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James Dalton

Mind over Markets


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(crambe 12)


James Dalton Mind over Markets
298 . pdf

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Laying the Foundation


The Auction
Organizing the Day
Challenging the Rules
The Role of the Marketplace
Going with the Crowd

Introduction to Day Timeframe Structure


Normal Day

Normal Variation of a Normal Day

Trend Day

Double-Distribution Trend Day

Nontrend Day

Neutral Day

Day Type Summary

3

Building the Framework
The Big Picture: Market Structure, Trading Logic and Time :
,
A Synthesis: Structure, Time, and Logic : , ,
Ease of Learning
Amount of Information
Recognition Speed
Trade Location
Confidence Level
Summary -

Evaluating Other Timeframe Control


Other Timeframe Control on the Extremes
Tails (or Extremes) ( )
Range Extension
Other Timeframe Control in the Body of the Profile

TPO Count TPO

Initiative versus Responsive Activity ( )


Initiative Buying
Initiative Selling
Responsive Buying
Responsive Selling

Trending versus Bracketed Markets ()


Key ElementsA Brief Discussion -
Trending Markets
Bracketed Markets ()

The Two Big Questions

Doing the Trade


Section I: Day Timeframe Trading
Day Timeframe Directional Conviction
Opening Call
The Open
The Open as a Gauge of Market Conviction
,
Open-Drive -
Open-Test-Drive --
Open-Rejection-Reverse --
Open-Auction -
Open-Auction in Range
Open-Auction Out Of Range
Summary
Opening's Relationship to Previous Day
Open Within Value
Acceptance
Rejection (Break-out) ()
Open Outside of Value but Within Range ,

Acceptance
Rejection (Break-out) ()
Open Outside of Range
Acceptance
Rejection (Break-out) ()
Summary
April 13,1989
Crude Oil
S&P 500
Gold
Japanese Yen
Soybeans
Treasury Bonds
Summary
Day Timeframe Auction Rotations
Two-timeframe Markets
One-Timeframe Markets
Using Auction Rotations to Evaluate Other Timeframe Control

Structure
Half-hour Auctions
Extremes
Range Extension
Time
Identifying Timeframe Transition

December Swiss Franc, October 12,1987


Y-E: One-timeframe Buying
E: Time
Y-F: Auction Test
G: Transition Confirmation
E-H: One-timeframe Selling
H: Auction Test
I: Transition Confirmation
H-J: One-timeframe Buying
Summary
Auction Failures
Excess
Signs of Excess
The Rotation Factor
TPO Trading TPO
The Close
Day Timeframe Visualization and Pattern Recognition
()
Short Covering Rallies
Long liquidation Breaks
Summary of Short Covering and Long Liquidation
Ledges
Summary
The Liquidity Data Bank
The Anatomy of the LDB
General Uses of the LDB
Total Volume
The Value Area
Dispersion of Volume
Methodology
Cti Figures Cti
Acceptance of Value Outside the Value Area

High Volume Concentrations
Top Five versus Bottom Five 5 5
Trend Tests
Average High Volume
Opening Range Volume
Summary
Evaluating Commercial Activity
Definition
Commercial Logic
Expected Response
Unexpected Response
No Response
Identifying the Significance of Price
Average Daily Cti2% (Total) ()
Average Cti2% above the Value Area
Average Cti2% Within the Value Area

Average Cti2% Below the Value Area


Cti2% in Action Cti2%
LDB Summary
High- and Low-Volume Areas
High-Volume Areas
Identifying High-Volume Levels
The Liquidity Data Bank (LDB)
The Market Profile Graphic
Tick Volume
High-Volume Examples
Example 1: Up Auction; Probe Down Into High-Volume Area

Example 2: Down Auction; Probe Up into High-Volume Area


Low-Volume Areas
Identifying Low-Volume Areas
Low-Volume Examples
Example 1: Low Volume as Resistance
Example 2: High and Low Volume Used Together
Summary

Summary Day Timeframe Trading


Section II: Long-Term Trading
Long-Term Directional Conviction
Attempted Direction: Which Way Is the Market Trying to Go?
Auction Rotations
Range Extension
Long-Term Excess
Island Days
Long-Term Tails
Gaps
Summary
Buying/Selling Composite Days /
Summary
Directional Performance: Is the Market Doing a Good Job in Its Attempts to Get There?
Volume
Evaluating Changes in Volume
Volume as a Measure of Directional Performance
,
Value-Area Placement
Evaluating Directional Performance through Combined Volume and Value-Area
Placement
Value-Area Width
Summary: Long-Term Activity Record
Long-Term Auction Rotations
Brackets
Trade Location in a Bracketed Market
Rule 1: Monitor market direction and location within the current bracket

Rule 2: Markets generally test the bracket extreme more than once

Rule 3: Markets fluctuate within bracketed regions

Rule 4: Monitor activity near the bracket extremes for acceptance/rejection

/
Transition: Bracket to Trend :
Trends
Trade Location in a Trending Market
Monitoring Trends for Continuation

Transition: Trend to Bracket :


Detailed Analysis of a Developing Market
Bracket Reference Points
Region A ( 4-98)
Region B ( 4-99)
Region C ( 4-100)
Region D ( 4-101)
Long-Term Auction Failures
Long-Term Short Covering and Long Liquidation

Applications
Corrective Action
The Function of Corrective Action

Summary
Long-Term Profiles
Using Long-Term Profiles
The Long-Term Profile in Action
Region A ( 4-109 & 4-110)
Region B ( 4-111 & 4-112)
Summary

Special Situations
3-I Days 3-I
Neutral-Extreme Days -
The Value-Area Rule
Distance from Value
Value Area Width
Market Direction
Summary
Spikes
Acceptance versus Rejection
Openings Within the Spike
Openings Outside the Spike
Bullish Openings
Bearish Openings
Spike Reference Points
Balance Area Break-outs
Gaps
Day Timeframe Significance of Gaps

Summary
Markets to Stay Out Of
Nontrend Days
Nonconviction Days
Long-Term Nontrend Markets
News-Influenced Markets ,

Summary
News
Summary
Beyond the Competent Trader

The Results Equation: Market Understanding x (Self-Understanding + Strategy) = Results


: ( + ) =

Self-Understanding: Becoming a Successful Trader


:
Self-Observation
The Whole-Brained Trader
The Left Hemisphere
The Right Hemisphere
Combining the Two Hemispheres

Strategy
A Business Strategy
Capital
Location
Timing
Information
Know Your Competition
Know Yourself
Consistent, Daily Execution. ,
Inventory

Risk
Goals
Record Keeping and Performance
Dedication
Applications

Summary

6

APPENDIX 1 1
VALUE-AREA CALCULATION
Volume Value-Area Calculation
TPO Value-Area Calculation

APPENDIX 2 2
REFERENCE TEXTS AND EDUCATIONAL LITERATURE
Literature
( )


Mind over Markets,
Market Profile.
, MoM,
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James Dalton - Markets in Profile MiP, .
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crambe12
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Market, Markets

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Timeframe

Day Timeframe Trading


Long-Term Trading
Trade location

Long, Longs
Short, Shorts

Buy, buyer
Sell, seller

ullish sentiment
Bearish sentiment

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Auction, s process

auction up
auction down
longer-term auction

short-term auction

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Inventory
Opportunity
Local, Locals

Other timeframe

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Time
Price
Volume

Derivative source

Break-out


Day timeframe trader
Longer-term trader

Swing trader


Trend
UpTrend - DownTrend

Trending market

Bracketed market
Balanced market

(value), ( ),

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out-of-balance
new business
old business

Bracket
Bracket extreme



()


Market Profile
Statistical bell curve
roughly one standard deviation

Time Price Opportunity (TPO)


Value



(68%-70%)
-
TPO

Initial balance IB


(60 ) 30
, -

Point of control POC


(price x time = value)

( x = )
TPO ,

Area of balance
Double TPO price prints


TPO

Single TPO price prints


running Profile

Tail
single print buying tail
single-print selling tail
TPO Count

- TPO


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TPO . TPO ( )
(point of control) ,
(short) (value).
, TPO (point of control)
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(long) (value).


Normal Day
Normal Variation of a Normal Day
Trend Day

Double-Distribution Trend day


Nontrend Day
Neutral Day

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, Normal day
standard
Double-Distribution Trend day.

