Inventory Grab Alert 4/30/09!

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Quote from chuckt101:



Watching price real time, unless you are a scalper, has no benefit
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First the context is important. I agree with you.

But. I think we all scalp. The win% risk/reward ratios of a scalper are not much different than the guy who trades over few days or weeks.

We all face the same problem. Sell higher then you bought and the reverse. Trading is trading.

Now value investing is different.
 
Here is a thought for lunchtime.

"What is it about price that makes people try to circumvent their way around it"

A surgeon or F1 driver has no choice other than to watch the action in front of them, anticipate the outcome and act accordingly until the operation or the race is finished.

Obviously you could say that if they are incapable of this, then they shouldn't be a Surgeon or F1 Driver.

The big difference being, that a Surgeon or F1 Driver must qualify step by step by step.

A Trader is thrust into the hot seat by his/her own, needs and/or greed and either survives or not.

This "sudden death" scenario produces another group of people and that is those people who understand very well the mechanics of trading but do not possess the nerve to carry through with it in the real market ... I say "real market" to distinguish the money market from the market these people carry around in their head.
These people have trouble following price because it's sense of reality is more than they can cope with.

And this is where indicators and any other info comes into play.
It allows people to view price obliquely thus reducing the anxiety level and socialising risk in the mind of the Trader.

Sounds weird to you .... well we live in a weird world.

regards
f9
 
If you ever get a FULL understanding of Auction Market Theory, you will then learn quite frequently price is NOT always telling the truth of the current environment. Also, price ALONE does not always show the full potential REACTIVITY of levels traded. Many times price alone will not point out the most optimal areas to take trades from. I want to enter trades from optimal areas of price reactivity with the best potential for follow through.

When I go on a lot to buy a car I don't give a damn what price they are asking......what I want to know is how much inventory is stacking up out on the back lot. I want to see the potential of price to deviate from the current displayed level, and the potential reactivity in price as it moves away from what is currently displayed.

Within the process of Auction Market Theory, I want to quantify supply and demand.......where is SUPPLY and what is the DEMAND when the market trades to those levels of supply.
 
Quote from AMT4SWA:

If you ever get a FULL understanding of Auction Market Theory, you will then learn quite frequently price is NOT always telling the truth of the current environment. Also, price ALONE does not always show the full potential REACTIVITY of levels traded. Many times price alone will not point out the most optimal areas to take trades from. I want to enter trades from optimal areas of price reactivity with the best potential for follow through.

When I go on a lot to buy a car I don't give a damn what price they are asking......what I want to know is how much inventory is stacking up out on the back lot. I want to see the potential of price to deviate from the current displayed level, and the potential reactivity in price as it moves away from what is currently displayed.
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Beautiful analogy...
 
Quote from ivanbaj:

<img src="http://www.elitetrader.com/vb/attachment.php?s=&postid=2422057">
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"DAMNIT.....why did price just shoot 5 points against me!!!"

"I wished I would have known about all that resting inventory there.....SON OF A #@&*$ !!!!!!!!!" :eek:


:D :p LMAO!!! :p :D
 
Quote from AMT4SWA:

If you ever get a FULL understanding of Auction Market Theory, you will then learn quite frequently price is NOT always telling the truth of the current environment. Also, price ALONE does not always show the full potential REACTIVITY of levels traded. Many times price alone will not point out the most optimal areas to take trades from. I want to enter trades from optimal areas of price reactivity with the best potential for follow through.

When I go on a lot to buy a car I don't give a damn what price they are asking......what I want to know is how much inventory is stacking up out on the back lot. I want to see the potential of price to deviate from the current displayed level, and the potential reactivity in price as it moves away from what is currently displayed.

Within the process of Auction Market Theory, I want to quantify supply and demand.......where is SUPPLY and what is the DEMAND when the market trades to those levels of supply.
More...

Excellent post AMT!!!

If there is a pocket of resting inventory, how is it that in the AH session, price can rocket right through that zone with a fraction of the volume? I thought that held inventory would have to be eaten up before price could continue beyond the zone...
 
I do not disagreeing with you as long as this is used for a context information. I use tons of MP and what you are talking about in your last post is 100% in agreement with the MP theory.

I have also found that when it comes to actual trade executions, value price is very dangerous. Many times the market has lost its mind and traded further and further from my price models. Leaving me holding the bag.

My current thinking is this. You can build some models to keep you oriented but when you start trading have only price chart with no indicators. And follow the price action around your zones.

I am questioning that one should make entry and exit decisions based on CD or delta or what ever you call it.

I also think that your zones will be the same S/R lines that will be found by the old methods of charting.

It will be comforting to know that there is a new method of trading. A method that reduces the risk and gives you comfort. The comfort goes a way as soon as you enter the trade. At that moment it is you alone and the price. If you can't read the price I am not sure how you will decide to stay in or get out and when.



Quote from AMT4SWA:

If you ever get a FULL understanding of Auction Market Theory, you will then learn quite frequently price is NOT always telling the truth of the current environment. Also, price ALONE does not always show the full potential REACTIVITY of levels traded. Many times price alone will not point out the most optimal areas to take trades from. I want to enter trades from optimal areas of price reactivity with the best potential for follow through.

When I go on a lot to buy a car I don't give a damn what price they are asking......what I want to know is how much inventory is stacking up out on the back lot. I want to see the potential of price to deviate from the current displayed level, and the potential reactivity in price as it moves away from what is currently displayed.

Within the process of Auction Market Theory, I want to quantify supply and demand.......where is SUPPLY and what is the DEMAND when the market trades to those levels of supply.
More...
 
Quote from SoCalTrader619:

Excellent post AMT!!!

If there is a pocket of resting inventory, how is it that in the AH session, price can rocket right through that zone with a fraction of the volume? I thought that held inventory would have to be eaten up before price could continue beyond the zone...
More...
The AH session is just a low volume environment, and many times inventory will remain to be held even though price is against the cost basis of that held inventory. That is when you will often see price AFTER the open driven back to the area the inventory was intiated......the held inventory will then get neutralized at or near breakeven. This creates at times what you see as a gap fill scenario after the open.......commercials cleaning up underwater held inventory.
 
What is your uncle point. I bet that you will stay in no mater what the price is doing as you do not believe the price.

When I used mostly MP information my stops where huge. It takes a while for the new value to build and prove you wrong. A price spike does not make you wrong. It takes tons of cash from your account but you are not wrong yet. Or are you? What makes you wrong?
 
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