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sanchez

Price Action

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  itrade4income said:
Sanchez... this is great information. I am learning alot from your posts. Why did you leave the chat room? I hope it wasn't because I was asking too many questions or for additional help?

 

Not at all dude. I thought I made a post last week that I had some personal things to take care of. I am helping a good friend"s dad with some things he needs done around his house. He had a liver transplant about 12 years ago so we don't want him to get too ambitious. I have a pretty extensive background in the contracting field so I need to help him out or we find him climbing ladders and stuff like that lol. I was hoping it would have been just a few days to a week but I'm a bit of a perfectionist and one thing kind of leads to another

 

  itrade4income said:
How do you see volume at levels above or below the charts?

 

That is a great question and one I have had to figure out. Part of the answer is in the PA...once again. The previous day or days, leave clues but it is much more suspect. the other way is to have enough data to be able to look back far enough. I will post a chart in a little while showing how far back I look. U might think I'm crazy but it's been working for me.

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"Think you're crazy"? Man you're the best thing since the automobile was invented lol. What you're saying about vol and PA a day or two back makes sense to me. My trading has improved alot since I have been following your thread and chatting in the room. You're a great trader and great person for helping your friends dad. Tell's me alot about you as a person and that's very cool.

 

Sorry, I had just assumed you would be back in the CR this week. You know what happens when you assume lol. Anyway, I'm learning alot from you and can't thank you enough.:applaud:

 

Cheers

itrade

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Itrade, your welcome but I wouldn't get too carried away. It's great to hear that the concept makes sense. We all might each trade it a bit diff but if u can remember that it's an auction and stay on that train of thought I think things will only get better. Remember, sometimes the mkt tells us to stay out.....if a trade setup isn't fairly obvious (once u r comfortable with the charts, settings and scanning routine) then it probably isn't.

 

I need to eat and I'll post some charts later

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-fist pic is a daily(405 min)

-2nd chart is a daily as well but u can see where all the data comes from....back to 2008

the vol u see on the chart is for all the data pulled from nov 08.

-3rd chart is a 135 min(405/3=135) it breaks the day into 3 equal parts...the 81 min can be used as well (405/5=81) and it breaks up the day into 5 equal parts.

the vol profile on the right on this chart represents only the vol for any visible bars. My goal here is to profile the most recent swing hi/lo so I can get a better feel for the PA directly to the left of the current PA. When this and the 405 show confluence gives me a bit more conviction. Then I look at the individual profiles on a smaller TF chart(10 or 15 min)

daily.thumb.jpg.8dba3073f1c57f62c6705efaf4fe3089.jpg

5aa710199705b_daily2.thumb.jpg.6c3b6136dfe8f57f853acc4752cc6f81.jpg

5aa710199f527_135min.thumb.jpg.3ae9d046818aee0b079bcce912087b6a.jpg

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pretty big vol yest. I'd be looking at PA on any bounces either with or without vol. We've had about 1 week of movement to the downside & profit taking at some point is inevitable, especially around a dbl or triple bot. As always, LVB ( low vol bounce) into an area or resistance or 3, is always something I look for especially if we can get a vol spike on the 1 min chart to coincide with the res area.

 

The O/N ( overnight) POC is currently at 1039 although vol is pretty evenly distr between 1039 - 1043.

NPOC yest is 42.5 and NPOC above that is 62.5 & 71.5. Gap above is 70.5

 

NPOV below is 24.5 and 1007 with the first gap being at 995.75 with another NPOC 994.75

 

some HVA & LVA on the 405 min chart I posted....look to see where any #'s might overlap

 

As always, keep an eye on yest open, hi, low and IB range(hi/low of the 1st hour of trading)...yest IB is 1037.5-1055.75

 

Try to have these # prior to the open and have a game plan should price come into these areas....especially the areas with the most confluence. This is not about guessing which way the mkt will go but what to do when the mkt gets to an area of interest. If u use fibs or MACD, my philosophy would be the same. Have a game plan so the only thing to do when price gets to an area u r interested in is, watch PA and make a decision to enter or wait. IF PA is 1.5 points away from your area before it makes a move to where u r interested in doing business(remember this is an auction just like ebay) and the avg swing for the day,week,month is 3.5 points, would u really want to stand in front of the the move with a resting limit order? I guess it depends on what s/r levels are above/below and how much heat u can take so it is up to each trader to find their comfort level

 

Hope this makes sense. Good luck today. I'm off to lay a blue stone driveway...I'd rather be trading & then surfing that's for sure.:doh:

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This was very helpful in what to look for. One question thou, if I understand you correctly you look at volume at price levels for past days and months HVA and LVA? And you look at these for S/R levels?

