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

  #491 (permalink)
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josh View Post
Ditto -- I bought 67.50 around 12:15 ET. If you look at how BA was pulling down the dow at that time, yet how the S&P just would NOT break down, then it's clear ES wanted to try for a new high. Then there was the France downgrade and I puked at the same price, expecting at least a new low by 1 tick. But in the next couple of minutes it became again clear that ES was just too well bid to not get back in so I did, again at the same price.

Nicely done! Im just not at that level yet to be honest to do that type of trade. I was watching the DOM/footprint like a hawk and overall my impression was NOT "this thing is going to get crushed" but rather "they just cant take this thing down" so I hung in there as long as (i thought) I could before they finally shook me out. Basically I saw two possibilities happening- either they actually do take it down to 64.5 where I would buy or they 1 or 2 tick the low which is instantly just gobbled up and I was ready to hit the "buy market" button for a ride up to new hi. Instead neither happened and because my mind was locked into either A or B to resolve itself I did nothing as C played out...

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  #492 (permalink)
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josh View Post
...While you are seeing a "poor low" form (and it technically was a poor low), in fact it was simply so well bid that it was a very strong buy....

I really have a hard time grasping the concept of a poor low here. In fact, i would rather consider it as a top quality level of support right at the IB high and 1 minute opening range of the previous day. Before even the day started this was a level of support. On a TPO profile this level emerged as a buying ledge. Let's pretend price would have broken this level and would have went long at 64. Now you would have faced resistance because of the change of polarity, ie, support becoming resistance. A poor scenario for the long side and a seducing level for the short side.

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  #493 (permalink)
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Ddawg View Post
and I kept thinking...if they can push this a little lower, these guys are gonna bail, and the market is going down. Just didn't happen.

And the thing is, on any other day it might very well have played out that way. It doesn't mean anything really about your read, it just means that the randomness of the market happened to play out the way it did today. Monday the same thing might happen, and it might play out exactly as you had expected. Best thing to do is act on the scenario you deem most likely, manage the risk, and that's what you did, so no worries.



Profiler View Post
Instead neither happened and because my mind was locked into either A or B to resolve itself I did nothing as C played out...

@Profiler, because you were long from 69s, it simply altered your perspective--you had been in the trade for a while, and the picture had shifted quite a bit from when you got in the trade. This is a prime example of how actually trading is different from looking at a historical chart. After begin in a day trade for 3 hours, your mind is in a totally different place than somebody who's just looking to initiate a position. I was in the long for over an hour, and after I thought the BA pull down was over, here comes the France downgrade which had me immediately bail because I fully expected a quick run lower. But it didn't happen, so I got back in. But had I not had a position on, I would have not been thinking to get out of anything--I would only see the potential opportunity. So where we are positioned has a large effect on how we perceive market activity--it's unfortunate but it's how we are as humans, and it's something we have to deal with!



trendisyourfriend View Post
Before even the day started this was a level of support. On a TPO profile this level emerged as a buying ledge. Let's pretend price would have broken this level and would have went long at 64. Now you would have faced resistance because of the change of polarity, ie, support becoming resistance. A poor scenario for the long side and a seducing level for the short side.

I agree, this is one way to look at that scenario. Still, with the lack of much selling interest and the potential to close the week with a new all-time high close, following Thursday's new record, I would tend to treat most activity like this as an opportunity to buy. But I agree that holding 67 was a much more favorable scenario for longs than a stop run to 64s. From a risk perspective, I would have bought around 64, expecting at least an attempt back up to 67, with a likely run for 70s, for the relatively small risk (about 4-6 ticks). While 67 was the HOD early Thursday, it was traded through quickly on the way up later in the day, after which it found buyers later in the day, and early Friday. The fact that 67s was a low volume price means not only that it is support or resistance, but that it simply is rejected--sometimes that means it is rejected by means of a reversal, as you mention, but other times it is rejected by continuation, as was the case Thursday afternoon. I know you know this, but it's just one way to frame it. All said and done, I think a good case can be made either way, and all that matters is to take an appropriate risk on the trade and see what happens!

