Crash course into MP

[sydney]

I am not a MP trader by any means but I use value areas and pivots as possible reversal points, as such I agree with darth and james in that MP gives you an edge and ignoring such a well proven and greatly used method might just hurt your trading in the end.

[AgeKay]

	Quote:	sydney
	I am not a MP trader by any means but I use value areas and pivots as possible reversal points, as such I agree with darth and james in that MP gives you an edge and ignoring such a well proven and greatly used method might just hurt your trading in the end.

I would like to ask everyone to be specific when they make a statement, because if you're not specific and don't provide any examples, your statement does not add any value to the discussion. In this case, how do you use the "value area", what "pivots" are you talking about and how do you use them as "possible revesal points". How do you determine that it's a "possible" reversal point and what do you do if it reverses and what do you do it it breaks through. What does reversing mean and what does not reversing mean? What edge does MP give you? Can you quantify it? How is it "well proven" and how does "greatly used" make it any good?
See what I mean? Most people talk so vague about trading tools that it's just meaningless blub...

[Hlm]

	Quote:	AgeKay
	Sorry, you're basically coercing me to reply, so here it goes:

Sorry, I just figured you would have made a new thread as I suggested and just linked to your reply.

	Quote:	AgeKay
	You're just stating your opinion and not providing any explanation. Please explain. I explained why the 'value area' in MP is arbitrarily defined and why the standard deviation makes no sense. Can you back up your disagreement with any reason? And if so, what is wrong what is said? Please be specific.

The value area is not arbitrarily defined. The value area that most short-term traders use is created during one day of regular trading hours. Why is this period significant? It is because that's when the big players come in and take positions within high liquidity. Now that we have a definite starting and stopping point, we want to know statistically where price spent the majority of the day. This is where the standard deviation comes in. You do make a good point that StdDev works best when you have a nice single distribution day. However, MP takes that into account. There are different ways to trade single distribution versus double distribution days. Even without taking into account any of the more detailed MP rules (distributions, # of prints, etc), just looking at the daily TPO lines you can see that price reacts very well with the current and past value area lines. Again, I agree that Volume MP (using vwap) is very important and I use it right along side TPO MP. However yes, it is my "opinion" that pure price market profile is also very important. My reply was not written to put down any trader that does not use TPO MP. Let's face it, if you can make money consistently trading moon rotations then more power to you . My reply was to counter the false (or what I believe to be false) accusations being made about the worthlessness of TPO MP.

	Quote:	AgeKay
	Btw, you sound like you came straight from EliteTrader. I like this forum because people tend to be reasonable here unlike on ET.

EliteTrader: Hlm
Registered: 05-01-06
# of Posts: 4
Last Post: 09-29-07

I have nothing to hide. You're right, EliteTrader is somewhat a joke in my opinion. I am not saying there isn't good information, but the skew is heavily on the garbage side. I check it a few times a week mainly for comedic purposes. Also, I am very "reasonable". I doubt anyone on this forum would say otherwise. My posts are created without any negative emotion. I like to cut straight to the real point at hand.

Here...some smiles to make everything happy.

[Hlm]

	Quote:	AgeKay
	I would like to ask everyone to be specific when they make a statement, because if you're not specific and don't provide any examples, your statement does not add any value to the discussion. In this case, how do you use the "value area", what "pivots" are you talking about and how do you use them as "possible revesal points". How do you determine that it's a "possible" reversal point and what do you do if it reverses and what do you do it it breaks through. What does reversing mean and what does not reversing mean? What edge does MP give you? Can you quantify it? How is it "well proven" and how does "greatly used" make it any good? See what I mean? Most people talk so vague about trading tools that it's just meaningless blub...

Previously you stated:

	Quote:	AgeKay
	I have studied MP well enough to understand that it gives you as much of an advantages as most technical indicators out there (i.e. none).

With your current remarks I would have to guess that you haven't studied Market Profile "well enough". Currently I am confused if this is on or off topic with what the original poster expected. I hope the original poster can step in here. AgeKay, I would suggest that you start another thread stating exactly what you would like to discuss.