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(initial balance)



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(value)


Market structure
Market time
Market auctions
half-hour auctions
Trade facilitation


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Market confidence
Directional conviction

Strong conviction

Nonconvictional

10

Reference points

follow-through

( ..) POC


( )

Price rotation
Auction rotations
Rotation Factor

Range

Range extension
Overlapping
Extremes
INITIATIVE - RESPONSIVE ACTIVITY
Initiative Buying


()

-
,

Initiative Selling

(value area)

,
(value area)

Responsive Buying
Responsive Selling
Opening Call
Open - opening bell

Open-Drive
Open-Test-Drive
Open-Rejection-Reverse

Open-Auction
open-auction in range
open-auction out of range
OPENING'S RELATIONSHIP TO PREVIOUS
DAY
Open Within Value




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(value) ( TPOs
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Open Outside of Value but Within Range

Open Outside of Range

11

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Initial test
Acceptance
Rejection (Break-out)
Two-timeframe Markets

()
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One-Timeframe Markets

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Other Timeframe Control

Timeframe transition
Transition Confirmation
Auction Failures
Excess
Signs of Excess

The Close
Day Timeframe Visualization
Short Covering Rallies
Long liquidation Breaks
Ledges
The Liquidity Data Bank
High- and Low-Volume Areas
High-Volume Areas
Low-Volume Areas
Tick Volume

Section II: Long-Term Trading


Long-Term Directional Conviction
Auction Rotations




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Long-Term Excess
Island Days
Long-Term Tails
Gaps
Buying/Selling Composite Days

composite Buying day

composite Selling day

Volume
Evaluating Changes in Volume

Volume as a Measure of Directional


Performance
Value-Area Placement

12


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(composite buying day) ,


(composite selling day)


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inside day

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outside day
Transition: Bracket to Trend
Transition: Trend to Bracket

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Long-Term Auction Failures

Corrective Action
Special Situations
3-I Days

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3-I - 3-I day , TPO count,
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Neutral-Extreme Days

The Value-Area Rule

Spikes
Balance Area Break-outs
Gaps

Break-away gap

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TPO prints) ,
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invisible tail.
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Exhaustion gap

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Markets to Stay Out Of


Nontrend Days

Acceleration gap

Nonconviction Days

Long-Term Nontrend Markets

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13


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Eric T. Jones
Robert B. Dalton

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2-1

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Laying the Foundation


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The Auction -
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Organizing the Day


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( 2-2)
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2-2

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2-3

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Challenging the Rules


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The Role of the Marketplace


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Going with the Crowd


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Normal Day

Normal Day , Normal Day


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Normal Variation of a Normal Day

Normal Variation of a Normal day


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30

2-5

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Trend Day

Trend days: standard


Double-Distribution Trend day.

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2-6

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Double-Distribution Trend Day

Trend day, (Double-Distribution Trend day),


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TPO (single TPO price prints) ( 3).
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TPO, (DoubleDistribution Trend day), (reference point) .
(single prints) ,
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34

2-7

35

Nontrend Day

(Nontrend day)
(directional conviction).

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2-8

36

Neutral Day

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Neutral day,
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37

2-9

38

Day Type Summary


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Building the Framework


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The Big Picture: Market Structure, Trading Logic and Time :


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A Synthesis: Structure, Time, and Logic : , ,


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Amount of Information
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Trade Location
Confidence Level
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Trade Location
,
.
, () ,
. ?
,
, , ,
.
,
, . , ,
( )
.
Confidence Level
, , ,
, .
, . ,
.
,
. , , , ,
. ,
, , , .
(Market time) (trading logic),
.
,
,
.
, , ,
, (),
.

42

Summary
, , .
, ,
, , .

( ).
, , ,

.

,
, , , .

Evaluating Other Timeframe Control


, , -,
. ()
. , ,
, , , .
, , , ,
, .
,
(value area) .
, . ,
(value), , .
,
(value).
, ,
. , ,
.
, , .
, , , .
, ,
.
(range
extension), (tails), , ,
(value area) . , ,
,
. ,
, , ,
.
, .

.
(Longer-term traders)
, (longer-term auction)
, .
(value area) , 4.
, , , ,
() .

. ,
, , , . ,
, ,
.
.
,
. , ,
. , ,

43

() ,
. ,
(value) , .
(
). , ,
(shorts),
. . ,
, , .
,
, .
, , , , ,
. , ,
.
,
.

Other Timeframe Control on the Extremes


Tails (or Extremes) ( )
,
. , , ,
( , TPOs).
, , ,
.
, .

.
Range Extension
(Range extension) ,
/. ()
, , .
, ,
( ).
, (Trend day)
.

Other Timeframe Control in the Body of the Profile

,
, (value) (
).
, . ,
(General Mills) .
, , .
, , ,
. , ,
. TPO (TPO count)
.
TPO Count TPO
Time Price Opportunity (TPO) .
, TPO (Time), , (Price),
, (Opportunity)
.
TPO
(value area). , TPO (imbalance) (
) (
locals).

44

, , ,
.
, local, ,
. , , ,
local, local.
, , ,
, , locals . ,
, , , locals .
Locals
( (off-floor), ). , ,
(floor broker) 100 , , $5 .
Locals , ,
100 $5.02. locals
( ) ,
.
, .
, - locals ( ,
, ). , , locals
(inventory) (too long). , locals
.
, locals , -
. , local .
, , .
,
, , , .
, locals
() .
, ,
. , 20 $10 .
, , . ,
. ,
, .
() . ,
, $8,
$12 $15. , , .
, , .
(), .
, , , , , .
(Tails) (range extension) ,
, ,
(value area).
TPO (day-to-day) ,
.
TPO (point of control) (
, ), TPOs
. (Single print tails) (.. )
, , .
, (point of control) ,
, , ,
.
(price x time = value) ( x = ).
( 3-1) TPO.
TPO ( ) (point of control)
, (short)
(value).
, TPO (point of control)
, (long) (value).

45

3-1

46

/, .
, 32/24 32 TPOs 24 TPOs
.
, (value area) . ,
TPO, .. (single-print rejections), ,
(value).

3-2 ( , 29.jan.1988)
( 3-2) January 29,1988.
A-F .
29- ,
, (auction down).
, , , ( )
.
, ,
() , .
(value area) .
TPO , ,
, ,
.

47

A . A-F TPO 13/21,


. , 13/21 TPO : ,
TPO (point of control) , , ,
, .
,
(downside) . (point
of control) (value), , TPO, ,
. , TPO (value area)
(), , , (floor
traders), locals, .
B ( 3-2) , TPO H
21/22.
, locals (too
short) , (buy back)
(shorts), . ,
G H, locals .
, , ,
. L TPO 93
21/32
( 32nds $1000), L
(point of control) , TPO
30/47.
(momentum) .

Initiative versus Responsive Activity (


)
, ,
( ) ,
. , (initiative)
(responsive), (value area)
.
, ,
.
:

Initiative Buying
Initiative Selling
Responsive Buying
Responsive Selling

Initiative Buying
, ,
(value area) .

Initiative Selling
, ,
(value area) .
(strong conviction) .

Responsive ctivity ()
() .
(value), (value).
( 3-3 3-4) .
( 3-3), (range extension)
(buying tail) E, (responsive buying).
. ,
.

48

, ,
, . , ,
.
(buying tail)
. , ,
. ,
, .
,
.
( 3-3), ,
, . ,
,
.

3-3

49

( 3-4) :
, , , .

3-4

50

( ), ,
.
, , ,
.
(Range extension) (tails),
(value area) , .
(buy) (sell)
(value), ,
,
(excess) . , ,
(), , ,
(value).
(value area)
. , ,
.
, TPOs
(value area) , , TPOs
.
TPO , (value area)
, , ,
.
( 3-5 3-6) .

51

3-5

52

3-6*

53

Trending versus Bracketed Markets


()
() , ,
, . ,
,
, , . ,
, ,
4 .
(trend - )
(bracket - ), .
Websters New Collegiate Dictionary :
(a) , ...

(b) ; :
, .
, ,
.
, () (value).
, , (
), .
( 1 2)
Crude Oil ( 3-7).

3-7 ( )

54

( 3-8) , S&P 500 ( Points 1


2), (bracket).
Websters ( - bracket), :
(a) ,

(b) .
, ,
.
,
, . ( 3-8) , S&P (
) 2, (bracket),
2 6.

3-8 ( S&P500)

55

Key ElementsA Brief Discussion -


(), ()
(value). ,
, (value) .
(trending market) ,
(reference points), (bracket)
. ,
.
, ,
20 30 .
, .
, - ( ),
, . , (bracketed
markets), , -
, .
, .
, ,
. - ,
, .
, ,
.
; . -
, . ,
( ), .
(), , , .
, .
, ,
(reference points), , .., ,
, .
(bracketed market),
, ,
. ,
(), , .
, ()
. ,
.
Trending Markets
() ,
, ,
.

(value area). (value area)
, , , .
(value area)
, , ,
.
() ,
, (value) .
, ,
(value), . ,
,
. , , , ,
. , ,
, , ().
(value) ,
/, .

