Jump to content

Welcome to the new Traders Laboratory! Please bear with us as we finish the migration over the next few days. If you find any issues, want to leave feedback, get in touch with us, or offer suggestions please post to the Support forum here.

  • Welcome Guests

    Welcome. You are currently viewing the forum as a guest which does not give you access to all the great features at Traders Laboratory such as interacting with members, access to all forums, downloading attachments, and eligibility to win free giveaways. Registration is fast, simple and absolutely free. Create a FREE Traders Laboratory account here.

jperl

Trading with Market Statistics X. Position Trading

Recommended Posts

Position Trading is generally described as a trade which you enter and expect to hold for a considerable period of time during the day. Such a trade can be entered at any time after the open. My personal preference for a position trade is at the beginning of the trading day using market statistics from the previous day as my guide for determining entry, profit target, stoploss and scale in points if necessary. The direction of the trade is based on interpretation given in the last 9 "Trading with Market Statistics" threads but using the previous days statistics as the starting point. Position trading is thus no different than any other type of trading that I have previously described.

 

Here is the idea:

 

a)Set up a chart with yesterdays volume histogram, PVP, VWAP and SD's on it. Leave sufficient room to the right of yesterdays close so that at the open you can continue to add to the statistical data as todays market begins to unfold. In effect you are continuing to update yesterdays volume distribution as more data is added to the chart.

 

b)Before the open, decide on your trading plan. Pick a direction for the trade, an entry point, profit target and stoploss based on what you see in the volume distribution function. It will help to reread the previous threads to determine what you should be looking for.

 

c)When the market opens, execute the plan.

 

In the following video on trading the ER2 (Emini Russell 2000), you will see that the previous days volume distribution ended the day in a symmetric state with the VWAP = PVP. I then concluded that I should look for a countertrend trade back toward the VWAP as described in [thread=2285]"Trading with Market Statistics Part VIII"[/thread].

 

Watch the video to see what I did on September 06, 2007.

 

ER2PostionTradeSep06

 

This trade was a good position trade which would have been even better if I had traded more than one contract. After having climbed up to the 2nd SD above the VWAP, the price action continued on down below the VWAP to the 1st SD and then evenutally to the 2nd SD, a very typical signature of a symmetric distribution.

Edited by jperl

Share this post


Link to post
Share on other sites

Very interesting video Jerry. Thank you very much. I will be spending some time this week pouring and reviewing your threads so I can hopefully understand your methodology better and have some good questions for you.

Share this post


Link to post
Share on other sites

Do you ever use the average of the past few trading sessions for the opening play? Or do you only take the previous session data?

 

I usually use only the last trading session for a position trade. Once I decide on a trade entry, I will then take a look at the VWAP and SD's from previous 2 days, 1 week, 1 month, 2 months and 1 yr data to see if there is anything that would block the progress of the trade. I haven't gotten around to preparing a thread on this for want of time. Probably do so when I get back from my China trip.

Share this post


Link to post
Share on other sites

not much discussion in 'market profile' area.... thought I would point out that we closed today with a reasonably 'normal' distribution, price closed right on VWAP at 1498.50 and PVP was close by.

 

here is an example of combining statistics with a pattern or two. I put a short on very late in day at 1498.00 to play for an overnight gap. we've had 3 up days in a row but I am unimpressed by the last few days. I did try a long this morning but it didn't fill (missed by a tick) so I took the day off. I came back and this Head & Shoulder pattern had become evident but I did not want to fight the market while it built higher value so I waited until very late in the day to enter as the market appeared to find a home at 98.00 and could come out of this balance to the downside overnight. Effectively, I want to find a short in the morning and this trade is a hedge in case the short works overnight instead of in the morning (both could still happen too).

5aa70e015d586_sep13ES.thumb.png.58fae4485592f85e90b26a6f2df861e6.png

Share this post


Link to post
Share on other sites
Once I decide on a trade entry, I will then take a look at the VWAP and SD's from previous 2 days, 1 week, 1 month, 2 months and 1 yr data to see if there is anything that would block the progress of the trade.

 

Jerry, does this apply to all your trades or just position/breakout/no skew to the market trades?Or even just position trades/no skew?

Also, if yesterdays close is a HUP I take the high and low of yesterday is also a HUP?

If I ask you any stupid questions I'm sorry. This is kind of why I never did good in math classes in highschool or college. I get the first few videos but I learn top down then fill in the details where your building on the details.

