Investor/RT Professional

[MC]

I finally got my hands on Investor/RT Pro with MP and WOW is all I can say.
I'm tweaking my setup and MAN does this software have some wild options.
I intend to focus on teaching market structure heavily. I'll touch on other features as I delve deeper into the capabilities and may copy posts to other locations for maximum exposure.

HUGE thanks to Chad at Linnsoft/InvestorRT. Hopefully we can help each other out here.

http://www.linnsoft.com/

[MC]

I annotated with SnagIT as usual. The HUGE feature you're seeing here is a Daily chart of the ES with a profile box drawn around the big wave down. You simply drag a box around the area you want profiled and you're going to see Support/Resistance VERY clearly. You can do a profile based on Time or Volume.
The next post I will show has both Volume AND time profiles. I'm still tinkering so it's gonna be a lil bit.

[MC]

Ok, the black is easier on my eyes. AHHH.

-The white outline/empty histogram is the volume profile.

-The colored in histogram is the market profile.

-The long white lines are the POC's (point of control).
The volume POC is where the peak volume transpired in the profiled selection.
The MP (market profile) POC is where the market had the most candles/price action touch in the profiled selection.

-The orange dots are the VWAP (volume weighted average price) for the wave down.

Combined you get a great picture of where in that wave down you'll encounter support if above, or resistance if below. This is a big piece of reading market structure.

So what is market structure?
The way the market moves is actually quite simple. It has trending and balancing periods. You generally want to play where the market is trending because balancing is often tight price action and indecision. A balanced market typically has a limited payout because people agree on the pricing. It's when a break from acceptance occurs that the real fun begins.

The market has waves of movement that when segmented and looked at vertically give an indication of accepted or perceived value.
NOTE: Price does NOT = Value
Value = an area where price has been accepted and the market balances.
The theory behind using volume/market profile is that accepted value areas tend to be revisited once price goes far enough away that volume/price action shuts off.
Think of the market as a 2 way auction. If there is no longer interest at lower prices, the auction shifts higher to find accepted value and vice versa. Generally the auction will press to a prior balancing area of accepted value to see if those prices are still accepted. In other words the balancing periods tend to be connected to each other with a trending period. I'll illustrate in a future chart.

Please ask questions.

[MC]

The beauty of the Investor/RT Pro with MP is that I simply drag a box around the candles I want profiled and voila! This lets you create profiles on individual waves. Similar to Fibonacci retracements we can now see where a trend is likely to carry us to. But unlike Fib's we see true value at work. TRUE support and resistance.
FWIW the fib tool in Investor/RT is awesome and I myself use fibs heavily because I feel floor traders and in general many traders/investors use them.

Here's a daily view. This makes the profiles more granular and we can see there was a different POC for volume and MP, unlike on the weekly timeframe. There are pros and cons of smaller timeframes. The weekly has less noise but you can't see as deep into the profiles. It's VERY important to take a holistic approach so you can gauge what the various timeframe traders/investors are thinking and what accepted price levels they are likely to look at supporting or selling into. No one timeframe will give you context...be sure to choose your charts according to your trading style.

As you can see, I use channels and trendlines in my analysis. This helps me further visualize the markets "structure". More on that later I'm sure.

[J_Mart2387]

Hello to MC and everyone on the board, its been awhile - 328 unread posts since my last visit =/

That looks like some awesome software, definitely worth further investigation. One question I had is what is the difference between the volume profile and the market profile? On the weekly chart they are basically on top of each other, but the market profile on the the daily chart is lower than the volume profile. Could this be attributed to daily "noise" that you mentioned, or something else?

[MC]

Originally Posted by J_Mart2387

Hello to MC and everyone on the board, its been awhile - 328 unread posts since my last visit =/

That looks like some awesome software, definitely worth further investigation. One question I had is what is the difference between the volume profile and the market profile? On the weekly chart they are basically on top of each other, but the market profile on the the daily chart is lower than the volume profile. Could this be attributed to daily "noise" that you mentioned, or something else?

Volume profile is a vertical representation of the volume and what price it went in at. You can see "clusters" or "bellcurves" where there is a lump of activity/transactions. That is considered to be fair value generally speaking. This is because the most volume transpired there. If you think about the market from a true VALUE perspective and not so much about price this makes perfect sense.

Market profile is a vertical representation of price action. So in otherwords how many times did a candle touch that price level. Volume and MP tend to profile just about the same. To be honest you really don't need both though I like to be sure there are no major discrepancies in the accepted VALUE.

I keep hammering on the term VALUE because I feel too many look at the market as price only. Price doesn't become VALUE unless and until it's accepted. And acceptance will form a bubble or bellcurve.

Weekly has a less elongated market profile because there are less candles to profile. AKA less noise. Make sense? Good to have you back in here BTW. Keep us posted on your investing and trading.

[J_Mart2387]

Originally Posted by MC

Volume profile is a vertical representation of the volume and what price it went in at. You can see "clusters" or "bellcurves" where there is a lump of activity/transactions. That is considered to be fair value generally speaking. This is because the most volume transpired there. If you think about the market from a true VALUE perspective and not so much about price this makes perfect sense.

Market profile is a vertical representation of price action. So in otherwords how many times did a candle touch that price level. Volume and MP tend to profile just about the same. To be honest you really don't need both though I like to be sure there are no major discrepancies in the accepted VALUE.

I keep hammering on the term VALUE because I feel too many look at the market as price only. Price doesn't become VALUE unless and until it's accepted. And acceptance will form a bubble or bellcurve.

Weekly has a less elongated market profile because there are less candles to profile. AKA less noise. Make sense? Good to have you back in here BTW. Keep us posted on your investing and trading.

This makes perfect sense, thanks for clarifying. I also like how you've pointed out the difference between price and value.

As far as using both profile indicators, like you said it's not a bad idea to make sure there are no major discrepancies, but one thing I try to remind myself of often is KISS - Keep It Simple, Stupid. I know that as I trader, I don't need a dozen indicators clouding my ability to trade and have been putting more emphasis on keeping things simple. So far it seems to be working. Thanks for the heads up about the new software though, it definitely has merit. Keep up the good work chief.

[MC]

If any new members try to register and get any errors or issues please email me at tradersbase@gmail.com. We'll get you all set up. Should be no issues I've heard of though.

[aznxdgnz]

hey thats a pretty nice software. how much do you pay?

[MC]

Originally Posted by aznxdgnz

hey thats a pretty nice software. how much do you pay?

I'm demonstrating just a few capabilities of the software thusfar. This is professional level software so don't be shocked at the price. For the capabilities it offers it's actually very reasonable.
For the Pro version including volume breakdown and market profile it's $75 per month. If you need backfill capabilities they partner with DTN Market Access for $15 a month.

Investor/RT - Pricing Summary
Pricing

Investor/RT Tour - Volume Breakdown (VB)
Info on the volume breakdown tool. More on this feature in a lil bit.