Wednesday, 8 June 2011

Using Yesterday's Market Profile, Today

I use yesterday's Market profile (or the previous distribution's MP) to trade today. A great example was yesterday's RTH Profile for the ES.

You can see from the Profile below that the RTH close on Tuesday was 1285.00 and the market was sold off leaving a big zipper down. The VAL is around 1289.00.

Now look at what happened next: after the RTH close, the market rallied back up almost to the VAL. The 99EMA held the market. The 0.75 Range Bar chart showed a double top and a failure of the rally. Order flow quickly reversed here making one of our typical patterns of a pullback and thrust in the down trend.


"Funnily" (what a coincidence he says with tongue in cheek), the market came down and was helped by my Fav Fib, again forming a double bottom.

This is bread and butter text book stuff for the purely discretionary trader. Making trades like this on a discretionary basis is necessary to make good money, otherwise, using an algo to grind out those repetitive with the trend trades over a longer period of time is the way to go.

1 comment:

  1. Hi Mr. Tom,

    Good Trade.
    I am a beginning Market Profile student. There were Single Print and VAL around 1288 where you entered your trade. Can you give an example of typical order-flow reversal pattern about what you've talked over here.
    Thank you. Just trying to get some orientation in MP field.