Thanks again to Will for spending time on this today, and for the great analysis. I hate to post yet another ES short and wish I had a different market for you all to look at. Since Will has taken the time to go over this and so many of you are familiar with the area I am going ahead and doing it. Also Paul's earlier post regarding market replay and the effectiveness of the software is a tough act to follow. So with all of that in mind I will keep it short yet thorough if possible!
LTF Daily: The area of supply these past two weeks shorts have come from for me is a well defined supply zone. On the weekly it will all show as one as well as the all time high, on the daily its the sharp drop just under the all time high.
STF 25,000 volume & 30M: This is the time frame that I set my entries and stops on and the image below is from the 30M. I am still playing with the 25K volume that Will turned me on too as well and really like it. I also used an ATM strategy that allows for multiple targets and trailing stops. This is stock ninja trader stuff and can easily be learned if your not familiar with it, no ninja script or coding required.
Result so far: Target 1 hit for $500 and change profit per contract, and my stops had moved down below the new supply that formed on the chart this afternoon. I had originally entered at the old supply from February 2nd so I went ahead and moved them manually back above this new supply. The historical zone is over 6 months old so to me this is a "fresh and active zone" showing new supply. In addition the VR looks really good so I had no issue moving the stops above it for now. I like this area and if we see a pull back to it I want to stay short. I made enough from the 1st target to still turn a profit so I am going to let it ride and see what happens. When I am counter the long term trend, I always front load the first target with most of my contracts because statistically in my trading its the most likely to hit. Plus I only want to leave on a handful for the subsequent longer term swing style trade that is left anyway. Now I may have a swing trade going or may get stopped out we will see what happens and it does not matter.
Note: I have already shorted the LTF zone from my daily twice now, so I wont be surprised if we see a push upwards to the higher time frame supply from the daily next. I wont take this area again and will not short again until we see the area above. I stayed in this one because it looks like there is still room to run to the down side and I was already profitable. Counter trend rules applied: As I mentioned above this trade is counter the strong & long term uptrend so I front loaded the first target, and I am not setting my technical targets as far away I would if these trades were long from the lower altitude demand. In addition if price touches this new supply and then attempts to retest it, or spends a lot of time in it during a high volume time I will exit as well to maximize my profit.
That is about it, thanks again to Will for great analysis and to everyone else sharing on the forum. I only take an average of 2-5 trades a week during the slow months of July and August so not much else to share or offer up for discussion. Just advise everyone to stay patient in this market this time of year. Try to look at a lot of different markets and take only the very best setups, enjoy your families. God bless and good luck, B
LTF Daily: The area of supply these past two weeks shorts have come from for me is a well defined supply zone. On the weekly it will all show as one as well as the all time high, on the daily its the sharp drop just under the all time high.
STF 25,000 volume & 30M: This is the time frame that I set my entries and stops on and the image below is from the 30M. I am still playing with the 25K volume that Will turned me on too as well and really like it. I also used an ATM strategy that allows for multiple targets and trailing stops. This is stock ninja trader stuff and can easily be learned if your not familiar with it, no ninja script or coding required.
Result so far: Target 1 hit for $500 and change profit per contract, and my stops had moved down below the new supply that formed on the chart this afternoon. I had originally entered at the old supply from February 2nd so I went ahead and moved them manually back above this new supply. The historical zone is over 6 months old so to me this is a "fresh and active zone" showing new supply. In addition the VR looks really good so I had no issue moving the stops above it for now. I like this area and if we see a pull back to it I want to stay short. I made enough from the 1st target to still turn a profit so I am going to let it ride and see what happens. When I am counter the long term trend, I always front load the first target with most of my contracts because statistically in my trading its the most likely to hit. Plus I only want to leave on a handful for the subsequent longer term swing style trade that is left anyway. Now I may have a swing trade going or may get stopped out we will see what happens and it does not matter.
Note: I have already shorted the LTF zone from my daily twice now, so I wont be surprised if we see a push upwards to the higher time frame supply from the daily next. I wont take this area again and will not short again until we see the area above. I stayed in this one because it looks like there is still room to run to the down side and I was already profitable. Counter trend rules applied: As I mentioned above this trade is counter the strong & long term uptrend so I front loaded the first target, and I am not setting my technical targets as far away I would if these trades were long from the lower altitude demand. In addition if price touches this new supply and then attempts to retest it, or spends a lot of time in it during a high volume time I will exit as well to maximize my profit.
