Without giving away the farm, I'll go through a simple analysis on the emdz5 contract for Thursday and Friday. The attached is a profile of the strong trend on Thursday. The two value areas are at ~742.60 buy side and ~745.20 sell side. Notice Friday's collapse (chart in next post) from the sell side value area and eventual range completion into Thursdays buy side value at ~742. The first 1/2 hour shows a sell side range completion and the rest of the day stays in value. I suggest to everyone here that they read CME market profile. It is very useful tool IMO and much of my analysis is based on the theories presented in that text. I can provide a link if you wish. Mike
Mike, i didnt get get what you tried to show on the PDF file you presented thanks for the chart though. Sure, I'd love to have that link... another question: what time frame do you find works best for you? is it 30 minutes for the Opening Range or do you find some other time frames where risk is less but the chance that it'll be the low/high of the day is high... thanks in advance
Here is the link to CBOT's market profile handbook: http://www.cbot.com/cbot/docs/handbook.pdf Its a big file - might take some time to load... Attached below, you will find a short description of what I'm doing in the first PDF I attached. I've tweaked some stuff in my price/time range accounting so its custom to the way I like it. I essentially assign letters to the range in every 1/2 hour time frame - this is purely a personal choice, you can use any time frame you like. Note that I trade 3 and 13 minute charts, not 30 minute charts. The 30 minute seems to work well for daily forecasting but is too slow for my style of trading.
I can explain this In the above example with Emini chart you used 30 min time frame to get a bias for the day, that means that if the low of that 30 min would be penetrated you'd get a neutral bias or would switch to bearish one... The question is have you seen some shorter time frames where the Opening Range is actually the low/high for the day? I am using all different ones, for Lean Hogs for instance it is 5 min, that means that i have lower risk than if that would be a 30 min bar(that comes usually with wider range). Please see the chart attached
contribution: I've read most about the market profile stuff Mike805 posted. While it has its merits in the idea, basically ORB methologies with volume, which I also use as well but in a different way. but what I found funny is, Market profile is a product from CBOT. CBOT likes to make traders think they are being informed but they do not say they'll be headfaked and commissioned out eventually Has anybody ever found it funny that CBOT provides trading strategies on their site? I always thought that was odd, until I started 'getting it', and Most of the crap they post up are so BELIEVABLE IN PROFIT but in reality not even viable for long term profitability. Basically ORB methods do not work successfully consistently unless used in conjuction with other very important ideas/strategies nobody will explain to you other then yourself. Well I guess Market profile is good enough for the basic foundations, but surely useless unless combined with other very important ideas not mentioned. Sort of like the engine, but if you want it to ride as luxurious as a lincoln, theres much more to add in. Taking the ORB and adding in more filters would be a good start, but understanding price action and converting it into daily would be the complete solution most likely not easy while using ORB as another filter. The most interesting thing is. Knowing the trend/direction/type of day of the market won't even make you money consistently. Because trend can change in 15 minutes, people who don't understand that will surely understand when the time comes for them.
Coolweb, I am curious. You mentioned before that you run a business or businesses and you also mentioned you are living somewhere in the NY/NJ area (I may be wrong about this, not sure). What business do you run, I'd like to check it out. Do you have a website? Are you in the yellow pages?