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Learning to trade the ES using volume profiling


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Learning to trade the ES using volume profiling

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  #291 (permalink)
Rio de Janeiro, Brazil
 
Experience: Beginner
Platform: SC, S5T
Trading: Es
 
Posts: 617 since Jan 2013
Thanks: 321 given, 589 received

Economic data: beige book

ON Profile: Kind of a double distribution shaped profile thus far. Larger than average range of 14.75 pts and heavier than average volume (300k). The hi is 3 ticks below pHi and the low is 3 ticks above pLo so really all of yesterdays range has been re-traced. Vpoc sitting at 1560.5. I am surprised that yesterdays LVN didn't act as better support on the way down but it certainly has been acting as resistance from below.



Yesterdays rally went right to the top of the prior balance area and stalled. It was a great place to initiate a short, I just wish it had gotten there earlier in the day to do it instead of at the close. All of those gains have been re-traced and we are set to open in range, at or below value, though I am not sure yesterdays value means much. Auction logic says rejection from BAH targets the BAL at ~1530. I think the key price for today will be yesterday's low. If it is rejected, then I see no reason why the market wouldn't just head back up the 1570 area provided it can get through 1562.25. But if it is accepted then the ES will target 1548.75 mc vpoc and potentially lower. I expect responsive buyers initially and from there the strength of sellers will determine the day. If they can take it down to pLo and build value its one thing but if they can't then up is the way. Longer time frames are very bullish, daily time frame is undecided.

Levels Above: 1559.75 CLVN, 1562.25 LVN*, 1569 nvpoc/BAH, 1572.25 nvpoc

Levels Below: 1554.75 pLo**, 1551.5 CLVN, 1548.75 mc vpoc**, 1542 nvpoc

Hypo#1- ES opens OAIR and responsive buyers push to 1559.75 and fail as sellers step in and auction it lower to pLo but fail as well and buyers step in and auction it higher through the day.

Hypo#2- ES opens OAIR and sellers step in and build value at/below pLo and target 1548.75 then 1542.

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  #292 (permalink)
Rio de Janeiro, Brazil
 
Experience: Beginner
Platform: SC, S5T
Trading: Es
 
Posts: 617 since Jan 2013
Thanks: 321 given, 589 received

1. Sold 1554.5 pLo on 2.5 pt move off lows. Very strong selling off the open. Vwap a tick above me. 4 ticks instantly in my favor, now 3 ticks against. God damnit, blows through my stop, 10 tick loss after 4 min.

2. Long 1555.5 mid on 2.5 pt pb. Last push up through mid ran 6 pts so I bot the pb. Volatile action here. My stop is below pLo so that could act as support. Trades my exit but no fill. Stopped after 5 min and 1.5 MF. Unreal.

3. Sold 1546 HVN on 4.25 pt move up. Strong move off lows. Not really confident in this trade at all. 3 ticks against and 5 for so far. Vpoc shifted to entry. Scaled after 10 min and 1.0 MA. Second scale given.

4. Long 1541 VAL on 2.5 pt move down. Very strong buying response from this level earlier so I will take a long here with a stop 2 ticks below the low. Scaled after 2 min and .5 MA. No second scale.

5. Long 1549 on top of 3 pt move up as this is the 3rd time up to this area so expecting move above. Caveat being my exit is just above the dVAH. Dang 5 tick spike in my favor but nothing prints at my exit and now back to entry. Stopped after 5 min and 1.25 MF.




Recap
ES opened kind of OD with sellers really stepping but then laying off the gas and first 30-45 minutes were pretty wild. Buyers never unable to take it more than 1 tick above the open so sellers layed the boom and wacked it. Value and vpoc significantly lower than yesterday along with price on heavy volume of more than 2.5 mill. Daily candle has a nice lower wick and we did close above Mondays low but below the mc vpoc. So big ranges, heavy volume and lots of volatility lately.

I really got spun around in the first hour today which is too bad because I saw early on that the day would most likely be lower targeting 1548 then 1542 but I was unable to capitalize on it. Super frustrating days lately.

