My Foot Z Journal

[canaussieuck]

I wanted to continue a FTSE Trading blog started on another forum in hopes of getting some more experienced FTSE traders ( being a UK Forum and all) to comment on my Daily Plan. I feel i am headed in the right direction but I'm always open to some advice to help me improve.

I will post the other Blog entries from the past 5 days or so forward...

Where i take live trades i will post the "Post Mortum".

Size:
-For my prime trades i trade 4 contracts
-For scalps i trade 2 contracts
-Quite often if i'm not confident i will take the trade on the SIM only
-More often than not i stand aside if i don't feel confident that the order flow is on my side of the trade

Regarding the Plan:
I'm not trying to forecast the market, but I am trying to avoid placing myself in trades that have a greater risk of failing. That's why I use the Volume Profile to structure the market and try to develop "IF/Then" statements.


Cheers,


CanOz

 

[canaussieuck]

21st February 2013, 02:49 PM IP

Well last night saw the market move up as we said, doing what we said it could do if it broke higher. We got in too early on the pullback and got stopped out by 1 tick as the market reversed and hit new highs, such is trading. After that we has a few scalps but no full size trades. All up a -ve night for me.

What actually happened:
After the market established an small initial balance area between 49 and 63 it broke higher on good volume taking out 65.5. We then pulled backed much deeper than i expected, to the VWAP before buyer once again swamped the offers and sent the market in a 13 point non stop rampage. We again pulled back to and tagged the first breakout high before charging off again another 20 points...We then pulled back again to the 1 STD VWAP and then made the final high at 96.5, a couple of points higher than out triangle target and just shy of 6400. Looking back there were so many opportunities even after the double top. So much easier if we could just trade in hindsight.

The market had established a nice double distribution and then was sold off hard into the close, below the initial balance area, the low of the day and the previous close. This is a remarkable change of events. We've gone from bracket to very bullish trend to a total rejection of higher prices....

So what can happened today?
Price can move down:
a. Price will most likely gap down if the Asian markets and oil/FX are anything to go by. If we gap below 54.4 i would expect a test before dropping off, then that would be a chance to look for rejection and get short. I would not expect last session VPOC to be tested today, its just too far away (6388.5). If we open at or above 54.5 then i would expect a test of 42.5 pretty quickly...probe for sellers. We would need to look for shorts into a bounce. Either way our target for today will be around the 6293.5 area where there is a large value area on the composite. I could see the market looking for value there and bracketing. If we drop below this area then the next stop for value is 6260.5.

Price can bracket:
The market could open and bracket but i just don't think we've got enough support at this level to hold the market, 6347 is a naked VPOC so i expect it will be tested. 6322 could turn the market temporarily but i feel the market has the best chance of looking for value lower at 6293.5.

Price could move up:
I really think we'll be looking for value and then need to bracket for a while before higher prices have a chance again....I do not expect higher prices today unless we have some kind of very bullish news.

News today is PMI out of EU, Public Sector borrowing out the UK, some CPI out of Ireland and then CPI out of the US...nothing too big really. We do however have Spain and France selling debt, so that could be interesting if we're over 5.4 and 4.25 % yield respectively...

We are Bearish down/Bracket

Again the key levels for rejection from top to bottom are:
6397
6368
6342.5
6276.5
6254.5
6242
6213

And key levels for price to be accepted, from top down are:
6888.5
6354.5
6332
6293.5
6260.5
6246.5
6206.5


Cheers,

 

[canaussieuck]

22nd February 2013, 02:53 PM IP

We ended up in the value area that we highlighted as a possibility. We're not trying to forecast the market, but we are trying to avoid placing ourselves in trades that have a greater risk of failing. That's why we use the Volume Profile to structure the market and develop our "IF/Then" statements.

Also, as an Admin note, I've moved this thread to the Discretionary Trading Styles forum so those that share this style of trading can comment and contribute. I have allot to learn in regards to the markets and of particular interest to me is the Market/Volume Profile style of organizing the markets information.

