Crash course into MP

[Northern boy 10]

you never know if its a trend day until the market closes,but if it gets to the next nip and the bounce doesnt bounce much and you have left several single traded prices, a wide cleavage,chances are it will drop to next nip,you should be prepared on those days with daily trendlines drawn that you can easily refer to so you know where to get in or out of a position since it picks nips or trendlines for major support and you wont know which til after the fact

 

thanks Ammo. next time I get layed I'll be thinking of value areas and points of control... and i'll probably go long :did I say that?: .

[ammo 10]

there is a tl from 3/17 to 6/12 that is 1337 on es ,if we break that there is another at 25 and another at 17,37 was also fri low and 36 todays

[darthtrader2.0 10]

Or if you have ideas of how to anticipate volatility outside MP maybe you can post it here or PM.

 

I kind of have a speculation that if you look at the shape of the intraday volatility surface of SPX options and how its changing that it will give away exactly what kind of day to expect on the futures because the guys that move the markets are too big and the options markets too illiquid for them to not show that card.

How to actually view that card, I haven't a clue yet though.

[ammo 10]

there is a recent book out by lawrence McMillen that covers that subject,how to read the cboe put/call ratio

[alleyb 10]

A simplistic way to look for early identification of a trend day is the amplitude of the brackets together with the degree of retracement. For example in the Dow (or ym if u prefer) if the market has moved more than 34 tics in a straight line and the retracement is 3 to 4 tics then the chances of a trend day are increased dramatically. This was once expressed as being no more that 4 time brackets in a market that is not breaking rotation where the profile looks like a long and thin (as opposed to a fat) profile. Some like Don Jones at Cisco would state that you need to know where you are in relation to the previous 3 days value, others like Bill Duryea at IOAMT would suggest 5 days, others still like the Turtles would state look at 20 days etc. What all of these people misunderstand is that markets are dynamic and they are using static time intervals. You have to use the information given by the market and if that is 18 days rather than 20 so be it. IE look for the unfolding distribution (and this applies to virtually any time frame..... IE for those for example who would say but I can't scalp my 1 minute chart off a 3 day value etc take note). The reality is that trend days are frequently born out of a small early range frequently non trend in nature and not faciliting trade that then explodes into life and catches people off guard. In reality the market trends approx 22% of the time today rather than approx 12% 20 years ago brought about by computer algorithms that only seem to know the go with the momogogo momentum breakout

[alleyb 10]

I did a presentaion on June 6th that was for one hour but ended up being 3. (nothing unusual in that when I get involved. lol) It was such an interesting day that it necessitated the extention. With SoulTraders pre-acceptance and permission I place the link here. I urge you to spare the 3 hours needed for it was one of the most interesting days we have had for some time

http://www.tradingclinic.com/oneoff/special20080606/special20080606.html

[Guest forsearch]

Alex,

 

Just curious if you've addressed this question already here or else where....

 

What exactly are your thoughts of the Soc Gen trader, le petit garcon, Jerome Kerviel?

 

Let us know since you have the experience to render a more nuanced opinion on it...

 

Thanks,

 

-fs

[alleyb 10]

foresearch: He thought he was bigger than the market whether with or without upstairs or even on the desk approval. That organization felt that they could always push the market around and what was demonstrated was a total lack of culpability and risk management

[firewalker 10]

In reality the market trends approx 22% of the time today rather than approx 12% 20 years ago brought about by computer algorithms that only seem to know the go with the momogogo momentum breakout

 

Could you point me towards the source of those statistics? I'm interested in this, since I've found the market to have much more 'trending' tendencies last couple of months compared to last year...

[alleyb 10]

firewalker the stats come from my own database or data warehouse as I like to refer to it

[btfox 10]

Most of what has become MP today is only a vague resemblance of what MP is all about. Dalton, Alexander, Frank Butera, and a few others are familiar with the range of content and meaning of Market Profile in it's broader context. Don Jones of Cisco-futures.com offers a lot of free content as well as a couple courses as well as various data services. He has been researching this from the beginning; I think his book is available on a pdf file or bound. Trevor Hardnett (sp) is also among those who know MP in it's entirety and he and a few who do, such as those mentioned above, are finding their own method of applying mp to short and longer term trading. Whether the value areas are 70 or 80% is not necessarily relevant. Don uses sextants, octants, etc. More to the point MP has greater value when a balance is achieved over a period of days. He also attempts to show where the money is; i.e. from commercial interests to do to the small trader (the kind of info you get in the pit because you know who the "jamoke" facing you is). Making these numbers just another pivot point without any understanding of the larger context is really just laziness. You're looking for another easy way to trade; and if you were around through the 90's, 2000, to today, you will recognize that people who cannot adapt to changing markets will be short lived. Also, to criticize elite trader, as I noted somewhere on this site earlier is calling the kettle black.

