CanOz's intermittent and sporadic trades

[captain black]

Looks like it is runnin out of steam

Still long here (FESX). Looks like it's taking a pause but nothing screaming to flip to a short yet.

 

[captain black]

Off-topic a bit but there's a thread for someone looking to make $100 a day from trading? A single contract on the FESX taken at the consolidation at 2951 is up approx. 70 Euros (approx. $100) now. Just some food for thought. (apologies for the OT post CanOz)

 

[captain black]

Pushed up through the high of the day, building into a nice trade out of the accumulation zone

 

[Modest]

Pushed up through the high of the day, building into a nice trade out of the accumulation zone

Nice hold captain!

 

[CanOz]

Yeah, looks like we broke of the channel and could be challenging the upper edge of the value area on the composite if we can take out the low of the gap that we just filled on that stop run...retest in progress

 

[captain black]

Nice hold captain!

Thanks

That high volume push up was the reversal sign I've been waiting for so closed the trade (2965 FESX +14 ticks). Time for me to call it a night :sleeping:

 

[CanOz]

Half an hour away from pre-cash open and the markets have reacted to the BOJ. The NKD, the dollar denominated contract for the Nikkei is up 300 odd points. The Yen (6J) has dropped after an initial spike higher. CL has just recently spiked .15 higher and GC has been swinging around like a monkey.... The ES put on 6 handles before losing half that again. I think a mixed open and a wait for the Fed now....

On the DAX we filled the gap from last week and then came back into the range value area, we're sitting at the higher side of value on the composite. We now have a small short term channel to watch for stops....10372 a the most obvious trade level for a short. Above 10458 we should be buyers.

The BOJ press conference is scheduled for 4:30, this may cause more volatility....

I don't see any other key data for Europe on my calendar.

 

[CanOz]

The only time i'll take trades pre-cash are open drives, this was one of those....

Above 10458 we should be buyers.

 

[CanOz]

The thing about volume profile and auction market theory that is undisputed...price must return to value or value will come to price. Today was a great example of the former. There is no better technical representation of data that displays context so clearly.

I believe we can now expect the markets to explore value higher in the forms of a channel....I'm my experience, it is when price returns to value after breaking out of channels that the trends are the strongest.

 

[captain black]

CanOz, can you recommend any further reading/studies/links etc. on Volume Profile? I've found some Amibroker code but would be interested in some further reading. Any recommendations?

 

[Gringotts Bank]

The thing about volume profile and auction market theory that is undisputed...price must return to value or value will come to price. Today was a great example of the former. There is no better technical representation of data that displays context so clearly.

I believe we can now expect the markets to explore value higher in the forms of a channel....I'm my experience, it is when price returns to value after breaking out of channels that the trends are the strongest.

Hi Can, am I correct in thinking that the market profile spikes are where you're saying value lies?

 

[CanOz]

CanOz, can you recommend any further reading/studies/links etc. on Volume Profile? I've found some Amibroker code but would be interested in some further reading. Any recommendations?

Markets in Profile by Jim Dalton is the current 'bible' on the subject. He doesn't use volume profiles and prefers to use the price and time profile, the original market profile. Still, he gives some really good explanation of the theory behind the market auction process. I like volume profiles for the granularity they provide. It literally IS the structure of the underlying market. The great thing about using volume profile and auction market theory is it had great confluence with any volume based tools, be that VSA/Wyckoff, VWAPs, or price action alone.

I use the EOD charts with Amibroker and Premium data and the volume at price indicator for longer term analysis and context, very handy. I wish you (and others) would take up volume profile studies as it would be great to bounce ideas off others.

Thanks for reply on limits on Modest's thread too btw. I'm pretty good at trading trend days on the DAX, i don't get much of the move, but i can usually get a few good nibbles. I'd like to transition a bit to the FESX for balanced days when the markets are reverting back to the POC rather than trending all day. I recall a conversation I had with TH the day i met him in person, he said he didn't do as well trading trend days. I think that's because he's more of a mean reversion trader, really good at balance days....that's were i need to get to.