What actually Happened

So, what happened last session? We opened right at 6332 and attempted to retrace to the prior session close at 6351, but failed. That failure just 10 minutes after the cash open was the sell signal, highlighted on the 150 tick chart to show not the value of hindsight, but what to look for in terms of selling pressure. Its always a difficult decision for me whether or not to trade during the IB phase. There are times when it makes sense to let the market bracket out the Initial Balance and times when the best opportunity will be to take the trade during the open. This just comes with experience and until we feel confident to take the trade we can stand aside, its free.

After that signal the market continued to drop at a rate so fast that by the time the IB period was finished, the market had made over half its move. The market only paused at 6322, pulled back after the break and resumed the sell off. Same thing at 6300. These are bearish moves, going right through LVNs without hardly a pause, price firmly rejected on the retest to resume its search for value.

Price attempted to bracket briefly at 6293 before finally pushing lower, flushing out longs into the value area at 6260 and bracketing up higher in choppy action typical of markets in balance.

So what now?

The market is in balance, or has established a value area at 6270 or so.

The market can move higher
a.) Looking at the ES at the time of writing the market could gap up to the 6300 area. I would expect that for the martket to continue up it would need to test the VPOC at 6275 before moving higher. If that happens and we see buyer come in we will then attempt full size longs.

We could Bracket some more
The market could open and test the value area and simply wait for new information. If this is the case then we will look for sells of the VAH at 6300 or even as high as 6322. We need to be aware that short covering could drive prices father than we can anticipate. If the market tests lower to 6260 and finds few sellers we could look for scalps size long. This needs to be a drift down on low volume, if we see volume in the selling then we need to be aware that we could be looking for lower prices.

The market can move lower
I would expect a test higher before we moved lower. Markets tend to bracket before continuing into another range extension. IF we tested 6293 or 6300 and failed, then failed to hold 6260then we should prepare for lower prices and look for PBs at those lower levels. 6124 is really the next accepted value area on the composite. If the Asian markets were still selling off then its another story. Korea for example has rallied 1% after an gap down on the open to retracing all of that move to back at 50% again....CL had been hit hard by selling and has recovered some of the losses.

Anyway, i can honestly say that i cannot recall seeing a market reverse so quickly since i have been using Market Profile for structuring the markets so i am eagerly looking forward to this session.

Today's Key Levels from top to bottom:

LVNs
6342.5
6322
6300 (key number)
6278.5
6254.5
6242

HVNs
6354
6332
6293.5
6270
6260
6213




Cheers,

 

[canaussieuck]

25th February 2013

So its Monday again and after the close on Friday Moody's announce a downgrade for the UK

Anyway....let go to the charts...

What happened....Well the market pretty much took off after the initial balance low was formed by tagging the 6293 comp node.

After forming a decent value area we tested that area once more before moving much higher in the US trading.

We're now got some nice naked levels to trade off of.

What could happen today?

We could trade higher:
a.) we could open and look for a test of the VPOC at 6321. If we're successful there then we can look for resistance at the VAH at 6342.

We could trade lower:
a.) if we open lower and test the VPOC from below and fail we have support at the VAL at 6293....If this does not provide support then we could close the gap at 83 and possible move lower. Below 6279 and we'll looking to go much lower.

We could bracket today:
With not allot of news out, other than the downgrade its possible that we could have a slow day. We can still look for the initial balance highs and lows to provide trading opportunities for us.

So some ket levels for today from top to bottom are:

LVNs
6397.5
6368
6350 (HOD)
6315
6278
6254

HVNs
6388.5
6354.5
6293.5
6273.5
6260.5
6246.5
6206.5

 

[canaussieuck]

25 February 2013 06:62 PM

Only took one trade today. My connection was good so we took a live a one.

Lots of divergence on my Bid/Ask tools and there was a 100 lots on the bid below my first target so i took the short.

Got the first three contracts off and then got stopped out at BE+1 tick for an +8.5 tick move.

The DPOC shifted up after the bounce, then i had to stay out for the news anyway. Then it shifted down again....

 

[canaussieuck]

25th February 2013 08:32 PM

Well we are accepting value at the HOD now, trades with favorable R/R are not forthcoming so we're sitting on our hands....

edit...i have a feeling we may try and challenge the highs...all while I'm asleep no doubt...

 

[canaussieuck]

26th of February 2013

What the heck happened?