56

Bracketed Markets ()
, () ,
().
( ), .
, ,
. , (bracketed
market), .
(), , .
, ,
. ,
.
() ,
. , (bracket
extreme), ,
, .
(break-out) ,
.
(price rotation)
, .
, (Rawley's car) ,
. : Series Magma
8.9. , , ,
.
,
. Magma
, , - .
, Rawley , .
, , -
. (salesman), ,
.
,
, , (value).
(value), .
,
, , . ,
, .
, , , ,
. , , ,
, , .
, ,
. ,
,
.
(bracketed market) .
, (value).
, ,
. , , ,
.
, ,
. ,
, ().
() , ,
. ,
, , . ,
, , .
, , . -
, ,
.
,
( ) . ,

57

, ,
.
- , .
, ,
(short-term bracketing activity)
.
, ,
().
() .
, , 4.

The Two Big Questions


: (Profile structure), (day
types), (other timeframe control), (initiative)
(responsive activity), (trending bracketed markets) ,
.
,
.
, ,
,
, . (),
, , , .
, , ,
, .

, :

1. ?
2. ?
, ,
. ,
.

58

, .
.
, ,
. , , .
,
(Market Profile).
(day) (longer timeframe) .

, .

Doing the Trade


" , , .
, ,
". David Hume

. , ,
, ,
, , .
, , .
, , , , .
, .
, , , .
.
, .
,
.
: - .

Section I: Day Timeframe Trading


Mike Singletary - Chicago Bears
1988-89. ,
.
, , , "" .
, , ,
. Singletary , ,
, . , , ,
, ,
. , Singletary
, ,
.
, Mike Singletary , .
. , ,
, , . ,
. ,
.
,
, Singletary . ,
.
(day timeframe trader), Singletary, .
,
, . ,
(longer-term market direction),
(value area - VA) (Opening Call) ( , ).

59

, ,
, (opening type),
(value) , (auction rotations). Mike Singletary,
, ,
. , ,
.
,
, .

Day Timeframe Directional Conviction


, , 3- .
, ?, ,
? ,
(market confidence) (directional conviction).
, ,
.
,
(, ), (), ,
.
, ,
(day's range).
, ( ).
Opening Call -
( : ).
,
(floor trade) : " ,
( ), ,
?"
{"If the opening exceeds or fails to make its opening call, can that also be considered recordable initiative or responsive activity, even though
the market never actually traded there?"} ( : ,
.) , , , "".
(
, ), , .
Opening calls , , 2 ,
.
, , , ,
, .
, ,
, . ,

(trading pit). , ,
, (longer timeframe traders),
(orders). ,
, .
, .
( ) , .
, ,
(other timeframe).
() ,
(Opening Call) .
, ,
, (tail) (Market Profile).
, () 87-19,
87-12, , , (hidden selling
tail). ,
(value area) ( ).

60

The Open -
,
, , Mike Singletary playbooks .
(opening
call), , .
, ,
(initial balance), , .
, , (one of the day's extremes), .
, ()
.
(initial balance) (,
), , , .
.
The Open as a Gauge of Market Conviction
,
(opening call), ,
(market's directional conviction)
. (market conviction), ,
, () ( ),
. , .

, , .
, , .
(day types), 2, ,
.
:
1. Open-Drive
2. Open-Test-Drive
3. Open-Rejection-Reverse
4. Open-Auction
Open-Drive -
- - (OpenDrive). -, , ,
. ,
.
.
( 4-1), - (Open-Drive).

61

4-1

62

April 10, (value area)


. ,
. ( 4-1), ,
12 (tail) , (Double-Distribution Buying Trend
day). , , - (Open-Drive),
.
- (Open-Drive),
, , . ,
, .
, , .
- (Open-Drive)
, (Trend) (Normal Variation day).
.
(. 4-1) .
(longs),
, - , (longs),
. ,
, ,
.
- (Open-Drive),
.
, - (Open-Drive),
. ,
(tail), ,
.
Open-Test-Drive --
-- (Open-Test-Drive) (Open-Drive),
, .
,
(high low , bracket top bottom ..), ,
, .
, . (initial test),
, ,
.
-- (Open-Test-Drive)
, (Open-Drive).
( 4-2) -- (Open-Test-Drive) .

63

4-2

64

-- (Open-Test-Drive) , ,
.
( 4-2) , , (
),
April 3, 708. - ,
.
, .
, , ,
(up auction) - ,
708 , ,
( ).
(
, .. ), .
-- (Open-Test-Drive), ,
().
, , ,
.
,
, .
, April 10 ,
, . , ,
, . ,
.
-, . -,
, (value areas),
. , -, 10- , . ,
, ,
.
704 1/2, .
(break-out), ,
, ,
(follow-through).
(break-out) , , (longs)
, () ,
( ,
(value area) , .)
,
.
, , ,
. ,
,
. .
, ,
, , .
-- (Open-Test-Drive), (OpenDrive), ,
.
, , (Normal Variation) (Trend).
,
. , ( Open-Drive),
, .
, ,
.
, ,
, , , .
, , ,
-- (Open-Test-Drive), .
(Open-Drive) -- (Open-Test-Drive), ()
. ,
, , ,
.

65

, , (Open-Rejection-Reverse) (OpenAuction), . , ,
.
Open-Rejection-Reverse --
-- (Open-Rejection-Reverse) ,
,
, .
, ,
, .
-- (Open-Rejection-Reverse)
, - (Open-Drive) (Open-Test-Drive). -
, () .
, ,
, . , ,
, (Open-Drive),
-- (Open-Rejection-Reverse).
( 4-3) -- (Open-Rejection-Reverse).
, Swiss franc (value area) ,
, , 0,6630 .
Z.
3 :
1. , ,
(two-sided), .
(Trend) - .
2. (Normal) (Normal Variation).
3. Y, , ,
, .

66

4-3
(Open-Rejection-Reverse) .
, ( 4-3), Rejection-Reverse, Swiss Franc,
. , - (Open-Rejection-Reverse).

67

,
. , ,
, , .
, , (Open-Rejection-Reverse)
. ,
, , .
Open-Auction -
, - (Open-Auction)
. .
, , - (Open-Auction) , ,
.
- (Open-Auction), ,
, , -
(Open-Auction), .
, (value area)
, , , (nonconvictional).
, ,
, .
, (out-of-balance).
, (Open-Auction),
(nonconvictional), , ,
.
- (Open-Auction),
(Double-Distribution Trend days). , (OpenAuction).
Open-Auction in Range -
, ,
, . , (OpenAuction), .
, (market auctions) ,
, .
, .
( 4-4) (Open-Auction in Range).
(Open-Auction in range), (Nontrend),
(Normal) (Neutral) . , ,
, , .
(Treasury bond) June 30th ( 4-4),
(value area) June 29th's,
. ,
(), .
, , ,
, , . (Open-Auction )
, , , (big day), .
(Open-Auction in range), . ,
(value area), ()
(value area extremes). ,
(Nontrend) , ,
.
Open-Auction Out Of Range -
,
, , .
, , , ,
.
, ( ), ,
,
. March 22 ( 4-5), (Treasury bond),

68

(value area) .
(Open-Auction in range), ( 4-4), 3- ,
( 4-5) ( ) :

4-3

69

4-4

70

4-5

71

, , , (Open-Auction outside of range)


, big day, (Open-Auction within value),
, .
, March 22 (Selling Trend
day), June 30, (Normal Variation day).
, .
Summary
4 , . ,
, .
, , ,
, .
, ,
, ,
(Market Profile).
( 4-6), 4- , .

4-6

72

Opening's Relationship to Previous Day



, ,
.
, ,
, .
.
, ,
, :
(1) (2)
.
.
(value area) ,
() ,
.
, ,
. , (
). ,
. , (
, , ) ,
, .
(value area) , ,
, .
(opening/previous day
relationships), .
:

Open Within Value


Acceptance *
(value) (
TPOs ), ,
.
.
. ,
.
(value area) , ,
.
, ,
(within value), , .
, , .
, () (),
,
.
, , , ,
, (buying tail), ,
. , ,
, , .
15 , 15 (
), ( ).
, ,
, ,
.

73

,
:
1. .
2. ( ), ,
, . ,
, .
3. , 10% , , ,
.
4. ,
,
, .
( 4-7) ,
(value area) .
, ,
, .
,
, (auction rotations) , . (,
, , .)
.
, ()
. ,
, , ,
( ).
( 4-7) .
, , ,
(period selling tail), (day's high).
, , .
,
(top of the selling tail).
, ,
.
( 4-7),
, .
( D), ,
, .
, , ,
.

74

4-7

75

. ( 4-8)
S&P September 23,1988.
(within value), ,
S&P (overnight). ,
, .
,
(value area) , ,
. , 22-,
. , , S&P
, ,
(Open-Drive) .
, ,
( TPO prints), , ,
(overlapping) . , ,
, ,
. ,
, , 22.
, ,
(buying tail), (longs) .
, 270.30.
22- (285 points), , ,
23- (high on the 23rd) 273.15.
( ). (longs),
D, E F .

