The Markets Said "Oops"

[Soultrader 12]

I missed a great trading opportunity today on the YM but would like to share.

 

The markets had a nice little donwtrend during the opening 90 minutes. However, it found key support at the previous zones resistance level around 11940. Plenty of buyers in this area to push price back towards value.

 

The markets basically said "oops" to me. And indicated that it had gone too low and wanted to move back where it felt comfortable. Notice how the price acceptance in this new zone still remains valid (see attachment).

[namstrader 10]

Soultrader,

 

I now understand why my VAL VAH POC pivots were different from yours. I had my Market Profile chart on the 24 hour session. I would truly appreciate your thoughts on using a gap chart, or only market hour session charts. Can pre-market sessions offer you some further insights that may indicate price areas that might be useful for a trader.

 

Thanks,

namstrader

[Soultrader 12]

Hey namstrader,

 

Try to keep the market profile charts to a gap chart. Overnight liquidity is low and volume is important for a profile chart.

 

I am pretty sure not everyone interprets overnight session like I do... but I have found my analysis surprisingly useful. I watch for any overnight support or resistance. My theory is that US market participants probably do not trade the overnight session. Who stays up to trade after mignight?

 

The overnight session is reserved for market participants in other countries. They have a chance to express their opinion on the markets. Also I doubt newbies trade during this hour... so these overnight market participants are aware of the market action for the day. This means they recognize key reference points.. perhaps even use a market profile chart to move prices. (note: this is just my theory. I could be 100% wrong)

 

Therefore, the overnight support or resistance points act as key pivots for the following trading day. If there was price rejection above value in the overnight session, this may indicate that price will likely meet resistance at this level or perhaps trade within or below value for the following day. I have seen this happen too many times that I have applied this theory into my methodology.

 

So this is the importance of an overnight session.

 

The gap chart is useful for the opening setup. Gaps tend to fill but its important to observe SSF volume and market internals carefully. I find the opening play to be the easiest and most profitable setup. I trade the opening at almost a 80% success rate. (Im not that good in the afternoons)

 

For me the opening is easy since price can only go two ways. Up or down. Not often do you see price just stall at the opening. The moves are quick so your entry must be quick and precise. This is why I spend most of my time doing my homework for the opening play. Also the opening price can sometimes provide the ideal entry point since it can act as the dead low or high for the day.

 

I used to use a gap chart more often but lately I tend to just use the 24 hour chart. (gap chart for MP) Just know where the gap fill is.... and you should do fine with a 24 hour chart.

[ant 10]

I absolutely love the way the market decides to test the opposite end of a range after encountering price rejection at the other end. Makes a lot of sense because the market's job is to facilitate trade, so when it couldn't find buyers/sellers at today's low, it decided to test the upper limit. Doesn't happen all the time but enough times to make it worth noting. Thanks for pointing it out James.

[Soultrader 12]

I absolutely love the way the market decides to test the opposite end of a range after encountering price rejection at the other end. Makes a lot of sense because the market's job is to facilitate trade, so when it couldn't find buyers/sellers at today's low, it decided to test the upper limit. Doesn't happen all the time but enough times to make it worth noting. Thanks for pointing it out James.

 

Yes I am amazed each day. Understanding this concept alone can offer a trader an income to live off.

 

I love trading futures

[namstrader 10]

Soultrader,

 

Thanks for your explanation of using the gap chart for MP. I am going to change my MP charts to the gap session and use the 24 hr. session with another chart not using MP, to be able to observe these prior areas of S/R. John Carter's book was very useful concerning the Gap trade, and with MP a even better understanding of value and price behavior seems possible now.

 

Traders Laboratory is the place to be now for me and other forums offer so much less for my education. I am a pivot and Market Profile trader with market internals now. Using indicators only, gave me no reference points or a road map as to other timeframe buyers and seller involvement and where and when, and especially seeing targets now.

 

I have always had tight stops and tight profits for the pennies and nickels based on fearful trading. When I can begin to trust, I will learn to hold for the gold because of understanding better where the professional levels are.

 

Keep up the great work James

 

namstrader

[Soultrader 12]

Thanks namstrader,

 

Every trader has his own set of methodology... I just try to show what has worked for me. Not all traders will feel comfortable with it and some may even reject it completely. I understand there are many different ways to trade but using market profile, S&R levels, and market internals is pure information based on price. This is why I like this metholodogy very much.

 

MP is not easy to learn at all... there are so many things I have yet to learn. You purchased Dalton's book? I go through it once a month and I never stop gaining new insights. By far my favorite book.

 

Im glad you are able to see a clearer picture of the markets now. Pretty astonishing isnt it? It seems like all of a sudden the market is talking to you and you can actually understand what she is saying.

 

Regards,

 

James Lee