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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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  #301 (permalink)
Market Wizard
Quebec
 
Experience: Intermediate
Platform: NinjaTrader wt Rancho Dinero's profiling tools
Broker: AMP/CQG
Trading: ES, NQ, YM
 
trendisyourfriend's Avatar
 
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I have a question regarding your profit target in general. Why do you select a target that is so small? The idea behind MP is certainly to aim at a bigger profit per trade. You can't create a viable edge with such small targets. The aim of a lot of profilers on the ES is to catch between 5-10 pts. There is even that famous 10 handle rule that is often mentionned to this effect.

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  #302 (permalink)
Rio de Janeiro, Brazil
 
Experience: Beginner
Platform: SC, S5T
Trading: Es
 
Posts: 617 since Jan 2013
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trendisyourfriend View Post
I have a question regarding your profit target in general. Why do you select a target that is so small? The idea behind MP is certainly to aim at a bigger profit per trade. You can't create a viable edge with such small targets. The aim of a lot of profilers on the ES is to catch between 5-10 pts. There is even that famous 10 handle rule that is often mentionned to this effect.

Im aware that to make money in this style of trading you have to let the winners run and that is my plan once i start trading more than 1 lots. But for now i have just been trying to figure out context and what makes good trade location. Ive been debating jumping to 2 lots for a month or so but i guess i have a lack of confidence in myself/my trading to be honest.

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  #303 (permalink)
wa/ usa
 
Experience: Intermediate
Platform: schwab, metatrader, OEC,T4,TDameritrade
Trading: CL ES 6C 6E
 
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Today was a weird day in many aspects least of which was waiting for fills. It seemed like all 4 trades I took I was last one to fill and when I got filled it moved another 2-3 points further and I would wait thru 30 minutes of chop for a fill. Crazy.

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  #304 (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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Profiler View Post
Im aware that to make money in this style of trading you have to let the winners run and that is my plan once i start trading more than 1 lots. But for now i have just been trying to figure out context and what makes good trade location. Ive been debating jumping to 2 lots for a month or so but i guess i have a lack of confidence in myself/my trading to be honest.


I am sure you have worked on expectancy in the past before you took this journey even if you are trading a 1 lot avg 4 trades a day

with 50% winners and 6 tic stop 6 tic target you are flat for month

with 40% winners and 6 tic stop 10 tic target you are +32 tics for month


I have read most of your posts right from beginning and you stated that you had an edge that was taken away by algos. And also that you are contextually blind. Its great thing to admit but are you working towards context too ? Imho context is more important than most people give it value. How are your chart reading skills ? There are some great webinars on this site itself and I would recommend you devote sometime to reading charts. It s not instant gratification but over time its very helpful to see how things are unfolding. There are days when they fold exactly as you expect and imo those are the days that make the difference at the end of the month.

I see you are working very hard and I hope you are successful. Goodluck as you make progress.

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


garyboy275 View Post


I have read most of your posts right from beginning and you stated that you had an edge that was taken away by algos. And also that you are contextually blind. Its great thing to admit but are you working towards context too ? Imho context is more important than most people give it value. How are your chart reading skills ?

im def trying on working on context, always asking myself whats going on and what its likely to do next but its hard man. i dont really know when to determine an auction has completed itself and a reverse auction is underway vs when one is just pulling back and resting on its way to resume in the direction.

My chart reading skills suck, assuming you are talking about candle formations or something of that nature and to be honest i am not really working on that. my main focus is context. if i can get a handle on context i think i am good.

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

Economic data: new homes

ON Profile: ES was initially under pressure last night but after tagging the mc vpoc it has since rebounded strongly and is printing above pHi. Range is above average at 14 pts and volume is at 254k. Vpoc sitting at 1554.5. Profile shape is trendy with a big bulge near the bottom as most of the night was spent lower but a 9.5 pt rotation higher has left poorly auctioned areas in its wake.



Bulls will not give up on this market it seems. ES rotated from BAH at 1570 last monday down to BAL at 1531 last thursday and we are now approaching 1570. Will sellers emerge around that level again? ES is headed for another OAOR up open or possibly an OAIR above value. Im anticipating responsive sellers on the open and a move back into pRange but not sure how far it will go. Yesterdays responsive sellers really took it deep into pRange. I think buyers will step in, possibly 1555.25 area and then grind it higher back up to 1570 level. Longer time frames are bullish, daily time frame is balancing.

