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ES1! trade ideas

S&P's Path After VIX 50E-mini S&P (September) / E-mini NQ (September) S&P, last week’s close: Settled 5370.25, up 22.00 on Friday and down 5.75 on the week NQ, last week’s close: Settled at 18,616.00, up 90.75 on Friday and 59.75 on the week Inflation and the consumer will be front and center this week, but we also see equally important anecdotes driving markets, which I will get to next. Today at 10:00 am CT, the NY Fed will release 1-year Consumer Inflation Expectations. Fed Chair Powell has called inflation expectations a self-fulfilling prophecy. Think about it: if everyone expects gas prices to be higher next week, they will be filling the car this week and thus driving prices higher. Tomorrow morning, we will get the July PPI report before CPI Wednesday. Remember, producer prices are a leading indicator of consumer prices. The July Retail Sales report and earnings from Home Depot will also be released tomorrow morning. Walmart, the world’s largest retailer, is due Thursday. Markets will ebb and flow in response to this data, but we do believe last Monday’s volatility event laid the groundwork for higher prices in the weeks to come, barring a severe escalation in geopolitical tensions. The Olympics’ closing ceremony was yesterday, and it is important to remember that only days after the 2022 Winter Olympics closed in China, Russia invaded Ukraine. Tensions are running hotter between Russia-Ukraine and the Middle East than in recent weeks. As for the volatility spike, last week, we compared the event to August 2015 and February 2018. Outside of the pandemic, these were the last two instances the VIX hit 50, and upon such, it also marked a low in the S&P. It is important to understand that after a significant rally in the weeks to come during both instances, we did see a retest into the range of the session in which the VIX hit 50. Are we in the clear? Certainly not. However, the VIX is now trading at 20, and upon volatility suppression, it is very reasonable to expect the market to drift higher, at minimum, at least for a trade. E-mini S&P and E-mini NQ futures are extending their range higher ahead of the U.S. open. We are looking for the first 30-60 minutes after the bell to help define an acceptance of the higher range and usher in continued buying. We must see the E-mini S&P hold out above major three-star support at 5359.35-5366.50 and positively digest a retest into our Pivot and point of balance at 5370.25-5376, which aligns with settlement from August 2nd. Bias: Neutral/Bullish Resistance: 5396.75**, 5404**, 5417.25-5420***, 5432.50-5441.25***, 5480.25-5485.75*** Pivot: 5370.25-5376 Support: 5459.25-5366.50***, 5348.25-5350.25**, 5333-5337.75**, 5319.25-5324.75***, 5306-5309***, 5292.25**, 5278.75-5280.75**, 5259.75-5266.25***, 5227.50-5231***, 5202.25-5204.25**, 5189-5192.25***, 5146-5161.25***, 5120**, 5092-5102.75***, 5059.75-5078.75*** 4988.25*** NQ (September) Resistance: 18,725-18,761***, 19,023**** Pivot: 18,598 Support: 18,525-18,557***, 18,484**, 18,404-18,438**, 18,323-18,358***, 18,179-18,208***, 18,064***, 17,966-17,987***, 17,856-17,893**, 17,711-17,741***, 17,509***, 17,333-17,398****, 17,110-17,180****, 16,826-16,870*** Check out CME Group real-time data plans available on TradingView here: www.tradingview.com Disclaimers: CME Real-time Market Data help identify trading set-ups and express my market views. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com *Trade ideas cited above are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management under the market scenarios being discussed. They shall not be construed as investment recommendations or advice. Nor are they used to promote any specific products, or services. Futures trading involves substantial risk of loss and may not be suitable for all investors. Trading advice is based on information taken from trade and statistical services and other sources Blue Line Futures, LLC believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. All trading decisions will be made by the account holder. Past performance is not necessarily indicative of future results.
