Mind Over Markets by Dalton - Need Badly Explanations

[JossBeaumont 10]

Hi everybody,

 

I am writing this post out of frustration. I am reading Mind over Market for the 2nd time and I just can't understand some relations between the Day types and Open types.

 

For example, a Normal day is primarily characterized by a wide initial balance caused by the swift entry of other timeframes participants.

Then in the open types chapter, the author defines an "Open-Auction" as the least convictionnal open type, and says that it generally leads to...Normal Days!!

Well I've tried to read and re-read those definitions, put those definitions into an excel spreadsheet in order to try to see it clearer, but it seems that it just doesn't make any sense. And it's not the only problematic point, in fact almost every time Dalton make a relation between Day types and Open types it seems either obscure or incoherent:

 

- Open-Drive and Open-Test-Drive lead to Trend or Normal Variations days: "A Normal Variation of a Normal day is characterized by market activity early in the trading session that is less dynamic than that of a Normal day".

So how can it be that these 2 opens lead to Normal Variation days but not to Normal days??

 

- Open-Rejection-Reverse lead to Normal or Normal Variations days: leave alone the fact that there is almost no difference between a Open-test-drive and an Open-rejection-reverse (the author seems to miss completely that these opens as he describes them are almost exactly the same). But again why Normal days?? Aren't they suppose to be characterized by a very convictionnal opening, pushing strongly the market in one direction?

 

I really feel frustrated because I like the author approach and I feel like this book is full of very valuable informations.

I do understand that these are concepts difficult to grasp, not carved in stone. and I am OK to try to put the pieces of the puzzle together, but only if the pieces of puzzle fit at some point !

 

Do you have any coherent explanation about these points?

 

Thanks in advance !

[xfin 10]

Hi, I've read two Dalton books and basically feel the way you do, lots of good knowledge but not really any info on how to trade effectively. I'll put a link to a recent interview Dalton did with Peter Reznicek at shadowtrader.net;

 

http://www.shadowtrader.net/twitter/dalton.mp3

 

I think you'll find that the use of Market Profile is most useful in context of other technical indicators like Support/Resistance, trend analysis, etc. I've also listened to Steidlmayer and I was surprised in listening to Dalton's interview that they sound very similar in that you can listen to them talk for hours about MP, but at the end you will hear that things aren't the same as they used to be, that MP is used differently now. That there isn't a single solution that you can use MP and make money, you have to be able to adapt.

 

One thing I picked up and like from Steidlmayer is that you no longer trade TPO's so to speak, you trade time now. When TPO's start to stack up in one area, time is slowing down and you want to wait. You are waiting for volume to pickup at the same time price is breaking out of the consolidation, this is when you will wind up with the P or B profiles, and this is when you will see time speeding up. You want to have your position on before time speeds up and get out when time slows down again. Good luck!

[JossBeaumont 10]

Hey,

 

Thanks for your answer and the link. I am half throuhg it and it is very interresting.

Here is also a link to a Peter Steidelmayer's conference at the CME group.

 

I think your right about the context, etc... but I still can't help wondering why this book is so highly regarded with such incoherences... Maybe I'll understand one day. If someone can help, I'll appreciate.

[TheDude 10]

Hi everybody,

 

I am writing this post out of frustration. I am reading Mind over Market for the 2nd time and I just can't understand some relations between the Day types and Open types.

 

For example, a Normal day is primarily characterized by a wide initial balance caused by the swift entry of other timeframes participants.

Then in the open types chapter, the author defines an "Open-Auction" as the least convictionnal open type, and says that it generally leads to...Normal Days!!

 

Yes - The Other TF Participant is a long term seller at the top of the day, and Other TFP is a buyer at the bottom. You have 2 types of OTFP - a buyer and seller.

 

This means an open auction with little directional conviction is so because it has the OTFP (always read both types) active throughout the range

 

Well I've tried to read and re-read those definitions, put those definitions into an excel spreadsheet in order to try to see it clearer, but it seems that it just doesn't make any sense. And it's not the only problematic point, in fact almost every time Dalton make a relation between Day types and Open types it seems either obscure or incoherent:

 

- Open-Drive and Open-Test-Drive lead to Trend or Normal Variations days: "A Normal Variation of a Normal day is characterized by market activity early in the trading session that is less dynamic than that of a Normal day".

