MC

Nice post. I think it's very wise to be cautious on that flag within that monster WRB. JMHO I think brief consolidation on a heavy trender can be a good time to get optimum entries for either side as the WRB range should be tested out or close enough to it. Of course entry in the middle of the WRB is a gamble but the extremes are a wise play with a tight stop. 3 ways to play this setup could be... 1) Enter during consolidation near the WRB extremes. (highs for short, lows for long) (most aggressive but most profit potential with a tight stop) 2) Wait for a breakout of the WRB range. (2nd most aggressive trying to catch momo) 3) Wait for a pullback test at the WRB's breakout level to see if it holds up. (Least aggressive also with a decent stop) I prefer number 1 myself. I try to analyze the background and pick my side, get in at the WRB extreme and just set the stop. Getting in in the chop can be double edged sword though, especially on gaps. You could nail a gap in your favor but what if you're wrong and it gaps against you...it is a VERY aggressive trading style. Number 2 is probably the most sound since it's momentum that moves price, and price action is what pays us as traders. Just be aware of fakeouts. Number 3 is risky only in the sense that you could miss the move. There isn't always a test of the breakout level and it could sail away without you.

SUP buddy? Hope all is well with you. I was bearish on USO with all that volume at the first high in the island. Here's a chart I did the night before it gapped up a 2nd time and then free fell all day. Yesterdays volume profile was incredibly balanced. I'm finding that most times after such a tight balancing day the next direction chosen will have lots of emotion and movement so watch her today for some possible crazy moves. There's that open gap down at just below $104 that could suck price down if the island is broken to the downside.

HLM, whom I respect highly, has already confirmed my thoughts for me (though he worded it much better than I did). I'd take his word over either of ours any day. We are trading a derivative contract. There are times when the futures being almost a 24 hour contract will influence the DJI and it's underlying stocks as well as vice versa. Why does the YM have a different closing price than the DJI if it's all predetermined by the root index. 12,093 close on regular market hours for the YM and 12,261 for the DJI. They simply don't move in exact harmony, that's undeniable. And the jab at my signature...it describes how ALL markets including the YM work. The markets move to seek out accepted perceived value. If the YM had no pursuit of it's own value and it's fate was sealed in the DJI stone then nobody would bother trading it. The "perceived" part is because they are paper assets and have no true tangible value. But enough on all that jazz...this horse is dead and already had it's carcass picked to the bones. We know where you stand, and I don't have intentions to argue or belabor my beliefs any further. Cards are all on the table and this thread can be used to "help people see the whole picture" should they choose to read it. I still want to see you post some of your trade setups or concepts. I am honestly interested in everyones approach to actually trading the markets. Much moreso than their thoughts on how tangled the markets web is.

I'm waiting on you to share some of those ideas and/or setups. Thusfar it's all seemingly been a ploy to delve into certain intricacies of the markets. :\

I have to borrow the ice cream one for my place. I just can't resist...it's too fitting of the 90% that fail. :o

Cool...hope this setup helps you stay on the right side of the trade. http://tradersbase.com/tbimages/mc/VIX-TRIN.jpg Check out this chart to see what I think of the TRIN. IMO VIX is way better, I do run the TRIN but only to see if it closes outside the extremes (2.0 and .6). Many use the TRIN as something inverse to the market to try and spot trends, but again JMHO VIX shows trends and moves much more clear. BTW...I also run an $ADVN comparison with $DECN to compare advancing issues to declining in the same fashion as the UVOL technique. If lil old Think or Swim platform can do the comparison I'm sure you can do it on the beast esignal. I've never used esignal though so I'll be of little help there. You just need to do a comparison of the 2 tickers though. I'm sure somebody here uses Esig and could help you out if comparison isn't enough.

You can either click on the quote button of the post you want to quote or you can do BB code for quote. BBcode you just Cap what you want to show in quotes with [ quote=postersname] and then end in [ /quote]. Remove the spaces before quote and / in the above example though. I had to add a space so it would post and not show as a quote. As for the rest of the stuff...I didn't say anything about a value of 0 only volume being 0. It would look like a weekend where it didn't trade basically. LOL My point was meant to be that the YM is a separate entity and just because the 30 DJI stocks didn't trade doesn't mean the YM won't trade or move. If they removed the DOW as an index then the YM could cease to exist I suppose. But again this is alot of he said she said and I'm tired of spending brainwaves on it. PM me if you need more help on the quote thing.

