[MP] Trading with Market Profile

[trader_74 10]

hi marketguy

where i can find this free webinar on MP

please drop a link

thanks alot

[alleyb 10]

Soul Trader. Thanks for your kind words

[subq 10]

Thanks Shreem. Though I dont consider my MP knowledge extended at all.... traders like Alex Benjamin (alleyb) are the real experts trading solely of MP charts. I grabbed what was useful for me and learned in depth on how to utilize them into trading strategies. I dont think I follow all concepts of MP to the dot... MP helps me create a roadmap for the trading day. This comes in forms of pattern recognition, tails, profile shapes, IB extensions, etc.. But it is still a tool for me as a candlestick & volume chart comes top priority for me. Understanding the combination/relationship between price & volume is far superior that any method in my opinion.

 

Just learn the sections from Steidlmayer and Dalton where they get into profile types/day types & opening types by heart. That information is gold.

 

I suppose this is strictly subjective, but in my MP trading, I have actually culled through what I personally don't find relative and just work off non-traditional core parts of market profile (i.e., shape, POC). I find a lot of the other components aren't really applicable in today's market...from my understanding, even Steidlemeyer himself has zeroed in on the POC and using profiles dynamically. It's not a magic bullet...but it is a very unique way to view price action (which I personally think can give an edge if understood).

[Soultrader 12]

Please see todays market recap. Thanks.

 

TL! Videos

[Soultrader 12]

Short video for today.

 

TL! Videos

[kuky969 10]

Hi Soul

please I would like hear your opinion.I am a little confused

In Daltons book Mind over market on 237 page he writes some situations in Region A of figure 4-98. Point 1 confirmed the excess.Excess in this case is a long term selling tail and selling gap. OK, gap is obvious but selling tail no .Please see my atteched picture.

Point 5 in same figure is not clear too.My opinion is that selling gap is form of excess but not confirmed in next day because responsive buyers entered and closed market near its high.Why Dalton writes that at point 5 aggresive other time frame buyers CONFIRMING the selling excess ??? . What is in this case exactly a selling excess??? -- selling gap or bar in red circle on my second picture ??? I think this bar is buying tail.

Thank you for your opinion.

[bundraider 10]

Morning everyone, just thought I would join in the forum on Market Profile.

I trade the Bunds, outrights, and use MP and some candle stick setups. Always keen to learn more and share ideas.

 

 

Happy trading:)

[robb 10]

Hello everyone...

 

Can someone expand upon MP and the 80% rule? I am familiar with the details, I am wondering if anyone has found success with this rule in its simpleness or did you have to tweak it a bit.

 

If you care to share any ideas that would be great.....I trade ZB...I am 3 months into market profile learning, so if you have any details about trading the bonds using MP...chime in.

 

Thanks.

[Soultrader 12]

Hi Soul

please I would like hear your opinion.I am a little confused

In Daltons book Mind over market on 237 page he writes some situations in Region A of figure 4-98. Point 1 confirmed the excess.Excess in this case is a long term selling tail and selling gap. OK, gap is obvious but selling tail no .Please see my atteched picture.

Point 5 in same figure is not clear too.My opinion is that selling gap is form of excess but not confirmed in next day because responsive buyers entered and closed market near its high.Why Dalton writes that at point 5 aggresive other time frame buyers CONFIRMING the selling excess ??? . What is in this case exactly a selling excess??? -- selling gap or bar in red circle on my second picture ??? I think this bar is buying tail.

Thank you for your opinion.

 

Hi kuky,

 

Sorry for getting back to you late. I would gladly give you some input... however, I have trouble understanding your drawing. Could you please post a chart instead as it will make things easier? Thanks

[Soultrader 12]

Hello everyone...

 

Can someone expand upon MP and the 80% rule? I am familiar with the details, I am wondering if anyone has found success with this rule in its simpleness or did you have to tweak it a bit.

 

If you care to share any ideas that would be great.....I trade ZB...I am 3 months into market profile learning, so if you have any details about trading the bonds using MP...chime in.

 

Thanks.

 

The 80% rule is misleading in my opinion. Whether it be 70, 80, or 90%... success comes only if you can apply it accordingly in your trading and make money of it. There is really nothing to tweak.

 

The way I apply this concept is to avoid going long once price has fallen into value. But this rule alone is too narrow and fail to grab the bigger picture of price action. You need to understand what is causing price to decline into value or rise into value.... what clues are left above/below/within value, etc...

 

Over the course of 1-2 years... my use of market profile has expanded beyond just simply value area rules whether it be 80% or using vah and val as pivots. What I have found valuable in my course of mp education is studying profile patterns and type of days; being able to recognize profile shapes, understanding price action above/below the IB, recognizing the psych of traders through profiles, etc.... Once you feel like you know mp, dig deeper. Study it again as if you are just starting out on the learning curve again. Become proficient enough to be able to spot potential trading setups just by glimpsing at a market profile chart.

