[jonbig04]

Not at all, criticism is encouraged on all fronts. As far as I'm concerned enthusiasm is not strong enough a word. When I think of enthusiasm I think of people who ski on the weekends or play soft ball twice a week. I think something as challenging as learning to trade requires all of your attention, pretty much all the time. Thats what Im trying to do anyways.


That's interesting what you say about the Sim slowing me down. Why do you say this?

thanks

[jonbig04]

Oh and I didn't trade today. I got a root canal this morning and was out of the house all day

[Head2k]

Originally Posted by jonbig04 »

That's interesting what you say about the Sim slowing me down. Why do you say this?

I am joining jonbig with this question, because I trade on a sim, too. What should I do after I shut the sim down? Start for real or just watch? I mean for better market understanding.

[jonbig04]

I had planned on simming until I was consistently profitable. Then easing into real money one contract at time.

[Hlm]

I don't have time to go into a lot of detail but I would like to make a few comments...

This is where I think auction theory and understanding what the market is trying to do can come in very handy. I personally use Market Profile (TPO and Volume) but Db does a great job at drawing areas manually (and I hear he has a very good reasonably priced book ). If you don't already, I would like you to throw 1932, 1943, and 1955 up on your chart. This is the VAL, POC, and VAH created from the previous days price action. As you can see, price spent most of the day trying to find "interest" outside the value area. Around 11:30 ET it made an excellent attempt but still found no interest. There was nothing wrong with how you found you support area. However, that was the smaller time frame. Any longs I would have taken between the POC and the VAH would have resulted in partial profit at the VAH. You actually did a great job at collecting inventory for the test outside the value area. Remember, the market will usually rotate from the VAH to the VAL looking for interest to put it into a trend away from the value area in search of the new value area. I wasn't trading the NQ on that day but I believe that you were in the room (I might be mistaken) when I stated I was going short (1299.50) and was looking for a strong rotation to the downside. Of course on the ES we were trying to ENTER the value area (1299.75 1304.75 1310.75). Back to the NQ...on the rotation down (after failing to find interest outside) we only made it to 1935.75 even though the VAL was at 1932.00. However, if you throw up a volume by price histogram you can clearly see that the next highly active area down was around 1938.00. This is why having a histogram up along with your value areas is important. Of course if you draw your areas manually like Db this isn't a problem.

Okay, enough rambling for now. Hopefully there is some logic within that run on paragraph.

[OAC]

This is my advice to the newbies, please keep an open mind. Don't fall in love with Market Profile or VSA, although they are the most popular on this forum. Most of us trade the index futures market and this market has taken drastic changes in the past few years, and what used to work don't work any more. It is my opinion that a lot of these examples only look good in hindsight. I am going to stick my neck out and say this: you can't make money in this market being a Market Profile or VSA purist. The reason is that they may be effective trading tools but way too vague if just used by themselves. You need much more precision to survive in today's fast market that is dominated by computers.
And one thing that has not changed is the price action. It is still the undisputed king and discretionary trader's best friend.

[Hlm]

OAC, don't take any of the following comments as being rude (I type it with a smile). I am just trying to clarify....

Originally Posted by OAC »

Most of us trade the index futures market and this market has taken drastic changes in the past few years, and what used to work don't work any more.

It depends on how you trade. If you trade a system that has fractal significance then most likely the time frames have only shifted slightly over the years. From the back testing I have done, things haven't changed as much as some will have you believe.

Originally Posted by OAC »

It is my opinion that a lot of these examples only look good in hindsight.

I can't speak for VSA (I am not a fan of bar by bar volume), but Market Profile is no more hindsight than trading straight "PA". The levels are there...the bias created by value area formations are there...imo it's not as gray as some claim it to be. Anyone who has spent any time in the TL room with me knows I am anti hindsight and will hesitate at explaining things that happened in the past.

Originally Posted by OAC »

I am going to stick my neck out and say this: you can't make money in this market being a Market Profile or VSA purist. The reason is that they may be effective trading tools but way too vague if just used by themselves. You need much more precision to survive in today's fast market that is dominated by computers.

I would tend to agree with this statement for retail day traders. In my experience, the pure MP traders tend to have deeper pockets and trade a higher time frame. Both my discretionary and auto styles are hybrids of the Market Profile (both TPO and Volume) concepts. The daily MP areas are great for bias, potential high action areas, and targets. Entering at a good spot around those areas are best done with smaller time frame entry techniques. There are also detailed MP hybrids out there for the reading. Just take a look at jperl's threads on trading with market statistics.

Originally Posted by OAC »

And one thing that has not changed is the price action. It is still the undisputed king and discretionary trader's best friend.

This is what I don't understand about you pure PA guys. Do those that claim to use only pure PA (no MP, etc) look at a chart with ONLY vertical movement up and down (no horizontal importance)? I mean...if you think MP is bogus than you can't use candle formations on a time chart. You also can't use congestion areas or large quick runs to determine your trade. If you do, I don't see how that is any more pure than finding the VAH, POC, and VAL of a period of time be it daily, monthly, from high, from low, congestion area, etc. I guess I must be missing something. If one doesn't want to have a computer draw the lines for you (eg daily MP) then draw them manually like Db does. But in my opinion defining statistically significant value areas IS reading PA.

Maybe we are talking about two different kinds of MP.

[BlowFish]

Originally Posted by jonbig04 »

Not at all, criticism is encouraged on all fronts. As far as I'm concerned enthusiasm is not strong enough a word. When I think of enthusiasm I think of people who ski on the weekends or play soft ball twice a week. I think something as challenging as learning to trade requires all of your attention, pretty much all the time. Thats what Im trying to do anyways.


That's interesting what you say about the Sim slowing me down. Why do you say this?

thanks

What are you trying to achieve by simming? Thats the big question.

What exactly are you simming if you don't have an adequate plan? How can this help your consistency and discipline if you don't have something to judge your performance against? The fact you are asking 'why did this not work' rather than 'did I follow my plan' rings alarm bells. Performance is all about how well you stuck to your plan. If you are unsure whether it was a valid trade or not you need to re examine your plan. A simulator is a reasonable tool to see if you can trade your plan without deviation. If you haven't got the plan down cold how will you know if you are deviating?

A simulator is not a good tool to determine if a method works. In fact its a distinctly bad one. Looking at charts (both live and historical or with a replay) is likely to be much better proposition. There are two main reasons. Firstly you can judge the method without your judgements being clouded by actually 'trading'. By all means watch live charts to see if things 'work' but don't add the presure of the simulator.

Secondly you can get more work done by review of charts to see if things 'work'. You don't have to sit in the live market to wait for things to occur. This is the time for iterative refinement to your rules. That's not to say that once you start trading your plan (live or with the simulator) that you might not see some room for improvement.

You might be using the simulator to improve your 'market reading' skills, again sim is not really suited for that either. Do you think you are likely to read what is going on better with a position on or without a position? Again watch the live market or replays by all means but adding the 'fun' (your word) of the simulator is unlikely to help. Far better to scribble in a note book or talk yourself through the price action than trying to trade it.

There is no doubt that becoming proficient at trading can be a lot of work but the journey can be cut down by doing useful work with a purpose in mind. (I know, I have wasted probably 10's of thousands of hours in my time and you know what, I am still prone too)

So what are you trying to achieve by using the simulator? tbh I might be completely wrong (I often am) as I don't recall you having stated that yet.

The other thing to do would be outline your plan (a few sentences would do) then people will be better able to comment on where (if at all) you are going wrong.

Cheers!