Tuesday, 17 March 2015

Its Still All About the Context

Understanding what "they" are doing is not so hard when you read the order flow in the context. That's what the book is all about.

Progress on the book is good although I had some time off for a minor medical procedure. Life is like that, I've learned. Anyway, Part 1 is pretty well nailed and am waiting to finish the current training I'm giving so I can lock down Part 2. Part 1 is dependent on Part 2 so that's where I am.

The pic below show the split DAX Profile from yesterday - split before the market opened today. The support and resistance worked perfectly and gave me what I needed to read the oirder flow in context.

Wednesday, 4 March 2015

Lots of Trades are this Clear!`

I'm in the process of doing a training that I'm recording to use in the new book. We're at the point of creating a trading plan. My trading plan consists of a number of trading pictures, each of which has its own "rules". I've written "rules" in quotes as these rules are not mechanical rules but rules that allow us to recognise specific trade opportunities. Each picture has certain order flow and context requirements and we learn to recognise and react to these opportunities instantly. No umming and ahhing required. Its a picture that is easily recognizable.

The pic below is this mornings DAX. As you can see, the distance between the VAH and the POC was worth about 750 euros per contract. We have 4 trades in that space taking out much more than 750 euros per contract. And we haven't even gone down to the VAL....yet.

Trading orderflow in this Market Profile context allows us to make very high win rate trades with low risk. This context allows us to see the potential profit and risk per trade very clearly before we enter. In this way it is easy to see whether a trade should be taken. A properly constructed trading plan is a critical part of the process to CP.

Wednesday, 18 February 2015

Kung Hey Fat Choi

Happy New Year to all my Chinese friends! I will be visiting Asia later this year and look forward to seeing some of you again.

Friday, 13 February 2015

TBonds Have Zippers!

Today's trade is the TBonds. I used to trade a lot of Bonds in the 1980's both off floor and on the LIFFE market as a Local in the pit. Today's trade is pretty self explanatory. I love zippers. Price usually runs along a zipper.

I'm trading more TBonds again as I have a training session under way and my student will be trading them. I'm making dual use of the training by recording them for inclusion in Part 2 of the eBook. We worked on the tools and theory this week and next we will embark on live markets. These will be recorded too. There will be other markets that we look at. This week did watched a lot of DAX and some ES but we'll look at NQ and perhaps Gold and Light Crude and maybe the Euro future.

Thursday, 5 February 2015

Day Traders Rule!

I've really been enjoying these markets. Up one day and down the next. There are good intra day moves. The longer term traders are having a tough time. With all that is going on in the world I expect this volatility to continue all year in the stock indices, forex, crude and gold, not to mention the interest rate futures. We have a plethora of markets to trade to suit the speed requirement and time zone of everyone.

Market Profile is a key part of understanding both directional bias and where trades should be looked for. As the great Mark Twain wrote:
It ain't what you don't know that gets you into trouble. It's what you know for sure that just ain't so.
There seems to be more misinformation out there about Market Profile than most technical analysis tools and methods. I guess its because its something very real, very good that was developed by a trader not by a smooth talking salesman. Lots of people have hopped on the band wagon and given their own interpretation. Pete Steidlmayer believed in self discovery. He didn't clearly tell his students, including me, what to do. As  said before. I discovered the existence of Market Profile in the early 1980s and immediately ordered the manual from the CBOT. It was useless for me. I then met pete and studies under him. Still didn't get it. Met Jim Dalton and took his class. Still lost. Went back to Pete. I knew there was something very valuable there but could not see what. It was a few years after that the penny finally dropped.

To learn how to use Market Profile effectively I believe that you need to observe. But I also think that you can save lots of time and money if someone shows you how he uses it. You can then know what to look for. The book and videos will do all that and more. Part 1 is almost ready and Part 2 is going well.

Tuesday, 3 February 2015

Splitting Market Profile

This chart of today's ES shows the importance of context and splitting the Profile.

The high and low support and resistance of the tradeable distribution is only visible with the split. All I had to do when price was near those extremes was to look for the reversal of the order flow.

Wednesday, 28 January 2015


The DAX used to be my nemesis many years ago. I traded other markets that supported my DAX habit. It was not a cheap habit. But I persevered and the DAX became my bread and butter.

If you look at today's pic you can see how wonderfully it behaves with the MarketProfile. Of course you have to get the split done to see where the real support and resistance is. There are 3 S & R areas that the price tested so far on the chart.  I had the price near the high of the day so far marked on my chart as a selling point as soon as the market opened. The VAH of yesterday's split distribution was a buy point the first time. As price was accepted in the VA, the POC became a target.

ALL these areas had to be qualified by order flow and additional  when price was there.