CME_MINI:ES1!
by Blue_Line_Futures
fakeout into a shakeoutgood eve' over the last 4 weeks the es1! has seen a bit of a shakeout which has scared a lot of people out of the market. whenever these things happen, i always wonder what it is that they're afraid of? --- the es1! completed 5 waves up on a weekly timeframe from the 2023 low which we predicted, to the 2024 top which we did not pinpoint this time around. i'm predicting we sweep the high 1-2 more times into the fed pivot, before dropping very aggressively into the presidential election. --- if all goes well, the timeline will look like this: > we pop to sweep the high into the "fed pivot" > we drop -20% into the presidential election. > the presidential election turns out to be favorable for the market: > next bull run begins. --- i'm not your financial advisor, in fact - i'm not telling you to be a buyer nor a seller. just sharing my interpretation of the chart in front of me. do with this information what you will. 🌙
CME_MINI:ES1!
by Eloquent
#202433 - priceactiontds - weekly update - sp500 e-mini futuresGood Evening and I hope you are well. tl;dr sp500: Last weeks update is still worth reading because it was so on point and most prices given are still valid. Bears need to keep it below 5400/5450 and bulls want above so the bulls would have retraced much more than the 50% they currently have. Also neutral going into next week. Quote from last week: bear case: Bears made it clear that this bull trend is over with another huge bull trap. Right now the channel down looks decent enough if we ignore Friday’s tail. Bears could force another drop to 5300 early next week but I think a bounce and more sideways is more reasonable to expect. I am very confident in loading up on shorts on the next pullback and hold until we hit 5000/5100, which will likely happen over the next weeks/months. comment: Market got to 5100 way faster than I expected but it was climactic selling and a pullback was expected. Not much difference in reasoning compared to dax and the same would apply to the nasdaq. Market is trying to find the big sellers again and we are probing higher. We will most likely hit the daily 20ema soon, which is around 5440 and that is also around the July low and therefore a breakout retest. After the 2 bull bars from Thursday & Friday, I do think the odds of disappointment for the bulls is greater than another bull bar on Monday. current market cycle: Bear trend started with the drop from 5600 down to 5119. The second leg will bring us to or below 5000, where I expect much more sideways movement again. That big round number will probably be fought over for the next weeks until more bad news come around or earnings Q3 will show clear deterioration. key levels: 5000-5500 bull case: Bulls already recovered a bit more than 50% of the 480 point sell off and if they get above 5450, the chances of a bear trap and not a bear trend, are bigger than a continuation of the selling. Bulls want exactly that and Monday/Tuesday will be key for the next impulse. A daily close above the 20ema would also turn the momentum in favor of the bulls again. Their target is 5430 and then a daily close above the daily ema. Invalidation is below 5300. bear case: Bears need to step in and keep the market below 5430. That’s it. If they get strong selling again on Monday, I do think that below 5300 most bulls will cover and we see a retest of 5200 and lower. Bears still see this as a pullback in a bear trend and 50-60% is a normal retracement. Invalidation is above 5430. outlook last week: short term : Full bear mode. Pullback is expected and I will load up on shorts. This will go much lower in 2024. → Last Sunday we traded 5376 and now we are at 5370. Market sold off to 5119 so my read was perfect. Down there I wrote “you can’t get bearish at these lows” and the pullback was expected and written of. Hope you made some. short term: Full bear mode if we stay below the daily ema. Retest of the lows is higher probability than breaking above the daily ema. I gave clear key levels, mark them and watch what the market does when it gets there. medium-long term: Same as dax. Want to see a break of this bear flag before I calculate new targets and draw a better channel. We will likely see 5000 before end of October. current swing trade: None. Will load again on shorts on Monday/Tuesday if bears appear again. chart update: Added second bear gap, adjusted the possible bear channel and removed all broken bull trend lines.
CME_MINI:MES1!
