CL overnight inventory had all been traded below y'day value. This left two scenarios for me to consider at the RTH open. First would we push on lower and continue the bearish move or two reject the overnight inventory and push back to value.
Today, scenario two played out. On the RTH open sellers were not there to push price lower and the buyers stepped in, driving price directly up through y'day low and directly to the globex high/value low area before taking a breather. Price from there worked on up to the POC and then eventually stalled out at 104 evens. Buyers showed no interest above 104 and from thee we rotated the rest of the day until the close.
Following my trading plan I identified four potential trades as described below
Trade 1 long when the opening 5m bar closed bullish for a push back to value. LIS would have been a close back below the OP. Initial target ideas were to first reach VAL and then POC then eventually VAH and higher. Price failed out before it got to VAH, stalling out at 104 evens. Multiple exit points came along, confirmed by high volume spikes at globex high, POC and 104 even areas.
Trade 2 long after price pulled back to globex high on an ACD A up day. I would hope for a bigger pullback but this trade had the potential to still push up to and eventually through VAH so it fit my trading parameters. LIS would have been a close back below globex high. Exit points could have been when we failed again at 104 or when price closed back below POC signaling a possible push back lower.
Trade 3 short after 30m bar closed bearish back under value and inside globex. This trade would not have worked out. the idea is against the A up day but looking for a bigger push down for another globex long trade. LIS was close above VAL where a reasonable loss could have been taken. Initial target idea was first y'day low and then OP and maybe beyond.
Trade 4 long after we failed out on trade 3 and price started pushing back into value. This would be trying to again push higher one more time before the close. LIS was again VAL, which held and you could have held onto this trade or scratched it at any time before the close with a scratch or small profit.
Overall price greatly respected the key levels I use today and offered one nice trade and then some choppy mess for the rest of the day.
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Thanks to you all, I have been able to validate that TradeStation can produce Market Profile information accurately. I have been comparing charts for the past few days and looks like I will soon be able to incorporate MP into my trading.
If anyone wants to know, the study (analysis technique) in TS is called a Price Distribution study. I set it up as @dctrade69 described his settings for Ninja - based on 30 minute intervals and I am getting values that are very close if not equal to what you are getting in Ninja.
This is yesterday's RTH profile that I was watching during today's action. I still dont understand quite a bit but I will keep following your charts and eventually get it.
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I had a ton of distractions today with my day job so I am satisfied with my results.
Like DC, I was looking for a continuation down or a push back to value today. I was actually a bit biased short but I took what the market gave me when it went up.
Trade 1 I waited until price cleared Y'day low before I entered. exited at the doji when price stalled a bit at globex hi. I am not nearly as good as DC at reading order flow yet so I still have to take my clues from given levels.
Trade 2 After price stalled a bit at globex hi it pushed thru VAL and I entered long with VAL as my line in the sand. Price stalled again at 104 area so I took my profits.
Trade 3 Same trade. Price rejected off globex hi so I entered after price closed 5m bar thru VAL. Danced around for 1 hour so I scratched the trade since we were close to the RTH close and I was unsure what to expect.
Still trying to learn order flow, until then I will take my entries and exits at known levels.
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I'm not sure I am set up to trade NQ and CL. Too much toggling back and forth and I'm too cheap and lazy to go buy more screens. I will post my ugly NQ trades (sim mode) in the interest of full disclosure.
Trade 1 & 2 5m bar closed under VAH at open so I shorted. immediately ran back up thru VAH long so I reversed. Price then stalled at globex hi but I failed to exit. Exited back at OP for total -39 tics
Trade 3 Price passed thru OP, shorted and exited at globex low. +29
Trade 4 got short on a pass thru POC. Went my direction then turned sharply back up thru POC. I got scared and did not observe my LIS rule and exited before a 5m bar closed above my LIS for -39 tics. Bad mistake, trade was good if I'd of followed my rules.
Trade 5 Long on PB to VAL. Exited way too quickly at POC for +21 tics. Trade was good for another 150+ tics if I'd held.
I have a LOT of work to do on my exits. Livin and learnin!!
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Today was a very interesting day in NQ. Basically we had two trends. I am sure there is a fancy name for this but for me it gave opportunity to trade on the short side following the trend down and then the markets reversed with strength and trended higher through the close.
Overnight price had traded in a tight range until a couple of hours before the RTH open. Price then broke out pre RTH and went up and tested around y'day high area. At the RTH open price went down and made an attempt to get back into value but was quickly rejected and then pushed higher testing a previous swing high area that proved to be a stopping point for the bulls at that time.