76

4-8

77

Rejection (Break-out) ()
(value area)
( TPOs, ),
. (Break-out)
,
, ( 4-9).

4-9

78

, (value area) ,
.
( ), ,
. , ,
( 4-10).
, , ,
, .
,
.
, ,
.

4-10

79

Open Outside of Value but Within Range


,
Acceptance
, ,
, , ,
.
, .
, , ,
( 4-11).
, , ,
, , ,
.
( 2- ), ,
(1- ), .
, , ,
, , .
, Openings Within Value,
. , ,
, .
Rejection (Break-out) ()
, ,
. ,
, ( ),
( 4-12).

80

4-11

81

4-12

82

Open Outside of Range


Acceptance -
, ,
, .
, :
1) () ;
2) ;
( 4-13) .
, , ,
().

4-13

83

1- ,
(), ( 4-13).
, ,
. ,
.
,
. , ,
.
, , ,
, .
, ,
. ,
.
,
, .
Rejection (Break-out) ()
, ,
,
, .
, ,
, ,
.
, .
( 4-14), ,
.

4-14

84

Summary
, ,
, .
, ,
. , ,
. , ,
, , (opening type) /
(initiative/responsive activity),
.
, ,
, . April 13,1989,
, .
April 13,1989
Thursday, April 13th, , (Retail
Sales) 7:30. , 5
: Merchandise Trade, Producer Price Index, Business Inventories, Capacity Utilization
Industrial Production. , ,
. , .
, , , ,
IMM. ,
, . , ,
,
, April 13.
, 6 : crude oil, S&P 500, gold, Japanese yen,
soybeans Treasury bonds.
Crude Oil
( 4-15) Crude Oil .
, , gap (
). , ,
. , , , ,
. ,
(initial balance) ( 4-15),
(Double Distribution Trend day) .
, Crude Oil ,
(Double Distribution Trend day), ,
. ,
(big day to the upside). , ,
,
. , -
.
, . ,
(shorts), , ,
, ,
.

85

4-15

86

S&P 500
( 4-16), , 12-, ( ),
, outside day,
, . , ,
. C D,
, , .
,
, E, F , G,
, (Double Distribution Selling Trend day).
4 , . 13-,
, , , ,
, .
, ,
, . , ,
, , ,
.

4-16

87

Gold
Gold 13-, . ( 4-17),
,
(big day on the upside). , Z,
, (double TPO prints) 12-,
. Z ,
(Open-Drive), Y ,
13-, Y 12-. 13-
392.60 397.20 - 10%. , (longs)
Z, .
393.00 Gold ,
. - Z A,
, ,
. , , ,
, - 12-, ,
, .

4-17

88

Japanese Yen
Japanese Yen 13-, ( )
. ( 4-18), Yen
12-. Z
, .
Z, (initial balance) 13-, . ,
,
, Yen , .
12- ( 1 ),
. , Z
, .

4-18

89

Soybeans
Soybeans 13-, , ,
12-. ( 4-19), , D,
Soybeans ,
, E. , , ,
12-, .
12-, D ,
, 723 729. , ,
G H, . (Shorts),
, , ( ),
.

4-19

90

Treasury Bonds
Treasury Bonds
Z ( 4-20*). , 2 (double TPO prints),
12-, , 12, 2 .
. , ,
12-, .

4-20*

91

Summary
:
(opening call), .
, , .
,
, .

Day Timeframe Auction Rotations


, ,
, ( ), . ,
, (opening calls),
, . ,
, ,
.
, , 1- ,
.
, (market's auction
rotations), .
, ,
. , , , .
, , .
(, )
, - (one-timeframe market).
(one-timeframe market), (Trend day). ,
(Nontrend day), (one-timeframe market). (Nontrend day),
(local).
, ,
, , . ,
, ,
- (two-timeframe market).
(two-timeframe market) , (Normal),
(Normal Variation), (Neutral days). (two-timeframe market),
, , ,
, ( ).
, (off-floor trading),
.
, , -, , ( )
, , -,
.
, ,
, .
, (auction rotations) ,
.
,
, .

92

Two-timeframe Markets
(Two-timeframe Markets), ( )
. ,
, .
, (bracket).
, ( 4-21), (Twotimeframe Markets).
(Two-timeframe Markets), (
), , .
( 4-21)
, (
, D ..)
.

4-21

93

One-Timeframe Markets
, , ,
( ) .
.
, ( ) (One-Timeframe Markets).
(One-Timeframe Markets) ,
.
, (Trend day Profile), ( 4-22),
, (one-timeframe market).
(Trend days),
, , ,
. ( 4-22), ,
(Z, C, D, F, G, H I), ,
(A, B, E). (One-timeframe seller),
,
, 2- .
.

4-22

94

Using Auction Rotations to Evaluate Other Timeframe Control



, , (half-hour
auctions), : (market structure)
(market time).
.
Structure
, ,
, (TPO count), (tails),
(range extension), (initiative) (responsive activity).
, , ,
(marker's half-hour auctions), (offspring-tails)
(range extension).
, ,
. , (timeframe transition)
(Time).
Half-hour Auctions
, , ,
. (half-hour auctions) ( 422).
( ) ,
, , ,
() . , ,
, ,
(tails) (range extension).
, , ,
, , ,
.
(Tails) (range extension) ,
, (timeframe transition),
, . ,
Timeframe Transition,
.
Extremes
,
() .
, ,
, (value). , ,
, .
, , .
,
.
, ,
. , ,
, , .
Range Extension
,
,
/.
(Multiple-period) ,
.
, .
, ,
, ,

95

. ,
, , .
, , ,
, (auction rotations)
(tails).
Time
, ,
.
, ,
, .
, ,
. ,
,
. ,
, . ,
.
, ,
. , (two-sided trade),
, .
, , .
,
, .
, , ,
.
,
().
,
.
, .
, , , ,
, .
, , ,
.
, ,
, , .
Identifying Timeframe Transition
(one-timeframe) (two-timeframe),
, , ,
.
, , , (
), - ,
, , , .
, , , ,
.
(floor), ,
(off-floor trader). , (Market Profile),
- (listening to the floor).
, (timeframe
transitions), . (off-floor trader)
(floor traders), ,
. (pit),
.

96

-,
, :
1. ; (one-timeframe) (two-timeframe) ;
: (one timeframe) (Normal days) (two
timeframe).
2. (One-timeframe) (two-timeframe) .
: ( ,
..) ,
(two-timeframe) .
3. (Two-timeframe) (one-timeframe) .
: , , ,
, ,
.
4. (One-timeframe) (one-timeframe)
.
: .
, ,
, .
, , ,
( 4-23), , (Swiss franc on
October 12,1987).
December Swiss Franc, October 12, 1987
, (one-timeframe buying),
(one-timeframe selling), (one-timeframe
buying).
" " (running Profile)
. ,
.
, ( 4-23), ,
Swiss franc on October 12.
Y-E: One-timeframe Buying
(One-timeframe buying) Y E.
, ( ) .
, B D.
, .
E: Time
. ,
. , ,
, .
Y-F: Auction Test
F , (.6710)
. , ,
("test" of buyer control).
, . ,
, , ,
, , , ,
.
, ,
.

97

, :
, , (one-timeframe),
.
G: Transition Confirmation
"Double prints" (two time period TPO prints) (one-timeframe auction),
, (one-timeframe) .
(Double TPO prints) , , ,
, .
"F-G" double prints, (.6702) (double prints) (.6710), ,
, . , ,
(two-timeframe), (one-timeframe selling).
, .
, , ,
, .
"D-E" (double TPO print) , ,
.
, , ,
, .
E-H: One-timeframe Selling
(running Profile), , (one-timeframe)
, (one-timeframe selling),
H.
H: Auction Test
H, G, ,
. H, (buying tail),
, .
I: Transition Confirmation
(Double "H-I" prints) .6704, (timeframe transition),
.
H-J: One-timeframe Buying
"H-I", (double "HI" period prints),
. ,
(.6716 "D-E") , , ,
(nonconviction seller).
Summary
(Two-timeframe trade) (transition) (F H periods); ,
,
.

98

4-23

99

Auction Failures
"follow-through" ( )
(trends), (break-outs),
(initiative activity), . , "follow-through"
: , ?
"follow-through" , , , , .
"follow-through" - , .
"follow-through" , , ,
.
, "follow-through" ( ), ,
"follow-through" ( ) .
(),
:
1. ,
;
2. , .
,
.
().
: /,
/, /, ,
, / .
,
( ), .
, ,
( ), , ,
,
.
(long-term bracket extreme),
, .
. ,
, ,
.
,
, (market to rally).
, , ,
, ,
.
, ,
.
(longer-term support levels)
(), (
) ,
.
, , ( ),
.
( 4-24) .
April 3, 1989, 708.
(), 4 ,
(value). ( 4-25), April 10th, ,
. 710 ,
3- (708).
, , .

