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The way I see it consolidation, or better yet "Congestion", I assume is the building of the "Battery", more like saturation of a dark claud with ions before lightening discharge, and "Combustion" or breakout, used here as an analog. If you draw the "CongestionBoxes" indicator on your chart you can actually clearly see most of the congestion areas before or at the breakout. Combine congestion boxes with divergence and you are in green over 85% of the time.
I have been trading since mid 1975 and yet to master volume profile and order flow, it just does not stick. You are not alone. "If it works use it until it does not" -- Woodie
I think I may have confused you with some non-standardized terms.
Lets talk Concepts and context. I'll use candlestick terminology. Also, keep in mind, we are discussing a 2 sided auction. (Bulls and Bears)
I think we can agree on these things.
If you have a
1. large bodied green candle, that's a lot of bullish fuel.
2. large bodied red candle, that's a lot of bearish fuel.
3. A doji stick....its very little fuel.
All of the above are each auctions in themselves. But, without context, they are meaningless.
Lets say you have identified a 50 day range of all different type candles and the range is between 20 and 50. If you buy while in the range, your just adding fuel to the fire so to speak because there is no direction for the past 50 days. Meanwhile your patient and calculating what the target would be if it breaks up or down. If the range (auction) in this case is 30 points and you think if it breaks thru 50 we could move to 80 (50+(50-20) you are now able to calculate risk/reward. This is where context comes into play...those candles (auctions) become much more meaningful. If prices for the next couple days dribble down to the point of breakout, thats your trigger, you know your risk/reward, your target and thats all you need. So, the steps are to identify a range(auction) calculate what you think the move could be from that auction and react if the boundaries of the auction are violated with some kind of forceful movement.
You probably already know all this, but putting context with with concepts is probably the most overlooked thing a trader can do. Now, at it relates to volume profile. Volume profile is like looking at a picture in with a 8k resolution versus looking at candlesticks which is like 320x240 resolution The process of using candlesticks or volume profile are equally valid but the profiles can fine tune your analysis superbly.
David....those are very nice profiles. Stare at them a lot....envision the auctions and where the auctions could target for prices. Your only hurdle now is reps !
Meanwhile as I was writing up my response earlier, I went to my workstation and missed the entry level I had for this AM which was 6885. It occurred at 5:30AM. I don't trade that early anyway, but whats important is to mark off levels every single day...test yourself ! I don't say this to brag, I say it to encourage you to test yourself.. Mark off levels (where you think an auction started and ended) every day and try and figure out where you went wrong or right. Figure out targets from those levels, if your not figuring out targets you should not play this game.
Auction market theory.....the question should always be what's possible based on the auction at hand. Today for example. the support for todays daily was 6885...it responded very well early AM. After the open it gave way.....the downside target would be 6838. It doesn't have to respond there, its the target.
Yes........my rule of thumb is, if all the supposed pros on the internet say you need POC, value areas etc they honestly don't have a clue how things work. They will charge you to tell you publicly available stuff which is as useful as moving average crossovers. Here's why, particularly, the current days POC and value areas. They are dynamic, they have ZERO meaning until the days over, they will change as the market changes. As it relates to previous day POC's and value areas, they are equally worthless, its statistically proven even though some people like to think differently. Stick to trying to grasp auctions. POC is merely the center point of the auction outside of that its basically pointless.
Agreed on the core point. Steidlmayer built Market Profile as a framework for understanding price discovery - acceptance, rejection, balance vs. trend. Somewhere along the way it got reduced to drawing lines and fading bounces.
The developing intraday POC is the worst offender. It migrates all session long. Trading a moving target like it's a fixed level is just asking for chop.
Where I'd push back slightly - composite profiles showing multi-session volume clusters still have value as context. Not as bounce levels, but as reference points. Price revisits a high-volume node from three sessions ago and you see absorption on the footprint? Worth paying attention to. But that's reading the auction with profile as supporting data, not trading the profile mechanically.
Most of what gets taught online skips that distinction entirely, which is your point. Mechanical value area fades are just a moving average crossover with extra steps.
@DavidHP - strip it down, read the auction raw first. Add tools back later once you know what they're actually measuring.
-- Fi "The map is useful when you understand the territory - dangerous when you mistake it for the territory itself."
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