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How to learn to "read the Tape" aka Volume Foot Print / Delta chart.


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How to learn to "read the Tape" aka Volume Foot Print / Delta chart.

  #11 (permalink)
yawaniga
chennai/india
 
Posts: 155 since Sep 2015
Thanks Given: 111
Thanks Received: 149



Hi Meklon,

Wanna know about ur valuable suggestion based on ur great exploration of orderflow analysis concept. 've enclosed CL Chart with Gomiorderflowpro.

Still some confusion how to handle the Unfinished Auction with Any Imbalance level(Buy or Sell),

awaiting for ur comments.

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  #12 (permalink)
 Meklon 
New York, USA
 
Experience: Advanced
Platform: Sierra Chart
Trading: RTY, ES, YM, NQ, CL, NG, GC, HG
Posts: 61 since Oct 2016
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yawaniga View Post


Hi Meklon,

Wanna know about ur valuable suggestion based on ur great exploration of orderflow analysis concept. 've enclosed CL Chart with Gomiorderflowpro.

Still some confusion how to handle the Unfinished Auction with Any Imbalance level(Buy or Sell),

awaiting for ur comments.

Hi yawaniga,

My understanding of Unfinished Auction (aka Unfinished Business) is that it is equivalent to a "Poor TOP" and "Poor Bottom" of the TPO Market Profile concept. The idea is that market should come back and revisit these areas to "repair" or "finish" the failed market auction that happened at those levels. Quite often, based on what I have observed, the first test of Unfinished Auction area fails so taken in consideration overall Market Context it may be traded contrary tot he trend. Just my observation.

Again, I am NOT an expert and still learning myself so please take it with consideration. I am sure there are many way more experienced traders on this forum that could add to my comments or correct them (I could be wrong).

Also, I am just starting to explore the Gomi indicator set for Sierra and really like the graphics and how they present the data. IF you don't mind sharing the settings used on your setup of these indicators I would appreciate it. It will certainly save some time.

Cheers,

Mek.

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  #13 (permalink)
yawaniga
chennai/india
 
Posts: 155 since Sep 2015
Thanks Given: 111
Thanks Received: 149



Meklon View Post
Hi yawaniga,

My understanding of Unfinished Auction (aka Unfinished Business) is that it is equivalent to a "Poor TOP" and "Poor Bottom" of the TPO Market Profile concept. The idea is that market should come back and revisit these areas to "repair" or "finish" the failed market auction that happened at those levels. Quite often, based on what I have observed, the first test of Unfinished Auction area fails so taken in consideration overall Market Context it may be traded contrary tot he trend. Just my observation.

Again, I am NOT an expert and still learning myself so please take it with consideration. I am sure there are many way more experienced traders on this forum that could add to my comments or correct them (I could be wrong).

Also, I am just starting to explore the Gomi indicator set for Sierra and really like the graphics and how they present the data. IF you don't mind sharing the settings used on your setup of these indicators I would appreciate it. It will certainly save some time.

Cheers,

Mek.




Meklon,

No more modified settings, using default one, just changed the S/R Zones Opacity only.

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  #14 (permalink)
yawaniga
chennai/india
 
Posts: 155 since Sep 2015
Thanks Given: 111
Thanks Received: 149


Meklon View Post
Hi yawaniga,

My understanding of Unfinished Auction (aka Unfinished Business) is that it is equivalent to a "Poor TOP" and "Poor Bottom" of the TPO Market Profile concept. The idea is that market should come back and revisit these areas to "repair" or "finish" the failed market auction that happened at those levels. Quite often, based on what I have observed, the first test of Unfinished Auction area fails so taken in consideration overall Market Context it may be traded contrary tot he trend. Just my observation.

Again, I am NOT an expert and still learning myself so please take it with consideration. I am sure there are many way more experienced traders on this forum that could add to my comments or correct them (I could be wrong).

Cheers,

Mek.

Meklon,

My understanding is same as per ur quote regarding Unfinished Auction (aka Unfinished Business), Anyway refer the below attachments.

Scalp long trade @ $51.29 expected Tgt Top UA Levels $51.37 & $51.44 @ as per IST ,

Result - Hits the all Unfinished Auction Levels, really logic works on this case.

Note : i also learner, So lets share our observation whether it is right or wrong. Some experts 'll correct when we are wrong.

