Inventory Grab Alert 4/30/09!
- Thread starter AMT4SWA
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How do you tell if an area of initiated buying/selling is only neutralizing a previous inventory, or actually creating a new inventory? Also, are you constantly keeping track of inventories at every level?
If you understand basic Auction Market Theory it does make a lot of sense.......a zone of statistically significant resting inventory that goes to neutral has a price reaction which repeats. It is not at all as complicated as you might think......the bottom line is, these zones of resting inventory do form some of the best support and resistance based trade entry opportunities that I have ever found (look how many times a trader was able to sell the 904.00 to 905.00 area the past day and a half).
Yes I watch and track all levels, and there are usually only about 3 to 4 major delta zones of support and resistance within each 100 points of ES range.
Yes I watch and track all levels, and there are usually only about 3 to 4 major delta zones of support and resistance within each 100 points of ES range.
what is an inventory? What is previous? What is new? What is resting?
Ok, one last question for the night... I promise!!!
It is quite easy to identify areas of initiated buying and selling, but these areas usually span a range of 5-10 points. Can you explain a little more about how you narrow down the zone to a more specific 3-4 point range? I appreciate the help!
I've attached a chart showing some of the recent areas of initiated buying/selling.
The zones are created by areas of divergence between price and the delta......there are statistical differences between a strong zone and a weak one.
Do you want to see a statistically significant zone? Look at your chart between price and delta as price traded above the 903's each time....see any reason why I was continuing to sell rotations up to that area (selling above 904 each time)?
Quote from AMT4SWA:
The zones are created by areas of divergence between price and the delta......there are statistical differences between a strong zone and a weak one.
Do you want to see a statistically significant zone? Look at your chart between price and delta as price traded above the 903's each time....see any reason why I was continuing to sell rotations up to that area (selling above 904 each time)?
Hi again AMT. I think you have made enough RT calls to establish your credibility, and I'm not challenging that at all.
Now, at the risk of being perceived as persistent (like the turd that won't flush!), would it be mostly true if I say that, without your exquisite extremely short-term entry tactical tools (which understandably you have not discussed much), the CD delta zones (or whatever other zones Support or Resistance, or whatever) would be basically devoid of edge?.
i.e.: If one enters with exquisite timing at the turns (long or short), really the "CD zones, etc stuff" is only used to try to guess and grab an extended position trade for large profit targets?. In other words, if you can tactically enter shorts a few tics from a high or enter longs a few tics from a low (like you have done), and take partial profits almost inmediately...really where is your edge more?. In your tactical entries (my opinion )or in whatever you are discussing with the CD/Delta/inventory (in which I have fruitlessly delved for enough weeks/months), support resistance, or whatever else?.
Another thing that makes me conclude the above is that in a 240 point rally, you have made precious few posts of long trades, but still managed to make money...in your short trades...due PRECISELY to your exquisite short-term timing tools.
Thanks again for your input. Maybe I'm just frustrated for not finding any CONSISTENT edge whatsoever in the CD/delta zones.
JW
I agree with f9. No mater how you dice it and slice it, it comes down to S/R and PA around it.
You will be surprised that no matter what method you use the S/R lines are mostly the same. Usually the whole world is looking at the same line in the sand. How you trade around it is what matters.
You will be surprised that no matter what method you use the S/R lines are mostly the same. Usually the whole world is looking at the same line in the sand. How you trade around it is what matters.
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