by priceactiontds
UPDATED - SP500 Futures Drawdown AnalysisOverview & Reason for Update Hi all - I found some errors in my previous post that I wanted to correct. It was better to just scrap that idea and move on, so here we are. After some peer review and testing I am back with an analysis of the ES futures contract and its historical drawdowns. I am using daily logarithmic returns for this analysis. Analysis: Drawdown Range | Count | Percentage | Avg Drawdown | Median Drawdown | Max Drawdown | Min Drawdown | Avg Duration (days) ------------------------------------------------------------------------------------------------------------------------ 0% to -0.5% | 32 | 31.07% | -0.17% | -0.15% | -0.50% | -0.00% | 1.22 -0.5% to -1% | 10 | 9.71% | -0.74% | -0.73% | -0.97% | -0.50% | 2.10 -1% to -2% | 23 | 22.33% | -1.42% | -1.28% | -1.94% | -1.01% | 5.78 -2% to -3% | 8 | 7.77% | -2.44% | -2.22% | -2.92% | -2.05% | 10.50 -3% to -5% | 12 | 11.65% | -3.72% | -3.57% | -4.60% | -3.02% | 13.83 -5% to -10% | 10 | 9.71% | -6.81% | -6.21% | -9.17% | -5.19% | 31.70 -10% to -20% | 4 | 3.88% | -13.72% | -12.27% | -19.85% | -10.49% | 128.75 Over -20% | 4 | 3.88% | -41.29% | -41.05% | -57.25% | -25.80% | 901.00 Current Drawdown Analysis: Duration (days): 17 Current Drawdown (%): -5.27% Max Drawdown (%): -8.83% Summary of Results: 1. Drawdown Ranges: - 0% to -0.5%: These minor drawdowns happen frequently (32 instances) and typically last just over a day on average (1.22 days). - -0.5% to -1%: Less frequent, with a slightly longer average duration of 2.1 days. - -1% to -2%: These drawdowns are more significant, averaging around 5.78 days. - -2% to -3%: The average duration here increases to 10.5 days, reflecting the more sustained nature of these drawdowns. - -3% to -5%: These drawdowns, which are even more severe, last on average 13.83 days. - -5% to -10%: These significant drawdowns occur less frequently but have a much longer average duration of 31.7 days. - -10% to -20%: Rare and severe, these drawdowns last on average 128.75 days. - Over -20%: These extreme drawdowns are the rarest but most prolonged, with an average duration of 901 days. 2. Current Drawdown Analysis: - Duration: The current drawdown has lasted 17 days so far. - Current Drawdown (%): The current level of drawdown is -5.27%. - Max Drawdown (%): During this period, the maximum drawdown observed was -8.83%. Interpretation: - Drawdown Duration: The data shows that the average duration of drawdowns increases with their severity. Minor drawdowns (0% to -0.5%) tend to resolve quickly, usually within a day or two. However, as the severity of the drawdown increases, so does the time required to recover. Drawdowns of -5% to -10% last about a month on average, while the most severe drawdowns, over -20%, can last for several years. This suggests that the market is often quick to recover from minor corrections but takes significantly longer to recover from more severe downturns. - Impact on Trading Strategy: Understanding the typical duration and severity of drawdowns is crucial for managing risk in trading strategies. For instance, traders and investors should be prepared for prolonged periods of underperformance following severe drawdowns. This could involve adjusting position sizes, setting more conservative stop-loss levels, or diversifying to mitigate the impact of long drawdown periods. - Current Market Context: The ongoing drawdown of -5.27% over 17 days is consistent with the typical behavior of drawdowns in this range, which usually last about a month. The maximum observed drawdown of -8.83% within this period is relatively severe, indicating that the current market environment is challenging. Traders might consider this when making decisions about holding positions, as there may be further volatility ahead before recovery. - Strategic Adjustments: Given the data, it would be prudent to review stop-loss levels and consider reducing exposure during periods of heightened volatility, especially when drawdowns reach the -5% to -10% range. The fact that more severe drawdowns take longer to recover from means that capital could be tied up for extended periods, reducing the opportunity to capitalize on other market opportunities. - Long-Term Planning: For long-term investors, understanding that severe drawdowns over -20% can take years to recover from emphasizes the importance of having a solid financial plan that can withstand prolonged downturns. This might involve ensuring liquidity during such periods or considering hedging strategies to protect against significant losses.