 

Have fun in china, I don't know how you could not. That should be an interesting time to say the least.

 

When you get back though, HUP theory, please? I'm dieing to understand what you see there.

Share this post


Link to post
Share on other sites
Jerry, does this apply to all your trades or just position/breakout/no skew to the market trades?Or even just position trades/no skew?

Also, if yesterdays close is a HUP I take the high and low of yesterday is also a HUP?

When you get back though, HUP theory, please? I'm dieing to understand what you see there.

 

You are right on track Darth. There are two kinds of HUP, static and dynamic. The static ones are for example yesterdays high, low and close. The dynamic ones are all the VWAP and SD's from yesterday, 2 days ago, 1 week, 2 weeks, 1 month 2 month, 1 year ago. I think you can see that how these cluster will be important for determining price action. The rest of the story you will have to wait until I come back.

Share this post


Link to post
Share on other sites

Hi Jerry, great thread I hope you will find soon the time to explain us your HUP concept.

In the meanwhile I invest the time to code the theory (I am using AMIBROKER) and practicing, no doubt it improved my stats.

I wonder if and how we can implement Market statistics trading strategy to longer term trading style such as swing of several days?

Thx

Karish

Share this post


Link to post
Share on other sites

Im glad someone mentioned HUP's again before I did! I have a broad idea what they are but do wonder how Jerry uses them in trade decisions. Last I recall he was not quite sure how to present this. I hope that he comes up with something as I have enjoyed this series immensely and miss my Market Stats fix!

 

Cheers.

Share this post


Link to post
Share on other sites
Hi Jerry, great thread I hope you will find soon the time to explain us your HUP concept.

I wonder if and how we can implement Market statistics trading strategy to longer term trading style such as swing of several days?

Thx

Karish

 

I'm still working on a presentation for HUP. Hope to have the beginning of it sometime this week.

As far as swing trading goes, I don't do swing trading, but longer term stat analyis should be useful for swing trading as for day trading. The standard deviations will be considerably larger so you will have to have a larger risk factor to do swing trades.

Share this post


Link to post
Share on other sites

I dont know if this is the right place to ask but does anybody have a volume histogram that prints on the Y axis intra day for trade station they would be willing to share?

Share this post


Link to post
Share on other sites
miss my Market Stats fix!

 

haha, yea maybe we need a little methadone maintance hit before the big HUP fix.

Jerry, any chance you could do a video on how you use the longer time frame stats? I think I remember you said you look at longer time frames stats even for intraday, maybe that ties in with hups though.

Share this post


Link to post
Share on other sites
haha, yea maybe we need a little methadone maintance hit before the big HUP fix.

Jerry, any chance you could do a video on how you use the longer time frame stats? I think I remember you said you look at longer time frames stats even for intraday, maybe that ties in with hups though.

Well if you read the position trading thread, you saw I used the previous days volume distribution data to decide on a trade for today. That's an example of using a longer time frame for today's trades.

You will see that HUP is an extension of that

Share this post


Link to post
Share on other sites
I dont know if this is the right place to ask but does anybody have a volume histogram that prints on the Y axis intra day for trade station they would be willing to share?

 

I have inquired on the Tradestation forum about this and they don't have it. They have an analysis study called 'activity bars' but they aren't any good. that is what they reference though when you ask them about it.

 

what I do is screen-capture the daily intraday volume histogram from the 'matrix' window each day. I then put notes on it and save them in a folder for future access.

 

I have actually found this process to be quite insightful. I summarize the daily daily volume distributions by hand into an excel spreadsheet. Doing this process every day really helps me understand 'value' (higher-volume) zones that tend to get re-tested and imprints on your brain important pivots.

5aa70e16d3454_Oct26FriFinalESVolDist.png.a37bf4bbaf838950b15b577b93eabe03.png

Share this post


Link to post
Share on other sites

Is it possible to put in relation the differents Market Profile openings and the Jerry' strategy ?

 

Or, Jerry, would you have managed to use tools of your system to get ready for types of days of trading (as Dalton) ?

As the hubs !

 

With impatience, best regards.

 

bye Alex

Share this post


Link to post
Share on other sites
Is it possible to put in relation the differents Market Profile openings and the Jerry' strategy ?

 

Or, Jerry, would you have managed to use tools of your system to get ready for types of days of trading (as Dalton) ?

As the hubs !

 

With impatience, best regards.

