you can use 3 points in market profile , i believe you mentioned it so assuming you are familiar with it, i use 3 areas and discard the rest of the science ,and just watch how it reacts at each,again having a framework,that changes in each timeframe as it reduces and becomes magnified,the nip is the value area or point of control,the widest spot where the most trades took place,,it always returns to the nip,just have to follow the moves and get in and out of the way until it goes
Making of a method
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the other 2 terms are ledge and cleave , at the top of this chart you can see where it has made the same top several times that repeated top forms a ledge ,works the same way at a repeated low, and last a cleave,have no idea why these work so well, but if we have broken a nip on the way down, then the ledge,we usually head to that cleave,(same on the way up)i believe its the same as a gap but in reality its not,its just a spot where very little action took place,and over time it will eventually get filled in and disappear as the market moves up and down filling in those spotty bell curves on the first mp chart above
Actually it returns to the POC only if ranging. If trending, the value area is continually changing, which is why it's trending. If the value area weren't changing, it wouldn't be trending.
The trend channel is a diagonal trading range, from the upper limit to the lower limit, the limits being defined as a certain distance from the mean of the channel, what in a trading range would be the POC. It is important to understand that the mean is diagonal as well rather than lateral. To view all of this as a series of ranges may prevent the trader from riding the extension if he's waiting for price to return to a value area that no longer exists.
i agree and in theory it should apply but in reality they work like a charm,most major tops and bottoms don't actually stop on a dime,not being flippant,they are just areas where the large players positions and their reactions are exposed,one of the few times during the fact instead of after you can watch them,gives a lot of informationQuote from dbphoenix:
Trend channels can be misleading when drawn on a log chart:
again i agree,but i think it can also be looked at as building blocks and gives a great binocular view of the landscape below on the retrace,they work out a bell curve,extend work out another bell curve,extend usually 3,sometimes as many as 4 and retrace,there are many smaller bell curves formed inside those
originally i was only pointing out that he need to start with the big pic and move to the small and replace his bias with structure,he also mentioned mp,sorry if i got a little carried away,after awhile it's a very simple way to look at the market with only a few markers,you can expand this footprint to correlating markets for tips on direction,confirmation of and so on, but you're right it's games journal,carry on game
Ammo thanks for sharing some parts of your process. Seeing how others go about this helps me with perspective.
Your suggestion to keep the big picture in mind is well taken. Regarding bias - I should clarify that I am using the word in a positive sense. I initially viewed the word to hold only negative connotations. Earlier on in this journal it was suggested that bias is not always a bad thing. If price does not confirm, then the bias needs to be changed.
Since then, but especially lately, I have been trying to be intentional about forming a bias - as a first filer of sorts. Working on building faith in my ability to translate evolving context into a directional stance that is correct more often than not. But how do I differentiate between the intensity of the biases? Giving point values to these biases is something I am looking at. But how do I turn S/R or trend or re-tests into points? This is something that I am working towards.