So how can it be that these 2 opens lead to Normal Variation days but not to Normal days??

 

Open (Test) Drives tend to lead to trend days. Nothing is set in stone though. P and b type days are also a result of these open types. Are these the normal variation day types you refer to? (I cant remember). The key to any MP idea is that of context. The Open (Test) Drive are the 2 strongest opens as they are characterised by the OTFP being active from the open - or very shortly after. The OTFP's have a longer time horizon than the day trader/swing trader that MP was designed for. In P or b type days, the market begins to rotate as the other OTFP (seller in P, buyer in b) who sees price as reaching their idea of value.

 

- Open-Rejection-Reverse lead to Normal or Normal Variations days: leave alone the fact that there is almost no difference between a Open-test-drive and an Open-rejection-reverse (the author seems to miss completely that these opens as he describes them are almost exactly the same). But again why Normal days?? Aren't they suppose to be characterized by a very convictionnal opening, pushing strongly the market in one direction?

 

ORR are weaker than OTD opens. OTD TEST something - like a high/low/value/POC/whatever which brings in our friend OTFP, who sees this test of a level as a great price to come in aggressively. That leads to price DRIVING. The ORR is basically a directional move with less conviction. It runs out of steam. The turn would probably seem more gradual on say a 2minute or 5 minute chart. It gathers momentum as OTF/locals/scalpers see price has changed direction.

 

I really feel frustrated because I like the author approach and I feel like this book is full of very valuable informations.

I do understand that these are concepts difficult to grasp, not carved in stone. and I am OK to try to put the pieces of the puzzle together, but only if the pieces of puzzle fit at some point !

 

Do you have any coherent explanation about these points?

 

Thanks in advance !

 

Not really much conflict - just keep at it. Reading his other book may help.

 

CISCO Futures may also throw some other light on his stuff (ie a lot of free stuff to wade through, but some is ok.

 

Remember MP isnt a system. Its just a method to understand good locations to put day trades and swing trades, and how to measure the markets progress in terms of deciding to hold or cover, or add. Its also very good at defining where/how to see when the market is changing direction, or where the market shouldnt trade if your trade pretext is correct (ie take a loss).

 

In other words, it teaches/enforces you how to trade properly!

[MightyMouse 12]

MP was a volume estimation tool when volume wasn't available. No need for volume estimation since most instruments publish volume.

 

The MP properties of MP that are detailed in the Dalton book(s) are mystical at best. Useless would be more appropriate.He is an author who makes his money from book sales and not from trading.

 

I signed up for his webinars in 2008 and can report that he can double speak with the best of them. He is awesome at not committing and spent easily 15-25 minutes of each 1 hour seminar pitching his 10,000 per week seminar. Oddly enough, the seminars had little to do with MP. He would "speed read" the market using daily bars and find gaps that would make the market rise sometimes 60 points to fill. He believed that traders would manipulate the market to fill the gap. I thought it was senseless and was very sorry I signed up.

[ForexTraderX 10]

MP was a volume estimation tool when volume wasn't available. No need for volume estimation since most instruments publish volume.

 

The MP properties of MP that are detailed in the Dalton book(s) are mystical at best. Useless would be more appropriate.He is an author who makes his money from book sales and not from trading.

 

I signed up for his webinars in 2008 and can report that he can double speak with the best of them. He is awesome at not committing and spent easily 15-25 minutes of each 1 hour seminar pitching his 10,000 per week seminar. Oddly enough, the seminars had little to do with MP. He would "speed read" the market using daily bars and find gaps that would make the market rise sometimes 60 points to fill. He believed that traders would manipulate the market to fill the gap. I thought it was senseless and was very sorry I signed up.

 

 

Ya know, I've found that when it comes to trading (and life in general)... a little common sense and skepticism combine to form a bullishitometer of almost mythical power. If someone is inventing a lot of new words and definitions to describe a market phenomena that other people before have already discribed, just more clearly.... the odds are that this "inventor of language and communication" is probably closer to the "fulll o'shit" side of the meter, than he is to the "inspired brilliance" side.

