One Good Trade

[tech/a]

The volume traded at these levels has a shelf life and price reacts to that, as is evident on any chart.
CanOz

But price doesn't always re visit old levels.
At best you have a 50 / 50 opportunity of
Returning to a value area in the one ay or to an old one
Impulse moves are evidence of that.

Not all volume is equal.

You see it DOESN'T MATTER.

 

[Joules MM1]

But price doesn't always re visit old levels.
At best you have a 50 / 50 opportunity of
Returning to a value area in the one ay or to an old one
Impulse moves are evidence of that.

Not all volume is equal.

You see it DOESN'T MATTER.

i think a good idea is for you to end your emphatic sentences with "to me"....afterall, arent you doing exactly what youre promoting? Youre saying; give up fitting round holes n square pegs and go onto creating new ones, yourself?

(this should be fun)

 

[tech/a]

i think a good idea is for you to end your emphatic sentences with "to me"....afterall, arent you doing exactly what youre promoting? Youre saying; give up fitting round holes n square pegs and go onto creating new ones, yourself?

(this should be fun)

I'm sure you'll enjoy it.
I'll have tea and write it up
In a separate thread.

 

[CanOz]

But price doesn't always re visit old levels.
At best you have a 50 / 50 opportunity of
Returning to a value area in the one ay or to an old one
Impulse moves are evidence of that.

Not all volume is equal.

You see it DOESN'T MATTER.

Why does it not matter? If price is accepted at another level and rejects the historical level, then it could be one way to stay with a trend and look for the next area that price must be accepted or rejected. I don't see how this is allot different from what your descretionary method attempts to do.

The higher volume the more relevant these levels become as it is evidence that more agreement on price occurred at these levels. Price tends to move quickly in areas where it is NOT accepted as fair value. These are impulse moves are caused by large orders that shift the current value of price to a newly accepted area.

CanOz

 

[tech/a]

(this should be fun)

Why does it not matter?

Duck over here!

https://www.aussiestockforums.com/forums/showthread.php?t=25121&p=718324#post718324

 

[boofis]

In regards to DOM, it seems one of its biggest draw cards is that its not necessary (maybe optional, I'm no expert) to plot out support/resistance areas from the past as that's kind of irrelevant because one can now 'see' support and resistance by how the orders flow (e.g. speed and who's hitting what, for the ES at least).

So it almost seems counter-productive to plot out previous s/r when you can see the s/r as it happens (though I do find this hard to keep up with at times).

My 2c.

 

[CanOz]

In regards to DOM, it seems one of its biggest draw cards is that its not necessary (maybe optional, I'm no expert) to plot out support/resistance areas from the past as that's kind of irrelevant because one can now 'see' support and resistance by how the orders flow (e.g. speed and who's hitting what, for the ES at least).

So it almost seems counter-productive to plot out previous s/r when you can see the s/r as it happens (though I do find this hard to keep up with at times).

My 2c.

Sure, accepted...but in looking for more than a scalp, the larger time is needed so as to anticipate the target and avoid scalping all day long. I want to know where and for how long the price will rise or fall before it is accepted as fair value again. This keeps me trading against the flow in the market and can keep my runner in the trades longer.

I'm trying to avoid working for the broker....

CanOz

 

[boofis]

Fair point, personally I only seem to be profitable when putting a fair bit in the brokers pocket so I will bow out at that :\

 

[waza1960]

Duck over here!

https://www.aussiestockforums.com/for...324#post718324

+1 to that post Tech covering most of what I was thinking of adding (saves me some time lol)
This is how I would put it.. and keeping in mind that my perspective is biased towards system trading.

If you look at entry efficiency (with systems building )then with Market Entries it is hard to get any meaningful results above 55% which is close to random therefore how much time and effort are you putting in to try and
gain a few extra percentage points of entry efficency by using different T/A approaches when IMO that effort
could be put into trade/money management.