CME_MINI:ES1!Education
by NariCapitalTrading
Full ES/SPX Trading Plan For Monday Aug 12thPlan for Monday: Supports are: 5363 (major), 5351, 5337-42 (major), 5324 (major), 5312-10 (major), 5302, 5288, 5273 (major), 5260, 5247-50 (major The key focus now is that ES has finally cleared the critical 5338-42 support, but it needs to hold this level to avoid a move back down. The first target below from here is 5363. Since this level has already been extensively tested friday and is too close to the highs, it’s not appealing for a long position, but flushes and reclaims remain possible. Below there is 5338-42 yet again. This area has been heavily tested and remains a significant trap zone, which likely won’t change soon. While it’s possible to buy directly at this level, it requires quick, agile trading. I’d rather see a setup similar to what I played multiple Friday today: a dip down to 5324 followed by a recovery. However, I’ll stay flexible and ready to react in this zone in real time, with volume. Below 5324, the 5312 level comes into play. I'm open to a small bid in this area. If you're unsure, you can wait for a potential failed breakdown of Friday's low before entering. If this zone doesn't hold, selling momentum could pick up again, so I'd be cautious with buying any supports. Areas of interest might then be 5250 and 5186-91. For Monday, I view the entire range between 5324 and 5372-78 as a potential new consolidation zone, playground for traders. Resistances are: 5372, 5378 (major), 5388, 5393, 5400 (major), 5414 (major), 5424, 5432, 5438-40 (major), 5450 (major). If the squeeze resumes on Monday, next spot for those who want to try shorts would be 5438-40 in terms of higher confidence areas. 5414 is another. Buyers case: After two days of relentless rallying, a correction on Monday wouldn’t be surprising. For buyers, it’s crucial that the discussed supports hold, with 5312 as the lowest level they want to see. Dropping below that increases the likelihood of another leg down. The 5338-42 zone, which served as major resistance throughout the week, is now support. Ideally, on Monday, ES could consolidate between 5372-78 and 5338-42. From there, the next leg up could target 5400, 5424, and then 5438-40. In terms of spots to add on strength, this is tough to provide when we close at the lows but I’d generally see flagging below Fridays high, and above 5338-42 as being bullish (especially if we flush 5362 and recover). Sellers case: This setup begins with the failure of 5312. As I mention frequently, these types of trades come with a strong disclaimer. Trades below support levels, known as breakdown trades, carry inherent risks. My main edge lies in trading failed breakdowns because most breakdowns (about 80%) tend to trap traders. Even when executed skillfully, breakdown trades have a low win rate, with over 60% expected to fail. However, the risk/reward ratio is high—two or three trades might fail, but the fourth could yield significant returns. If you’re uncomfortable with these odds or the possibility of getting trapped, it’s best to avoid these trades. Breakdown trades are advanced setups, so if you’re a newer trader here, there’s no harm in passing on them. As always, I avoid chasing the market. I’d want to see a bounce or a failed breakdown around 5310-12 first. Once this plays out and there’s clear evidence of weak demand in that zone, I’d consider shorting around 5302 or slightly higher if a clear structure forms from the bounce that I can short beneath. In general, my lean for Monday is that 5324 to 5372-78 is now a new consolidation zone, with 5338-42 being s mid-pivot. As long as we continue consolidating in this zone and really above 5338-42, buyers can just continue to work higher to 5400, 5414, then 5438-42. If 5324 fails, it’s a warning shot for buyers, with 5312 fail triggering short back down the levels.
CME_MINI:ES1!
by ESMorg
SP500 Futures Drawdown AnalysisDetailed Analysis of Drawdown Data for ES Futures Contract This drawdown data provides an overview of the frequency, severity, and distribution of various drawdown ranges for the ES futures contract (ES1! on trading view). Understanding this data is crucial for developing a robust trading strategy, particularly in the context of the current market environment, which has been characterized by heightened volatility, economic uncertainty, and fluctuating investor sentiment. 1. 0% to -0.5% Drawdown Count : 332 occurrences Percentage : 5.50% Average Drawdown : -0.24% Median Drawdown : -0.24% Maximum Drawdown : -0.50% Minimum Drawdown : -0.00% This range represents the smallest drawdowns, occurring with moderate frequency (5.50%). The tight clustering around the average and median drawdown suggests a consistent, low-level pullback that is often seen during periods of market consolidation or minor profit-taking. In the current environment, such drawdowns could be indicative of short-term corrections within an overall bullish trend, where market participants are adjusting positions without signaling a significant change in market direction. 