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FuturesTrader's Journal - Trading ES with Market Profile
Recap:
ES opened below yday PB Low but the first 2 periods were dominated by day timeframe traders. B period tested yesterday settle and only then sellers showed up => Carry this information forward
Profile became 3 wide in C period. This indicated that selloff might be liquidation only, however it was only one data point. 3 wide profile also showed that there was acceptance below PB Low, this indicated change was underway.
Market one timeframed lower B,C,D,E,F. Inventory corrected in G period. H,I one timeframed lower.
J period stopped 1t above the gap fill - this was mechanical buying => carry forward
K stopped 1t above J - mechanical selling
L was inside bar = balancing
M broke out and put pressure on the mechanical sellers.
N high was 1t below D high = mechanical selling
In my opinion all we saw today was liquidation. Both low and rally high at 2115.50 are weak references and likely to be taken out at some point.
Larger picture:
ES stopped one time framing on daily bar chart. After one time framing higher for 9 days this could be just inventory adjustment.
We also have Double distribution day. Treat each distribution as a separate day. Opening and finding acceptance withing lower distribution will indicate that prices are likely to continue lower. Acceptance above 2115.75 will target all time highs
We have poor high's on daily, monthly and weekly charts.
Gapping below today's low and holding the gap change the perspective since Gap is a form of excess.
Premarket: Overnight inventory is 100% short. 2100 level is in play today. Expectation is that there will be correction to overnight inventory. If that doesnot happen, it will indicate stronger sellers stepping in.
Downside references are:
2103.25 POC
2095.00 - this was a weak level - low of 7/15 and high of 7/13.
2091.50 - low of 7/14
2088.75 - Untested Prominent POC from 7/13
Upside targets are:
2107.75 - Low of the Gap and yday low (this is now resistance)
2112.00 - Yday POC
2115.50 - High of lower distribution
not sure whether you look at volume or not but there was also a naked (untouched) volume POC from 7/15 at 2013.75 and that coupled with the prominent POC at 2013.25 were going to have a high odds play of a bounce. That coupled with the fact that overnight inventory was 100% short made the bounce even more likely at least to touch yesterday's low.
I use volume more than Dalton likes to suggest because I find it to be excellent indicator of magnetic prices
i look at volume histogram on the profile and helps me see the volume activity at price rather than time. i would suggest you take a look at it if you like. i know Julia used volume more than Dalton but not sure to what degree. i have had good success with it. just a suggestion and nothing else. Good luck.
I am sticking with what works for me. I used Volume Profile for years but I couldn't convert it to positive results. I am sure it was due to my lack of market understanding more than anything else.
Yes, POC was my target when I took long inside prev day range at 08 area, but I did not want hold the trade into housing news so I exited the trade before destination was reached.
