets and Markets in Profile do a good job for learning the Market Profile concepts and lingo. Read them several times. But reading those books will not turn anybody into a Market Profile expert, but they are a good start. Note that some of the concepts in Mind over Markets is outdated. This is a tough question to answer since market context is also important for identifying nuances. I gave you some ideas above, but this takes experience again. Experience will definitely be one of those things that you'll here me mention again and again, which is why I say it takes time to learn to trade successfully. However, as Jim Dalton says, "the amateur trader can tell you what happened in the market on any given day, the professional trader will tell you what didn't happen. Often, what didn't happen is more important than what did happen." One-timeframing up is when the low of the previous 30-min bar is not taken out by the next 30-min bar. One-timeframing down is when the high of the previous 30-min bar is not taken out by the next 30-min bar. Usually, I will not fade a market until it stops one-timeframing. You can look for one-timeframing in daily and weekly charts as well. Rarely will you see a market one-timeframe up or down all day long. The one-timeframing usually stops during the day and the market pulls back on a trend day up and then resumes its move up, or rallies on a trend day down and then continues it's move down. These are good short-term trade opportunities. Anything by Jim Dalton. I'm one of Dalton's clients.

Frank, thanks for your reply and your suggestion. My goal was to provide some continuity in the market analysis across two trading days. I wasn't trying to explain different MP concepts separately, but your suggestion is a good one. First let me say that there are many ways for traders to view the markets and they can all be correct. It all depends on one's timeframe. For example, take a look at three different ways that one can see balance areas in a daily bar chart of the S&P. I suspect you were viewing the market as shown in Chart 1 whereas I was viewing the market as shown in Chart 3. In addition, others can break up the market into even smaller balance areas by looking at intraday charts. That's a personal choice based on how one wants to trade. The chart below provides a little more detail as to how I was seeing the market. I won't elaborate too much in text since I think the annotations should be sufficient. One of the key concepts in my posts is that balance areas form in all timeframes and the high and low of those balance areas are key reference levels. Balance area highs and lows are important because those are areas where change can occur and the longer timeframe can enter the market. By change, I mean that a market can break out of a balance area and transition into a trending market. Breakouts provide the best opportunities for traders. They are the toughest trades to do, at least for me, but they're the best in terms of potential profit. If the market looks above/below a balance area high/low and fails, usually you get a dynamic move in the opposite direction. The point is good trades usually develop in these areas. When a market is approaching a balance area high or low, especially the first time, I would look to fade it, generally speaking. If the market is accepted within a previous balance area, the destination is usually to the opposite end. The market doesn't have to do that, of course. So that was the concept at play on 8/18. Going long after the rejection of the 5-day balance area as seen in Chart 3 shown in the first attachment. I viewed 8/17 as a breakout of the 10-day balance area, but then the poor structure and low volume decreased the odds of continuation. The fact that the lower gap was not closed by a tick was an important piece of information for "Trade 1" on 8/18. As of yesterday, the price was accepted back in the 10-day balance area so the balance area expanded in my view as shown below. The game on 8/17 appeared to be simply to go for the gap - that was the game played by short-term traders. 8/17 also becomes an excess low for the 15-day balance area shown below. I usually don't enter in the middle of the previous day's value area, but I have no problem taking a short-term trade in the middle of a larger balance area or bracket. Trading is definitely more of an art than science.