2. -0.5% to -1% Drawdown Count : 199 occurrences Percentage : 3.30% Average Drawdown : -0.74% Median Drawdown : -0.74% Maximum Drawdown : -1.00% Minimum Drawdown : -0.50% This range shows slightly larger pullbacks, but they occur less frequently than the previous category. The similarity between the average and median drawdowns suggests that these movements are still relatively minor, often associated with more pronounced but still controlled market fluctuations. Such drawdowns might be seen during brief periods of increased uncertainty, possibly due to geopolitical events or economic data releases that create temporary market jitters. 3. -1% to -2% Drawdown Count : 289 occurrences Percentage : 4.79% Average Drawdown : -1.49% Median Drawdown : -1.47% Maximum Drawdown : -2.00% Minimum Drawdown : -1.01% This category represents more substantial market corrections, occurring with moderate frequency. These drawdowns could signal the beginning of more significant market concerns, such as unexpected economic data or earnings reports that fall short of expectations. In the current environment, this range could be triggered by macroeconomic factors like inflation concerns, central bank policy changes, or global trade tensions, which might lead to a reassessment of risk by market participants. 4. -2% to -3% Drawdown Count : 207 occurrences Percentage : 3.43% Average Drawdown : -2.52% Median Drawdown : -2.51% Maximum Drawdown : -3.00% Minimum Drawdown : -2.01% Drawdowns in this range are less common but represent more significant market corrections. Such movements often reflect broader market shifts, potentially signaling the early stages of a bear market or a significant change in investor sentiment. Given the current market conditions, such drawdowns could result from escalating geopolitical risks, sharp changes in commodity prices (e.g., oil, gold), or unexpected shifts in central bank policy that lead to a reevaluation of asset valuations. 5. -3% to -5% Drawdown Count : 314 occurrences Percentage : 5.20% Average Drawdown : -3.97% Median Drawdown : -3.97% Maximum Drawdown : -5.00% Minimum Drawdown : -3.00% This range represents significant corrections that are indicative of broader market disruptions. Such drawdowns often occur during periods of heightened uncertainty or in response to major economic or financial events. In the current environment, these drawdowns could be triggered by major shifts in fiscal policy, unexpected global economic slowdowns, or significant corporate earnings misses. These corrections often lead to increased volatility and can signal a shift from a bullish to a bearish market trend. 6. -5% to -10% Drawdown Count : 712 occurrences Percentage : 11.80% Average Drawdown : -7.36% Median Drawdown : -7.35% Maximum Drawdown : -9.99% Minimum Drawdown : -5.00% Drawdowns in this range are more severe and occur with relatively higher frequency (11.80%). These are often associated with significant market corrections or bear markets, where investor sentiment shifts dramatically, leading to widespread selling. In today's context, such drawdowns might occur due to a combination of factors like economic recessions, financial crises, or widespread panic selling in response to unforeseen global events (e.g., pandemics, wars). 7. -10% to -20% Drawdown Count : 1044 occurrences Percentage : 17.30% Average Drawdown : -15.01% Median Drawdown : -15.10% Maximum Drawdown : -19.99% Minimum Drawdown : -10.01% This category represents the beginning of deep bear markets or recessions, where the market experiences prolonged and severe declines. These drawdowns are common during periods of significant economic downturns, such as the 2008 financial crisis. The high frequency (17.30%) suggests that such environments are not rare and can persist for extended periods. In the current market environment, a drawdown in this range could be triggered by a combination of severe economic contraction, systemic financial risks, or a collapse in investor confidence. 8. Over -20% Drawdown Count : 2644 occurrences Percentage : 43.81% Average Drawdown : -33.22% Median Drawdown : -30.98% Maximum Drawdown : -63.08% Minimum Drawdown : -20.00% This range represents the most severe market declines, often associated with economic depressions, systemic financial crises, or catastrophic global events. The high frequency (43.81%) underscores the prevalence of these extreme events in market history. In the current context, such drawdowns could be triggered by a global economic collapse, a major war, or another unprecedented global crisis. These are periods of maximum fear and uncertainty, where market dynamics are driven by panic and extreme risk aversion. Contextualizing for the Current Environment The current market environment is influenced by a multitude of factors that could lead to drawdowns across the spectrum outlined above. Let's expand on how specific elements of the current environment may interact with this drawdown data: 1. Economic Uncertainty The global economy is currently grappling with a complex mix of challenges. Inflation rates remain elevated in many regions, prompting central banks to maintain or even increase interest rates. This monetary tightening can suppress economic growth, increasing the risk of recession. In this scenario, drawdowns in the -1% to -10% range might become more common as markets react to slower growth prospects and tighter financial conditions. Additionally, the ongoing debate about the timing and scale of rate cuts adds further uncertainty, making market participants more reactive to new economic data, potentially leading to increased volatility. 