100

:
1. , ( , local)
;
2.

(), (, ).
April 10, ,
. (Double Distribution Buying Trend) .
,
() 708, ,
.
() (shorter
timeframe), , ,
(longer timeframe).
, , ,
.
( 4-26) ,
Treasury bond.
May 16, 1989, (90.22) Y,
, (follow through), .
, , (no sell
stops) . ,
,
.
. , Treasury bond , .
, , ,
.
, .

101

4-24

102

4-25

103

4-26

104

Excess
,
, , , .
, (value), ,
, , (two-sided trade)
.
1
, .
, ,
() .
, 1000 ,
50 . , ,
.
, , ,
55 - . ,
60 , , 800 ,
.
, 55 , -
. ,
(), , ,
. () 5 ,
60 55 .
, , ,
, , .
, (),
.
, ,
.
, , , ,
.
Signs of Excess
, (), ,
, . , ,
, , . ,
, .
, ( 4-27).
( 4-27), ,
.
,
, . , ,
, , .
, , ,
. (Longer term excess)
Long-Term Trading.
, , .
, , .
(prints), (Double Distribution Trend day),
. , ,
. (gap), , , ,
.
, ,
.
, ,
, . ,
, , (),
.

105

4-27

106

The Rotation Factor


Day Timeframe Auction Rotations,
: ?
, ,
, () -
(two Big Questions).
, , ,
. , ,
, .
(Rotation Factor).
, ,
, ( )
. , , .
(Rotation Factor)
. , ( ),
.
( 4-28), ,
.
, ,
.
, ,
() +1. , , ()
-1.
, , ,
+1. () ,
-1.
, ( ),
, 0.
, ,
, ,
.
( 4-29), , (Rotation Factor)
Treasury Bonds. +3,
. +6,
.
, , (Rotation Factor),
- , .
,
, .
, ,
. ,
, , .

107

4-28

108

4-29

109

TPO Trading TPO


TPO ,
.
, (TPO Trading), ,
local
.
, ,
TPO ( TPO, 3
).
, TPO 16/25 , (25),
POC ( ), (16), POC.
, POC
, (value) . ,
.
TPO , (two-timeframe),
. , (two-timeframe) ,
() .
(one-timeframe), ,
, .
TPO , , , , (
). TPO ( ),
(two-timeframe), .
, (two-timeframe), (onetimeframe). , , ,
. ,
. , ,
, .
,
, ,
(one-timeframe) .
, ( ),
(intraday transition).
, , , ,
(municiple bond), ,
, TPO ,
, , .
(Municiple bonds)
(off-floor). local ,
TPO .
(Treasury Bonds), , (local)
. TPO Crude Oil, Gold,
(grains) , (off-floor)
.
TPO
TPO.
,
, . ,
, , TPO .
( 4-31 4-35), (Treasury Bonds),
, .

110

9:30 AM ( 4-30): TPOs 13/16.


99-00 98-31, ,
. ( ,
). ,
( , ).
, 99-00. , 9831. , .

4-30

111

10:00 AM ( 4-31): D 99-00, -


99-08 ( ,
). TPO , .
, 99-00,
, TPOs .
.

4-31

112

10:30 AM ( 4-32): . TPOs 16/24


. ,
, .
() ,
.
, .
F (99-03) , TPOs .
(long), (98-29),
, . F G
(99-03), ,
. , (longs)
, .

4-32

113

( 4-33): F, G H ,
(17/38),
. (Longs), H,
, ,
TPOs . , .
, , I (9904), 99-05. , TPO .
( ), .
.
, . ,
.

4-33

114

2:00 PM ( 4-34): (Treasury bonds) 99-05 ,


. () TPOs .
, - TPOs .
L .

4-34

115

The Close
,
.
, .
, , ,
.
, ,
. ,
, , .
-,
.
-, ,
, .
, ,
, -
.
, .
,
( Treasury bonds), , (, ),
, .
, (open call) , ,
, .
( 4-35) sugar market,
, .
May 31, (sugar)
. , ,
, , 31-
. ,
sugar ,
J. sugar ,
, (bullish close) ,
, .
,
, (May 31 June 1). ,
. ,
.

116

4-35

117

Day Timeframe Visualization and Pattern Recognition


()
, , 59
( ).
, .
, . ,
, . ,
, 59 , ,
. , 57 ,
. ,
? 57 , ,
.
, , ,
. ,
, . , ().
, , ,
.
, ,
, , , ,
.
, ,
(Market Profile), ,
. ,
,
. , - (Open-Drive) ,
(),
, . , - (OpenAuction) (value), ,
.
.
. (opening call)
, . ,
(), ,
. (),
.

.
,
: (short covering rallies),
(long liquidation breaks), (ledges).
Short Covering Rallies
, ,
- short covering ( ).
, (short positions),
, .
, , , .
(Short covering) ( )
. ,
(too short).
, , ,
, () .
:
1) locals , (too
short);
2) ;
3) , .
, , ,
, , .

118

, ,
, ,
.
, ,
, ,
.
, , ,
, (shorts)
(longs).
, , ,
.
( 4-36), , (
), .
( ), , ,
.
,
, .
, .
- , .
, , ,
. , ( ),
.
, , , ,
. , .
( 4-37) . ,
. ( 4-38) .
( 4-38), S&P.
, ,
, , B-H ,
.
, , ,
. ,
.
( 4-37).
( 4-37), , ( 4-38),
.
( 4-38) . ,
, , , .
F , ,
().
, ( 4-38) ,
. , S&P (onetimeframe selling), (
, , ).

119

4-36

120

4-37

121

4-38

122

Long liquidation Breaks



(long liquidation break).
, , ,
. - locals, (too long) (
), ,
, , .
, , (old long
positions), (shorts).
, , ,
(longs), ( , ,
() , (follow-through)) .
("sale") .
() b (
).
( 4-39) (long liquidation break).
S&P , .
(long liquidation break),
- (onetimeframe buying), H.
, ,
.
, I S&P .
, ,
(follow-through), .
I , ,
.
, ,
.
(minute-to minute) ,
. ,
.
Summary of Short Covering and Long Liquidation
, b, ,
.
, .
, ,
, ,
.

:
1) ;
2)
;
3) ;
4) ,
.

123

4-39

124

Ledges
, .
, , -
. ,
. ,
.
. ,
- , . ,
, .
, ,
.
,
, .
.
, .
(follow-through), .
, , ,
. , :
1) , , ;
2) , , .
( 4-40).
, , ,
.
(value), ,
. (break-out) , , ,
.
, ,
.
, (off
the ledge), (
- ..)
( 4-40), , (shorts) 4472,
4476 H.

Summary
, ,
(), . ,
. ,
.
, ,
(short covering), (long liquidation) (ledge).
.
, ,
, .

125

4-40

126

The Liquidity Data Bank


TPOs. TPOs ,
, ,
(), .
Liquidity Data Bank (LDB), , ,
, .
, LDB , :
1) local floor traders ,
2) commercial clearing members ,
3) , (orders)
4) , .
, / (price/volume) ,
, ,
.
LDB, .
LDB. ,
, , .
The Anatomy of the LDB
( 4-41) Treasury bonds April 28,1989.
:
1. Trade Price. , .
2. Volume. . , .
3. % Vol. , % .
4. % Cti. "Customer Trade Indicators" .
Cti ( ),
.
Cti1 local floor ; Cti2 commercial clearing members ;
Cti3 , ; Cti4 ,
.
5. The Profile Structure
6. Value Area , 70%
7. Value Area Participation ,
Cti.
8. Range Participation
Cti
9. Total Volume ,

General Uses of the LDB

, ,
. , , , ,
,
. , , ,
.
, .

127

LDB , .
, LDB ,
( ), .
LDB,
:
1. Total Volume
2. The Value Area
3. Dispersion of Volume
4. Cti Figures
5. Acceptance of Value Outside the Value Area
6. High-Volume Concentrations
7. Top-5 versus Bottom-5 Tick Analysis
8. Trend Tests
Total Volume
LDB ,
.
(volume) (value area).
, .
(), , ,
, . , ,
.
, .
, ,
.
, , ,
, , .
, ,
.
(day-to-day),
. 2 , (Long-Term
Trading).
The Value Area
, , ,
LDB, , 70% .
LDB , , TPOs. (
, 1).
, ,
. ,
, .
, ,

.
, 2.
Dispersion of Volume
,
. ,
, .
, .
, April 28,1989.