 

bye Alex

 

Alex,

The only tools I use to get ready for today's trading are the HUP lines from previous trading days, weeks,month and year. I don't use anything else. These are my support/resistance lines that will keep me in a trade or tell me to exit

Share this post


Link to post
Share on other sites

Hello to everybody and to you, jerry,

 

I wondered how reacts jerry's system when the day is a trend day!

 

How react the standard deviations ? What are then the points of entry ?

 

Is there a means to foresee this type of day and trade with it ?

 

Too, I wish you the good end of year and merry Christmas !

Share this post


Link to post
Share on other sites

Or, Jerry, would you have managed to use tools of your system to get ready for types of days of trading (as Dalton) ?

As the hubs !

bye Alex

 

Other than putting the HUP lines on my chart, I don't do anything else to begin the day. I just follow the statisitics and what the price action tells me.

I will be cautious around key economic events that usually come out around 10:00 EST, but other than that there is nothing else that I do premarket.

Share this post


Link to post
Share on other sites
Well if you read the position trading thread, you saw I used the previous days volume distribution data to decide on a trade for today. That's an example of using a longer time frame for today's trades.

 

Hello Jerry;

 

On certain days it appears that using the previous day's volume distribution data, is better suited to the price action, to decide on a trade even in the afternoon.

 

Have you developed a process to identify when this course of action is appropriate

OR

do you have a means to recognize this fact early in the day, and thus not switch to using today's volume distribution data?

 

Thank you.

Unicorn.

Share this post


Link to post
Share on other sites
Hello Jerry;

 

On certain days it appears that using the previous day's volume distribution data, is better suited to the price action, to decide on a trade even in the afternoon.

 

Have you developed a process to identify when this course of action is appropriate

OR

do you have a means to recognize this fact early in the day, and thus not switch to using today's volume distribution data?

 

Thank you.

Unicorn.

 

Yesterdays distribution would always be more important than today's, early in the trading day during the period when today's distribution is still developing. If there is rapid price action early in the day, today's price action is not going to help you much. You can tell this by comparing the range of each bar to the standard deviation. When the bar range is the same size as the SD, you can't tell much by looking at today's statistics. So you either have to go to a faster time scale, or use a distribution that has developed over 1 or more days such that the SD is larger than the bars range.

Share this post


Link to post
Share on other sites
Yesterdays distribution would always be more important than today's, early in the trading day during the period when today's distribution is still developing.

 

Hi Jerry;

 

When watching yesterday's and today's probability function and statistics, and both lead to the same trade assessment, the decision is easy.

How do you deal with situations when one trade assessment contradicts the other?

Do you go with today's assessment or yesterday's ?

 

I guess yesterday's statistics over-ride during the morning and noon.

How do you decide in the afternoon?

What is your thought process?

 

cheers.

Unicorn.

Share this post


Link to post
Share on other sites
Hi Jerry;

 

When watching yesterday's and today's probability function and statistics, and both lead to the same trade assessment, the decision is easy.

How do you deal with situations when one trade assessment contradicts the other?

Do you go with today's assessment or yesterday's ?

 

I guess yesterday's statistics over-ride during the morning and noon.

How do you decide in the afternoon?

What is your thought process?

 

cheers.

Unicorn.

 

I was wondering how long it would take for someone to see this. Congratulations Unicorn, you are an astute observer.

If you are a NEWBIE trader, and you see a contradiction, you of course do nothing.

 

An advanced trader however would look at the VWAP's and SD's from various days as a series of HUP's (read the HUP thread to see what this is). The HUP lines are then treated as simply support/resistance lines. Decision to enter a trade would then depend on several factors:

a)The separation of the HUP's----is there enough open space for a trade or are they close together for just a quick scalp

b)The placement of the HUP's in case scale in would be necessary

c)is the HUP below a VWAP or above it?

d)Am I looking for a reversal or a continuation at the HUP?

e)Can I use the Shapiro effect for entry?

 

As you can see there are numerous things to consider, but after you practice this for a while, it becomes second nature. Sort of like learning to play an instrument.

Share this post


Link to post
Share on other sites
there are numerous things to consider, but after you practice this for a while, it becomes second nature. Sort of like learning to play an instrument.

 

Thank you Jerry;

 

I would appreciate a few examples i.e. charts with your comments, at your convenience, as the market may provide them in the following days.

 

I think that I have understood the theory, but applying it real time is still a challenging task.

 

Take care.

Unicorn.

Share this post


Link to post
Share on other sites

Hello Dear Jperl and all. First thing first, Jperl I really want to congratulate you for your excellent work on Market Statistic Threads. They are simply incredible and very much interesting.

