The 3-2-1 Approach: A Simplified Method for Trading Any Market

With all due respect to the creators of this software.

I have found no significant difference between market profile s / r level trading vs swing points on a daily chart as s/r trading, and your low volume areas are no different then open gap trading.

So why does anyone need your software?



:)
 
I'd like to know how a person really defines these longer term high and low volume areas? You can have a 5 day distribution that shows high volume but on a longer time frame it may look like low volume....so how specifically does one decide.....I've never seen that question actually be answered without some kind of general statement or some form of subjectivity ( like most trading ideas) but perhaps you can define it...

Thanks
 
Volume Levels

The levels we use are as follows:

F1 Chart (monthly MP distribution) - 360 days of volume data
F2 Chart (Daily MP distribution) - 180 days of volume data
F3/F4 Charts (5 min bars) - 30 days of volume data

Five days of data will work just as well for the F3/F4. There are slight differences between 30 days and 5 days worth of data, but not significant.
 
Quote from bthomas:

Supply/Demand vs Volume

In response to Hombre's post, I would answer whichever side of the market that volume is entering forces the market in that direction. If there is more sell volume than buy volume, the market goes lower. If there is more buy volume than sell volume, the market goes higher.

So what's a trader to do? Watch the directioon of the mode (the magenta line in the profile that denotes where the most volume has traded). If the mode is moving lower there is more selling. If the mode is moving higher, there is more buying.

You don't have to know the reason why, you just need to see the movement. As a trader, that is my key concern.
More...

Thanks for clarifying . I always look at DOM but never saw sell volume and buy volume delivered separately as an independent indicator.
 
Support/Resistance Levels

Joab, I too have found that by close examination of a 15 minute chart, or a 300t chart, that I can get support and resistance levels in the bond and the ES. They are pretty close and certainly workable for a swing trader.

But for the short term swing trader or the scalper, support and resistance change throughout the day. We are strong advocates of following the volume. We superimpose the traded volume on both the F1 and F2 charts and do continual splits looking for moves out of the middle. This "look" gives us better information about what is happening real time in the market.

It is also very helpful to see a "mode flip" when you suspect that you are seeing a volume exhaustion bar forming. A mode flip is where the mode moves from one side of the mean to the other. Another indicator of a possible reversal is decelaration, our key indicator, after a key level has been hit, or at any point in between.

To summarize, if you hold positions for longer periods of time, you may be able to do well with your subjectively identified S/R levels. We think our software gives you the best real time data for making your trading decisions. To decide for yourself, I'd suggest taking the free trial so you can do an accurate comparison.
 
Software Capabilities

Here are some ES trades off a 15 minute chart from today, 5/22/08, that highlight some of the software's capabilities.

ES5-22.jpg
 
Quote from ZAL:

[...]

The US Treasury futures complex is approximately 1:1. In other words, the same numbers of hedgers and speculators.
More...

How do you access to the CTI for the US Treasury market after the CME-CBOT merger and CME dismissed the publication on January (if I remember correctly)?
 
Quote from Bernard111:

How do you access to the CTI for the US Treasury market after the CME-CBOT merger and CME dismissed the publication on January (if I remember correctly)?
More...

I don't have a reliable answer for you. The ratios I stated earlier are pretty much accepted from past CTI observations. I can't imagine that the ratios have changed much in the last 5 or 6 months.
 
Quote from bthomas:

Hypotheticals

I don't have a rational answer to your disaster sconario hypotheticals. What I can say is that good traders never stop learning.

I personally know one trader in the TIE room that took 53 handles out of the S&P on a day when the range was 3 handles. Why would he remain in the room. One of out newer guys is trading 10 lots already and averaging over 10 32nds a day. Charles Cochran, after putting in a 10 hour day on Tuesday, attended a trader group meeting to share and improve his skills.

My perception is that you're being critical without knowledge of Charles Cochran, the TIE traders room, or the software. I'm more than willing to talk trading and share what I know, but this discussion is a bit far out for me.

You are, of course, free to post anything you like, but I will be confining my responses to trading issues.
More...
bthomas,

Welcome to the world of Reaver, the ET destroyer and resident thread saboteur. Your observations of him are right on, so simply put him on igmore and he'll have no one to chat with but himself. Eventually, he'll go away, but if you engage him be prepared for a lifelong prison sentence with him as the nasty wardon.
 
Quote from ZAL:

I don't have a reliable answer for you. The ratios I stated earlier are pretty much accepted from past CTI observations. I can't imagine that the ratios have changed much in the last 5 or 6 months.
More...
dont't know whether less spreaders on 10Y vs. 30Y due to the cut on tick size on tbond could have changed that ratio.
 
You must log in or register to reply here.
Back
Top