*claps for bolter* I add to the applause of "great thread bolter". Our firm has been using MP for a while now on Equities with moderate success. You've enlightened me to it's usefullness on futures. Thanks a bunch!
Hey thanks guys, your appreciation makes it all worthwhile, and congratulations to xxxskier on another profitable day. Well obviously it was a pretty good call again today. Buying the pullback to the POC and then patiently waiting for the UVA was exactly the right play. The market even offered a chance to add to your entry, and the agressive traders among us should have taken it. But this wasn't the big bounce trend day that I suspected we might get. Two important observations from todays action: 1) retesting yesterdays low at the open and then again at 11:00 didn't bring in any big selling which means that this is an important low. I don't expect we'll see these levels again for a while. 2) where I was wrong in my call for today was over-estimating the buying enthusiasm that this low would invoke. Yesterday I under-estimated the bears and today the bulls. There's clearly a lack of real interest in this market at the moment, and we need to trade accordingly. Here's my chart for today: Hopefully you guys are getting a feel for how I trade by now, and the fact that it works. Study your MP theory and understand the auction market process, then build and refine your trading techniques. Keep it simple. Eschew wacky ideas, complex charts and magical indicators. Ignore all the noise. Forget the news, economic numbers huh who cares? (although you must know when important ones are due for realease). Chatrooms and websites who needs 'em? Don't have opinions or take views. You want to be an empty vessel with a pristine mind totally focued on the market action in front of you. Trade what you see NOT what you think. The more committed among you might want to shave your heads, don a brown robe and assume a zen like position. Ummmmm, Ummmmm ..... I'm not saying this is the only way to trade successfully, and my style might not suit everyone, but if you're a newbie or struggling to find a method that works then it might offer some hope. Late for you.
Incidentally, one instructional point today. If you were watching yesterdays action and looking at this thinking what the hell is the market doing? <a href="http://tinypic.com"><img src="http://i1.tinypic.com/nf19uh.png" border="0" alt="Image hosting by TinyPic"></a>[/quote] Then you gotta do your home work. The MP literates knew eaxctly what the market was doing - it was bracketing or rotating. This is what I was looking at, at the time: [img]<a href="http://tinypic.com"><img src="http://i1.tinypic.com/nf1aur.png" border="0" alt="Image hosting by TinyPic"></a> A nice VA forming as a normal distribution around the mean of about 1260 - right at a vacuum (pink highlight) and with a low at local support (blue highlight). Ignore the volume figures they are for the full day. Not too difficult right?
Hi Bolter, Enjoying your journal immensely! Very impressed with the quality of this thread. When you have time, could you check my understanding of the strategy described thus far? Given UVA, POC, and LVA... - If the market opens below LVA, the play would be to short at LVA and place a stop above UVA. - If the market continues to move towards POC, another short can be taken at POC and again the stop is placed above UVA. - If the market trades above UVA, the trades would be stopped out and one would look to go long by buying support at UVA. In essence, reversing the logic as stated above. - However, if the market behaves as expected, and reverses at LVA, how do you determine the next support level? Do you continue to look back at MP for previous days? - Can you clarify when do you use VP? So far all of your trades were based on MP of the previous day, I think. - Can you describe how you would determine support/resistance from MP for longer-term trades, say a week to month, for example? Thanks in advance.
HispaTrader, Most of this is not strictly correct. Let me try giving you a broad outline and see if the helps. I'm looking at where the market opens in relation to the POC in order to set my INITIAL bias. Above then posetive bias, below then negative bias, around then neutral. With a posetive bias I'm looking to buy pullbacks and sell resistance. A negative bias is the opposite, sell rallies and cover at support. My bias can occasionally change during the day depending upon the market action, but NOT more then once. If I have to change it more than once clearly I'm out of sync and I'll stand aside. Gotta study the tape carefully also. Obviously the POC, UVA and LVA are excellent S/R levels. In addition I'll also use levels from yesterday, especially if they worked well. So I do like at previous days MP's. But I'm also very focused on the S/R levels and vaccuums from the longer term VP chart. I'll ususally place stops outside S/R levels, or I'll use HOD, LOD if this is more logical. I often give the trades plenty of room initially with the stop and then work it according to how the action is playing out. There is a whole bunch of standard MP stuff about "value" that I could throw in here but I won't. Review the material. I'm usually looking to scale in and out whenever possible. I like to lean on the trade to get the most out of it. I have strict risk management rules that govern position sizing etc, and I'm always focusing on risk:reward ratios. If necessary I will pass up a trade. Not my bag I'm afraid. Hope this provides a little illumination.
i don't trade longer-term, but one method you can use to look for longer-term S/R levels is to combine multiple days. i know some people who use a fixed time (i.e. 5-, 10-, 20-days, etc.). others use a variable period and base it on visual breaks in value (i.e. they will merge days as long as trading is within and fills a normal distribution curve). either way, you will get upper and lower value areas, as well as a POC for that time frame. then the same concepts apply as they would to a daily profile. fwiw, in his book, steidelmayer wrote about using multiple sessions to establish IB's for longer term perspectives. i think Dalton also writes about longer term use of MP in his book. hth take care omni
Good evening bolter. Can you share with us how you utilize the various indicators you have tabbed in E-Signal. Also, would you still consider the 10895 peak a major resistance point? Thanks. Paper
Hey thanks for helping out omni. ES UVA=1264.50 POC=1260.50 LVA1258.25 YM UVA=10835 POC=10825 LVA=10785 ER2 UVA=721.40 POC=717.20 LVA=716.40 Let's see if we can figure out what the markets might serve up today. Again the levels look the clearest to me at the moment on the ES. If you check my notes from yesterday I suggested 1268.25 was the first major overhead resistance. Well that's exactly where we closed. Have a look at this and you'll see why this is so. We're printing 1270.75 on Globex at the moment. Obviously well above the POC so we'll adopt a posetive bias from the get go. Look to buy pullbacks and take profits at resistence. We've got no business being anywhere near yesterdays VA (this would definiely cause me to shift bias). The range extension we saw late in the day yesterday was initiative buying from longer term particpants. This tells us that fair value is moving higher and the market will be in a state of inbalance until we start getting some consensus as to where the new VA might be. It may be the 1266.75 to 1269.75 area (VA for Feb 3 and 6) that constituted yeaterdays closing range, but we're already above that range so perhaps perceived value has moved higher overnight. The ideal play here would ordinarily be to short weakness at the open in anticipation of a gap fill, right at major support level of 1268.25. But I'm not sure if we'll get the chance. I use a tight stop on gap plays usually - if you're wrong you're wrong - so get out. Newbies need to sit on their hands at the open and wait until the dust settles. 10-15 minutes will usually do it. Certainly once we've had confirmation of some buying interest at or above the opening price I'll be buying any pullbacks toward support. In terms of what's overhead 1273.75 will be minor resistance, and the big vaccuum at 1277 I mentioned yesterday. 1283.50 remains an area of large supply. Remember we have't seen much interest in this market the last few days so don't expect miracles. Set you targets and book your profits. One last point, remember support becomes resistance if you're below it.
PT, On the YM 10885 to about 10940 is a longer term value area, with 10895 as the volume peak. Once you're in that area the market should facilitate trade quite well. If you're trading up to the level you mentioned from well below it would be resistance. However since we look to be opening in this area I wouldn't expect too much resistance. If the market is acting well the trade should flow higher. I will cover my indicators some day soon. All the best.
Bolter, How is it that the ES mp numbers (UVA, POC, LVA) you gave are all below yesterdays close. How can that be? Thanks, Ryan