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

1. Long 1676 after the OSLO was only taken out by 1 tick. This trade feels real uncomfortable for me especially after as soon as I put it on I expected a bounce right away but didnt get it and it made new low by another tick- thankfully only 1 tick. ES opened OAIR just barely above pLo and the open tick was the hi tick and sellers just didnt seem to be pressing below pLo. Will use 6 tick stop on this. First scale after 8 min and .75 MA. I am going to change my second target to 1681 nvpoc. I would be filled on my 80s now (13 min) had I kept my order there. Man printed 552 at 81 and no fill. Scaled after 23 min. Third scale would have been given if mechanical targets used.

2. Long 1679.5 vwap on 2.75 pt pb from hi. I think we have a poorish hi with almost 4k traded at top tick on the offer but it did happen at yesterdays LVN. First scale at vpoc which is lined up with yesterdays almost. ES being accepted back inside yesterdays value so hoping to stay inside of it. Vpoc just shifted to 1680.25-hmm... 23 min in its gone 4 ticks against vs 5 for but really struggling to get over the vpoc. Stopped after 34 min...

3. Sold 1685.25 pVAH/HVN late in day (30 min before cash close). Will use a 5 tick stop on this so 2 ticks above current hi. This is second time up this area so not really confident and I am pissed I missed it the first time which gave a nice rotation off of it. Scratched it after 8 min and it touched my stop then came back to break even. It did got 6 ticks my way right away though. Overall this was a poor decision to enter this trade I think.




Recap
ES opened OAIR/OTD and dipped below pLo twice but ended up building value almost exactly the same as yesterday. Vpoc too basically unchanged. Price closed essentialy unch as well, inside value on light volume of about 1.15 mill (but considerably higher vol than the 5 day MA). Traders basically decided that there was nothing to re-price today. Profile shape is pretty fugly with what I would describe as a poor low and a poorer hi.

I started the day off with a nice winning trade and then that sell off to new lows took me by surprise. I was kind of paralyzed by context analysis today. ES sells off and leaves a poor hi behind then fails at vwap (it did give some rotation/pause though) then drops out of prior range again so I was thinking they might really wack it but then take it back up to clean up the hi. Turns out they only 2 ticked the low and I had my mouse ready to buy 1675.25s but I just couldn't believe that they would take it down all this way only to 2 tick it. Turned out to be the trade of the day and never gave more than a 5 tick pb to let people in. I really wanted to sell around 85 but I'm sick today and ended up taking a nap and waking up to see ES at 85 and I almost just sold it blindly before checking out how it got there. So I didn't, looked things over then joined the 84.5 offer but no fill and it just dropped. Snooze you lose never more appropriate then there. I suppose I had some bitterniss left over from missing out on that which made me want to take that late short on the second trip up. Need to maintain discipline. So, could have been a great day today, it wasnt but I still have a few extra bucks in my account than I started with. Tomorrow is another day.

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

Economic data: michigan

ON Profile: ES traded in a 12.5 pt range on decent volume of 155k so far. The hi is 1289 which is right where the ES broke down on wednesday. The low is currently 1676.5 which is in between the last 2 days lows. Vpoc currently at 1686.25 but it might shift down to 1679.25 before the bell. Again, another fugly profile shape with no real consensus on value.



I was expecting ES to be trading ~1689 this morning when I woke up and had planned a long off 1685.5 for my first trade but the market had other ideas. ES has balanced two days in a row now with nearly identical value areas and vpoc. Today we are set to open near the low of the balance area and right around the mc vpoc of 1677.5. First test of 1677.5 produced an 8 pt bounce. Second and third test had to go a little lower down to 1675 to pick up buyers but they were there and yesterday closed 10 pts higher. Can we get expect buyers again? I continue to view the 1671 nvpoc/nclose/chvn area as an attractive target so I am leaning towards the short side off the open. However, if responsive buyers are active on the open then the first objective will be to get inside prior value and if accepted then up to VAH and possibly squeeze into the close. Longer time frames are very bullish, daily timeframe is balancing.

Levels Above: 1678 LVN/pVAL**, 1680.5 nvpoc, 1685.5 pVAH, 1689 ONHI

Levels Below: 1674.75 pLo, 1671.25 nvpoc/nclose/CHVN**, 1666.75 CLVN, 1660.25 GAP, 1658.25 CHVN**, 1648.5 pBAH***

Hypo#1- ES opens OAIR below value and responsive buyers make push to 1678 where sellers entered and knock it down to 1670 and possibly lower down to 1658.25

Hypo#2- ES opens OAIR below value and sellers knock it below pLo to 1670 where buyers enter and grind higher.