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  #494 (permalink)
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7-15 pre-market

Economic data: retail sales, empire, biz inventories

ON Profile: Small 6 pt range on VERY light volume of only 102k so far. The low is only 2 ticks below prior settlement and is coincident with prior vpoc. The hi is above pHi and 2 ticks above the 1675.25 CHVN. Vpoc currently at 1674.25. Profile shape generally balanced.

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ES balanced above friday's vpoc in a quiet overnight session so far with even retail sales barely causing a blip. The focus is squarely on the 1679.75 all time hi at this point as the strength in this market is impressive and sellers can't get anything going at all. At the moment, ES is set to open OAIR above value or OAOR. I expect some weak responsive sellers initially to give way quickly to the bulls who grind it up to 1669.75. What happens there will be interesting. Acceptance above just continues the grind. However, if it turns out that sellers are lurking there then we could end up with a nice big reversal down day to clean up some of the nvpocs and gaps left behind. All time frames are extremely bullish at this point.

Levels Above: 1675.25 CHVN/ONHI*, 1679.75 all time hi***...1700

Levels Below: 1670 nvpoc/ONLO*, 1667 pLo, 1664.5 nvpoc**, 1658.25 CHVN**, 1655 CLVN, 1648.5 BAH***

Hypo#1- ES opens OAIR/OR and sells off weakly to 1670 then bulls grind higher up to 1670 and either continues or is rejected strongly.

Hypo#2- ES opens OAIR/OR and bulls push higher but fail at ONHI and then sellers liquidate down to 1664 to pick up buyers.

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Interesting my all time high is at 1680, barchart is at 1680.25 and yours at 1679.75. What number to use for a perfect double top?

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trendisyourfriend View Post
Interesting my all time high is at 1680, barchart is at 1680.25 and yours at 1679.75. What number to use for a perfect double top?

How about the undisputed S&P cash high of 1687.18

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  #497 (permalink)
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7-15 recap

No trades today...

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Recap
ES opened OAOR and grinded higher ever so slightly falling a tick short of new all time hi's. Value and vpoc shifted higher. Price closed higher (above pHi) and inside value on extremely light volume of about 730k- I have never seen a full day with such light volume. Overall market continues higher. Still no sellers in sight at near all time hi prices, what price are they waiting for???

I did no trades today as I just couldn't justify any. Its frustrating. I could blame the fact on the range only being 7.25 pts and volume being non-existent and that would be partially true. I consistently fail to come up with trades on days like today. But I have no doubt good traders found at least one good trade today and executed and made money. Frustrating... Tomorrow is another day.

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  #498 (permalink)
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72 was a great spot to buy, as was 70. But it's all relative--maybe good spot, but is the market "singing" to you? I did not take any trades today either. Just no volume, no range, and no real opportunity. Don't underestimate the skill required to just sit on days like today. Seriously, these are outlier type days--7.25 range, < 700K volume... lowest vol so far this year. No need to waste money on subpar activity if nothing jumps out at you. Believe it or not, lots of people will get killed on a day like today, trying to squeeze blood out of a turnip, as they say. Consider it a good day, good learning experience. You didn't see anything, so you didn't do anything--that alone is better than most in the herd.

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Profiler View Post
Still no sellers in sight at near all time hi prices, what price are they waiting for???

Maybe the question is, what guidance from Bernanke on Wednesday (and somewhat Thursday I suppose) will they hear? Since Bernanke's flub-a-dub in May, the fed had to pull out all the stops to get this thing going again--speaker after speaker, Hilsenrath, the whole lot saying "whoa there market!" in order to get it back up (too bad for them, bond market is not buying it and yields still much higher than they want). Wednesday should provide some volatility--no seller wants to jump in when Bernanke and the crew might come out with an even more dovish policy stance, and be caught holding the bag. Just remember, statement released Wednesday at 8:30am ET, then the proceedings at 10am including questions, so be on your toes early Wednesday.

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  #500 (permalink)
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josh View Post
no seller wants to jump in when Bernanke and the crew might come out with an even more dovish policy stance, and be caught holding the bag.

indeed, good point.

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