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Soultrader

Special MP Presentation by Alex Benjamin

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Hi Everyone,

I'm a new poster here. Has Alex changed the way he uses and establishes targets? I am familiar with his 2 day IB for the weekly IB and the first 5 days of the month for the monthly IB but in this video he seems to be using other forms of targets with the profile. I couldn't follow it completely due to the chart size etc........does anyone have a summary of these techniques?

 

When does his book come out? Great site you have here. I've been a lurker for years...thanks for all of it

 

JohnE

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I have been conspicuous by my absence from open forums for a while for personal reasons

but I put together a chart for the December E-mini S&P500® futures contract as at Sept 17th 2010. This is a classic composite chart for the month of September 2010 splitting out the first 2 weeks versus this last week. There has been a glorious bull run where the entry was on the close of August 31st or on the open of September 1st and from which there were other long entries but all on an initiating basis (IE Going with the momentum break-outs) until finally most of the upside measured move targets were met on Friday Sept 17th. I, consequently, decided to post this chart and to try to provoke a decent conversation

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This question was posted on the internet in an open education forum:

Has Alex changed the way he uses and establishes targets? I am familiar with his 2 day IB for the weekly IB and the first 5 days of the month for the monthly IB but he seems to be using other forms of targets with the profile. I couldn't follow it completely due to the chart size etc........does anyone have a summary of these techniques?

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The discussion about measured moves involves much more than purely a mathematical equation. For one needs to involve analysis of regular session versus 24 hour markets. Is there really a difference in terms of market structure IE types of day (Day Type), direction (Horizontal vs. Vertical), so called points of control (POC), value areas (VA), so called unfair highs and lows (STDs) and even do the differences of 23.25 hours versus 7.25 hours really matter.

 

It by definition invokes emotional discussion about the role of the floor (CME PITs) versus Electronic Trade (Globex® Platform) - Does the floor influence trade flow or even impact it. Does the floor even need to exist, is it a dinosaur, and last but not least

discussion about traditional MP® (Market Profile) analysis versus volume spread analysis (VSA) or volume weighted average price (VWAP) or even cumulative volume delta (CVD), - (PS: a note to Market Delta® (MD) and Trading Technologies® (TT) as they battle out the patents on this one - Pete Steidlmayer actually was the first to initiate this but he called it order flow information (OFI) - as well as on balance volume (OBV) or anything else that one can think of that represents trade transacted at the price whether it be looking at aggressor trade (hitting the bid or lifting the offer) or passive non aggressor trade (Resting orders which by definition are limit buys and sales)

 

The basic function of traditional MP® (Market Profile) and the adjustments that I and TradingClinic.com ( Tradingclinic.com ) created versus some new way is in essence about the evolution of traditional open outcry - which had also been superseded countless times from its hey day of the coffee shop in the 17th-18th centuries, then the bourse in the 20th century, then the office with telephones and telexes then the closed network medias like Reuters dealing terminals - versus today's electronic connectivity where speed of transaction has contracted to not just milliseconds but nanoseconds. Where the order book can be analyzed on the fly and a decision even whether to accept an incoming order is figured into the algorithm.

 

Is traditional MP® (Market Profile) under threat and potentially obsolete as Pete Steidlmayer suggested in a magazine interview article in 2006? I beg to differ but recognize think the original basis without any change, in a world that everyone requires some formulae to operate, is probably so. After all Steidlmayer and by definition Dalton stated that the profile was just a way of organizing data. So with that in mind I decided from the mid 1990s that all one needs to do is re-tool and adapt and be flexible to the changing environment. This gave birth to my concept of incompleteness and measured moves. With measured moves one could then establish order entry IE rules for both responsive and initiative trade within any timeframe whilst taking into account the pattern of the distribution

 

I believe with my concepts of incomplete days and therefore incomplete distributions that I have adapted and changed and completely adjusted the original MP basis to enable MP to continue to compete with the algo whereby adding in measured moves, pattern recognition, symmetry and equilibrium creates a visual methodology which has objectivity built in that can compete with the machines in terms of where and when to buy or sell and especially importantly where to exit.

Over many years I have been building an extensive database that I prefer to refer to as a Data Warehouse (TCLDB) which serves two functions.

