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Why is the first hour of trading considered so important (the initial balance)? Why is it the first hour? Has anyone come up with ideas for what characterisitics might define an 'initial balance' better? |
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I agree with what jjthetrader said. Simply put...this is when volume comes in (repositioning) to confirm or deny the previous perceived fair value. This is why many times when the market opens outside the
Value Area (e.g EOD run or overnight move) it will try to (if close enough) reenter/test the
Value Area on open. When we open inside a
Value Area price will often test outside looking for interest. How the market reacts to these tests will usually create a trend or confirm a two sided consolidation period. On completion of repositioning volume tends to dry up. Depending on the outcome of these tests the activity usually lasts from 30 minutes to a couple of hours. I personally don't use any hard value. I let the market activity around these areas show me when it's complete.
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Also, Hlm, you mentioned doing some work refining MP. Can you expand on what you are doing (only as much as you are comfortable with obviously, I don't want to pry into your private trading)? |
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Much of my research and development has been on TPO and Volume Market Profile started not at time related spots (e.g. Daily), but at swing highs and lows. I analyze not only the differences between TPO and Volume but how all of them converge to either cross or parallel each other.