May 2014
by Bernard Larouche
Category: Intro

5/13/2014 (EST)

Basic Strategy - 6 : One time framing and balance concepts apply to 30 minute chart.

Today I would like to show you how to apply the balance concept to the Market Map 30 minute Volume Tracking Indicator.

The balance principle can be apply to any time frame and can be easily visualize with the Balance and Excess indicator but we will use a very simple manual approach for the 30 minute chart.

First let's define one time framing :

"A trending situation where in an uptrend, the low of the previous auction in a Market Profile is not broken to the downside by greater than 2 ticks or the low of the previous bar on a chart is not broken to the downside. At the same time, the high of the previous auction in a Market Profile or the high of the previous bar on a bar chart is normally equaled or exceeded. ( It is possible that the high is not reached - the determinant is that the low is not taken out to the downside. ) As this situation occurs over multiple bars we identify it as "one-timeframing. The inverse applies in downward trending situation." From JDaltontrading web site.

Now let's define an intraday 30 minute balance :

A one time framing is stopped by an inside bar. An inside bar is defined as a low higher than the previous bar low AND a high lower than the previous bar high and it starts a new balance. This balance top and bottom being the high and low of the bar preceding the inside bar.

These market conditions ( one time framing and balance on the 30 minute chart ) will be a very important piece of information in applying our strategy. I like to apply this analysis to the Market Map 30 minute Volume Tracking Indicator because it also includes volume number to the whole picture.

May 2014
by Bernard Larouche
Category: Intro

5/6/2014 (EST)

Basic Strategy - 5 : Reading the daily auction

Today we're gonna look deeper at the Balance Excess indicator using it to read the daily auctions ( or whatever time frame you may use ).

So now that we know about balance and excess we will use them to define the start of a new auction.

A new auction will start when we get an excess bar or a breakout from a balance area that goes against the current active auction. For example the current action is down and we see a buying tail or a balance area breakout on the upside. That would start a new up auction. That's it ! not very complicated...

The auction direction is very important because it will tell us which side offers the best risk-reward potential.

It is always preferable to trade with the trend ( auction direction ) because with are trading with the flow.

Slowly but surely we are putting all the pieces together toward a trading strategy that makes sense. This daily auction analysis will be the first step that we will take EVERY DAY to adapt the way we will approach the market.

April 2014
by Bernard Larouche
Category: Intro

4/30/2014 (EST)

Basic Strategy - 4 : Excess

Today I will talk about excess.

Market excess exists when prices have extended too far above / below value.

"Excess is created when the other timeframe recognizes an opportunity and aggressively enters the market, returning price to the perceived area of value."  from Mind over Markets.

Why are these levels important ? They can act as key future support and resistance points. These levels represent price rejection. No time = no acceptance.

Balance and Excess indicator will spot these excess for you according to your rejection definition. ( number of rejection ticks surrounding excess lows and highs ). Not only do they represent rejection but they also very often start a new auction.

That's how we will use excess in our trading. Combined with the balance areas they both will help us figure out the current market auction direction so that we will lean toward it.

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