Note : Are you familiar with TPO Market Profile concept?




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  #15 (permalink)
 Meklon 
New York, USA
 
Experience: Advanced
Platform: Sierra Chart
Trading: RTY, ES, YM, NQ, CL, NG, GC, HG
Posts: 61 since Oct 2016
Thanks Given: 53
Thanks Received: 197


yawaniga View Post
Meklon,

My understanding is same as per ur quote regarding Unfinished Auction (aka Unfinished Business), Anyway refer the below attachments.

Scalp long trade @ $51.29 expected Tgt Top UA Levels $51.37 & $51.44 @ as per IST ,

Result - Hits the all Unfinished Auction Levels, really logic works on this case.

Note : i also learner, So lets share our observation whether it is right or wrong. Some experts 'll correct when we are wrong.

Note : Are you familiar with TPO Market Profile concept?




yawaniga,

Yes, good example of the "repair" of the failed market auction. I am familiar with MP concept, using it for my day preparation routine to gain possible understanding of what type of day to expect and where the key areas of support / resistance may be. I identify Trade Locations using the MP and then look for the OF and Delta to take the trade in those areas.

Mek.

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  #16 (permalink)
yawaniga
chennai/india
 
Posts: 155 since Sep 2015
Thanks Given: 111
Thanks Received: 149


Meklon View Post
yawaniga,

Yes, good example of the "repair" of the failed market auction. I am familiar with MP concept, using it for my day preparation routine to gain possible understanding of what type of day to expect and where the key areas of support / resistance may be. I identify Trade Locations using the MP and then look for the OF and Delta to take the trade in those areas.

Mek.

Wow, What a coincidence? try to adopt the same trade plan, i was read this unique combo (MP with OF) somewhere on this forum.

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  #17 (permalink)
 
paps's Avatar
 paps 
SF Bay Area + CA/US
 
Experience: None
Platform: TS, TOS, Ninja(Analytics)
Trading: NQ CL, ES when volatile mrkts
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Meklon View Post
Hello Guys,

Yes, I was referring to the information that trader can obtain from the Volume Foot Print chart and the Delta numbers associated with it. NOT the Price ladder and NOT the DOM. In my humble opinion the Depth Of Market lists only passive orders which can be "pulled" or changed any time while the Volume Foot Print chart and Delta list the orders that were executed and clearly show if there was a significant change in the BUY or SELL activity by institutions. Taking that information in combination with other factors such as Market Context / TPO and learning how to interpret it is what I am looking for.

Regards,

Mek.

Hi there...seems you are already on the right path and have got info. Not to diverge you off the Vol Foot print & Delta you were looking for. But just thought of pitching in what other forms of Tape reading could also exist. I try and follow a path given by Livermoore and a proponent of Wyckoff both of whom knew what the tape foretold much in advance.

However just an fyi/-. What you call as DOM and passive orders also does have much predicting power. Yes ofcourse it is difficult to analyze. Tape reading comes in various forms & the most astute and predictive form is when you have the ability to predict price depending on what is transpiring rather than what has transpired.

Tape reading depending on what is being done...can be done on ETFs..Long Only...Bear funds..Oil...Gold...Futures, etc etc.

Check a video from Nanex on the flash crash. One of the best videos as the crash was occurring not on one instrument but on all indexes.



cheers and best

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  #18 (permalink)
 
Brutus's Avatar
 Brutus 
Adelaide Australia
 
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Hi
you should also take a look at this thread, some good info posted by Camdo


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  #19 (permalink)
 Meklon 
New York, USA
 
Experience: Advanced
Platform: Sierra Chart
Trading: RTY, ES, YM, NQ, CL, NG, GC, HG
Posts: 61 since Oct 2016
Thanks Given: 53
Thanks Received: 197


paps View Post
Hi there...seems you are already on the right path and have got info. Not to diverge you off the Vol Foot print & Delta you were looking for. But just thought of pitching in what other forms of Tape reading could also exist. I try and follow a path given by Livermoore and a proponent of Wyckoff both of whom knew what the tape foretold much in advance.

However just an fyi/-. What you call as DOM and passive orders also does have much predicting power. Yes ofcourse it is difficult to analyze. Tape reading comes in various forms & the most astute and predictive form is when you have the ability to predict price depending on what is transpiring rather than what has transpired.

