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The paintbars on market data are a custom indicator that I wrote, which is very similar to the better pro am paintbar. I have not made that one public.
I am new to this forum and am interested in using volume trading the ES. I am considering buying the Pro Am indicator from emini watch, but am not certain as to how to use it effectively.
Even after watching the video found here ( emini-watch.com/volume-patterns-how-i-interpret-professional-and-amateur-bars/647/ ), I am not convinced as to the usefulness of labeling a bar as a "pro" or an "am." On that video at 8:37 in the video, on the chart at 10:32 you can see that four down bars were labeled as professional--if so, why then did price bottom out at that point? The answer I suppose is that pros were buying into the bottom--but how do you KNOW that in real time, without knowing it's a bottom? Also see a similar case at 14:42 in the chart where pro bars are present--how do you interpret if this is buying or selling?
I know nothing works all the time, I'm just trying to see if an experienced trader as yourself who uses this can help me understand more clearly how you interpret this. Any help you can provide is appreciated. Thank you so much for taking the time to read this!
Good questions and it's great you're being critical.
The answer is the blue bars are showing where professionals are trading with each other. It doesn't show buying or selling. Just above average trade size. In my experience often (but not always) occurs when price is about to reverse. It really takes a lot of time to learn how to read it properly, and I would never trade solely with this. For me it's just another piece of information that I add. if I get confluence then that's great. If I get a blue bar without any confluence then I'm not going to act on it.
Here is my bund chart from yesterday. I posted this about 10 minutes ago before I saw your post so I'm not cherry picking a market/timeframe. This is just what I had on my workspace right now. There are two areas with blue bars. Both were at reversals.
This is the only indicator from eminiwatch that I still use. I actually use my own version but it's the same idea.
Thank you so much for your reply (and so quick!) !!
It's very logical then--for every seller of huge contracts, there must be buyers, and vice versa--this makes SO much sense.
I am currently using NT, may try TradeStation, and will definitely try out this indicator to see if it can add just a slight edge. If I may ask, what is the histogram on the right side of your chart (is it in tradestation?)?
