shrekchenbin 

... Given the first hour's profile, it is pretty much clear to me that today is a long liquidation day and I should trade the setup to the down side.

do I understand correct as: this means "traders are selling long positions" ?

shrekchenbin 

... I hope you find this idea interesting.

Very much so. Thank you.

do you perhaps have a document, .. a summary cheat sheet, listing all these synthetic and very practical market profile rules, which you would like to post here ?

guidoisot 

do I understand correct as: this means "traders are selling long positions" ? Very much so. Thank you. do you perhaps have a document, .. a summary cheat sheet, listing all these synthetic and very practical market profile rules, which you would like to post here ?

Guidoisot,
Yes, you can interpret long liquidation as a selling. It is the opposite to short covering rally.
I use this term because they are auction market theory terms.
You can check out my other thread in which I had some in depth look in the methodology.
https://www.forexfactory.com/showthread.php?t=751584

After laying out the scheme on how to formalize a dynamic intraday bias, I didn't update on this. But I was too tired and fell asleep. Therefore I didn't trade most of the session. After my kids being back, I was busy with the kids again.

Hence I can only practice the scheme in hindsight.

Today ES has had a elongated IB profile bar with a bullish tilt (POC at the high). It is saying that the intraday bias is likely to be bullish so long as the VAL of the IB profile bar is not taken out. Remember that we have laid out a bearish bias in our pre-market prep. When daily bias and intraday bias conflict, it is time to take a pause to consider the situation. In fact, even with a bullish IB profile, the day still could turn bearish if market failed after auctioning into prior day's range. The third bar was a bearish engulfing bar which might turn the market around. But the 17:00 drive was not able to take out value area low of the IB profile. And the market extended further to the upside after the failed bearish drive.

This concept is quite similar to the IB range expansion idea. But with the help of the TPO profile, the analysis has become much richer, multi-dimensional as we have much more additional parameters available to help us to make sense of the market sentiment.

This morning, DAX has traded within a well defined box that it has provided many range trading opportunities. It started the session with a drive to the upside and failure. It has turned around and found support at 75. This range has remained in place until 12:20 and sudden spike has broken it decisively. The cause of the such spike is most probably the cheaper Euro. The Euro slumped hard during the morning session, but it was never reflected in the DAX price. I think it is likely that some big trader from London was pressing the market down via brute force until the morning session ran out of time that he would have to liquidate his position before the lunch break. That was merely my hypothesis. But if you look back there are plenty of spike around 12:20 CET time in DAX that I can not help to make the link to the London lunch break.



After that spike high, DAX has stood firm above yesterday's VAH which is bullish. After building a bit value and acceptance in the upper distribution, we are likely to see price advance from here to challenge the Tuesday high sometime today or tomorrow.

Yesterday was a wide rotational day for ES that it has failed at prior day's value and auction back down all the way to the open print. It is suggesting nervousness and the lack of risk appetite to take overnight risks by the investors. The overnight session has reacted to the supposedly positive Trump tweet, but this kind reaction can fade very quickly as the money deployed to buy into the market has no staying power. Hence the strategy for the day is to look for failures of the bullish drive and trade rotation to the down side.
At this moment, the market trading above yesterday's value, and it looks buoyant and ready to pop. Out of the open i would look for two scenarios:
1. An auction against the overnight inventory and drive higher. Failure and rotation after the Ny lunch break
2. Open drive and failure after the lunch break

Basically, i see a high odds of bull failure late into the session as the market lacks the confidence and conviction. The lack of conviction is quite common for a bear market that all the rallies are sold into eventually.


Be mindful that on a higher time frame, the ES has formed a contracting triangle. It could break out to either side.

An extremely bullish initial balance profile -- elongated with POC close to the highs.
Expect more bullish follow through until failure (selling tail) appears.

Testing the IB profile POC.
If it fails, it opens doors for a failure pattern.

That was a precise reaction from the VPOC.
Now VPOC has migrated higher.
Still bullish.

The pattern of strength into balance, balance into failure, and failure resulted in a drive to the other side just repeats itself
all the time in the market

shrekchenbin 

Yesterday was a wide rotational day for ES that it has failed at prior day's value and auction back down all the way to the open print. It is suggesting nervousness and the lack of risk appetite to take overnight risks by the investors. The overnight session has reacted to the supposedly positive Trump tweet, but this kind reaction can fade very quickly as the money deployed to buy into the market has no staying power. Hence the strategy for the day is to look for failures of the bullish drive and trade rotation to the down side. At this moment, the market trading above yesterday's value, and it looks buoyant and ready to pop. Out of the open i would look for two scenarios: 1. An auction against the overnight inventory and drive higher. Failure and rotation after the Ny lunch break 2. Open drive and failure after the lunch break Basically, i see a high odds of bull failure late into the session as the market lacks the confidence and conviction. The lack of conviction is quite common for a bear market that all the rallies are sold into eventually. Be mindful that on a higher time frame, the ES has formed a contracting triangle. It could break out to either side.

Hi ShrekChenBin,
Following your thread for last couple of days. Thank you! very informative ans well explained concepts. This actually got me interested and am now reading "Mind over Markets".
I have a question about the NinjaTrader MarketProfile and OrderFlow indicators you have on your charts, they are very clean. Did you get these from a vendor?

Please continue to educate us. Much appreciated.
Thanks