Kung Hey Fat Choi

Happy New Year to all my Chinese friends! I will be visiting Asia later this year and look forward to seeing some of you again.

TBonds Have Zippers!

Today's trade is the TBonds. I used to trade a lot of Bonds in the 1980's both off floor and on the LIFFE market as a Local in the pit. Today's trade is pretty self explanatory. I love zippers. Price usually runs along a zipper.

I'm trading more TBonds again as I have a training session under way and my student will be trading them. I'm making dual use of the training by recording them for inclusion in Part 2 of the eBook. We worked on the tools and theory this week and next we will embark on live markets. These will be recorded too. There will be other markets that we look at. This week did watched a lot of DAX and some ES but we'll look at NQ and perhaps Gold and Light Crude and maybe the Euro future.

Day Traders Rule!

I've really been enjoying these markets. Up one day and down the next. There are good intra day moves. The longer term traders are having a tough time. With all that is going on in the world I expect this volatility to continue all year in the stock indices, forex, crude and gold, not to mention the interest rate futures. We have a plethora of markets to trade to suit the speed requirement and time zone of everyone.

Market Profile is a key part of understanding both directional bias and where trades should be looked for. As the great Mark Twain wrote:

It ain't what you don't know that gets you into trouble. It's what you know for sure that just ain't so.
There seems to be more misinformation out there about Market Profile than most technical analysis tools and methods. I guess its because its something very real, very good that was developed by a trader not by a smooth talking salesman. Lots of people have hopped on the band wagon and given their own interpretation. Pete Steidlmayer believed in self discovery. He didn't clearly tell his students, including me, what to do. As  said before. I discovered the existence of Market Profile in the early 1980s and immediately ordered the manual from the CBOT. It was useless for me. I then met pete and studies under him. Still didn't get it. Met Jim Dalton and took his class. Still lost. Went back to Pete. I knew there was something very valuable there but could not see what. It was a few years after that the penny finally dropped.

To learn how to use Market Profile effectively I believe that you need to observe. But I also think that you can save lots of time and money if someone shows you how he uses it. You can then know what to look for. The book and videos will do all that and more. Part 1 is almost ready and Part 2 is going well.

Splitting Market Profile

This chart of today's ES shows the importance of context and splitting the Profile.

The high and low support and resistance of the tradeable distribution is only visible with the split. All I had to do when price was near those extremes was to look for the reversal of the order flow.