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Thread: The View DownRiver

  1. #11
    DownRiverTrader

    I notice that you use Market Profile on your charts if I'm not mistaken. I've read it about, but also confusing to understand. If you ever have the time, it'd be much appreciated if you can describe how you use it.

    Regards
    ET

  2. #12
    Hello DRT,

    What do you mean when you speak of building value around a price point?

    Thanks,
    Randy

  3. #13
    DRT

    Thank you for posting your methodology ideas, I found it rather interesting and look forward to reading more about your trading technique and reasons for trades your are in on your separate currency threads.
    I myself exchange every now and again once I visit a deal I have a hunch about and also the price action affirms it. I have been learning from stuff written on the thread. I mainly base my trades on PA but do have additional indiors on my charts such as trendlines, fibos and MAs as confluence of these just re-confirm the trade I have obtained. Hope that this makes sense.

    Maintain the job!

    HoZe

  4. #14
    This may be somewhat hard to read, but I wanted to give you an idea about what my Risk Modeler resembles. An extremely simple spread sheet designed in MS Excel which I am sure most of you can perform. I've got tabs for each of my accounts. This example is for just one of my futures acccounts. You certainly don't need a spreadsheet program to perform this. You could just as easily calculate your risk from the traditional method. I have a rule that before I put in a transaction, I have to model the transaction. I expect the entry well before the transaction to get an idea about what the risk will look like. Then I adjust once I get an actual fill. It certainly is not rocket science by any means but it keeps me conscious of my risk at all times.

    http://home.comcast.net/~downrivertr...k_Modeler2.png

  5. #15
    ET,

    I Don't use Market Profile. What you're seeing in my charts in called Price Distribution. On the surface it is extremely similar. It is the dumbed down version of market profile. PD doesn't take volume into account.

    I use Price Distribution Analysis (PDA) more as a visual maybe not as a specific technique. It is just another way of defining value for me. Knowing price distribution around fair value is absolutely essential in helping me know where to buy and where to market.

    If you're a very short term trader, it is the ideal technique in my opinion for taking profits out of the currency market. Understand the Bell Curve. All markets transaction this manner. Cars, Widgets, Food, you name it. Some are more reliable than others when setting bets though.

    My advice would be embark on a study of comprehension the Bell Curve. It is not a simple road and requires dediion but it is well worthwhile. Even if you only know the fundamentals, it will prove invaluable to you when trading currencies.

    To get started, I would recommend buying this novel by James Dalton. It is easier to understand then a few of the more advanced functions.
    Http://www.amazon.com/Mind-over-Mark.../dp/0934380538

    There is also good information on the http://www.cbot.com/cbot/pub/page/0,3181,1168,00.html site.

    Good luck.


    Quote Originally Posted by ;

    I notice that you use Market Profile in your charts if I am not mistaken. I have read it about, but too confusing to understand. Should you ever have the time, it'd be much appreciated if you're able to explain how you use it.

    Regards
    ET

  6. #16
    Randy,

    The answer to this can be discovered by studying the information I explained to ET in the preceeding post.

    Let me get you started. Refer to this chart below. On the last two days of trading I'd say traders believed the fair value of the EURUSD was right around 1.3135. The flat (Black Colored) plots signify the number of occasions the EURUSD traded at a particular price. So the further it goes to the right, the more times it had been exchanged at this level. As we move below or above this level, not as many traders were buying or selling. Perhaps these traders represented MasterTraders who new when to take advantage of a good deal. As with any analysis, it is far easier to discuss it after it has occurred. Hindsight is always near 20/20. We had a lot of clues from Thursday's action to guide us though. Trading about these value places is usually done by sailors (traders).

    Would you understand what a Bell Curve looks like. Orderly flow aways out of a mean price. Do you see any Bell Curve's here? You will always see them as worth develops on every time frame.

    Let me state this. If you prefer to short term trade the currency markets, you can always find good bargains after the price settles down prices go away from worth. Late at the sessions for instance as traders move to trap new traders into thinking price is headed one way or another. When there is no additional time period large boy type traders to enter and move the market at that time, price only might return to the fair value area for that time period. Happens All of the TIME.

    Hey and you may Earn Money without any of these MACD, Stochastic thingys because YOU KNOW WHAT MOST OTHER NOVICE TRADERS DON'T KNOW.


    Http://home.comcast.net/~downrivertr...ding_Value.PNG

    Quote Originally Posted by ;
    Hello DRT,

    What do you mean if you talk of building value about a price point?

    Thanks,
    Randy

  7. #17
    DRT:

    Yes, welcome to the FF. You'll find very few big egos here, it is a good place to be with lots of good men and women. I look forward to digesting your musings on trading afterwards. I need to update my own thread soon but I've some duties for the next few days....Again, welcome.

  8. #18
    HoZe,

    Good Fortune. I've a hunch we will talk a bit more.

    DRT

    Quote Originally Posted by ;
    DRT

    Thank you for posting your egy thoughts, I found it very interesting and look forward to reading more about your trading egy and motives for trades your are in on your separate currency threads.
    I myself exchange every now and again when I visit a deal that I have a hunch about and also the price action affirms it. I've been learning slowly about PA from materials written on the James16 thread. I mostly base my trades on PA but do have additional indiors in my charts like trendlines, fibos and MAs as confluence of them just re-confirm the transaction I have obtained. Hope that this makes sense.

    Keep the work going!

    HoZe

  9. #19
    Thanks .

    Quote Originally Posted by ;
    DRT:

    Yes, welcome to the FF. You'll find very few large egos here, it is a good spot to be with lots of great people. I look forward to digesting your musings on trading afterwards. I want to upgrade my thread shortly but I've some obligations for the upcoming few days....Again, welcome.

  10. #20
    DRT,

    Large THANKS for taking the time for you explanation(s).

    Without the use of PDA (just using price), let me attempt to translate what you are saying. We'll stick to the EUR/USD Daily chart.

    - Since around the end of last November until now, am I correct in saying that buyers and vendors have put a fair vaule about the Euro at somewhere between 1.3050 and 1.3100? I came to the conclusion buy looking at the range of prices that comprised the many Support/Resistance tags.

    - Could it also be said that this range (provided I've even correctly identified it) represents the fattest part of this bell curve?

    - Let us say I'm even in the ballpark here....what would you (we) do with this advice going forward?

    As we sit here today I see two different scenarios developing....

    - Placing my Price Action knowledge to use, I see a Sell opportunity coming from this 2-15-07 Pin Bar.

    - However, if I'm following you correctly, it seems that the Buyers have taken hold again since they've moved price up throughout the 1.3050-1.3100 worth zone on 2-14-07 and scooped it up yesterday when it dipped into this zone. This could create be think that the Buyers are in control now and we are looking at a Buy prospect.

    Randy

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