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Learning to trade the ES using volume profiling
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Learning to trade the ES using volume profiling

  #281 (permalink)
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4-15 pre-market

Economic data: empire, housing

ON Profile: Some action in the night session last night! ES traded in a 11.25 pt range with heavier volume (240k) that normal so far. We have a double top 1 tick above prior vpoc and a double bottom at 1571.75 that looks very poor and is below pLo. Vpoc sitting at 1574. Shape looks somewhat like a "b".

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So I was not expecting this action after my weekend review but the market is the boss and we have to respond to whatever it throws at us. We are looking at an OAIR or OAOR opening today. First key level will be pLo, 1575, if it can hold that level and build acceptance above that level the natural target becomes nvpoc at 1582.75 with 1579 potentially acting as resistance. I am expecting responsive buying on the open so maybe possibly a pullback will fail at/above 1575 and that will be the all-clear to get long? If the ES builds value below pLo, well then the breakout area of 1569 is the target and I expect that level to hold and buyers to auction it up back into pRange. If it does not hold and prices are accepted back into prior balance...we could have the makings of a significant top with sizable correction to follow. All time frames are bullish and therefore my bias is to the upside.

Levels Above: 1579 LVN, 1582.75 nvpoc/ONHI*, 1586.75 CLVN, 1588 CHVN*, 1593 BAH HI

Levels Below: 1575 pLo, 1572.75 MP Single, 1569 breakout***, 1566.75 CHVN, 1562.75 CHVN

Hypo#1- ES opens OAIR below value/OAOR and responsive buyers make first push, if prices accepted and 1575 pLo holds then 1582.75 is target then 1588.

Hypo#2- ES opens OAIR/OAOR and sellers make first push but fail around ONLO/1569 and then buyers auction it higher thru the day.

Hypo#3- ES opens OAIR/OAOR and sellers push to 1569 and build value below that level inviting aggressive sellers to step in and really wack it.

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  #282 (permalink)
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1. Long 1575.5 mid/vwap on 1.75 pt pb after opening OAIR and pushing weakly below pLo before heading higher then pulling back and printing weakly at pLo. Man 4 ticks against me instantly. Stopped after 2 min and 0MF. Well that trade clearly was wrong...

2. Sold 1574.5 mid/vwap on 2.75 pt move off lows. pLo above. Not sure if this trade makes sense as market moved down to ONLO and traded it to the tick but resting bids there absorbed sellers and then moved higher. Low looks poor but the fact it stopped there to the tick makes me question sellers strength. Christ, stopped after 1 min. Pff, realized I forgot about housing number at 9, aww man, then sell off instantly to exit. Stopped out to tick on 118 print and now new lows...

3. Long 1569 pBAH on 5.75 pt move. ES has a nice balanced profile so this is a buy at a key level and below value and I really expect a bounce. Pff, stopped after 3 min and 0 MF. This level offered no support whatsoever, I am kind of stunned by it. Keep in mind for further use.

4. Long 1563.25 CHVN on 5.25 pt move down. Naked settlement a tick above. Sellers def in control today and we have 14 pts of range so far. 4k iceberg bid a tick below. Traded 312 at my exit but no fill... back to entry... now printing my stop but weakly...christ. Stopped after 17 min and 1.5 MF and 2 ticks slippage on stop. Limit down for the day.

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Recap
ES opened OAIR below value and chopped around a bit before making a decisive break into the prior balance area and just getting destroyed. Vpoc got left behind near the top. Value did not exist. Price took a beating on very heavy volume of 2.45 mill. Including the ON session total range was over 40 pts. The daily candle is a massive red beast. We are now firmly back in prior balance area.


Profiler View Post
Hypo#3- ES opens OAIR/OAOR and sellers push to 1569 and build value below that level inviting aggressive sellers to step in and really wack it.

I debated whether or not to add hypo#3 to my morning analysis. Coming into today I thought the conditions were the most bullish in awhile and certainly expected 1569 level to contain any selling pressure. Little did I know how right that hypo would be and how un-able I would be to profit from it but rather hit my daily loss limit. I'm a bit shell shocked at the moment, this makes 2 mondays in a row where I hit limit down. The open definitely felt weird. I expected responsive buying and got it but it was weak. But then sellers couldn't really do anything themselves and a nice balance area formed. Lately some crazy moves have developed after seemingly innocuous balanced morning sessions. Time to take my mind off today and get ready for tomorrow.

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  #283 (permalink)
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Why would you be bullish coming into today? Bad China number, gold down big at open again, ES extended and losing momentum for last 1 1/2 days, gapped down below Fridays value area - no attempt in first 15 minutes till number came out to fill the gap.

Bookmark forexfactory.com and check it on Monday so you know what# is coming and when. That's not a very convincing excuse

Then it couldn't break above 63.50 area after filling gap. Pretty convincing short there.

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  #284 (permalink)
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garyboy275 View Post
Why would you be bullish coming into today? Bad China number, gold down big at open again, ES extended and losing momentum for last 1 1/2 days, gapped down below Fridays value area - no attempt in first 15 minutes till number came out to fill the gap.

Bookmark forexfactory.com and check it on Monday so you know what# is coming and when. That's not a very convincing excuse

Then it couldn't break above 63.50 area after filling gap. Pretty convincing short there.

how could you not be bullish? ES entered today 20 pts off all time hi. how many crappy numbers (from here or china) has the market ignored over the last 4 months? gold got wacked on friday and I dont think it had any effect on the market. ES extended? it spent the last month balancing and finally broke higher last week and entered today a measly 6 pts above that balance area hi. your bearish bias was obviously correct with hindsight but i dont think your reasoning is valid.

i know when numbers come out, i had the 9am number in my pre-market analysis. i accept responsibility for all my trades and i accept responsibility for forgetting about this in the minute before it came out when i put the trade on. its a minor number but i still would not have put the trade on had i remembered it. this will happen again, too.

i wanted to short that bounce to 63 big time but i was already limit down and had to watch

i blew it today, no doubt. sounds like you had a good day and i congratulate and tip my hat. wish i was in your shoes today.