Levels Above: 1562.25 LVN from 4-16, 1568.75 nvpoc/BAH*, 1572 nvpoc, 1574.5 CHVN

Levels Below: 1557 nvpoc, 1555.25 yLVN, 1551.5 CLVN/yLVN, 1548.5 mc vpoc/ONLO**

Hypo#1- ES opens OAOR/OAIR above value and responsive sellers push into pRange but stall ~1555 and bulls auction higher up to 1570 and possibly above.

Hypo#2- ES opens OAOR/OAIR above value and pushes higher but fails near ONHI and sellers step in pushing to 1557 then 1548.

Hypo#3- ES opens OD higher.

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  #307 (permalink)
Rio de Janeiro, Brazil
 
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Trading: Es
 
Posts: 617 since Jan 2013
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1. Sold 1562.25 LVN from 4-16 on 9 pt move pre-market. This was a very clearly defined LVN from that day seperating 2 distributions so combined with large rotation think its good odds for a scale. 17 min into the trade and its gone 3 ticks MF vs 2 MA and printing my entry, not looking good as sellers just arent interested yet it seems and a poor hi has formed. Stopped after 25 min and .75 MF. Unreal, this is now a 10.75 pt rotation.

2. Long 1569.5 vwap on 4 pt move. Debated waiting for dVAL at 1568 but overall context on the day is bullish: gap up open, open drive higher, one time framing higher until just before the twitter news and a poor hi above with over 4k at top tick. Pff, traded my stop but I switched to manual because it looked like someone was coming in and puking out. Scratched after 3 min and .25 MF vs 1.75 MA. Would have been a great trade from dVAL.




Recap
ES opened OAOR/possibly OD with an upside gap, printed 2 ticks below the open and never looked back- until the afternoon twitter swoon. Im going to disregard that action. It did happen but I don't think its relevant especially considering the market quickly returned to the scene of the crime. ES finishes with higher value and vpoc for the third day in row. Price closed just off the poor hi and above/at value on better than average volume (1.65 mill). Additionally, it closed above the 1569-70 breakout area and one would think the logical target is the hi at 1593.

Today sucked. My first trade didnt work then I had problems for the first 30 minutes with my charts so I couldnt trade the open. For the second day in a row there was a juicy pullback to the mid right before the 9am number so I couldn't take it. Today offered up a second chance a few minutes later though and I didn't take it because it was second test and I was forced to watch it go higher the rest of the morning with no good entry. Then the twitter crash happened and I debated just not doing a trade for the rest of the day after that nonsense. I took the vwap trade though and would have been stopped if I had used the automatic stop but I pulled that based on the action, which was the right call in this case at least, because some 1000 lot trader kept moving his offer down and he was real. He can't be happy with his fills now because that was the bottom. Im trying to pay more attention to the VAH and VAL in initiating trades and today the VAL was a sweet trade.

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  #308 (permalink)
Rio de Janeiro, Brazil
 
Experience: Beginner
Platform: SC, S5T
Trading: Es
 
Posts: 617 since Jan 2013
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Economic data: durables

ON Profile: ES opened in range and pushed lower to yIBHI then rallied up to and beyond pHi. We have a poor hi at 1579 which is an LVN from 4-12 and right where supply started to come in to the market on the composite building up to the CHVN at 1582.75. Vpoc is sitting at 1576.25 and volume is light at 216k. Profile shape is generally balanced and the ES is currently back within balance trading right around pHi.



ES has rallied almost 50 pts since last thursday's low of 1530.75 to this mornings pre-market hi of 1579 which makes for quite a move. Today could be the third gap higher open in a row. You have to respect the strength but the short side is looking tasty. Since the bottom, the most traded price is 1573.25 which means sellers finally found a price they wanted to step in at (conversely buyers gobbled it up as well). Durable goods are out and it seems to not be good and our OAOR is potentially off the table. So for today, I anticipate an OAIR inside value with a downside bias. Perhaps yesterdays twitter crash low will be revisited. The ONLO will be key, if it peaks below and finds no additional business then we have to continue looking upward to find sellers. But if new business is found below then there is little in the way between it and 1557.

