RAVIN

VSA in Realtime folks, Attached 5min chart, R1 is pivot resistance 1. What do you read 2. What do you expect 3. What is the trade, stop loss, target 4. What price action would you like to see that will negate the original plan cheers

Soultrader, Wonder if you trade Index futures with Market Profile, if so, would you be kind enough to put a chart up to illustrate your strategy.

Guys, this is probably the 3rd time that I am trying to get some form of clarification on Market Profile and Mark Fisher POC and value ranges. So much has been written about it namely that it mirrors the value areas generated by MP, Now only Blu-Ray provided some info. perhaps other knowledgeable folks could shed further light.

Thanks Blu-Ray Mind you I could be reading this all wrong, however I checked the veracity of the calculations from the Mark Fisher's book "The Logical Trader" on the following link: http://books.google.com/books?id=4xFo6Pnb6JsC&pg=PP4&lpg=PP4&dq=mark+fisher+acd+method&source=web&ots=qwf5nU_nzz&sig=JU5N3-BHk0tnamUjGT0BkXFHs4U Anyway glad to hear from somebody who trades Dax, how do you generate Market Profile for that market, and have you found it useful in your trading. I know there is a lot written about it on Enthios website, Dalton's Mind over markets etc Infact the chap who runs http://www.learningtotrade.com/ started off with this single concept of the important of price level at which maximum number of trades and maximum volume occurred, created zones around that where when price enters it, there is a high probability of it going to the other end and so on, now he has his own software with triangles, floating zones and what not.

Hi Blu-Ray, Wonder if you can help. Have been trying to understand the concept and logic behind Mark Fisher POC etc. 1. The H/L/C values on Dax for Monday were 8081, 8022 and 8056 respectively. 2. The POC works out to be 8053 , with PP modified 8054 , with the value areas (reaction) 8049-58 , Deviation 8052-56, all rounded off numbers. Have plotted the POC(black) and the Reaction values(pink) on Dax 15min here, 3. Now as far as I can understand Mark and his followers claim that this range mirror the traditional Market Profile i.e 70% of price/volume Viewing the chart find it kind of difficult to figure that out. perhaps I am doing this all wrong. I have been operating with something solidly logical like VSA for sometime now and have got into the habit of thinking that way i.e seeking logic. Perhpas you can enlighten

In the first couple of hours Dax can be traded via 5min and 1min charts with pretty good signals, once the US opens it can become difficult. Dax 5min: a Trap upmove signal shows up with an appropriate explanation, this is right at the floor Pivot, POC, previous No demand followed by Bozo etc, exactly the location expected. Dax 1min: this shows the classic upthrust at that point. Also of interest to note the first 30min range in blue on Dax 5min, Note the test over the High after breakout, another point for a long entry. Good trading

Here are charts from Tradeguider with the VSA signals Dax 5min with classic No Demand, mind you it shows after the second bar Also note the reactions at the normal Floor Pivots, 8022 is S1 plus Yesterdays low and where support was observed yesterday as well plus weekly POC if you want to throw that in. However it is also the area where on Dax 1min chart a Basic Test Signal appears. For those interested the chart also shows an Upthrust to go short. I normally do not switch on these VSA indicators

Hi Rajiv, Hope you managed to find some more info. on Moneytec, here is the same stuff on YM another market which I trade. YM 30MIN WITH FIB. LEVELS YM 15MIN WITH FLOOR PIVOTS AND KPcurrency Pivot ranges, black line is POC at 14134 which is the region where support was evident during the lunch period on Friday 5th Oct, 07, now acting as resistance YM 5MIN WITH FLOOR PIVOTS AND 30MIN RANGE. Note the breakout of this 30min range, Support is at 14091 which is S1(floor pivot) , also 62% fib level, Deviation range low (value 1low) and finally Friday's Low, all coming together in conjunction with that BOZO on high volume at lunch time , classic sign of strength on a down bar, low risk high probability trade long There was also a short this morning off the POC and 31.8%fib level It is nice when all this confluence takes place, however during times like last month when the market really gathers momentum, all support and resistance levels are blown away, have seen signs of strength and weakness in Tradeguider negated during these period and those who rely heavily on them without considering what the next bars are telling them really get hammered. However they are certainly useful tools. Previously I have experimented with this lot, the first 30 or 60min ranges etc have been well documented by Jake Bernstein, George Angell etc but ended up with charts with far too many horizontal lines, so much so that I used to sit there hoping for reversals at these levels and not looking at the price action. As the Buddhist states " To see the mirror one has to stop looking at the relflection"

