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The way I see it is that you need to really wait for most of the day to finish before you get a clear development of your volume histogram so the VWAP and PVP would be used retrospectively i.e: the VWAP and PVP made today would give me an indication of what to expect tomorrow? |
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Good observation Nick. Todays
VWAP and
PVP can be used for tomorrow's trade setups. We will cover that topic down the road when we get to more advanced types of trades. However, you will see in the videos that you can use todays developing
VWAP to make trades today. This will be the basic
VWAP trade that must be understood before we move on. Newbies will be able to get their feet wet here. A sort of crawling before we start walking.
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In essence this seems to be similar to MP but using volume histograms instead of TPO's. Correct me if I'm wrong though. It's a very interesting thing you've got going on here. |
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Market Profile Analysis is actually a subset of this more general way of looking at market statistics. There are important differences, however. a)Market Profile uses half hour increments for setting up the distribtuion. Generalized market statistics has no special time scale. b)I introduce the concept of the distribution average (the
VWAP) which Market Profile does not use. c)There is no concept of
value area as used in Market Profile.
Value area is a purely heuristic invention. Rather we use the terms, high volume zone or high probability zone and low volume or low probability zone. In addition we will see later on that there is a generalized standard deviation of the
VWAP which can be used as a measure of market volatility. But I am getting ahead of myself....so stay tuned.