Tasuki

You have got to be kidding me. What we need (OK, what I need) is a separate thread where I can safely fire up my flamethrower.

Blu-Ray, as much as I respect your incredible knowledge of the markets, you are mistaken here. As my statistics professor used to say, "There is safety in numbers." Trade volume is an absolute, a hard number. That hard number is reflected in a one-to-one correspondence to the size of the volume bars. There is no room for "giving an impression" with a hard number. The fakeouts you are describing are not reflected in the actual trade volume. Not even the so-called smart money can give the impression that there are more buyers than sellers, at least not if you can separate volume up from volume down...you know what, I think it's time we peeled this discussion off to a separate thread and I started posting examples.....the problem is, TradersLab is taking over my life. I am spending WAY too many hours a day reading and replying....information overload!

Actually, Blu-Ray, that's not what I was talking about. I did describe in some detail what I do on previous posts--I just take volume up and put it on top of (in the same subgraph with) volume down. The volume down I make fat and red and the volume up I make skinny and green. For my eyes, this combo works MUCH better than volume delta.

jj, The indicators I'm using are just "standard issue" volume up and volume down indicators from Tradestation. Absolutely nothing special at all. I presume every charting package has them. You use TG, right? Don't they have volume up and volume down? They HAVE to, they're all about volume, it's their big thing, right?

Hi Springtime, I use Tradestation as my data provider. The one big advantage with TS is that you don't have to "export" anything--Tradestation the charting package is also Tradestation the data provider. One of the huge drawbacks of IB is that you have to export data from them to a charting package, and all SORTS of stuff gets lost in the mix. I know lots of people do it, especially with eSignal, but I've found exporting to be a total drag. For example, I recently tried the charting platform Neoticker for a month, and exported data from eSignal. For some of my charts, the exporting process took 45 minutes for the chart to refresh. Yeesh. Gimme Tradestation any day.

bubba, feel free to barge in any time! Regarding the "failed pattern" that waveslider mentioned in permalink #103, the pattern is the wedge formed by the trendlines from pivot points 1-3-5 and 2-4. When that wedge fails, we take the trade in the direction of the failure. The chart you posted gives a perfect example. You have the 1-3-5 line in red and the 2-4 line in blue, and the two lines form a rising wedge. If/when that wedge breaks to the downside, we take the trade. For future reference, bubba, please include all necessary details of the chart you're posting: 1) contract name (or symbol, if it's a stock) 2) timeframe (or tick-frame if its a tick chart) 3) X and Y axes--at least you did get these into the chart, but I still can't figure out what contract or timeframe. It's a courtesy to your TradersLab friends to tell us what we're looking at--many of us like to pull up the chart on our own software platforms and see what else we can see---sometimes that can be very helpful both to us and to you, if we report back that we've found something interesting.

Well, actually, they can't if you use my up-inside-down volume indicator (or any indicator system that shows both up and down volume). The belief that volume could be hidden (selling on up bars, buying on down bars) originated decades ago, before the advent of the internet and our incredibly sophisticated charting platforms. If you watch both up and down volume progressing on a single bar, you can plainly see when there's "hidden" buying or selling. Needless to say, the problem with hidden volume still applies to those charts where you can't parse out the types of volume. On Tradestation, daily, weekly, and monthly charts won't allow you to insert up and down volume indicators (maybe other charting platforms are different, I'm not sure), but for intraday trading, hidden volume is a thing of the past. Tom Williams has correctly pointed out that the exchanges have intentionally dragged their feet on providing accurate volume information for a very good reason--the folks that rule the market don't want you to know what they're doing. As Tom points out, there is no damn good reason why we can't get intraday volume on indexes such as the $SPX in this day of supercomputers, and don't get me started on FOREX. Still, for those of us who wisely trade contracts where you can get intraday volume, the separation of up vs down volume is an added level of information that can unmask the hidden buyers and sellers. The last time I presented this idea, many pages ago on this thread, my idea received a lukewarm reception to say the least. Before you all go jump down my throat, PLEASE do yourselves a favor and watch the up/down volume for a week or so and see what you think.