Last nights US sell off on the back of the election results in Europe introduced some other time frame participants into the market that pushed price past two VPOCs and the 6260 low from a couple of sessions ago. If that wasn't enough the market then closed smack on the LOD. Wow...

So what could happen today then?

The market could go up
a.) The ES on the Globex session has recovered some what, like 23%, to the first Fibb and then pulled back. We can expect an open between the LOD at 6225.5 and 6260.5. If the market trades above 6260.5 we could expect to see some frantic short covering, driving price higher. 6280 will provide some resistance however 6294 could stop price and see it accepted. 6299 is the 50% retracement. Above 6321 and we could go back to the VPOC at 6356. Doubtful....but we need to see how much strength the move has before we commit. To me i think we would look for weakness at 6260 and try and get short.

We could bracket
a.) Its quite possible we could test low, then test high at 6260 and then establish value at 6240 ish while we wait for more information. That could provide some nice fades from those two levels.

We could go lower
a.) we could test high, reject and head lower but i would think the test of the low would be met with at least a little buying, we can evaluate then if we think shorting a pullback is less risky.

It unusual to have one range extension on top of another, but anything can happen. All we can do is be prepared to react after seeing how the market participants react at our levels.

I'm biased to a bracket but not too bullish right now....

Some key levels today - few less than normal with an expectation of volatility

6369.5 - VAH and LVN
6279 - LVN and bounce point/mid point support from last sessions decline (it deserves some respect IMO)
6260 - HVN and prior LOD
6225 - Prior LOD and Close

6175 - Last call

Not a whole lot of news but interestingly enough there is an Italian bond auction at 10 AM GMT....so that will give us an insight to the feeling on the election results anyway...this may be the key info event of the AM session.


Good trading....

 

[canaussieuck]

27th of February 2013

What Happened?
Yesterday saw us bracket as we expected, then test higher into the ES session. Price was rejected at @ 6276.5, and then eventually close off the highs. As of writing we have opened pre cash at 6260.5, right around the IB high.

What could happen?

We could trade higher. We could test the VPOC at 6253.5 and then if we find buyers we could head higher and test the highs from the prior session starting with 6253.5, then 6260.5 and then the HOD at 6276.5. Doubtful...Sure we could test higher but unless we're flushing shorts out at a rate of knots i'm not to convinced we'll have higher prices....risk is on the long side.

We could bracket. We could trade in another range day today, but given that we've a full schedule of announcements, i doubt it. News out of Europe hasn't been stunning lately. If there is bad news in a trend we can soak it up and keep going, but bad news in a bracket? No way. In any case if we see slow price action we can trade short at the top of the bracket and evaluate how fast the bids are getting hit on the way down and determine if longs off the bracket floor are what we want.....doubtful.

We could head lower.
Given the news due out, the recent bracket and volatility in the currencies I'm guessing any bad news and we'll be taking out the lows. If we fail a test higher than the open then we'll look for acceptance back at the VPOC, we can look for a short here if price fails to hold. After this we'll look for price to reject the recent lows and get short if buyers don't reject.

Lots of news out, too much to list.

Key levels from top to bottom are:

LVNs
6340
6276.5
6219.5 Prior session LOD
6175 Prior LOD
6167
6095.5
6049.5
6014.5

HVNs
6293.5
6260.5 VPOC
6253.5
6246
6123
6064
6026

Good trading....

 

[canaussieuck]

28th February 2013 at 01:05 PM (2 Views)

Our ATR is increasing, we've got some divergence on our Stochastic Momentum. Ahhh the return of volatility....Is our bull run nearing an end?

At the end of the day they're just a derivitive of price, but as we'll see in my next post, we are starting to see some dramatic counter trend auctions....and that is a warning sign.

 

[canaussieuck]

28th February 2013 at 02:40 PM (2 Views)

There are a couple of interesting observations about the volume profiles over the last half dozen sessions....Obviously we have more range extensions to the upside as well as the downside, contributing to the increase in volatility. The volume however should give us a clue as to whether or not there is any interest from new buyers in this leg of the rally....