Levels Above: 1573.25 nvpoc, 1574.75 pHi, 1579.25 ONHI/LVN*, 1582.75 CHVN, 1588 CHVN

Levels Below: 1571.5 ONLO*, 1566.75 CHVN, 1557 twitter lo**

Hypo#1- ES opens OAIR inside value and pushes higher to pHi and fails where sellers step in and auction down to ONLo and if accepted down to 1557, if not back up to 1582.75.

Hypo#2- ES opens OAIR inside value and pushes lower to ONLO but fails and bulls grind it higher the rest of the day.

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

1. Shorted 1576.25 on 2.5 pt move up after printing 77 Hi from 4-15 (day of big sell off) weakly then leaving a big ledge below it. Scaled after 3 min and .5 MA. Second scale given.

2. Sold 1546.5 mid/vwap/pHi/pVAH on 3.75 pt move. So we popped above pHi then came back into range and established value but really struggled taking out the ONLO and have had a nice bounce off of it so really tough to say, Im hoping sellers keep it in pRange. The hi is poor as it has been touched twice. Stopped after 13 min and 1.0 MF.

3. Long 1575.75 on top of 2.25 pt move up as I have reversed my short and targeting the poor hi above. Maybe too aggressive as its near VAH but it pulled back and failed to print pHi so I jumped in. Instantly 4 ticks against me, regretting this trade already. Stopped after 10 min and .5 MF. Day is looking rotational now so outsides in?

4. Long 1573 dVAL on 2 pt rotation. Rotation sucks but I think context still favors the long as the poor hi above combined with buying tail off the low and rotational day makes me think this trade has edge. After 30 min its gone 4 MA and 1.5 MF but only printed 33 contracts at my exit. Scaled after 34 min and 1.0 MA. Second scale given.




Recap
ES opened OAIR above value and basically spent all day rotating between 1572 and 1577 with a peak above and below each. Value and vpoc shifted incrementally higher on the day. Price closed inside of value and inside prior days range. Volume was pathetic at 1.12 mill. Profile shape is about as close to gaussian as you can get so market either just wanted to consolidate for the day or is awaiting further information. The daily candle is a near-perfect doji which could signal a reversal? On the composite, 1573.25 became even more pronounced as the most accepted price in the area.

My first and last trades were good and I am pleased with them. Trading multiple lots they would have given a couple scales each making really nice trades. The mid short I had serious doubts once the bears struggled around the ONLO area but I still thought it would work. The reversal long after I got stopped was so stupid. I really thought it was going to make new highs right then and there, funny how the market makes you think things. The good thing about it is that after that I realized we were in a balanced day and playing in the middle prolly isnt the best thing to do. Maybe I should have realized that earlier though?

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


Economic data: claims

ON Profile: We have a 12 pt range so far on light volume (208K). Es traded down to pLo to the tick and found buyers that have auctioned it beyond pHi and to the 1582.75 CHVN after some consolidation at yesterdays vpoc. Profile shape is pretty ragged.



I must admit I was expecting the ES to open lower today. Yesterday was a perfectly balanced, rotational day with clear agreement on value around 1575. We are now set to open above that and above pHi which is obviously very bullish but I can't help but think about the short. Hopefully the market will give us a nice clue which way to go on the open. I think the reaction to the ONHI/CHVN at 1582.75 will be they key. If it fails there or pushes through only slightly then falls back below and builds value then the nvpoc at 1575.75 is the natural destination and potentially back to the other side of balance at 1570. However, if buyers can build value above the ONHI then 1588 is on deck and all time hi at 1593. Longer time frames are bullish. Is daily still balancing or is that bullish now too?

Levels above: 1582.75 ONHI/CHVN***, 1588 CHVN, 1593 all time hi**

Levels Below: 1578.75 pHi/CLVN, 1575.75 nvpoc*, 1573.25 CHVN, 1570 CLVN**, 1566.75 CHVN, 1557 twitter lo

Hypo#1- ES opens OAOR and responsive sellers push to pHi/nvpoc to pick up buyers and then grind it higher thru the day.

Hypo#2- ES opens OAOR and buyers push to near ONHI but fail and sellers step in to auction it lower to 1575.75 nvpoc and possibly to 1570.

Hypo#3- ES opens OD up.

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