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CL Market Profile Analysis
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CL Market Profile Analysis

  #31 (permalink)
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Hi Everyone,

I have not posted as much because it does take a fair amount of work and the thread does not get that much traffic, so i thought I might do an occasional post that encompasses more time and I still want to continue to look at the market in this way. The detail is in the charts. I take a longer term view as well as a current day time frame view. It is interesting to look at the market in this way because one could take the view that the market is out of value and prices are to low, but if you zoom in, that may not be the case.

Look at pics left to right. I go back in time and look at just individual daily profiles and move forward in time. There are two merges or profile overlays that are made up of the individual daily profiles and finally one large one month merge.

I'm currently not trading CL, but with market profile as a tool and if patient and selective there are some very nice opportunities. Feel free to comment.

David

Attached Thumbnails
CL Market Profile Analysis-cl-day-profiles-2-12-3-4.jpg   CL Market Profile Analysis-cl-day-profiles-3-5-3-26.jpg   CL Market Profile Analysis-cl-merges-2-12-3-4-3-5-3-26.jpg   CL Market Profile Analysis-cl-32710-1-month-merge.jpg   CL Market Profile Analysis-cl-15-min-candle.jpg  

Last edited by David_R; March 27th, 2010 at 07:45 PM. Reason: Added 15 minute candle chart
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  #32 (permalink)
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David, I appreciate your posts and wanted to say they are very informative.

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  #33 (permalink)
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Big Mike View Post
David, I appreciate your posts and wanted to say they are very informative.

Mike

Thanks, Mike.

D

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  #34 (permalink)
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David_R View Post
I have not posted as much because it does take a fair amount of work and the thread does not get that much traffic, so i thought I might do an occasional post that encompasses more time and I still want to continue to look at the market in this way.

I often feel that way too. Are you doing this thread for yourself or for everyone else? Or maybe both? As long as you're doing it for yourself then I think it's ok if there is not a lot of traffic.

I'm just beginning to learn Market Profile so I'm following along with your posts and I'm learning a lot, I just haven't posted because I am still learning all this. I think it's a great thread.

How do you like Finalg? I'm debating if I want to try it or just keep Market Delta. I use market delta for 3 reasons:

- market Profile
- volume ladder
- delta momentum

it seems the GOM ladder can do #2 & #3 and Fin alg can do #1. What do you think?

Also, are you tracking the MP for CL in order to day trade CL or for swing trading?

Thanks for sharing.

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  #35 (permalink)
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cunparis View Post
I often feel that way too. Are you doing this thread for yourself or for everyone else? Or maybe both? As long as you're doing it for yourself then I think it's ok if there is not a lot of traffic.

I'm just beginning to learn Market Profile so I'm following along with your posts and I'm learning a lot, I just haven't posted because I am still learning all this. I think it's a great thread.

How do you like Finalg? I'm debating if I want to try it or just keep Market Delta. I use market delta for 3 reasons:

- market Profile
- volume ladder
- delta momentum

it seems the GOM ladder can do #2 & #3 and Fin alg can do #1. What do you think?

Also, are you tracking the MP for CL in order to day trade CL or for swing trading?

Thanks for sharing.

Cunparis,

You make a very good point. I was doing it for myself and for others, but was hoping that others would be more interested. I think it is important to continue the thread for myself and realize that the way I like to look at things may not be the way others do. I know you experience this with you cycles thread. We just can't take it personally if others are not interested in how we do things.

I like the Fin-Alg add on a lot. My original thought was that with Ninja and the Fin-Alg MP add on that I would have all I need, and it may be, but, I'm not 100% happy with Ninja or Zenfire. I'm not sure which is the culprit, but one of them can be problematic. I've had issues ranging from a freezing workspace, the DOM or chart trader indicating the wrong price of my fill, to not being able to enter my workspace without having to run through some hoops. The one thing that I don't like about the Fin-Alg add-on is that when you make splits or merges it does not retain them, so if you exit the chart or even just repaint the chart for some reason, the splits and merges go away.

Like you I mainly got MD for the footprint (volume ladder) charts and the volume breakdown indicator.

Yes, it seems that GOM can do the things you mention, but the fact that it's code written by a user you never know if it is totally reliable. I'm not ridiculing GOMI because I think what he has shared is very generous of him. Something Ben Brooke said to me, and it speaks volumes, he said, "if you want to be a professional trader, you need professional tools".

I like to day trade CL. I always thought swing trading would be the way to go, but I don't know if I have the patience for it. I find it difficult in managing a swing trade. I never know how much room to give it and don't want to give back too much profit etc etc. I suffer from a lot of what Big Mike talks about in many of his threads. I don't think my methodology is faulty, but my psychology and emotions are. I agree with mike 100% that the success or failure in the business is not in the indicators etc, but between the ears. That is a little off track.

My trial for MD still has about 3 weeks to go, so I am giving it more time, but am leaning towards keeping it for charting and then just using the DOM on Ninja for execution.

