steve46

Hello Praveensuri Thanks for your kind words and your thoughtful questions First let me say that each time period becomes critically important (more so than other time periods) as it comes to a close. Therefore at the close of a week, the weekly time based pivots (particularly the open) becomes quite important. Having said that, please also realize that today is options expiry (quad options expiration) and that causes dislocations in the markets because there are participants who are interested in the short term advantages that can be gotten by moving price up or down so that they can A.) "get paid" for the options positions they hold or conversely B.) protect the options positions they have sold (for credit positions that they may hold hoping they expire "out of the money"). For this and other reasons, the normal effects of time based pivots are skewed somewhat. The "short" answer is that the closer we get to the end of a time period, the more likely it is that institutions will step in, although it can happen at any time.... Over in the thread "Trading the Extremes" I have commented on the fact that on my ES chart, my supply/demand nodes worked very nicely. If you look at my last post there, you will see that price tested down to a node (to the tick) and then bounced off it to the upside for a nice profit. My point is that my system (which I talk about in this thread) is composed of several elements, including time based pivots AND supply/demand analysis. While you can use them separately if you wish, I prefer to use them together, because when they coincide, that "confluence" produces a higher probability entry...I realize it is not part of your question to me, but I wanted to make it clear, hoping it helps you with your trading. Best Regards Steve

I suggest gentlemen, that there are many more "things" in the universe, than any of us can imagine, however I have yet to see "code" that can adjust and adapt like an experienced skilled human being. "Code" of and by itself cannot "think"....maybe one day but not today... Finally, take a look at the screen capture....price tests these horizontal lines (in my class we call them Supply/Demand "insets") TO THE TICK. They were put in place last monday.....how did I know that price would visit that place and how would a trader use them to make a buck...I suggest humbly or not, that YOU Mr. Blume and your programmers can't do this...and because I have this in place and I know it is that accurate (almost to the tick) I CAN in fact, read the tape, evaluate ALL the data points and find these entries day after day....been doing it for years....and I don't have to "adjust my resolution" or warn my clients that an indicator signal is "up to 7 minutes early".... Its a strange and wonderful world isn't it...? You all have a nice weekend

The scenario I was taught is simple. The novice or retail trader comes in late trying to obtain favorable entry on the short side. The bid is "replenished" to use your term, but I think it is not just automated execution at work here. The selling volume is insufficient to overcome buying interest, and the bid is "held". Once the last seller is executed, the next buyer sends the market up...and the low is established. Those of us who read the tape can see this happen real time as the tick drops and the time & sales shows the sellers trying to move it down. A "tug of war" ensues as the time and sales oscillates from red to green and back again.. Monitoring price you see that sellers cannot overcome the bid volume. They are throwing everything they have at it, but the selling volume is absorbed without moving price down appreciably. Once you see that you know its time to buy.

Well I don't know where to begin...first institutions decide when to move inventory depending on things that I am not privy to....I was an order taker not a decsion maker. So there's a limit to what I know about that... What I do know is that institutions are likely to come into the market with size at specific turning points. That is the basis for time-based pivots. Its easy to see when and where this happens (in other words you don't have to take my (or anyone's) word for that)...also there used to be a commercial data base that listed the activity of commercial traders by code..so one could in effect see exactly where and when institutions and speculators were active...its no mystery... To your point, yes institutions do on ocasion move size and yes it does take a while to place that inventory, or to liquidate it...but not months certainly, more like a week to 10 days depending on the size of the position and the related hedges and options positions. Today was a good example in that price retraced to an area that was formerly a yearly low. At that point I can say with some confidence that many institutions start to "get interested" because some of them have positions dating back to that time, and some are interested (for tax reasons among others) in defending those prices. Other institutions and speculators look at those prices as representative of "wholesale value" thus they are willing to step in and try to mark it up hoping that others will agree. It is a noisy market and there are myriad reasons why these things happen, but in a market dominated by profesional interests, these are some of the motivations for institutions to take action...both intraday and on a longer time frame. As an aside, I have no motivation myself to distort the role of institutions (or speculators for that matter) in the markets. I'm not selling indicators.....just the opposite... Hope this helps you Steve