Where my view differs from Tech (assumption)is that I'm not interested in Trends at all below a Time Frame of 240mins I use mean reversion strategies only.

I think it was mentioned earlier regarding Backtesting.............. Why not create some basic strategies with simple entry conditions and backtest those to get an idea of a simpler entry that occurs frequently and get some idea of the value of profit targets and stops and then trade that setup then adding some of your discretion to the trade

 

[CanOz]

+1 to that post Tech covering most of what I was thinking of adding (saves me some time lol)
This is how I would put it.. and keeping in mind that my perspective is biased towards system trading.

If you look at entry efficiency (with systems building )then with Market Entries it is hard to get any meaningful results above 55% which is close to random therefore how much time and effort are you putting in to try and
gain a few extra percentage points of entry efficency by using different T/A approaches when IMO that effort
could be put into trade/money management.

Where my view differs from Tech (assumption)is that I'm not interested in Trends at all below a Time Frame of 240mins I use mean reversion strategies only.

I think it was mentioned earlier regarding Backtesting.............. Why not create some basic strategies with simple entry conditions and backtest those to get an idea of a simpler entry that occurs frequently and get some idea of the value of profit targets and stops and then trade that setup then adding some of your discretion to the trade

Totally agree Waza, but I am trying to master a descretionary method using the DOM, and a tool that organizes data differently than just traditional TA.

The markets are extremely mean reverting at the moment...your MR systems are testament to that. There are few intraday trends. That's what Mr. Trend trader is having trouble coming to grips with...I think.

CanOz

 

[waza1960]

Totally agree Waza, but I am trying to master a descretionary method using the DOM, and a tool that organizes data differently than just traditional TA

And you are to be congratulated for how far you have come in your understanding of market dynamics I was just hoping you were still seeing the forest and not the trees only
BTW I have always being interested in Market Profile/ Steidlmayer Distribution so good to see your input there.

 

[CanOz]

Having not taken trades on Friday i spent the day studying Market Profile and trying to understand how to best incorpoarte this organisation of data into a trading plan.

This weekend i spent some time analysing how price reacts in and out of the value areas and how that is best traded. I now have some trading setups that i can look for after the market determines its initial value area. Market replay is very handy for replaying the weeks price action. So i now have several little setups to test in my playbook.

The first two charts are of the HSI and what we may expect for the coming session. You can see on the chart that there has been a fairly large range in play. The range is where buyers and sellers agreed on value, for the most part. There was a test of higher prices and that was rejected.

I'm off to Shangers on Monday for the day so i won't be able to post charts, curious to see what happens.

Cheers,


CanOz

Nice GAP up to retest the break of a prior low and then test of the value area, wasn't quite what i expected in that it gapped 50 points higher, but a nice clean rejection of higher prices none the less. Higher Prices are being accepted, but very reluctantly.

CanOz

 

[Trembling Hand]

TH, I really don't see how the structuring the market, doing some homework, trying to understand what is probable has to do with making a mistake that is typical of other TA Traders. You may be gifted enough to understand the order flow in the DOM and get in with the controlling side more often than not for larger wins than losses, but I need to understand what levels are likely to bring in sellers or buyers. Market or volume profile is a REAL method for doing this. This is my larger time frame.

Now I have not perfected any setups as of yet, but the homework is the first step in understanding where and how the auction process will decide what is a fair or unfair price.

The volume traded at these levels has a shelf life and price reacts to that, as is evident on any chart.

Surely you do some analysis of the larger time after hours? Or do you do the analysis on the run, as you trade?

Nah either I was too flippant or you have missed what I was saying. Work out what type of market we are likely to have then workout how your brand of TA may fit in so as to frame trades (wrong/right & R:R). All the work is in the IF not the THEN. By that I mean don't get hung up on details. You know likely range from recent history. You know where we are opening. You pretty much have everything there. How we get from present to the extended range is chaotic. TA will not help you.

