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

  #541 (permalink)
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Profiler View Post
What is an overlapping interval? Can you post a chart distinguishing these?

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  #542 (permalink)
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7-31 trades and recap

1. Long 1688.25 on re-test of BAH/LVN after breaking out. Market acting heavy now so not real confident in the trade but I still think overall context favors buyers so I took it. Scratched after 8 mins. Reasons why I scratched- was not filled on first test that produced a 2 pt bounce exactly to IBHI to the tick where it was rejected; lingering just above for about 40 min and now below mid/vwap; market may just chop for next 2 hours until fomc. Would have been loser.

2. Sold 1684.5 IBLO after 3.5 pt bounce off lows. Garbage trade, can't believe I took it, they got me. Stopped after 2 min...

3. Long 1690.5 IBHI. HOD looks pretty blunt and it is just short of 1694.5 all time hi so I think bulls can target that. Otherwise I will be getting clowned fading IB trades from both sides today. Stopped after 2 min, clowned again.

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Recap
ES opened OAIR and put in a volatile but balanced session. Value and vpoc shifted overlapping higher. Price closed basically unch and inside value on heavy volume of 1.77 mill- heaviest day in awhile. Daily candle shows strong rejection from the all time hi but is also a doji and sellers are just unable to shift value down.

I made 3 horrible trades today, I am so frustrated at the moment. I wanted a breakout today, market did breakout twice and both times without me and all trades I put on looking for some sort of a continuation of the breakout didn't work. The sale was just the worst as I was wanting to get long at 1681.5 initially but then decided to play for a break lower as earlier in the day ES broke higher and failed so I thought perhaps its time to test lower balance area 1675ish. V bottom, very little volume indicating no acceptance and it just blew right through me. Plain and simple I wanted to end the month positively and instead I end it poorly. I don't want to be too negative as its still my best month to date and I am enjoying trading 2 lots. Tomorrow is another day.

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  #543 (permalink)
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No worries mate. Today was also my worst day and only day I would call "bad" in July, too bad we didn't end it better. It's FOMC day, and the liquidity is just absolute shit after the announcement, and it's very easy to get suckered in with the wild swings. From the low post-announcement at 81 up to 92, only about 170K traded--very thin. I'm considering just taking the next FOMC day as a vacation day. There may be opportunity but it is a very dangerous day. 9 handles down in 15 minutes, 13 up in 30 minutes, 13 back down in 60 minutes. For no purpose ... next Fed day I will be at the park I think

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  #544 (permalink)
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8-1 pre-market

Economic data: claims, ISM, ECB, construction

ON Profile: ES traded in a 10 pt range on slightly heavier than normal volume of 167k so far. The low is 2 ticks below the settlement so sellers lost interest after the close. The hi so far is currently equal to the all time rth hi of 1694.5 and 2 ticks above pHi. Vpoc currently 1692 in a very fugly shaped profile.

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Over the past month the ES has put in hi's of 1693, 1694, 1694.5 and 1694 again yesterday. I've been waiting for a break above and tag of 1700 for some time but buyers have just been unable to or unwilling to make it happen. The last 4 days have progressively higher lows. Yesterday I anticipated a break out but it didn't happen. Today with the ES currently trading 1693.5 it would seem to be another golden chance. Some very important data is being released this morning and tomorrow is most important with non-farms so frustratingly we must consider the possibility that the market may again NOT breakout. I'll be watching for a quick rejection from the 1694.5 rth ath level or the 1695.5 globex ath to see if sellers once again emerge but I think you have to say odds favor the long side and move up to 1700 or more. Maybe we see responsive sellers off the open and depending on the strength/weakness of it we will be able to further gauge the breakout possibility. Longer time frames are very bullish, daily time frame balancing but potentially transitioning to bullish.

Levels above: 1694.5/1695.5***, 1700

Levels below: 1690.5 pVAH**, 1687 nvpoc, 1683 mc vpoc, 1677.5 chvn, 1670.5 CHVN, 1664.5 nvpoc, 1660.25 gap

Hypo#1- ES opens OAIR above value and responsive sellers push weakly to 1690.5 where buyers enter and rip higher to 1700 and possibly further.

Hypo#2- ES opens OAIR above value and buyers push but fail around 1695 and sellers push down to 1683.

Hypo#3- ES opens OD higher, get on!

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  #545 (permalink)
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8-1 trades and recap

1. Long 1696.5 on 1.5 pt pb after ES opened strong and popped above 1695.5 all time hi. Aggressive buy but I think the market is finally breaking out. Thought about waiting for 95.5 re-test but wasn't sure if it would get there. 20 mins in its only gone 2 ticks against while 8 my way but no fill on my scale. The 9am number seems to me to be the problem. Not sure what to do here. I think up is still the way but maybe a shake lower is in the cards first to clear the way as there is quite a ledge beneath my entry. Scratched 1 ahead of the number...Number comes out and it pops higher and gives my scale...dang. I will mark this in my log as a full winner for record purposes. Second and third scale given.

