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Market Profile One-Time Framing Technique
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Market Profile One-Time Framing Technique

  #51 (permalink)
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Cvital,

That's why I've re-asked you in what direction you are taking trade.
But it's ok we as are learning.

Krgds,
Andrew


Cvital View Post
I was counter trend.
They used 117'110 like a support.
The MFE was just for 5 ticks, I needed 8 ticks.


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  #52 (permalink)
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I hope you don't mind me adding to your Market Profile thread. I didn't think it was necessary to start another thread, but I can if this is too off topic. I created a profile of CL and indicated areas of interest to see how price acts in those areas to help with trade decisions. Comments are welcome. I hope i have not misinformed anyone based on my comments. There are two images. Best to look at the one with individual daily profile first and then the merged profile.

Image on the right is the individual profiles.

David

Attached Thumbnails
Market Profile One-Time Framing Technique-1-29-2010-cl-proflie-merge.png   Market Profile One-Time Framing Technique-1-29-2010-cl-profiles.png  

Last edited by David_R; January 29th, 2010 at 07:33 PM. Reason: indicate which image to view first. had to update image
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  #53 (permalink)
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Great post David ,

can you elaborate more on how you use this TPO charts ,

ban.

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  #54 (permalink)
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banbrooke View Post
Great post David ,

can you elaborate more on how you use this TPO charts ,

ban.

Long winded...

Ban,

I will do my best, but I am no expert by any means. As we can tell from the futures.io (formerly BMT) website, there many ways to do the same thing, trading. I think Market profile lends itself to many approaches, some more complex than others. In trying to keep with the KISS (keep it simple stupid) mentality, I will try and give an idea how these charts can be used. When I begin trading again I will be incorporating MP into my plan. This link will take you to a page on a site that will give you a little overview of the profile and what it means. Market Profile Terms

The reason I like the concept of Market profile is because it comes from what I call a scientific of logical perspective. If you look at the image with the merged profile of 4 or so days from my prior post, it takes on the appearance of a Bell Shaped Curve. I'm not a statistician or anything like, but most have heard of the bell curve. It was/is used when giving grades in school and in any area where looking at the distribution of data. I don't mean to assume you don't know, but I'm just rambling and giving you some details.

If you look at the height of 1000 men. You will have some very short, some very tall and most will be in a range that falls into the 70% area, or one standard deviation. The very tall and Very short would be considered extremes. In the context of trading the same applies in a distribution of trades at a certain price or TPO (Time Price Opportunity). Most of the trading will take place within the 70% area and the extremes of high prices and low prices would be considered too expensive or too inexpensive. Of course prices do move vertically either up or down, but at some point the vertical move stops, goes sideways and then does it again.

The TPO chart is made up of letters. Each letter represents a half hour of time. So A is the first half hour of trading, B is the second half hour, C the third and so on. Wherever prices trade during each half hour period a letter will appear. So if during the A period, B period and C period prices traded at 70.00 there would be the letters A,B,C at the price of 70 on the X axis. If price traded at 74.75 in A period, but it only traded there for an instant, or a few trades ,you would see one A and nothing else. If you look at the attached image you will see on the profile on the right that during A period prices went up to 74.86 and left single prints of A at a few levels. When you see single period prints (letters of only one period such as A) it usually means less volume, but more importantly a rejection of price. Also, since the letters represent 30 minute periods think of the each period as a 30 minute bar chart. Each lettered period is a bar. The profile are those bars collapsed on each other and wherever you have the most trades or TPO's will be the widest part of the profile.

In order to not make this post enormous I will jump to some usage. Consider the Value area as fair prices and the Value area high and low as the extremes of fair prices. This could be considered support and resistance. Since the current day we are trading has not developed or completed we use the prior day or days profile to give is areas of support and resistance. In addition to the VAH and the VAL the bases of selling tails and buying tails act as support and resistance as well as high volume areas and low volume areas. I will point these out on the picture. The profile is also used to come up with a bias for the day or longer. If your bias is down then look to short. Of course it does not mean you can't go counter trend, but in general the bias is a safer play.