That is about it, thanks again to Will for great analysis and to everyone else sharing on the forum. I only take an average of 2-5 trades a week during the slow months of July and August so not much else to share or offer up for discussion. Just advise everyone to stay patient in this market this time of year. Try to look at a lot of different markets and take only the very best setups, enjoy your families. God bless and good luck, B
Thank you so much for sharing this, I love seeing you all do so very well 
Your analysis is thorough and well thought out. I like that you're of the mindset to utilize a counter trend approach and "know when to fold em" as Kenny Rogers would say! Keep up the great work and please keep sharing!
Once I finish up a couple things (boring business stuff haha) I'll be rockin the forum much more with you
Your analysis is thorough and well thought out. I like that you're of the mindset to utilize a counter trend approach and "know when to fold em" as Kenny Rogers would say! Keep up the great work and please keep sharing!
Once I finish up a couple things (boring business stuff haha) I'll be rockin the forum much more with you
BillPrivate: Thanks again to Will for spending time on this today, and for the great analysis.I also wanted to add that I appreciate your kind words very much! While I presented this as an opportunity (for educational purposes) you did the hard work and followed your own plan. So nice job on this and many others! Trading is no picnic and the fact that you're executing with consistency is excellent my friend
- BillPrivate
- 3 years ago
- #452
Thanks Will and what a great community environment you've created for us! I mentioned the volume profile in the post briefly it is such a great tool for the way I like to trade and compare the zones within multiple time frames. Between the futures and the forex markets all the scanning and evaluating looking for A+ trades has been made so much easier and less time consuming for me with the tools you've provided. Just really enjoying it! B
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Another great post Bill. Thanks for the honorable mention too. Your experience really comes through and it is inspiring and motivating for me. Unfortunately the last couple of days I've had to deal with some things for my business that I put on the side lines to focus on learning to trade so I missed the ES trade. There will be others so it doesn't worry me much.
Here is an update to the trade and an image to consider. This shows pretty well why I love the volume ratio feature within PFA zone suite. Take a close look at the Avg totals and then the totals for the two respective zones, then notice how price is already reacting to the first supply zone on this (30M) chart. All of this improves the odds for the level of supply above if price makes it back there. Great feature! B 
Thanks for that post Bill. I have not got into that feature yet. I almost always look at the Volume Profile though to try and reduce my entry/stop area and risk. I'm not exactly sure what the VR feature does even so I have a few questions when someone has time. My VR numbers differ from yours a little. I'm guessing that's just a data thing though.
1. Are those the actual number of sell/buy orders that took place in that zone ?
2. Are they completed order or just orders that were placed ?
3. Assuming the answer to 1 is yes, then is the number in the red box is the actual number of sell orders and the green number is the actual number of buy orders that took place in that zone?
4. What do the Average Sell & Average Buy number represent?
On a whole other train of thought, and maybe this should be a new thread but I'm here now. I know we talk about order flow and imbalances all the time and it's the basis of our whole methodology. I'm wondering if that is the whole picture though. The only information or data that makes it to our charts is completed orders or trades. In order to have a completed trade you must have a buyer and a seller. That's a fact. Without both sides the data will never make it to the chart or into our analysis. If that's the case, then simple mathematical logic dictates that the number of "completed" sell orders must be equal to the number of "completed" buy orders. It's mathematically impossible to have more completed buy orders than sell orders or vice versa. Therefore, if they're equal, how can there possibly be an imbalance ? It's not possible. There could be an imbalance of buy/sell orders that are sitting on the exchange but we don't use that data because it can and is easily manipulated. So I'm thinking, can the underlying cause of what truly moves the market possibly not be an imbalance of buyers/sellers but rather an imbalance of the strength of the buyers and the the strength of the sellers. What kind of buyers and sellers were they? Were they passive or aggressive? Did they place a market order or a limit order? If price went up then the buyers must have been stronger and more aggressive than the sellers.
Hope I'm not getting too philosophical here. Just a light topic for a Tuesday afternoon discussion. lol
Cheers !
1. Are those the actual number of sell/buy orders that took place in that zone ?
2. Are they completed order or just orders that were placed ?
3. Assuming the answer to 1 is yes, then is the number in the red box is the actual number of sell orders and the green number is the actual number of buy orders that took place in that zone?