2. Long 1698.25 vwap. Ok, 1698.5s are real well bid and they just cant seem to take this down and they only printed 68 at 1698.00 so I decided to try a long given we have a double top and overall context is bullish. Going to use a tight 4 tick stop on this trade, 1 tick below the mid. Negative is that its a balanced profile and a flat vwap so im taking a trade right in the middle of balance. 12 min in and its gone 4 ticks my favor vs 0 MA and I am wondering if maybe I should just ditch this trade at breakeven if it goes back there? First scale after 17 min and 0 MA. 2nd scale after 30 min. Filled only in top 1140 in cue so def a lot of resting orders there ahead of me. No third scale.

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Recap
ES opened OAOR with an upside gap on a breakout from balance into new all time hi's and didn't look back but also didnt exactly run away either and uncertainty over tomorrows non-farms may have been the reason. Value and vpoc shifted completely higher. Price closed well higher and just inside value right near the VAH. Volume was pretty light given the breakout to new all time hi's at only 1.26 mill. Profile shape ended up being pretty balanced. Overall, strong bullish day but it wasn't a full blown trend day by any means. Depending on tomorrows jobs number we could get a trend day though.

My first trade was solid, I just wish the market hadn't hesitated before the 9am number though or at least given me a scale before hand. So I took 1 contract off right before it for a scratch and the thought didn't even occur to me to put it back on after the number so that will be something to remember in the future. Also, I almost took this trade off fully for a scratch like 3 times because it just kept coming back to my entry and leaving a nice ledge below. Perhaps that was the first clue this day would not be a run away. Second trade worked beautifully, I'm just not sure it made sense to put it on as it was more of a price action trade combined with overall bullish context trade. Tomorrow is another potential big day so lets hope its a good one.

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  #546 (permalink)
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Profiler View Post
1...Second trade worked beautifully, I'm just not sure it made sense to put it on as it was more of a price action trade combined with overall bullish context trade...

You seem to attach a negative connotation to price action here in relation to your approach. Why is that?

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  #547 (permalink)
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trendisyourfriend View Post
You seem to attach a negative connotation to price action here in relation to your approach. Why is that?

If I do, its totally unintentional. Its not the style of trading I am trying to achieve here but I am a firm believer there are a million ways to consistently pull money out of the market and no one way is superior to another.

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  #548 (permalink)
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If I do, its totally unintentional. Its not the style of trading I am trying to achieve here but I am a firm believer there are a million ways to consistently pull money out of the market and no one way is superior to another.

I do understand you. Many volume profilers would consider such a trade a poor trade because of its location right in the middle of the developing value area but when every Joe and Jane want to get this elusive 1700 kiss then your trade made a lot of sense. 1698.25 was the POC of the traditional TPO profile at the time of your trade.

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  #549 (permalink)
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trendisyourfriend View Post
I do understand you. Many volume profilers would consider such a trade a poor trade because of its location right in the middle of the developing value area but when every Joe and Jane want to get this elusive 1700 kiss then your trade made a lot of sense. 1698.25 was the POC of the traditional TPO profile at the time of your trade.

The best location was obviously lower and a bit earlier in the 96s, but as the shot below shows, at this point there was a VPOC shift higher and a bit of a double distribution, albeit not the cleanest. Value was being created higher, and where Profiler bought was indeed below the most traded area, at the rejected prices (again, not strongly so but to some degree) in between.

So even though it was in the middle of the value area, it was a good location, because at that point, trading to the VAL would have shown a potential shift in value back lower to the 96.50-98 region, at which point a long may not be as desirable anymore. Just one way to look at it.

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  #550 (permalink)
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Profiler View Post
Ok, 1698.5s are real well bid and they just cant seem to take this down and they only printed 68 at 1698.00 so I decided to try a long given we have a double top and overall context is bullish.

I'm not advocating straying too far from plan, but this is a great example of how you are identifying context and making decisions based on it, instead of just buying/selling at a LVN or HVN. In the past I don't think you would have taken this trade, and if it had not worked out, no big deal, but you seem to be developing more confidence in your ability to read things. Awesome job man.

I had a bit of a tough day, as I sold 1701.50 but gave up on it. My premise was a falling A/D, along with a weak Dow, along with weak technology, health care, and financial sectors (no new high from those 3, despite the new high and rotation in the ES, and these are the biggest 3 sectors in the index). Not a short I would normally take but they all lined up, but it just hung there for too long for me so I bailed for -2 ticks on it. Then, I bid 99 after 98.75 printed, and was in the first 200-300 for sure in the queue but did not get a fill and was too slow to hit 99.25 -- all in all a frustrating day but glad you did well buddy!

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