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    jadie ali
    This document provides guidelines for identifying trading opportunities by understanding market structure and value. It discusses understanding the market stories told through order flow, using multiple time frames, and leveling the playing field between retail and professional traders by properly interpreting market data. Key concepts covered include understanding market conditions like trends and ranges, identifying reference points of value defined as the price region with the most volume over time, and closely watching commercial traders who have insight into value.

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    My Research Profile

    Uploaded by

    jadie ali
    66 views3 pages
    This document provides guidelines for identifying trading opportunities by understanding market structure and value. It discusses understanding the market stories told through order flow, using multiple time frames, and leveling the playing field between retail and professional traders by properly interpreting market data. Key concepts covered include understanding market conditions like trends and ranges, identifying reference points of value defined as the price region with the most volume over time, and closely watching commercial traders who have insight into value.

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    This document provides guidelines for identifying trading opportunities by understanding market structure and value. It discusses understanding the market stories told through order flow, using multiple time frames, and leveling the playing field between retail and professional traders by properly interpreting market data. Key concepts covered include understanding market conditions like trends and ranges, identifying reference points of value defined as the price region with the most volume over time, and closely watching commercial traders who have insight into value.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    66 views3 pages

    My Research Profile

    Uploaded by

    jadie ali
    This document provides guidelines for identifying trading opportunities by understanding market structure and value. It discusses understanding the market stories told through order flow, using multiple time frames, and leveling the playing field between retail and professional traders by properly interpreting market data. Key concepts covered include understanding market conditions like trends and ranges, identifying reference points of value defined as the price region with the most volume over time, and closely watching commercial traders who have insight into value.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 3

    Identify an Edge in any Market!

    Trading collection: http://www.forex-warez.com andreybbrv@gmail.com, Skype:


    andreybbrv
    5 Page PDF Cheat Sheet – loaded with easy to follow guidelines on the most commonly
    used entry, stops and exit tips and tricks. This is an outline to a live discussion with real
    examples.
    Assumptions: It is with our belief that the market is the only entity that is 100% transparent
    and 100% correct. All indicators are a derivative of the market and therefore create lag.
    Because the futures markets are transparent- according to the CBOE, and offers complete
    price transparency and an orderly dual auctioning process, a trader can look for clues
    hidden within the order flow.
    A great trader will ask himself/ herself this question at every level in the market: What story
    is the market telling me? This is where you create “IF” Then” scenarios and make no
    assumptions. If the story being told by the markets order flow is unclear then there is no
    need to rush for judgment. It simply means the market needs more information, the trade
    has no edge and therefore there is no trade.
    A complete market understanding can come only from first understanding the market. And
    the market does not consist of one day’s trading or one time frame. It consists of a number
    of days and depends on its “condition”. If the market is trending, its condition can be
    described by including all those days since the trend began. If it is in a trading range, it can
    be described only by taking into account the activity since the trend ended. The missing link
    to market understanding is found within the data itself. All the relevant data must be used.
    Many retail traders do not have access to the inside information and they do not have the
    market understanding that comes with years of experience until now. Information directly
    from the markets, properly interpreted, can level the playing field between the professional
    and retail traders. It is extremely important to understand Market structure and condition,
    who the principal players are and what they are doing. Once you can find value that a group
    of prices over time will be perceived as fair then you can readily identify prices that are too
    high or too low relative to said value.
    Then and only then will you know the markets behavior and quickly be able to detect the
    unexpected when it occurs. In the end, if you follow value and changes in value, you can
    control trading risk. If you know value, you can know the most important reference points.
    The best way to consider the markets is both from the longer term fundamental (value-
    based (price over time)) and short term technical analysis (price).

    Trading collection: http://www.forex-warez.com andreybbrv@gmail.com, Skype:


    andreybbrv
    What is value?
    Value can be understood as price over time. That is, value is located by volume: It is the
    price region to which the market continues to return over a period of time. Market Profile
    theory defines value as 68-70% of trading volume or a bell-shaped curve to represent
    “normal” statistical distribution.
    Understanding the market structure leads to finding the markets condition and the reference
    points from commercial and institutional traders. Once the market condition, value and other
    reference points are found, a trader is in position to make low-risk trading decisions and
    avoid the daily bear and bull traps. The first trader to identify value wins.
    The condition of the market will be described as:
    ● Balanced Markets
    ● Trend Days,
    ● Continuation
    ● Value Divergence

    Commercial Traders www.cftc.gov


    Why am I spending so much time on this? And Who are Commercial Traders?
    Commercials are the dominant force in trading, period. They work for financial institutions,
    governments and large corporations such as XOM, Monsanto etc… Each day they have
    business to transact which they try to do at value. Because of their insight, they understand
    value better than anyone else on the floor. (For example, grain commercials know the
    prices for which their firms are buying and selling grain, and hence current value.) When
    prices deviate from value, the commercials often identify value by selling near the top and
    buying near the bottoms. Commercial traders are closely watched by others on the floor
    because if the smartest traders (those with legal inside information) are selling, should you
    be buying?
    Overlaying value with the understanding of commercial traders will give you the
    fundamentals and foundation of the markets. Keeping track of value will limit your risk and
    protect profits. You can also set your expectations with this method. Once potential trades
    are identified, use technical analysis and oscillators to identify price and the discrepancies
    or deviations from value. Price can then be validated by volume imbalance.

    Trading collection: http://www.forex-warez.com andreybbrv@gmail

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