Hi Mr. Ed, refer to permalink #982 on p. 99 Taz

OK, MC, I'll be happy to correct you. No, this is not bid/ask volume. Rather, these bars are created from the Time and Sales data, which just represents actual sales, not bids and offers. In a standard T&S window, there are two colors, red and green. The bars in my upvolume indicator simply tally up the number of contracts in each sale that's green on the T&S, and the bars in my downvolume indicator simply tally up the number of contracts in each sale that's red on the T&S. The only novel thing I've done is to arrange my Tradestation indicators so that the upvolume appears inside the downvolume on the same bar--it just gives you a handy way to look at the difference between buying and selling, or to be more accurate, selling on the offer and selling on the bid. The green represents selling at the offer price, i.e. selling as price is going up, which means that the buyer is buying when the price is going up, which means that the buyer is "paying up" because he expects the price to go up even further. In other words, the green represents buying pressure. The red represents selling at the bid price, i.e. selling as the price is going down, which means that the seller is selling at the lower price (the bid price is always lower than the offer price) because the seller expects prices to go down even further. If you look at the up vs down volume for a while, you will convince yourself that this is not "smoke and mirrors" (as bids and offers often are when they don't result in actual trades), and I think you can also convince yourself (as I have) that this information is very valuable.

unicorn, thanks for the MP setups. I'm a complete newbie at the Market Profile approach, so this was very valuable information--gives me a framework for understanding how to look analytically at an MP chart. Excellent job!

jj, I've managed, I think, to reproduce your chart from permalink #973. It's a five minute chart, right? Many pages ago on this thread, I recommended an enhancement to VSA in which volume would be broken down into volume up vs volume down. The "experts" on the thread didn't like my idea, but here's an example where it is valuable (in fact, invaluable). See attached chart. On your putative upthrust, the total volume is too high, but just as importantly, the upvolume nearly matches the downvolume (upvolume is seen as a green line inside the wider red line which is downvolume). This clearly shows that there was significant buying on this bar, hence it was not an upthrust. The total volume itself would have been a clue, but the picture is clearer if you separate the up from the down.

To everyone on this (and all TL) threads: It would be REALLY helpful if your charts would include: 1) the contract name (or ticker symbol if it's a stock) 2) the timeframe (or tick-frame if it's a tick chart) 3) the X and Y axes of the chart Many times I want to try to reproduce the charts you post to see what else I can see, but it's really difficult when I have to guess about the essential information about the charts. Why do you not include these details? Most of the people who post on TL are guilty of this, and it reduces the value of the site. Kindly give my suggestion some consideration, and help out your fellow traders. It really would help.

alleyb, that's a good start, but what's your website? edit: p.s. a "google" of your handle brings up, um, "interesting" web pages, but trustfully not your website.

Sebastian, Thankyou for taking the time to create that audio/chart combination--it was incredibly helpful !! You mentioned during that audio that Tom Williams has written a second book? I didn't catch its name. Where can we get it? Thanks, Taz

Thanks, bubba, that was a good one....and the timing lines worked too!

Hello everyone, just joining this thread. Gosh, what a tempest in a teapot. Chill, guys and gals. The local surfers here have an expression I really like and respect: "Chill, dude, it's all good." A short comment and a short question: 1) Unicorn asked some good questions on permalink #40. Love to hear an answer to them from somebody who knows. 2) Early in the thread alleyb said that he had some free videos somewhere. Could someone point me to them please? Many thanks, Taz p.s. so far, at least, this thread has had great educational value, for me at least (I'm a newbie to MP). Not only have I learned about the guy JPJ, but also two other resources for Market Profile, alleyb and balancetrader. I'll be sure to check them all out. Also, several valuable books were mentioned on MP that I definitely need to read. I have the Mind Over Markets, but I got bogged down in it when I tried reading it earlier. Now, thanks to this thread, I realize that I've got to go back and study it carefully and thoroughly (and get all the way through it this time!). Anyway, thanks for all the good advice, folks. TradersLab rules!