 

I remember when I first became famlilar with the concept of a "liquidty gap". I always thought they were just range expansion candles, AKA "impulse moves".. but once I became more familiar with market microstructure in general, as well as the various implications that a "liquidity gap" may have on future price action at those price points... then I clearly saw that the new definition "liquidity gap" was in fact a more appropriate and useful way of looking at those range expansion candles in the markets...

 

On the other hand, if there is a new definition for something that already has a definition but this new definition doesn't actually provide some great new insight that the old definition lacked... and WORST of all is when it has several other qualifying factors, taht can morph the new word into several different and confusing other words....

 

well, lets just say it can get pretty darn stinky in those hotel seminar rooms. SO much so that one might be well advised to bring a heavy pair of cowboy boots. And a shovel. A really,really, big shovel.

 

Look. new fancy definitions should be used when naming new, fancy concepts.

 

if it's just an old concpet rehased or restated, but with a fancy new name, you'll probably be wiser and richer for having never learned those new names.

 

FTX

 

P.S. And I wouldn't put too much stock in the opinions of others who think guru XYZ can walk on water. My experience has been that idolatry is frequently used to fill the void that is created when a person discards independent thought, rationality, objectivity, genuine curiosity, and knowledge. So I tend to not heed such dribble. WHat can I say, i'm contrarian to the core. :p

[steve46 12]

Like many professionals I learned Auction Market Theory and MP early on....later I discovered that the originators of the concept (MP) had made changes to the system....

 

I decided to make "my own" changes to the MP that I learned....and ended up with a system that uses "time based pivots" and a relatively simple distribution..(authored a couple of threads on the subject in the Emini Forum).

 

Basically I have gone from using MP to a hybrid system based on the alignment of time & price

 

Knowing what I know now....I wouldn't use MP....because in my opinion markets have evolved to such an extent that those principles no longer provide an accurate description of how markets act...

 

Good luck

Edited October 26, 2012 by steve46

[TheNegotiator 13]

Hi everybody,

 

I am writing this post out of frustration. I am reading Mind over Market for the 2nd time and I just can't understand some relations between the Day types and Open types.

 

For example, a Normal day is primarily characterized by a wide initial balance caused by the swift entry of other timeframes participants.

Then in the open types chapter, the author defines an "Open-Auction" as the least convictionnal open type, and says that it generally leads to...Normal Days!!

Well I've tried to read and re-read those definitions, put those definitions into an excel spreadsheet in order to try to see it clearer, but it seems that it just doesn't make any sense. And it's not the only problematic point, in fact almost every time Dalton make a relation between Day types and Open types it seems either obscure or incoherent:

 

- Open-Drive and Open-Test-Drive lead to Trend or Normal Variations days: "A Normal Variation of a Normal day is characterized by market activity early in the trading session that is less dynamic than that of a Normal day".

So how can it be that these 2 opens lead to Normal Variation days but not to Normal days??

 

- Open-Rejection-Reverse lead to Normal or Normal Variations days: leave alone the fact that there is almost no difference between a Open-test-drive and an Open-rejection-reverse (the author seems to miss completely that these opens as he describes them are almost exactly the same). But again why Normal days?? Aren't they suppose to be characterized by a very convictionnal opening, pushing strongly the market in one direction?

 

I really feel frustrated because I like the author approach and I feel like this book is full of very valuable informations.

I do understand that these are concepts difficult to grasp, not carved in stone. and I am OK to try to put the pieces of the puzzle together, but only if the pieces of puzzle fit at some point !

 

Do you have any coherent explanation about these points?

 

Thanks in advance !

 

Don't get too hung up on normal days. If you do a study on any particular product, most would have a very small percentage of normal days. The point he's trying to make is that if lots of business enters the market early on in the form of otf and creates a very wide IB then that IB is more like to stay in tack over the course of the day. I'm not so sure that this sort of thing happens so often these days, but why not just test it? Do a study of what an extremely high reading of an IB range has looked like over say the past two years and then identify what the percentage of these days ends up being a Normal Day. If you find a abnormally high percentage (if) then you have an edge. Look to fade extremes on days where you've got an extremely large IB.