8/18: The Trading Day. Refer to the chart below while reading this post. The market opens at 981, just above the POC at 980.50 and the 5-day balance area high at 980. Once it opens, I note that the market is in balance and I look at how the market trades around the opening price. On 8/18, the market revisited the prominent POC first, as mentioned above, and then traded a point below the 5-day balance area high and was rejected. As it came back up through the balance area high at 980, that was the long trade. I would not want to see it trade back into the 5-day balance area or to the day's low anymore. You could have also waited for the market to trade through the opening price. Note that the overnight low or the previous day's low was never seriously challenged either. That coupled with the fact that the lower gap was not closed provided the support for the long trade. Also important to note, is that the trade was not based on only one piece of information. I usually do not enter trades within the value area as that is where everyone is trading and I have no edge there, but under these conditions, I would enter the trade within the value area. Again, not trading within the value area is just a guideline. The stop for the trade would be a few ticks below the 5-day balance area high. This trade would provide good trade location because your risk was small with a stop based on market structure and your reward could have been good with a destination to the previous balance area low at 989.75. But that is easier said than done. Once I put a trade on, I monitor for continuation, so let's take a look at the market as it progressed throughout the day. Let's assume for the sake of discussion that the entry was at 981.50, two ticks above the open (you could have gotten a better entry by entering as the market traded above 980), with a stop 2 ticks below the balance area high at 979.50, you would be risking 2 points. I usually risk no more than 3 points. If my stop is further away, I would usually pass on the trade. So as trade continues, the next level I would be monitoring is the yesterday's selling tail and the yesterday's high. The NYSE composite volume was running fairly low after the first hour of trading so I would do my first scale out a few ticks below yesterday's high. Afterwards, the market pulled back a bit and formed an inside day, which is a form of balance on a smaller scale. At this point, I would still be risking the balance of my position and I still would not have moved my stop. The next trade would be a long as the market trades above the 2-bar balance area, which also coincides with yesterday's high. The stop would be a couple of ticks below the 2-bar balance high. You do not want to see price being accepted with that small balance area again. At this point, I would also move up the stop for trade 1 to the same point. Again, my stop is based on market structure. By the way, I would not have gone with a breakout to the downside from the inside day because of my upward bias. For me to get short, price would have to get accepted below yesterday's low. The rules for trading breakouts is the same regardless of timeframe. After trading above yesterday's high, I would be looking at the profile shape and volume throughout the day. At this point, the market is one-timeframing higher so fading the market (shorting) is not something I would be considering unless the market closes the upper gap and is rejected from the 10-day balance area (see Chart 1 in my second post) or the market gets accepted below yesterday's low. As the market trades higher, it leaves single prints after the 12:30 bar completes. The next trade would be to go long within the single prints with the idea that the traders that drove price higher would still be there to defend that area. The stop would be a few ticks below the first single print around 984.75, which is the same stop as for trade 2. The trade destination had not yet been reached nor was there a good high indicating that the up auction was completed. Obviously, the market doesn't have to do what I am describing here, but I am simply playing the odds. The odds are not based on backtesting, but on empirical observation from watching and trading the markets over the past couple of years and from learning from others. At this point, the profile shape developed a P-formation indicating that the market rally was short-covering and not new money buying. A P-formation does not mean to get short immediately as the short covering may not be over. However, the odds for upward continuation had decreased significantly. In addition, the volume was lower relative to the previous days. I would have exited all of my positions a couple of ticks below the daily high, even though the objective was met. The market traded one tick above the 10-day balance area low. No other trades would have triggered for me. Note that trades 1 and 2 were not based on Market Profile, but trade 3 was. Trade 3 was based on single prints as seen through the Market Profile graphic. However, Market Profile kept me from shorting the market because of the one-timeframing which ended in the bar where trade 3 was taken. From that point on, the market kept balancing for the remainder of the day. I didn't realize how much writing this would take so I will stop here. If there is enough interest in seeing an analysis for the trading day of 8/19, I will do it. Otherwise, I will end the thread here if there isn't any interest. Even though this analysis was written in hindsight, I hope it succeeded in illustrating how I trade with Market Profile. These posts introduced only a few types of trades based on what the market offered us on this day.

