Taylor Trading Technique Nov 2007

[waveslider]

Hi Dogpile,

You offered some interesting and unique ideas. Question for you, how do you quantify the 40k share volume at one price? I guess you would use the matrix window?

The one caveat I would add to what you said about the need to chop would be regarding run-away days. For a bullish move, a gap in the opposite direction of the previous day's close which forms a low to high day. Rare yes.

Interesting to note that ES price faked lower first, then faked higher. Failed both moves away from the opening range and then closed at exactly the 50% level on the day, exactly at VWAP.

As you mentioned, price spent more time above the 50% level, as seen in the market profile. There is support in the market here, but sellers are holding it down. A good washout bar below resistance could trigger a quick move higher. I think we will see that tomorrow, on "turnaround tuesday". Likely price will make some kind of attempt to close the gap overhead created by last Thursday.

More churning around 1505

[RAVIN]

	Quote:	Dogpile
	let's review today. There was a low violation later in the day. This low violation is not a Taylor type of buy because a Tayor 'low violation' should come in the morning. The market did end up trading 'low to high' after 2 high to low days. Personally, I made 1 trade today and then couldn't find another good entry. Very tricky 'structure' and I am sure today tore up a lot of traders. Patience and discipline.

Great stuff, I am trying to understand this with some logic. Interesting to note that nuance regarding LV which has to occur in the Morning for a TT buy.

1. Well we had 2 H-L days last week, and yesterday was L-H I presume, as there was a low which tested friday's low, albeit in the afternoon, prior to the high later in the day.

2. Now strictly speaking that is not a buy day, then any test of the low should be viewed as a buying opportunity. Correct me if I am on the wrong track.

[RAVIN]

Dogpile,
Any LV today is what I meant. Perhaps you can outline "if-then" scenarios just as you did for Monday. That is a great learning process.

[RAVIN]

	Quote:	WHY?
	Today nov 5 was a ss day and price action was consistent with that. It wasn't an ideal ss day in terms of entry but in terms of price movement it was close to an ideal day. That is: it opened, traded up, then down. Tomm 11/6 is a Buy day. . If it trades down first on 11/06 i would look to to take the long position mentioned above. and look to re-enter long on a possible bv on 11/7. This is taylor...also looking to position ones self for the more probable move. WHY?

Good to have you back, thought you were on holidays for 2-3weeks.

Question:
Last Thursday and Friday were down days, so how does that make Monday a SS day, thought SS days came after a buy day and a sell day.

[Dogpile]

today, we are in 'breakout mode'. This is actually rare situation where we closed yesterday with LOW 15-min ADX. I think odds today are on a directional move away from the 1507 area. My guess is up towards 25-30 but I will remain flexible and just 'go-with' the momentum. I am not going to fade a move this morning as I see no significant resistance above yesterdays high. If we break lower, I will go with that too but be mindful of action relative to VWAP to signal that the 'tape' is not signalling a big dynamic down day.

[Dogpile]

	Quote:
	how do you quantify the 40k share volume at one price? I guess you would use the matrix window?

yes, 40k is watched in my matrix window (ES.D not ES).

	Quote:
	The one caveat I would add to what you said about the need to chop would be regarding run-away days.

yes, this is 'breakout mode' --- I won't look for this on days where I would expect a directional move to be likely. but this condition is the exception, not the rule.

Have noticed that often best to wait for volume to build about 30k contracts at one price --- then expect back & fill until it becomes 40k. I faded a move yesterday for 5 pts based on this tendency. Caveat is that once it builds to high 30k zone, even a 'fake' move can go quite a ways before reversing --- so I like playing this fade just maybe 1 time and then stop once it starts to close in on 40k. After 40k, I will look for an afternoon trending move.

[RAVIN]

Dogpile,
What software you use to generate VWAP, was under the impression that this is mostly employed by passive traders such as pension funds etc. Is there a site for more info. on strategies with VWAP
my datafeed is esignal and charting software is Tradeguider.

[Dogpile]

	Quote:
	What software you use to generate VWAP

Tradestation has it as a free add-in. just google it for information.

	Quote:
	was under the impression that this is mostly employed by passive traders such as pension funds etc.

I have found VWAP to be an important measure for the S&P futures... not for the other futures contracts though.

I used to follow market profile POC but have switched to VWAP. I don't use it for 'set-ups' -- I use it for 'context'.

[waveslider]

check out the vwap color gradient I put in the coding section last night, a fun way to see it.

[Dogpile]

Tuesday review:

gap up led to morning high violation which led to test down toward 15-min 20ema and test of major support area 1503-05

market made 'higher bottom' vs previous day low and traded up

went 'low to high' for second day in a row