 

Cheers

itrade

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  itrade4income said:
This was very helpful in what to look for. One question thou, if I understand you correctly you look at volume at price levels for past days and months HVA and LVA? And you look at these for S/R levels?

 

Cheers

itrade

 

Yes I do but I don't have a set # of days I look back. I try to use the most recent swing hi to swing low on my 135 min chart. That helps me profile the most recent PA or most recent auction. The auction process is like any other buying /selling process, think about a dept store, flea mkt, super mkt etc it doesn't really matter. If inventory is too hi or product just isn't moving, it goes on sale....20% 30% 50% etc. once the price reduction is low enough, the consumer flocks and inventory is reduced, mission accomplished. Sometimes sale prices aren't low enough to interest the consumer and price must be reduced further. In trading this is a retest of the HVA / LVA & this is why I rarely just sit an order out at a specific price. I want to see where the consumer views value. Hundreds of years ago, It used to be trial & error but with spread sheets these days it's fairly easy find where the break point is.

 

this is how the s/r levels are formed as I see it

 

Hope this makes sense.

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  stpips89 said:
sanchez,

 

I am interested in your thread here. I trade forex with price action. Does it work just as well in the e-minis?

 

Stipps, Not sure how u are using or what u consider to be "PA" but I believe that PA is evidence in every mkt. The diff with the forex mkt is that vol is not present, you can get tick vol on some platforms but it's not true vol

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interesting AM PA so far. After probing the 16-17 level the mkt bounced & made a DT @ 27.75 to the tick. 21.5-24.5 is the hi vol area in the pre mkt so far with 24 being the POC

 

As u can see on the daily chart I posted, there is an HVA at 1025. This how I start to look for confluence. I don't put a tremendous amount of weight on pre mkt PA but I am aware of what takes place. Quite often these things are not a coincidence.

 

some news this AM to take note of. Do u think any of it was already factored in? Will we bounce if the reports are bad and drop if the reports are good? I certainly don't know and I don't give a shit either. All I can do is be prepared with my levels and do my best to watch the PA ( how the mkt reacts) as we approach these levels to make my trade decisions. I know what I'm looking for in terms of PA so the decision becomes prety clear as price approaches.

 

Take the time to do this & nothing else and it might help the decision making process for you to. For this exercise, don't be looking at all of your indicators and other mkts etc., don't even touch the mouse. Take a deep breath and relax and just let the PA tell the story. I am not saying that u will see this right off the bat but it's like anything else, practice, practice, practice. If u are VERY used to looking at a DOM or T&S then watch the prints as well(ONLY WHEN PRICE REACHES YOUR AREA) u will find this can be helpful too but if this is not part of your regular routine then focus on the chart for now as that stuff will only make it more difficult...trust me. Less is more quite often

 

the NPOC at 1024.5 was taken out at the end of day yest. we have another one at 994.75 and a gap at 995.75 as mentioned th other day so u knew this already. another NPOC 978.75 and another gap at 956.75

 

38.75 is the NPOC & 1025.5 is HVA from yest, 62.5 NPOC above that. Gap at 1070.5. yest LVA 1030 and 33.5

 

1017, 1011-1009, 1007, 1002.25 daily HVA and LVA below

 

30.75, 32.25, 37, 41.5-43.5, 46 and 48.75-50.25 above

 

Good trading today

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  sanchez said:
1017, 1011-1009, 1007, 1002.25 daily HVA and LVA below

30.75, 32.25, 37, 41.5-43.5, 46 and 48.75-50.25 above Good trading today

 

Sanchez,

 

I am really getting the hang of things on what to look for and it is helping with my trading. I understand NPOC and where you get these levels. When you say HVA it is not the same as VAH for "Value Area High" correct? You are referring to "High Vol Area? Would you also please explain what charts you look for these? I would think maybe daily charts. You may have already done so in the past, but overlooked it. :confused:

 

Cheers

itrade

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  itrade4income said:
Sanchez,

 

I am really getting the hang of things on what to look for and it is helping with my trading. I understand NPOC and where you get these levels. When you say HVA it is not the same as VAH for "Value Area High" correct? You are referring to "High Vol Area? Would you also please explain what charts you look for these? I would think maybe daily charts. You may have already done so in the past, but overlooked it. :confused:

 

Cheers

itrade

 

Itrade, I don't use the VAH but many people do. HVA = hi vol area. I look at them on many diff charts. I will be trading the AM session tomorrow and I'll be in the chat room so I will be able to splain it better.

Glad it's helping

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This makes sense, and I did say "high vol area". I just got back from playing golf and everyone was gone from the CR. Oh well, I guess I see you on Tuesday if you're there. I see three good trade entries and noticed you took one of them. Happy 4th!!!