Reviewing the Pre-Market Session and Trade Scenarios for 8/18. During the pre-market session of 8/18, I noted that the S&P was going to open in balance relative to the previous day's value area, which was also right at the previous day's POC. I liked the fact that the market would open near the prominent POC, because if it didn't, I would be thinking throughout the day that the POC might get revisited and could hamper continuation in the direction that the market decides to move, so we took care of that first thing early in the morning. I was also aware that the market would be trading above the 5-day balance area from the end of July (see Chart 1 in previous post). The upper limit of the balance area was at 980. So in summary, when the market opened, I was aware of the following levels below the market: the POC around 980.50, the upper limit of the 5-day balance area at 980, the overnight low at 976.25, the previous day's low at 975.50, and the gap close at 975.25. My trade plan for the day would be the following. I'll discuss stops in the context of the trades that could have been taken in the next post. Get long on any rejection into the 5-day balance area around 980 with a target of the upper gap and 10-day balance area low at 989.75. Given that the gap was large, it may take more than one attempt to close it. Play the breakout of the previous rotational day, i.e. short below the previous day's low at 975.50 or go long above prevous day's high at 985. The short would have a target of the lower limit of the 5-day balance area at 965.25. The long would be looking at the same target mentioned above. Note: The numbers above are based on the emini S&P (ESU09). There is no doubt that successful trading requires a lot of learning and internalilzing a lot of information, and it all has to become second nature. Hopefully, my analysis thus far is logical. I go through this process everyday systematically. Next: The Trading Day (8/18).

Daily Preparation for Trading on August 18th. I day trade the emini S&P so that is the market I will be discussing. I will start with my nightly homework at the end of the 8/17 trading day. I start by looking at the daily bar chart of the big S&P contract and I make the following observations (see the Chart 1 below): The market has been in a 10-day balance area from 989.75 to 1015.60. On 8/17, the market gapped open lower leaving a large gap of 7.5 handles. The market broke out of the 10-day balance area to the downside. On 8/17, the market failed to close "Gap 2" by 3 ticks. This is an important nuance. If the lower gap could not be closed, in which direction do you think the market will trade next? Note that this observation is based on market logic, not Market Profile. Next, I examine the daily Market Profile and I make the following observations (see Chart 2 below): The trading on 8/17 was a rotational day on low volume. The odds of downward continuation has decreased based on the low volume and the poor market structure at least on a short-term basis. Longer term, the longer timeframe broke the market out of balance to the downside. So what does this portend for the next trading day? For the next trading day, the most important piece of information for me was the fact that the lower gap ("Gap 2") was not closed, followed by the poor structure and low volume. The gap not being closed gave me a long bias for the following day with poor structure and volume supporting that bias. I was also alert to the prominent POC where price traded 12 out of the 14 time periods, because that level could be revisited. As I've learned, nuances make all the difference in trading and can make the difference of being a breakeven/marginally profitable trader or a very profitable one. Next: The Pre-Market Session and Trade Scenarios for 8/18.

