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Monday 10-24-11


I'm hoping to expand on this as the weekend progresses and I have more time. My disclaimer here is that these comments and charts are only focusing on the bell curve ideas. These are not the only numbers I use or trade from. These comments are also made because we don't have volume to work from at the current prices from the current active contract.

One of the nice things about the emini is that even if you don't like this approach or using the cash market or the continuous contract for data then you can just wait until volume comes into the current contract. The emini does so much back and fill that you would rarely have to wait more than half a day to get better volume numbers.

My good buddy Lorn was kind enough to send some charts to me that I requested which in turn inspired me to fire up my old Investor R/t to have a look at some charts that I can post.

Nick asked about further numbers on the upside and I was unable to get to a response to him on Friday. This will cover some of that and some additional questions that were sent to me. Hopefully this won't seem too complex.

Below is a mini bell curve from part of 8-03-11 (day session only )and part of 8-04-11. Time can be used as an approximation to volume when volume is spotty and you are not comfortable with your "read" on a contracts volume. Normally I would be against using the time factor on it's own but when you have a good visual on the regular bar chart to confirm your time reading then it is a fair proximity. See bar chart down below.

So I have lines snapped at this mini bell curve from 8-03. I put lines at the low time tpo extremes but also at 1236 as that begins to define the high volume/time area of that particular bell curve. The BEST bell curves will also have a nice peak volum eline too. Look what happens on the following day - 8-04. We trade into the mini bell curve and reject it and sell off. This tells us that the 8-03 bell curve is still valid! You could then combine the 8-03 and 8-04 trading days into one if you cannot see this. Over time you will probably lose your need to combine the profiles.


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august


I mentioned above to confirm your time based bell curves ( tpo charts) with your standard bar chart patterns too. Here is what the bar chart looked like from that day. The reality is that 41.25 actually captures the upper limit of the bell curve much better. The TPO chart does not capture the bulk of the volume/trading effectively. See how resistance becomes support at a price of 41.25 ? This happened at 2:30 in the afternoon for reference. This to me encapsules the bulk of trading better.
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barchart



So the upper limit I feel should really be up at 41.25 and not the 38 area. This is a great example because it is something we should look at anyway everyday and not just pretend that the volume bell curves are the holy grail. They fundamentally are really just consolidation points seperated by low volume. This upper bell curve will be the key to continuation or a decline on Monday. Can they keep trade above it to ensure a further rally or will they get back below the lower edge and sell off?

So now on this next chart I have taken those lines and put them on Fridays trade bar chart as this was/is the nearest bell curve as we went higher. Now some can see why the hour breakout with an air pocket below was a very good trade on Friday. Everything in context!

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friday
Bruce. Thank you for posting the charts and the explanation for the bell curve and how to use the volume, I really appreciate it, however I have a little problem visualizing and marking the lines for the “Air” when it comes from the bottom, will you be kind enough to mark for me the “air” zone please
R u talking about in general or from this particular set of charts ? Is there a zone you can't see ? Please clarify and I will explain.
Originally posted by khamore1

Bruce. Thank you for posting the charts and the explanation for the bell curve and how to use the volume, I really appreciate it, however I have a little problem visualizing and marking the lines for the “Air” when it comes from the bottom, will you be kind enough to mark for me the “air” zone please
Sorry to barge in like this but I just want to know if Kool still contributes to the forums here?
here is how the last three days looked...you can see how the zones played out.
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three days
Unfortunately he pops in for a visit rarely....I'd like to see him join us again...
Originally posted by smithgar

Sorry to barge in like this but I just want to know if Kool still contributes to the forums here?
Originally posted by smithgar

Sorry to barge in like this but I just want to know if Kool still contributes to the forums here?


If you go to the forum search page and enter koolblue in the "search by member" box you'll see 3 posts from him in the last month.
maybe we will see the 22.25 LV tomorrow nice to see gap fill we still sooner or later see 13.00 and 15.00 one of theses days if maybe gap igher overnight sell off from there NEWS DRIVEN GREEK CHEESE
R u talking about in general or from this particular set of charts? Is there a zone you can't see? Please clarify and I will explain.

Bruce I'm talking in general. there are many examples here on the forum when the air pocket is formed at the top of the chart I can't find none of them formed in the bottom for this reason I'm not sure where exactly to draw the lines for such air pocket will you be able to show me such a chart please.
Bruce, I’m sorry to bring my requests in pieces and bits but will it be possible to show air pocket on a bar chart? I don’t have a market profile chart yet
Hi David,

do you really have the definition of an air pocket nailed down ? Click on the hypertext words " air pocket" and read that first. Most air pockets also have low volume . For example the classic single prints as per market profile is nothing more than a bigger air pocket.

Like all good traders, I stole the idea, lowered the time frame and made it my own.....Let me know if the definition doesn't help. There have been plenty at lows and highs recently but they get filled in so often and don't last long.Don't accept any answer unless u really understand it. So push me to explain better and don't be embarassed...the ones who should be embarassed are the ones who spend years trying to understand the work of others when a few simple questions could reduce the learning curve to a day or two for them.
bruce im check my numbers for tomoroow
50.75 ,46.75, 42.50,36.75 ,28.25 how do they look to you LV