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Poison Pills for Trading

Lots of people in the industry want to tell you to keep trying to figure out how to trade. This is a story about knowing when to give up the dream..... Several years ago I was on the board of a non-profit discussing new ideas for the organization. Many of them sounded promising and exciting, but as with any new idea, there was risk with all of them. In one…

Skill Session: Stop Placement

One of our Skill Enhancement Sessions. Traders often say we could help them by giving insight into entry and stop management. It's a common challenge. There are many approaches that are effective in improving this skill and most of them require first defining the opportunity. Once that's accomplished, then trigger and stop placement become a key component of the fight for good price. In this session, we discuss a number…

Skill Session: Debriefing Trades

One of our Skill Enhancement Sessions. To gain consistency in your trading, one of the most useful tools any developing trader can employ is to perform debriefs of trades. This is effective whether the trade is a winner or a loser. This will help you isolate performance issues and avoid poor trade definition in the future. In this session, we debrief some trades using a simple matrix of questions any…

Q&A: Earnings, AAPL, TSLA, MSFT, AMZN, ES, NQ

Part of our regular Q&A series. In this Q&A session, we took a look at a number of products from stocks, futures, and forex. Then we opened the floor to additional questions.

Q&A: Rules based execution, “If this, then that”, Crude, ES, Gold, NQ

Part of our regular Q&A series. In this Q&A session, we took a look at a number of products from stocks, futures, and forex. Then we opened the floor to additional questions.

Q&A: CL responsive trade, NQ open drive, ES, ZB, RTY, Sim vs Live, Sizing risk to opportunity

Part of our regular Q&A series. In this Q&A session, we took a look at a number of products from stocks, futures, and forex. Then we opened the floor to additional questions.

Q&A: EUR/USD, BABA, GOOG, AAPL, CL, GC, ES, NQ

Part of our regular Q&A series. In this Q&A session, we took a look at a number of products from stocks, futures, and forex. Then we opened the floor to additional questions.

2020 Annual Outlook Video

Whether you trade intraday or look for multi-session opportunities, looking at the much wider timeframe is a good start for any approach to markets. As the rule states, "always default to the higher timeframe." This can mean you may take a long position, but if the larger timeframe is bearish, take your profits and don't overstay your welcome. Each year we produce an annual outlook. This is your chance to…

Q&A: Tariffs, Year End, & 2020

Part of our regular Q&A series. In this Q&A session, we began with a look at the impact of tariffs. We reviewed some early action in the NQ and we discussed expectations for the end of the year and anticipation for 2020. Then we opened the floor to additional questions.

Q&A: NFP, FOMC, Practice

Part of our regular Q&A series. In this Q&A session, we began with a look at the impact of news releases like NFP or FOMC. Then we took a short "structure clean-up trade." We continued discussion about deliberate practice with the profile. Then we opened the floor to additional questions.

Q&A: Trading News Events, CL, NQ, ES, ZB, LE

Part of our regular Q&A series. In this Q&A session, we began with a look at how we incorporate news events into our view of the auction. Then we opened the floor to additional questions.

Q&A: 4 Questions, CL, NQ failed Long, Sugar, Acceptance, Process

Part of our regular Q&A series. In this Q&A session, we began with a look at 4 questions to ask and answer before you ever put on a trade. These questions are crucial for traders looking to build consistency. Then we opened the floor to additional questions.

Q&A: Post NFP, ZS, CL, ES, NQ, ZB, Initial Balance Breakouts, & Platforms

Part of our regular Q&A series. In this Q&A session, we began with a look at some opportunities after Non-farm payrolls. Then we opened the floor to additional questions.

Q&A: Earnings impact on Index futures, CL, NQ, ES, AMZN, AMD, MSFT, & Orderflow

Part of our regular Q&A series. In this Q&A session, we began with a look at some opportunities in NQ, ES and CL. Then we opened the floor to additional questions.

[Q&A]: ES, CL, NQ, ZS, NG, Orderflow Spikes, Fractal Rotations, Being Trapped, Excess

Part of our regular Q&A series. In this Q&A session, we began with a look at some opportunities in NQ, ZS and CL. Then we opened the floor to additional questions.