Recently, there have been quite a bit of discussion around Market Profile here and I have participated on some of those threads essentially stating how valuable Market Profile is as a tool for understanding and trading the markets. In this thread, I would like to provide more details of my trading approach using Market Profile by reviewing the last two trading days (8/18 and 8/19), and how they could have been traded from my perspective. Even though this is being posted in hindsight, it is my intention to show that the market on those two days were understandable and tradeable using Market Profile and market logic. I will cover my daily preparation and a blow-by-blow analysis of what was going through my mind on those days on an intraday basis. My goal for this thread is to simply show another way to use Market Profile since I believe that most traders do not use Market Profile in the manner in which it was intended to be used. That comment is based on what I've read in message forums. As Pete Steidlmayer said, “The evolution of the fundamentals of the Market Profile has been lost on the majority of users because most of the interest was in using it to make trading decisions, rather than in understanding the market.” I don't claim to be an expert trader, although that is my ultimate goal and still have a ways to go, but I thought that this discussion may be helpful for traders interested in using Market Profile in their trading. Before proceeding with the market review, I would like to say a few things about my trading approach. For me, long-term, successful trading requires uniting market understanding with self-understanding. One is not more important than the other - they are both required, in my opinion. Essentially, I divide my trading methodology into three components: Market Profile, market logic, and self-understanding. In this thread, I will only address the market understanding piece, which includes Market Profile and market logic. Self-understanding is a personal thing so I'm incapable of adequately covering that here, but I will make one observation about myself. I've noticed that once I started to get a good grasp of market understanding, which has taken me about 2 years, I now spend about the same amount of time working on my self-understanding. You could have a great understanding of the markets, but if you can't execute your trade plan effectively because of your mental/psychological issues, than it will be virtually impossible to become a successful trader. And as we all know, we all have our own "baggage" to deal with. I would say that Market Profile makes up about 25% of my trading, market logic makes up another 25% or so, and self-understanding makes up the remaining 50%. So note, that although I spend a lot of time talking about Market Profile on this forum, it is only a small part of my trading, albeit an important part. As I said above, it has taken me about 2 years just to reach a proficiency level of market understanding. Generally speaking, I believe that learning to trade successfully takes years, because one first has to find a suitable trading approach that fits their personality, and there are many tangents or detours that distract us before we find an approach we like, then it takes time to learn that approach while at the same time having to deal with the mental aspect of the game, and then we have to accumulate experience, which cannot be accomplished in a few weeks or months. Yes, everyone is different, and there may be people out there with an innate trading talent, but for most of us mortals, we just have to work at it very hard, just like doctors, lawyers, and professional athletes do. I also believe that it takes more than a financial incentive to succeed at this, you have to be self-motivated and passionate about this. In my trading, I use bar charts (30-min and daily) and the Market Profile graphic. I will often use a weekly and a monthly bar chart for a different perspective on the market. I no longer use tick charts or 1/5 min bar charts. The reason I don't use them is because there is a danger of focusing too much on the small picture, and as they say, "you miss the forest for the trees," resulting in one catching the small trades, but missing the big ones. If I focus too much on small timeframe charts, I usually miss where the longer timeframes are entering the market, which is critical to understanding the market. The longer timeframes will always trump the shorter timeframes. If the longer timeframes are not dominant in the market, then one can trade off short-term reference areas more effectively. And as I've mentioned in another thread, I do not use traditional technical indicators. I do not consider bar charts or Market Profile an indicator because they are market generated information. But please, let's not debate that here, it really doesn't matter for this discussion. During the trading day, I primarily monitor the developing Market Profile, a 30-min bar chart, and some key levels along with my daily written analysis next to me. I also monitor other markets for diveregences. Obviously, trading off of a 30-min chart is not going to generate many trades per day. My goal is to catch the 2 or 3 bigger moves that usually occur each day. I trade for handles, not ticks, so there are times when I give up a 2-3 point move in my favor and exit a trade that has gone against me or get stopped out. Unfortunately, that's part of the game given the way I play it. I consider myself a discretionary trader as opposed to a mechanical trader. I do not have trade setups that I blindly execute. I do have guidelines that I use, but they are not hard and fast rules. I believe that one of the problems with using technical analysis, is that it is devoid of market context, which is critical to understanding and adapting to the markets. I try to understand what the market is doing and then I try to identify good trade location. Good trade location is key for me as you will see in my subsequent posts. I also see trading as a game of probabilities and try not to focus on the outcome of any one trade, because if I take the trades where the odds are in my favor, the results in the long-term should be positive. Viewing trading this way, takes a lot of pressure off me while trading since I don't put too much importance on any one trade and have less of a need to be right, an issue I still struggle with. When I look at charts, I see trading ranges (balance areas/brackets), breakouts, and trends, and then adjust my trading strategy accordingly. So I trade in all market conditions and Market Profile is a great tool for the way I trade, it provides a lot of market information that is not easily seen in other charts. Finally, I'll end by saying that my trading edge is having an informational edge, i.e. being able to see the markets in a way that most traders don't. I try to align myself with the dominant timeframe in the market (either short-term or long-term traders) and I try to identify good trade location and asymmetric trades, where the reward is higher than the risk and where the odds of me being right are higher than being wrong over the long-term. In my next post, I will discuss the last two trading days from my trading perspective, answer any questions, and then wrap up this thread. The trades that I will be discussing will be hypothetical trades, but I hope that that will still make for a productive discussion. Please note that I am only trying to show a my trading approach with Market Profile and I am not trying to prove anything to anybody or convince anytbody that my way is better than another, but I will provide my opinion which I'm sure will be different than others. I'm looking forward to the discussion.

