VOLUME or TPO's ???

[clmacdougall]

Thanks for the input guys. I appreciate it. I've got another weird observation to throw out there, please tell me what you think. Here goes!!!!!
"Volume is irrelevant!"
Here's the theory: Markets are 24 hr a day instruments. With this in mind all price movements are equal unless they overlap which makes them more valuable ( or at least more telling as places of value). The reason being that what happens around the world to influence price movement in the ES for example, is happening in various world stock markets and dollar relationships at potentially high volume but as most ES traders are asleep it is unfolding as low volume areas on the ES profile, fooling traders into thinking that certain price areas are not valuable due to low volume.
Notice that all night profiles are skewed towards the end of the night session as volume is picking up, making a volume based night profile completely and totally useless, and proving a rotation based profile as far more valuable.
The only incorrect assumption of Market Profile by Steidlemayer may have been his first, that TPO's are a proxy for volume, instead of possibly being more valuable and telling than volume.
Please let me know what you think.

[FuturesTrader71]

This is a lengthy thread and I haven't actual read through it, but I will agree completely with Omni's original comment. I use MP extensively (I used to compute POC moves in my head well before they happened...pretty geeky, but that is my approach). I must say, however, that I don't look at TPO's at all. I believe that, for my approach, it is a completely outdated look on the market. 30 min TPO's made sense when Steidlemeyer didn't have access to real time and accurate volume data (mostly floor trading at that time).

I look at volume profiles almost exclusively when it comes to assessing and using the auction as my main market-generated input. I tweet a lot on this subject and have held a couple of chats/webinars on it at various places.

I think the most important thing to take away from here is that MP or VP is NOT a system. It is simply a way of categorizing or organizing the market. It is what you do with that information that dictates which one suits your needs. Again, I find it easier to go with volume than TPO, but that is just a personal preference for the setups I trade.

Cheers,
FT71

[FulcrumTrader]

I have never cared at all how long price traded somewhere (TPO's).....but I do care is there any inventory resting at the levels I am tracking and who is in control of the order flow (Cumulative Delta).

[Frank]

TPOs are useful as a measure of imbalance.

So long as the bid or ask moved, there was enough volume to move price and that is what is most important and this is what TPOs approximate, the # of ticks of movement in X amount of time. A market can grind sideways on huge volume --- which would be low TPO counts.

This is an example of a useful MP concept -- just not in probably how most think of it -- high TPOs to me are not a 'proxy for volume' --- they are a proxy for 'imbalance'...

[clmacdougall]

Originally Posted by FuturesTrader71 This is a lengthy thread and I haven't actual read through it, but I will agree completely with Omni's original comment. I use MP extensively (I used to compute POC moves in my head well before they happened...pretty geeky, but that is my approach). I must say, however, that I don't look at TPO's at all. I believe that, for my approach, it is a completely outdated look on the market. 30 min TPO's made sense when Steidlemeyer didn't have access to real time and accurate volume data (mostly floor trading at that time). I look at volume profiles almost exclusively when it comes to assessing and using the auction as my main market-generated input. I tweet a lot on this subject and have held a couple of chats/webinars on it at various places. I think the most important thing to take away from here is that MP or VP is NOT a system. It is simply a way of categorizing or organizing the market. It is what you do with that information that dictates which one suits your needs. Again, I find it easier to go with volume than TPO, but that is just a personal preference for the setups I trade. Cheers, FT71

Would you care to let us in on just how you would specifically use a volume profile for the setups you trade. Thanks

[eurotrader]

Originally Posted by clmacdougall Would you care to let us in on just how you would specifically use a volume profile for the setups you trade. Thanks

Seems like this thread has come to a sudden halt.

FT71 does a blog at Simplicity in Trading you might be interested in in which he has discusses what he does in detail. Also in Twitter.