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  #285 (permalink)
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garyboy275 View Post
gapped down below Fridays value area - no attempt in first 15 minutes till number came out to fill the gap.

so if an open out of value doesnt get inside prior value within first 15 minutes you fade away from value as a general rule?

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  #286 (permalink)
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Maybe this helps, maybe it doesn't... just a humble opinion that may provoke some thought/insight of your own:

To me (and the best trader I know said this too) the key was the fact that we absolutely couldn't maintain anything above Friday's low. We attempted to push up towards Friday's value area, and just could not accept prices above the lows of the session.

The overnight low provided support for a while, so we ranged in between the two. Once those broke down, direction was clear and no swing high was violated the rest of the day.

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It's easy for me to sit here and point this out in hindsight. I did not trade it perfectly myself, but I did have a profitable day. I knew I wanted to be shorting coming in to the day with my game plan, and probably a bigger reason is that I realized I needed to be taking advantage of pullbacks with the main (downward) direction based on the things I discussed above.

Maybe something in this speaks to you, maybe not, but this is just a futures.io (formerly BMT) neighbor offering his own way at a helping hand.

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  #287 (permalink)
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that makes sense ID7 and thanks for contributing!

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  #288 (permalink)
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4-16 pre-market

Economic data: CPI, housing

ON Profile: ES has recovered some of yesterdays losses, currently trading +13. Wide range of almost 20 pts so far and heavy volume (348k). Vpoc sitting at 1552, right above the 1551.5 CLVN. The hi looks poor and I think that will get taken out one way or the other before end of day. The low at 1538.75 has a strong selling tail as buyers continue to be found in that low 1540 upper 1530 area.

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Yesterdays big sell off def sucked for bulls but its important to keep in mind overall context is still bullish. Longer time frames are still trending higher. However, we now have a failed breakout at new all time hi's on our hands. Auction logic says the market "should" visit the other side of balance after a failed breakout. Does 1538.75 satisfy that? 1548.75 mc vpoc is our main reference point from the composite. ES is currently up 20 pts from yesterdays after hours low. I am looking for responsive sellers to step in off the open and see if they can push it down, potentially to 1548.75. If they are unable to accomplish much then I will view yesterday as a one-off type of day with bears having no more ammo left and bulls to auction it higher.

Levels Above: 1559.75 CLVN*, 1563.25 CHVN/yswing hi**, 1565 CLVN, 1566.75 CHVN, 1569 BAH

Levels Below: 1554.75 CHVN, 1548.75 mc vpoc**, 1542 nvpoc pLo

Hypo#1- ES opens OAIR and responsive sellers step in and push it lower-their strength being key for the day- if rejected near 1554.75 CHVN then push higher to 1559.75 and 1563.25 then 1569, if accepted then continue lower to 1548.75.

Hypo#2- ES opens OAIR and pushes higher but fails at 1559.75 or 1563.25 area and pushes lower targeting 1554 then 1548.

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  #289 (permalink)
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4-16 trades and recap

1. Sold 1556.5 IBLO on 2 pt bounce off low. ES balanced the first 1.5 hours of the day then broke below the IB. Caveats are a poor hi and a decent bounce off the 1554.75 CHVN. Stopped after 4 min and .25 MF. Garbage trade.

2. Sold 1563.5 yesterday swing hi on 2.75 pt move after it went through 2 ticks and nothing above. Scratched after a minute, going to wait for 1565 MP single. Would have been loser.

3. Sold 1565 MP single on 4.25 pt move. SO far we have at least a neutral day so it makes sense to play the outside in. Traded my exit, 550 contracts and no fill and now back to entry...Back to exit and only 68 print but over 4000 on bid above me and now pops to entry again. Super annoying. Scaled (!) after 18 min and .5 MA. No second scale, thing doesnt want to go down.

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Recap
ES opened OAIR and chopped around for the first hour before putting in the definitive low at the 1545.75 CHVN. Buyers auctioned it higher thru the day to the BAH of 1569-70 area where it closed. Vpoc shifted up to 1569 at the close and I would not say there was a clear cut value area. Volume was above average at 1.75 mill but obviously not as heavy as yesterday. After yesterday's panic the ES finds itself at the top end of prior balance area having reversed the majority of yesterdays losses.

My first trade sucked so bad today. I wanted the long but then remembered how lately the ES has been balancing early then breaking out definitively so I went with that. I didn't even take it on the first touch either which at least offered a 1.25 MF, I took it on the second touch and got 0 MF. Whatever, neither one paid. Larger point is I am just not making good decisions. The long was the trade of the day. And I tried a short back into it. Serenity now!

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Profiler View Post
so if an open out of value doesnt get inside prior value within first 15 minutes you fade away from value as a general rule?

I hope these two charts explain it-I know you watch tick chart but I personally find 5 minute more helpful than tick chart esp on a day there is enough volume. There is nothing in hidhsight-mark it for next time there are two types of reversion to mean-price and time. Yesterday when price after moving down almost 12 handles at 63 area couldnt move up-it just chopped sideways and then made another thrust down. The sideways chop was just letting MA's catch up. Look where we bounced today after correcting from 68 area-exactly 62.50-63.50 area. I think you need to look at previous days and be aggressive at these areas.

If I can recommend an improvement. Go for bigger profits but in direction of trend esp on first day of a gap.


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