The Flow Method and Market Profile

[segul]

3iInfotech 5 mins Profile.

By mistake i have mentioned Nifty Fut (out of habit).

thank u sir. Would be really happy if u could chip in some findings based on MP here are there.

regards.

 

[segul]

Hi Segul Great initiave dont know single word of market profile but got interested as you mentioned that it can be help full for flow trading ... even i have not down loaded the book you have provided in your first page ....

Before that plz explain bit more about market profile how this can be used in flow method in laymans language hope you consider

Regards
Satya

Thanx Satya,

Those books gives the basics on what is MP one or 2 reads on that will give u picture on MP. Yes, will do. Here I will only discuss about MP and relation with the flow method and how this can be used for our benefit and decision making.Will not go into too much details about MP.

Regards.

 

[Satyen]

Thanx Satya,

Those books gives the basics on what is MP one or 2 reads on that will give u picture on MP. Yes, will do. Here I will only discuss about MP and relation with the flow method and how this can be used for our benefit and decision making.Will not go into too much details about MP.

Regards.

Thanks looking forwrd to learn new things from you

Regards
Satya

 

[segul]

This is a picture of MP with its basic lvls for the coming day.
basically has 3 lvls.
the UVA-upper value area
POC-point of control
LVA-lower value area

regards.

POC: It is the level where highest activity has taken place in a day's trade. There very high chances of the market reacting at these points in future.

Value Area: It is the region bound UVA and LVA . Always POC is present within the value area.This consists of the 70% of the total market activity in a single day.
Here while plotting the value area high and value area low I am not following exact 70% rule.I am taking into consideration of some breakout bars and some important reaction points to come to conclusion of plotting of UVA an LVA.
Have backtested it and found really useful.

UVA:Upper extreme of the value area.

LVA:Lower extreme of the value area.

UVA and LVA, like POC provides reaction points for future market activity.

Regards.

 

[segul]

Now if we start drawing POC,UVA,LVA for every day for a previous month or two we might get so congested lvls that that we might have a level for every 5-10 points or so. But we are not wanting to scalp with these lvls but want to catch the flow. So what do we do?

 

[segul]

To keep things simple here we can do this.
Delete all the previous lvls which have been used up by the current market activity and look for the newly developed lvls. To say it with an example, suppose at the the end of the previous day we are having 3 newly developed levels. And today the market jumps up and starts to fall back, breaks the UVA ferociously and touches POC and rests for some time and again breaks down from POC and surpasses LVA and closes at the low point of the day.Now the previous day's all the 3 lvls are used up and is leading way to form 3 new lvls of today.

regards.

 

[segul]

The above example on the chart.

on the chart the 3 lvls(dotted lines) of 4/11 was used up on 5/11 leading way to give 3 new lvls(thick lines).so now we delete the 3 dotted lines and keep the new levels for future market action and reaction.

Regards.

 

[sunilm02]

This is exactly what we call "trying to make a beautifully working system perfect".
There are many useful things we read in books. While reading them, we appreciate them. But, later on we do exactly opposite.

Now, don't we know that trying to make a system perfect is the best way to ruin it? Then, why are we trying? Are we trying to search a holy grail system.
Sunil

 

[renu daga]

thnks alot segul

making refreshed again,,, pls pls continue,,,, and give excat gaining strategy ,, and how to use this for day trading!!
and the span of time too

renu

 

[Ank!t007]

As described by Segul We only keep the level which has not been touched by market on consequent days aka Virgin POC.Market sees it as support or resistance level.

Ankit