Jump to content

Welcome to the new Traders Laboratory! Please bear with us as we finish the migration over the next few days. If you find any issues, want to leave feedback, get in touch with us, or offer suggestions please post to the Support forum here.

  • Welcome Guests

    Welcome. You are currently viewing the forum as a guest which does not give you access to all the great features at Traders Laboratory such as interacting with members, access to all forums, downloading attachments, and eligibility to win free giveaways. Registration is fast, simple and absolutely free. Create a FREE Traders Laboratory account here.

JohnE

VOLUME or TPO's ???

Recommended Posts

Sorry if this is a bit off topic.

 

Am i right in assuming the followings.

 

The TPOC is the line of price, where 50% of tpos are above and 50% of tpos are below.

 

The VPOC is the line where the greatest volume traded.

 

Rgs,

Share this post


Link to post
Share on other sites

Would it be too strange to consider that a volume based profile would be exactly whats wrong with trying to decipher and find trading rules for Market Profile?

It's a fact that the opening of a market and the end of that same day are times of incredibly high volume everyday. Already then, the volume profile becomes a strange endeavor, leaning more towards these high volume times then towards the truth.

Can we trust that the truth is found in looking for more information (ie volume) while discarding the past (ie rotation).

Because something seems simpler does not mean that it is. A rotation based profile evades the daily routine of the volume "U" formation. If you trusted in the volume profile, it would almost be akin to trusting the open or close of each day as the center of your bell curve, due simply to the height of volume at those times.

Thoughts anyone???

Share this post


Link to post
Share on other sites

Trades are trades and they are reflected by volume. Would you rather know where the most trades took place or where price spent the most time? If the former use volume profile if the latter use TPO's. It is possible (but unlikely of course) for the POC to be at a level where a single trade for a single contract took place. The peak volume is by definition where the most trade took place so where the buyers and sellers where most in agreement. The PoC will exist where buyers and sellers are in agreement but it certainly wont necessarily be where the most buyers and sellers are in agreement.

 

Jperls excellent trading with market statistics threads have some discussions on this. They are compelling on various levels. In short volume profiles (and VWAP's with SD bands) are statistically relevant. TPO's are most certainly not.

 

if you want some arbitary 'lines' to trade against, sure, use POC, VAH, VAL, floor pivots, S1, R1, yesterdays mid point, whatever floats your boat :). They are all decent heuristics but that is all.

Share this post


Link to post
Share on other sites

A good way to decide which is more important is to compare the reaction of price at the high TPO low volume overnight activity to the price reaction at the higher volume low tpo areas from yesterday or from earlier in the day session. Many times you will see that the high TPO low volume overnight areas trump the high volume low tpo areas in terms of reaction. I have concluded that the high TPO's are more relevant for my trading as far as the market profile is concerned.

 

I know a lot of people who only look at the market profile for the day session only. Why look at only a quarter of the picture? I took the Dalton course and know he refers to the overnight activity as "weak hands" which is truly silly since major trading firms all have overnight trading desks and most major independent traders treat the 24 hour markets like a 24 hour market and use the overnight to get in and out of positions.

 

Of course, you can certainly trade without using MP too.

Share this post


Link to post
Share on other sites

Thanks for the input guys. I appreciate it. I've got another weird observation to throw out there, please tell me what you think. Here goes!!!!!

"Volume is irrelevant!"

Here's the theory: Markets are 24 hr a day instruments. With this in mind all price movements are equal unless they overlap which makes them more valuable ( or at least more telling as places of value). The reason being that what happens around the world to influence price movement in the ES for example, is happening in various world stock markets and dollar relationships at potentially high volume but as most ES traders are asleep it is unfolding as low volume areas on the ES profile, fooling traders into thinking that certain price areas are not valuable due to low volume.

Notice that all night profiles are skewed towards the end of the night session as volume is picking up, making a volume based night profile completely and totally useless, and proving a rotation based profile as far more valuable.

The only incorrect assumption of Market Profile by Steidlemayer may have been his first, that TPO's are a proxy for volume, instead of possibly being more valuable and telling than volume.

Please let me know what you think.

Share this post


Link to post
Share on other sites

This is a lengthy thread and I haven't actual read through it, but I will agree completely with Omni's original comment. I use MP extensively (I used to compute POC moves in my head well before they happened...pretty geeky, but that is my approach). I must say, however, that I don't look at TPO's at all. I believe that, for my approach, it is a completely outdated look on the market. 30 min TPO's made sense when Steidlemeyer didn't have access to real time and accurate volume data (mostly floor trading at that time).

 

I look at volume profiles almost exclusively when it comes to assessing and using the auction as my main market-generated input. I tweet a lot on this subject and have held a couple of chats/webinars on it at various places.

 

I think the most important thing to take away from here is that MP or VP is NOT a system. It is simply a way of categorizing or organizing the market. It is what you do with that information that dictates which one suits your needs. Again, I find it easier to go with volume than TPO, but that is just a personal preference for the setups I trade.

 

Cheers,

FT71

Share this post


Link to post
Share on other sites

TPOs are useful as a measure of imbalance.

