When opening FAR below POC...

[TinGull 10]

How do you approach the day? What I usually do when opening is below POC is look to short the rallys up to POC and VAL. ER2 is right now about 10 points below VAL. How do you look to make a play when opening is so far below value?

 

Just curious!

[TinGull 10]

Well...we never went anywhere today, let alone to the POC or VAL. There was no plays to be made today. This makes the VAH, POC and VAL very, very tight for tomorrow...explosion tomorrow? Maybe.... Still would love some thoughts on what to do when it's so far away from VAL or POC.

[Soultrader 12]

Hey TinGull,

 

If you notice the YM, the dead high was at the POC of yesterday. When the markets are far away from both the VAL and the previous days low, this offers a high risk/high reward situation. The markets are in complete imbalance. Because you can not rely on value points and the POC what you need to look is the value pivots and POC from the past trading days. I like to go back 10 days to view my mp charts.

 

Or another method is to start looking for regular pivot point plays. Basically if price is accepted below VAL and the previous days low, there is a high probability that the markets will head lower. Therefore you can start shorting rallies. If the markets start consolidating, find the resistance points and play the upper range.

 

Playing the open

 

Couple steps I take when playing the open. Lets say the markets gap down below value the previous days range. I first check volume on the SSF's. I will then look for the next line of support. This will usually be S1 or S2. Then I look at the TICK's. Did the TICK's open up negative? Are they hooking at the zero line and falling? If so, I will short at the market looking to scale out or exit at the next line of pivot.

 

Its just a simple method I use in playing the open.

[TinGull 10]

Awesome. Thanks so much James!

[wrines 10]

Tin,

I agree there werent many good opportunities today in the index futures. I trade the YM, and other than the tank at 8:30EST, the only thing worth a hoot was the 11:22 EST bounce off of the 12060 POC from yesterday. I didnt see a single playable long, though I didn't have my pivots up and now that SoulTrader mentions it, there was a playable long off of S1. Tough day, the afternoon was a total flatline.

Soultrader - I know MP generally looks at YESTERDAYS VAL/VAH/POC (at least the older material uses that), but in using Antonio's TS version, it builds the MP in real time - I have found that in the morning it is too much of a raw "skeleton" to be useful as a reference, but do you actually make use of the developing MP heading into the afternoon? It seems to me after using this for a couple weeks that as a session gets into the afternoon the prior day VAL/VAH/POC areas are often ignored, while the levels built upon earlier in the same day gain in validity - has that been your experience?

Thanks for all the great work and the Journal - your pivots are also excellent!

W

[Soultrader 12]

Hey wrines,

 

Thank you for the compliments. A pure MP user would probably trade off a developing profile. I am sure traders like ant watches the developing profile carefully. However, I am more of a mix betweeen MP, pivots, tape, and market internals. I tend to trade off different methodologies instead of a developing profile.

 

I think the VAL, VAH, and POC setups still work fairly well in the afernoon. But they are often used in the morning to trade off. I hardly trade the afternoon lately so I may need to get updated on market action in the afternoon. If I find any insights on this topic, I will definitely keep you posted.

[torero 10]

soul, I have a question. When you say tape reading, how do you do it? You read from Time & Sales matrix or Market depth? The word seem to lose meaning from the time that it was really reading from the ticker tape machine. Now everyone uses it without clearly stating what it is.

 

For my own meaning of tape reading, I read price action from bar charts (higher highs/higher lows and lower highs/lower lows). So no idea what others do.

 

Thanks.

[Soultrader 12]

soul, I have a question. When you say tape reading, how do you do it? You read from Time & Sales matrix or Market depth? The word seem to lose meaning from the time that it was really reading from the ticker tape machine. Now everyone uses it without clearly stating what it is.

 

For my own meaning of tape reading, I read price action from bar charts (higher highs/higher lows and lower highs/lower lows). So no idea what others do.

 

Thanks.

 

Hello Torero,

 

I look at the time of sales. Ive stared at it and praticed it long enough to be able to read it fairly well. I just have a column for price and another column for size. I attached a picture of the time and sales I look at.