Market Profile Analysis

Nifty Dec F:

NF made a OAIR (Open Auction In Range) start which meant that it is still not ready to move away from the previous day’s balanced Market Profile & that we can expect some more balance today. It did try to break below the previous low but left a small tail to get back into previous day range & Value where it auctioned for most of the day and one lower than average volumes which meant that there were only locals present & there was no OTF. NF traded in a very narrow range of 50 points & even tried to push above the IBH but as there was no new volumes coming in, it got back into the IB making a nice balance over the past 2 days with a prominent POC at 10820 levels from where it can give a move away. It has left a probable multi-day FA at 10837 if it breaks below 10771 on Monday open which will open up the 1 ATR probe lower & a test of that extension handle & spike lows of 12/12 can come. On the upside, a move above 10850 can take it to recent highs of 10882 & above 10885 it can tag the VPOC of 10908 & 10926.

• • The NF Open was a Open Auction In Range
  • The day type was a Normal Day (‘Gaussian’ profile)
  • Largest volume was traded at 10820 F
  • Vwap of the session was at 10808 with volumes of just 79.1 L in a session which traded a High-Low range of 10837-10771 for a narrow range of just 66 points 
  • The VWAP & POC of Nov Series 10480 & 10580 respectively. It tagged the VWAP on 11/12 but closed above it
  • The VWAP & POC of 31/10 10250 & 10248 will be important levels going forward

You can check the monthly charts & other swing levels for Nifty & NF here & for the weekly charts & analysis, please click here.

Daily Zones:

• • Value zones (volume profile) are at 10798-10820-10825

Hypos / Estimates for the next session:

a) Neutral day balance with POC at 10830 is the pivot for stage 2 of this 3 day auction
b) Supply will be seen near 10900 and 10930 on any probes highs
c) 10760 and 10730 are supports for the auction tom

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BankNifty Dec F:

BNF also had a OAIR start below that 26890 level (as mentioned in previous daily report) & tried to probe lower making a low of 26792 which meant it is not yet ready to break the previous day range after which it reversed to move higher above that 26890 level towards that HVN of 26970 but could only make a high of 26948 & settled down in a narrow range for the day making a nice balance with a slightly lower Value Area & a prominent POC at 26870. There was an attempt late in the day to break the IBH when BNF made a new low of 26770 but this was swiftly rejected & BNF closed at the dPOC & VWAP combo leaving a probable FA at lows if it can get above 26950 on Monday.

• The BNF Open was a Open Auction In Range
• The day type was a Normal Day (‘Gaussian’ profile)
• Largest volume was traded at 26870 F
• Vwap of the session was at 26868 with the lowest volumes this series of just 19.2 L in a session which traded a High-Low range of 26948-26770 for 178 points
• BNF has left a FA at 27029 on 13/12 and the 1 ATR move down comes to 26728, the FA is currently on T+2 Days
• BNF had left a FA at 26453 on 10/12 and tagged the 2 ATR target of 25927 on 11/12. It got back above this FA on 12/12 at T+2 days & completed the 2 ATR move at 26976 on the upside on 13/12
• BNF had confirmed a multi-day FA on 05/12 at 26745 and tagged the 2 ATR target of 26237 on 06/12. BNF tagged & closed above this FA on 12/12 which was T+5 Days and tagged the 1 ATR move up of 26999 on 13/12
• BNF has stayed above the vwap of 17/10 which was 25500 and is now support
• We had a FA at 24625 on 31/10 which has completed 1 ATR of 25102 & has stayed above the 2 ATR of 25575
• The VWAP & POC of Nov Series 25686 & 26218 (Spot) respectively
• 31st October’s VWAP of 24895 & POC of 24900 will be important levels going forward

For the Monthly charts & other swing levels for BankNifty & BNF click here & for the weekly charts & analysis, please click here.