 

So long as the bid or ask moved, there was enough volume to move price and that is what is most important and this is what TPOs approximate, the # of ticks of movement in X amount of time. A market can grind sideways on huge volume --- which would be low TPO counts.

 

This is an example of a useful MP concept -- just not in probably how most think of it -- high TPOs to me are not a 'proxy for volume' --- they are a proxy for 'imbalance'...

Share this post


Link to post
Share on other sites
  FuturesTrader71 said:
This is a lengthy thread and I haven't actual read through it, but I will agree completely with Omni's original comment. I use MP extensively (I used to compute POC moves in my head well before they happened...pretty geeky, but that is my approach). I must say, however, that I don't look at TPO's at all. I believe that, for my approach, it is a completely outdated look on the market. 30 min TPO's made sense when Steidlemeyer didn't have access to real time and accurate volume data (mostly floor trading at that time).

 

I look at volume profiles almost exclusively when it comes to assessing and using the auction as my main market-generated input. I tweet a lot on this subject and have held a couple of chats/webinars on it at various places.

 

I think the most important thing to take away from here is that MP or VP is NOT a system. It is simply a way of categorizing or organizing the market. It is what you do with that information that dictates which one suits your needs. Again, I find it easier to go with volume than TPO, but that is just a personal preference for the setups I trade.

 

Cheers,

FT71

 

Would you care to let us in on just how you would specifically use a volume profile for the setups you trade. Thanks

Share this post


Link to post
Share on other sites
  clmacdougall said:
Would you care to let us in on just how you would specifically use a volume profile for the setups you trade. Thanks

 

Seems like this thread has come to a sudden halt.

 

FT71 does a blog at Simplicity in Trading you might be interested in in which he has discusses what he does in detail. Also in Twitter.

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.


