A useful way to identify support and resistance is to reference naked POC’s. A naked point of control represents the high volume price within a bar that has not been pierced by a subsequent new bar. It is represented as a line drawn across the chart into the future until price trades that price again. Once the price trades the lines stops drawing.
Look at these examples to see how it is visually represented on the chart. One of the benefits of MarketDelta is this technique can be applied to any time frame chart, not just the typical 30 minute bars. It can be applied to 5 minute charts, daily, reversal (point and figure), renko, tick, volume, and more!
How to Trade Using Naked POC’s
The best way to apply naked POC lines is to identify support below and resistance above. The definition of a POC is a price that attracted a lot of trading volume in the past, so the idea is if price approaches it again in the future it will serve as a stopping point, at least temporarily. Those who traded heavily there in the past will most likely defend it in the future. For this reason alone naked POC’s become price attractants but also price stoppers.
Settings (How to Add to Your MD Charts)
Right click to add a technical indicator and choose Profile. This is the profile indicator. There are lots of settings options on this preferences window, but the only ones that are important are outlined below.
Market Profile® Charts
MarketDelta Charts also have Market Profile which allows for the naked POC to also be plotted on the traditional Market Profile graphic. Here is an example and how to apply the setting to the chart.
A novel use of the volume imbalance Footprint chart is to use the manual setting and set it to 101. This represents 101% and would color each volume imbalance comparison. To learn more about the comparison methodology see this post.
What we would be trying to achieve in setting it up this way would be to highlight which side, bid or ask, is experiencing more trading volume. This comparison uses the volume imbalance methodology. Setting it up this way can be very helpful in understanding the auction taking place and visually show the dominant order flow on the chart.
Here is a sample of what the ES would look like if setup this way.
Just double click the Footprint and set it up this way.
There have been a lot of requests for the video and slides from yesterday’s webinar Making it Easy to Read the Footprint Chart so we created a slide share with the video at the beginning and the slides after that. You can easily skip the video by clicking next and getting right into the slides, although a lot of valuable information was provided in the video in case you missed it.
What holds people back from understanding?
Emotion! There is no doubt that as humans we are scared of the unknown. For example, when you don’t understand something, there is an obvious element of fear. Trading has 2 layers of that. The first layer is, “How do I learn this business? Once we get past the “OK, I think I know the mechanics, I’ve read some books, I know more than I did two months ago…” we fall into the second unknown. The realization that we really are uncertain where the market is going, sometimes we’re right, sometimes we’re wrong.
Do you see how once you get past first unknown, you’re hit with the second?
Peel back the onion and you’ll be surprised that the skill set of career traders are not what you might of expected. The basics are also the advanced. Some of the best edges in trading are always the, “why didn’t I think of that?!” Often times being good at something takes less learning and more understanding. Try to strip down this business by taking your consumer skills and apply them to trading. It’s amazing how much less time it takes to understand something, when you knew it all along.
As we march towards the Super Bowl, let’s draw a quick football analogy. Non-professional traders tend to focus on the past to predict the future, while ignoring the present. Take a quarterback in football, when they walk up to the line of scrimmage and see the defense set up in real time, they are prepared to know if the play that is called might “qualify.” If not, they audible or change the play.
Professional football isn’t about calling the perfect play, it’s about getting out of bad ones based on the present. It’s based on real time analysis, not what was recorded on video tape. Trading professionally is the same way. It’s not about predicting where the market is going, it’s about executing your prediction.
Qualifying when to execute a trade is like a quarterback walking up to the line of scrimmage. It’s taking the tools you use to track buyers and sellers, and in REAL TIME deciding if it’s time to trade. Deciding if this is the location to execute your bias…
“Does the pass play, the team has called, have a good chance of succeeding based on what I see the defense doing RIGHT NOW?!”
Email firstname.lastname@example.org for a 2 day trial to the MD Trading Room and walk up to the line of scrimmage using the FootPrint to track buyers and sellers (see below)
As some of you may or may not already know, Zenfire has been experiencing a lot of troubles over the past couple of weeks and is on hold at the moment while technical options are considered for the popular order routing service.
MarketDelta has long supported Zenfire and even made the investment in the new API to stay current with Zenfire and support clients who use it as their data source for MarketDelta Charts and choosen order routing system for MarketDelta Trader. However, now that Zenfire has halted trading through its service for the time being while technical matters are resolved it is important to know what your options are if you use Zenfire.
The good thing about using MarketDelta is there are other order routing options, all the while still retaining your relationship with your current broker. Many Zenfire clients clear through Dorman. If this is the case the simplest option is to just contact your broker and request a CQG login permissioned for “MarketDelta”. All you need to do is uninstall Trader and reinstall and choose CQG. You can be trading again today!
The nice thing about this option is no account transfer or clearing firm change has to occur. You just use a different order routing system and be up and running same day. If Trader is installed for Zenfire, uninstall, and re-download from www.marketdelta.com/downloads and choose CQG when installing.
If you should choose to go with a different broker and move your account, chances are MarketDelta Trader can be used at the new broker with one of the other order routing systems we support. Here is a partial list of supported brokers and below are the 3 other order routing systems we support with MarketDelta Trader. There are multiple FCM’s we support, including AMP Clearing, Crossland, Dorman, OpenECry, and Vision.