[Q&A]: Crude short; NQ & ES gaps & LT picture; Gold; Natty Gas; Reviewing tradeplans; unfinished business

Part of our regular Q&A series. In this Q&A session, we began with a look at some opportunities in NQ, ES and CL post NFP. Then we opened the floor to additional questions.

[Q&A]: CL, ES, BTC, Assessing performance, Over-trading, Cumulative Delta, 50pt NQ live trade

Part of our regular Q&A series. In this Q&A session, we began with a discussion on our plan for the session and then we took a 50pt intraday swing short in NQ. Then we opened the floor to additional questions.

[Q&A]: NQ fade, Crude, ES, DAX, Using index relative strength

Part of our regular Q&A series. In this Q&A session, we began with a discussion on a “fade” trade we took in Nasdaq futures. Then we opened the floor to additional questions.

IB EXT FADE example in Crude oil

One of the anchor playbook set-ups we encourage developing traders to look for is called an IB EXT FADE (initial balance extension fade). This is means we wait for the first hour of trading to complete, see extension of range beyond that range of that first hour and then take the counter position to the extension to target a profile reference back inside the first hour's range. Below is an…

[Q&A]: Patience, “Postures”, Bonds, Notes, GS, Crude, Nasdaq, ES

Part of our regular Q&A series. In this Q&A session, we began with a discussion with an important level for the day's auction, discerned from the profile. Then we opened the floor to additional questions.

[Q&A]: 2976.5

[Q&A]: Profiling overview, Global Trade Turmoil, Volatility, Setting Stops

Part of our regular Q&A series. In this Q&A session, we began with a discussion with an overview of both Market Profile and Volume Profile. We discussed current geopolitical turmoil and its impact on our trading plans. Then we opened the floor to additional questions.

[Q&A]: Trading Fed information

Part of our weekly Q&A series. The Federal Reserve, aka "the Fed", or the United States Central Bank is an entity whose actions traders and investors do well to be aware of. Now, as behaviorists, we do not spend much time looking at Fed actions to judge the direction in our trades. We do however mark how the auction behaves when the Fed acts and speaks and use these references…

[Q&A]: Why the first hour still matters

Part of our weekly Q&A series. We began with a discussion about why the range of the opening range still matters, how we use this information and what we look for in the profile to help us make decisions. Then we opened the floor to questions. Then we opened the floor to additional questions. Additional questions asked and answered: How can I improve my consistency? How can I better understand…

[Q&A]: FOMC trade, price action and what we look for in the profile

Part of our weekly Q&A series. We began with a discussion reviewing trade on days like FOMC, how we use price action and what we look for in the profile to help us make decisions. Then we opened the floor to questions. Then we opened the floor to additional questions. Additional questions asked and answered: What does structure mean when we look at the profile? How can I see a…

Mapping human behavior in the auction

Profiling is the core of our trading approach and analysis because it captures how all market participants (institutions, hedge funds, retails, etc) interacted with various prices. While no market cycle is the same, there are consistent behaviors in auctions that are millennia old and are not going away. This means we can see how these behaviors played out in the past to help inform our decisions in the future. At…

[Q&A]: “2nd Move”, bias, and determining support zones

Part of our weekly Q&A series. Part of our weekly Q&A series. We began with a discussion regarding the "2nd Move" trade set-up, how to discern bias and how to find larger levels in the auction. Then we opened the floor to questions. Then we opened the floor to additional questions. Additional questions asked and answered: How can I improve my skills using volume? How can I find and set…

[Q&A]: Nasdaq & Crude open gaps

Part of our weekly Q&A series. We began the discussion with a look at some opening gaps in Crude and Nasdaq futures. Then we opened the floor to additional questions. Additional questions asked and answered: When using profile, in general, does it say anything about the direction or just about levels? What are your trade management these days? how do you assess the context? How are you doing to deal…

[Q&A]: Glossary of terms, Nasdaq & Crude open fades

Part of our weekly Q&A series. We began the discussion with a look at some opening "fade" or "responsive" trades in Crude and Nasdaq futures. We also reviewed a trade in Wheat that we took earlier in the week. Then we opened the floor to additional questions. Additional questions asked and answered: So being new to your style of trading, do you have any resource that defines the acronyms that…

[Q&A]: Morning Routine, Option Trades, & Session Volume v. Orderflow Delta

Part of our weekly Q&A series. We began the discussion with a look at our morning routine, how to build option trades with the profile, and what the difference is between session volume and orderflow delta. Then we opened the floor to additional questions. Additional questions asked and answered: Why do you like NQ over ES? Will the market fill the gap? What's the average volume in Crude? Do you…

