Over the years, in chats with several traders I have found that those traders who watched volume alongside price always emerged more successful than the ones who followed only price and price based indicators.
There are several different ways of watching price and volume together and these are as varied as the different methods employed by successful traders over the globe in reaching the same objective-to be successful in their trading.
Surely in trading it's the ends not the means, and if you are successful then it does not matter.
But if you are still looking to get that edge to define your trading, and googling for a methodology or a trading system, then there is none better than Market Profile.
Consider these words from yesterday's post here :
Both of them are forming bell shaped curves, indicating balance coming back to the markets.Whilst this does not discount the possibility of another sharp spike lower, today's action does indicate exhaustion of the dominant trend.
If the market needs to go down , it would be new sellers who will have to enter to bring it lower, but any good upmove will put 5745 and 5815-30 back in play.
If you have been studying profile , it wouldn't have been difficult to figure the 80 points from close to close. Or the fact that we stopped 3 points away from the 5745 level ( why ?) or the low of today was value area high from yesterday ( how ?).
I had posted a chart earlier on the impact value areas have on the motion of the markets.You can find that same chart here
These markets can be tamed and you can be profitable as much as any big institutional player or fund house.
You just have to choose the correct way.
Order Flow charts of today :
Nifty :
Bank Nifty :
Charts need to be read as blue for buyers and red for sellers. More details about OrderFlow are there in last night's post.
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1 comments:
Very nice post Shai!
Once the VAH was tested in Banknifty this afternoon and held, there was a beautiful high probability setup to go long @10560(the developing VAL for the day at 2:30). Besides the OF was green/blue. So I was able to manage a 4 lot 80 point winning trade with only 20 points stop loss in BN. And those who have traded Banknifty can appreciate the fact that its extremely difficult to take a Banknifty trade with 20 or even 40 points stop loss.
Most of the times its because of my impatience or disbelief that makes me not take some of those trades. Otherwise with the MP concepts + Order flow indicators, one should be literally minting money!
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