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


1. Sold 1678.25 pVAH/LVN based on my short side bias and poor ONLO and what looks to be decent absorption by sellers. Will use a 6 tick stop. Well it went 6 ticks against me now back to even. Took 4 tick loser after 10 min because it doesnt "seem" like its going to work. Would have been full loser.

2. Long 1678.75 vwap/pVAL after ES is being accepted back in prior value so looking for move back up through the value area. Took 1 tick loser after 10 min. Market isnt doing much and I am not int he right frame of mind to be trading now I think. Going to take a shower and re-evaluate after that. Would have been full loser as well.

3. Sold 1674 on 3.5 pt bounce off double bottom lows. Wanted to sell 1674.75 pLo but it looks like it may have stalled a tick before there. Aside from it being a double bottom, it does look good and its from a known area of interest. Scratched after 13 min and 4 ticks MF vs 2 MA. Will try to re-enter higher. Would have been full loser.

4. Sold 1675.75 vwap/mid. I guess this is the do or die area for bears. They don't hold this then the bottom holds. IBHI 2 ticks above, could have been filled there. Stopped after 24 min. Unreal, 0/4 today so far.

5. Sold 1682.25 LVN on 4.25 pt move. This level provided rotation yesterday and overnight so maybe it will again today. SO finally a trade goes my way, 6 ticks for vs 0 MA at the moment but not a whole lot of interest wacking the bid below the IBHI. If this goes back up to entry I might just scratch. First scale after 18 min and 0 MA. Scratched second lot after 48 min and 1.0 MA. Might re-add it higher.




Recap
ES opened OAIR below value and after taking out the weak's low proceeded to grind higher thru the day. Vpoc and Value shifted slightly lower as a result of the down move but VAH stayed at the same price it has for the prior 2 days so not much change at all. Price closed near the hi, above value on light volume of about 1.2 mill. Really a strong reversal off the bottom, nice long wick on the daily candle. Bears just can not gain any traction and the weak closes a mere 7 pts off all time hi's.

Man I traded horribly today. Market did *almost* exactly what I thought it would do and I lost money. I got spun around two times today which sucks. I'm kicking myself for not taking that long off the 1671 area and then the double bottom it left behind made me think a short was a good idea despite feeling the grind and expecting the grind higher per my trade plan pre-market. As far as positives go, by scratching some would-be full losers my day was nowhere near as bad as it could have been. I traded like a clown and only lost $225. I finished positive for the weak though which is good so I will leave on that note.

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  #534 (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: ES traded in a 7.25 pt range on light volume of 125k so far. The hi is 1 tick above fridays hi and the low is 1680.75 which is 1 tick below the mc vpoc of the 3 day balance we are in. Vpoc currently at 1683 and profile shape is nicely balanced.



I was thinking friday's squeeze into the close would be accepted and I would wake up to ES trading in the low 1690's this morning but I was wrong. Fridays squeeze was not accepted and instead ES is set to open inside of value. Nothing major on the calendar today but this week is chock full of very important stuff so today may be somewhat quiet but this week promises to provide some good opportunities to be sure. Friday's profile was kind of long and lean and doesn't give much to work with. Absent a highly motivated buyer/seller off the open I guess it would be best to look long near the 1678.5 nvpoc or 1675.5 VAL or possibly short near 1684.5 VAH. Longer time frames are very bullish while daily is kind of balancing just below all time hi's.

Levels Above: 1684.5 VAH, 1687.75 pHi, 1694.5 all time hi, 1700

Levels Below: 1678.5 nvpoc, 1675.5 VAL, 1670.5 pLo, 1666.75 CLVN, 1664.5 nvpoc, 1660.75 GAP, 1658.25 CHVN**

Hypo#1- ES opens OAIR inside value and pushes lower weakly to 1678.5 to pick up buyers then grinds higher.

Hypo#2- ES opens OAIR inside value and pushes up to 1684.5 and fails then moves down to 1675 and possibly lower.

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

1. Long 1681.5 after ONLO got taken out by only 2 ticks and it feels like sellers are struggling. Tried getting long 1681 but no fill. Had I waited another minute would have been filled there...Really low conviction morning so far. Vpoc shifted to my entry and lower profile does not look complete really so be interesting to see how this plays out- so far 4 ticks in my favor vs 4 ticks against. Scratched after 25 min. Might try and re-add lower. WOuld have been full loser.