 

Cheers

itrade

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Thought I was going to be around this week but I still have some work to finish up. Should be around tomorrow.

 

Interesting LVA on the daily at 02.25....just where the overnight PA stopped and reversed

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prety flat O/N session. watching the lVA yest at 29 We had a double distribution day(maybe even a triple dist) yest as well 35.5 being the POC 20 running a close 2nd and 25 had some good vol there as well

 

No news today except the normal BS comments from the peanut gallery which is always the case

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Spike on unemploy news this AM coupled with yest rally(no one knew the news would be positive....naaaaahhhh) & I guess everything is fixed and everything is all better. Do I think that the shorts are actually buying this mkt so they can short at higher prices? Sure I do but that type of thinking had me all messed up yest and I was fortunate to have made a few points when all was said & done. My levels were pretty good & being patient & waiting to trade those levels was the ONLY thing that stopped me from taking a ball beating. Understanding the mkts a bit and what/who drives them is OK but I can't let that interfere with trading what is in front of me which is why I took mostly short trades

 

Being away for the last few weeks certainly didn't help my trading so I should have been a bit more mentally prepared, instead, I traded like a mental patient yest. Today I have taken a bit more time for myself pre mkt and tried to relax myself and verbally reiterate what has become a very natural process/zone I get into when trading the mkts everyday. I didn't do that yest and it could have been costly.

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Sanchez,

 

Nice thread. I see that you use IRT, it will automatically draw HVN/LVN just check off auto Peak/Valley.

 

Do you use Delta in your trade decisions?

 

Could u please explain Harmonic rotations. Thanks.

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  Jthoma said:
Sanchez,

 

Nice thread. I see that you use IRT, it will automatically draw HVN/LVN just check off auto Peak/Valley.

 

Do you use Delta in your trade decisions?

 

Could u please explain Harmonic rotations. Thanks.

 

been in the chat room with a few guys casue it's real time

 

I like to do the hva/lva manually but thanks for the heads up.

 

I don't ue the delta as much as I should but I am about to incorporate it a bit more.

 

Harmonics, as I use them, are just the avg wave height of a particular time frame. I use these in conjunction with s/r levels....the more the merrier but as a stand alone thing it really depends on the tape or PA as well extend the length of the wave. Hope that makes sense

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5 pt O/N range triple topping right into the 6/24-6/28 sideways PA. 1068.75 being a LVA on a daily chart. The area between 1067-1055 is questionable as composite vol is relatively low but consistent. Looking inside of the daily, the 135 min indicates low vol areas at 65.25, 62.5, 53.5, 50.5 below & hi vol areas 58.5, 40.25 below.

lva above 79.5, 82.25, 90, 94.5 and hva 70, 73.5, 85-87.5

 

gaps 1070.5 above & 1024 below

NPOC 73.25, 87, 1108 above & 58 below

 

fri in the summer...going to watch the opening PA and try to make a few points early and be done for the day

 

Good Trading

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Hi Sanchez,

Great thread. Your style of trading is very similar to the way I approach the markets. And the information you are providing is excellent.

Can you be a bit more specific on what type of price action you look for at the support/resistance areas that would cause you to take a trade. I understand that you look for a low volume move into a resistance area, or a high volume spike on the 1 minute chart into a resistance area to initiate a short trade. Is there any other type of price action that would tell you to take a trade. If you could post charts showing your entry and why you took it , it would be of great help.

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  SRspider said:
Hi Sanchez,

Great thread. Your style of trading is very similar to the way I approach the markets. And the information you are providing is excellent.

Can you be a bit more specific on what type of price action you look for at the support/resistance areas that would cause you to take a trade. I understand that you look for a low volume move into a resistance area, or a high volume spike on the 1 minute chart into a resistance area to initiate a short trade. Is there any other type of price action that would tell you to take a trade. If you could post charts showing your entry and why you took it , it would be of great help.

 

Hey SR, I like to look at the DOM or T/S (time & sales) I look to see if there is size and if that size is trading. Again, the s/r levels are the important thing as the tape can simply be a head fake. I am only interested in the tape @ areas of interest. I also look at the harmonics/waves.....how far have we traveled vs the avg wave hgt. etc.

Big vol into s/r is key for entries & low vol on bounces or pullbacks are equally important to help stay in a trade or re enter.

 

this week I might not be around too much but I have been posting charts in the chat room...tough to do both but I will try do do so even if it's after mkt hours

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hope u guys have been doing well in this mkt. Range has pretty small for the past 4 sessions. HVA's have been great in attraction price on the 405 min. 1102.25 lva and 1110-1112.5 hva on the 405 above.

1083 lva and 1078 hva (POV) on the 405 below.

 

ATR=22

The open price has been great the past few days.

Did they set us up for the news on wed and thurs?

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