Daily Zones:

• Value zones ( volume profile) are at 26833-26870-26901

Hypos / Estimates for the next session:

a) The BNF also was balanced but with value slightly lower
b) Support exists at 26800 for the session tom
c) Supply at 27000 and 27136 for the session

For more tradeable ideas and intraday trading strategies based on MarketProfile and the OrderFlow live charts with OrderFlow analysis Live, subscribe to the trading room. The Vtrender Trading Room hosts India’s largest MarketProfile community live every trading session from 9.15 am to 3.30 pm.

If not a Trading Room member you can get immediate access at – https://in.explara.com/e/vtrender–trading–room/checkout

Auction Market theory on Orderflow | Vtrender

Auction Market Theory provides information reliable enough that market decisions can be based on the Auction Market data.

I have often spoken on the importance of buyer and seller activity in the movement of the markets. Logic dictates that the market will continue going up till there.

The trading community at Vtrender trades on Market Profile and uses Order Flow to plot entries and exits for the trades.

Below is a short 15-minute presentation which will give you a good understanding on

a) what constitutes a good learning process

b) how to master a trading process

c) how MarketProfie gives you an edge as you make trading decisions.

Before you go through you may want to understand a few basic Market Profile terms used. These can be looked up at – https://vtrender.com/market-profile-terminology/

How to Use order flow

Order Flow Trading is not technical analysis or fundamental analysis, although both of those certainly do play a part in order flow analysis. Market depth of a stock shows the standing limit buy orders and standing limit sell orders. Simply put, the market depth represents the total bid and offer at different prices pending for execution.  Each bid and offer price represents, willingness to buy or sell the stock at a particular time.   However, that does not determine the direction of the market.  The price of the stock increases or decreases when the orders are actually executed.  Order Flow records all the traded information such as quantity bought or sold at a particular price and it is graphically displayed on the chart in realtime so that it becomes easy to identify what the market participants are expecting in the near future, whether the demand or supply is strong at a specific price.  For ex.  huge quantity of a stock is bought at a particular price by an institutional player, the price of the stock starts increasing and the same can be easily identified in the Order Flow trading strategies chart graphically.  This kind of information would not be displayed on a Candle Stick or Bar chart.   Order Flow helps to identify the internal structure or  sub divide the auction process in detail thereby the traders can determine the increase / decrease in the price due to the impact of demand of supply at a particular time.  By using Order Flow, the trader can decide the future price action of the stock from the graphically represented information.

For more visit https://vtrender.com/

Auction Market Theory

Auction Market Theory provides information reliable enough that market decisions can be based on the Auction Market data.

In comparison to other trading disciplines, order flow trading does not contain that many trading strategies you can use. The reason why, is because there is no proper order book available which you can use to see when buy and sell orders are entering the market in real time. The strategies I’ve picked for this article aren’t full order flow trading systems, so you don’t have to worry about changing your current trading strategy in order to trade them, you can just use them as additional setups to watch out for when your trading the market.

Let’s move to defining core strategies.

When you have an idea what you want to use as core strategy, ask yourself:

·         What is the idea behind the strategy?

·         What are the strategy’s strengths and weaknesses?

·         What factors are giving my strategy an edge?

I’m using the stop hunt strategy myself, so I’ll answer the questions in the way I perceive it:

What is the idea behind the strategy?

Large traders cannot simply accumulate or distribute positions whenever they wish to do so, because they would suffer from slippage. Slippage can have a great impact on your P/L if you are one of the big players in the market.

What are the strategy’s strengths and weaknesses?

Strengths: Initiative of large traders behind it, clear sentiment gives us the support of other participants, clear profit target.

Weaknesses: Entry point can be somewhat hard to determine, another reason why we should focus on strong sentiment, so that we have the support of “the flow”.

What factors are giving my strategy an edge?

I only trade when sentiment is clear. I look for the market to trigger buy stops during positive sentiment and when sentiment is negative, I target sell stops. If sentiment is positive and price action starts to move accordingly, other participants will start to join the move.