[mister ed 10]

Also, to criticize elite trader, as I noted somewhere on this site earlier is calling the kettle black.

 

Thanks for the comments on MP btfox - if you would like to expand on the comments that would be appreciated too.

 

Regarding the criticism of ET - I think there is no denying that there is excellent info on ET and some excellent people there, it is just that there is a lot of personal attack and abuse there, and some posters who seem to concentrate on distracting threads. To be honest, it is quite an entertaining read sometimes! But what we try to do here at TL is focus on the quality input and get rid of the attacks and distractions. It is hard work sometimes, but hopefully you, and others, can spot the difference.

[OAC 10]

Most of what has become MP today is only a vague resemblance of what MP is all about. Dalton, Alexander, Frank Butera, and a few others are familiar with the range of content and meaning of Market Profile in it's broader context. Don Jones of Cisco-futures.com offers a lot of free content as well as a couple courses as well as various data services. He has been researching this from the beginning; I think his book is available on a pdf file or bound. Trevor Hardnett (sp) is also among those who know MP in it's entirety and he and a few who do, such as those mentioned above, are finding their own method of applying mp to short and longer term trading. .

Since when did Frank Butera and Trevor Hardnett become legends of MP ?

While you are at it, may be you should add our outstanding member AMMO to the list. Have you read some of his posts here ?

[mike_ITL 10]

You have to use the information given by the market and if that is 18 days rather than 20 so be it

 

 

Nice post, Alex!

[MC 10]

Thanks for the comments on MP btfox - if you would like to expand on the comments that would be appreciated too.

 

Regarding the criticism of ET - I think there is no denying that there is excellent info on ET and some excellent people there, it is just that there is a lot of personal attack and abuse there, and some posters who seem to concentrate on distracting threads. To be honest, it is quite an entertaining read sometimes! But what we try to do here at TL is focus on the quality input and get rid of the attacks and distractions. It is hard work sometimes, but hopefully you, and others, can spot the difference.

 

ET has a much bigger number of visitors and users. As a site grows it's very hard to please everyone and contain all the drama. I think we at TL do a great job compared to on any other market site I've been on. Given the size here...I'll be bold and say James and the mods here do the best job even.

 

While this may be a business for James, it's first and foremost his passion. That comes through in his participation, information and the way he cares about quality over user count. User count is lucrative business, it means more ad exposure. James has never mentioned user count to his mod team as far as I know and he gives us the freedom to ban as needed.

 

Thanks to James and my fellow mods for making this place so clean.

[Guest forsearch]

Thanks for the comments on MP btfox - if you would like to expand on the comments that would be appreciated too.

 

Regarding the criticism of ET - I think there is no denying that there is excellent info on ET and some excellent people there, it is just that there is a lot of personal attack and abuse there, and some posters who seem to concentrate on distracting threads. To be honest, it is quite an entertaining read sometimes! But what we try to do here at TL is focus on the quality input and get rid of the attacks and distractions. It is hard work sometimes, but hopefully you, and others, can spot the difference.

 

Only when the mods don't join the frey. Otherwise, yes, TL is better than ET in that regard.

[MC 10]

Only when the mods don't join the frey. Otherwise, yes, TL is better than ET in that regard.

 

http://www.traderslaboratory.com/forums/f52/please-respect-all-members-4154.html#post42290

 

[brownsfan019 17]

Only when the mods don't join the frey. Otherwise, yes, TL is better than ET in that regard.

 

I have to disagree FS. The "mods" here are regular people like you and me. They help James out, but they too are entitled to their opinion and discussions.

 

I know you have an issue w/ me since I am a 'mod' of the candle corner, but I started the CC as a way to give back and I "moderate" it but nothing else.

 

If the mods were a paid position, then I would agree 100%. But it is not. It's the community helping the community.

[Guest forsearch]

I know you have an issue w/ me since I am a 'mod' of the candle corner, but I started the CC as a way to give back and I "moderate" it but nothing else.