 

I really like your way of approaching the markets with the PVP, VWAP and how we can use their relationship to decipher setups according to our trading style.

 

I have read all your threads in the past few days and will certainely read them again and again to incorporate every nucance of them.

 

As I am also using the Ensign Software, it is easy to get the same type of profile with the PH and VWAP and bands.

 

Right now, I just need to use a lot of screen time in real time (even with the playback feature of Ensign) to see the setups emerging in real time.

 

So, just wanted to say my deep gratitude to you to have started these great threads and as Unicorn said, hope to see others examples and videos when you have free time.

 

Sincerely

 

Shreem:)

Share this post


Link to post
Share on other sites
Thank you Jerry;

 

I would appreciate a few examples i.e. charts with your comments, at your convenience, as the market may provide them in the following days.

 

I think that I have understood the theory, but applying it real time is still a challenging task.

 

Take care.

Unicorn.

 

I don't know if I will have the time to post more videos on these topics. Each one takes a considerable amount of my time. I have posted over 15 videos and 10 charts in these threads dealing with market statistics. There is of course considerable room for further expansion. But the basics are here for all to use. When there are topics related to this that I deem important I will make additional posts.

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.


  • Topics

  • Posts

    • EURUSD Is Dominated By The Bull Market Throughout As The Pair Seek To Recover EURUSD Price Analysis – November 18 The bulls had full control today, moving the market up during the entire European session as the FX pair confirmed its breakout past the high of the prior session after trading up to 1.1068 above during the day. Key Levels Resistance Levels: 1.1501, 1.1412, 1.1278 Support Levels: 1.0989, 1.0879, 1.0780 EURUSD Long term Trend: Bearish EURUSD at the moment, the rebound from the 1.0879 level is initially seen as a remedy and, in the case of a further increase, the increase may be contained by the level at 1.1412 retracements from the level at 1.0879. Although the downward trend from the 1.1501 (high) level may resume later. However, the sustained plunge from the 1.1412 level may change this bearish position and lead to a greater increase in the retracement to the level at 1.1501. EURUSD Short term Trend: Ranging The EURUSD intraday bias stays neutral for the initial position and a further plunge is anticipated as long as the resistance remains at the level at 1.1073. Also, the corrective rebound from the level at 1.0879 is expected to end at 1.1501. Meanwhile, past the low of the level at 1.0989, the bias will be revised downward to repeat the low of the level at 1.0879. However, the breakout of the level at 1.1073 may soften this bearish trend and push up the bias for the level at 1.1175. Instrument: EURUSD Order: Buy Entry price: 1.1073 Stop: 1.0989 Target: 1.1412 Source: https://learn2.trade 
    • 0X (ZRX) Continues To Disappoint Investors Key Resistance levels: $0.30, $0.35, $0.40 Key Support Levels: $0.20, $0.15,$0.10 ZRX/USD Price Long-term Trend: Bearish The ZRX/USD pair is in a downward move after the market retests the $0.30 price level. In October, the coin was in a bullish move and tested the $0.35 resistance level. The bulls tested the $0.35 price level again and formed a bearish double top. With the formation of the bearish double top, the coin fell to the support line of the channel. The bulls may a retest at the $0.30 price level and resumed the downward move. The market has fallen to a low of $0.27 and it is consolidating above that level. This was the previous low in May. However, if the price breaks below $0.27, the pair will drop to a low at $0.20. Nevertheless, if the $0.27 support holds, the price will move up. Daily Chart Indicators Reading: The price has fallen to the support of the 50-day SMA and if the 50-day SMA holds, the 0x will move up to retest the resistance level. The RSI period 14 level44 indicates that the price is in the range-bound zone. ZRX/USD Medium-term bias: Ranging The bulls move up to test the resistance at $0.35 on two occasions and commenced a sideways move. The coin is fluctuating between the levels of $0.27 and $0.35. Nevertheless, the bears tested the support line and rebounded. The pair is likely to continue with the sideways move. 4-hour Chart Indicators Reading The 21-day SMA and 50-day SMA are trending horizontally indicating that price is in a sideways move. The stochastic indicator is above the 40% range indicating that price is in bullish momentum. General Outlook for 0x The ZRX/USD pair is in a downward move but the price is ranging above the $0.27 support level. After the sideways move above $0.27 and if the bears break below the support level, the selling pressure will resume. 0x Trade Signal Instrument: ZRXUSD Order: Buy Limit Entry price: $0.25 Stop: $0.20 Target: $0.35 Source: https://learn2.trade 
