[CandleWhisperer]

Originally Posted by brownsfan019 »

And of course the next question is - what levels do you use and why? Use them all and your chart will look like a mess of horizontal lines everywhere. If you put enough lines on your chart, some will look like they nailed the HOD or LOD. Some will just get in your way.

And the follow up question: are static, fixed lines that are based on YESTERDAY'S price action good for determining TODAY'S price action? Food for thought.

Simply, Yes.

They are far better than mathematically derived numbers like "Floor Pivots". Key Numbers, aka floor pivots, derive their utility from two things: regression to the mean, and self fulfilling prophecy.

Market profile lines have as their basis the concept that because the market found support/resistance at this level today, all things being equal it should find the same there tomorrow. The market has memory. It knows when a price level is reached that found sellers/buyers the previous time the level was reached. If 510 on the emini, for example, brings in the bulls today as they see value, there is a good chance they will again see value at that level going forward.

I have been playing with this concept a bit after reading an article from Straightforex.com. Instead of using key numbers, they use what they call a "Market Map". The map consists of:

1. YH (Yesterday's High)
2. YL (Yesterday's Low)
3. DYH (Day before yesterday's High)
4. DYL (Day before Yesterday's Low)
5. PP (Pivot Point) (O+L+H)/3

The first 4 are already HUPs (Hold Up Prices) and may continue to be. One thing the map tells us is if price is above the PP the trend may be up. If Price is above either or both YH or DYH and above the PP the trend is up. The reverse would be true for a down trend.

After reading a couple of threads on this forum, I have become predisposed to the Pivot Range concept that Pivot profiler talked about. So I add the Range to the map, plus a couple more HUPs.:

1. YH
2. YL
3. DYH
4. DYL
5. PMH (Pre Market High= highest high made between 5pm close and 2am open NY time)
6. PML (Pre Market Low= lowest low made between 5pm close and 2am open NY time)
7. PP (H+L+(2*C))/4
8. PRH (Pivot Range High)
9. PRL (Pivot Range Low)

[laredo]

Ninjatrader software has a very quick line drawing design and with a little practice drawing S/R lines becomes an after thought.

[maxwells]

Heya, I understand most of it but as for you number 8-9 (PRH (Pivot Range High , PRL (Pivot Range Low), that I dont' . COuld you please elaborate on them (formula, trading usefullness,etc...) when you have time. Thanks

Max

Originally Posted by CandleWhisperer »

Simply, Yes.

They are far better than mathematically derived numbers like "Floor Pivots". Key Numbers, aka floor pivots, derive their utility from two things: regression to the mean, and self fulfilling prophecy.

Market profile lines have as their basis the concept that because the market found support/resistance at this level today, all things being equal it should find the same there tomorrow. The market has memory. It knows when a price level is reached that found sellers/buyers the previous time the level was reached. If 510 on the emini, for example, brings in the bulls today as they see value, there is a good chance they will again see value at that level going forward.

I have been playing with this concept a bit after reading an article from Straightforex.com. Instead of using key numbers, they use what they call a "Market Map". The map consists of:

1. YH (Yesterday's High)
2. YL (Yesterday's Low)
3. DYH (Day before yesterday's High)
4. DYL (Day before Yesterday's Low)
5. PP (Pivot Point) (O+L+H)/3

The first 4 are already HUPs (Hold Up Prices) and may continue to be. One thing the map tells us is if price is above the PP the trend may be up. If Price is above either or both YH or DYH and above the PP the trend is up. The reverse would be true for a down trend.

After reading a couple of threads on this forum, I have become predisposed to the Pivot Range concept that Pivot profiler talked about. So I add the Range to the map, plus a couple more HUPs.:

1. YH
2. YL
3. DYH
4. DYL
5. PMH (Pre Market High= highest high made between 5pm close and 2am open NY time)
6. PML (Pre Market Low= lowest low made between 5pm close and 2am open NY time)
7. PP (H+L+(2*C))/4
8. PRH (Pivot Range High)
9. PRL (Pivot Range Low)

[firewalker]

Originally Posted by CandleWhisperer »

That is why it might make more sense to use static levels that are plotted before the day starts.

Exactly!

Originally Posted by CandleWhisperer »

I have not read the book so I can't recommend it, but there is a book specifically about this type of method called "Price Action Trading".

Some levels to think about could be:

1. MP levels (POC, VAH,VAL)
2. Yesterday's High (YH)
3. Yesterday's Low (YL)
4. Day Before Yesterday's High (DBYH)
5. Day Before Yesterday's Low (DBYL)
6. Key numbers (aka Floor pivots)
7. Actual pivot levels-places where the market did react/retrace/stall.

Never head about the DBYH or DBYL

Originally Posted by drsushi »

Brownsfan,
Also, my intension would be to use specifc targets for profit such as 4 tics, 6 tics and then moving my stop to B/E or B/E +1tic and letting my other 1/3 of the position run, but manage the trade and take profit at s/r. The last 1/3 should be a free trade at that point based on profit of the first 2/3 and moving the stop. This would be on the ES. I'm not looking to make a fortune in a day. If I can do what I just described on a consistent basis I would be very satisfied. Am I out of my mind or is it reasonable?
David

The problem with specific targets, is that they are static while the market is dynamic. You can do a whole lot of backtesting to determine what the maximum favourable excursion (MFE) is, after you enter a trade. You could then determine in what % of the cases price runs 70-80% of that MFE or in what % of cases it goes twice as far (for example). Depending on your strategy, you could then use these reference points as scaling out points. The backtesting might show superior results to real-time, if you try to determine those in absolute values. I think it's better to use values that are a function of the volatility. That way you have a better way of gauging the potential of a move.

But most importantly, you need to exit when the market tells you to. Trendlines can help there, volume might also give clues...

[NomadTrader]

@email
re AB=CD. Assuming this is the Larry pasavento's fib work, how do you trade this exactly?

[Tams]

Originally Posted by email »

Hello to everyone in this thread and thanks to drsushi for starting it.

drsushi ,you are very fortunate to have found that group, very neet. I am a big pivot point trader myself and would be paralyzed if I did not use them.
I see most guys here use the same method I trade with; floor traders pivots, YH, YL, UVA, LVA. A good understanding of chart patterns and candles are essential, especially at resistance or support.
Always on the lookout for triangles, AB=CD, Gartleys will give you a good edge....
Cheers to all,
email

EasyLanguage Gartley is here:
http://www.traderslaboratory.com/for...html#post66119

[NomadTrader]

Thx Tams,
I know his work well. but an AB=CD is not a Gartley or a Butterfly its an ABCD where AB=CD. This can of course be part of a Gartley/Butterfly.

Wht iwas curious about was how people a re actually trading this?
Are you buying the .618 with a stop at the .786 and waiting to see if it fails at "C"?

[cashcube]

Is there any good candlestick identification tool available for metatrader?