128

Methodology
( 4-41), , ,
.
1. ( ): 90-06.
2. "% Vol" ( ).
3. ( ).
4. "% Vol" 2 .
( 4-41) , 34% (90-06),
, 38,5% . , (bond
market) ,
.
, .
(
), ,
, . ,
,
. , , 3
The TPO Count.

-
TPO, ,
(two-timeframe), , , ,
. ,
, ,
, .

129

4-41

130

Cti Figures Cti


, , ,
.
Cti , , . Treasury bonds,
, Cti1 (locals) 55 60 .
Cti1 , local .
locals. , -
. , Cti1 / Cti2, Cti3, Cti4
, . ,
. Cti
, ,
.
Acceptance of Value Outside the Value Area
( ) ,
.
, , .
, ,
, ,
. ( 4-42) ,
, .
L May 22, 6
. , TPOs
(49/33 ). , L
. ,
, - , TPOs ,
, (
TPO).
LDB . ,
.
L May 22, "% of total" 89-07 89-17,
. , , L
.
, L . ,
Cti2 ( )
( ). , Treasury bonds
. , - Cti2
. , .
, ,
,
. Treasury bonds ,
.

131

4-42

132

High Volume Concentrations


.
, , , , .
, ,
/,
.
, ( "High- and Low-Volume Areas",
"The Liquidity Data Bank").
Top Five versus Bottom Five 5 5
LDB, , ,
5 "% of Total" ,
5 "% of Total" , .
, , ,
.
( 4-43), 5 , 5
, , . (Treasury bonds)
, .
5 , , .
, ( ,
).

4-43

133

Trend Tests
LDB ,
.
, "Average High Volume" "Opening-Range Volume",
( 4-44).
Average High Volume
, 5 "% of Total" ,
, . ,
, .
( 4-44), 5 (*).
Opening Range Volume
"% of Total" ,
. , .
, ().
, , "opening-range
volume" "high volume average". ()
, .
Summary
(Liquidity Data Bank),
,
, . ,
LDB.
, Cti2 (commercial)
. LDB,
(CBOT Market Profile Manual 2). 2.

134

4-44

135

Evaluating Commercial Activity


(commercial) , ,
.
, ,
, ( , ).
, , ,
(value).
CBOT Liquidity Data Bank, (commercial)
. ,
(commercial), , , , ,
. ,
(commercial) .
Definition
"commercial clearing member"
.
, , , ..
. , ,
, , ,
(). , (commercial clearing members)
.
,
(), ,
.
, , ,
.
LDB,
, .
Commercial Logic
,
, , .
, , , .
?
()
.
Expected Response
, , ,
, () .
, ,
. ,
(), .

, .
LDB , ( 4-45). , ,
, "Cti2%." ,
, .
,
, , .
( Treasury bonds, 12-14% , ), 16.3
Cti2% 89-23 .
, Cti2% 17.7, 18.9 17.9 88-16, 88-21, 88-23
, .
, ( 4-45), ,
. ,
, (Neutral, Normal Normal
Variation) .

136

4-45

137

Unexpected Response
,
.
, , ,
. ,
.
,
. ,
"coffee extravaganza." , , . (),
.
(),
, .
( 4-46), ,
Treasury bond.
December 15, (two-timeframe),
, , , .
, D, ,
.
, 26.6 Cti2%, 84-22.
.
Cti2% ( 4-46), , , ,
(84-22, 85-00 85-22). ,
, .
,
. , , , ,
, , .
, ,
.
, , ,
. ,
.

138

4-46

139

No Response
, (value), .
,
, .
.
-, LDB ,
, , ,
.
, , ,
. , , ,
. , Cti2 ,
, .
-, , Cti2% . , ,
, .
, , . ,
, - .
, , ,
.
( 4-47) Treasury bonds.
, (11.7%,
4-47), October 1, 1987, ,
(14.6%).
Cti% ,
. , ,
( , ).
, Treasury bonds
(Multiple Distribution Buying Trend).
October 1 2 ( 4-50).

140

4-47

141

Identifying the Significance of Price


,
.
, ,
, .
:
1. The average daily Cti2% Cti2% .
2. Average Cti2% above the value area Cti2% .
3. Average Cti2% within the value area Cti2% .
4. Average Cti2% below the value area Cti2% .
, , ,
, , .
LDB , ( 4-48), ,
Cti2%.

4-48

142

Average Daily Cti2% (Total) ()


Cti2% (16.2%) LDB, ,
"Volume for T-Bond (CBOT) Day" (. Point 1 4-48).
,
(commercial clearing members).
Average Cti2% above the Value Area
Cti2% .
Cti2%
(total volume) . , ,
.
(Point 2 4-48). 89-23 28930 . Cti2%
89-23 12.6%, 3645 , .
.
, Cti2
, Cti2% (average Cti2%) .
.

143

Average Cti2% Within the Value Area


LDB . Point 3 4-48.
Average Cti2% Below the Value Area
Cti2% , Cti2%
, 2.
Cti2% , ,
, . ,
, .
, Treasury bond.
( 4-49) , April 25, LDB
. Cti2% 18.7%, Cti2% 16.0%,
Cti2% 12.9%.
, , - ,
.
, .
, .
(commercial), , . ,
, ,
.
, ( ),
, .
,
, ,
, , .

144

4-49

145

Cti2% in Action Cti2%


Cti2% , 10 ,
.
, .
, ,
, .
December (Treasury Bond), September 28 October 9, 1987,
( 4-50).
September 28
September 28, :
.
(30.2% 82-28) ,
, .
, , , ,
.
, , ,
.
September 29
. Cti2%
, Cti2% 8209 (29.4%) , , .
- .
September 30
, (20.7%) 81-23,
, , .
, , .

.
,
, , , .
, .
October 1
11.8%, .
.
, ,
.
October 2 .
October 2
(Buying Trend day).
(18.6%), 81-14 (22.2%), 81-17 (28.9%), 81-30
(20.7%) 82-03 (19.1%).
, , , .
, , , .
October 5
5 . ,
Cti2% 81-24 (25.5%). , Treasury bonds 81-24,
, . (
),
, .

146

October 6
(12.0%) (14.6%) ,
. , ,
, .
October 7
(Buying Trend day)
(Auction Failure) . October 5
2-, .
( 82-14) .
October 8
(29.6%). Cti2%
,
.
, ,
, .
October 9
October 9.
, ,
. Treasury bonds (full point)
.

147

4-50 1

148

4-50 2

149

LDB Summary
, (Liquidity Data
Bank), :
1. LDB.
, ( ).
2. LDB , .
. LDB ,
, ,
.

High- and Low-Volume Areas


Day Timeframe Trading,
, .
, .
,
, .
,
,
.
High-Volume Areas
(High-volume) ,
, .
, , ,
, .
, ,
.
,
(), , , .
, , ,
(value).
,
() .
, ( ), , .
,
, () .
, ,
, , ,
.
, , (Treasury bonds) ,
, .
, long,
.
, , long,
, , ,
, .
Identifying High-Volume Levels
,
:
The Liquidity Data Bank (LDB)
( 4-51) LDB,
( ).
,
"%Vol". , .

150

( 4-51), , 89-05 89-08,


, 25-.
, 9.7% 89-08, 10.4%
89-07, . 40.3% , ,
,
( ).
The Market Profile Graphic
, LDB ,
.
,
, TPO (high TPO prices), .
LDB. ,
.
Tick Volume
(quote) ,
(tick-volume), - ,
, .
, , ,
.
, 2000 ,
. , (, ),
- (local),
, , .
,
TPO , , ( 4-52).
,
, .

151

4-51

152

4-52

153

High-Volume Examples
Example 1: Up Auction; Probe Down Into High-Volume Area.
; .
October, (Treasury bonds)
.
( 4-53), October 25 (high-volume),
89-05 89-08. 26-,
. , ,
.
25-.
, , ,
, ,
, 25-.
,
.
, ,
- , ,
. .
,
, .
:
1) , , 2)
.
,
, () .
.
October 26 ,
. ,
,
.
89-10,
, ,
.

154

4-53

155

Example 2: Down Auction; Probe Up into High-Volume Area


; .
( 4-54) (Treasury bonds)
.
September 14 (Normal Variation selling day),
- ,
. ,
.
( 4-54) September 14 and 15, %Vol .
14-, , 88-20 88-25, 53.7%
. September 15,
14-. ,
, , .
,
:
1. , .
() ,
. (shorts) ,
H.
2. , , ,
, (shorts) .
(A B
Treasury bonds), ( - ),
, , (
).
, , 88-26, ,
, . September 15,
(Double Distribution Selling Trend),
.