4. What do the Average Sell & Average Buy number represent?
On a whole other train of thought, and maybe this should be a new thread but I'm here now. I know we talk about order flow and imbalances all the time and it's the basis of our whole methodology. I'm wondering if that is the whole picture though. The only information or data that makes it to our charts is completed orders or trades. In order to have a completed trade you must have a buyer and a seller. That's a fact. Without both sides the data will never make it to the chart or into our analysis. If that's the case, then simple mathematical logic dictates that the number of "completed" sell orders must be equal to the number of "completed" buy orders. It's mathematically impossible to have more completed buy orders than sell orders or vice versa. Therefore, if they're equal, how can there possibly be an imbalance ? It's not possible. There could be an imbalance of buy/sell orders that are sitting on the exchange but we don't use that data because it can and is easily manipulated. So I'm thinking, can the underlying cause of what truly moves the market possibly not be an imbalance of buyers/sellers but rather an imbalance of the strength of the buyers and the the strength of the sellers. What kind of buyers and sellers were they? Were they passive or aggressive? Did they place a market order or a limit order? If price went up then the buyers must have been stronger and more aggressive than the sellers.
Hope I'm not getting too philosophical here. Just a light topic for a Tuesday afternoon discussion. lol
Cheers !
Thought I'd take a stab at these since these are technical software questions.
Let's address the logic portion a bit. Very true regarding a transaction, it takes 1 to 1 to have a transaction for sure. However there is one primary part that you're leaving out which should clear all of the logic up.... "Unfilled Orders". Let's say there are 1000 willing buyers and 3000 willing sellers, what happens to the 2000 sellers that didn't get filled? Some of them just sit there patiently waiting and that is what you cannot see on the price chart unless you know what you're looking for, and even then it's a probability factor not definitive, otherwise we'd be gazillionaires
Not only do you have the unfilled orders, you have a strong departure from that area because the hefty imbalance of sellers to buyers would force price to drop quickly to the next large amount of buyers, that's a clear sign of significance. In other words this creates a footprint that we can use for future purposes in the hopes those orders are still willing to take a shot at that area. This of course is where all the PFA Methodology comes into play regarding the "read" on the market and determine if the setup has a high or low probability of repeating itself.
I hope that helps, I do like how you're mind is working trying to piece the actual logic together!
gardelli: 1. Are those the actual number of sell/buy orders that took place in that zone ?Correct this is the actual volume that took place at the level at that time. Remember there are settings to allow for the retest data as well and IF enabled the software will continue to calculate the volume each time we return to the level.
gardelli: 2. Are they completed order or just orders that were placed ?Indeed they are filled and full executed, that is the only way to account for true volume that is not capable of being manipulated.
gardelli: 3. Assuming the answer to 1 is yes, then is the number in the red box is the actual number of sell orders and the green number is the actual number of buy orders that took place in that zone?Correct, it is dependant on the data being provided so it calculates as accurately as possible.
gardelli: 4. What do the Average Sell & Average Buy number represent?This allows us to compare the amount of buy/sell volume at this particular level to that of all previous. It simply tells us if this was a high volume area or not in comparison to other zones. This also has a setting that allows us to compare all zones, or only that of the same kind (demand to demand, supply to supply etc....)
gardelli: I know we talk about order flow and imbalances all the time and it's the basis of our whole methodology. I'm wondering if that is the whole picture though.Whoa Whoa LOL.... Let me try to clarify a few things so this isn't confusing. Order flow or volume is indeed a huge part of the methodology, but rather I'd say the primary component is the "anticipation" of order flow. This is why getting the location is so important, it helps us see where the larger amount of orders would likely get placed and we can use that to our advantage.
Let's address the logic portion a bit. Very true regarding a transaction, it takes 1 to 1 to have a transaction for sure. However there is one primary part that you're leaving out which should clear all of the logic up.... "Unfilled Orders". Let's say there are 1000 willing buyers and 3000 willing sellers, what happens to the 2000 sellers that didn't get filled? Some of them just sit there patiently waiting and that is what you cannot see on the price chart unless you know what you're looking for, and even then it's a probability factor not definitive, otherwise we'd be gazillionaires
Not only do you have the unfilled orders, you have a strong departure from that area because the hefty imbalance of sellers to buyers would force price to drop quickly to the next large amount of buyers, that's a clear sign of significance. In other words this creates a footprint that we can use for future purposes in the hopes those orders are still willing to take a shot at that area. This of course is where all the PFA Methodology comes into play regarding the "read" on the market and determine if the setup has a high or low probability of repeating itself.
I hope that helps, I do like how you're mind is working trying to piece the actual logic together!
Excellent reply Will! I saw the post earlier and was waiting for you to hit it for Paul you did not disappoint. Paul I would also add that you should play with the static DOM and order flow tools in ninja if you haven't already. The data box in the PFA software will also help you see the order flow more clearly and what happens as price hits/approaches the zone.
