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Price is a vagabond - Market Profile at TST


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Price is a vagabond - Market Profile at TST

  #1 (permalink)
Lucerne, Switzerland
 
Experience: Beginner
Platform: NinjaTrader
Trading: ES, CL
 
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Posts: 17 since Jul 2013
Thanks: 60 given, 15 received

Price is a vagabond - Market Profile at TST

Hi there,

I posted this oneliner some minutes ago:

Price is a vagabond

Somewhere (at a certain price area) it settles down for a while, until it doesn't feel comfortable anymore, and then it moves quickly (aka trends) to another area where it settles for a while.

Sometimes it escapes to another continent (aka crash or massive shortsqueeze)


and actually, that's what trading is about, respectively to recognise in which state is the market right now. Does it feel comfortable there it is (rotation, congestion, balance) or is it nervous and wants to get away from this area (trend). And after we have understood what is the market telling us, we have to interact by having a plan for this situation and follow this plan.

Sounds simple but it is not as we all know.


As this is the start of my journal, I will first introduce myself personally, then I'm going to talk about my experiences with the market, where am I right now and last where should the journey go to.


So I am a 50 year old guy, originally from Vienna, Austria, where I grew up and lived until my mid-twenties, then moved to Sweden and Germany for about 5 years, returned to Vienna for the next 12 years, thereafter moved to an island in the Mediterranean Sea for about 3 years, and now I'm situated here in Switzerland since summer 2011.

I'm married since 1992, have a 17 year old daughter and a 9-pound animal, that tries to be a dog (Maltese bitch), effectively she's a lap-addicted pet. I used to have "real" dogs, we had some English Setter brides in our family, but since my last fellow lost a fight against a Pickup full of barking dogs, when we had our morning walk, I'm done with big dogs, at least for now.


So how did I come to trading?


Back in 2007, we sold our small enterprise. A low 6-digit amount of US$. What to do with this. To little to live, to much to die. So I anticipated the market. Wow, this stock made 500% last year, pennystocks even some thousands, dividends, IPO's, hot stocks, knock-out certificates, CFD's, futures ... massive possible revenues - everywhere you look at.

Next step: open my own account, or two, or three. All together US$ 20.000,-

Fundamental analysis, technical analysis, trendlines, indicators, Elliot waves, money management, R's, ...

Lots of decisions! Investor? Swing trading? Day trading? Scalping?

And we are not even quiet near the decision "When to enter the trade?" - But I trade! ("Are you serious?")

I recognised pretty quickly, that money/risk management is key. But they alwas seem to know, where my stops are.

Wider stops - not allowed by money management. Put more money to the account? Hmm?

After I dumped half of my trading money, I decided to quit. I revised my trades (around 2000 in three years) and I discovered, that 3/4 of my losses were fees for trades, spreads, platform costs, etc. So actually, I didn't a bad job, not because I am a good trader, only because I respected my risk management. But this is not enough.

I read an article at that time, somewhere in the net about the correlation between trading and poker, the similarities according to risk, to probabilities and how to deal with it. So I started to play poker, and I learned a lot through it. First of all, Psychology. How to deal with losses. Not to get personally and emotionally involved with the outcome. And Patience! And Dedication!

So in springtime last year my fingers were itching to trade again. So I approached the market and landed in some way (don't know how and why) here at futures.io (formerly BMT). That definitely opened a new world to me. Looks like there are a lot of people, who know what's going on. At least much more than I do.

Where am I know:

I'm in my (I think) fourth combine at TST trading the ES. It is pretty unlikely, that I can fullfill the targets to get a funded trader this time, simply because I have to much work to do over the summer period to cover the required 10 trading days within 1 month. I decided to do the combine regardless of this fact, because this delivers the possibility to act in a real trading environment to a reasonable price, and only this makes an improvement possible.

I'm using market profile theory to get my picture of what the market is doing and therefore find a plan on how to act with it, where can I find my setups, I'm following DionysusToast and I'm using his jigsaw tool as well ("thank you, DT"), I' m also following FT 71 on a daily basis, but I force myself to make my daily approach in advance, so I base my decisions on my own conclusions, and then, after revision their daily statements, can learn from the pro's, what did I do wrong or right.

For everybody, who is not familiar with market profile and auction market theory:

Market Profile is a Trademark, licensed to CBOT, which is owned by CME, there is a lot of educational stuff on their site, respectively links to it: https://www.cmegroup.com/education/interactive/marketprofile/handbook.pdf

I hope, I'm not violating any forum-policies with the post of this link, I'm not a vendor, nor do I have any relationships.

Thank you all for reading this post, wish you the best and gl in trading


Last edited by nightshift; July 12th, 2014 at 11:19 AM.
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  #3 (permalink)
Lucerne, Switzerland
 
Experience: Beginner
Platform: NinjaTrader
Trading: ES, CL
 
nightshift's Avatar
 
Posts: 17 since Jul 2013
Thanks: 60 given, 15 received

20140714-premarket


Beside the intraday MP-profile, I also use a composite profile, in which I merge weekly profiles to a bigger picture.

And then I monitor where the daily value-areas (only US-session) move and what kind of profile they build.

The composite starts back in May 2014, when we left a several month range behind us.





Trading in the overnite session occurs in an area above the overall value within 1964ish and 1972ish. So my assumption is, that these are the areas we will test today. Will be interesting to see, if these areas hold.

The profile of the daily value-areas confirms the importance ov these two reference-areas.


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  #4 (permalink)
Lucerne, Switzerland
 
Experience: Beginner
Platform: NinjaTrader
Trading: ES, CL
 
nightshift's Avatar
 
Posts: 17 since Jul 2013
Thanks: 60 given, 15 received

20140714-EoD

How did the US-session play out?

Market opened at 1971.50, which was last monday's (naked) VAH, tested last mondays (naked) POC, where selling has been rejected, formed an IB up to 1973.25, rotated around for a while and extended 3 ticks to the upside with a doubletop. Further rotation down within value.

On this rotation down I took a long trade in the lower value area at 1971.75 with a 6 tick stop (right under the volume-value-area).



Although it looked like buyers are in control, they could not build up any momentum for around 2 hours. So I decided to tighten my stop for 2 ticks and set my target to 3 ticks above the poor high of the day, and let the market play it out. Stop got filled around 20 minutes later, and market rotated in this narrow area for the rest of the day.



So in the end it was a normal day with a narrow range, no extremes in the end, building up energy for a wider move.


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  #5 (permalink)
Lucerne, Switzerland
 
Experience: Beginner
Platform: NinjaTrader
Trading: ES, CL
 
nightshift's Avatar
 
Posts: 17 since Jul 2013
Thanks: 60 given, 15 received

20140715-premarket

No trading for me today and tomorrow, have to work 14:00 - 23:00 CET (= CT + 7), so only a short analysis:



Yesterdays trading tried to fill the upper area around 1972, but couldnot reach the upper end at 1976.25. On the downside we have a single print at 1966.75, which also is the lower end of the mentioned area. Low of the overnight trading so far is 1967.25. So the question for the day is if it will hold and rotate up again, or if it breaks and we will test the VAH of the composite or maybe dive deeper into value.

Good trading, you all


Last edited by nightshift; July 15th, 2014 at 08:42 PM.
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