MP for NSE INDEX AND OPTIONS

alex_laxya · #21 03-04-2009, 03:32 PM

After big move down today market try to regain the balance as shown in chart todays price movement was within y.days inside bar..red lines indicates prev value area, after market hours we got news of 50 bps rate cut, whether its already in price or not market will tell us.. but the resistance zone clearly would be previous value area which coincide with break out target of inside bar ( range of IB is b.o. projection )
As its very obvious since when market shifted down from those value areas more volume attracts other time frames, in MP terms advertisement of the price below value area been confirmed by higher volumes which confirm the weakness so even on gap up/ move up market has heavy resistance around 2775.
The indicator dominant period is depend on ehlers MESA( maximum entropy ), its totally different subject all together just put here as m studying on it to understand cycles and reversals to sharpen profile study ( any one interested can look at mesasoftware.com )
p.s. my intention is only sharing information i dont have any vested interest in above link, if its against forums policy happy to delete it.
Alex

mathew111 · #22 03-05-2009, 12:13 AM

Hi alex...Nice to see you here....

alex_laxya · #23 03-05-2009, 01:19 AM

thanks mathew..and thanks my all older friends out here ( u knw what i mean ) ..

we open with y.day value area ..and moved down..profile is elongated, signifies trend, right nw we on lower side of inside bar ( hourly ) ..

mathew111 · #24 03-05-2009, 09:16 AM

Originally Posted by alex_laxya

thanks mathew..and thanks my all older friends out here ( u knw what i mean ) ..

we open with y.day value area ..and moved down..profile is elongated, signifies trend, right nw we on lower side of inside bar ( hourly ) ..

Haha...I have followed you from TJ alex..im with u bro..

alex_laxya · #25 03-05-2009, 10:56 AM

As mentioned in last post market profile is looking very bearish establishing new lower value areas daily, even rate cuts wont able to boost the prices.This is where MP comes handy, MP allows to see what market is actually telling and help us not to mix our own feelings/impulse to the information.
As mentioned before, trying to add the angle of VIX and option open interest put call ratio in next post ..heading for break ..
Alex

alex_laxya · #26 03-05-2009, 01:03 PM

As mentioned in last post market profile is looking very bearish establishing new lower value areas daily, even rate cuts wont able to boost the prices.This is where MP comes handy, MP allows to see what market is actually telling and help us not to mix our own feelings/impulse to the information.
As mentioned before, trying to add the angle of VIX and option open interest put call ratio in next post ..heading for break ..
Alex

alex_laxya · #27 03-05-2009, 01:43 PM

I think you cant edit your post after some time... just found i accidentally posted the wrong chart on post no. 25...correct chart shows in post no. 26
Request to moderator, plz delete my post no.25..meanwhile plz ignore that post...
sorry for confusion
Alex

alex_laxya · #28 03-05-2009, 01:43 PM

I think you cant edit your post after some time... just found i accidentally posted the wrong chart on post no. 25...correct chart shows in post no. 26
Request to moderator, plz delete my post no.25..meanwhile plz ignore that post...
sorry for confusion
Alex

alex_laxya · #29 03-05-2009, 02:19 PM

Time, price,volume and 4th factor
Lets start from the very foundation of market profile ..
who are the auction partcipants ?
. Local market makers
. Day traders
. Intermediate-swing traders
. Long time frame traders

This auction create market-generated information, auction organize and reflect the attitudes of the market's partcipants,thus creating market-generated information.
The key to reading market-generated information is
.Time
.Price
.Volume
This i sthe primary tool of market profile
now there is another time of auction involved ..auction of option buying and option selling..
option sellers are considered as Smart Money, though there r verious contradictory theories, lets not get in to this,
but Indian market is special in this sense, option market hasnt yet developed and there r normally in the month options are liquid and those only of nifty index,
there is still attraction of quick money among this high volatility ( vix)
higher vix means greater fear which by standard mathematical model increase the option premium
This option induced data is very meangful when look in to context of market profile, i am not a great reader of volume distribution but i found option induced information very profitable in my trading...
there ant any secrets in trading and nor i intend to have one, its about the art and how u adjust ur knowledge to earn money, which come by practice..
In this thread, now and then i will try to explain market profile using 4th factor/ dimension as option open interest
i assume every one knows te calculations of option open interest put call ratio which i extensively use in my trades..
here is the chart explaining todays activity ( plz note o.i.pcr is daily ) ..there is a build up of 92 lk o.i. around 2500 pe ( not shown in chart ) and this build up is since last few days, but still oi pcr is decreasing which indicates there is call writing ahppening around resistance zone or u can say most strong value areas,
If 2500 nifty broke ( which we proved mathematically an important psychological area) then there wd be heavy selling from other time frames.