Quote from mfbreakout:01-23-2012
I use market Profile in very broad terms. CL moves from middle of one bell curve to the next. It requires lot of effort to move price form one POC to next. Chart attached.
On your attached chart, you comment "bit excat science. Sometimes level works, sometimes they do not." What work have you done to quantify the times when MP/POC does work? If you haven't done this work, or you have done and not found it sufficiently accurate, then why use an MP in your trading? Surely the objective is to do what we can to increase our probabilities - in which case "works some of the time" isn't good enough.
Quote from mfbreakout:
01-23-2012 end of day
This chart, you write "tried short 99.80..." - was it the volume "spike" here which was an indicator to you to go short? What is the tfpXRay indicator on your charts - it seems to be some calculation on the volume?
Assuming you entered on that bar (the spike), did you expect the market to sell immediately? In other words, when it held up for almost 15 minutes before making a new high, did you see this as a sign your trade wasn't working? I think this trade could have been exited for a wash shortly after 13.00 on your charts...do you consider time as a parameter for a stop or do you always wait for your price?
Quote from mfbreakout:
01-24-2012 end of day
Interesting point about stops. You say "we never know". I appreciate that we cannot have certainty in the market, however shouldn't the aim be as near as possible. In the near term, we can construct a very high degree of accuracy. You correctly note that the size of the stop has nothing to do with the probability of being stopped out if wrong. So why risk more? Well risking more is due to not understanding enough to enter with a tight stop, so good that you are aiming for this. However, when you say "the move needs to have potential 60 ticks or more" then how do you know how far? You say you cannot "know" for sure if your entry price will hold - how do you "know" how far it will move the other way?
Jan 25 - you start to refer to DXY and "risk on". You know "risk on/off" has been quoted so often in the popular media over the last four years that there are now new ETFs for punters to have a go betting on ONN and OFF. It was noted on DailySpeculations that both ETFs seem to be heading down, despite being supposedly inversely correlated. Just goes to show...but the point here is why are you using other instruments for your CL trades? Does your trading model account for this? Have you correctly tested all the parameters (formal correlation studies, accounting for correlation vs causation, etc).
Jan 26 - you say 100 becomes target because 100.40 broke. Is this a generalism that price once in motion tends to continue in that direction? Are there exceptions to this? Could 100 have been a target prior to the 100.40 "support" area breaking (or even before that 100.40 level formed?)
What caused that 100.40 level and what is its significance?
Your three points are interesting:
1) WHAT PRICE LEVELS ARE MOST IMPORTANT TO BIG MONEY?
Who is big money and how do we know which levels are important to them? Then how does that information help our trading decisions?
2) WHERE ARE THE STOPS OF WEAK HOLDERS?
Who are the weak holders, and where do they place stops? How does that information help our trading decisions?
3) BEWARE OF THIRD FORCE ENTERING THE MARKET.
What does this mean?
Time to get discretionary!