[Q&A]: Joining the breakout

Part of our weekly Q&A series. Breakout trades! Breakout trades occur when we take a trade in the direction of range extension. There is a great example of this exhibited in this discussion. We began the discussion with a look at a breakout trade in Nasdaq futures. Then we opened the floor to questions. Additional questions asked and answered: What are you looking for taking a trade? I mean what…

Buying a house above value

Take a look at this pre-market chart of Nasdaq futures: NQ (Nasdaq futures) are gapping (A gap is where we open completely outside the range of the prior session) into what we call an "extreme posture" in this chart. Nothing says short here yet, but this configuration does tell us it is getting late for longs in the day time frame and we should be careful about buying this gap higher.…

[Q&A]: Using triggers to reduce trade entry risk

Part of our weekly Q&A series. Triggers. Triggers are short time frame price action arrangement patterns we use to help us minimize entry risk when we enter a trade. We began the discussion with a look at how we use triggers when we come into an area of interest based on the profile. Then we opened the floor to questions. Additional questions asked and answered: Do you consider any pit…

[Q&A]: Using the profile to help you find patience in the trade

Part of our weekly Q&A series. Patience. Patience in trading is an edge. The challenge is in knowing what you are being patient for. We began the discussion with a look at how we use the profile to help us be patient traders. Then we opened the floor to questions. Additional questions asked and answered: How do you measure gaps? What is the difference between means reversal vs pull-back trades?…

[Q&A]: What is auction context and how can it help you?

Part of our weekly Q&A series. We began the discussion with a look at how to use the profile to determine the context of the auction. Then we opened the floor to questions. Additional questions asked and answered: What statistics does IRT provide for Profile, say for the ES? I know you have provided a 17% number for 1.5XIB for example. What timeframes context (5 days, 20 days or 6…

[Q&A]: What is a bias and how can it help your decision making?

Part of our weekly Q&A series. We began the discussion with a look at how to use the profile to set a bias for the coming session. Then we opened the floor to questions. Can you look at crude for today? Where do you start the ER? Where is the MC-VPOC in that current balance are on CL? What is the best way to trade a trend day? Can you…

[Q&A]: What is the initial balance and how can this help you generate trade ideas?

Part of our weekly Q&A series. We began the discussion with a look at how to use the initial balance to help generate trade ideas. Then we opened the floor to questions. Can you look at crude for today? Where do you start the ER? What product do you prefer? ES, NQ? pls explain the significances of Globex and RTH? would you hold overnight trades? Will you cover the HE…

[Q&A]: How to pick better price targets

Part of our weekly Q&A series. We began the discussion with a look at how to use the profile to pick better price targets. Then we opened the floor to questions.

[Q&A]: Using the profile to confirm or negate a directional move

Part of our weekly Q&A series. We began the discussion with a look at how to use the profile to confirm or negate a directional move. Then we opened the floor to questions. Additional questions asked & answered during the session: How do you keep yourself from getting chopped up in these areas of acceptance when trying to establish a position? So in that example in NQ, you would enter…

[Q&A]: Using the profile to prepare for the next move

Part of our weekly Q&A series. We began the discussion with a look at how to use the profile to prepare for the next move. Then we opened the floor to questions. Additional questions asked & answered during the session: Crude? Thanks for these webinars guys. Wondering how do you typically determine where to set your stops? Given a balanced volume profile, and excess levels, are there things in the profile…

[Q&A]: Using the profile to see and find value

Part of our weekly Q&A series. We began the discussion with a look at how to use the profile to see "value" and use that value to help establish good trade location. Then we opened the floor to questions. Additional questions asked & answered during the session: Do ag products have a tendency to slow down in vol as the week goes on like indices do? Is value following price in…

[Q&A]: Discerning auction direction and quality

Part of our weekly Q&A series. We began the discussion with a look at how to use the profile to discern auction direction and quality. Then we opened the floor to questions. Additional questions asked & answered during the session: If you can can you look at SBUX on the stock side? I got short in the morning of a gap down and post open drive now looks to be one…