  • Topics

  • Posts

    • NFLX Netflix stock watch, local support and resistance areas at 838.12 and 880.5 at https://stockconsultant.com/?NFLX
    • NFLX Netflix stock watch, local support and resistance areas at 838.12 and 880.5 at https://stockconsultant.com/?NFLX
    • Hello citizens of the U.S. The hundred year trade war has leaked over into a trading war. Your equity holdings are under attack by huge sovereign funds shorting relentlessly... running basically the opposite of  PPT operations.  As an American you are blessed to be totally responsible for your own assets - the govt won’t and can’t take care of you, your lame ass whuss ‘retail’ fund managers go catatonic  and can't / won’t help you, etc etc.... If you’re going to hold your positions, it’s on you to hedge your holdings.   Don’t blame Trump, don’t blame the system, don’t even blame the ‘enemies’ - ie don’t blame period.  Just occupy the freedom and responsibility you have and act.  The only mistake ‘Trump’ made so far was not to warn you more explicitly and remind you of your options to hedge weeks ago.   FWIW when Trump got elected... I also failed to explicitly remind you... just sayin’
    • Date: 7th April 2025.   Asian Markets Plunge as US-China Trade War Escalates; Wall Street Futures Signal Further Turmoil.   Global financial markets extended last week’s massive sell-off as tensions between the US and its major trading partners deepened, rattling investors and prompting sharp declines across equities, commodities, and currencies. The fallout from President Trump’s sweeping new tariff measures continued to spread, raising fears of a full-blown trade war and economic recession.   Asian stock markets plunged on Monday, extending a global market rout fueled by rising tensions between the US and China. The latest wave of aggressive tariffs and retaliatory measures has unnerved investors worldwide, triggering sharp sell-offs across the Asia-Pacific region.   Asian equities led the global rout on Monday, with dramatic losses seen across the region. Japan’s Nikkei 225 index tumbled more than 8% shortly after the open, while the broader Topix fell over 6.5%, recovering only slightly from steeper losses. In mainland China, the Shanghai Composite sank 6.7%, and the blue-chip CSI300 dropped 7.5% as markets reopened following a public holiday. Hong Kong’s Hang Seng Index opened more than 9% lower, reflecting deep concerns about escalating trade tensions.           South Korea’s Kospi dropped 4.8%, triggering a circuit breaker designed to curb panic selling. Taiwan’s Taiex index collapsed by nearly 10%, with major tech exporters like TSMC and Foxconn hitting circuit breaker limits after each fell close to 10%. Meanwhile, Australia’s ASX 200 shed as much as 6.3%, and New Zealand’s NZX 50 lost over 3.5%.   Despite the escalation, Beijing has adopted a measured tone. Chinese officials urged investors not to panic and assured markets that the country has the tools to mitigate economic shocks. At the same time, they left the door open for renewed trade talks, though no specific timeline has been set.   US Stock Futures Plunge Ahead of Monday Open   US stock futures pointed to another brutal day on Wall Street. Futures tied to the S&P 500 dropped over 3%, Nasdaq futures sank 4%, and Dow Jones futures lost 2.5%—equivalent to nearly 1,000 points. The Nasdaq Composite officially entered a bear market on Friday, down more than 20% from its recent highs, while the S&P 500 is nearing bear territory. The Dow closed last week in correction. Oil prices followed suit, with WTI crude dropping over 4% to $59.49 per barrel—its lowest since April 2021.   Wall Street closed last week in disarray, erasing more than $5 trillion in value amid fears of an all-out trade war. The Nasdaq Composite officially entered a bear market on Friday, sinking more than 20% from its recent peak. The S&P 500 is approaching bear territory, and the Dow Jones Industrial Average has slipped firmly into correction territory.   German Banks Hit Hard Amid Escalating Trade Tensions   German banking stocks were among the worst hit in Europe. Shares of Commerzbank and Deutsche Bank plunged between 9.5% and 10.3% during early Frankfurt trading, compounding Friday’s steep losses. Fears over a global trade war and looming recession are severely impacting the financial sector, particularly export-driven economies like Germany.   Eurozone Growth at Risk   Eurozone officials are bracing for economic fallout, with Greek central bank governor Yannis Stournaras warning that Trump’s tariff policy could reduce eurozone GDP by up to 1%. The EU is preparing retaliatory tariffs on $28 billion worth of American goods—ranging from steel and aluminium to consumer products like dental floss and luxury jewellery.   Starting Wednesday, the US is expected to impose 25% tariffs on key EU exports, with Brussels ready to respond with its own 20% levies on nearly all remaining American imports.   UK Faces £22 Billion Economic Blow   In the UK, fresh research from KPMG revealed that the British economy could shrink by £21.6 billion by 2027 due to US-imposed tariffs. The analysis points to a 0.8% dip in economic output over the next two years, undermining Chancellor Rachel Reeves’ growth agenda. The report also warned of additional fiscal pressure that may lead to future tax increases and public spending cuts.   Wall Street Braces for Recession   Goldman Sachs revised its US recession probability to 45% within the next year, citing tighter financial conditions and rising policy uncertainty. This marks a sharp jump from the 35% risk estimated just last month—and more than double January’s 20% projection. J.P. Morgan issued a bleaker outlook, now forecasting a 60% chance of recession both in the US and globally.   Global Leaders Respond as Trade Tensions Deepen   The dramatic market sell-off was triggered by China’s sweeping retaliation to a new round of US tariffs, which included a 34% levy on all American imports. Beijing’s state-run People’s Daily released a defiant statement, asserting that China has the tools and resilience to withstand economic pressure from Washington. ‘We’ve built up experience after years of trade conflict and are prepared with a full arsenal of countermeasures,’ it stated.   Around the world, policymakers are responding to the growing threat of a trade-led economic slowdown. Japanese Prime Minister Shigeru Ishiba announced plans to appeal directly to Washington and push for tariff relief, following the US administration’s decision to impose a blanket 24% tariff on Japanese imports. He aims to visit the US soon to present Japan’s case as a fair trade partner.   In Taiwan, President Lai Ching-te said his administration would work closely with Washington to remove trade barriers and increase purchases of American goods in an effort to reduce the bilateral trade deficit. The island's defence ministry has also submitted a new list of US military procurements to highlight its strategic partnership.   Economists and strategists are warning of deeper economic consequences. Ronald Temple, chief market strategist at Lazard, said the scale and speed of these tariffs could result in far more severe damage than previously anticipated. ‘This isn’t just a bilateral conflict anymore — more countries are likely to respond in the coming weeks,’ he noted.   Analysts at Barclays cautioned that smaller Asian economies, such as Singapore and South Korea, may face challenges in negotiating with Washington and are already adjusting their economic growth forecasts downward in response to the unfolding trade crisis.           Oil Prices Sink on Demand Concerns   Crude oil continued its sharp slide on Monday, driven by recession fears and weakened global demand. Brent fell 3.9% to $63.04 a barrel, while WTI plunged over 4% to $59.49—both benchmarks marking weekly losses exceeding 10%. Analysts say inflationary pressures and slowing economic activity may drag demand down, even though energy imports were excluded from the latest round of tariffs.   Vandana Hari of Vanda Insights noted, ‘The market is struggling to find a bottom. Until there’s a clear signal from Trump that calms recession fears, crude prices will remain under pressure.’   OPEC+ Adds Further Pressure with Output Hike   Bearish sentiment intensified after OPEC+ announced it would boost production by 411,000 barrels per day in May, far surpassing the expected 135,000 bpd. The alliance called on overproducing nations to submit compensation plans by April 15. Analysts fear this surprise move could undo years of supply discipline and weigh further on already fragile oil markets.   Global political risks also flared over the weekend. Iran rejected US proposals for direct nuclear negotiations and warned of potential military action. Meanwhile, Russia claimed fresh territorial gains in Ukraine’s Sumy region and ramped up attacks on surrounding areas—further darkening the outlook for markets.   Always trade with strict risk management. Your capital is the single most important aspect of your trading business.   Please note that times displayed based on local time zone and are from time of writing this report.   Click HERE to access the full HFM Economic calendar.   Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding of how markets work. Click HERE to register for FREE!   Click HERE to READ more Market news.   Andria Pichidi HFMarkets   Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
    • AMZN Amazon stock watch, good buying (+313%) toi hold onto the 173.32 support area at https://stockconsultant.com/?AMZN
×
×
  • Create New...

Important Information

By using this site, you agree to our Terms of Use.