MP for NSE INDEX AND OPTIONS

alex_laxya · #1 03-02-2009, 02:29 PM

Hi,
Its Alex from India, my first thread... had a brief stint somewhere..will be posting here mostly ..this is the thread for market profilers who trade in indian stocks ..will be posting my charts often here and will write up my method of using option open interest and VIX to use 4th dimension to get more pure market generated information.
Thanks and regards
Alex

JohnE · #2 03-02-2009, 09:40 PM

we look forward to it...

*Soultrader* · #3 03-03-2009, 12:41 AM

Hi Alex, welcome to TL. Looking forward to your insights into MP. Please correct me if I am wrong but India does not allow citizens to trade foreign markets?

alex_laxya · #4 03-03-2009, 01:37 AM

Hi soul trader, India does allow its citizens to trade foreign markets, there ant such regulations, in fact few brokers just started its services recently with facility of trades in any world market you want.
Best wishes
Alex

alex_laxya · #5 03-03-2009, 01:43 AM

Hi,
didnt able to post last night, got bz with few things so pardon me ..
To understand the market perfectly yesterday's Market Profile is very important, especially if you are a day trader, it gives a referral point..here is the list of to do list to prepare for next day market open, as said in first post there are no shortcuts to understand the principal -how market behaves -in contextualize way.

1>Review yesterday’s profile for clues as to what to expect today. Make
a note of possible trades, based on varying developments.

2> Review the overnight markets for any unusual price movement or
early indications for the day.

3> Compare the expected opening to the previous day. Is it within or outside
the previous day’s range? Value area? To the upside or downside?

4> Relative to the expected opening, identify three references points,
both above and below the expected opening. These could be the
previous day’s high and low, weekly high or low, the top and bottom
of the previous day’s value area, or the high or low of a recent trading
range. (There is no set answer—you should be guided by your past observations
of where price slowed or accelerated, as well as past areas
of heavy or light volume.)

5> Note what kind of opening is occurring, as well as what you’d want to
see in order to quickly judge the resulting directional confidence.

6> Note whether or not there is clear attempted direction, and whether
that activity is supported by volume.

7> Does the market appear to be within balance or out of balance?

8> Visualize the remainder of the day. Will it look elongated, squat, fairly
normal like a bell-shaped curve, and the like. Note any unusual shapes
or patterns that may suggest something unexpected is happening.

9> Estimate how much effort is being expended to move price directionally,
and note what that suggests about the inventory conditions of
your competitors—too long, too short, above water, below water, etc.

10> If there is a major news announcement scheduled, be aware that there
could be unexpected volatility. Let the market provide short-term interpretation
of resulting activity by observing developing structure.

Unless the day-timeframe structure is extremely strong and unlikely
to be reversed by such an announcement, we recommend that day
traders be flat in front of significant numbers.

alex_laxya · #6 03-03-2009, 01:46 AM

value area ( weekly, in green and blue ) shifted downwards,..now at virgin territory which signifies a bearish territory. longer time frames which were active at 2775 zone now moved down at 2656, open interest put call ratio ( use as additional tool for volume information ) down to 1.59

alex_laxya · #7 03-03-2009, 01:57 AM

Today Nifty Future ( NF) open down, trading within previous day's price range, but value area shifted downwards..at the moment profile looks 'balanced ' , if failed to close within previous value area ten signifies further weakness with weekly profile skewed towards elongated one.
Alex

alex_laxya · #8 03-03-2009, 04:11 PM

Last hour sell of from point of control with heavy volume along with shading in open interest in put option, all signifies bearishness, most put writing happen at 2500 level, which indicates next potential support zone.
Alex

alex_laxya · #9 03-03-2009, 04:19 PM

Nifty Split profile. market open time frame 'D'

alex_laxya · #10 03-03-2009, 05:42 PM

Heart of the market profile is to gather market generated information... this question still there..whether the market generated information is three dimensional i.e. price, volume and time ? or four dimensional price,volume,time and volatility in context of option open interest ?
specifically in India option market isnt much developed..so smart money always take position in option ( mostly option writing, as math of probability skewed towards option writers ) and based on option value is VIX which also indicates fear in the market... shall one discretionary trader include those points in market generated information ?
Alex