The interesting thing about last nights high in the FTSE was that it occurred O/N (Overnight) as it tracked the US session. It did this one other time recently too and even though it made another session high, it still had to test the RTH VPOC, which occurred at the close. So could today's open go higher without testing that VPOC? It would take allot of new buyers to not test that VPOC, to ignore it and auction higher. No, i think it could be more probable that we see selling at the open, even the pre cash open to take us down and test the VPOC.

The market has been auctioning higher but it has been the strength of the US market bringing in new buyers. Our value area last session was higher anyway, granted. It was however, the US that drove the market into a range extension and out of the established value area. In my view we are out of balance into the open.

The market could go higher
We could see new buyers on the open driving the market to new highs. Doubtful. I think it would be risky to be long above the VPOC at 6316 until its tested. If its tested and we find responsive buyers in volume then we'll look for an entry long, back into 6354.5

We could bracket
We could bracket, but i doubt we could without a test of last sessions VPOC. As at the time of writing we look like the market could open around the 6350 area, according to the pre open. Right on our little trend line.

We could trade lower.
If we open and start to auction lower i feel it would be less risky to be short the market until the VPOC is tested and we see if buyers respond. If not, then we'll either stay short or look to enter shorts on a pull back to the VPOCs and levels as we go.

I don't normally trade the pre cash and i usually wait another 15 minutes, claim that as the Initial Balance before i trade. Today however it may be worth a fill to get short in the pre cash open if the market auctions lower.

Most of the news is EU stuff, German CPI and Unemployment.

If i have time I'll post the ES which may give us more clues for volume weakness in the last couple of sessions....Its entirely possible that without the US we could just test the VPOC and either drift down to 6293.5 and wait for the US lead, or test and bracket...Last sessions VPOC was within 4 points of the VPOC on the 23rd.

Todays LVNs
6369.5
6339.5
6278.5
6219 IBL 26th NKD
6167
6095.5



Todays HVNs and VPOCs from top to bottom
6354.5
6316 VPOC
6293.5 Comp HVN
6285 IBH
6260.5 Comp HVN
6253 VPOC 27th


Good trading...

 

[canaussieuck]

In relation to the strong counter trend auctions...We can see there have been 6 strong CT auctions during this latest bracket.

For those that have read Dalton...

Another sign that the upward trend had aged was provided by observing the counter-trend auctions- auctions that, in many cases, were stronger then those that occurred with the trend....J.Dalton - Markets in Profile

Just something that i thought relevant to the context...

Cheers,


CanOz

 

[canaussieuck]

28th February 2013 at 06:53 PM

Two trades today, pretty much according to plan although i got in a tad too early on the break lower and missed the big leg down. Got the bounce off the VPOC though....

 

[canaussieuck]

Summary of what happened
We tested the prior session VPOC exactly as we expected and that provided a great long opportunity. Unfortunately I got out at the first sign of weakness with my runner, perhaps I should have held it into the US session...thats hindsight again... Our value area moved higher and the VPOC is at 6347. We pushed higher after the cash close into
the O/N HOD at 6368. We then sold off with the US into a close at he VAL, 6336.5.

Is the market in balance or out of balance?
The market is accepting vakue between 6334 and 6369.5, and really part of a larger value area on the composite that ranges from 6219 to 6369.5. So in the short term we are in balance. If the rejection of 6369.5 had have taken place during the cash hours then I would be inclined to consider it a fair rejection. However given that it occurred on lower volume O/N, I think its loses some validity.

What could happen today?
We could auction higher.
At the time of writing the market is not overly bearish despite the late sell off. So I expect the market to open near the close. If we are to auction higher we will need to test the VPOC at 6347, find little in terms of responsive sellers, and auction higher through 6354.5, before testing the HOD of 6369.5 I would then look for buyers to join as we push towards the prior high just shy of 6400.

We could bracket
If is the first of the month and we have data out, UK PMI at 930 GMT. Its possible we bracket in the current value area until the news, we'll judge the pace of things after the news and determine pressure at our bracket extremes of 6316 – 6369.5.

We could auction lower
If we take out 6316 then we could auction lower to the 6293.5 area. We would look for shorts below 6316 to 6293.5 where we could see responsive buyers again.

I am a little biased towards the long side but I want to see the test of the VPOC and the HOD first...if that fails we could once again, go much much lower.

