Ideas for struggling traders

Steve46, This is great. Thank you for sharing your insight; Most helpful, a new way to look at the market for me. Already using daily and weekly pivots but I'll have another look at market profile.

Questions:

What market hours do you use to calculate M.P. for U.S. stock indexes? RTH? Or, do you use the nearly 24 hour Globex? If the latter then when does a new day start and end?

What do you find significant about M.P.? VAH (value area high) as a line of S/R, VAL (value area low) as a line of S/R. What, if any, significance do you give to the POC (point of control)? Do you look to take trades when price leaves the value area and then returns to it on the assumption that price will then test the other side of the value area?

Thank you for starting this thread and your thoughtful, patient manner.
Shel
 
Shel

Thanks for the kind words

For a beginner, I suggest using RTHs. For those on the East Coast that would be 9:30 am to 4:15 pm. I trade index futures so those are my hours. If you trade another market adjust accordingly.

Although I haven't mentioned it before I also keep MP charts of the Nikkei and DAX markets. This is probably a little much if you are a beginner. You can simply use the ES and do just fine.

I also look at the overnight obviously and that chart starts at 4:15 pm EST and goes "around" to 9:30am EST.

Market Profile gives you information that no other kind of chart can provide. I watch the profile type, looking to see whether it is a "b" or a "p". If you are familiar with this you will know that one type of profile indicates movement up from the bottom and the other, movement down from the top.

At some point if you find it interesting, you will want to have MP charts for weekly and monthly time basis as well

What I have found over time is that MP is a very powerful tool. If you know how to view it, it gives you a look into the psychology of institutional investors. Also it gives you a better handle on what the daily participant is doing. One example is "singles". These are easily seen on MP charts. I never fail to trade them and if they line up with another indicator (pivots for example) I put on extra units knowing the % of successful trades at that point is high.

"Value" is in my opinion the most important concept to learn from MP. Each day before the start of trading, I look at the area defined at Value Area Low to Value Area High. I look to see how big that area is and how far away the start of regular trade hours is from either end.

I also look at the "Initial Balance" and use it in my trading plan.

For regular candlestick charts I use 24 hour time periods. My EMAs are more accurate that way.

I hope this helps

Steve
 
Quote from steve46:

What I have found over time is that MP is a very powerful tool. If you know how to view it, it gives you a look into the psychology of institutional investors. Also it gives you a better handle on what the daily participant is doing. One example is "singles". These are easily seen on MP charts. I never fail to trade them and if they line up with another indicator (pivots for example) I put on extra units knowing the % of successful trades at that point is high.

Steve
More...

Steve,

Think I understand what 'singles' are; Basically an area where price has spent very little time. However, trading them is a new concept for me. Could you elaborate and possibly post an example?

Thanks so much,
Shel
 
Steve i don't mean to be a killjoy but there is a problem. You say people need to do the homework. If they are hopelessly taking tips and shallow instructions from you then they are not doing their homework. People have no idea how to plan a trade well when you tell them too. The only way someone could benefit from your words is if they take the idea extremely seriously. This means studying the market for months with zero trading and then developing an insight on how to plan certain trades among certain stocks. Your advice is like telling a fat kid to go run a mile everday for a week and then to go run a marathon.
 
I think we all face our limitations in our own way....

For me it is easy to motivate myself to go for whatever I want.

For you (or for anyone else for that matter) it may be more difficult to find that motivation....

I do what I can...and I do the best I can...that is all I can do.

If it is not enough...then perhaps you will have to point and click to another thread.

I hope everyone finds what they are looking for, if not here, then someplace else.

Steve
 
Here is the Globex so far this evening

You can see that Asia did little to affect the Globex market this evening

But when DAX (Germany) opened, they had quite an affect on the ES contract

First, the ES "drove" up to test the previous session's POC (point of control)....they failed to take it out and moved back down to test the previous session's Value Area Low.....Failed again to take that out.

From that point (overnight low of 1257.25) price made a sustained move up to test the previous session's Value Area High(and today's Daily Pivot)....

So

What we can see so far is continuation of the same chop from Friday....Participants looking for value...testing up and down.
 

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Here is the follow up on the previous post

using the 2401V chart we can see both the Asian open and the European open, then the lower highs that formed prior to the open of the US market

On the open of the US market, price tests the 200 period EMA and the previous session's POC and fails. The obvious short entry is the test with a 2 point stoploss.

As I have mentioned a couple of times, my preferred method is scale out at 2, 3, 5, 7 and 10 leaving at least one unit in case it runs on...
 

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Here is the same data using a 10,000V chart

Again you can see the lower highs as Asia and Europe react to the previous US session data, and their own market news.

The US open is a gift...Nice test of the 200 and POC (again) and the obvious entry.
 

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and finally for people who prefer standard 5 minute candles or bars.

Although we cannot see the Asian and European open in this chart we do see the nice test of the 200 and POC, the failure and the obvious (for me anyway) entry point.

If you took this one, you had 3 ticks heat on the open.

Escalating volume of 30.5k, 23.8k and 39.8k on each of the first three candles, told you that this one was likely to continue south

This was an easy gift of a day.
 

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I don't see anything else I can say except to encourage struggling traders to keep on with it.

This business offers several challenges, one is finding a way to see the markets that suits your temperment. The next is learning to control risk..and finally at least in my opinion, learning to control your emotional state as you trade.

If you can get over these three hurdles, chances are you will get to your goal...

I think the best thing I can do now is stop and let people give it their best shot....

Seeya

Steve
 
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