Dang, Waveslider, I prepared a reply to your chart from permalink 90 and you're already three posts ahead of me. Anyway, my rendition of your post on page 9 of the thread, permalink 90, is instructive, at least for Wolfe newbies. Take a look. p.s. thanks for the TRIX info.

waveslider, that's a beaut of a Wolfe. Pretty oscillator below--nice to look (cool colors) and it also seemed to catch that divergence beautifully. Care to tell us what the oscillator is?

Waveslider, The cool dotted triangle things are just the work of the Butterfly indicator drawing out its pattern on my Tradestation chart. Whipsaw? Well, I guess so. The Butterfly, like its parent, the Gartley, has specific Fibonacci ratios for each point in its pattern. The classic numbering pattern for these patterns is X-A-B-C-D (which corresponds to the Wolfe Wave numbering of 1-2-3-4-5). I have a friend who's eyes are so good at seeing patterns that he routinely trades the move from C to D (4 to 5, if this were Wolfe), but the originators of these patterns (Gartley and Butterfly) traded them after point D (point 5) was put in, much as Wolfe Waves are designed to be traded after point 5 has formed. The most interesting part of the Wolfe Waves, for me at least, is that there is an understanding of the psychology behind the formation of each point. I'm not sure this psychology was developed as extensively for the Gartley and Butterfly, but maybe I just haven't done enough reading. I have met Larry Pesavento on several occasions, and I don't remember him discussing the psychology in as much detail as Bill Wolfe did for his waves (and thanks again Waveslider for elucidating that psychology for me--extremely helpful).

See my comments in permalink #31 on page four of this thread. The attached chart is another example of a Butterfly which almost looks like a Wolfe Wave. Maybe it could be a variation. I won't be surprised if Monday's trading brings the ES up to the target at point 6 around 1490. BTW, the pattern outlined in dark green on the chart is a classic "Butterfly" championed by Larry Pesavento and others. It definitely has a higher probability of success in some markets more than others. I'm not sure why that is--no doubt due to quirks in how different markets behave. I presume this would hold for Wolfe Waves, but I haven't done enough of a study yet to be able to tell. I think I remember Bill Wolfe's website saying that the Wolfe Wave works in all markets.....the rate of success in one market vs. another would be a very interesting topic to investigate. As I pointed out in an earlier post, I also suspect that these patterns work better on tick or volume charts, but again, this needs to be researched.

See chart. Here's a nice one on a share (volume) chart of the ES.

Thanks, James. Bizarre that someone would send so much spam at once.....guess there are some sick minds in cyberspace. Hope they don't bother you (and us) again! Taz

Anybody know why Traders Lab, our favorite home away from home, is taking excessively long to load some days, and is even refusing to open on some other days? Doesn't happen all the time. Right now, I'm having no problem, but earlier today, and several times in the past week, I haven't been able to enter the site or navigation around the site has been incredibly, intolerably slow. Love to know if this can be fixed.

Daily chart of the Dow. Today's action (hard right edge) looks like a failed test to me---tested lows, closed near high, but volume higher than last few bars. This would suggest that we haven't seen the bottom yet. The only question I have is whether or not a true test should close below the close of the previous bar. There are examples of tests from this thread which go both ways--some closing above the close fo the previous bar, some below.

wavelsider, I did a comparison of the last two charts you posted (permalinks #73 and 81) and I noticed something interesting--in both cases, the wave lengths were not even throughout the formation of the Wolfe Wave. That is to say, in both cases there were three pivots that formed quickly, creating sharp, steep moves in price, but there was also a slow step as well, in which the price meandered and the pivot formed much more slowly. In one case, it was the wave from points 3 to 4, and in the other case, it was the wave from points 2 to 3--so it's not always at the same place. I remember reading somewhere that the best Wolfe Waves occur when the waves are symmetrical and flow in a regular pattern. Well, it doesn't look as if that's exactly correct. At least in these two examples, there was one slow step in the process.