The comment above is as close to the truth as can be. If you don't find a way to get an education, you are going to fail (you are going to lose money) If you find a way to get an education (a real challenge in this environment) you will still lose money but, you will have a way to get it back.... that is the difference. Now the question is where do you look to get the education you need? and how much should it cost? You might start (at no cost) by reading my thread "an institutional look at the S&P futures" Best Regards Steve

Interesting and amusing The gentleman's indicator gives you "up to a 7 minute warning"?........ Well, thats a nice way spin it but no sale here....the fact is that longer time frame participants are using bigger stops (most of the professionals I know are using about 6 points for the S&P contract). As a result they enter differently (scaling in and starting that process earlier) than the retail crowd (who are usually late the party). So it is more likely that the resolution of this indicator is not very good, and again, you have to either read the tape...or take a bigger stop yourself...(traders choice)... As with most things in this world, there is a trade-off....you take signals from an indicator and you have to give up accuracy, or you develop your own skills...Hey I get it...why work at it, if you can buy it..... Please continue as you were folks. Jurotraderslab....the reason you have people hitting the bid at the bottom is that they are making the cardinal mistake of A.)entering late hoping for continuation.and B.) not taking the time to see where in the past, the previous uptrend originated This happens all the time because there are both institutional participants (some of whom have similar training) and short term participants who have different training and beliefs....What you see is how it plays out when the short time frame players don't do their homework....plain and simple.

Just thought I would offer this comment I am doing the same thing every day, I use supply & demand analysis of the chart (the chart shows you everything you need), and I incorporate time based pivots to show me where the high probability entry points are...When price hits these points, we read the tape.... This morning we had 15 ES points right off the open...(the only software required for this is located between my eyes and ears) At the end of the day, you can see the reversal down at 1252.25. If you took the trade, you got another 10 So, I realize that what most folks want is to be told when to buy or sell...no problem, God Bless and go right ahead with that...I think I will continue to do it this way... Cheers

Yes Biko, the logic is off and likely the gentleman is a shill. The way he phrases his comment is meant to suggest that he is making a lot of money, and that we should all be looking at this website because he "knows" that others are doing this as well... You are correct, this is a difficult profession. Recently I have tried to help several retail traders so I know just how difficult it is...the first hurdle is getting a tradable system in place and learning to use the tools, the next is probably the most difficult and that is the psychological issues. The truth of the matter is that most retail traders are unprepared to accept risk (they simply can't accept loss/they are risk "intolerant")...It takes a while to show them that you have learn to "lose" before you can win in this game...I try to do this in steps....first I demonstrate what it is like to put on consistently winning trades....then as we move forward I show them that when you trade very conservatively.....although you don't lose much....you miss important opportunities to profit...and the final hurdle is showing them how to "compromise" and to trade with "controlled agression"...so that they catch as many important opportunities as they can, given their risk tolerance....Based on what I have seen recently THIS is the critical issue, not setups, not indicators, not systems, but learning how to trade aggresively, how to tolerate minimal losses and still come out with a profit at the end of each time period...It sounds simple but in reality it is THE LIMITING FACTOR for retail traders.... This is why when I read like the ones about Shadow Traders, I am skeptical... Good luck people Steve

Well thats nice, and it all looks very impressive indeed...except that it is only part of the picture...you see if one or more institutional participants decides to put money to work...they WILL move the market, no matter what your software says about the degree of imbalance....look what happened on Friday...as the market came down to test the yearly open......participants were trying to mark it down bigtime, and they were winning, until somebody decided (at around 1263.50) "thats enough"...thats when size came in to move it back up..At this point in time, no one has written a program that anticipates when a institutional player is going to make the decision to move capital...and I am pretty sure no one is going to be able to do that in the foreseeable future.

