NexusFi: Find Your Edge


Home Menu

 





Market Profile Initial Balance Setup


Discussion in Emini and Emicro Index

Updated
      Top Posters
    1. looks_one Dazzc with 7 posts (3 thanks)
    2. looks_two Devil Man with 3 posts (8 thanks)
    3. looks_3 matthew28 with 2 posts (9 thanks)
    4. looks_4 bobwest with 1 posts (7 thanks)
      Best Posters
    1. looks_one bobwest with 7 thanks per post
    2. looks_two matthew28 with 4.5 thanks per post
    3. looks_3 tr8er with 4 thanks per post
    4. looks_4 Devil Man with 2.7 thanks per post
    1. trending_up 7,492 views
    2. thumb_up 32 thanks given
    3. group 4 followers
    1. forum 14 posts
    2. attach_file 0 attachments




 
Search this Thread

Market Profile Initial Balance Setup

  #11 (permalink)
 
matthew28's Avatar
 matthew28 
United Kingdom
 
Experience: Beginner
Platform: Bookmap
Broker: Stage 5, Rithmic
Trading: US Equity Index Futures
Posts: 1,250 since Sep 2013
Thanks Given: 3,500
Thanks Received: 2,532


Dazzc View Post
In terms of data do you just include the pit sessions or the entire ETH. Thanks

Sent using the NexusFi mobile app

Quick answer. I only show the session I am interested in trading. For the US equity futures I would use profile 9:30am- 4:15pm. and the rest of the time I wouldn't see which would give me gap opens if price has moved during those Asian European morning sessions.

Same with Dax. I would follow the European stock market session times. If I also potentially traded up to the US session close I would extend the profile and end with the US close (that gets tricky in Spring and Autumn when the UK and US clocks time difference changes for a week or two with the summer time clock changes.

If trading currencies I would still only profile the session I was interested in. So for the Euro or Sterling, the European session time and ignore the Asian session for the profile. I would only trade the Asian session if trading a currency from the time zone, say the USDJPY (but as I live in the UK I would stick with the currencies most heavily traded by this country).

Just my thoughts. I think different people will have different answers but as long as you choose a reason that makes logical sense as to why you use a certain period's data, and aren't interested in another portion of the day (and aren't excluding a high volume/heavily traded part of the day for your market), you are good to go in my opinion.

ps This answer only applies for Market Profile where I wouldn't one profile bars showing from the low volume Asian session. If I was creating daily volume profiles, as opposed to market profiles, I would just use the full ETH volume profiles laid on to of a standard barchart.

You do not win as a trader, you just get to play again the next day. If that game doesn’t appeal to you then you should not trade. Gary Norden
Reply With Quote
Thanked by:

Can you help answer these questions
from other members on NexusFi?
Better Renko Gaps
The Elite Circle
New Micros: Ultra 10-Year & Ultra T-Bond -- Live Now
Treasury Notes and Bonds
My NT8 Volume Profile Split by Asian/Euro/Open
NinjaTrader
Deepmoney LLM
Elite Quantitative GenAI/LLM
Futures True Range Report
The Elite Circle
 
  #12 (permalink)
 
bobwest's Avatar
 bobwest 
Western Florida
Site Moderator
 
Experience: Advanced
Platform: Sierra Chart
Trading: ES, YM
Frequency: Several times daily
Duration: Minutes
Posts: 8,162 since Jan 2013
Thanks Given: 57,341
Thanks Received: 26,267

Hi @Dazzc, I'm really not the best one to respond to these questions, since I don't use either volume or market profile and don't use Initial Balance either.

But not really knowing what I'm talking about doesn't always stop me, so I have a few thoughts anyway. Take them with as much salt as you think they should have.

To start, you ask:

Dazzc View Post
I was wondering if someone could clarify the correct times to be looking at IB in terms of the time frame.

I will guarantee that you will get about as many answers as you get people who will try to answer this. There is probably more than one reason for this:

1. Often, in trading many different ideas work out fairly well. Different traders will inevitably apply them differently, and will get their own results, often different from the results of others. No one looks at a chart or a market situation the same way, nor trades it the same way.

2. The concept of Initial Balance, as the balance reached in "initial" trading, was formulated, along with Market Profile (as distinct from Volume Profile, which came along later) on the CME by J. Peter Steidlmayer in the 1960s, when the only futures trading was pit trading, and when prices were only available at half-hour increments. So Market Profile charts are often still plotted on a 30-minute timeframe, and the Initial Balance is still often based on a multiple of 30 minutes (one hour, as a rule.) It is not that there is a "right" way, just that it has traditionally been this way. Can it work? Of course. But others use other ways of doing it, and many use an "opening range" concept, which is similar in some ways to IB, and I have seen different opening ranges being successfully employed by different traders. Many others don't use either IB or OR, and do fine.