[Q&A]: Picking better auction times to be active

Part of our weekly Q&A series. We began the discussion with a look at how to find better times of the trading session to be active. Then we opened the floor to questions. Additional questions asked & answered during the session: Where did you get the stats for IB extension etc? I saw a couple of guys say "crushed the delta" what do you mean? You mentioned the best times to…

[Q&A]: Building an expectation for the session based on how it opens

Part of our weekly Q&A series. We began the discussion with a look at how we use "OPEN types" to determine the likelihood of "DAY types." Then we opened the floor to questions. Additional questions asked & answered during the session: Can you take a look at ES. How today opened and what the rest of day will maybe look like? Could you explore potential position trades in ES, NQ…

[Q&A]: How to use the profile with short term triggers to minimize risk

Part of our weekly Q&A series. We began the discussion with a look at how to use the profile along with short term triggers to minimize risk on entry. Then we opened the floor to questions. Additional questions asked & answered during the session: Why would you love it to be to the upside? We were looking for a long entry at a key decision zone Can you look at Sugar…

[Q&A]: How to use the profile to establish context

Part of our weekly Q&A series. We began the discussion with a look at how to use the profile to quickly identify the context of the auction. Then we opened the floor to questions.

[Q&A]: How to use the profile to determine a bias for the coming session

Part of our weekly Q&A series. We began the discussion with a look at how to use the profile to determine a bias for the coming session, and more importantly, know when that bias is being challenged. Then we opened the floor to questions. Additional questions asked & answered: How long are your longer bias? You mention with your posts on twitter in the a.m. that when gapping "gap rules…

[Q&A]: Figuring out who is controlling the auction, so that you can go with them

Part of our weekly Q&A series. We began the discussion with a look at how to use the profile to help figure out who is in control, allowing us to position with them. Then we opened the floor to questions. Additional questions asked & answered: Do you look into inter-market relationships? Do you consider anything after the bond market closes? Do you try to concentrate your trades in the morning…

[Q&A]: Gaining confidence in directional entries using orderflow along with the profile

Part of our weekly Q&A series. We began the discussion with a look at how to use orderflow along with the profile to gain greater confidence in directional entries. Then we opened the floor to questions. Additional questions asked & answered: Please explain order flow. TY. Hey guys, do you also analyze weekly or even monthly profiles? Are there differences compared to intraday profiles? Imho, Delta can be a two-sided sword.…

[Q&A]: Expected vs. unexpected behavior in the auction

Part of our weekly Q&A series. We began the discussion with a look at how to use the profile to discern unexpected market behavior (and what to do when you see this). Then we opened the floor to questions. Additional questions asked & answered: Crude broke out of a 4-day balance on Wednesday after moving about a weekly ave move in 2 days. thursday failed to accept below Globex low…

[Q&A]: Should you go with the move?

Part of our weekly Q&A series. We began the discussion with a look at how to decide if you should go with a move or not. Then we opened the floor to questions. Additional questions asked & answered: How can I discern that the auction is "accepting" lower prices? When I go with a move, where should I place my stops? Do you consider value area high or low as…

[Q&A]: How to use the profile to anticipate the next move

Part of our weekly Q&A series. We began the discussion with a look at how to use the profile to anticipate a larger market move. Then we opened the floor to questions. Additional questions asked & answered: Do you look at order flow when you want to be long/short or do you use a signal for your entry? What platform do you recommend to use for charting with MP? How…

Trading after a binary event

Binary events occur when a news or econ release is expected during the trading session. It creates one of 2 responses, higher or lower. In this video, we describe some ways to think about trading the day after a Binary event and what that's telling you about the forward auction.

What happens when a profile reference doesn’t hold?

Profilers are taught to observe certain structural reference points in the profile graphic and expected certain behaviors when the auction comes toward those reference points. So, what happens when a reference point does not behave as expected? Does this mean that profiling is invalid? May it never be. Instead, learn to interpret how this is showing you who is in control of the auction. This nuance makes the profile more…

How to return to the market and find the plot

Whether you've been away from markets for a bit and coming back, or if you want to be able to get away from screens and not feel like you've lost the plot when you return; you can use the profile to help you quickly find the plot (narrative in the market) and get reconnected to the auction.

TRADE IDEA: Avoiding the squeeze

You may have heard of traders being "squeezed" in an auction. What does it mean? How can you see it, or better yet benefit from it? In this video, we demonstrate how you can use the profile along with orderflow data to see squeezes, keep from being caught in one and benefit when they are over.