156

4-54

157

Low-Volume Areas
, .
, , ,
.
, ,
: , TPO, (gaps, single TPO prints, and tails)
( ).
() ,
, .
, , .
, (single TPO prints), (Double Distribution Selling
Trend day), ,
.
(Shorts), (single-print) ,
. ,
, (Shorts) .
, ,
, .
.
, .
.
, , , .
,
.
, , .
,
.
Identifying Low-Volume Areas
,
.
"%Vol" LDB,
, , , TPO , .
, LDB September 15,
( 4-55).
, , 88-25
88-26 88-12 88-16.
88-26. ,
.
12.6% ,
, , , , .
:
1) (), ,
,
2) ,
TPO.

158

4-55

159

Low-Volume Examples
Example 1: Low Volume as Resistance.
1: .
, (Treasury bonds) ()
89-09 September 14 ( 4-56) .
September 15 (Double Distribution Selling Trend day)
( 4-57), .
( 4-57) 15-, 16- /. ,
88-12 88-16 15-,
.
, , .
, , 16-.
-, ,
88-12 88-16. ,
, (shorts)
16-. , ,
. , .
- (OpenDrive), (short).
, (shorts) ,
. ,
.
( 4-57), September 16 15-,
. ,
, , ,
. ,
. , 88-12
, September 15.
,
.
,
.
, , ,
.
:
1) , ;
2)
;
3) , , ,
;
4) ,
( ).
,
September 16 .
15-, ,
.

160

4-56

161

4-57

162

Example 2: High and Low Volume Used Together.


2: .
September 19,
.
( 4-58), (Treasury bond) 88-09
88-11 88-12,
September 16.
88-03, (0.8
%), . , 88-03 19-,
, ,
.
, , September 19,
, 16-. ,
16- ( 88-06 88-07), ,
(shorts) .

4-58

163

4-59

164

4-59 2

165

Summary
,
:
1. , ,
, - -
(two-timeframe market to one-timeframe trade), .
2. ,
, ,
( ).
3. , ,
.
4. , ,
, . , ,
. ,
, , ,
.
. ,
, ,
.
.
,
, .
,
, .

Summary Day Timeframe Trading -


,
. , . ,
. , , ,
. ,
. ,
.
, ,
.
, , ,
.
, ,
, , .
, ,
. , ,
.
,
. ,
.
II ,
, ,

.

166

Section II: Long-Term Trading


I Mike Singletary .
, ,
, .
, ,
, .
,
, , .
(longer-term) , , Singletary's.
, , ,
. ,
,
, , .
,
.
.
, ,
(), . , ,
, ,
, .

, .
.

Long-Term Directional Conviction


I, Day Timeframe Trading, .
. , ,
, ,
.
,
, .
,
: ?,
, ?
, .
, . ,
(Long-Term Activity Record),
(Big Picture).

Attempted Direction: Which Way Is the Market Trying to Go?


: ?
-,
, , .
, . :
1. Auction Rotations
2. Range Extension
3. Long-Term Excess
4. Buying/Selling Composite Days /
, .
,
II.

167

Auction Rotations
(Day Timeframe Trading),
. , (Rotation Factor),
, ,
.
(Rotation Factor) .
, ,
.
(Rotation Factor) .
, , .
,
,
.
Range Extension

, (locals).
,
() .
, .
( 4-59), , (Swiss franc),
,
, .
Long-Term Excess
, (short-term excess),
, (value), (tail)
. (gold) May 2, 1989 ( 4-60).
I ,
( ) (value).

, (pivot
point), . , ,
.
(Longer-term excess) ,
(excess) .
, ,
, .
, ,
: (island day), (long-term tail) (gap).
, ( 4-61),
.
Island Days
January 3, 1989 (point A) "island day."
,
.
(
), ,
.
3-, 84 December 30.
, ,
,
. - , ,
, .
, 50 ,
.
(Island days)
.

168

( 4-61) (island day), April


4 (point G).

4-60

169

4-61

170

Long-Term Tails
(excess) ,
(island day) , .
, ,
. January 19
( 4-61) (point B).
( 4-62)
, ( 4-63).
.
, .
,
.
( 4-61), ,
January 3. 19- 18-. ,
. , ,
, .
,
.
, , , , .
,
(value)?
,
,
.
, ,
.
, January 13 18 (points C D), .
, ,
. 19-,
, . , ,
. ,
.
, 24- (point E 4-61),
.
, 19-,
.
Gaps
(gap).
(gap) ,
(value), .
, , (overnight),
.
February 9 (point F 4-61), , 8-,
, January 30 February
8.
(), ,
. , ( ).
, , , ,
.
, (island days) .

171

4-62

172

4-63

173

Summary
, , ,
.
, ,
() .

( ).
, , ,
, ,
.
Buying/Selling Composite Days /
.
,
; .
, .
(composite buying day) ,
.
, (composite selling day)
.
( )
.
( 4-61) . ( 4-64)
.
.
, .
, . ,
: ,
?
, , ,
.
,
,
.

Summary
. ,
,
(Rotation Factor), ,
, .
, , .
(), ,
.
, : ?, .
: ?

174

4-64

175

Directional Performance: Is the Market Doing a Good Job in Its


Attempts to Get There?
:
?
. ,
, ,
. , .
, : ?
, ,
. ( ) (),
. ,
. ,
.
. ,
, ,
.


.
,
:
1. Volume
2. Value-Area Placement
3. Value-Area Width
Volume
, ,
,
.
, .
,
.
, , .
, ,
, , .
, , ,
, ,
.
Evaluating Changes in Volume
,
.
, .
, , ,
( , ,
, ).
, ,
.
.
Volume as a Measure of Directional Performance
, . ,
. ,
. , .
.

176

.
, , , ,
.
(
), .
, , ,
.
Value-Area Placement
,
, .
,
, , .
, ,
? ?
? , , ?
, ,
.
-, ,
.
-, ,
.
-, ,
(inside day). ,
.
, (outside day) ,
,
.
(Neutral day),
, . , ,
. , ,
.
( 4-65) .

.
( 4-66) , .
September 12, , ,
. , (selling
composite structure),
. , .
, ,
, .
Evaluating Directional Performance through Combined Volume and Value-Area Placement


.
-, . -,
.
, ,
.
, , (,
, ) ,
.
, ,
.
,
- , .
, ,
.

177

( 4-67)
.
30 , ,
. .
, ,
, . , ,
.

4-65

178

4-66

179

- 4-1

180

- 4-1

181

4-67

182

4-68, Treasury Bonds on September 1 and 2,1988


.
,
(initiative buying tail), (initiative buying range
extension), (buying composite structure).
,
.

4-68

183

4-69, Gold on July 28 and 29,1988


29- . ,
, , .
.
.

4-69

184

4-70, Treasury Bonds on April 14 and 15,1988


April 15, .
, ,

.
, ,
.
,
.

4-70

185

4-71, Gold on September 19 and 20,1988


20- .
, .
,
. .

4-71

186

4-72, S&P 500 on August 3 and 4,1988


- (OpenDrive) . ,
.
, ,
, .

.

4-72

187

Value-Area Width
,
.
, ,
. , ,
.
, Treasury bonds April 17, 1989 ( 4-73),
2 . 120 . ,
, , Producer Price
Index, .
, ,
, ( 4-74).
April 27, 16 .
600,000 .
, , ,
. , ,
, ,
.
, ,
, ( ).
,
Treasury Bonds December 14, 1988, June 22, 1989 ( 4-75).
.
, 1-5 127,000 .
11 15 , , 284,000 ,
21 25 313,000 .

188

4-73

189

4-74

190

4-75

191

- 4-2

Summary: Long-Term Activity Record :


,
. , ,
.
, ,
.
( 4-76) "Long-Term Activity Record"
.
( 4-76) , , .
, ,
.
LTAR, ,
.
( 4-77 4-85) May 16-22, 1989
LTAR's .

192

4-76

193

4-77

194

4-78

195

4-79

196

4-80

197

4-81

198

4-82

199

4-83

200

4-84

201

4-85

202

Long-Term Auction Rotations


,
, , .
, , ,
. (onetimeframe) (two-timeframe) .
.
, .
(bracket), , (two-timeframe),
, (one-timeframe).
, (),
.

. .
Brackets
, 70% , ,
.
,
(value), , .
, ,
. , ,
. ,
, ,
( 4-86).
.
, ,
, .
Treasury bonds ( 4-87)
. ,
, ( 1 4-87).
87-00 91-00.
-, ,
, ( 2 4-88).
. - 88-00,
89-16.
( 4-89) ,
.
,
. ( 5 4-89),
. , , ,
4.
,
.
( 4-90) - ,
. -
(), , ( 4-91).
, .
, .
, , ,
,
.
, .
.
, , , .
, , , .
,
, , .