There we have something we can already work with. As has been mentioned, the markets are all about greed of fear. Even professionals with a long and successful track record will sometimes find themselves in one of those states. It is not meant for us humans to be like robots, not even in trading. In combination with sentiment analysis, try to incorporate some psychology. Regarding those without a position yet, it is all about perception. Where will key demand and supply be located? And then are those with a position on, what’s their target? Do they have sentiment in their favor? Which side of the market is the weaker one? Where are the stops of the weaker side? Some questions you can ask yourself and note in your journal. While those questions are not easy to answer sometimes, it is about keeping it simple by observing and taking notes. Your subconscious mind is capable of amazing things and you have nothing to lose by trying it.

Your best bet is to focus on key supply/demand zones on higher time frames that will likely attract the flow necessary to ignite momentum.

Best Order Flow Trading Strategies for beginners

In comparison to other trading disciplines, order flow trading does not contain that many trading strategies you can use. The reason why, is because there is no proper order book available which you can use to see when buy and sell orders are entering the market in real time. The strategies I’ve picked for this article aren’t full order flow trading systems, so you don’t have to worry about changing your current Market profile tradingstrategies in order to trade them, you can just use them as additional setups to watch out for when your trading the market.

Let’s move to defining core strategies.

When you have an idea what you want to use as core strategy, ask yourself:

·         What is the idea behind the strategy?

·         What are the strategy’s strengths and weaknesses?

·         What factors are giving my strategy an edge?

I’m using the stop hunt strategy myself, so I’ll answer the questions in the way I perceive it:

What is the idea behind the strategy?

Large traders cannot simply accumulate or distribute positions whenever they wish to do so, because they would suffer from slippage. Slippage can have a great impact on your P/L if you are one of the big players in the market.

What are the strategy’s strengths and weaknesses?

Strengths: Initiative of large traders behind it, clear sentiment gives us the support of other participants, clear profit target.

Weaknesses: Entry point can be somewhat hard to determine, another reason why we should focus on strong sentiment, so that we have the support of “the flow”.

What factors are giving my strategy an edge?

I only trade when sentiment is clear. I look for the market to trigger buy stops during positive sentiment and when sentiment is negative, I target sell stops. If sentiment is positive and price action starts to move accordingly, other participants will start to join the move.

There we have something we can already work with. As has been mentioned, the markets are all about greed of fear. Even professionals with a long and successful track record will sometimes find themselves in one of those states. It is not meant for us humans to be like robots, not even in trading. In combination with sentiment analysis, try to incorporate some psychology. Regarding those without a position yet, it is all about perception. Where will key demand and supply be located? And then are those with a position on, what’s their target? Do they have sentiment in their favor? Which side of the market is the weaker one? Where are the stops of the weaker side? Some questions you can ask yourself and note in your journal. While those questions are not easy to answer sometimes, it is about keeping it simple by observing and taking notes. Your subconscious mind is capable of amazing things and you have nothing to lose by trying it.

Your best bet is to focus on key supply/demand zones on higher time frames that will likely attract the flow necessary to ignite momentum.

If you are at the beginning of your Order Flow TradingStrategy development journey and looking for more information, you should start with the training program, Check out our training program. https://vtrender.com/trading-room/

For more visit site 

https://vtrender.com/

 

Market profile analysis with monthly and weekly charts

Nifty Nov F:

NF opened below the Neutral Extreme reference of 10745-10779 which was a weak open and it made a balance in a very narrow range of 40 points in the first part of the day between the OH of 10749 & 10709 which was also the previous week high. It went on to give a pull back high of 10730 but then could not sustain above VWAP & started trending lower for remaining part of the day first breaking below the FA of 10693 & then tagging the VPOC of 10670 before making poor lows at 10650 as the selling looked a bit streched therefore gave a late pull back high of 10687which will be the first level to watch tomorrow on the upside above which we have a ledge at 10715 which will act as resistance. For now the PLR seems to have turned down as NF closed well below the FA of 10693 so the levels to watch lower would be the other multi-day FA we had at 10636 & then the VPOC of 10620 & next the 1 ATR move down from 10693 which comes to 10553.

