No trading system can.
But what it can do is anticipate "wisely"
What is the difference?
That's anticipation.
The Market profile is a system which measures the buying/ selling of others and can show at various stages who is in control. Traded volumes give powerful information on these roles and if utilised well are a single point gateway of getting the trading odds in your favor.
Unfortunately for us our business of trading is dominated by big money and larger institutions.. At the core of it is a simple buy- sell mechanism . You buy and someone who has bought before you now becomes a seller (for whatever reason) and gives it to you and we have a trade. But it is also true that the more money you have the more influence you can have on the price action. so if a person keeps buying and buying and buying at every fall he can potentially arrest a falling price. So if you find yourself trading against guys who have more "money power" than you , you don't go against them, you go with them.
We have tools at vtrender which show us this buying and selling happening in real time and where the control is. You can't beat them, you join them.
Now you are playing with the person who is controlling the ball and you can see where he is headed.
That's anticipation for you.When it gets armed with data and analytics it no longer is prediction.
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10 comments:
hi shai..good one..
plz explain the differenc btwn a trader and investor too..
i m not able to trade as not in font f screen ..
broker here r not technical..
then shld i invest in equities or not ?
can profile tell this?????
@ Manu,
Thanks.
The diff between the trader and the investor is time frame for a trade, as well as the reason which could be of a fundamental nature.
a traders will rely on technicals most of the time to enter/ exit his trade.
as an investor, if you use longer duration profiles, you should get a better idea of the movement of your stock. Infact it is much easier to trade as an investor.
Shai, thanks for this wonderful post and the discussion above. It opens lots of channels of thoughts.
Your approach remains open to looking at the market turns and adopting. That helps take away whatever lag, and sets the fresh course with least bias.
Your strength, [as I see] is your ability to stand off from bias and mend the strategy when a change is needed. You call it backup plan, or plan B. But the speed of execution comes from your open frame approach. I have seen it from inditraders times.
Prabu,
thank you for your generous feedback.
yes, a trader without a plan B would be like a driver on a high way without an insurance policy !
Miss the forum at IT. Hope to be back soon.
Shai nice post,I always insist to others to have MP tool in their trading archery.
Atleast it can give a true picture without any "prediction".
Thx & be continue your Good Job.
1 ...a trader is one who is attempting to create a regular income at short span using a given capital- he succeeds if he gets a return better than the best bank rate.....an investor attempts to create wealth using a given capital over a longer span and his target would be like 10 ,20 or 100 times the capital
2....market profile is just another method of using market generated data to arrive at a trading bias....i for one use a method similar to the acd method of fisher using opening range,pivot range and volatility to arrive at a trading bias.....i visit this site and compare notes with my own reading and what the mp projects.....and to me mp looks like a complex way to reach the same conclusions !.....as for anticipation vs prediction ...it is a bit of semantic acrobatics...still anticipation leaves some room for variance while prediction has a definitive ring about it...whatever name you call it it is the trading bias that you arrive at....through ones own method...be it mp,acd,ma,elliot...or lunar phase !
@ niftyoptionstrader,
what is this "acd method of fisher"?
What would be the opening range you would choose in minutes?
Just googled and found this :
"http://www.dacharts.com/templates/descr/ACDmethod.htm"
""Fisher mentions the Market Profile method and at the time the book and symposium were current, maintained that his Pivot Range is comparable""
quoted.
@ Niftyoptions trader,
Thank you for your comment.
Ocassionally I like to read Andrew Menaker. Here's what he says on this subject : http://www.andrewmenaker.com/the-slippery-slope-of-prediction/.
there are some other good articles also on the psychology of trading, a fav subject of mine.
well....i do not wish to turn this in to discussion board....still ur reply gives me the impression that i did not succeed in conveying what i meant in the previous comment....
what is anticipation....when you believe that there is a better than 50% probability of an event happening......as your belief about the probability starts going up and when it tends to 100% it becomes a prediction.....that is what i meant when i said the distinction is more of semantics......in trading parlance no method can give you such a probability except perhaps arbitrage trading.
thats it....no more comments......best regards....and i admire your excellent work !
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