[sydney]

	Quote:	AgeKay
	I would like to ask everyone to be specific when they make a statement, because if you're not specific and don't provide any examples, your statement does not add any value to the discussion.

You have a point, AgeKay... that said, it is people like you and the accusatory, almost aggressive writing style, that has kept me from participating in this forum. Too bad that we can't be cordial with one another.

[Hlm]

	Quote:	Bearbull
	It would be greatly appreciate if you would take the trouble to illustrate how MP concepts aided your trading on Friday.

Since this topic is about MP I will focus on that and not Internals and Price Action. Also, my charting system is currently processing data from the previous week so I will try to describe it without illustrations as best as possible.

Value Areas (by the day they are used (in case Bannor is reading this))
This is also off the M contract. LVA POC UVA (or VAL POC VAH) I tend to randomly use both.
3/11: 1276.25 1281.25 1290.75
3/12: 1289.50 1302.00 1308.00
3/13: 1318.25 1323.25 1328.75
3/14: 1298.75 1315.75 1324.25

Let me start by saying that to keep this short I will focus on what did happen versus giving a bunch of rules and different scenarios. So on open what do we have. We have an open above today's Value Area but still inside yesterdays. Take note that yesterday price was unable to find interest above the POC (1323.25). We also have a gap below us that is right above today's POC (1315.75). When opening outside the Value Area I always look for reasons why the market may want to return or test the Value Area (Gaps, *Internals*, Previous VA's, Distance, etc). On this particular day any interest below 1323.25 and I was looking for a gap fill. BTW, this may sound hindsight but anyone who has spent time in the chat room with me knows otherwise. Once inside the VA we look for the market to find resistance at the UVA and for Price Action and Internals to show no interest on moving back out. This lack of interest to the upside was confirmed when we bounced off the POC, returned to the UVA and previous POC, and held while internals continued to become more bearish. Depending on your entry strategy you would have been short somewhere between 1324.25 and 1317.00. At this point as long as PA and Internals stay bearish my initial target is 1298.75. This is what we call the 80% rule. When entering into a VA there is an 80% rule that it will trade to the other side. Of course we have the VA from 3/12 to watch for signs that we may want to get out. As you can see, price DID hesitate and rotate around the UVA of 3/12 (1308.00). Of course we have that emotional number of 1300.00 around there as well. After reaching 1298.75 you could have taken off some. Any trader watching the Internals hopefully would have held on to some at this point though. The next target would be between 1289.50 (3/12 LVA) and 1290.75 (3/11 UVA). I personally went completely flat on the bounce when the market was unable to find interest below 3/11's POC (1281.25).

Also, a few observations:
Where did price pull back to and continue to consolidate around for the rest of the morning? The LVA and 3/12 POC. When did price stop using this area? When it broke into 3/11's VA and found resistance on the other side. Where did the market return to when it found resistance at the 3/11 UVA? Straight down to 3/11's LVA. In the afternoon, where did price spike to? The LVA.

Again, this is very basic and there is MORE to MP than what I just described. The purpose was to show Bearbull some basic MP concepts that aided my trading on Firday. ALSO...I wrote this up VERY QUICKLY (I do have another things to do on my weekends ) and hopefully I didn't mess up any of the numbers or areas.

[AgeKay]

Hlm, please reread post #23 by me in this thread. If you don't adhere to it, it just does not make any sense to me to reply to anything what you say in the future.

	Quote:	Hlm
	The value area is not arbitrarily defined. The value area that most short-term traders use is created during one day of regular trading hours.

Please reread my posts. I said why the value area in MP is arbitrary defined. It's because the creaters of MP picked some number out of the air to define the value area.

	Quote:	Hlm
	Now that we have a definite starting and stopping point, we want to know statistically where price spent the majority of the day. This is where the standard deviation comes in. You do make a good point that StdDev works best when you have a nice single distribution day. However, MP takes that into account.

That was not a starting point you defined, but just meaningless blub. SD's percentage probabilities work ONLY when there is a normal distribution. It has no meaning with any other distribution! Price spent the majority of the day where there was the majority of volume. That's it.