 

[CanOz]

Hi Can, am I correct in thinking that the market profile spikes are where you're saying value lies?

Yeah, the term value is used for the bulky areas of the profile, including the highest volume node. The theory is that more trade occurs at agreed 'fair value' than at 'unfair value' areas, evidenced by the lack of volume there. An example of this is product on a supermarket shelf, it does steady trade at fair value but put it 'on sale' by marking it down and it goes quickly, until the inventory is gone.

 

[Gringotts Bank]

Yeah, the term value is used for the bulky areas of the profile, including the highest volume node. The theory is that more trade occurs at agreed 'fair value' than at 'unfair value' areas, evidenced by the lack of volume there. An example of this is product on a supermarket shelf, it does steady trade at fair value but put it 'on sale' by marking it down and it goes quickly, until the inventory is gone.

Thanks for that. When an item gets marked down at the supermarket, that would be an example of price < fair value or price = fair value? Does it depend on how quickly the product disappears... ie. volume?

 

[captain black]

The great thing about using volume profile and auction market theory is it had great confluence with any volume based tools, be that VSA/Wyckoff, VWAPs, or price action alone.

Yeah, I've noticed that with the stuff you've posted in Modest's thread and the confluence of different types of analysis is something of great interest to me at the moment. I'll check out Jim Dalton's book, thanks

I recall a conversation I had with TH the day i met him in person, he said he didn't do as well trading trend days. I think that's because he's more of a mean reversion trader, really good at balance days....that's were i need to get to.

Yeah, I'm a bit the same, swing trading and reversing trades at pivot points makes sense to me and I often have bad days on the grinding trend days. Last night on the FESX was a little like that, in hindsight it would be much easier to just hold and let the trend do the work but more often than not futures markets are mean reverting and tend to swing. I'll pick up trades in accumulation/distribution areas but also pick up a lot fading high volume moves. When others are looking to enter a trade on a breakout I'll be looking to fade it. I spent a lot of time testing these setups and swing trading was the one thing that I could make work. Still sucks to get constantly stopped out on trending days. The SPI today is the same, I picked up a few good winners after the open but it's been a grind higher since then where I'm only treading water. 20 trades today, 10 losers/breakeven out of the last 15.

 

[CanOz]

A bit of action on the calendar today....

GB, yeah price is all of the sudden less than what was considered fair value. As an unfair low price, buyers snap up the bargain quickly. If value changes and for some reason the new lower price becomes the norm, then price will consolidate there (balance) and trade will become steady and persistent. Same goes for an unfair high, sellers jump on the get a good price, it becomes a sellers market.

 

[CanOz]

The SPI today is the same, I picked up a few good winners after the open but it's been a grind higher since then where I'm only treading water. 20 trades today, 10 losers/breakeven out of the last 15.

The SPI has been a steam roller today...yet the Nikkei has pulled back as has the HSI. The ES is flat, CL has pulled back. It will be interesting to see IG's call for the DAX open.

I'm thinking pull back to find support for a smaller bracket to develop. So i'll be looking at the profile for an area where thats logical to happen. If we gap higher today, we could fill the gap. Same if we see a gap lower. I'm expecting a rotational day for the most part. Maybe the news will shake things up a bit.

 

[captain black]

The SPI has been a steam roller today...yet the Nikkei has pulled back as has the HSI. The ES is flat, CL has pulled back.

Kospi has been wishy washy too, I'm in the red there today.

Thankfully my longer term ASX systems are all having a good day. Swings and Roundabouts

 

[CanOz]

Got smacked around pretty good tonight for 50 point loss. Ouch....chop fest...

 

[captain black]

Got smacked around pretty good tonight for 50 point loss. Ouch....chop fest...

Yeah, it's been one of those days, thankfully they don't happen too regularly.

Just out of curiosity, do you set yourself a maximum loss limit for the day? I don't set a hard limit but I do stop trading until I start seeing better price action. I stopped trading the Kospi after the first hour this morning. Sometimes you just know that things don't look right.