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  #293 (permalink)
wa/ usa
 
Experience: Intermediate
Platform: schwab, metatrader, OEC,T4,TDameritrade
Trading: CL ES 6C 6E
 
Posts: 261 since Oct 2012
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Dont let todays frustration affect tommorow's trading. I made a detailed post in Spoo-analysis thread. Read that a bit -and pick your days to trade. I am just too busted to post everything again. So far first 15-30 minutes tell you very nicely which way its going. 10 point gap up yesterday couldnt find any sellers and 10 pt gap down today couldnt find any buyers until 1538. Tommorow should be interesting. It is OPEX week afterall living upto its name.

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  #294 (permalink)
Rio de Janeiro, Brazil
 
Experience: Beginner
Platform: SC, S5T
Trading: Es
 
Posts: 617 since Jan 2013
Thanks: 321 given, 589 received

just a heads up i wont be trading tomorrow, headed back down to brazil to rejoin my wife after waiting 3 months here in the chi for my permanent resident visa to be issued. be a nice little break from trading and a better situation for me overall. looking forward to my dog laying down next to me too while i trade...

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  #295 (permalink)
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just a heads up i wont be trading tomorrow, headed back down to brazil to rejoin my wife after waiting 3 months here in the chi for my permanent resident visa to be issued. be a nice little break from trading and a better situation for me overall. looking forward to my dog laying down next to me too while i trade...

Awesome, enjoy your trip!

Mike

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  #296 (permalink)
wa/ usa
 
Experience: Intermediate
Platform: schwab, metatrader, OEC,T4,TDameritrade
Trading: CL ES 6C 6E
 
Posts: 261 since Oct 2012
Thanks: 202 given, 447 received


Profiler View Post
just a heads up i wont be trading tomorrow, headed back down to brazil to rejoin my wife after waiting 3 months here in the chi for my permanent resident visa to be issued. be a nice little break from trading and a better situation for me overall. looking forward to my dog laying down next to me too while i trade...

Oh my God why now ? We are going to have 40 point days everyday, you gonna miss out

Have an awesome trip. Clear your head too-maybe read a few books ? Jonathan Livingston seagull, by Richard Bach and Unstoppable Confidence would be my recommendations if you do read. Let me know if you want I think kindle will allow to loan upto 7 days.

Edit:Sorry just checked both titles are not loan-able

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  #297 (permalink)
Rio de Janeiro, Brazil
 
Experience: Beginner
Platform: SC, S5T
Trading: Es
 
Posts: 617 since Jan 2013
Thanks: 321 given, 589 received

Its nice to trade off this computer set up instead of the 17" laptop I was using for the last 4 months. if only it makes me do better trades... In between my dog getting under my desk I managed to make a few today.



1. Sold 1540.25 CLVN 2 ticks above mid/vwap on 4 pt move. Strong reaction off nvpoc below/LOD hinders this trade. Stopped after 2 min and .5 MF. Stupid trade?

2. Long 1540.5 mid on 4 pt move. So same trade as before but from above as the market run through mid last time on a 6.25 pt move up and traded above value before coming back in. Neither ON hi or lo has been taken out yet and it seems the hi is more likely given mc vpoc is there. Scaled after 3 min and .25 MA. Second scale given.

3. Sold 1546.25 mc vpoc on 3.25 pt move. Market has been bullish today so not to keen on it but when it poked thru the IBHi first time by only 2 ticks it quickly got rejected by 2.25 pts so I was thinking the bulls strength is fading up here. Stopped after 6 min and .5MF.

4. Long 1544.75 IBHI/LVN on 4 pt move. Ok so we have a normal variation day so far with 6 pts range extension above the IBHI and vpoc that shifted up to 1548 so I think this trade looks good. However, the HOD 2 ticked prior days hi only and came back down so the market checked above pHi and found no buyers which sucks. 15 min into the trade and its gone 1 tick against and printed my exit but only 73 contracts then come back to entry which makes me think they aren't done going down yet. Scaled after 35 min and .75 MA. Second scale given.




Not going to do a recap today as I don't have time but man that long off the nvpoc was sweet, too bad I was too confused by context to take it... Today shifted the mc vpoc back up to 1548.5 from 1546 and that is exactly where we closed so which way from here?

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  #298 (permalink)
Rio de Janeiro, Brazil
 
Experience: Beginner
Platform: SC, S5T
Trading: Es
 
Posts: 617 since Jan 2013
Thanks: 321 given, 589 received




Monthly and weekly uptrends are strongly in place. However, the weekly is entering a period of expanded volatility which could be a harbinger of a trend change?