 

I do think that the book has some not particularly clear parts to it but you should see past that. When I first started trading I read it and wasn't best impressed I have to say. However, re-reading it later I understood that the profile was merely the tool that he was using to see the auction and the principles could very well be applied (in most cases) with other types of charts. The principles are sound, but they're not a strategy. What they do is help you to see what is happening in the market. It's up to you to then find a way to profit from that (and you should be able to do that). I agree that maybe the guy doesn't trade and maybe things have changed to some extent and that there's a lot more to coming up with a coherent trading strategy (and plan), but I'd stand by the book as a good way to learn how to get context from the market. Read "Markets in Profile" too I'd suggest.

[Steve66 10]

Hi everybody,

 

I am writing this post out of frustration. I am reading Mind over Market for the 2nd time and I just can't understand some relations between the Day types and Open types.

 

For example, a Normal day is primarily characterized by a wide initial balance caused by the swift entry of other timeframes participants.

Then in the open types chapter, the author defines an "Open-Auction" as the least convictionnal open type, and says that it generally leads to...Normal Days!!

Well I've tried to read and re-read those definitions, put those definitions into an excel spreadsheet in order to try to see it clearer, but it seems that it just doesn't make any sense. And it's not the only problematic point, in fact almost every time Dalton make a relation between Day types and Open types it seems either obscure or incoherent:

 

- Open-Drive and Open-Test-Drive lead to Trend or Normal Variations days: "A Normal Variation of a Normal day is characterized by market activity early in the trading session that is less dynamic than that of a Normal day".

So how can it be that these 2 opens lead to Normal Variation days but not to Normal days??

 

- Open-Rejection-Reverse lead to Normal or Normal Variations days: leave alone the fact that there is almost no difference between a Open-test-drive and an Open-rejection-reverse (the author seems to miss completely that these opens as he describes them are almost exactly the same). But again why Normal days?? Aren't they suppose to be characterized by a very convictionnal opening, pushing strongly the market in one direction?

 

I really feel frustrated because I like the author approach and I feel like this book is full of very valuable informations.

I do understand that these are concepts difficult to grasp, not carved in stone. and I am OK to try to put the pieces of the puzzle together, but only if the pieces of puzzle fit at some point !

 

Do you have any coherent explanation about these points?

 

Thanks in advance !

 

To understand these concepts, one must first ask themselves, In what direction is the market attempting to go, & , Is it doing a good job getting there? Before we can answer these questions, we have to do some prior homework to get an idea of who and what is controlling the market before we can anticipate its next steps. We must identify key market levels, tempo, volume, conviction, inventory and important levels to place trades. We must manage risk and monitor change or continuation. Identifying the opening is easy after it has begun, but chances are that once you identified the open, you missed the meat of the move.

 

One must know the behavior/ feel of the market they are trading and have a sense of becoming one with the market, otherwise, it will be difficult to identify anomalies, opportunities, and enter with good trade location.

 

Without getting to caught up in trying to identify each of the 4 openings in real time as its playing out, I have committed the opening types to memory. What has worked for me is, before I put a trade on, I've already did my homework and I also identified current market conditions. I place buy and sell limit orders in the DOM at important go/no-go levels and manage the opening by cancelling or adding orders to the trade. As the trade is playing out, it is easier for me to determine what kind of open is developing so I can anticipate change or continuation.

[kuokam 10]

I am wondering what exactly has changed in the use of MP since the beginning? If TPO's are no longer helpful, does it mean you only need the day MP to trade, like the ones beside some DOM's? If so, how about the IB?

 

There should be a way to bring the open/day types down to 2 questions: will this day trend or no?

[steve46 12]

For those having difficulty, you simply have to spend time (quite a lot of it) thinking about what markets do and how they are used by knowledgeable participants

 

That framework provides the key to making use of any approach including MP or VP....

 

My interest is in trading for a living and teaching small groups of motivated folks to do the same....basically what I have done is to strip down MP and only use a few concepts...for example I show folks how to monitor and evaluate the IB as forms....how to understand and frame that same data in markets worldwide and to understand just how interconnected markets are and how to profit from that interconnectedness...

 

Think about this....markets have changed dramatically over the last couple of years....institutions have created those changes.....they profit greatly from those changes and interestingly most of YOU folks don't get it...so you waste your time trying to make sense of outdated material (like Market Profile)....instead of understanding what is going on and profiting from that, most of you will be on the losing side of that equation.

 

I mentioned this a couple of times, but people keep banging their heads against a wall reading Dalton (and similar material).....

 

Good luck with that....