Interesting point. That goes to further show that they are tied together. That was kind of what I was going for when talking about open interest. Everything moves in relative terms, to its own past moves given the same volume and/or in relation to other markets and how they move on their relative volume.

No offense taken here, and I don't think others are offended either. I know what your saying, but what if for arguments sake the 30 tickers on the DOW had 0 volume for a day. Does that mean that the YM is not allowed to trade or will have had 0 volume also? Futures may track an underlying index and in turn the underlying stocks...but it's a separate contract and trades as such, albeit somewhat harmoniously with the underlying issues. Would there be many trading something where it's underlying had 0 volume, of course not but it could still have traded. The DJI on the other hand would have 0 volume because that's a raw index tracking those 30 stocks. So I guess in another twist of convolution we need to separate futures, ETF's and raw indices? :doh: :o

If I read into that right, I think you're talking of open interest on futures in comparison to the float on the stocks that make up the underlying index...yes? That's the thing with volume on futures...there is no float really is there? On stocks you can see when most the float has traded hands and it's easier to spot an imbalance. On futures you could have a showing of no demand only to have it blast up in your face. There is the COT report or what not to show open interest on futures...has anyone used that successfully that cares to comment?

I didn't mean to hijack or confuse...I'll bow out of both threads, sorry guys. TL is getting way too "deep" for me lately. People are over thinking everything and it's turning into a battle of the minds rather than traders helping other traders learn. I think I just need to stay focused on my screen time and spend less time trying to put what I see and feel into words on boards. Good luck fellas.

I don't fully agree...I think you're taking an overly simple approach as to what drives a broad index. There's more to it than an index moving JUST because of the stocks it's comprised of. Of course probably none of this discussion will help anyone profit from the markets, nor do I think about this stuff myself till now. But... I think things are so intertwined that emotion on the YM CAN and WILL effect the price of individual stocks making up the underlying DOW. Just the same, a sell off on a top performer in the DOW will trigger selling in other DOW tickers which will in turn pull that market lower. The YM being down will surely effect the ES as well as tickers in the S&P. So on and so forth. You could kill yourself thinking or debating the intricacies of the markets and how they are linked. This is also why I like trading the indicies, futures on them or ETF's. They ARE the index rather than playing AAPL and wondering if the NAS will be cooperating with my position on AAPL. Anyhow, I like to be simple on things...I don't care about the order of planets or magnetic pull anymore than I care about the why the market is going up. The market is way too big for me to understand as a whole, luckily you can profit from understanding a small slice and sticking to that piece of the pie though. Good luck, I hope you get the answer you're looking for.

Eiger...B is incredibly well likened to the markets most profitable approach. Good analogy. And the rest was good food for thought as well.

Sorry, I'm referring to the original thread FW has quoted from. James depicted a double top basically, with traits showing smart money had sold out of the move. I see demand as smart money's willingness to continue to participate (aka not sell into) prices auctioning higher. Typical traders (aka dumb money) just see higher prices as demand and jump in with no thought of distribution. To them that burst of volume (which was in actuality pros selling) was "demand" and was bullish. That was James original point as I understood it. I guess in thinking about this... Do you believe there is only one S&D chain in the market?

I respect your opinion and agree, though I'm not sure I see it 100% the same. Either way you slice it, we're looking for a continuation or dried up volume leading to a reversal. The reversal allows the auction to reverse and seek out higher perceived value through waves or cycles. That's the part I think we agree on. I don't agree that looking to see where professional money (big volume) is NOT playing is complex. This is the simple pattern James showed earlier...it shows when big money has offloaded their position to the retail herd. This test, or a similar test with lower volume is built into your TA though it seems you make an effort to not think about the "why" behind volume having dried up. Same result, different mindset is all. Big money drives supply and demand so to ride their coattails is the wise thing to do IMO. If they deem a price level too high, and therefore sell into a price. And that price then tests again on low volume showing pros aren't backing it, it's logical to short that price. Again, we are saying the same thing, I'm just adding the thought of WHY behind it where you don't worry about the why.

