But is there is no logic in using MP on $tick ? Indeed, one needs to watch $tick when in extremes (which signify certain conditions), either via fixed levels or by BBs. But putting a value-area type distribution on it makes no sense to me. Afterall effectively it's a range-bound oscillator.
Can anyone give me more information regarding using Market Profile as for as price and where to get it? thanks!
I think that what you describe (shorting tick high extreme) would work regardless of where we are wrt yesterday's VA (I assume you're talking about ES VA and not $tick's "VA").
http://www.cbot.com/cbot/docs/handbook.pdf And read this thread, lot of links !!! A lot of vendors will offer this as an add-on service. CBOT has a free version for YM I believe, look at their website
Last time I checked (early 2004), the MP feature was priced an additional $75 in CQG. I read somewhere (ET?) it's $10 or so in ESignal. What you can do to maintain a "feel" for the 30-min auctions is keep charts by hand. After a few months, you can switch to Excel: e.g. download the 30-min OHLC at the end of day and run a macro that will chart the profile in a spreadsheet++
I also use it to derive potential S/R points. 1. Software to use for MP I use a) esignal's MP as well as b) ckryza's efs, which is based on volume (I'm not aware of a time spent @ price efs for Esignal). I understand that there are other sw out there with very good MP implementations. Ensign can easily do both. Since I can't have 10 different sw running at the same time, I have to settle to 2 or 3 sw max (I also run TS2K in r/t for systems). There are some sw which are specifically marketed as MP tools (windotrader, Steidlmeyer's sw etc) 2. Volume@Price vs Time@Price Also I'm not sure how volume@price works in a market like ES, where volume can be traded in cash market (SPY, individual stocks) and a lot of volume is still in the pit. This volume@price concept would be totally flawed in a market like forex futures, where most volume is done in the spot. How about bonds (I think most of the volume there is again done in cash)? What about other markets (commodities)? CBOT stopped offering LDB? 3. Trading methods for MP I;m attaching the ES MP for 30-Sep-2004. Since some people here mentioned the 80% rule (which I don't use in my trading yet), let's apply it on that chart: So, the method says. if price closed for two consecutive 30min bars within previous day's VA (1112.75-1109.25), it had high probability to traverse through the entire VA, i.e. drop to VAL of 1109. But, price went higher instead. Was 20040930 a day where the "80% rule" didn;t work? 4. Books, info, tutorials Samson wrote: So, the guy who co-authored the books with Steidlmeyer can't trade with MP profitably... rwk wrote: I visited the site and also subscribed to a (now practically dead) list of users of PS's new sw. They weren't very happy about their results (using "new" sw). I am personally trading with MP for S/R, but with current 6pt daily and 12pt weekly ranges in ES, levels are often within a few ticks of eachother. And I have no low-risk method to participate in the larger moves, e.g. last Wednsday's 15-Sep drop with gap down, or Fri 1-Oct gap up. I think what tradinglife said is very true. MP works for him, just like a seasoned trader finds that candlesticks or 34EMA work for them. Many people have contributed great ideas in this thread back in 2002, but sadly few are currently active in ET. Hopefully we can re-vitalise the thread. I'd be happy to compare notes either here or in PM Hope this helps.
About the value area rule : "if the open is higher or lower than the previous days' value area, and then drives back into that value area and double prints there, it is likely to trade through the entire value area range...works about 80% of the time". Whether or not it works 80% of the time I cannot say. It certainly depends on the market and... current conditions. Jim Dalton : "The following considerations should be taken into account before executing a Value-Area Rule trade: 1. Distance from Value 2. Value Area Width 3. Market Direction" Why not try to backtest it?
In the CBOT's webinar on this subject I believe they said this "pattern" of price behavior works 70% of the time and even then the speaker seemed a little cautious about it.