Now I could be full of it, but my intention is to use this tool to define potential areas of support or resistance, see how price behaves at those areas and trade accordingly. Generally, for a day in question such as today, you would look at the prior days VAH, VAL, POC as well as high of day, low of day and the close. You would also look at these areas further back in time such as the day before or two days before. Additionally you would want to look at the open in relation to the prior days Value Area. Today CL opened above the value area of yesterday. This could be considered bullish and there was a nice move, but it hit resistance.

My main thinking is that MP provides market structure. With a bias, and the structural reference zones for S/R a trade based on the profile should yield more profit than 10 or 20 tics. Since price was rejected at the high today, a structural reference zone, it should move lower and considerably. The tough part would be hanging on for the ride. Something i am not good at.

I hope this is of use. So, in answer to your question, how I would use the TPO and intend to do so when I begin again, is to try and find these areas and trade based on them. Regardless if the area is rejected or accepted, price should have a decent move. I was looking at the MP for the YM today. There was a 100 point move off of the VAH resistance. In a SIM trade I took I made 20 tics on one contract and was stopped out for +15 on two others. I didn't know the zone at the time. I looked after the fact.

One last comment. Since the profiles from the prior days overlap by 50% or more they get merged together. That merged profiles POC is approx where resistance was today.

David

Attached Thumbnails
Market Profile One-Time Framing Technique-1-29-2010-cl-profiles-usage.png  

Last edited by David_R; January 30th, 2010 at 04:04 AM. Reason: added comment about merged profile.
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  #55 (permalink)
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Thank you so much for a very detailed explanation

Ban.

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  #56 (permalink)
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hegh, could you please provide links to your thread in NT and also the imarketPersonal? Very good work. Thanks.

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  #57 (permalink)
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cclsys View Post
hegh, could you please provide links to your thread in NT and also the imarketPersonal? Very good work. Thanks.

hi,

iMarketProfile1_65 - NinjaTrader Support Forum

the indicator is already posted on the site of futures.io (formerly BMT)

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Register to download File Type: zip iMarketProfile1_65.zip (6.1 KB, 51 views)
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  #58 (permalink)
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Thanks, hegh, I did manage to find it but it wasn't easy. I think I didn't type in the 1 after imarketprofile or something. Like others here I don't get the same looking charts. A template would be nice to at least get started with it. Also the personal one with the Value Areas nicely bracketed looked good.

Currently use dValue with dynamic PVP. You might want to check it out and see if you can put in a dynamic PVP/POC on yours. I am finding it very helpful during live mkt tracking. Dynamic Value areas would also be good. Plus a vwap synchonised to start and end at same time as the marketprofile calcs.

Of old the skilled first made themselves invincible to await the enemy's vincibility.
Invincibility lies in oneself. Vincibility lies in the enemy.
Thus the skilled can make themselves invincible.
They cannot cause the enemy's vincibility.
Thus it is said: 'Victory can be known; it cannot be made.'
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  #59 (permalink)
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hello,

I am not convinced by POC dynamics.
I prefer to use MP as described in Mind Over Market on 30 minutes UT.
For the dynamic, actually I use the VWAP.
Combining the two, I think we can identify the movement of the market.

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  #60 (permalink)
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Fair enough. I find re-tests of the current PVP are often very interesting.

My version which you kindly linked as one less input than the one in all your pics. I have copied the inputs as best as possible and am now getting results closer to your pics. Thxs.

Of old the skilled first made themselves invincible to await the enemy's vincibility.
Invincibility lies in oneself. Vincibility lies in the enemy.
Thus the skilled can make themselves invincible.
They cannot cause the enemy's vincibility.
Thus it is said: 'Victory can be known; it cannot be made.'
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