ES trade wrap up: As you can see none of this is an absolute and they don't all go perfectly. I moved down my final stops and took an exit earlier when price hovered around in that zone for too long burning up the sell orders I needed to get my free fall. Not with any emotion, I had planned that one ahead of time as this was a real possibility with this particular entry. So the trade result was a decent profit on target one yesterday with about 75% of my contracts and a small loss of about $200 each on the remaining 25%. Not bad for the second trade of the same area (that first one last week was really good!) Now I will wait for it to bounce off the higher supply zone and hope for a big pull back to demand that's much lower in altitude, I really don't see any good fresh supply in that all time high area until the very top of it and that action happened at the Asian open which I do not trade on this market. I know Will will look at it for us tomorrow and make a good call on any potential entries short up there as well. To me it looks like Trump and demand will together push price higher and we may see some new highs in August.
Thanks for the likes and comments everyone, will try to post a few more for discussion but its just been awfully slow lately. God bless and good luck! B
ES trade wrap up: As you can see none of this is an absolute and they don't all go perfectly. I moved down my final stops and took an exit earlier when price hovered around in that zone for too long burning up the sell orders I needed to get my free fall. Not with any emotion, I had planned that one ahead of time as this was a real possibility with this particular entry. So the trade result was a decent profit on target one yesterday with about 75% of my contracts and a small loss of about $200 each on the remaining 25%. Not bad for the second trade of the same area (that first one last week was really good!) Now I will wait for it to bounce off the higher supply zone and hope for a big pull back to demand that's much lower in altitude, I really don't see any good fresh supply in that all time high area until the very top of it and that action happened at the Asian open which I do not trade on this market. I know Will will look at it for us tomorrow and make a good call on any potential entries short up there as well. To me it looks like Trump and demand will together push price higher and we may see some new highs in August.
Thanks for the likes and comments everyone, will try to post a few more for discussion but its just been awfully slow lately. God bless and good luck! B
Thanks as always guys.
Hey Bill . . . So in reference to the VR feature, when you see that the red and green numbers are considerably higher than the average numbers does that add to the probability that there should be a reaction when price comes back to the zone ?
I'll give the DOM a watch. What's the difference between static and dynamic?
Hey Bill . . . So in reference to the VR feature, when you see that the red and green numbers are considerably higher than the average numbers does that add to the probability that there should be a reaction when price comes back to the zone ?
I'll give the DOM a watch. What's the difference between static and dynamic?
Paul to your first question, yes it adds to the probability of a reaction. However in the example shown if you look at your ES chart now you see that price did indeed get a little bounce off the initial and lower volume zone, before breaking through the higher supply that I exited from. Of course we are not dealing in absolutes anyway so you could say that's not relevant but it is worth pointing out. You can't win them all but once you develop and begin to stick to your trade plan you can generate a reasonable win loss ratio, and certainly the average winner/loser numbers. As you begin to feel satisfied with those two statistics start to pay attention to your MFE, ETD and MAE (bottom of your trade performance report in ninja). Those are the intermediate statistics you can work on improving through good entry and target selection and trailing stop refinements. To me those three along with your Sharpe ratio are the key to the pro trader level and maybe along with time/market cycle experience the key to moving from SIM to a live account. In my opinion, no one should trade a live account until all these stats are where you want them to be and you have seen a complete market cycle.
To answer your questions regarding the two types of DOM in ninja ie; static and dynamic.
1. STATIC SUPER DOM: The inside market (ask/bid and last price) climb up and down the price ladder in response to a change in market price.
The price rows are static (do not change).
2. DYNAMIC SUPER DOM: The inside market (ask/bid and last price) is in a fixed location in the price ladder display.
The price rows are dynamic in that each row's price changes in response to a change in market price.
NOTE: Open up ninja trader support and look under order entry, under Super DOM there is actually a dynamic vs. static button with a video and everything that is useful if you want to enter orders this way. Personally myself and most of the other traders I know trade on the charts almost exclusively but its there for you if you want to dig deeper.
Hope that answered your question brother! Have a good evening and great weekend. B
To answer your questions regarding the two types of DOM in ninja ie; static and dynamic.
1. STATIC SUPER DOM: The inside market (ask/bid and last price) climb up and down the price ladder in response to a change in market price.
The price rows are static (do not change).
2. DYNAMIC SUPER DOM: The inside market (ask/bid and last price) is in a fixed location in the price ladder display.
The price rows are dynamic in that each row's price changes in response to a change in market price.
NOTE: Open up ninja trader support and look under order entry, under Super DOM there is actually a dynamic vs. static button with a video and everything that is useful if you want to enter orders this way. Personally myself and most of the other traders I know trade on the charts almost exclusively but its there for you if you want to dig deeper.
Hope that answered your question brother! Have a good evening and great weekend. B
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