·          

·         The NF Open was a Open Auction in Range

·         The day type was a Normal Variation Day (Down) with a 3 IB range extension

·         Largest volume was traded at 10720 F

·         Vwap of the session was at 10702 with volumes of 92.3 L in a session which traded a High-Low range of 10749-10651 for 98 points 

·         NF has a multi-day FA at 10636 and has tagged the 1 ATR target of 10779, the 2 ATR target comes to 10917

·         NF closed below the FA of 10694 (19/11) today and the 1 ATR down target comes to 10553

·         The vwap of 29/10 at 10175 is strong support now which was broken intraday but re-captured

·         We had a FA at 10111 on 31/10 which has done its 2 ATR objective & is now strong support

·         The VWAP & POC of 31/10 10250 & 10248 will be important levels going forward

For the weekly and other swing levels of the Nifty go to – https://vtrender.in/market-profile-analysis-with-monthly-and-weekly-charts/ (has monthly and weekly Profile charts updated to trade date 16/11)

Daily Zones:

BNF looked like giving a Open Test Drive Down at start when it moved away from the POC of the 2-day bell but the volumes were again very low & BNF for the third consecutive day made a narrow range of just 182 points (lowest in the last 3 months) and a bell profile on daily. BNF probed through the singles of the DD made on 15th and tagged the weekly extension handle of 26080 (mentioned in the weekly report). BNF also left a multi-day FA at 26395, the 1 ATR move down of which comes to 26035. We have a wide POC today at 26200 which will be the level to watch on any bounce above which we have the VPOC of 26290. On the downside, BNF remains weak below 26160 & the multi-day FA of 25811 (which got confirmed on 15th Nov) and is now at T+3 days can be expected to be revisited in the next 2 days.

·         The BNF Open was an Open Auction

·         The day type was a Normal Variation Day (Down)

·         Largest volume was traded at 26200 F

·         Vwap of the session was at 26185 with volumes of 28.7 L in a session which traded a High-Low range of 26262-26080 for 182 points

·         BNF negated the FA made at 26080 on 14/11 and the 1 ATR target to the upside is 26472

·         BNF closed below the multi-day FA of 26162 (made on 19/11) and the 1 ATR down target is 25801

·         BNF confirmed a multi-day FA today at 25811 and tagged the 1 ATR target of 26208 & is currently on T+3 days

·         The FA of 13/11 at 25429 is now strong support as has tagged the 2 ATR target of 26230 and closed above it

·         BNF has stayed above the vwap of 17/10 which was 25500 and is now support

·         We had a FA at 24625 on 31/10 which has completed 1 ATR of 25102 & has stayed above the 2 ATR of 25575

·         31st October’s VWAP of 24895 & POC of 24900 will be important levels going forward

For the weekly and other swing levels of the Nifty go to – https://vtrender.in/market-profile-analysis-with-monthly-and-weekly-charts/ (The BN Monthly and BN weekly F charts are posted at the same link)

Daily Zones:

·         Value zones ( volume profile) are at 26145-26200-26242

Hypos / Estimates for the next session:

a) The auction has supply at 26200 F now
b) 26014 is minor support
c) Below 26014, next support is at 25960

For more tradeable ideas and intraday trading strategies based on MarketProfile and the OrderFlow live charts with OrderFlow analysis Live, subscribe to the trading room. The Vtrender Trading Room hosts India’s largest MarketProfile community live every trading session from 9.15 am to 3.30 pm.

If not a Trading Room member you can get immediate access at – https://in.explara.com/e/vtrender–trading–room/checkout