[robb 10]

Wow, great answer Soul.

Thanks for the help....would you recommend I lose the traditional charts or keep them on another screen? Can they be useful or detrimental with market profile?

 

Awesome forum!

[Hlm 10]

Can someone expand upon MP and the 80% rule? I am familiar with the details, I am wondering if anyone has found success with this rule in its simpleness or did you have to tweak it a bit.

Nothing to tweak. It's just a statistic that works well with keeping you in a trade if you know the other concepts that Soultrader listed. However, I believe that those other concepts are also very easy to understand and are many times over complicated as well. Once you understand them it just goes back to screen time - screen time - screen time.

[Soultrader 12]

Wow, great answer Soul.

Thanks for the help....would you recommend I lose the traditional charts or keep them on another screen? Can they be useful or detrimental with market profile?

 

Awesome forum!

 

Its up to you. There are traders that are able to trade successfully with just a market profile chart. I on the other hand, need a candlestick chart with volume. My settings: 5min & 10min candlestick chart with volume and 30min mp.

[BlowFish 10]

I came across the 80% rule in 'the secrets of traders'. (side note - lord knows I have bought some junk in my time).

 

Simply stated it purports that if price enters value from one side it will hit the other side 80% of the time. Their 80% trade was simply to short if price crosses down below VAH with a target VAL. Opposite way round for a long.

 

Cheers.

[Minetoo 10]

Blowfish: Have you investigated the application of this rule intraday? IOW, about 1-2 hours after the opening bell seeing price action traverse the same day's new value area?

[lasker08 10]

Here's a link to a video from Market Delta that deals a fair bit with another variation of the 80% rule:

http://www.marketdelta.com/recordings/webinars/011508Webinar.html

[BlowFish 10]

Short answer is No. The secrets of traders stuff never 'spoke' to me. Some of it seemed out and out bogus. Of the 8 or so set ups this one seemed to have some merit but I quickly realised it was going to be a $xxxx dollar bookend. There was another one loosely based on MP but using first 3 x 30 minute bars as a kind of proxy.

[Soultrader 12]

Interesting price action on March 19, 2008. However value area is overlapping to higher. Daily charts shows a nice double bottom test on lower supply volume.

 

TL! Videos

[CandleWhisperer 10]

Basic MP question. Forgive my ignorance here, but how long into the day does one have to wait to "see" enough of a developed profile to make trading decisions?

[Soultrader 12]

Basic MP question. Forgive my ignorance here, but how long into the day does one have to wait to "see" enough of a developed profile to make trading decisions?

 

It would be trader preference but alot of the traders I talk in Tokyo wait for the initial balance to develop first. I also obtain a clearer picture of the developing profile by waiting until the IB settles. However, I do take trades at the opening if price is at or near S&R levels... or is quickly rejected above/below key mp levels.

 

Waiting for the IB to complete helps as the range of the IB leaves good clues on the type of day we are likely to have.

[CandleWhisperer 10]

Thanks soul. Just one more thing. If you just wait until the initial balance is complete, don't you only have As and Bs? If so , do you have enough data points to get a sense of where the value area might be?

[Soultrader 12]

Thanks soul. Just one more thing. If you just wait until the initial balance is complete, don't you only have As and Bs? If so , do you have enough data points to get a sense of where the value area might be?

 

Sure, even A and B period alone is enough to develop strategies around it. Not necessarily the developing value but below is a setup from March 14, 2008 that bests illustrates this. We had a very wide IB telling us that price was most likely going to rotate within the IB. Hence, a strategy built around this concept was to fade the test of high or low.

 

 

[Soultrader 12]

Interesting price action on March 19, 2008. However value area is overlapping to higher. Daily charts shows a nice double bottom test on lower supply volume.

 

TL! Videos

 

The following day, the markets tested the pdl before rallying higher. This is one of my favorite patterns; to look for longs when we have higher value placement on a downtrend day.

 

Another favorite is when price rallies strongly into the close only to have overlapping to lower value placement. A very good pattern to grab a short into the close or in the after hours.

 

Also note that this downtrend but with higher value placement occurs at a very key area of the double bottom low formed on January 22, 2008. JGB futures (Japanese government futures) has also fired 3 short signals for me this week. Perhaps we are seeing a possible bottom in place? I say this because the general public here in Tokyo is talking alot about JGB... seems to be the more popular contract amongst brokers, institutional sales traders, and the general public. Hence, I am sensing a potential turning point.

[Soultrader 12]

Todays video.

 

TL! Videos

[Soultrader 12]

Interesting chart here on ES.

 

 

 

 

Simple support and resistance levels. PDH = previous day high.