 

 

Really? I think we put that one to bed quite awhile ago. Looks like you're still bearing grudges or something. Let it go....

 

Remember, you're not the only mod who has "opinions" on this site that occasionally cross the line.

 

 

 

If the mods were a paid position, then I would agree 100%. But it is not. It's the community helping the community.

 

Fair enough. Just don't care for double standards, is all. Guess that's why Reaver was shown the door, I suppose.

 

-fs

[MC 10]

Fair enough. Just don't care for double standards, is all.

-fs

 

There are no double standards here, you've instigated on many occasions with no course of action taken. Everyone gets some leeway...there is a reasonable level that can slide, then it crosses the line and something has to be done.

 

I would also suggest those with thin skin shouldn't trade barbs. If one can't take the heat, they should stay out of the kitchen.

[ammo 10]

i've been crying all morning,had to open 2nd box of tissue,over oac's comment,seriously tho,if you get insulted,and don't respond or respond like a gentleman ,any barbs should just burn themselves out

[OAC 10]

i've been crying all morning,had to open 2nd box of tissue,over oac's comment,seriously tho,if you get insulted,and don't respond or respond like a gentleman ,any barbs should just burn themselves out

Ammo:

You are obviousely a very modest individual. The comment was meant to be an endorsement. It is obvious to me that you do use floor trader's market profile lingo. First let us get some facts straight :

(1) Peter Steidlmayer invented MP, but Market Profile is OWNED by an Exchange, in this case the CBOT.

(2) Floor Traders are members of the exchange and probably the first ones to try out market profile.

(3) Foor Traders are known for their vulgar languages with occasional sexist overtone.

 

 

So ammo, when you speak, I believe you are speaking from the source.

Whereas Btfox named a whole list of individuals, with the exception of John Dalton who authored two books, the rest are just vendors. One thing that I hate is getting caught up in a vendor's hype.

[ammo 10]

i wasn't offended oac,i've read your posts,i just used it as an opportunity to expose the value/or lack of, taunting people on threads,i'm interested in any trading site that can improve my bottom line and when people come on here and emulate sword fights over the toilet like a couple of 8 year old boys,they are embarassing themselves,and its a lot of crap that others have to read while searching for trading info,good luck,i'm enjoying your posts p.s. i mentioned on here that those could very well be drew cary's boobs and didn't mean to offend any of the ladies

[ammo 10]

by the way,this is so far a 3 boob day like last monday,there is a chance we trade back up to 1252 on spus

[btfox 10]

Right, well I don't know Trevor but I thought the MD had promise. He is using some MP ideas in developing his software and I thought that even Don Jones has mentioned him. I've watched Frank Butera call trades and though he may is not among the older generation of MP users, he does know Dalton's work and has adapted it for his own use.

Btw, there is a Jones who is co-author of Dalton's book and he is the son of Don.

 

As I mentioned Don Jones has been associated with MP since the 80's. I don't know if he was working hand in hand with Pete S. when he developed MP, but he is obviously an authority. And he will talk to you and mull over trading ideas. I had no problem making money in the short course using just the basic information...but you are watching probably a dozen markets and looking for the best trades.

 

I'm not so sure that floor traders cared about MP, because MP delivers what you get from standing in pits. As the 30-yr pit dried up, bond traders walked over the the Ag pit. The best have good memories for levels and you get lots of info standing shoulder to shoulder with traders. As markets go electronic traders have had to adapt. The most successful trader I know, a bond trader for 20+ years, "trades by feel." He does, of course, have all that experience up his sleeve. He would still go down to the pit on occasion but he said that he was making more screen trading--probably 3 5-min interest rates charts (5s,10s,30 yr), the dow, sp, are hidden under a screen filled with TT Domes. He day trades, also holds overnight, and scalps the dow.

 

In general, I would say that the best MP trades are breakouts from a balance, especially those of a minimum of 2-3 days. Reactive trades from extremes are less dependable, but once the market begins a move out of it's current balance it will be seeking a new one--those are the days where you can count on the best moves.

 

I think a lot of pit traders are having trouble adapting to the screen and they are the ones looking at what's out there to help them. If anyone is interested in MP after learning the rudiments, then I think Dalton is the next logical step. Cisco-Futures and a lot of information; PS's original work is in pdf file at cbot website under Education-Market Profile. Just don't expect to see anything resembling a trading system. Good Luck.