Tape reading depending on what is being done...can be done on ETFs..Long Only...Bear funds..Oil...Gold...Futures, etc etc.

Check a video from Nanex on the flash crash. One of the best videos as the crash was occurring not on one instrument but on all indexes.



cheers and best

Hi Paps,

Great post, thank you! I have to be honest, it took me 5 times to read this quote of yours "..Tape reading comes in various forms & the most astute and predictive form is when you have the ability to predict price depending on what is transpiring rather than what has transpired.." before it TRULY sinked in. YES, this is EXACTLY what I am trying to learn and what I need to improve on. My good understanding of the prior activity on the Foot Print and Delta activity still lacks that bridge to over "what is happening NOW".

I would greatly appreciate if you could share some insight on what approach you personally take in order to analyze how you evaluating the real-time market activity before making a decision on whether to take the trade or not, get out of the trade or stay in it longer.

It is absolutely fascinating to watch the video you have posted, observing how liquidity is drying up right in front of your eyes leading to the crash and how it is slowly being replenished taking the market higher from the abyss while the rest of the world is still watching the talking heads on TV and lagging light years behind to what is happening in REAL-TIME. Incredible! This is by far THE BEST illustration of how the market is moved, being affected by lack of liquidity (trading vacuum). The same very concept is very well illustrated by Peter Davies in this article:

Understanding Liquidity and Market Pullbacks

Thanks much!

Mek.

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  #20 (permalink)
 
paps's Avatar
 paps 
SF Bay Area + CA/US
 
Experience: None
Platform: TS, TOS, Ninja(Analytics)
Trading: NQ CL, ES when volatile mrkts
Posts: 1,739 since Oct 2011
Thanks Given: 2,176
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Meklon View Post
Hi Paps,

Great post, thank you! I have to be honest, it took me 5 times to read this quote of yours "..Tape reading comes in various forms & the most astute and predictive form is when you have the ability to predict price depending on what is transpiring rather than what has transpired.." before it TRULY sinked in. YES, this is EXACTLY what I am trying to learn and what I need to improve on. My good understanding of the prior activity on the Foot Print and Delta activity still lacks that bridge to over "what is happening NOW".

I would greatly appreciate if you could share some insight on what approach you personally take in order to analyze how you evaluating the real-time market activity before making a decision on whether to take the trade or not, get out of the trade or stay in it longer.

It is absolutely fascinating to watch the video you have posted, observing how liquidity is drying up right in front of your eyes leading to the crash and how it is slowly being replenished taking the market higher from the abyss while the rest of the world is still watching the talking heads on TV and lagging light years behind to what is happening in REAL-TIME. Incredible! This is by far THE BEST illustration of how the market is moved, being affected by lack of liquidity (trading vacuum). The same very concept is very well illustrated by Peter Davies in this article:

Understanding Liquidity and Market Pullbacks

Thanks much!

Mek.

hi there @Meklon glad you found some value. But let me tell you there is never a guarantee. And its continuous learning. Even today I constantly try and explore as things are always changing. But the Rule of Supply/Demand & what happens before & after these levels can be known if one can read Supply/Demand as shown by Wkyckof. Likewise what Livermoore saw on ticker tape can be easily seen by platforms such as Tradestation with tweaks.

Wyckoff was shown to me by one of my mentors & i since he never shared his charts publicly...and hence I will also not. My charts actually print out what is happening at the market ...though i still use bookmap & jigsaw. I use jigsaw & bookmap to see area of Hidden Orders or when markets are flushed/blown thru. But Limit Order are printed on my candles. However attaching a screenshot of how i use Jigsaw. Am just very used to it.


But i also look at various things such as how Orders arrive at exchanges which gives me a certain edge. Nothing is a guarantee in trading & hence this is something i have experienced & come to learn of certain order conditions as they happen in the markets. I do something similar for Heavy weight stocks & funds which will influence the market.


But again I do not look at this in isolation. This is typically used in conjunction with Cumulative Delta which I find powerful & use of Liquidity (google term VPIN which will show what some school of thought thinks what caused flash crash...but this happens regularly). I use liquidity with certain Spikes which happen in the markets. i did have an old journal which i stopped updating...some of this may have been shown there.

bottom line for me....identify Key Supply/Demand...what happens there before & after. What happens when Informed Traders enter/exit the markets & can their footprints bee seen.

cheers

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