Mentally using Mp

[Anonymous 11]

Completed Profile:

 

Dotted line is at 1700- the time the profile is calculated. That means all lines except for the blue lines (Initial Balance Extensions) are done prior to today's trading.

 

Check out how price move within these areas before the break out.

 

Of note is the new green line. This is the VWAP. Thanks to Jperl for the idea. Obviously this is a static version rather than dynamic one. It is based on a 30 min chart. So this was the Volume Weighted Average Price as of 1700.

 

The blue lines are done after the first hour of trading (opening range=initial balance). If I was trading ACD, these would be my Aup and Adn levels. However, they are just extensions 1.1765*OR+ORH or ORL-1.1765*OR. Some may be familiar with the extension as OR/.85 same thing.

 

This was not a trade, but very interesting to see:

 

Note the No Demand just after 1700 hrs @ 1715. Price is closing outside of the Value Area (DRH-DRL). Three bars later we are back into the Value Area. Price moves all the way to the other side and beyond. Hitting the POC of the previous day (so even with this sell off, this will not be a Naked POC). Price moves down and gets rejected at the RRL (lower purple line). After that, the VWAP really contains price as does the ERL (lower dark purple line). Note the Squat as price tries to move up which ends up forming a tweezer pattern. Then note the No Demand/UpThrust bar. The top of this candle is just inside the Value Area. Yesterday's Value is truly being rejected on last time before the bottom falls out.

 

[Anonymous 11]

Very interesting.

 

First, I need to give more props to Jperl and his threads on VWAP. If you have not looked at them, it's your loss. One interesting thing he mentions is the idea of skew. I will not get into it here, except to say that zero skew would mean that the VWAP and the POC (PVP as Jperl calls it) would be the same. So what does that mean to me? Well, take a look at the chart below.

 

All the pivot lines have converged to the POC. In other words, only the POC can be seen. This happens when the range is narrow, the close is in the middle and price was evenly distributed. Take another look at those last two words: Evenly distributed. Now, an even distribution of volume and price should result in near zero to zero skew. Notice how close the VWAP is to the POC. We have almost no skew. Put another way, the VWAP and the POC are 1 pip off from being the same.

 

The orange line above Yesterday's high is a Naked POC. Wed did not make it back up to the POC so we now have a Naked POC. The blue line is a 2 day VWAP. As stated before, the narrowness of the profile (one line) should mean that tomorrow will be more volatile. Not so coincidently, tomorrow (Thursday) is rate decision time for the ECB.

 

[Râlex 10]

Hi, becareful ! the POC (market price distribution) is not the same thing that the PVP (market volume distribution).

Totally differents (sometimes are possibility near).

 

So poc near vwap, not no skew.

 

bye

[Anonymous 11]

  Râlex said:

Hi, becareful ! the POC (market price distribution) is not the same thing that the PVP (market volume distribution).

Totally differents (sometimes are possibility near).

 

So poc near vwap, not no skew.

 

bye

 

It is in my world but thanks.

[Râlex 10]

ok, it 's simply not to merge with the very good job of jerry cause the poc have got nothing to do with volumes so the vwap too.

 

Thanks.

[Anonymous 11]

  Râlex said:

ok, it 's simply not to merge with the very good job of jerry cause the poc have got nothing to do with volumes so the vwap too.

 

Thanks.

 

  Soultrader said:

Key terms:

 

1. Initial balance - market activity in the first hour

2. Range extension - price action extending beyond the initial balance

3. Range - range from high to low

4. Single print buying tails - any single print TPO's at the lower extreme of the profile

5. Single print selling tails - any single print TPO's at the upper extreme of the profile

6. Point of control (POC) - price level of most volume. POC indicates an area of greatest market activity

7. TPO - stands for Time Price Opportunity. Letters are used to build the market profile structure. Each letter represents a half hour period. The letter is also known as the TPO.

8. Value area - price range in which approximately 70% of the market volume took place.

9. Value high - the upper pivot of the value area

10. Value low - the lower pivot of the value area

 

Please see #6.

[Râlex 10]

A big error : the point of control of Dalton, of the MP, is the price level of most trades, so the most TPO. The volumes are not in this distribution.

See "mind over market" but i am sure.

 

Too, the pvp (or highest level volume) is the price level of most volume.

 

Alex

[HAL9000 10]

Hi,

 

from my point of view, the problem with the POC is, that you have to use it in the context of the profile you are looking at.