For customers of other trading software, you should consider moving over to MarketDelta Trader. MarketDelta doesn’t have any exclusive relationships and can freely offer connectivity to a host of order routing systems for the broker of your choice.
We wish you our best and standby to answer any questions you might have at 1.312.922.7800. Consider following us on Twitter to stay abreast of information as we hear updates.
As many of our longer time customers may already know, I used to be a member of the CME and traded a lot of ES contracts back in day before coming up with the idea for the Footprint and creating the software company.
After a few years the “side project” of the software company really took off and pulled me away from trading because of the day to day commitment to customers and managing the grow of the business.
This past Autumn I was finally able to get some “in between time” where I had some time just about each day to actively engage the market. In the past my trading style was very active as I scalped the market for profits, but I knew this time around I would need to approach the market somewhat differently.
I have always been the first to say that part time trading is not a good idea if distracted by other work or duties. Given my schedule and all the other unscheduled demands (not unlike many of you I am sure) I have found something that works for me and my schedule and wanted to share it.
Picking My Spots
The first thing I am doing is identifying some levels to “lean” on. All this means is finding some spots I feel will act as support/resistance and expect a market reaction. There is no one set way to do this but I use a combination of Market Profile levels, volume profile levels, and just plain old fashioned bar development. Here was a trade that I tweeted out on Friday and sums up a typical trade. It took patience, but patience paid off as the market put in new lows and then the volume imbalance Footprint identified the change in order flow to create a nice bounce.
Is the $ES_F bottoming here? The volume imbalance Footprint is showing some initial signs. pic.twitter.com/hrR85VRuj7
Taking the Trade
Last Autumn we announced the Volume Imbalance Footprint chart. You can watch a webinar about it here. Even with all the experience I have at reading the Footprint chart, the simplicity at which the volume imbalance Footprint shows the order flow is very helpful, even to a trained eye.
Using the volume imbalance footprint has allowed me to casually watch the markets, identify my levels, then wait for my order flow signal on the volume imbalance Footprint chart. When I see the imbalance at my level I take the trade.
Even if I had more time to trade I would still use this same process to identify some of the larger potential trades and then take my smaller scalps. With limited time to trade and many distractions throughout the day, I have found this approach offers me a great way to stay engaged with the markets and stay disciplined to a defined trading strategy.
As 2013 is now in the books we wanted to highlight the 3 most popular blog posts for the past year. Each post is unique and offers something worth checking out and possibly working into your trading setup for 2014.
There are many exciting things planned for 2014 and we look forward to serving you and helping you become the best trader you can be!
During this cold (brrrr) and snowy season we have been hard at work on MarketDelta Trader. We have been listening to your feedback and made some significant updates in the latest release. The most significant updates will ONLY apply currently to the Zenfire order routing system, but we hope to gradually introduce these features to the other supported order routing systems in the first half of 2014.
Server Side Brackets Orders and OCO’s
Available immediately by upgrading your MarketDelta Trader (close, reopen, accept update) newly placed orders that utilize OCO’s will all reside server side. Some of the benefits are increased execution speed because your order is resting on the server and doesn’t have to be transmitted once triggered, and loss of connection won’t matter because orders are working on the server.
Single Sign-On for Live / Demo Account
Previously with MarketDelta Trader you had 2 sets of logins, one for demo/sim and another for live trading. This has now been consolidated to a single login for Zenfire. This added convenience will allow you to quickly jump between live and sim accounts. It will also keep the data flowing continuously to your MD Charts so you never miss a beat!
At the login screen the trading environment now will always show “Live“. There is no longer a selector if the order routing system is configured for Zenfire.
Once logged in, the account drop down will list BOTH the live and sim account. The sim account is preceded by an “S“. If both your live and sim account do not show in the drop down contact your broker and ask that they be associated. When the sim account is selected yellow bands will appear across the trading window, giving indication on the user interface that the sim account is selected.
Front Month Symbol Search
When configured for Zenfire, you can search for the front month symbol by searching @Symbol. So if searching for the front month for say Comex Gold…
A new drawing option has been added to the Profile Indicator in MarketDelta titled “Time-Shaded”. This paints the different time periods of each profile different shades or colors. It provides a great way to apply a profile to a chart and see how the profile has developed through the course of time and comparing it to other recent profiles. For instance, maybe the profile is showing us the overnight activity for the past 3 days has always held and the market traded lower through the course of the regular trading hour session. The time shaded profiles make this pattern stand out. There are many other patterns that may jump out as well.
The time division is dependent on the duration of the profile. For instance, one day profiles are broken down into overnight period (gray), opening range (yellow), initial balance (green), late morning (red), early afternoon (purple) and closing period (blue).
Weekly profiles are divided into days. Monthly profiles are divided into weeks. Quarterly profiles are divided into months. Yearly profiles are divided into quarters. When Time-Shading is turned on, several color options are available including Rainbow (default), Gray scale, Red, Green, and Blue.
More Examples of What is Possible
For yearly profiles, we shade each quarter a different color….
Quarterly Profiles are broken down into months…
Monthly Profiles are broken down by calendar week…
Weekly Profiles into days…
And Daily Profiles (day session) into 9:30 to 9:35 (yellow OR), 9:35 to 10:30 (green IB), 10:30 to 12 (red), 12 to 2:30 (purple) and 2:30 to close (blue). Times shown are EDT.
Overnight session (31) does the same, but also colors the overnight period all gray….
Here is example of same profile above but with Blue shading…