For me and my student the process is a bit different. We begin with supply/demand analysis of charts Once we have overhead supply and underlying demand in place for our market, we look at the previous day, week and month We also look at pending economic reports and high impact events We look at average true range We anotate our worksheets and develop a set of working numbers that correspond to our suppy/demand analysis. Based on these worksheet numbers and the location of supply & demand we locate our first two trades prior the open of the market. We trade the market, take our trades and do our P/L Rinse and repeat

In a nutshell I only trade extremes based on standard deviation and supply/demand analysis (related to order flow)...I can use any chart system that allows me to go back in time far enough to locate areas of previous balance and imbalance just prior to a significant move up or down. It takes a while to get used to but basically you can see where participants have decided to put money to work. Once you have that in place you look at where price went after that move...I want to see a significant excursion away from that origin, followed by a basing action and then a retrace to that point...the first test is what I look for. They are high probability entry points, AND they usually deliver significant profits in either direction (although I will prefer the trend side). It works on any time frame, but the longer the time frame the bigger the profit target (since risk and reward are always proportional). Most of the hardware and software required to to do this is located between your ears. Good luck Steve

What most retail traders call support and resistance amounts to lines in the sand...The truth of the matter is that for any liquid market there are both short time frame and longer time frame participants who have positions in progress and you have institutional participants who not only have inventory in place but usually a group of employees who trade around those positions. Finally each group views risk differently and therefore you have different stop losses in place. The reason I am commenting is because the "conventional view" of support & resistance simply won't get you very far...In my opinion what you need to do is to learn to see areas or "nodes" of supply & demand...These nodes vary in size depending on the time frame and they require that you adjust your orientation from "lines in the sand" to areas of balance and imbalance" (related to order flow)...You can see some of this in my thread "An Institutional Look at the S&P Futures".. Good luck Steve

and of course the hard question to answer is "what to do when nothing is working (you're in a drawdown or your account is significantly lower on the year)...how long do you let it go before re-evaluating the strategy and asking 1. Is my strategy still valid 2. Is his drawdown "nomal" and how long can I expect it to last 3. Am I executing with discipline (if "yes", back to question #1) Most skille participants have at least two or more different strategies that they are trading concurrently. This allows them to view (and evaluate) each as an independent profit center and to obtain some measure of diversification. Still the questions have to be answered if the trader wants to have a sustainable business.

Sorry I missed one element of your question I have some experience with "rooms" that use Market Profile. Frankly I might still be using Market Profile or Volume Profile, but for one lucky day when I ran into an old gentleman (now deceased) willing to show me a entirely different method of trading...I think a person can make money with market profile if they are willing to handle the drawdowns....One of the benefits of my method is that I can manage risk in more effiecient manner...and I am able to find favorable entry more often. simple as that... Good luck Steve

I try to be "low tech" whenever possible. I prefer the hands on approach. My worksheet is something that I do manually every night on a sheet of paper. Works for me. I use Esignal (the newest version) and I don't use market profile other than the basic "value area high and low" (its not necessary in my system).

I talk about time-based pivots in my thread "An Institutional Look at the S&P Futures". Basically, TBP form the profit goals that many if not most institutional traders use on a yearly basis. It has to do in part, with how bonus money is calculated. Coincidentally we had a test of one of the most important time-based pivots on Friday. That being the yearly open at 1263.50 I have attached a chart so that you can see the test and strong counter reaction (a 10 point move for those ready to enter long).... Time based pivots are one of the cornerstones of my method. Good luck Steve

When we talk about a segmented data series, the idea of a distribution stands independent of time. So all we want is a spread of data that approximates a standard distribution about a center point. Any centerpoint will do as long as it approximates a median value of that data. For example on an intraday basis you might choose a VWAP (I would not use that for many reasons) however I will often use a 20 period ema (this only one reason why John Bollinger's invention is so valuable). I realize that there are many who would argue, and yet what I find when I actually test (and I do the testing at intervals) is that this method is "close enough" so that when you get a test of the extreme values, you often see a high probability "reaction" or retracement that is tradable...the probability of obtaining favorable entry can be enhanced by using a couple of methods (confluence for one)... By the way, the idea of "value" (for professionals) is much different than for retail traders. Unlike the concept from Market Profile, professional traders look at direction first and then location within a specific time frame, to determine whether a price or series is defined as wholesale or retail. This is why amateurs are willing to buy at prices where professionals are selling...and vice versa.

