[Piptrader]

	Quote:	ant
	Carter, Below is a chart containing examples of what I look at each day. Keep in mind that I have the benefit of hindsight here... On the left side of the chart is a composite profile for 8/16 to 8/31. You can see from the normal distribution that a mature, short-term, balanced area has formed and imbalance is expected. While the bracket is forming, I would focus on fading the extremes of the bracket on weak internals. As price approaches the extremes I would monitor market internals and look for divergences between price and ticks/volume, etc. on a 1 min or 5 min chart. I would also look for divergences between the S&P and Dow, look at bid/ask info, and identify high volume nodes and single prints as key reference areas. I am always looking for a confluence of key reference areas. On 9/1, the market broke out of balance, but the higher prices were rejected, and the market traded back into the balance area. Within the next two days, the market returned to the lower limit of the composite profile and bounced off it. As the market traded, it left clues behind (i.e., it "tipped its hand"). So here is what I saw today and what I'll be looking at tomorrow... Today, 9/11, the market traded away from the high volume node of the previous 2 days and tested the lows of the composite of 8/16-8/31 and 9/7-9/8. This set up a high probability trade to the long side. Notice that the market will test one extreme, and if rejected, will often test the opposite extreme. This happens enough times to make it worth watching. In fact, this is one of my favorite trades. Notice where the market stopped today - in the single print area of 9/6 and 9/7. That is, on 9/6 there were single prints around 1314.75, and on 9/7 the market bounced off that area. Today it did the same. So what are the key reference points for tomorrow... The ES closed at 1312. To the downside, the key reference area is around 1309, the single prints from today, the high volume node of 9/7-9/8, and the high volume node of 8/16-8/31. To the upside, I will be paying close attention to how the ES trades around 1314.25, the high of today and 9/7, and the single prints of 9/6. I'll stop here, but I hope this gives you some idea of how I trade. Attachment 63

I would like to ask a question regarding your market analysis. Your methods seem very interesting. How do you analyze to determine whether tomorrow will be a trending day or a consolidation day?

Do you look for high volume price levels in either direction? For example, if a high volume area is close to the current price, would you expect prices to reverse at these points? If the current price is trading between two high volume areas that are relatively close to each other, would this be enough information to consider a consolidation day?

Thank you.