I think wise traders trade where the volume was seen. This puts you on the pro's coattails. Pro money moves markets, they also leave footprints. Follow the trail of their money that they left behind in the retail herds hands.

I think he mainly trades the nikkei and the ES now if I'm not mistaken. If I'm trading the YM though I would trade the YM, not the 30 stocks that make up the underlying. I'm a simplistic type, I don't want to convolute the issue further. I've been there and done that my first year on the market with indicators and other trial n' error methods. :crap: I do use UVOL compared to DVOL as an indicator for the overall health of the US markets. And since we've talked about how they move in tandem, what works in one should work in the others as well. It's no grail, but it helps me spot hidden selling like what James is pointing out on the charts below. I can see hidden selling on charts and this gives me an added level of comfort is all. I could trade fine without it I'm sure.

The missing piece of info is WHO is showing demand in James example. To profit it's not about what retail or other dopey investors do, it's about what the smart money did. Demand isn't defined by volume alone, it's what's being done with that volume. The retail demand was there simply because the prices moved higher. That's why volume itself doesn't always dictate demand by definition. JMHO

Pure gold comments, especially the last part about human greed.

1) Why does the ES move up or down? The market moves because it HAS to. Moving is how it seeks out and finds accepted value. How does it move though, well big money accumulates on the way down, then sells their shares (and shorts) at the top to people chasing news. Then rinse and repeat 2) Doesn't the S&P move according to the movement of the 500 stocks in this market? In theory yes, though probably not ever perfectly to the tick. All the markets tend to have alot to do with each other in some way shape or form. 3) Why does the ES (S&P), the YM (Dow), and the ER (Russel) all move in rhythm with each other? They are controlled by people with the same objective I suppose. See above answer, ALL markets are tied together whether inverse or in tandem relationships to another market. 4) Doesn't the YM (Dow) and the ER (Russel) also move up or down accoding to the individual stocks represented in their markets? Futures contracts are based on movements of the underlying, though they do seem to differ in numbers to some extent. That could be since it's a future contract and not based on the here and now? 5) Isn't the ES traded in an auction in the "pit"?. 6) Is the YM and the ER traded in an auction in the "pit"? Not sure what were you going for on 5 and 6. What's the thought about pit sessions? As a whole, I think these questions are way too granular. Honestly, who cares why rice is more expensive in one store than another? Shop wherever you can get it cheaper. Trade a contract that fits your risk tolerance and personality. One that flows a way you can feel and understand best. Just understanding it's an auction is enough, then seek times where supply and demand are mis-balanced and take advantage of the emotional trading of others. All JMHO

I'm sure it must, since they have to pay the royalties. I have no need for MP, I just want the volume by price setup. I can see in candles what the order of events was. I'm trying both on demo now and I'm fairly swamped by both. Both are super flexible and have almost too many options if that's possible. :o I'm used to Think or swims platform which I like but it lacks some things I really want. Especially ease of use and modification of drawing tools. Oh well time to suck up learning curve x2 and then decide which to go with. I thought Tradestation was difficult. :\

For me it all comes down to data compatibility and the cost of the data. I'm mostly focused on the futures contracts but would like stock data as well since I do analysis on them from time to time. You are right though, with the MP data which is needed it costs more for Investor/RT. I like the presentation better of the profiles on RT so I need to decide is that worth the extra 20 per month. I appreciate the help and thoughts guys.

Exactly what I was looking for. Any chance you could screenshot the settings and PM or post em here? I have a demo of ensign I want to try and tinker with but honestly get lost in all the options and settings. Much appreciated.

Can ensign do a complex merge like this? I really need this capability but can't afford the more pricey platforms yet. Thanks Edit to clarify--- It's not so much the platform thats pricey, its more the data feed. Ensign works with Infinity AT's feed so I would be free there.

Once I can afford to trade for a living I'll be using RT. Maybe I should ask myself how I cannot afford to be using your software? You're posts here just blow me away with it's capabilities. Any chance of a group rate for TL members? Thanks for sharing all these setups.