Yes TradeRunner, the gentleman does seem very confused

I assume he probably IS "just using the data"...thats what I am doing The first time period IS in fact the time to process the overnight and MOC orders that originate primarily from retail (when retail folks are in the market)....there is also a component of MOC orders from longer time frame speculators and system traders, so it is not entirely homogeneous...As a result the 15 time frame is probably subject to revision The second time frame is in my opinion the time frame in which most institutions come in to "shear the sheep" and that corresponds to the release of some (though not all) economic reports. Generally speaking you have "informed" participants pre-positioned for the report releases by this time...and the rest of the crowd is just reacting.... thats the way its always been. Depending on the significance of a report, or pending news (earnings, or political news) the balance of the day can be summed up as programmed execution, and speculators calling the shots until such time as the longer time frame crowd sees either A.) an opportunity to buy below value (at wholesale prices) or B.) an opportunity to sell above value (at retail prices)...and of course you have the rest of the informed participants either tagging along or initiating trades if they see price at the border of either scenario... Those of us using time-based pivots and supply demand analysis spend our time, watching the larger players move the market to places where we can lean on or front run specific numbers. Since most of us know what the numbers are, it has become a game of "tug of war" as each side tries to move the market while managing risk... Its been a fun year... Steve

Yes Josh, the articles by Perls are good and if you understand the basis, you have a good way to proceed...it takes a while to get it however, since most folks are a bit math challenged. Another simple way to proceed is to frame your trades around a standard ("normal") statistical distribution (notice I am not saying gaussian, but standard, there is a difference). You can use Bollinger Bands or you can simply create an indicator yourself if you have some programming skillls. If you go one step further and combine the characteristics of a standard (normal) distribution with supply/demand analysis and time based pivots, what you get is a very high probability system for finding favorable entries...which is what its all about (that and managing risk). So as you can see there are several ways to approach the problem, all you have to do is THINK about it and approach it in a common sense manner. Good luck Steve

I have a bit of a problem with replies like the ones above...to me something is wrong with this picture. First of all, I could care less whether a "70 year old man" is trading for 10 minutes and making thousands of dollars....that to me sounds suspicious right off the bat...who is that naive that they believe that kind of statement? Follow that right away with a glowing review from the same person (with 3 posts)....I am more likely to believe the earlier comments from folks who participate here on a regular basis... Finally, after many years of trading on both sides of the fence (as an amateur and as a professional) If there was a way to make thousands of dollars in 10 minutes on a consistent basis, I think I would have heard about it by now..its a job and a profession folks...it takes work, skill, talent, perseverance, and more... and (like golf) still makes you crazy on certain days...the rest of the commentary just isn't realistic in my judgement. I can think of several alternatives Best Regards Steve

I have been using "GoToMeeting" for my training class and have noticed a slight lag in the audio portion, but no discernible lag in the cursor movement. So when I circle a series of prices on a chart everyone seems to see it in real time (or very close to it)...I noticed more lag in other mediums but have not had extensive experience with alternatives. Would be interested in what you think the best webinar software choice are...(if you have any opinion). thanks

Yes indeed I am one of those people using all of the above. Charts used for monitoring but really not necessary as I am interested in specific "numbers"

You can't (focus continuously for hours)...so what we do is use our time based pivots and supply demand analysis to tell us when to focus and when we can "relax"... We also take a brief break during the NYSE lunch hour and at specific times of the year, we exit the markets one hour prior to the end of RTH Hope this helps Steve

No problem "Mr. Hoffman", I'll be on my way now....thanks for the interview. We all enjoyed it..