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In response to changing market conditions, Pete Steidlmayer has developed a new method to analyze the markets. Steidlmayer presents his recent research discussing the importance of understanding how price and volume databases as tools for market analysis …
Volume and market profile has always been an available intraday option, but relies on a normalized distribution with a single supply area in the center. One of the key ideas within volume strips is the concave distribution with multiple supply areas at the extremes of intraday movements.
Hth
Luck is what happens when preparation meets opportunity. ~ Seneca
I thought it might be a good exercise if we could get some guys to share "tomorrow's chart", in other words a chart with their projections of what price may do (or multiple scenarios) and then how they might trade them.
FT71: "I don't try to be right. I try to emphasize the probabilities. What is more likely to take place, in this area, right now that I designated to do business in, in my homework"
FT71: "Most attention is being spent on the tip of the iceberg (what you can see above water). That is not the most important part. What's important is the foundation (unseen under water)."
Typical plan for the day. Brief example -- more details are in Webinar 4.1 on FT71's website. (Below is my assessment of what he describes)
Start by looking at trading calendar (news events etc)
Next look at Big Picture: FT71 uses a 405 minute day session only chart (1 bar = 1 RTH session)
Review the composite profile chart
Read the "story" the market is telling
When market is in balance: create a micro composite to show what prices were doing during the ranging/balance span of days - until the market breaks out of that range (no longer in balance)
(Why composite profiles? Want to see inside the bar, not just OHLC - at what prices did most of the trading take place?)
Determine "where did the market like prices, and where did it not?"
(Think from auction perspective: if iPhone were sold tomorrow at $50, how long will prices remain at $50? What is the fair price of an iPhone? (~$200). What happens if AT&T offered for $50, would you buy it? (Yes) What if the inventory @ $50 is limited, how much volume would happen (very limited - supply will be gone very quickly). That becomes an unfair price to the seller, so the seller will raise prices quickly. Prices will continue going up until the new price becomes unfair, and there are no new buyers.)