1. To figure the dominant and therefore largest market influence (historically referred to as the commercial or CTi2) and to establish what their position is and the degree to which they were long or short as well as to establish the change of position or market exposure

1a.This is not just related to the CTi2 but I have a methodology of viewing the others and their relative exposure incorporated within the data

2. To extract probability scenarios based off time, news and/or other external influences

 

The TCLDB together with my adapted MP techniques have a major difference compared to Steidlmayer or Dalton and this is to add in order entry and perhaps more importantly exit. All this together re-enforces the concept of a trading plan and aid in the decision process of being a discretionary trader

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Specifically to JohnE and his question

I have not changed the basic premise of

first 60 minutes = IB daily

first 2 days of week = IB weekly

first week = IB Monthly

first month = IB quarterly

first quarter = IB yearly

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From this stems all the measured moves however flexibility is paramount as it is more complicated than just this. To find the levels one has to look at the distribution, the VA and POC and this gives rise to additional targets beyond the pure mathematical calculation of 60 minutes or 2 days worth of data and therefore this then shifts the exactness of time. IE does a week actually begin on a Monday? and many other questions such as what is the dominant influence in terms of day trade time?

 

From all this someone I dare say will say something along the lines of analysis by paralysis could come about from all the above.

Several answers come to mind.

What do you think the machines are doing with their algos? and more importantly with the extensive work over the years I now have a data warehouse (TCLDB) that is unparallel in that I can compare what came before to what comes after. I can explicitly state the position of the market. I can extract a probability for tomorrow in terms of direction percentage chance for success and much more. I have automated much of the hard work needed to extract this but more needs doing and although I will get there if anyone is an excel VBA programmer and would like to get me there quicker then please get in touch alex@tradingclinic.com or skype alleyb_uk

eminisept17.thumb.jpg.7a4147ae653ba5433c7ad62df2226578.jpg

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Glad you are back in action and thanks for answering my questions. Your symetric plan and the gap fill makes sense but what specifically would you need to see in order to negate this? Trade back again above 31 on Sunday/monday ? Would you sell the breakdown of 17?

 

The specific question is what would you need to see in your profile work to actually enter on the short side or what would determine that the gap isn't going to fill to round out that distribution?

 

I understand that MP provides the frame work but how do us regular folks use it in this particular example. Many I think will be trying to trade for that gap fill below without any knowledge of MP or symetirc distributions.So how does MP specifically help us here ? I'm not trying to be a wise guy but there are many MP practioners who can't and won't give any clear entry/exit.They drop the ball and leave the end user to fiqure out those two tuff questions ( entry and exit), or they come back to forums after the move takes place

.

I've always appreciated your honesty Alleyb.

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I also would love to watch that 3 hour presentation, however all i can get is the audio.. it is a bit hard to imagine what exactly you are looking at when describing it in the audio. Anyway you can post a link that works to the actual video? much appreciated

 

cheers,

 

youngest

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I thought the chart was quite explicit

The chart says it the break of 17......

But the chart also says that there is a symmetry requirement for time spent at the slightly higher levels of 21ish

so the trade is to fade the slight upmove and then pyramid the downmove. In the event that the upmove does not occur and the break takes precedence then either you have an initiative trade at the break or you wait for the break and sell the uptic or you wait for the downmove to occur and pick up a trade on the low 02-04 of the move for retest back to the 21-22

 

as to why few have commented that might be because of the thread title in that it is not attractive but I have also found and it is just one of several reasons why I have been absent from posting is that in reality people just want to be told when to sell and when to buy. They dont really care about the reasons but again read the chart comments slowly and as I said I thought I was quite explicit. Time required to be spent at............. then break of ...............

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Well I score 50/50 today cos my weekend chart above did not suggest the buy the breakup . I was focusing too much on the potential to pull back to the 1104 level but there in lies the issue of annotating charts in advance. The breakup for me today occurred at 1125.25 and then again when the Dow took out 10656 in dec

I guess the first clue was probably the lack of lower rotation in the Nasdaq

Until the mkt close back below 1124.25 and then breaks 1117 then some previously non posted upside targets exist which center around 1172. The FED tomorrow will set the tone for the rest of the week. Fully expect a liquidity mirage trade to the upside

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