2. Long 1678.75 after printing the 1678.5 nvpoc weakly. Stopped after 22 min, tried getting out for scratch on bounce up but it stopped a tick short. I might have just puked the bottom now as it 1 ticked my low... Yep, I puked a tick off the bottom.




Recap
ES opened OAIR inside value and spent the whole day chopping around prior value. Vpoc shifted incrementally higher while value put in an inside session. Price closed down marginally on very light volume of 943k. The daily candle is almost a perfect doji. In short, nobody had any interest in putting any money to work ahead of the fomc on wednesday. Tomorrow we have consumer confidence out which might move the markets a bit but I think its safe to expect the same action as today.

Frustrating day today that featured a lack of opportunity as well as a puke at the low. I knew there was potential I was puking at the low too which sucks. If only they had rallied 1 more tick higher before the last pullback and let me out for a scratch. To be honest I am not even sure if I should have entered the long at that nvpoc. I kind of thought the general rule of thumb is taking a trade off an nvpoc has good potential if its from a balance area different then the one ES opened in and that clearly was not the case today as we opened OAIR inside value. But friday was fresh in mind where it opened and went up the 1680.5 nvpoc and turned on a dime then went down 10 handles to another nvpoc and reversed 16. I was considering the short from IBLO as that had a lot of confluence going for it- LVN/ledge/vwap and had vpoc migrated down to the 1678.5 area I would have taken it but since it didn't I passed. It did give a scale but thats it. I'm a bit annoyed at losing some cash today because I wanted to finish this month strong and head into august with some good positive momentum. Still totally possible but I wanted a 3 day win streak to cap off my first month of 2 lots. Have to stay disciplined and take what the market gives though.

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

Economic data: confidence

ON Profile: ES traded in a 6 pt range on light volume of 137k so far. For the moment, the hi is 1 tick above fridays squeeze into the close hi. The low is 2 ticks below yesterdays vpoc. Vpoc is 1686.5 which is 1 tick above pHi. Profile shape is generally balanced in an abstract way but with some teeth in it.



Market continues to confuse me- I had expected ES to trade in a tight 4 pt range around yesterdays vpoc ahead of the FOMC tomorrow but instead we have ES trading near the hi of the 3 day balance and potentially set to open slight above it which is pretty bullish. Despite that my first instinct would be to lean short on the open for a return to balance by responsive sellers provided it does not open OD up. I really don't expect much downside to come of it though- maybe the ONLO gets taken out by a point or so. If bears do not get in the way, I can see buyers auctioning higher up to the 1694 area where I would expect sellers to be waiting as I am assuming the market won't break higher out of this extended 3 week balance area ahead of the fed but who knows? Longer time frames are very bullish, daily time frame is balancing. Bias to the upside overall but maybe a short on the open makes sense.

Levels Above: 1687.75 fri hi/1688 ONHI, 1694.5 all time hi, 1700

Levels Below: 1682.5 vpoc, 1677.5 mv vpoc, 1670.5 fri low*

Hypo#1- ES opens OAOR and fails above ONHI with responsive sellers taking it down to 1682.5 and ES rotates in a narrow range all day.

Hypo#2- ES opens OAOR and responsive sellers push weakly but fail around 1685 MC VAH and grinds higher up to 1694 where responsive sellers enter.

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

1. Sold 1687.5 after ONLO taken out by 2 ticks only and we are at the top of a 3 day balance area. Stop will be new hi so 5 ticks. Traded my first exit within 2 minutes but no fill as only 36 printed. There it goes, first scale after 4 min and 0 MA. Came within 3 ticks of my second scale but struggling. It came within 2 ticks now and is bouncing. Moving stop to entry because I think if it gets there the trade is over. Current dVAH is 1687 so 2 ticks below entry. Maybe I get filled either way on confidence number in 4 mins. Stopped on final for +1 tick after 50 min.

2. Long 1683 after 1682.5 nvpoc tagged lightly and it seems that ES struggling to push lower. Its a balanced day so far with vpoc at 1685.5 so I think room to run for a scale at least. Stop below ONLO by a few ticks. Well it went up to the IBLO and turned around and printed lows again, weaker then before so far but I was hoping it would just go straight my way. So back up to IBLO again but only printed 1 tick above it very weakly so far. OK now 3rd attempt at IBLO... Scratched after 30 min and 7 ticks my favor when it just dropped. Will try to re-add lower depending what it does on new low. Would have been a loser so good scratch.

