Just curious how people determine their trade entries? Lately, on StockTwits, and thanks in large part (okay solely) to FuturesTrader71, there has been a lot of talk and discussion about the VPOC and volume profiles. I wonder what people did before this? When FT71 first started posting his information and his blog it made a lot of sense to me as I noted in the comment section of his first post because our approach, while different in some ways for sure, is very similar. I have always defined areas before the day (what has evolved into the TraderSmarts Numbers) where I want to, as FT71 says, "do business". I have been doing this for years.
I have always been a fader. Almost all of my entries are fades either against the dominant trend or fading a countertrend move in the direction of the dominant trend. I will fade extremes looking for an intraday CIT or fade looking for a normal rotation - depending on the situation, or on trend days fade a countertrend move against the trend to trade in the direction of the underlying trend. This whole concept of trading rotations against key levels to me makes perfect sense. It is how I have always traded. That being said there are many different ways to trade. How do you trade? Or how did you trade before FT71 introduced the volume profile and VPOC concept? Please comment below. Looking forward to reading…
12 comments:
I started watching FT71 about 2 weeks ago. Now I've started studying volume by price charts. There's a great tutorial on the CME web site to get you started on market profiling
I have been trading stocks full & part time since 1998. Using trendlines, Moving avergaes, MACD, FIblines and other TA variations. Just started trading futures less than a year ago using similar method but in the process of change. I started following what FT71 had to say about 6 weeks ago... Picked up a copy of Mind over Markets and about to reread it for second time. My view on trading has definitely changed (for the better?) since. Listening to FT71's webinars, chat and advise has opened my eyes of how I can become a better trader. The most significant change I am making is within myself ... PATIENCE... how to wait for the right set-up, stay in the trade longer as it moves in your favor, dont overtrade, homework, meditation and much much more. I have also come to the realization that I am not trading on the right platform while trading futures and have been trading at a disadvantage. I always give thanks to FUT71 and all other traders that offer their time and knowledge about trading and the markets. I have seen a lot of sincerity from trader to trader and within the trading community as a whole.... and very grateful for it.
Trade well,
Volume analysis by price has been around for at least a decade. Interesting that you think FT 'invented it'.
I have only traded for a little while and like most, I was following down the path of "indicator" trading. I worked and worked and worked very hard to find the right set ups. I had "simmed" about 1500 hours and spent more hours reading and on webinars, etc... I primarily used indicators and a little bit of support and resistance.
Since learning about the market auction process, I have applied the same amount of diligence in studying and "doing the work".
I finally have something that makes sense and my results have been incredible! I absolutely love doing the work, creating a plan and then executing the plan. I am more patient in my set ups and I don't hyperventilate during trades. I am simply in winning trades now, not one loss in two weeks.
Thanks for the comments so far. They are greatly appreciated. It takes guts to share your trading style and I commend you for it. It is interesting to note that out of over 400 unique page views we have 4 comments. Either people don't know how they trade or they don't feel like sharing :)
Cleon - I don't believe I ever said FT71 invented volume by price. I think maybe you need to read the post again friend :) I do credit him alone for introducing the concept of volume profiles and VPOC to the StockTwits Futures Stream and for the attention it has gained since he originally mentioned it.
For the record I do not use volume profiles or VPOC. I do see the validity in it (some of my work is based on volume) and may incorporate it into my preparation and trading eventually. For now I stick with what works for me.
I really hope people will write more comments on how they determine trade entries. That was the whole point of this post.
I've been trading futures since 1994; as a floor trader from 94 to 05, and electronically since 08. It has been a major adjustment to go from the floor to computer. Tons of issues never discussed on Stocktwits. Believe me - as FT71 says you don't want to hire an ex-floor trader - didn't know I had such baggage. It has cost me a lot of money & time to cleanse.
Trading - I have always traded based on price action (especially on the floor) - now using a combination of PF, Market Profile, 2 minute candlestick, custom Stoch's, and stock sector baskets. I typically wait for the market to come to my levels.