The daily chart is firmly in the middle of its prior balance area. We have what appears to be a rejected upside breakout and spoos have since retreated back into the prior balance area and closed right at the mc vpoc. Yesterdays action broke the one time-framing down on the daily chart.



The volume profile shows that last week basically changed nothing. VPOC and VAH are exactly the same while VAL is off by a 2 ticks. So what did happen last week? Well price got smacked on heavy volume. Virtually the entire balance area was auctioned with buyers finding the low 1530's as too cheap and 1570 as too expensive. Now where to???

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  #299 (permalink)
Rio de Janeiro, Brazil
 
Experience: Beginner
Platform: SC, S5T
Trading: Es
 
Posts: 617 since Jan 2013
Thanks: 321 given, 589 received

Economic data: homes

ON Profile: P-shaped profile last night as the ES opened near the top of pRange, right at the mc vpoc of 1548.5, downticked once and then went higher in search of sellers. Its got a poor-ish looking hi at 1557.5 and has bumped up against 1557 3 other times. There is no obvious reason I can see why this area is acting as resistance. Vpoc is sitting at 1556.



We are set for a gap up open. I expect responsive sellers to make the first push and try to get back into pRange. The strength of this move will be key. If it is weak then it will be your cue to look long targeting 1566.75/1569 area. If it can build value inside pRange well then we look lower towards 1546.5 and possibly below. Bigger picture we are opening up in the middle of balance, just above the mc vpoc. Longer term trends are bullish but short term is balanced to possibly negative.

Levels Above: 1560 CLVN, 1562.25 LVN from 4-16*, 1566.75 CHVN*, 1569 nvpoc/BAH***, 1572.25 nvpoc

Levels below: 1551.5/1550.75 CLVN/pHi**, 1548.5 mc vpoc**, 1540 CLVN

Hypo#1- ES opens OAOR and sellers push first to attempt into pRange but fail and bulls step in at 1550.75/1548.5 and auction higher the rest of the day.

Hypo#2- ES opens OAOR and buyers push but fail at/near pHi allowing sellers to auction lower through the day targeting 1546.75 then 1535.25.

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  #300 (permalink)
Rio de Janeiro, Brazil
 
Experience: Beginner
Platform: SC, S5T
Trading: Es
 
Posts: 617 since Jan 2013
Thanks: 321 given, 589 received


1. Long 1550.25 pLo on 5 pt move. Responsive sellers really slapping it but it appeared to be slowing around this level, prior VAH. Scratched after 4 min and 1.25 MA vs .25 MF because a very poor low formed. Would have been loser.

2. Long 1544 VA/prior day swing low on 2.5 pt move down after nice buying response from first time down. Aggressive seller really knocking this down though, 4 ticks against me instantly. Now back to entry. Scaled after 2 min and 1.0 MA. Second scale given after new lows made by a tick but my stop not touched.

3. Sold 1551.25 above pHi/early morning top/dVAH on 2.75 pt move. Have had a strong move off lows now with value built inside yesterdays range so looking for sellers to come in here. Stopped after 11 min and .5 MF. Just grinding higher.

4. Sold 1559.75 CLVN on 6.5 pt move. Christ, instant 5 tick spike against me but sellers stepping and now back to entry. Should I scratch this? Traded my exit 255 times but no fill, could be a problem. Scaled after 20 min and pos # 470 in cue. Second scale given after more than an hour of chop.





Recap
ES opened OAOR to the upside and responsive sellers stepped in shortly after the open and wacked it. Shortly after the IB was put in a downside probe was quickly rejected and buyers auctioned it higher through the rest of the day to new highs which caught me by surprise. Vpoc and value shifted higher along with price which closed inside value. Volume was slightly below average at 1.34 mill. Profile shape is ugly with kind of a quadruple distribution formation. 1555.5 seemed to be the line in the sand today and perhaps it will continue to be important tomorrow.

I ened up buying the bottom and selling the top today, both within 5 ticks which feels good I guess. Both of my trades in the middle were losers. Weird day, went from looking like a normal day to a neutral day to neutral extreme then back to neutral.

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September 20, 2014


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