[clmacdougall]

Urma, this thread is fascinating. Please help me to understand why volume is better than time at price when understanding value. Doesn't time at price remove the problem of the daily "U" shaped volume profile in the ES, or even worse the problem of increasing volume as the night session ends and the day session of the ES is about to begin.
Don't these and other volume irregularities remove the value of following volume to find value rather than TPO's?
The problem I've had with volume is it seems to lie about value and instead points to panic areas of buying or selling at market openings and closings. It seems that most volume can be attributed to portfolio balancing when at either the start or end of the RTH large commercial traders are handed the present reality of price and react to it.
Would it be fair to say that time at price, no matter how weak in volume during the night, rotated/moved due to massive volume being traded in stock markets or forex markets on the other side of the planet. In this way doesn't using TPO's allow for a proper valuing of sentiment which occured throughout the night or simply at a low volume time?
Any help you can give would be greatly appreciated. Since finishing all there is publicly available to read concerning MP, your threads have been so refreshing and thought provoking. Please continue to share some insights on the new understanding of Market Profile out there today.

[clmacdougall]

One other question for you Urma, when you mention order flow in your previous posts, has it now become the medium to which you apply your MP methods both old and new?
Through reading your posts there seems to be an abandonement of concentrating on price and a real energy in your posts concerning order flow. Is order flow your core concentration when applying the balance to imbalance understanding found in MP teaching? It seems that you are able to indentify and take advantage of any buyer - seller imbalance, is this the most profitable and repeatable application of MP understandings?

[UrmaBlume]

Originally Posted by clmacdougall »

Urma, this thread is fascinating. Please help me to understand why volume is better than time at price when understanding value. Doesn't time at price remove the problem of the daily "U" shaped volume profile in the ES, or even worse the problem of increasing volume as the night session ends and the day session of the ES is about to begin. Don't these and other volume irregularities remove the value of following volume to find value rather than TPO's?The problem I've had with volume is it seems to lie about value and instead points to panic areas of buying or selling at market openings and closings. It seems that most volume can be attributed to portfolio balancing when at either the start or end of the RTH large commercial traders are handed the present reality of price and react to it.Would it be fair to say that time at price, no matter how weak in volume during the night, rotated/moved due to massive volume being traded in stock markets or forex markets on the other side of the planet. In this way doesn't using TPO's allow for a proper valuing of sentiment which occured throughout the night or simply at a low volume time?Any help you can give would be greatly appreciated. Since finishing all there is publicly available to read concerning MP, your threads have been so refreshing and thought provoking. Please continue to share some insights on the new understanding of Market Profile out there today.

clmacdougall,

First of all thank you very much for the kind words.

Peter introduced time at price as a method of approximating online volume from the pits when online volume from the pits was not available. For starters how can an estimate or an approximation be as useful as the real number? Its a matter of metrics and method.

Almost every commercial trader I know has a background in Market Profile theory but only 1 of them still uses it as a method. We also teach market profile theory to our in-house traders but only as concepts key to basic market understanding - never as a method.

The reason we teach it that way is because we believe that there are trade decision support technologies that while based on market profile theory as it was taught in the old days they are able to more precisely present the information that the profile was designed to approximate but fails in today's enviornment.

For example you can see in my posts on the Harmonic, HUD, Balance of Trade, primer on the construction of an index of weighted biases, Order Flow and Commercial Intensity that they all present information on topics basic to market profile theory but impossible to read from the market profile graphic.

Market Profile as a theory should be basic to any trader's education. As a key to understanding general market dynamics for sure - as a method - its time has passed.

[diablo272]

UB, can you remind me what you mean when you say "commercial traders"? Is that synonymous with "professional"? Or is it something different? I think you already answered that question in one of your threads, but I haven't been able to find that post. Thank you for sharing some of your tools and viewpoints.

[UrmaBlume]

Originally Posted by diablo272 »

UB, can you remind me what you mean when you say "commercial traders"? Is that synonymous with "professional"? Or is it something different? I think you already answered that question in one of your threads, but I haven't been able to find that post. Thank you for sharing some of your tools and viewpoints.

diablo272,

Thanks for the kind words.

At 1224 PST, less than an hour before the close on last Thursday 09/17 a single trading entity sold suddenly and sold big accross all three equity futures and coordinated that trade down to the sub 1 second time frame.

In each of the three charts below for NQ, YM & ES you can see the sell spikes that drove price down and see that it was coordinated to the second in all three markets.

This is the signature of what we call commercial trade - trade done by whomever that is of such volume and intensity that it creates local extremes as was the case with the trade shown below. This was the second such spike of the day and you can see them both discussed in a thread here.

While Peter always taught the importance of spotting commercial trade and the indicator shown below does exactly that - as this trade occured well into the value area none of this activity would have been apparent to users of the profile graphic.

[TEAMTRADER]

I agree completely Urma, it is a major confirmer of a fulcrum.
Everything is easy when you know how.
TEAMTRADER
"Trade what you see and not what you hear or hope."

[UrmaBlume]

Originally Posted by clmacdougall »

One other question for you Urma, when you mention order flow in your previous posts, has it now become the medium to which you apply your MP methods both old and new? Through reading your posts there seems to be an abandonement of concentrating on price and a real energy in your posts concerning order flow. Is order flow your core concentration when applying the balance to imbalance understanding found in MP teaching? It seems that you are able to indentify and take advantage of any buyer - seller imbalance, is this the most profitable and repeatable application of MP understandings?

In the past Peter taught that the best indicators of future price don't have price as part of their calculation. We agree. Price based indicators cannot lead price because they can't change until AFTER price changes.

In the screenshot bleow the lines are Jurik's AMA on the mid-points of the price bars. Note that on this chart, with time as the bottom axis, that the lines are to the right of price which means they come after or they LAG price. Next note the dots which represent an index of weighted biases whose construction is described here. Please note that the dots, in almost every case, are to the left of price which means they lead price. Certainly we reference price but indicators such as this index are heavily weighted towards indicacations taken from our calculation of the balance of trade/order flow.

[clmacdougall]

Thank you UB for the time you took to answer my questions. Could I ask, do you begin the day with a slant towards the short or long side of the market before you even apply your market generated information, or do you simply apply your weighted biases indicators and run with them? Thanks again.