For example. When trading your EOD systems my bet is you know when is a more optimal time to be playing long even without taking note of your system signals or specific TA setups. You just get a feel for what is setting up based on previous price action. Even thou most of the time you are letting your system do its thing you still recognise the feel of a market. We know a lot more than what we know explicitly. You know when its time to get bullish a lot more accurately than you can pick and shoehorn the specific TA pattern to future price action.

You will get far further in this game just trying to figure out if we are bullish over the next hour/day and roll with it.

 

[nomore4s]

Nah either I was too flippant or you have missed what I was saying. Work out what type of market we are likely to have then workout how your brand of TA may fit in so as to frame trades (wrong/right & R:R). All the work is in the IF not the THEN. By that I mean don't get hung up on details. You know likely range from recent history. You know where we are opening. You pretty much have everything there. How we get from present to the extended range is chaotic. TA will not help you.

For example. When trading your EOD systems my bet is you know when is a more optimal time to be playing long even without taking note of your system signals or specific TA setups. You just get a feel for what is setting up based on previous price action. Even thou most of the time you are letting your system do its thing you still recognise the feel of a market. We know a lot more than what we know explicitly. You know when its time to get bullish a lot more accurately than you can pick and shoehorn the specific TA pattern to future price action.

You will get far further in this game just trying to figure out if we are bullish over the next hour/day and roll with it.

Great Post TH, especially the bold bit, took me a long time to work that out when day trading.

My best days have always come when I have identified those bullish or bearish hours/days and traded with it. It took me a long time to realise day trading is not about any super special set up but about identifying the daily/hourly trend/pattern and then either participating in it or standing aside because it doesn't suit me.

 

[sinner]

You will get far further in this game just trying to figure out if we are bullish over the next hour/day and roll with it.

****, I swear I tried to explain this to CanOz already at the end of June.

You need to break the action down, intraday trends sometimes and mean reverts on the rest. Some valid breakdowns are volatility per time (e.g. Monday 9-10AM is quite different from Thursdays 11-12PM), volatility per absolute momentum (e.g. low vals follow through, high vals mean revert), or volatility per volume (follow when auction is unbalanced zone, fade when auction is balanced zone). Of course you can combine them all but they tend to show high correlation anyway. For the record I use volatility per momentum as well as per time (love them opens), and tend to follow rather than fade intraday.

This is only an example, but if you read this
http://trading-naked.com/library/Chap3.pdf
there is a good 'thought experiment' on breaking an intraday strategy down by time (near the end) which could give you a good idea of what I mean.

Or take a look at the (daily) returns of 'follow through' strategies using this volatility per momentum, broken down per percentile
http://cssanalytics.wordpress.com/2010/06/29/trend-strength-index-tsi-results-summary/

But of course, that's "fitting dynamism into neat boxes" lol.

I trade intraday discretionary, so the 'boxes', as you call them, are guidelines, not signals. I suffered from the same problem as CanOz described until I started to quantify the intraday charts by robust metrics and use them as my map. At the very minimum you can see if today is the same as the recent past or the pattern is changing.

 

[Joules MM1]

"fitting dynamism into neat boxes"

isnt that exactly what t/a attempts to do

 

[Joules MM1]

"fitting dynamism into neat boxes"

and isnt the art of fading the faders sometimes via t/a cos i know where and when some groups of traders will come into the game to play their little boxes.......so how does that make t/a wrong....it doesnt, it merely frames a period of activity......how well a trader understands that part of the auction activity is the key not the t/a itself as t/a is just an overlay.......sometimes its a cover-up for lack of understanding and that's exactly how faders get faded

 

[CanOz]

Using some levels from the past and today, this is one of the trades i took today...Still in it for now...

CanOz

 

[CanOz]

In on another pullback, but a bit late. Now its at the HOD again, a fail could see another test lower, but its holding the sellers for now...

 

[CanOz]

Failed the high test, waited for a pause before getting short.