I need to have a consistent method and reason for choosing levels and selecting key reference points. But because price opened inside of value and we had moved back into developing value the probability that price would move up to the DVAH and the fixed VAH were high. Trading is not easy, it requires a lot of focused dedication. Price looks like it is developing a new balance area. After moving up above the developing value price came back to the earlier low for the day during overnight trading. Theories are often far away from practical applications, especially because virtually no one of those who produced them has never had the need of taking daily buying or selling decisions in the markets with real money, however, the importance of these studies is that they tried in some way to standardize some behavior patterns that, even if usually far from reality, still give many useful insight for practical use. From our perspective, more strictly on the financial side, in the fundamentalism it has been studied the effects of individual economic variables on the prices of financial instruments equities, futures, bonds, options with more or less complex relationships, sometimes even difficult to be matematically defined.
Dec 20, · The market is a dual auction process. It moves from balance to imbalance and back to balance again. We all lose at first; mainly because we think we're smarter .
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Overnight, after moving from the value area lows to the value area highs the pullback was stopped on the developing VWAP, but again patience was needed as it stalled there for several hours presenting misdirection signals.
Short trades at the highs would have been losing trades but with low risk if I was honest with myself. Though, reading price behaviour properly would have shown that momentum was to the upside and the probability that the highs would hold is low.
Thursday we opened inside of the previous days fixed and developing value, and the fixed value area was smaller in height. We had value inside of value and often when this happens breakouts present continuation moves. My entries do not often will not have to be this perfect as outlined here, in hindsight, but as these levels are put in place they are available to me as factual evidence. If entries are early, I can use these now known levels to see that the direction is still biased to the upside and they help further determine safe stop areas.
I must remember stops levels are not there to say I am right, that I knew price would come to it. Instead stops are to be used to limit the amount of loss. Looking at the previous days volume profile I would have seen a double acceptance area labelled point A and B. After moving up above the developing value price came back to the earlier low for the day during overnight trading.
As price went below the DVAL and then back in a low risk buy trade was available— buy value area lows. Stops would go below the days low or below the fixed VAL.
If price came down here then it would indicate sellers are in control and would move price down to Tuesday low of the day or more. But because price opened inside of value and we had moved back into developing value the probability that price would move up to the DVAH and the fixed VAH were high. The target was the second acceptance area from Tuesday, labelled point A. Seeing this level also should have alerted me that this could likely be another destination for price.
Wednesday saw the Vwap and volume profile levels give excellent clues towards where price would go and ideal entry and target before it happened. I should see the logic of what would happen if I buy the VAL and use my imagination to see that price can move from the value area lows to value area highs.
Overnight price found resistance at 1. From the high price moved down pips to about 1. The move down was sharp with almost no trading done inside of the days developing value once it went below it. The move through the previous days value was quick with it slowing down a little at the previous days fixed VAL but price did not touch or enter the days developing value here. This suggested the fixed VAL was not a support area, the slow down here possibly was short entered at the highs taking profits.
If the fixed VAL had no buyers then the next logical place would have been the fixed VAL from Monday which is also very near the beginning of the most recent up impulse leg.
This level held and from here price moved up and into the days developing value. The daily bar left a big bullish pin bar wick. Priced touched the daily bar 5-ema and came very close to the daily ema but did not touch it. The day opened above the previous days value and traded up to a new high for the year overnight where it found resistance and strong selling at 1. From the overnight high price traded down into the developing value and the 3am bar London Open poked down to the previous days fixed VAH.
Cumulative delta on the minute chart continues to move down. Look for the developing value area low to be significant level for the day. If it holds as resistance price will keep moving down. If price gets accepted into the developing value look for a move up. The 7am bar has moved into the previous days value area and closed there pretty strong, the fixed VAL is in play.
The daily bar closed up for a 3rd consecutive day and put in a new high for the year at 1. Eventually buyers moved price up above the developing value area where we saw initiative buying. The pullback was to the DVAH and the day closed near the days high.
The path of least resistance today was up. The pullback from the high came right to the developing Vwap which held nicely. Of note price was moving up but the Cumulative Delta was moving down. At present, price is at the years high and broke last month high of about 1.
The months low was put in on the first trading day of the month at 1. The Weekly bars show a strong bullish move up as the 5 and 10 EMA lines are pointing up and have not touched each other since they crossed up back in July. So far this week, price has been trading above the 5 EMA and has not touched it, yet. On this chart a significant support area is 1. The daily bar chart show price moving up sharply over the last 3 trading days including today.
For most of November price was in a down channel but closed out the month up breaking the down resistance trend line. Price looks like it is developing a new balance area. The 5,10, and 21 EMA lines are all aligned up with the 5 and 10 serving as support each time they have been touched since the down channel break. Done after close of Monday, posted above. In part 1 , I talked about the importance of doing post market analysis. Through this homework, I can see factually how market logic played out using my tools.
I also talked about doing pre-market preparation. At times, I will look at the Cumulative Delta and use trend lines to help further read, interpret, and understand what is happening on the charts.
Though the drawing of trend lines should be done during post market home work and pre market preparation so that these levels are already available during trading hours.
Included equally in my analysis is the daily candlestick bars and the activity on this chart. Here I will use the 5,10, and 21 EMA lines. I will identify bracket balanced areas. This chart will be the starting point for everything I do. In addition, I must be aware of the activity higher time frame charts like the weekly and monthly bars. They are only to be used as guides to see the whole market and bigger picture.
BREAKING DOWN 'Auction Market'
Jul 22, · Auction Market Theory and Market Profile Trading Discussion. Forex Factory. Home Forums Trades News Calendar Market Brokers Login; User/Email: Password: Remember. am; Search. Menu. Forums Trades News Calendar Market Brokers Auction Market Theory and Market Profile. Exit Attachments. Auction Market Theory and Market . The purpose of me trading and doing all of this is to grow my account and earn an income. I must become more structured. I can only achieve this through better more efficient . I looked at my chart and really, the market spends more time at. Skip to content. Forex trading for everyone. Make money on forex. Introduction; News; Trading; Forex Cases; Forex Strategies; Forex Success Stories; Commercial; mchl13 replies to: Auction Market Theory and Market Profile. Forex Cases, Forex Strategies, Forex Success .