I've had difficulty sticking to my game plan because: I got away from having a plan, and in between trades I have been playing around with different time frames and indicators in "hopes" of seeing a trade to jump on! That resulted in a few "death of a thousand cuts".
Stumbling onto the generosity of FT71 was great timing. He has reminded me of the importance of a trading plan and sticking to it, keeping it simple (less is more), and different ways to view volume (composite charts, VPOC etc). The result for me has been patience and confidence - defaulting in good trades.
I'm back to making as many good decisions as I can - as opposed to "needing a trading fix".
TraderSmarts, I have also appreciated your daily inputs, market levels, and efforts to create a forum.
I can see clearly now...good luck in 10.
Happy Holiday,
David
I am still in the process of refining a system so am on the sim till I have tested to my satisfaction. have lost money in the market previously, due to poor discipline mostly, so am really working hard before entering again.
Like you I am a YM guy, have been following since its daily volume was in 35 to 40K area. I bracket the opening tick, & other key areas by 10 or so each way and trade long or short as price exits the bracket. tight stop therefore some losers before the move of 30 to 40 YM points I'm looking for.Have other exits along the way to protect some gain in case of pullback. Like also the midday chop for 5 to 10 points.
I very much appreciate yours and FT71s advise and insights, it is beyond dificult to teach oneself what surely must be one of the toughest professions out there. Thank You
I have only been trading for about one year and 4 months of that was spent on the trading floor in the DJ pit. In retrospect, it was the worst idea to start off in the pit. I went in with the arbitrage, scalpers mindset and there is only about 300-400 cars/day to work off in there these days.
When I started on the screen, I was using the basic O,H,L,C and trading break-outs and fades. Now I am focused on volume as an indicator. I also learned the importance of developing a solid trading plan, which is almost anathema for pit traders who trade order flow.
I have been trading stocks since 1988 and Eminis since 2003. I find Stocktwits of great help and wish it was around when I started my futures trading. Your work as well as that of others you mentioned here (and not only them) provide an excellent background to trading and enlighten all traders who by nature are lone wolves.
From my stock trading days I was in perpetual search and adjustment of various chart setups that would work for period of time and then fail. So since time is a luxury we cannot afford when intraday trading Eminis I transfer all the indicator output from the various setups into Excel where I run every 5 secs an algorithm to evaluate them on a “what if I was using x setup” and select the best one to apply at a time. To simplify matters the end output result from Excel is just one number that reflects the Market Strength of the instrument at the time and is used to trigger entries and exits. The indicators I use are the very well known ones like Macd, RSI, CCI etc.
The volume profiles are of great help in establishing key areas and I have been using them with a twist for about a year now. I use the premarket price action to establish an ES “magnet” value that we see a lot during regular hours trading, particularly when ADD is between –500 and 500. The time twist that I mention is that I believe beyond the volume, the frequency and the duration of each price related volume as seen in the Time and Sales plays an important role. I hope this “food for thought” will be taken up by some traders and expanded further.
Thank you for all the good work you do. Keep it up !
George
I am totally discretionary on my entries. The future is rarely an extension of the past.
Hi TS,
I finally got around to visiting your blog --I like the blue.
I found FT's blog while googling around for references to 'Volume
Point of Control' after having read Steidlmayer's 'On Markets' and
searching for contemporary work on the Market Profile methods. Before
discovering MP, and subsequently, FT71 and Volume Profile, I traded
support/resistance using price action in the context of 'auction
landmarks' such as OHLCs and swing extremes, and I used a tweaked macd
for gauging momentum. I was always aware of some invisible structure
behind the auction that weren't definable in terms of OHLCs and
swings, and MP and VP finally revealed their nature in the form of
volume. I have in the last 4 months begun a study of Volume Delta as a
more accurate gauge of momentum, and tossed out the tweaked macd. My
toolset is complete --now I must continue to master the tools I have
chosen! Also, FT71 helped me crystallize my risk management model.
Perhaps more than anything, his example of giving back to community
has shown traders that is most profitable to live in a mindset of
abundance.
Thanks for the blog!
I wrote up a Blog Post going over my "setup", or How I enter a Trade here: http://bit.ly/8ZGL9b
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