These are the terms given by KPCurrency aka PivotProfiler here. Click on the following for more info: http://www.moneytec.com/forums/f46/learning-speak-language-market-volume-price-21166/page16.html The calculations for these pivot ranges are slight modification of those of Mark Fisher i.e the POC , POINT OF CONTROL is ( H+L+2*C)/4 instead of (H+L+C)/3 and so on. When there is a confluene of these levels i.e traditional pivots, Mark fisher's pivots, fib numbers, high and low of wide range bars, previous S/R levels from swing points and VSA signs appear in the vicinity then it is time to pay attention for there is now context as well. I was just experimenting with this today for it is claimed that the Pivot Ranges mirror Market profile generated by traditional means, hope Pivotprofile would be able to shed more light

This is first time I pluggged in the Pivot Ranges as per Mark Fisher modified by PP, The High, Low, Close on Friday were 8089,8006, & 8086, Dax 15min has the POC(BLACK) AT 8058, the inner pink levels (deviation range) and the outer pink levels(reaction ranges) again as per PP(KPcurrency on MoneyTec) Hope I have got this right, would be quite happy to be corrected. Dax 5min has the first 30min range (blue), note this is the range was established after the cash market opens which is 1hr after the futures open. The strategy here was reversal and the tactics of entry were via Dax 2min shown within the pink boxes, based on VSA principles of no supply and no demand. It was interesting to note how all of this stuff comes together, the calculated pivot ranges and the support/resistances established by the market structure i.e previous pivot swing points and also those of Marubozos(candlestick jargon for wide range bars)

You are right, the Futures follow the cash, those in the know are able to see both sides of the orders in the cash markets and then take their positions in the futures market ahead of the actual move in the cash. The Dax futures open at 8a.m and run till 22hrs, however the cash opens at 9.am and run till 17.30hrs (correct me if I am wrong here). I believe guys at the Ultimate Trading Machine camp also employ the Cash market to trade the futures. They claim that the charts of the cash market are much cleaner, i.e less volatile on individual bars or better candlesticks, less of those upper and bottom wicks

Followers of Mark Fisher's Pivots etc claim that their calculated pivot ranges match those of the traditional Market profile i.e 70% price action contained within those ranges, do you subscribe to that view, if so, why, if not, why? Comments from all interested in this subject would be appreciatd

Great analysis on the shenanigans of Smart Money PP I am not trading currencies at present but am thinking about it, whether to focus on Currency Futures which have enough liquidity and traded via a central exchange/regulated, or Currency Market(FOREX) where one is effectively trading against a broker. Any comments.

Can very much relate to your experience, having been down that path. In many seminars I have listened to the old cliche's but never paid much attention: 1. Keep It simple, 2. Develop you own strategy and tactics and test them thoroughly 3. Then apply the rules consistently with discipline and patience 4. Stop looking for Holy Grail because there is none and finally keep away a Guru who claim to know the future via his system, he is either a consummate lair or GOD , if it is the latter, WHY THE HECK DOES HE NEED TO TRADE

To kick off, here is a copy of one of Sebastian's chart analysis in its original classic form: ANALYSIS BY SEBASTIAN 031904 The 19th was a quadruple-witching expiration and I have nothing wise to say about it. Therefore, I'm instead providing a "guest analysis" which illustrates reversals. Note that this is not a schematic for buying here, selling there. There are no cutesy names for setups. It's just an observation of and study of price behavior, the first step in the choice of strategy and in the development of tactics. The story plays out on the 3-minute chart. The open . . . dropped down to the low of yesterday afternoon. The first down arrow on the chart shows a wide range bar closing on its low on very increased volume (compared to the prior bar). Selling was clearly swamping the buying. Volume increased on the drop, but fell off on the retest of yesterday afternoon's low, signaling a potential bottom. Look at that bar on the low. It closes well off the bottom. And the volume has shrunk. Selling is no longer dominant (though confirmation is still needed). The next bar has a nice range up and closes on its high. Volume has dropped off, and that is good for the bulls. That and the next bar -- also an up bar with increased volume -- confirms the change in direction. Note that the volume falls off on the pullbacks. This is decidedly bullish. Volume expands with price as the market moves higher and contracts on pullbacks. Also, look at the price bars on the pullbacks. Their range also contracts. So, you have price bar range expansion with up closes on expanding volume and price range contraction coupled with volume contraction on the pullbacks. Note also where the closes are on the pullback bars --midrange, for the most part, rather than on their lows. Selling is weak on the pullbacks. All this action is bullish behavior. Look at the first down arrow in this up trend. It occurs around 10:30. It closes on its low and volume increases! This is the first hint that selling is coming into the picture. The next bar is up and volume increases, but then look what happens. Volume is heavy but the price action is showing weakness. With that increased volume, if this was still going higher, you would expect the bars to expand in range and close on the highs. But you get just the opposite. Range is contracting, the close is poor, and it occurs on increased volume. It canmean only one thing: selling is swamping the bulls' boat. Next, we move up to the high of the day. This is right into the 935 resistance area from the daily chart. Look at the volume and price action here. Volume expands for several bars, but the price won't go higher. That weakness we saw earlier starting with that first down bar on increased volume at 10:30 is now coming into play. Also, the average volume is lower as we make a new high. So, background weakness in the form of (1) the 10:30 - 11:00 price/vol action and (2) the overall volume/price divergence is seen clearly in the details of the individual bars. Note where I labeled the "No Demand" bar and its accompanying volume. We get a higher close on low volume. There is no demand or buying to drive prices higher. The no-demand event occurs again later. The noontime countermove starts right on time [NB: the lunchtime reversal is not as reliable as it used to be; stay tuned]. Look at the bar and volume at the turnaround. Like the waves, monotony is good. The market moves up a bit, but then goes into a lot of chop. Although there is an upside bias, volume is very low and the price bars are contracted and few close on their highs. All bearish action. Look at the last 3 bars in that area occurring around 1:00. They try to push it higher(probably gunning for stops), but volume isn't with them, and the buyers get swamped. Another no-demand event. Just before 2:00 there is another attempt to rally. But you can see the price and volume action shows weakness. The first bar highlighted by a down arrow shows a midrange close on increased volume. If they were going to take it up, that increased volume should have resulted in an up close. Compare this attempt with the rally that occured in the AM. As the market falls, the average volume increases. On the bars where price expands to the downside, volume expands, showing a consistant relationship. Note the two pullback areas in the downtrend (highlighted by the down arrows). Both the price action and the volume contract. This is nice bearish action. The bottom of this move is reached at the AM low. The price action and volume is a repeat of what we have been seeing, as is the push into the resistance at the 925 area ...