Attached is a Pit audio lesson given by Ben of TradersAudio. It runs for about an 1 hr and 11 mins. I believe this was a free lesson provided by TTM. Enjoy! PitAudioLesson.wav

For me, anything that is market-generated information (Open, High, Low, Close, and volume) is not an indicator. I also find VolumeJedi's view of price being an indicator interesting, because someone who trades using Market Profile principles trades value, not price. Price is simply an advertising mechanism, i.e. price advertises "price away from value" in balancing markets or "price leading value" in trending markets. But in the end, I don't consider price an indicator. Price and volume are all the markets generate.

I don't have a problem with Market Profile being considered an indicator. Market Profile is simply price bars collapsed to the left to form a statistical distribution (i.e., when using TPOs). It's just another way of viewing price, like PnF charts. This re-organization of price data provides other information not easily accessible from a bar chart, but I still use bar charts for a different perspective. Unlike traditional technical indicators, MP isn't derived from price, it is price - just organized differently than a bar chart or any other type of chart. What matters to me is that MP is real-time, market-generated information that doesn't lag the market and helps me understand market behavior as the market unfolds in a way that traditional technical indicators can't. I guess the real issue I have with technical indicators (excluding MP) is when traders use indicators as the basis for making trading decisions as opposed to using it to support trading decisions based on sound market principles and market understanding. But if a trader gets to the point where (s)he has a good grasp of how markets move, I just don't see that trader requiring the use of a technical indicator. In addition, a technical indicator is just one data point, and on it's own, cannot take into account market context and market condition, which have a lot to say about what trade will work or not in the current market environment.

The Market Profile is a real-time evolving database reflecting unfolding market activity. It allows traders to understand what is happening in the market, if a trader knows how to read it. I don't know any indicator that can do that. For me, as a discretionary trader, Market Profile wins hands down over indicators and it is how I analyze the markets during the trading day. I don't think you need Market Profile to trade successfully, but it does a great job when used for its intended purpose. I don't use indicators. I think that technical indicators are pushed by the industry as a way to make money off of new traders, and new traders flock to them because it makes it easier for them to make trading decisions. In a sense, it shortens the learning curve, but not really. It gives them the false illusion that they "know" how to trade. Indicators are not market-generated information, but the profile is. Over the long-term, I don't think that one can be successful trading with indicators. I think more in-depth market understanding is required than what indicators can provide. The market is just too complex to adhere to simple rules and indicators. Market understanding takes time to develop which is why I think most traders prefer indicators. Having said that, I will say that indicators are probably more useful than Market Profile if a trader wants to use an automated system. In my opinion, as one gains market understanding and experience, the need for technical indicators go away. Anyway, that's my opinion and I'm sure there are many opposing viewpoints, but I guess that's what makes a market. EDIT: Patterns are not mutually exclusive with Market Profile and indicators. I look for patterns in the Market Profile graphic.

Chris, Take a look at this post and see if it helps you. http://www.traderslaboratory.com/forums/46/soultraders-pivots-tradestation-488-6.html#post70460 Regards, Antonio

Inidcator Tip This indicator, as it is currently written, requires that the daily/weekly/monthly numbers be manually entered, otherwise no pivots will appear on the chart. If you don't want to enter the data manually, set the inputs as follows: DailyHigh = HighD(1) DailyLow = LowD(1) DailyClose = CloseD(1) WeeklyHigh = HighW(1) WeeklyLow = LowW(1) WeeklyClose = CloseW(1) MonthlyHigh = HighM(1) MonthlyLow = LowM(1) MonthlyClose = CloseM(1) These parameters can also be changed in the "inputs" section of the code. You will still be able to overwrite the numbers if so desired. Note: Keep in mind that the pivots may be different when using an intraday chart versus a daily/weekly/monthly chart because the close/settle may be different. Hope this helps.

