Market scan & market profile

Discussion in 'Technical Analysis' started by Gordon G., Feb 8, 2004.

  1. Hello,

    I would like to trade Nasdaq100 stocks with market profile charting.

    Do you have any suggestion about some filters I could use when the market is closed to have a little number of stocks to monitor?

    Thanks in advance for your comments!
  2. How do you want to use this list? What purpose would it serve? I"m not sure if I understand your question. Market profile is a theory to assist in understanding the market, it really isn't a system.
  3. Hi Bundlemaker,

    I understand market profile is not a system di per se, but a useful tool to support trading decisions.

    I wuold be pleased to hear some idea as: "I use volatility and volume filter to understand when the trend is likely to be over and therefor beginning to trade in a responsive way".

    Monitoring 100 stocks is impossible, so in a pre-market phase I would like to understand which stocks are supposed to fit a few conditions.


  4. Market profile is a wholistic theoretical basis to support trading decisions. It is impossible to make use of individual rules out of context of the whole picture. For instance increasing volatility means one thing in one market condition, quite another in a differenent market condition. Also, even in the same type of market condition, subtle differeneces in related factors will shift the priority of the various reference points that mp provides.

    The best analogy I've seen is that of being a detective. Every case is different. The clues and evidence in one case (yesterdays market) are not the same as the next case (tomorrows market). It is as much art as science and intuition (which is not guessing) plays an important role. Market profile cannot be simply learned and then applied. A great deal of observational experience is an integral part of successful application of the theory.

    Using individual mp concepts out of context will produce random results in the end.
  5. a idea. Could he use the consensus of the MP's value area for each of those 100 stocks from the previous trading day to trade the opening futures price in the indicated direction?

    Michael B.

  6. Perhaps, but that's doing it the real hard way. A more direct path to the same understanding is to just trade the value area of the index. But, not in a vacuum. I have discovered that the reason so many people have said for so long that mp doesn't work is they think you can take reference points like a previous value area and trade off them with no consideration of the myriad other factors that go into overall market condition and expected action.
  7. I was thinking that stocks lead futures and the trickle-down approach might be valid here....

    Michael B.

  8. That's sort of a chicken and egg situation. Do stocks lead the index, or does the index (futures) lead the stocks? I've heard fabulously convincing arguments for both sides. I prefer a method that does not depend on figuring out who is right or when they become wrong. I avoid any sort of predictive analysis like the plague.
  9. Bundle you put the arbs and spreaders to shame....

    Michael B.

  10. You may be right!!!

    Michael B.

    Don Bright (Feb 4, 2004 4:55:49 PM)
    Equities follow the futures because the brokerages and the insitutions trade with VWAP, and large share size that is hedged by futures....and......

    Don Bright (Feb 4, 2004 4:56:13 PM)
    the floor traders (and upstairs emini arb guys) will buy equities to hedge when the futures run away on them

    #10     Feb 8, 2004