AUCTION THEORY: Expected v. Unexpected Behavior

A mark of trading competence is being able to discern expected and unexpected auction behavior. For the novice, the example auction provided is seen as any other auction. For the trader who has been in markets for sometime, it means something different. The lesson here? Learn how to discern the difference. It will save you thousands.

TRADE IDEA: Gap rules

A gap is a move measured from the RTH (real-time hours) range of one session to another. This is a mark of the presence of the OTF (other time frame trader) and should alert a trader that large ranges are possible. Gaps do not occur very often, but when they do, it's helpful to have some rules to help you navigate them as there are different types of gaps as…

TRADE IDEA: How to find opportunities in balance

An auction in "balance" is an auction at rest. The next move is preparing to come and it will initiate from this zone. First, you need to be able to identify these balanced areas and then know what to look for when they begin to break so that you can join the move.

TRADE IDEA: Looking for “responsive” activity

Not all times during the session offer the same opportunity. During different periods of the trading session we look for different types of auction activity. In this example, we are looking for something called, "responsive" activity given how far we are into the session.

TRADE IDEA: Using Decision Zones and accumulated intraday inventory

Not all prices or activity in the auction are the same. So, to keep from being lulled into every bit of the action, we establish zones of interest. These can serve as targets to exit or areas to look for a counter trend entry. In this video, we show how we used one of these zones to find a high probability intraday trade in Nasdaq futures.

TRADE IDEA: Net short or long inventory rebalance on the open

Looking for a quick trade on the open? This is a great set-up to look for on the open in a trading product. This set-up is clearly visible through the use of the profile graphic.

Seminar: Using the Profile to Adapt to Volatility

Markets go through cycles of volatility which can be damaging to the account of a new trader. In this seminar, we describe how we use the profile to adapt to differing cycles of volatility.

There is no such thing as overbought or oversold in the auction

I had the opportunity to catch up with Dave Toth, Market Insights Senior Analyst with RJO'Brien (Dave has served as a technical analyst for over 30 years) during a meeting in Denver. Dave was hosting the meeting to discuss technical analysis. By definition, technical analysis is the perspective that trading decisions are determined simply through a reading of the charts. If you use things like RSI, MACD, Stochastics, CCI, trendlines, Fibonacci,…

Trading Trend Days

When making trading decisions, we remove some of the randomness of markets by identifying "open types" and "day types" to help give us an expectation of behavior.

Identifying zones of interest and letting the trade come to you

When making trading decisions, we remove some of the randomness of markets by identifying zones that we are interested in participating. Then, if the auction comes to us, we are prepared and have a plan in place.

Making trading decisions by leaning on value across multiple timeframes

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When making trading decisions, we always make them with respect to where we are in the "posture" of the market and that is discerned through knowing and leaning on value across multiple timeframes.

Seminar: How to Get Started with Profiling Tools

Maybe you've heard about Market Profiling before, but not sure if it's worth the hype. In this seminar, we guide you through practical examples of Market Profile in use so that you can discern whether or not Market Profile would be a value added tool to your trading methodology and approach.

The only thing certain in trading is that it is uncertain

You may have heard us say at some point that there is no such thing as a trading holy grail. What we mean by this is that there are no trading approaches or systems that are 100% effective, allowing you to extract money from the markets at will and without risk (btw, if they did exist, no one would let you know about it). So....if you come across someone promising a…

Do fundamentals matter in trading?

The short answer? yes, and no.....see below: Eventually market prices do sync with fundamental data (company finances for stocks, economic data for commodities), but the challenge is that most traders are not capitalized large enough so that they can last long enough until everything is in sync (i.e. anyone seen the Big Short?). The Crude oil futures example shown in this video shows how dangerous and poorly positioned you can…

Knowing where you are in the auction can save you headaches

Knowing where you are in the auction can help you stay present to potential bias shifts and opportunities to come. Don't be the trader who jumps on an exhausting trend just because it is easy to identify. Notice: derivatives trading involves substantial risk of loss and is not suitable for all investors. Past performance is not necessarily indicative of future results

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Notice: derivatives trading involves substantial risk of loss and is not suitable for all investors. Past performance is not necessarily indicative of future results

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