Thats why i think most people fail. They treat everything with rigid rules, like if they see alot of trades at the bid, then someone is selling real hard, so you must go short. If a hammer forms, you need to take a long. If you get a green bar at a MA, you go long.

You will never make money doing that. You need to see what happens, and then react.

If you see huge orders being traded at the bid, and it stalls there for 5 min, and fails to go lower( meaning all it can muster is 1-2 ticks more to the downside), and starts trading back up, then thats bullish. Now if you see orders picking up at the ask a few ticks higher after this, then you have a reason to go long with a reasonably small stops. Its exactly what cunparis said, someone is absorbing the selling, or its a limit buyer. You don't know until the market tips its hand.

People treat their indicators like a buy and sell switch. Thats why you constantly hear people on these forums talking about how its impossible to make money.

I kind of wish i could show you guys a video ( I record all my live trades), but the files are huge, and my DOM is on there, with my account number.

If enough people are interested, i could try to do one using the ladder and record without my dom( with chart trader on) so you guys can see the trade. Ill put a separate dom up on sim so you can see the level II

I am experimenting with the buysellvolume and buysellpressure indicators from ninjatrader .....

Try Investor R/T (or MarketDelta,but IRT is cheaper and just as good) .. the volume breakdown indicator does what you want.

here's a link that should work:

https://www.cmegroup.com/education/interactive/marketprofile/handbook.pdf

got it from here:

TradeMaven, Futures and Options Broker, Trader Education, Charting, Alternative Investments, Navigator


and here's my favorite market profile software:

Final| Financial Algorithms

VSA is very useful. It makes assumptions about the volume, where it occurred and who was the dominant side. Some of those assumptions can be clarified/proven by looking at time & sales and/or volume profiles & ladders.

Be careful using indicators such as buy/sell pressure as all this is very context specific and those indicators ignore context. One can study time & sales, DOM, & volume ladder rather than use an indicator.

@josh,

Thanks for the tip.
I´m curious if one can also use Gomi´s volume delta bars but as far as I remember, he use bid and ask values to generate the bars. Do you use IRT and if yes, have you compared it with gomi´s delta bars and what are your experience / conclusion with IRT?

Thanks and best Regards,
Abde

Adbe,

I used to use IRT but when I stopped using volume profiling I found it not worth the additional cost as I had to have another program to place orders. I have not used gomi's stuff in actual trading but when I've put them on the chart I've found them to be similar. If you use NT for everything and can get gomi's stuff to work, it's worth it to me not to have to run 2 programs. But like I said I don't use any of that stuff much. You can try IRT for a month at a time, it's $75 per month and quite a nice program, just not for my needs.

VSA is very useful. It makes assumptions about the volume, where it occurred and who was the dominant side. Some of those assumptions can be clarified/proven by looking at time & sales and/or volume profiles & ladders.

Be careful using indicators such as buy/sell pressure as all this is very context specific and those indicators ignore context. One can study time & sales, DOM, & volume ladder rather than use an indicator.

Are you using an indicator for your VSA? Because I use range bars, time is something I don't take advantage of. With the bettervolume indicator, Fat Tails says it can't be used on all time frames. Between 3 to 10 minutes is the best choice. How are you using VSA?

The better volume indicator is a VSA indicator, in the sense that it exclusively relies on the analysis of spread and volume. It uses a lookback period of 20 bars and identifies events, where either the product of volume and range, the ratio of volume per range or volume itself are highest or lowest over the lookback period.

The problem occurs, when you use it in a way that some of these 20 bars are pre-session bars (which always have a lower volume) and some of them regular session bars. You will get lot of signals, when the regular session starts, which you have to ignore.

For example, if you use the better volume on a 15 minute chart, it will give you reliable signals prior to the session start. Then it will trigger lots of signals anyhow, which cannot be used. Once you are 20 x 15 minutes = 5 hours into the session, the signals will have the same quality as before. So there is a blind spot after the session start. Even if you reduce the lookback period to 10 bars, the blind spot will still be 2 and half hours.

Now with 5 min bars, the blind spot is about 100 min, with 3 minute bars it is exactly one hour. If you just use 1 min bars, the blind spot will only be 20 minutes, but 1 min bars may not be reliable, at the high volume bar may just show a large order that was dropped. I have personally found that signals from 1 min bars are not significant, and I want to see a sustained pressure over a longer period of time.

The Better Volume indicator works well on daily charts, as these are not affected by low pre-session volume.