Volume and Market Profiling

[mnctigah 10]

Years ago, after blowing out a few accounts, my trading was turned around by a group of prop traders who wanted to give something back to the trading community.

 

With the help of those traders, I was able to learn to read flow and learn market structure.

 

I have been profitable for a number of years now.

 

I feel that I have a debt to repay and have been helping other traders for quite some time now. I'm not selling anything, nor do I ask for anything in return.

 

With all the garbage and broker sponsored methodologies out there, it is very difficult to find valid trading information. Independant traders are therefore at a severe disadvantage.

 

My only desire is to give back to the trading community....

 

Ronnie

[astrading 10]

Really really interesting.... can't wait... lol

[ValueTrader 10]

Looking forward to your posts, it will be a welcome rest from the usual technical analysis flim flam that's bounded about.

[mikew 10]

Sounds great. What did those prop guys tell you? How did they open your eyes? What did they teach you that was different? I'm very interested in your reponse!

[2213045 10]

Great!! I am still in the quest of profitable trading. Look forward to your sharing!

[mnctigah 10]

There were so many things that flew in the face of popular (mis)conception, and those things were learned over a period of time by submitting my trades to them and then receiving feedback.

 

So as far as a concise list of do's and don't's (aside from the obvious with regards to risk control and aversion - limiting to a single trade per day during the early AM when liquidity is high - remembering that each time you take a trade you're subjecting yourself to risk - most times unnecessarily), it would take a novel to teach all of the principles.

 

Most traders have the mis-conception that professional trading is holding for enormous gains. They do in fact have certain mathematical models that do such that, but from day to day they are mainly trading in rejection areas (LVN's), profiting on the daily grind as the market tends to turn and/or backfill in those areas. These guys are running multi-million dollar offshore accounts for clients and their clients understood what real trading is all about. When trading large amounts of contracts, huge profits can be made by simply grinding out from day to day.

 

I worked with them for about 5 years, the last 3 hanging around in order to help some of the more novice traders coming on board (they limited the membership to 50 traders worldwide because of time contraints upon themselves. I felt that I had my own debt to repay, and during that time I made the methodology they were teaching my own and grew into my own. I was catching many of the same trades of some of their other models (which they weren't sharing due to trying to help without complicating matters with various different methodologies). They traded many models in order to smooth results.

 

I don't mind posting my trades and descriptives, even the pre-market analysis, for those serious traders interested in learning market structure and making the transition into the foray of professional trading.

 

I have a FaceBook site that I post for the beneft of other traders I'm trying to help. If interested in the link, send me an email.

 

Ronnie

[Goals 10]

Can I make a recommendation? Why not add the info. you want to tell folks in the same message as your original post?

[joshdance 10]

but from day to day they are mainly trading in rejection areas (LVN's), profiting on the daily grind as the market tends to turn and/or backfill in those areas.

...

I don't mind posting my trades and descriptives, even the pre-market analysis, for those serious traders interested in learning market structure and making the transition into the foray of professional trading.

 

Ronnie

 

Ronnie,

 

LVN's over what period of time?

 

I certainly look forward to your analysis, as your style sounds similar to mine and I'm always looking to improve. Over in the "Day Trading the Emini Futures" thread, TheNegotiator usually posts a premarket profiling perspective, and throughout the day others of us also comment on market structure. You are welcome on that thread as well if you wish, to share your perspective.

 

Best,

Josh

[mnctigah 10]

joshdance:

 

You need to remove time from the equation. One of the trap's is trading on a time based chart. I use mainly a 6PF (reversal chart) for entries in the spoos.

 

I work off the last weekly swing for volume profile purposes.

 

Charts attached...

 

Ronnie

[VolumeProfiler 10]

Thanks for taking the time to start this thread and reveal some of your knowledge. I'm also a volume profiler, currently trading DAX futures.

 

I couldn't see any charts on your prior post though, although I'm new here so might not be looking in the right place.

 

Looking forward to hearing more about your methods.

 

[joshdance 10]

joshdance:

 

You need to remove time from the equation. One of the trap's is trading on a time based chart. I use mainly a 6PF (reversal chart) for entries in the spoos.

 

I work off the last weekly swing for volume profile purposes.

 

Charts attached...

 

Ronnie

 

My primary charts are constant volume charts. I have tried PFs and don't like them very much.. but either way, that's secondary to the structure and methodology, which I am more concerned with.

 

No charts attached to your post Ronnie...?

[ValueTrader 10]

I agree with Ronnie & Josh, time based charts are of limited value.

Indeed, Peter J S, the Creator of market profile no longer uses time charts either, he trades straight off the volume profile.

 

Like you've mentioned Josh, I like to use CV bars, as I like to see the structure and you can quickly decifer a trend or rotation market.

 

I like to use round numbers on these, although I don't trade the ES, when I'm viewing it I have it set to 5k contacts. For me, it helps with seeing where bigger buyers n sellers are doing business. /

 

I've never seen the point if averaging the volume and dividing it by 24, which I understand is common practice with CV bars. Surely that's just a proxy for time based trading.

 

Would be interested in others opinions on this, positive or otherwise ...

 

 

VT

[TheNegotiator 13]

"Throwing the baby out with the bath water" springs to mind. While I use volume based candles for trading, time based bars have their place too. As a day trader, my timeframe is entirely contained by the RTH session. 405 minutes. The tempo of the auction within the context of this timeframe is very important to me. Volume bars alone won't show you this, unless of course you have a time indicator, but even then it somehow doesn't give a good idea of flow imo. Then there is the very simple concept of competition (or lack thereof). In fairness this is similar to auction tempo, but more specifically the velocity at which the market acts on moves away from value.

[joefla 10]

Thank you Ronnie. I am interested in Market Profile. DO you have any suggestions on how to get educated?

[joshdance 10]

Thank you Ronnie. I am interested in Market Profile. DO you have any suggestions on how to get educated?

 

For starters, read "Mind Over Markets."

[ValueTrader 10]

MoM is a great book, Also check out the venerable Don Jones over at Cisco futures dot com.

 

There you'll find a website positively engorged with information for the Market Profile and Auction Market / Value trader.

[andrei_lint 10]

Hi mnctigah,

 

I wonder if you are willing to post a trade you made (or a possible trade) along with your thinking process so that we can familiarize with your approach of the market.