This should mean, if you are looking at a volume profile the POC is a V(olume)POC.

If you are looking at a time profile the POC is a T(ime)POC.

 

So without a context, one can't say that a POC contains volume information.

This is only true for a volume context.

 

Just my thought on it.

Edited February 7, 2008 by HAL9000
(...) added to avoid confusion.

[unicorn 10]

  PivotProfiler said:

Well, take a look at the chart below.

 

All the pivot lines have converged to the POC. In other words, only the POC can be seen. This happens when the range is narrow, the close is in the middle and price was evenly distributed. Take another look at those last two words: Evenly distributed. Now, an even distribution of volume and price should result in near zero to zero skew. Notice how close the VWAP is to the POC. We have almost no skew. Put another way, the VWAP and the POC are 1 pip off from being the same.

 

The orange line above Yesterday's high is a Naked POC. Wed did not make it back up to the POC so we now have a Naked POC. The blue line is a 2 day VWAP. As stated before, the narrowness of the profile (one line) should mean that tomorrow will be more volatile. Not so coincidently, tomorrow (Thursday) is rate decision time for the ECB.

 

 

Where's the beef?

Is there a reason that pivotprofiler has deleted his attached charts?

 

Same in the VSA thread... Nice going...

I hate to see traderslab catching the disease of other forums.

Edited February 7, 2008 by unicorn

[Râlex 10]

  HAL9000 said:

Hi,

 

from my point of view, the problem with the POC is, that you have to use it in the context of the profile you are looking at.

This should mean, if you are looking at a volume profile the POC is a V(olume)POC.

If you are looking at a time profile the POC is a T(ime)POC.

 

So without a context, one can't say that a POC contains volume information.

This is only true for a volume context.

 

Just my thought on it.

 

No, the true poc is in the price distribution, the true pvp or hvl is in the volume distribution.

 

No discuss possible !:crap:

[HAL9000 10]

Well, I agree with you, that the true POC is related to price distribution.

 

I further agree that #6 (see above) is wrong in my view.

 

But what is price distribution in a MP.

As far as I understand it, it is price in time, not price in trades .

 

So the true POC, based on 30 min bars, it gives you no information about volume or number of trades.

 

But anyway, correct me if I'm wrong, and as long as the context is clear,

we shouldn't have a problem if somebody uses POC instead of PVP.

But yes, PVP is the better choice if we talk in volume context.

[Râlex 10]

  HAL9000 said:

Well, I agree with you, that the true POC is related to price distribution.

 

I further agree that #6 (see above) is wrong in my view.

 

But what is price distribution in a MP.

As far as I understand it, it is price in time, not price in trades .

 

So the true POC, based on 30 min bars, it gives you no information about volume or number of trades.

 

But anyway, correct me if I'm wrong, and as long as the context is clear,

we shouldn't have a problem if somebody uses POC instead of PVP.

But yes, PVP is the better choice if we talk in volume context.

 

Ah OK for the poc (price in time) and pvp (volume), as mister Dalton, steidlmayer and mister Jerry.

 

But, the system of Jerry (Jperl), the Market Statistics based vwap, pvp and price need NOT poc, not Market Profile (VA, IB, vpoc....) so why use the poc ? sometimes poc and pvp are near but precaution !:doh: but not so often as it.

 

The market profile is totaly different of the market statistics, so why mix the both systems ? unless showing a relation between two.

 

For me, there is two great schools:

1-Price needs volume to fluctuate.

2-Price is self-sufficient in itself, doesn't much matter volumes.

 

And I think it is necessary to choose its school. Afterwards, some, a lot in fact, everything blend and matter what and we know all result. (forgiveness for my orthography, again)

[dupaski 10]

  Râlex said:

Ah OK for the poc (price in time) and pvp (volume), as mister Dalton, steidlmayer and mister Jerry.

 

FWIW have recently spent some time with Jim Dalton at a session he did for a group NYMEX traders and he stated that the use of either time based or volume based POC didn't make a much of a difference. He personally used VPoC in his day to day trading.

 

Use of either shouldn't make too much of a difference in leveraging MP. Lets not miss the forest for the trees......

[dupaski 10]

  unicorn said:

Where's the beef?

Is there a reason that pivotprofiler has deleted his attached charts?

 

I can no longer see the charts as well, but sometimes that happens when a webserver is very busy. Give it a couple of hours and try again.