2. Geopolitical Risks Geopolitical tensions continue to pose significant risks to global markets. Conflicts, particularly those involving major economic powers, can lead to sharp and unexpected market movements. For instance, a sudden escalation in trade tensions or military conflicts could trigger drawdowns in the -5% to -20% range, as markets quickly price in the potential for global economic disruptions. Furthermore, energy markets, which are closely tied to geopolitical developments, could exacerbate these moves, especially if supply chains are threatened. 3. Market Sentiment and Investor Behavior Investor sentiment is currently fragile, influenced by a mix of fear and opportunism. With many market participants still wary from previous downturns, the market is susceptible to sharp sentiment shifts. News or data that stokes fear or uncertainty can quickly lead to drawdowns, especially in the -3% to -5% range, as investors rush to protect their capital. On the other hand, any signs of economic resilience or policy shifts towards more accommodative stances could temporarily boost sentiment, potentially reducing the frequency of larger drawdowns. However, this sentiment is volatile and could change rapidly, leading to significant drawdowns if negative catalysts emerge. 4. Historical Context and Precedents Looking at historical precedents, the data suggests that significant drawdowns (-10% to over -20%) are not uncommon, especially during times of crisis. The high frequency of severe drawdowns highlights the importance of being prepared for extreme scenarios. In the current environment, where multiple risk factors are present, there is a heightened probability of such large-scale drawdowns occurring. Market participants should be aware of the potential for rapid declines. This is particularly important in an environment where systemic risks, such as financial instability or a major economic downturn, are a concern. Conclusion The data highlights the importance of preparing for a range of potential outcomes, from minor corrections to significant market downturns. This analysis suggests the importance of maintaining flexibility, vigilance, and a well-thought-out risk management strategy in the face of potential market volatility.
CME_MINI:ES1!
by NariCapitalTrading
1
Last 3 weeks of TPO in 1 week blocks for ES CME_MINI:MES1! I merged the last three weeks to see the Point of Control on the upcoming range, Could rip through the top of this current consolidation to reach for the Value area low and the Breaker Block resting right above and then reverse back to the 4h FVG down below to gather liquidity in a sweep or a raid. Should see an expansion one way or another due to the accumulation period we just finished with on Friday. Cheers CME_MINI:MES1!
CME_MINI:MES1!
by Making_Trades_Matter
ES ReversalReversal after liquidity sweep of Last month's New Week Open. 3 contract to start end of this week maybe next. All speculation risk entry... never bet against Capitalism; D jkjk Really though I'll be setting alarms and watching price action from here. If there is a sharp reaction to the HPE area, I will be placing a sell by Market, start taking 1R partial at 5440- 5460. Taking partials all the way down, scaling in at 50 retracement failure, and BE after a 50% retracement failure of weekly range, scaling in at half the size. Trailing stop starting at TP1 It could... do a small dip in my favor after tapping me in, just to pivot from the Event Horizon Risking .5%. Leaving a runner on :D Time H4- FVG M-15 MMXM M1-Entry S15- Micro Movement Analysis
CME_MINI:MES1!Short
by Making_Trades_Matter
1
75: Comprehensive Guide to Volume Profiles and Volume in TradingWhat is a Volume Profile? A Volume Profile is an advanced charting tool that plots the amount of trading activity (volume) across different price levels over a specific period. Unlike traditional volume indicators that only show volume over time, Volume Profiles provide insights into where the majority of trading took place, highlighting key areas of support and resistance, as well as zones of high and low interest among traders. Key Components of Volume Profiles: 1. Point of Control (POC) : This is the price level where the highest volume of trades occurred. The POC is a crucial level because it represents the price at which traders found the most value, making it a strong indicator of support or resistance. 2. Value Area (VA) : The Value Area represents the range of prices where approximately 70% of the volume was traded. This area is divided into the Value Area High (VAH) and Value Area Low (VAL). The VA is significant because it identifies the zone where most market participants were active, providing a clear picture of market consensus on value. 