3. Long 1678 after printing 1677.5 MC vpoc weakly while only 1 ticking the prior low. This could be seen as second test with first one having already produced (only) a 1.75 pt bounce. Maybe I am totally blowing this context read: ES opened at BAH and has rejected that, cut through vpoc and is now targeting BAL which makes my long too early. So its gone 7 ticks my favor vs 3 against and created a serious ledge that I would think can't hold but who knows...First scale after 48 mins. Second scale after 1:22. Third scale given.




Recap
ES opened OAOR, 2 ticked the ONHI and proceeded to slowly sell off 10 handles before bouncing into the close. We end up with incrementally higher vpoc and value shifting slightly higher as well. Price closed marginally higher and inside value on light volume of 1.14 mill. This ended up being day 4 (or 5 depending how you look at it) of balance between 1686 and 1676 which makes sense considering the fed releases its decision tomorrow and that will be very important. Bias remains to the long side and for tomorrow I am thinking ES opens unch and rotates in a 4 handle range until the news and then all hell breaks out.

I made some good trades today. I think all 3 trades were good. First one I dont know what to say. Did I manage it poorly? Was it unreasonable of me to move the stop to break even? Up to that point I thought that if it popped above pHi again and up to 1687.5 it would mean my trade was toast so no point in having a stop above 1688.5 as that would just be wasted money. Turns out I get stopped at the hi of the move and then they wacked it. If I managed that trade poorly then I managed the next one good to make up for it with a scratch that would have been a full loser. It was acting funny and not wanting to give me a scale so I ditched it and my concerns were borne out. Last trade I got lucky, I originally wanted the long at 1679.5 pVAL/afternoon low but I ended up going out to pick up a lunch with ES trading 1681 and came back and saw the market trading 1678 so I bought it after watching it a few minutes. I'm happy to make up for the last 2 days of losses with todays gains. I hope tomorrow I can latch on to a few good ones and finish the month strong.

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  #538 (permalink)
Market Wizard
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Profiler View Post
...I made some good trades today. I think all 3 trades were good...

Second trade was a low probability trade in the current context. Just below the RTH open and in front of two or three clearly overlapping intervals where price did balance for a while before finally falling to the bottom of the range for the day.

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


trendisyourfriend View Post
Second trade was a low probability trade in the current context. Just below the RTH open and in front of two or three clearly overlapping intervals where price did balance for a while before finally falling to the bottom of the range for the day.

What is an overlapping interval? Can you post a chart distinguishing these?

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


Economic data: ADP, gdp, PMI, FOMC

ON Profile: ES traded in a tight 6.25 pt range on volume of 155k so far. The hi and low correspond almost perfect to yesterdays value area to the tick. Vpoc currently 1684.25 and profile shape is very balanced. Exactly what you would expect ahead of key economic data/fed.



So the morning data is out (aside from PMI) and the market is remaining in balance. ES has balanced for 4/5 days now in a tight 10 handle range roughly and a breakout is likely coming soon. I think that catalyst will come this afternoon on the fomc release. However, my bias is to the upside and I think there is a chance that buyers get impatient and start this morning. ES is currently trading 1685 which would be an OAIR inside value indicating market is still waiting for info. Should the market trade higher and build acceptance around and above 1687/1688 then I think that will be your cue to get long for a breakout at least up to 94 and possibly 1700 today. Alternatively, acceptance below and around 1677/1675 will be the cue to get short for a move down to 1658/1660.25 or possibly 1648.5. If neither of those things happen then we end up with another balanced day which would make it appear as though the non-farms report will be the key piece of info. So, many scenarios possible for today and no doubt an uptick in volatility will make things difficult to read but I'm just going to try and do my best.

Levels Above: 1688.5 pHi***, 1694.5 all time rth hi*, 1700

Levels Below: 1677.5/1675 BAL***, 1664.5 nvpoc, 1660.25 gap, 1658.25 CHVN**, 1648.5 BAH***

Hypo#1- ES opens OAIR and chops around inside value until FOMC then goes batshit crazy but ultimately resolves to the upside.

Hypo#2- Same as above but with downside resolution.

Hypo#3- ES breaks higher early up to 1694 then pauses ahead of fomc and breaks higher after up to 1700.

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