I've been thinking of starting a new thread to discuss in general and how I'm using Gomi's volume ladder for trade confirmation. I also am very curious how others are using and interpreting the volume ladder. So I invite anyone else to feel free to contribute with comments, questions, screenshots of their own, or whatever. Not sure if I should post this in the public "Journal" section???
First, a little background. I started actively trading about 2 years ago and immediately went on a great run (random luck in hindsight); soon managed to give it all back and then some - death by a thousand cuts syndrome. I knew something was missing (context) so a few months ago I began studying market profile. I feel like I am now starting to really "get it" and entering into the competent phase. I am still only marginally profitable and I have a problem with sometimes severe hesitation when taking the trades, believing in my analysis and what I am seeing happen before my eyes. My background is engineering, so I think I've always been after something objective and concrete to base my entries and exits on. Anyhow, enter the volume ladder. A great tool, but a lot to look at (maybe too much and certainly not helping my hesitation problem...) But it really is so simple - in hindsight of course - and eventually I'll break through my personal barriers.
Now that I've been using this ladder for a few weeks, I've decided in order to help myself with recognizing the patterns and setups in real time, building confidence and taking the trades, I would accumulate a journal of annotated screenshots. I'll post them to this thread when I can.
Attached is today's late afternoon session of the NQ. It was tough to hang in there until this nice trade came along. The volume was abysmally low. Based on my homework last night my general plan was:
1. Wait for IB high/low to form.
2. Fade moves beyond IB high or low - but only if/when order flow confirms.
3. Go long around 1863 (12/24 VPOC) if price gets there and only if/when order flow confirms.
There was no range extension to the upside and downside range extension finally happened at about 14:15 EST, which also coincided with 12/24 close (1868.5) and a "minor" high volume node at 1867.75. At that point it was pretty obvious the setup was there and valid and order shifted to buying around 14:29 on my ladder chart. Screenshot is attached (sorry for large size). Of course the notes were mostly done in hindsight, but I believe it still helps me to internalize the patterns and setups to go through the exercise.