Key levels – Top to bottom
LVNs
6397
6369.5
6364
6278.5
6219

HVNs
6388.5
6354.5
6293.5
6260.5
6123

News
German PMI, UK PMI, EU Unemployment rate

Good trading.....

 

[canaussieuck]

Summary of what happened
Well, what session on Friday. We opened under the prior close, and proceeded to trade up to and test the Prior VPOC at 6340. We found lots of responsive buyers and pushed hiher to the prior HOD. We found sellers responsive in abundance and then as is quite often the case when the bracket high is rejected, we traded to the other side of the bracket. The market bounced around and tried to bracket near the lows at 6293 but by the time the US session open the market had recovered to 6316, but not after finding some sellers. The US markets then lifted the FTSE to challenge the highs at 6375 or so, shorts running for cover as the market advanced very quickly to start the month on a positive note.

Is the market in balance or out of balance?
The market is accepting value in the 6356 area at the top of the bracket. We are still inside the bracket but the lower reaches were rejected firmly.

What could happen today?
We could auction higher.
We could see a new high today, but we need to find responsive buyers in volume from 6369 to 6377 in order to push us higher. The prior VPOC is 6362 but with Asia down the market is looking at opening at 6332 or so. This is the prior session open & Mid Point, so now we'll be able to test the VPOC at 6362 for sellers, given the bearish tone of the day....

We could bracket
Being a Monday we could test the VPOC and bracket around that area until the US session opens. Either way we'll be looking for responsive sellers at the top of the bracket and responsive buyers at the bottom. Given that we'll likely gap down to open in a low volume area, we'll need to make a move. Bracketing not likely today, initially.

We could auction lower
If we take out 6334 then we could test for value lower near lest sessions low, 6293.5. I really favour a test high before we reject and go lower, this offers the best risk/reward, but we may not get it. 6260.5 is the composite high volume node and should be viewed as a target area if we decline further. We could see a bracket take place here.

Bias
I am a little biased to the low side today but given the recent volatility and the rallies in the US sessions, who knows. We just need to look for reactions at our levels and then side with size!

I've changed my shorter time frame charts to 5 range in an attempt to gauge the selling/buying pressure better. Eye balling the turning points over the weekend and testing today on the SPI seemed to support the change.

Key levels – Top to bottom

6397 - High
6377 – Prior HOD
6319 - VAL
6332 -34 – Mid point, prior open

6362 VPOC
6291 – Prior LOD
6260.5 – Target low (comp HVN)


News
16:00 (9:30 GMT) – UK housing data & PMI construction
EU – Sentix investor confidence

16:30 (10:00 GMT) – EU PPI

Good trading.....

 

[canaussieuck]

Todays range so far is the IBH and IBL from the previous session...hanging around the Midpoint. Choppy trade, look for fades at the extremes today if you trade :clover:

 

[canaussieuck]

Summary of what happened
We stayed between the prior initial balance high and low for the whole session. We've now got a great broad profile, an inside day. HOD was 6348.5, LOD was 6315.5

Is the market in balance or out of balance?
The market is accepting value at the VPOC of 6329...the market is balanced for the moment and we're still bracketing between 6219 and 6400.

What could happen today?
We could auction higher.
At the time of writing we were printing around the 56 area. So we could gain acceptance above 6346 and trade higher to test 6377 again. We could test the prior session VPOC at 6329 first, perhaps in the pre cash?

We could bracket
We could test the VPOC and gain acceptance there, but yesterday was an inside day, so bracketing again is unlikely. The market needs to explore to find value, we've accepted it at the VPOC already.

We could auction lower
We could look to gain acceptance below 6315 and then test the Friday low at 6291.

I am neutral at the moment, but feel like there is a big mve coming...the quiet before the storm maybe?

Key levels – Top to bottom

I also included the VAH and VAL due in part because of the broad value area yesterday.

6397 Bracket High
6377 HOD Friday
6348.5 HOD
6337 VAH
6329 VPOC
6325.5 VAL
6315.5 LOD
6291 LOD Friday
6174 Bracket Low

News
PMI for EU and UK PMI Services
Gilt Auction...

Good trading.....Buckle up, could be moving day!