I look for chart patterns but I don't trade them in a vacuum. I like one of the examples that Thales posted in this thread where there was a gap down open and the gap wasn't filled so he traded S/R levels in the direction of the gap. IMO, that's an example of the way to trade. I think understanding market context is essential for successful trading as I've mentioned in my prior post. The patterns I look for in weekly, daily and 30 min bar charts are mostly double tops/bottoms, trading ranges, and trends. I look at weekly and daily bar charts prior to the open for perspective and to identify the market condition in various timeframes. Intraday, I look for patterns in the Market Profile graphic which is what I actually trade off of. It seems that over time my mind has been conditioned to seeing the markets in terms of trading ranges and trends so that I can adjust my trading accordingly. All other patterns are secondary and not as important to me. I do try to stay aware of other patterns and technical analysis indicators, such as trendlines and S/R levels followed by most traders, to help me determine if shorter term traders are dominating the market, which would usually indicate a low confidence market. Identifying low confidence markets allows me to lower my expectations for a trade versus letting the profits run on a high confidence trending day, for example. Pattern recognition and understanding market context are areas where human beings excel over computers. These are areas that can provide a real edge for the trader in the marketplace. Those two concepts dominate my trading. Any trading system that can be automated I avoid like the plague because I know that I can't compete with others with deeper pockets in this arena. Frankly, that trading style just doesn't suit me anyway even as a software developer.

I found this post on "CouldaWouldaShoulda (The Wyckoff Forum)" interesting and have nominated it accordingly for "Topic Of The Month June, 2009"

I thought I'd provide my perspective on trading as well... I used to use support/resistance areas and then monitored price behavior around those areas. Although it intuitively makes sense, I had a tough time trading using this simplistic trading approach. These S/R levels held just enough to keep me thinking that this is a good way to trade profitably over the long term. I've found that when these S/R levels do hold, I would be late to the party if I wait for confirmation once price trades in that area. With the good trades, price is rejected from those areas fairly quickly. When they don't hold, the market gives traders enough time to enter. I think that's because it's normal to see a minor reaction (a pause) around those areas most of the time. My view is that the best trades only give traders a small window of time to enter (opportunity does not last long) and the trade feels uncomfortable at first. If a trade feels comfortable, it most likely isn't a good trade. Another key issue I had with this approach is that most traders see the same S/R levels and use the same technical analysis tools to monitor price, i.e. most traders conduct their business in the same areas at the same time. I didn't feel this gave me an edge over anyone else. Now, I still identify key reference areas in my trading. However, I now try to understand what the market is doing. Which timeframe is dominating the market? Is it a long liquidation break or a short covering rally? Is it a real breakout? What's going through the heads of my competitors? If the longer timeframe is dominating the market, basic technical analysis and short-term S/R levels do not often hold. The longer timeframes do not care about these levels and the longer timeframes trump the shorter timeframes. Same thing with liquidation breaks and short-covering rallies. When the market needs to balance its inventory, S/R levels usually get mowed over during a vicious short-covering rally or liquidation break. Learning to "read the market" is hard work and takes a lot of time, and the learning never ends. However, I believe that having the ability to interpret the market and understand what your competitors are doing/feeling (e.g., feeling the anxiety of shorts or longs before they throw in the towel and cover), provides an informational edge that few traders have. Unlike many rigorous trading systems, this type of edge never goes away since the trader is capable of adapting to the changing markets. I use Market Profile to help me understand market context. Market Profile is only 25% of my trading, another 25% is probably understanding market logic (not based on Market Profile), and 50% is the mental aspect of trading (psychology). I manage risk by identifying good trade location and monitoring for trade continuation using the Market Profile. I constantly strive to think in terms of probabilities and continue to adjust my risk as the odds change. My goal is to always exit a winning or losing trade on my own and not have my protective stop take me out. Obviously, I'm not always successful, but that's my goal. As everyone knows, trading is not easy. I also believe that the markets are complex and require a lot of knowledge and experience to trade consistently profitably, which I work on every day. For me, the journey to become an expert trader is extremely enjoyable. Without a passion for trading, I can't imagine why anyone would choose to trade for a living. Antonio