Here is something from a Trader who uses the info. from the DOM much more effectively: DEPTH OF MARKET AND ORDER FLOW What I want to talk about is what a lot of traders call reading “order flow†or just “the tapeâ€Â. I think a lot of people spend a lot of time working with indicators for their charts and don’t even think to just watch the orders moving in and out of the market as well as the trades that tick off (also called “prints†in the biz). Most quote providers offer market depth on electronic trading these days and I highly recommend utilizing this gift. The edge that floor traders have is now being given to everyone in the marketplace who trades these instruments, thus providing complete transparency and an even playing field. The problem is that if you’re not a professional and aware of what this actually means, you cannot capitalize on it. The next trading day, load up the market depth window of your favorite electronic mini contract and just start observing what you see. I’m going to be honest with you. This is going to be one of the hardest ideas you will ever try to comprehend as a trader. By watching this screen and this screen alone, you can gauge trader sentiment, their emotions and really make out what exactly is going on out there, things your indicators will never say. The first thing that is apparent is that the market moves like a pendulum, swinging one way and the other. It can look very messy at times but it is always essentially doing the same thing. It makes a move, a counter move, a counter move to that, etc, until it finds equilibrium and then it does it all over again. Watch how it does this over and over again and you will start to really get a feel with how the market is moving, when it’s turning the other way, where the pressure really is, etc. One thing to look for is what is happening in pullbacks. Let’s say the trend is up. The market has been making higher highs and lower lows and we’re in a mini down cycle and price is pulling back. The first thing to observe is how is the market pulling back? Is it a frantic sell-off pullback where the longs are scrambling? Is it orderly and more of a “drift†down? A frantic sell-off usually means the longs have panicked. This is fear in its purest form. They’re jumping on top of each other to sell. Offers are coming in and they’re hitting bids. The down thrust stops for a little bit but there is no mini bounce in the action. After a tiny stall they are hitting bids again, even if there aren’t many offers. They just want to get out, and they want out NOW. The lack of bids and support is a bad sign if you’re looking to purchase this pullback. If going long is the correct play, there needs to be buyers somewhere to hold the price up. An orderly pullback is more along the speed of what we’re looking for in terms of wanting to get long. Sellers are taking profits but it’s a slower move down. Sellers do push it down, and it can look rather thrusting when it happens, but you then see buyers step in and gobble up some levels and back off. Sellers may come in again, push it down, but then again, buyers come in and gobble up a few levels and back off again. This is the big money buying a pullback. You’ll see 6 times more contracts on the offer but the bid is holding because someone is showing a 10 lot and sitting there refreshing it. They’ll print off 50-100 and step off the bid allowing the price to come down more. Now, when I’m using number examples, understand this is all relative to the instrument you’re trading. Printing 50 and backing off isn’t as significant in the ES as it is to the YM, but the idea is the same. Eventually the sellers are going to be done and the selling will become exhausted at or very near a support level that you’ve been watching for it to pull back to. Buyers will start stepping in and when they gobble up some contracts, the selling that follows isn’t as strong any more. The point here is that buyers were sucking the stuff in the whole time it was pulling back and that’s the difference. A big money player, like a huge bank or fund, is working thousands of contracts and you’re going to notice it. I don’t care who you are. An elephant can’t run through a cornfield without leaving tracks. On a downtrend, typically what happens is the selling is frantic and the bounces are slow. Same type of scenario except that moves up in the previous scenario tend to be slow also. This is just a psychological thing. Bull trends tend to be slow, bear moves tend to be very, very fast. If the moves up are fast, it’s most likely short scrambling. Fast moves tend to indicate fear; people not in their right mind. I believe Alan Greenspan dubbed this situation “irrational exuberanceâ€Â. Honestly I could write a book about the market depth screen alone. A lot of it is something that cannot be quantified. I spent years scalping NASDAQ Level II without ever using a chart, just using order flow, momentum and levels and I can say that the same thing applies to the futures market. If you wanted to, you could do this just to scalp, and I mean REALLY scalp; taking 3-4 ticks in a matter of seconds. If that suits your personality so be it. I did that for years and did very well. It’s how floor locals make their money and there are many people doing it on mini futures now. In my opinion, however, it’s just too killer on the nerves. The point of this little essay is to give you some perspective into thinking like a local trader. If you’re like me, you’re looking at long term charts, medium term charts and short term charts. However, most people are not watching the flow. Work at adding this aspect to your trading to become a local when you’re looking to execute your trades. It will help you get great fills. Think how much money saving 1 tick per execution would save you. 1 tick on the YM is $5 and figure 3 trades per day. That’s 6 filled orders. 6 ticks = $30 per contract traded. 20 days a month trading is $600 per contract. That’s reason enough isn’t it? Now throw in the fact that adding this technique with solid technical analysis will make you a solid, well-rounded trader, which should be everyone’s goal. See, you want to become a local trader when you need to be and be more in tune with the market you’re trading. By watching the order flow and characteristics of the bids, offers and prints, you can be so much more effective. Don’t spend your time staring at your chart to get the last trade. Watch your market depth. You’ll thank me for it.