    • Read about Spectre.ai New asset class EPIC – Make 90% Every 1 Second!Low Minimum Deposit - https://binaryoptionsnodeposit.com/spectre-ai-new-asset-class-epic-make-90-every-1-second/
    • Date : 18th November 2019. Events to Look Out For Next Week 18th November 2019.Welcome to our weekly agenda, our briefing on all the key financial events globally. The week ahead is expected to reveal a healthy housing sector in the US, while Canadian data could clear the way for BoC. Eurozone’s PMI are also on tab.Monday – 18 November 2019 ECB Financial Stability Review (EUR, GMT 09:00) – The Financial Stability Review provides an overview of potential risks to financial stability in the Euro Area. Tuesday – 19 November 2019 Monetary Policy Meeting Minutes (AUD, GMT 00:30) – The RBA minutes, similar to the ECB Reports, provide a detailed assessment of the bank’s most recent policy-setting meeting, containing in-depth insights into the economic conditions that influenced the rate decision. They are usually a cause for FX turbulence. Housing starts and Building Permits (USD, GMT 13:30) – The September decline in starts reflected weakness in multi-family components, mainly led in the Northeast and Midwest, alongside small declines in the south and west. Permits have shown a solid growth path through Q3 alongside strength in starts, suggesting a likely solid path for both measures through Q4. Housing starts should rebound to a 1.285 mln pace in October, after the dip in September. Permits similarly are expected to rebound to 1.370 mln in October. Wednesday – 20 November 2019 Interest Rate Decision (CNY, GMT 01:30) – The PBoC is not expected to change its interest rates, at 4.2%. Inflation Report Hearings (GBP, GMT N/A) –The BOE Governor and several MPC members testify on inflation and the economic outlook before the Parliament’s Treasury Committee. Consumer Price Index and Core (CAD, GMT 13:30) – The Canadian CPI for October is expected to have come out higher than last month, at 2.1% from 1.9% in September, after the 0.1% dip in August, as declines in gasoline prices and tuition costs weighed. The CPI added to the backing for no change in rates from the BoC in October. Monetary Policy Meeting Minutes (USD, GMT 19:00) – The FOMC Minutes report provides the FOMC Members’ opinions regarding the US economic outlook and any views regarding future rate changes. Thursday – 21 November 2019 ECB Monetary Policy Meeting Accounts (EUR, GMT 1:30) –The ECB Monetary Policy Meeting Accounts, similar to the FOMC minutes, provide information with regards to the policymakers’ rationale behind their decisions. In the last ECB meeting, ECB kept policy settings on hold at Draghi’s last meeting, as widely expected after the comprehensive easing package announced in September. Philly Fed Index (USD, GMT 13:30) – The Philly Fed index is seen rising to 7.0 from 5.6 in October, versus a 1-year high of 21.8 in July and a 33-month low of -4.1 in February. The “soft data” measures have largely stabilized since June around moderate levels, though with a headline from the UAW-GM strike in recent months that seemed to have impacted some surveys but not others. The trade war headwind may subside somewhat in November, though the markets still face a wide array of troubles abroad. Friday – 22 November 2019 Gross Domestic Product (EUR, GMT 07:00) – German Q3 GDP expanded 0.1% q/q – boosted by consumption. Germany not just missed a technical recession, the economy actually expanded slightly in the third quarter, as Q2 was revised down. However, we expect no turnaround yet for the final Q3 GDP, despite the higher headline rate, as the balance of risks remains tilted to the downside. Markit Services and Composite PMIs (EUR, GMT 08:30-09:00) – The prelim. EU Markit PMI Indices are expected to continue above 50, but slightly decline to 51.9 and 50.3 respectively, according to consensus expectations. As for Manufacturing PMI, in November a slight improvement is expected at 46.0, even though the headline rate remains in contraction territory. Retail Sales (CAD, GMT 13:30) – Retail Sales are forecasted to have registered a flat outcome in Canada, after mild declines of 0.1% in August. Always trade with strict risk management. Your capital is the single most important aspect of your trading business.Please note that times displayed based on local time zone and are from time of writing this report.Click HERE to access the full HotForex Economic calendar.Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!Click HERE to READ more Market news. Andria Pichidi Market Analyst HotForex Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
×
×
  • Create New...

Important Information

By using this site, you agree to our Terms of Use.