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

Economic data: none

ON Profile: So I haven't figured out how to scale SC properly yet but based off MP looks like the session was very balanced and calm with only 4 pts range. The hi is just a few ticks above the nvpoc and the low went just a few ticks into the afternoon pullback. Volume is VERY light at just over 70k. ON vpoc sitting at 1609. Distinct LVN at 1608.5 but again this volume is pathetic.



Friday was a big and clean breakout from prior balance. Friday left a very poor hi behind and a very strong invisible selling tail in the form of a gap from 1605.5 to 1594.25. There is no data scheduled for today nor the whole week really and we are set for an OAIR below value start. My first guess would be to expect responsive buyers to push for a move back into value and if successful to clean up the poor hi. However, if sellers grab hold and start eating into friday's buying tail then who knows where it could go with no support until 1594. But I don't expect an aggressive seller and anticipate a rotational day. All time frames are trending higher so I would like for a nice bottom to be formed early on and then be able to hop on for a ride to new hi's.

Levels Above: 1610.75 nvpoc/ONHI, 1614.25 all time hi

Levels Below: 1605.5 pLo, 1600?, 1594.25 pBAH, 1592.25 nvpoc, 1588.5 MP single

Hypo#1- ES opens OAIR below value, responsive buyers push weakly but fail near ONHI then sellers step in and auction to near pLo but fail and bulls grind higher to close the day.

Hypo#2- ES opens OAIR and buyers push but fail near ONHI then sellers step in and auction lower through the day.

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

1. Sold 1614.25 pHi/2nd vwap on 4.5 pt move after only 2 ticking pHi. Very slow grind higher but we have a very poor low below and I expected rotational day so we will see. Scratched after 52 min and 1.0 MA vs .25 MF as a very poor hi has formed with a triple top and over 50k at top 3 prices. Would have been winner.




Recap
ES opened OAIR and basically just drifted upward ever so slightly through the day. Value and vpoc shifted slightly higher. Price closed incrementally higher on VERY poor volume (less than 900k). A poor hi and poor low were left behind. Basically there were very few motivated participants involved today.

I missed the open and I am not sure I missed much based on what I did see. I thought for sure when I scratched my short the market would go up and make new hi's but it didn't. Question is, was I right to scratch or should I have continued to hold? Or rather, should I have even put the trade on in the first place???

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  #343 (permalink)
New York, NY
 
Experience: None
Platform: Java/C/C# + Sierra
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Profiler View Post
Question is, was I right to scratch or should I have continued to hold? Or rather, should I have even put the trade on in the first place???

Your rationale for the trade was fine. Personally, at the time of your trade, I doubt there would be much of any range extension given the ON action / profile, as well as the development of the first few hours . Given the magnet at 1613, as well as the magnetic qualities of VWAP, that should have kept you in that short longer, at least to cover the commission

Typical of a monster move yesterday, and a bell shaped ON session, was a real snoozer of a RTH session.

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

Economic data: none

ON profile: Ok so SC is not getting the job done so far with these volume profile graphs, I need to figure this out. But we have new all time hi's in the ON session and the market is currently on it at 1616.5. Profile shape, based on TPOs is kind of b shaped with a poor hi. Volume is light at 150k but significantly more than yesterday. Vpoc sitting at 1615.75, near the top.



Yesterday left a very poor hi and low. The ON session has repaired the poor hi and made the poor low worse. As we are currently trading at hi's, above pHI and at new all time hi's and set for an OAOR open, the bulls are in charge. I would expect responsive sellers to make the first push, perhaps to previous VAH 1614.25 or nvpoc 1613 and then bulls grind it higher. If buyers make a push above the ONHI and fail then shorts have the ball targeting the poor low from yesterday at 1609.25 and the breakout low 1605.5. All time frames are trending higher.

Levels Above: 1617 ONHI

Levels Below: 1615.25 pHi, 1613 nvpoc, 1605.5 BAL*, 1600?, 1594 pBAH**

Hypo#1: ES opens OAOR and responsive sellers push back into pRange to pick up buyers around 1613 then auction higher thru the day.

Hypo#2: ES opens OAOR and pushes above ONHI but fails and then is accepted back into pRange targeting other side of balance at 1608 and possibly lower.

Hypo#3: ES opens OD higher, go with!

TO ALL SIERRA CHART USERS: Is there a setting I have wrong that is causing my volume profiles to be so distorted?

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  #345 (permalink)
Legendary Market Wizard
Georgia, US
 
Experience: None
Platform: SC
Broker: AMP+CQG
Trading: ES, HSI, Nikkei
 
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Profiler View Post
TO ALL SIERRA CHART USERS: Is there a setting I have wrong that is causing my volume profiles to be so distorted?

In what way is it distorted?

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


josh View Post
In what way is it distorted?

You think it looks right? Compared to IRT I just dont think its making the volume bars the right lengths, relative to others. Maybe this is just pure math whereas IRT was using some sort of smoothing formula to make it look nicer, I dont know.

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  #347 (permalink)
Legendary Market Wizard
Georgia, US
 
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Broker: AMP+CQG
Trading: ES, HSI, Nikkei
 
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Posts: 5,466 since Jan 2011
Thanks: 6,054 given, 14,471 received


Profiler View Post
You think it looks right? Compared to IRT I just dont think its making the volume bars the right lengths, relative to others. Maybe this is just pure math whereas IRT was using some sort of smoothing formula to make it look nicer, I dont know.

If you post a comparison side-by-side, we can have a look, but the profiles are 100% accurate in SC.

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


josh View Post
If you post a comparison side-by-side, we can have a look, but the profiles are 100% accurate in SC.




I dont have an IRT license anymore but i think the photo above displays something is wack. I believe SC's data is 100% accurate, I think their scaling system is out of wack. Todays day session looks pretty good but that ON session is just ugly by itself and even more so when compared to RTH right next to it. Seems that with low volume their scaling method falls apart. Does yours look different than mine?

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  #349 (permalink)
Legendary Market Wizard
Georgia, US
 
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Broker: AMP+CQG
Trading: ES, HSI, Nikkei
 
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Posts: 5,466 since Jan 2011
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If you are referring to the fact that it's wider -- there are more bars. Look at your profile settings. "Maximum volume bar width type" and percentage.

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



josh View Post
If you are referring to the fact that it's wider -- there are more bars. Look at your profile settings. "Maximum volume bar width type" and percentage.

thanks josh, that fixed it and it makes sense now how SC is doing this.

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