 

[canaussieuck]

Summary of what happened
I missed yesterdays summary as I was away, but after a day of bracketing we moved up and out of that value area and accepted value in 6380 ish and then extended even further in the session. Then yesterday we moved higher again and accepted value higher to 6446 before selling off even though the US bracketed. Leading indicator for the US? Depending whether you look at the volume profile or the TPO chart, value settled at the previous VPOC. The volume profile chart has value higher as several block trades are occurring and changing the profile. Rollover is not until next week, but already we're seeing large orders sweeping mostly the bids.

Is the market in balance or out of balance?
The market is trending, or was trending. Last nights rejection of the highs was accompanied by lots of responsive selling into the close. Can we expect to see the market try and establish balance again?

What could happen today?
We could auction higher.
At the time of writing the market was looking to open slightly higher than the close, near the mid point at 6430. We could test the VPOC at 6440.5 and seek acceptance there before moving higher again, to test the HOD at 6453

We could bracket
We could look for acceptance at 6416 as we close a gap open. We could bracket between 6422 and 6406.

We could auction lower
We could seek acceptance lower through 6422 to 6380. 6331 is a strong magnet as well, its a naked VPOC from Monday.

I am a little biased short and Asia is down to neutral in double distributions or value areas over the last two sessions.

Key levels – Top to bottom
6500
6475
6453
6440.5
6422.5
6406
6380.5
6349
6331.5
6315.5


News
German factory orders, EU and UK Rates!!!
Spanish and French Bond auctions

I've included the levels on a 150 tick chart, as well as the value areas as presented on a TPO chart.

Good trading.....

 

[canaussieuck]

Summary of what happened
We tested 6450 again and failed but did form another value area inside the previous days...and inside day again....woo hoo

Is the market in balance or out of balance?
The market is accepting value at 6440 or so for the moment.

What could happen today?
We could auction higher.
At the time of writing we are looking for an open just above the VPOC at 6445 or so. Not much data out of Europe today and none out of the UK so it could be quiet until NFP data at 1:00 PM GMT. So we could test the highs early to look for responsive buyers and there might be a fade back to value there.
We could bracket
There's a good chance we could bracket until the US data release.Edit: the market opened prior to the cash and shot up to 6468, then settled at 63

We could auction lower
If we test 6420 find sellers we could seek value lower, with a naked VPOC at 6331.5

I am neutral biased, but feel we could get a big range extension after two range bound days wuth the latter being an inside day.

Key levels – Top to bottom
6500 100% Range extension
6477 50% RE
6464 23.6% RE

6453 Wed HOD
6449.5 Prior HOD
6436 Prior VPOC
6420 Prior LOD
6406 Wed LOD
6380 Tues VPOC
6349 HOD
6331.5 Mon VPOC
6315.5 Mon LOD

News
German Industrial Production at 11:00 AM GMT. US NFP at 1:00 PM GMT

Good trading.....

 

[canaussieuck]

Summary of what happened
I missed yesterdays session which was uneventful until late in the morning when the market broke out of its congestion area. This large triangle broke higher until its target of 6495.5. We then retested the breakout and them moved higher again to challenge the high in the US session, which thankfully starts an hour earlier now


Is the market in balance or out of balance?
The market is accepting value higher every day. IT is out of balanace and seeking value higher as the value areas continue to stack upon one another. We did end up with a double distribution and a double top pattern.

What could happen today?
We could auction higher.
At the time of writing we were looking at opneing near the close at 6490 ish. We could trade immediately higher and seek acceptance of value around the 6500 area.
We could bracket
We could trade between the new high of 6496.5 and the 6464 area, bracketing at this level as we explore the extremes for responsive buyers/sellers.

We could auction lower
We could test the VPOC at 6483 and find responsive sellers and trade lowers thorugh 6459.

I am a little biased towards a tag of 6500 before we see a meaningful reversal. We have lots of naked VPOCs below at 6483, 6459.5, & 6436

Key levels – Top to bottom
6515
6505
6500
6496.5
6489
6483
6476
6464
6459
6449

News – EU consumer prices, UK industrial production, Spanish and Italian bond auctions

Good trading.....

 

[canaussieuck]

Going to just post the levels today...the rest is a little more obvious to those following. I'm knee deep in stats this week so time is a bit rare...

CanOz