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

Discussion in 'Technical Analysis' started by bthomas, May 17, 2008.

  1. bthomas

    bthomas

    The pink or blue square is the equivalent of seeing brokers put their hands down at their sides. It tells you that interest in buying or selling has dried up at this level and it means the market will do one of two things: It will pause and continue moving in it’s current direction after a rest or after pausing, retrace its recent move by trading in the opposite direction. This helps you avoid those situations where you could get steamrolled.
     
    #11     May 17, 2008
  2. bthomas

    bthomas

    Conclusion
    Three rules. Two patterns. One indicator. All based on the Market Profile and keenly focused on volume movement in conjunction with the long-term distribution. The 3-2-1 approach eliminates much of the noise and most of the variables currently used in your approach to trading. You can make better trading decisions, and more quickly too. With the right tools and information, you can trash most of your trading checklist and focus on the two or three important factors that actually drive the markets. This can only improve your decision-making and your trading performance.
     
    #12     May 17, 2008
  3. bthomas

    bthomas

    Full Disclosure
    This thread will be updated primarily by Doug Zalesky and Charles Cochran. Doug is a Managing Partner of Tradmaven Group LLC and has been a trader in the CBOT bond pit for 25 years. Charles is a partner in the Trademaven Inside Edge, the educational arm of Trademaven Group LLC and has been in the securities and futures industry for nearly 30 years. He has been a broker, analyst, CTA, Independent IB, publisher and developer of software programs. Since 1997 he has taught Market Profile classes at the CME, CBOT, and NYMEX exchanges.

    Actual charts and results will be posted as they were called in the TIE Traders Room Verification will be simple. A week trial membership will be available to the room for those who request it. Just match the calls to what was posted in the room.

    The reason we’re doing this is simple. We believe we can “do well by doing good.” As has been extensively reported, most futures traders fail. We believe the reason for this is that most traders don’t know how to trade like the pros. So we’re bringing in the pros to help.

    The 3-2-1 methodology is pretty straight forward, but it does take time and dedication to master as you might suspect. But for those who are willing to do their homework, the prize is freedom, and the lifestyle that goes along with it.
     
    #13     May 17, 2008
  4. I know of 2 traders that use MP, and both are profitable.
    I'm reading as much as I can and I've saved your website.
    Thanks for posting this thread.
    Ian
     
    #14     May 18, 2008
  5. ZAL

    ZAL


    A hedged or commercial market is one that contains a high percentage of participants who are hedgers or actual producers & users of a commodity or financial instrument.

    A farmer or a grain elevator operator is an example of a producer. A baker or pasta maker is an example of a user. Producers and users must hedge their exposure of a cash commodity (like Wheat) in the futures market.

    Physical commodities and financial intruments (like US Treasury Bonds) have a high component of hedgers and users. Unlike the S&P index which has a high component of pure speculators.

    A market that contains a 50% hedging component and a 50% speculative component is a better market for a trader to participate in.
     
    #15     May 19, 2008
  6. bthomas

    bthomas

    Bond Trading Levels for 5/19/08

    Rule 1 says low volume areas are support and resistance and should be traded as such. Note how the market stopped within 2 ticks of the low volume area at 116.27.

    Rule 2 says high volume areas are support and resistance the first time touched. As the market came off 116.29 it was attracted to 116.10, the high volume area.

    Charles Cochran's analysis was posted after Friday's market close for Monday's trading.

    [​IMG]
     
    #16     May 19, 2008
  7. StkWiz

    StkWiz

    I am looking at the charts and am wondering if their is any particular reason as to why the bar on the charts are different thickness and what does the color coding inside the bar means, also what does the histogram at the bottom of chart represents.

    Thanks
     
    #17     May 19, 2008
  8. bthomas

    bthomas

    The width of the bar represents the volume traded on that bar relative to all the other bars on the screen.

    The color coding parallels the market profile distribution. Yellow is the value area (68% of the traded volume), the green line is the volume weighted mean, the magenta line is the mode (the greatest volume traded on that bar), blue is the unfair high, and red is the unfair low.

    The volume histogram at the bottom of the chart is the cumulative volume traded throughout the day.
     
    #18     May 19, 2008
  9. StkWiz

    StkWiz

    Thanks for the reply bt

    Is this a prop charting software? I like the layout on the charts. Is it possible to get the charting software?

    The histogram at the bottom you said was cumulative volume for the day, how can it go under 0?

    Thanks again for the reply
     
    #19     May 19, 2008
  10. lol
     
    #20     May 19, 2008