3. High Volume Nodes (HVN) and Low Volume Nodes (LVN) : HVNs are price levels where there was a large amount of trading activity, indicating significant interest and often serving as strong support or resistance levels. LVNs, on the other hand, represent areas with minimal trading activity, where prices tend to move quickly due to the lack of interest. The Importance of Volume in Trading Volume is a fundamental aspect of market analysis, offering insights into the strength and sustainability of price movements. It reflects the level of participation in a market, indicating the intensity of buying or selling at different price levels. - Confirmation of Price Movements : High volume confirms the legitimacy of a price move. For example, a price breakout from a resistance level on high volume is more likely to be sustained than one on low volume. - Reversals and Continuations : Spikes in volume can signal potential reversals, especially when occurring at significant price levels such as the POC or near the VA boundaries. Conversely, a sustained high volume along a trend can indicate its continuation. - Validation of Support and Resistance : Volume at key levels like the POC, VAH, and VAL helps validate these areas as strong support or resistance. When price interacts with these levels on high volume, it suggests that many market participants are active, reinforcing the importance of these price levels. How to Interpret and Use Volume Profiles: 1. Identifying Key Price Levels : - The POC acts as a magnet for price, often drawing the price back to it when it moves away. This level is crucial for identifying potential areas of reversal or consolidation. - The Value Area is where the majority of the trading activity occurs. Prices above the VAH might indicate an overbought condition, while prices below the VAL could suggest an oversold market. 2. Volume and Market Sentiment : - High Volume Nodes indicate areas of significant interest, where prices tend to stabilize due to heavy trading. These areas often become zones of accumulation or distribution, depending on market conditions. - Low Volume Nodes indicate price levels with minimal trading interest, where prices may move quickly and encounter less resistance, often leading to rapid price changes or breakouts. 3. Order Flow and Large Volume Blocks : - Large blocks of volume, particularly at HVNs, suggest the presence of institutional traders or significant market participants placing large orders. These zones are critical because they reflect where big players are accumulating or distributing their positions. As a result, these areas tend to create strong support or resistance levels that can define future market behavior. 4. Dynamic vs. Static Profiles : - Volume Profile Visible Range (VPVR): This type of profile updates as you scroll through your chart, dynamically showing the volume distribution for the visible price range. It’s useful for analyzing the current market context and finding immediate trading opportunities. - Fixed Range Volume Profile (FRVP): This profile is static, showing volume data for a specified price range or time period. It’s valuable for comparing current price action to historical data, helping identify long-term support and resistance levels. Practical Tips for Using Volume Profiles : 1. Customization and Settings : - Adjust the number of rows or ticks per row in your Volume Profile settings to get a more detailed or broader view of volume distribution. More rows will give you finer detail, while fewer rows will smooth out the data, highlighting major trends. 2. Combining with Other Indicators : - Use Volume Profiles in conjunction with other technical indicators like moving averages, RSI, or MACD to confirm trading signals and enhance the reliability of your analysis. 3. Adapting to Different Timeframes : - Tailor your Volume Profile analysis to your trading style. For day traders, shorter timeframes (e.g., 5, 15, 30 minutes) might be more relevant, while swing traders or investors might focus on daily, weekly, or even monthly profiles to identify long-term trends and key levels. 4. Observing Market Reactions at Key Levels : - Pay close attention to how the market reacts when it approaches HVNs, LVNs, the POC, or the boundaries of the Value Area. These reactions can provide clues about future price movements and potential trading opportunities. Volume Profiles offer a deep and nuanced view of market behavior by highlighting where significant trading activity has occurred at different price levels. By understanding the interaction between volume and price, traders can make more informed decisions, identify key levels for entry and exit, and gain insights into market sentiment. Integrating Volume Profile analysis into your trading strategy can provide a significant edge, enhancing your ability to navigate the complexities of financial markets.
CME_MINI:ES1!Education
by SeventyFive-Invest
Squeeze, plus PPI and CPI next weekMajor decision upcoming on Friday - especially for shortsellers. PPI and CPI data is around the corner. Trouble for shortsellers, because neither of those data will likely be bad. TVC:VIX is already in a difficult to defend position for shortseller and they'll get a double whammy on Op-Ex week. The market will squeeze shortsellers quickly in the area above Thursday's high. Institutional had swapped chairs with retail and retail is currently bagholding shorts. Above Thursday's high is a good area to double down on longs, while shortseller should cut losses quickly.
CME_MINI:ES1!Long
by KJKaramay