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Look for areas around discount, fair price, or premium (also known as VAL, VPOC, and VAH) (you can also do this on a TPO chart)... and you can do it with VWAP as well (just use VWAP -1 std dev for discount or VWAP +1 std dev for premium).
What you are looking for is bidder support at/around discount. This is ONLY visible on the DOM. Second, look for transactional interest on the OFFER side for buyer aggression, or for Bid transactions that dont push price lower (this is absorbtion). Apply the opposite for the premium area.
Price does not matter. Fair value/price are established with either volume and/or time.
I clipped a picture to highlight the things I am talking about.
I am joining this party late. Not sure if argument here is possible. Highest high of N periods is an indicator, but nobody would argue trading breakouts is price action.
As far as I can gather quants use all kind of calculations to derive trading systems, including generic indicators.
Nothing wrong with using indicators as directional filters and/or setups. Here is the free trading system. I tested it on currencies. It is a variation of a well known O'Connor's system.
Directional filter: RSI(close, 50) > 50
Entry setup: RSI(close, 2) < 20 (anything below that works as well, produces fewer signals.
Entry signal: stop order at the high of the current bar. Or at market. Or if close >yesterday's close.
Reverse for the shorts. Stops and profit targets depend on a particular underlying. Works quite well if you allow additional entries if the trade goes the right way and you take long term view.
Anyway. Where was I... Bickering about indicators is pointless.
informative thread.
My broker's DOM is really goofy, and other traditional successful things.
my time turned around needing a beeping noise for possible entries (I cannot sit at the screen for long)
came up with this. I am always ahead of the entry points if i have time enough at the chart.. but it is a helper anyway.
It's a sideways market now, so some of this stuff is worthless.. (I have to determine sideways on my own- end up playing with ticks sometimes)
tried to post image..but am first time poster.
vrvp
lorentzian classification (that is the extra helper when not at screen- I have headphones on listening for beeps while i am elsewhere.)
volume
MA
LarRSI
all the above are tweaked to my own trial and error.
all at trading view.
I am no closer than 1 hour intervals. Boring yes.
I'm afraid I don't follow. What is your basic strategy and what is the trigger for entry?
Persistence! Nothing in the world can take the place of persistence.
Talent will not ... nothing is more common than unsuccessful men with talent.
Genius will not ... Unrewarded genius is almost a proverb.
Education will not ... The world is full of educated derelicts.
Persistence and determination alone are omnipotent! Calvin Coolidge
very extreme bottoms or tops.
everything has to align, including DXY (and sometimes treasury.- but that one is proving to be less important as rates plateau)
ie..at the current moment, no real trades for days..(I did take a beating yesterday, playing around.. that is what I get)
I am watching the next hours and possible day or two randomly..hedphones on, listening for beeps while away.
Basic strategy is easy. Look for buy opportunity at discount. Look for sell opportunity at premium. Carry your product to the fair-price (vpoc) region and unload it to retail. Keep a runner or two with a trailing stop for a bonus few points if it is going to come your way.
There's no particular trigger. Every trade is a 50/50 probability when you enter. It only becomes better than 50/50 when more sellers (or buyers) enter along with you. It is size and size only that moves a market. Retail is blind to this fact and trades only on price...(look its going up... look its going down). A professional trader is already long or is already short before the move. Take a look at your candlestix with a volume-by-price format attached to the candle. You'll see that most of the "action" occurred out of view of the retail candle trader that uses indicators. Indicators are lagging and are all a derivative of price. The only thing you need is a Volume Profile and a Time and Sales (formatted into a footprint style helps alot).
Take a short opportunity for example. Product inventory will display the premium level quite easily (it is called VAH in Sierra Chart). Look for both larger sell executions (bid-hits) and for DOM offers-to-sell.
This is not as hard as it sounds. You do not need indicators. You just need a basic understanding of what/how product inventory is and how it moves according to regression-mechanics (using a bell curve). Traders that do not understand this constantly get caught offsides.. and it is visible on the #'s bars. Professional traders will sell against a high-buyer at/around/above product premium, and it is how the game repeats itself, over and over. The system is fractal, so it works on all timescales, however, it works most practically from a daily VP and a footprint with DOM.
I attached a picture from an academic review I did. This is from the sim-practice, and was a review of a live trade that I took earlier in the day.
I have been trading for 15+ years, have survived my own errors, the candlestick world (which doesn't work), and hired an institutional mentor that spent over a year with me on various learning and setups. I am very serious about my trading, and this is how I make and earn an excellent living.
I use the indicator for not being able to sit there. It makes a beep noise. it have rarely worked for me..it is just another chance while away from compter
this morning I saw the dramatic DXY drop, puts outnumbering calls (on my chart that means puts are screwed or we go sideways), and the treasury 10yr drop. .. following jobless claims.
I simply paper'd in at the start, end of days was substantial...
but I was sitting there to be able to monitor and make a call.
