Thanks for this. I am more or an intermediate trader. I thought that price action was all traders needed to know about the market cause candlestick patterns and chart patterns really give huge indications of where the market is headed. However, this really showed me that it price action lacks a key component that is neccessary to know to get the entire grasp, which is knowing the true volume and psychology of what's going on under underneath. I can see how using price action in conjunction with understanding volume can be a very powerful way to trade. Thanks for this!
Hey FT, hope you are well. Found you through your Podcast appearance on “Chat With Traders” podcast. I have been researching market profile for a few years now. When i hear you on Podcasts use the metaphor of being in a bar fight, and fighting along side the bigger dudes - im assuming, by this metaphor you mean that you trade alongside the market makers and trade in the same direction as them? Would i be correct in assuming that you choose to trade around the point of control because thats where the people who control the market trade from?
Hi Humble Wordsmith, I think this is slightly misconstrued. The analogy here is more about trading with the side of the market (longs or shorts) that are showing more strength. This concept is independent of market makers, the edge of a market maker would be to not reveal themselves and move a market, a market maker also would often not have a directional bias. So it would be difficult to detect them in real-time on a consistent basis, and also something that would be difficult to yield an edge from. The volume point of control is an area that you know a higher volume of trades has transacted at before. Therefore it is more likely that participants are willing to transact in this area again. That doesn't necessarily mean to the long or short side, but the POC can be a potential support/resistance area.
25:24 The candlesticks reveal the story. But you can’t just look at the candlestick for the day. You have to explode it out into hourly candles, etc. I mean, c’mon.
So many years of trading the market looks like this ,simple, however for us beginning ,unfortunately we have to go through the congnitive dissonance until he get there. absolutely awesome video. I'm a long time follower of your work I just hope to see more from the execution side.
@25:13 you explain that the change from 3 consecutive b-form to P-form shown a changing state, indicate there could be a stall. From my view is the P-form created by the price change, price could not reach a higher level, so can not form a new HH, and close lower. So what comes first the price change or the volume change? I would say the price change, could not form a new HH, hence close in consolidation or a lower level, and because of the price change negatively the P-form is created, so the VP is still a lagging indication,
That was the cash/RTH session on the screen at that time-stamp. We certainly look at the overnight session as well, but that particular chart was just RTH sessions.
Hi, this video has InvestorR/T on display - we use a variety of platforms though, you can find our recommended tools and software on our website: community.convergenttrading.com/recommended-tools/
An LVN describes an area where the market previously did very little business at a price level/area (i.e. put in a low amount of volume) relative to volume traded at other prices. This may possibly indicate that price is unlikely to stick around the area long if there is not much willingness by the market participants to do business at those prices. So price "might" reject from an LVN because it is an area that participants in the past did not show much willingness to trade volume. The market also has potential to move quickly through an LVN as it does not offer much in terms of support or resistance.