I think in your case it would be beneficial to narrow down the platforms. I think having TS, Ninja and MD is too much. Also, I'm not sure you need to trade your cycle method and use MP. The more I've looked at different things the more I think they are very similar. I have found that when price stalls at a MP level it can also be a Floor Pivot level or a fibonacci level of some kind. I wouldn't be at all surprised if it coincided with a Hilbert Sinewave turning point as well. It seems as though in the end it all comes down to a level of support or resistance and what price does at that level. I like MP for support and resistance because it is statistical in nature. You can see where price has spent the most amount of time as well as where most of the volume is, as well as where the interest is via buying and selling tails etc. Additionally, if one agrees with why markets exist, which is to facilitate trade, and that prices go up to find sellers and down to find buyers then the profile is the tool for that.

I hope this rambling was of use.

David

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  #36 (permalink)
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The GOM software is excellent so far but if one is profitable then $200/month isn't really a big deal. I too have problems with ninja and I'm not even doing that much with it really.

I hope you continue the blog. I'm just now working on learning MP and incorporating it into my swing trading for ES.

Swing trading CL isn't a good idea IMHO, it's too wild. So I was curious if you were using MP for daytrading or swing trading or both. I daytrade CL so I am interested in your MP work for CL. I think anticipating key areas is very useful.

one thing I love about market delta is I have the MP levels automatically drawn on my charts. So when looking at my charts I see the POC, VAH & VAL, etc. and they update automatically. That's very useful and a real timesaver for me. I don't have to do them manually.

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  #37 (permalink)
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David - would you mind if we talk a little about ES as well as CL? Or do you prefer to keep it strictly to CL? I understand if you do. The reason I ask is cause I try to apply some of the ideas I get in this thread to ES to see if I can do it with a different market.

I'm not yet sure when to make composites, what days to use, etc.

While studying ES I noticed that the last 8 days have been pretty much overlapping so I combined the days circled in red to make a composite. This looks to me like a "mature" balanced area and it seems like a breakout from this area should be a good move. We've already had a few breakout attempts which we can see with the single print at the top & bottom. While waiting for the breakout should I be looking for longs at the bottom and shorts at the top? What would you be looking for based on this profile?

Thanks for sharing, I'm really digging this market profile stuff. I'm almost finished with Alexandar's book which is a nice summary.

PS: The POC is at 1061. I actually used the POC the other day (I think it was 1063 at the time) to exit my short. I wanted to get out at the POC because I anticipated the market would be trading around it for a while. So far that seems to be the case.

Attached Thumbnails
CL Market Profile Analysis-es-mp-daily.png   CL Market Profile Analysis-es-mp-composite.png  
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  #38 (permalink)
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C,

No, I don't mind if you talk about ES. I originally made a MP thread for CL because it appeared to me that a lot were trading CL and they would have interest in that type of analysis, but MP analysis in general is fine with me. I think it applies to any market. Its not a method just a depiction of the data in a different way.

For composites I do what you did. If the value areas overlap by 50% or more I will merge them. You can also just take a number of days or time period such as a week or month and create a composite.

As far as I know you hit the nail on the head as far as trading the composite or range. You short at the highs and buy the lows. In other words, you are buying and sell the "out of value" area or the unfair highs and unfair lows.

I saw your post about you trade and using the POC. I think in ATM (Auction Market Theory) if you short the high the first target would be the POC because its my understanding price will revert back to the mean or POC. The second target would be the VAL. Of course this can be tough to hold on to. The interesting thing about what I just said can be applied to a composite of several days as you have shown, or a profile or balance area based on a 5 minute chart. I don't know if you know, but with Market Delta you can draw a profile on a candlestick chart or bar chart etc. with one of the drawing tools. The one that looks like a profile.

I would be looking for exactly what you described, but I would use levels based on the individual profiles that may be confluent with the composite. In other words, for example, on the 26th it is somewhat of a double distribution type day. Lets say price stalled at the upper high volume node from the 26th and presented a short trade. That area may not coincide with the extreme on the composite, but I think that is okay. The composite paints a larger time frame picture that may not be conducive to day trading.

The composite looks fairly mature, but kind of peaky as opposed to bell curved. The market can do anything from breaking out this week to rotating back and forth with in the composite to fill it out a little more. It could be weeks if not longer before showing its hand. We never know. At least I don't know.

D

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  #39 (permalink)
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Thanks David, I'm glad that I am on the right track in regards to Market Profile.

ES is gapping up outside of the value area. I'm studying charts and trying to figure out if I should fade this move or not.

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  #40 (permalink)
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cunparis View Post
Thanks David, I'm glad that I am on the right track in regards to Market Profile.

ES is gapping up outside of the value area. I'm studying charts and trying to figure out if I should fade this move or not.


C,

In my opinion you fade it at a specified area such as a high volume node and or POC of a prior day, or the high, low, close of a prior day. Some area of significance. Of course use the foot print to determine if the fade looks like it might play out. I'm not a fan of just fading a gap.

D

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