Price then reversed off of the swing high and worked back into y'day range and then back into value and traded strongly lower throughout the morning, eventually pushing through y'day low before price stalled and again reversed when the YM tested and held the 16000 level and NQ was approaching a test of 3400. That was apparently an area the bulls were willing to defend today and stepped in with force moving the markets back up near their highs at the close.
Again, all of the key levels were respected well today giving lots of trading opportunities with low risk entry options and exit points. Same trading ideas that I identified today that could have been considered for entries are listed below
Trade 1 long on rejection of value near the RTH open. Price opened and tried a push into value and was rejected with strength. this gave a nice long opportunity and price pushed up into the previous swing high area where we stalled out and rejected the move higher. My entry idea would have been to enter after the 2nd 5m bar closed just above the globex/y'day high, giving a small risk LIS of close back below y'day high. Initial target would have been a break above swing level where we had some space to move up higher and just see what the trade could give.
Trade 2 short on rejection of swing level and close back under globex/yday high. Again, this gave a small risk with LIS of a close back above globex high and a downside target of POC initially. Price moved swiftly lower and gave a potential exit cue with high volume down near VAL. Or if you were watching the higher time frames they were fully bearish so you could have held on and waited for a bullish exit signal.
Trade 3 short on retest and rejection at POC. Price stalled nicely at POC and again pushed quickly lower. LIS was close back above POC. Initial target idea was y'day low which it didn't quite reach but gave a potential exit cue with volume at the ADR low. Or again, simply ride it out lower with the higher time frames
Trade 4 short on retest of VAL. When this first retested the 30m candle was very neutral so a pause was worthwhile here. Once a 15m candle had closed bearish and price was moving lower again it offered a nice entry lower but required a little different LIS. For me it was a close back above the bodies of the previous three 15m candles, around 3441. To use VAL as LIS would have meant somewhere around 40 ticks and that's more than I will normally want to risk on a trade. Price moved down nicely again and stalled out around y'day low, where you could exit or again try to hold on with the bigger time frames.
Trade 5 short on standing around at y'day low without a push higher. Just looking to see if price could continue the downtrend. Price moved down nicely until the YM tested 16000 where price stalled and then reversed. LIS was a close back above y'day low.
Trade 6 long on reversal off of 16000 YM/3400 area of NQ holding and pushing price back above y'day low. LIS was a close below y'day low. A little higher risk than I like but still worthwhile as the first target would have been back into value and test at POC. Price continued up nicely and could easily have been held until the close of the RTH session
Trade 7 long if you hadn't gotten on earlier when price pushed into value and retested/held VAL. Low risk entry opportunity with LIS close below VAL. With the hold of value the expectation for first target was VAH or higher.
Lots of standard setups available today and more range than I ever expected to trade within.
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Wanted to explain this view earlier but didnt have time. The attached chart explains why long term ACD is bullish. This is one of the long term ACD views I have in my toolbox - all thanks to @mfbreakout. I picked this all up from him but I cannot keep things in my head like he does so I had to program it.
The combination of Yearly, Quarterly and Monthly pivots and EIA ranges factors into my long term bias. Mark Fisher mentioned the importance of price breaking above the Yearly pivot in an interview on CNBC in Jan (I think) and his view since had turned bullish on CL. Hopefully, the attached chart explains that view.
This does not mean there are no shorts. Markets are fractal in nature and trading opportunities (long or short) are determined within the time frame of a particular view. One could have a short term bearish view within a long term bullish context. Nothing wrong with that.
In ACD, there are continuation and fade entry patterns, just like we have intra day. If price spends a certain amount of time above a level, ACD calls for a long and vice-versa for shorts. If price barely touches a level and retreats quickly, ACD terms that as a failure and calls for a fade. These entry patterns exist in the longer term too. Our natural tendency, as retail traders, is to fade moves and this morning, especially with price at the ADR limits, it looks very tempting. I am approaching this very carefully and will be careful shorting this, if at all I do. I am trying to put myself into the shoes of the traders that work for Fisher. I think we will know soon. 105.10-105.30 is key from my ACD point of view today. I want to first see what happens - does price get here and how does it behave if and when it gets here.
EDIT: Typo in chart. Feb 13 should have said Feb 14. Those vertical lines are the 2nd trading day of a month when the monthly pivot is known and traders take a position.
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Last edited by LogicalTrader; April 16th, 2014 at 08:20 AM.
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Off to a great start i see! I have a quick question about dctrades value levels.I was looking at your nq chart, and you reference the poc/val/vah levels.Are these the previous days tpo close levels?And if so, do youy use the developing tpo levels also?