Guess PP is right, there are other sites like elitetrader, t2w where there are endless discussions/arguments/controversy on importance (or not) of Volume, however sadly most of it is just theory. Sebastian Manby(Tom William's Prote'ge') made a concerted effort to start up discussion on VSA but that petered out due to failure on the part of most participants to grasp the basic concepts which they tried in vain to apply in isolation without paying attention to the context, hence it would be a good idea to let the other thread run exclusively on VSA. It certainly has the potential to become the longest and most informative thread on the internet. IMHO

TinGull, BTW, the previous post is of YM 5min chart and was in respone to your trade posted earlier, as I mentioned this is how I look at the charts for support and resistance levels ie. let the market tell me where those levels are rather than trying to force the market to turn at any calculated levels that I have placed on the charts. Mind you there is nothing right or wrong about calculated pivot levels, infact they are important in observing what the price does at those levels but majority of the times these act as self fulfilling levels as vast number of traders exit or enter there, however the levels already established by the market i.e previous Higher lows and Lower highs are more logical and in keeping with VSA principles

IMO it is important to look left, afterall the market structure itself provides resistance and support levels, instead most of the time we tend to focus on calculated pivot levels, Mind you all the VSA principles were there for a long, however looking left a Higher Low formed around 10.45 at 14006 was broken, a previous support which would now act as resistance, hence although the entry was correct, the profit target was in question i.e risk/reward ratio. This is also the level at which the no demand bar pointed out by rajiv poped up.

Hi Richard, The link only shows video on Market profile analysis, nothing about trading via DOM Wonder if there is another link to that, the 2nd part that you mentioned

Correction TG, After your 1st trade (which was stopped out), there was a classic test on low vol, ideal signal to go long as per VSA

DAX Trading was exciting too. CLASSIC ENTRY ON THE CURSOR, LOW VOL TEST, PURE VSA. Exited rather early at S1, expecting it to act as resistance, however there was an opportunity to jump aboard again, but was ruminating over how did I miss that 100pt drop:) Looking at your YM chart and the second trade, there was a similar opportunity to go long on the classic down bar test on low vol.

Much obliged BF , can I presume that this primarily for scalping, could this be applied to say trading of 15min or 5min charts. Question still remains, why does price gravitate towards size, what is the logic, the only one I can think of is if I was long, I would have a sell limit order at some resistance level, so if enough people employed this mode of exit, one could have a whole load of limit orders at a resistance level. Ofcourse to place that exit limit order was indicative of bullishness on the part of traders. Correct me if I am on the wrong track

Can somebody explain with clarity why does price gravitate towards size and does this unfold on a consistent basis, if so than surely it is the making of a holy grail;)

Hi, Rajiv Would require many pages and numerous charts to illustrate the strategies and tactics from the book which has nearly 33 detailed examples, they are a combination of the charts and comments posted by PP and BF