So to a degree, the one-hour Initial Balance (and a "balance" of the initial pit hour trading) is something of a holdover from an earlier time. It still may work fine, but it is not "right" or "wrong," and there is not necessarily a "correct" way to do it.

3. To expand on this, asking for the correct way to figure the IB is probably looking for something that isn't there. Instead, see what doing things one way, and then another, do for you and let you trade effectively.

So, for instance, you received an answer that says not to care about pit sessions:

Devil Man View Post
I just do ETH anymore...I don't really find the pit sessions relevant, but that is just me. Try both and see if you can catch an edge.

And another who says, yes, do use pit sessions:

matthew28 View Post
Quick answer. I only show the session I am interested in trading. For the US equity futures I would use profile 9:30am- 4:15pm. and the rest of the time I wouldn't see which would give me gap opens if price has moved during those Asian European morning sessions.
...
Just my thoughts. I think different people will have different answers but as long as you choose a reason that makes logical sense as to why you use a certain period's data, and aren't interested in another portion of the day (and aren't excluding a high volume/heavily traded part of the day for your market), you are good to go in my opinion.

They both also say to do what works for you, and I would say the same.

----------------------

One last thing:

Dazzc View Post
Always thought in general UK markets opened 8am GMT and EU 9am CET i.e. same time. Seems to be the case based on volume evidence anyway. Unless I'm mistaken? Cheers

You don't have to make assumptions. You can Google the particular exchanges for trading hours, or check here:
https://www.market-clock.com/
or here: https://market24hclock.com/
or here: https://www.tradinghours.com/

Bob.

When one door closes, another opens.
-- Cervantes, Don Quixote
Reply With Quote
  #13 (permalink)
Dazzc
Cardiff, UK
 
Posts: 30 since Oct 2020
Thanks Given: 22
Thanks Received: 7



matthew28 View Post
Quick answer. I only show the session I am interested in trading. For the US equity futures I would use profile 9:30am- 4:15pm. and the rest of the time I wouldn't see which would give me gap opens if price has moved during those Asian European morning sessions.

Same with Dax. I would follow the European stock market session times. If I also potentially traded up to the US session close I would extend the profile and end with the US close (that gets tricky in Spring and Autumn when the UK and US clocks time difference changes for a week or two with the summer time clock changes.

Cheers for the reply and apologies for the delay in response,

I understand with regards to choosing the time zone you are trading within but I am wondering what is the most accurate way to mark out points of interest i.e. TPOC, upper value areas etc... and what is the best way to achieve this accuracy with session time settings e.g. will the TPOC for a daily profile for a Euro stoxx 10 days ago be more accurate with a Pit euro session open -> Pit Euro close or a Pit euro session open to a pit US session close.

I think you touched open it in the later part of your reply and agree with what you said with regards to where the most volume is traded i.e. the Pit Euro Open to Pit US close this would make more sense in achieve a more accurate TPOC.

Reply With Quote
Thanked by:
  #14 (permalink)
Dazzc
Cardiff, UK
 
Posts: 30 since Oct 2020
Thanks Given: 22
Thanks Received: 7

@bobwest

Cheers for the reply, I'll take your advice on board. Seems IB is more fluid as you stated. Thanks also for the links re market hours.

Reply With Quote
Thanked by:
  #15 (permalink)
 
FundedTrader82's Avatar
 FundedTrader82 
Miami, Florida, USA
 
Platform: Ninja Trader 8
Trading: Futures
Posts: 29 since Apr 2021
Thanks Given: 51
Thanks Received: 26

I've always been taught that the IB is the first hour of cash open. From what I am learning from Axia Futures (Brannigan Barrett), he says the Initial Balance is the pre-cash session. It is a period where it is unlikely to see bigger timeframe participants or cash participants enter. It should imply low volume / lack of liquidity and is the earliest identifier/reference point/pivot on the day. Makes sense as you can use relative strategies that are highly effective.

Edit: Not exact time, but "always the period of trading that excluded the cash market, e.g., time period that excludes large timeframe participants (pension funds, hedge funds, etc. that initiate)"

10 minute point in video is where he explains it very well, where it doesn't matter what time IB you use as long as you can justify it and stay consistent with it. I personally am seeing very good IB from 7pm est- 4am est on ES.


Reply With Quote
Thanked by:




Last Updated on July 19, 2022


© 2024 NexusFi™, s.a., All Rights Reserved.
Av Ricardo J. Alfaro, Century Tower, Panama City, Panama, Ph: +507 833-9432 (Panama and Intl), +1 888-312-3001 (USA and Canada)
All information is for educational use only and is not investment advice. There is a substantial risk of loss in trading commodity futures, stocks, options and foreign exchange products. Past performance is not indicative of future results.
About Us - Contact Us - Site Rules, Acceptable Use, and Terms and Conditions - Privacy Policy - Downloads - Top
no new posts