Hi gifropan, You should try to determine why you're missing your initial trade entries if it's a recurring pattern. There are many reasons for this, but I think one prevalent reason is the following. Many times traders hesitate to pull the trigger because they're looking for more trade confirmation. As others have said, this could be due to lack of confidence in your system or yourself as a trader, which I think is usually resolved with experience. Experience builds confidence and knowledge, which is why I think it takes years to become a successful trader. Another reason may be a trader's struggle to deal with the uncertainty that is inherent in trading and will always exist. If this is the case, then I think you simply need to embrace uncertainty as it is uncertainty that creates opportunities in the marketplace, otherwise everyone would know what something is worth. One thing that took me a while to learn was that the best trades do not give a trader much time to enter. Hesitate and the opportunity is most likely gone (i.e., the trade moves away from your entry very quickly). If a trade gives you a lot of time to enter, than it most likely isn't a very good trade and everyone already sees it - there's no edge if everyone sees the same trade. I don't know if this applies to you or not, but these were some issues that I struggled with and maybe you can relate to them as well. Regards, Antonio

When I embraced the fact that trading is a game of probability and started to think in terms of probabilities/odds instead of trying to predict the market.

Here's how I look at it as a discretionary trader. I try to view trading as a game of probabilities. For example, if you're long in an uptrend and volume starts to decrease, the odds of continuation have lessened, it doesn't mean that the up move is over, so I will take some longs off the table since the risk has increased. Now, let's say the move continues up, and the profile starts to fatten out, the odds have further decreased for continuation, and at this point, I will probably take off the balance of my position. I don't care if it continues up or not because the risk of staying long has substantially increased. Or let's say that the trader is long in an uptrend and volume is increasing and the profile remains elongated, I don't see any reason to scale out some simply because it has reached a pre-defined level. The odds for continuation are still good. There are times when it makes sense to me to simply get out of a trade all at once. For example, you're long because you anticipated a short covering rally which occurs, then a huge up bar occurs on very high volume, indicating that the last of the short, weak hands have covered. At that time, i would just get out completely. The odds are extremely high of the market settling back a bit, at least. I guess what I'm saying is that it depends on the market conditions. I don't think that a trader should exit all their trades the same way all the time, i.e. "scale out" or be "all out" all of the time. Generally speaking, I think one needs to be more flexible when trading the markets, meaning that a trader needs to adjust their position as the market unfolds to keep risk in check. But I know that traders like to have exact rules that they can follow all the time, I just don't think the market works that way. Again, I'm talking from the perspective of a discretionary trader.

I don't generally trade the Emini S&P overnight, but I do use the overnight session to position myself for a trade that I've been waiting for. After doing my daily preparation at the end of each trading day, I identify several potential trading scenarios for the next day. If one of those scenarios set up in the overnight session, I'll take it. I'm not trading at the same level I do during regular hours - the volume is just too thin. Also worth noting is that I don't trade for ticks, I trade for multiple handles, so I would usually put my stop in and go back to sleep. But again, I don't do this often.

Short-term traders should strive for good trade location. Good trade location means that your entry is close to a reference level that you can lean on. If the market trades through that reference level by a few ticks, then you don't want that trade anymore. You should get out. For example, let's say you have a 5-day trading range and overnight the market breaks out of the trading range and gaps open higher. The market starts to move with confidence to the upside and then pulls back to the open. As a short-term trader, I would enter near the open, but I don't want the market to trade through the opening print, because if it does it will probably try to fill the gap. My stop would be a few ticks below the open. So I entered the long trade based on the break out and the high confidence opening. Stop placement for longer term trades is not as simple.

Assuming that the code is being copied into Multicharts exactly as you displayed it, then everything looks fine to me. It's hard to debug this without Multicharts. The only other thing I would suggest is that if it's complaining that variable "i" has already been defined, then rename it to something else. For example, change "i" to "x" throughout the code. Tams, already suggested renaming the variable at line 23. Did you try it?