203

4-86

204

4-87

205

4-88

206

4-89

207

4-90

208

4-91

209

Trade Location in a Bracketed Market


,
, ,
.
1:
.
, , .
: ,
, . ,
. , ,
(), , .
, ,
.
( 1 4-92), , ,
. , ,
(upside),
(downside). ,
. , ,
, .
2, , .
, . ,
, , .
3.
, ,
. ,
, .
, ( 4), , ,
.
,
. ,
, .
,
.
2:
( ),
, , , .
.
, - ,
.
3:
"beeline".
, : ,
, ..
- , (-),
.
4: /
, , ,
, . ,
?
, ,
(follow-through) .
, , , ,
, .
, ,
.

210

, , .
,
(follow-through).

4-92

211

Transition: Bracket to Trend :


, , (),
, , , .
- ,
, , . ,
,
.

, . , -
, .

.
Day Timeframe Trading (one-timeframe twotimeframe) . .
, ,
( ).
. , ,
() .
, ,
. ,
, ,
.
,
.
( 4-93), 1 ,
2,3 4
.
, .
, .
( 4-94), , S&P February 1-3.
February 7, S&P , .
(Double Distribution Buying Trend).
, Treasury bonds April 9
( 4-95). ,
(multiple-distribution Trend day)
.

212

4-93

213

4-94

214

4-95

215

Trends
()
.
, , ,
.
, ,
/ ( ), (),
( 4-96).
, , , ,
,
.

4-96

216

Trade Location in a Trending Market


, .
, () (value).
,
.
,
(follow through) . ,
.
, , , ,
.
,
, ,
.
,
. (go-with,
trail-blazing) , .
, ,
( ).
, ,
. ,
.
Monitoring Trends for Continuation
/
, .
, ,
. , , .
, ,
, .
,
, .
Transition: Trend to Bracket :
() ,
, .
, ,
.
, .
, ,
.
( 4-96), (crude oil).
, November 1988, ,
, March 28,1989. ,
, , ,
.
( 4-97) ,
.
January 19 20, the (Japanese yen) .
,
.
,
( ).

217

4-97

218

Detailed Analysis of a Developing Market


,
Treasury bond October 1988 May 1989.
- . ,
.
, ?
?
, , .
,
, .
70 80 ,
.
,
( Bracketed Markets 3). ,
.
, . ,
, ,
.
, ,
, .
, () .
, , , .
,
, . , -
.
Bracket Reference Points
, ,
, , .
, , ,
.
- , ,
, , . ,
. , ,
,
.
() ,
() ().
, ,
, , (Nontrend days), (balance breakouts) .
, (Treasury bond),
, .
, ,
. , ,
,
().
, ,
.
, .
, (overnight),
.
,
- .
, , ,
, ,
.
(),
, () ,
, .

219

.
, ( ),
.
,
, , , .
- (followthrough).
-
.
, ()
() . ,
, .
, ,
( ) "outside"
.
, ,
. , ,
(follow-through), (outside) .
, ,
,
().

, (outside) .
, ,
, .
, , , ,
.
, ( ),
(outside) .
, ,
, , .
, ,
, ,
. .
, , .
,
, .
(Treasury bond),
.
, , outside
, . ,
.
, ,
- ,
, .
, , , ,
, .
,
,
, .
(), , ( 4-98 4-101).

220

Region A ( 4-98)
, Treasury bond
90-12 November 1. ( 1),
. , , ,
.
, ,
( , , ).
( 2), ,
. , ,
.
, ,
() , .
(outside) .
, .
/ . ()
.
, , , , ,
. , ,
.
,
, , , .
( 3) , .
, ,
outside .
( 3), ,
( 4). ,
, .
( 5) ,
, .
89-06, .

221

4-98

222

Region B ( 4-99)
( 5), , ,
89-06. ,
, 89-06.
, ,
( ).
, ( 6) ,
, ,
( 3).
, .
, ,
, .
(long) .
(short), .
outside .
( 7) , .
outside , .
, ( 3 6),
, ( 2).
, , .
().
(follow-through) ,
.
( 8), ,
( 1).
,
. , , ,
.
( 8), ,
.
, ( 8) ( ),
, ( 9 10).
, , ( 1), .
( ) 90-12, November 1.
( 11 12) / ,
,
. ( 11).
, outside
( ) , ,
( 9).

223

4-99

224

Region C ( 4-100)
( 13), 90-12 ,
.
.
, .
, ,
. , , 14
.
( 15) (nonconviction),
February March.
, ( 15 16), ,
.
( 15), ,
, (high-conviction)
.
, , . ,
, ?
(nonconviction) .
, ,
. ,
.
, ,
, , .
( 16) ,
. , (
), (follow through).
.
( 17) ,
().
(non-conviction) ( 16),
, , ( 5).
89-06,
. ,
(finger term).
, outside .

225

4-100

226

Region D ( 4-101)
,
.
18, 19, 20 21 outside
10- . ,
.
, -,
:
1) / 2) .

4-101

227

Long-Term Auction Failures


, ,
() (follow through).
(. Day Timeframe Trading) ,
, .
()
() , ,
.
(Day Timeframe Trading)

.
, ,
.
, , ,
( ). ,
, -
, , .
, , ,
,
.
( 4-102), ,
Treasury bond.
, ( 1), ,
, February 21.
( 4-103), ,
February 9 22. February 9 10,
,
.
21-, Treasury bonds ,
.
,
, , . ,
(Double-Distribution Trend day).
,
, .
( 2) ( 4-102), ,
.
, , .
November 25, 1988, Treasury bonds 89-06,
.
, 91-21 January, , ,
, 86-09 March 21,1989 .
21-, 86-09.
, ,
.
,
.

. ,
, .

228

4-102

229

4-103 1 2

230

Long-Term Short Covering and Long Liquidation



(short covering) (long
liquidation) I.
, ,
, . , ,
, ,
, .
- ,
, .
, ,
.
,
, , , .
,
, . , ,
, ,
.
( 4-104) ,
January 26,1989.
70 cent ($3,500 per contract) ,
740 ( 4-105), ,
.
,
740, , , , (DoubleDistribution Buying Trend day).
January 26 - .
, , 60-70 cent
, 20 cents .
, ,
, 15 cents underwater.
, , 26-, ,
, .

231

4-104

232

4-105

233

,
, .
, , ,
.
,
, , .
- ,
(follow-through)?
, , ?
, (
).
( 4-104) January 26,
.
, January 27 30
26-.
, 26-,
, January 26th - 768.
February 1 February 2 768. ,
, 30 cents ,
9 . , (February 2)
January 26.
( 4-104) , February 6. 9-,
740.
January 26 February 2 ,
, () .
, , ( ),
.
( 4-106), (Long-Term
Profile).
( 4-106) ,
January 26 February 9.
Long-Term Profiles , /
Liquidity Data Bank, , TPOs.
Xs , ,
, , .
, Long-Term Profile January 26-31 ( ),
( ), 760. , ,
768, January 26.
,
- . , 26-
.
February 1, 768. ,
.
February 2, (follow-through),
768,
.
, , ,
, .
, ,
.
.
, , ,
, .
Applications
, , .
, , , .
, February 3 (Long-Term Profile)
, , :

234

1. . 777 (7774),
, , .
, , 777 .
2. February 2 3, , ,
.
768.
3. ,
740.
( 4-106) ,
( ).

.
1,
. , , 8,
, .

4-106

235

4-106 - 2

4-106 - 3

236

4-106 - 4

4-106 - 5

237

4-106 - 6

238

Corrective Action
, -
. , ,
, .
. ,
, , .
, ,
:
1. , , ( ,
?)
2. ?
.
-, , .
,
() , , ,
, .
, , , ,
.
, ?,
, .
, , , .
, ,
(), .
, , ,
, . , . ,
, .
, , ,
, . ,
, .
, , ,
, .
, ( ) ,
. , ,
.
, , ,
, (. Bracketed Markets (
) 3).
The Function of Corrective Action
.
-,
.
. ,
, ,
.
,
, , .
, (
).
, ,
, . ,
Treasury bonds ( 4-107).
, , ,
, , . , Normal
Variation , , .
, , ,
.

239

Treasury bond August 30, August 25,


, .
( 4-107) ,
85-11.
August 30, (
J). , ,
. , August 30,
, , .
.
, , ,
, , .
,
, ,
.
, , ,
, .
( 4-107),
.
, ,
-, , .
August 30, ( ) , ,
, .

Summary
, ,
, ,
.
, , .
, .
(Proficient Expert),
,
,
, .

240

4-107

241

Long-Term Profiles
, , , , .
, Robert Pirsig.
,
. ,
, ,
. ,
, . ,
, , , .
, ,
?
,
.
, ,
. (Long-Term Profile) ,
, .
, Long-Term Profile, ,
,
.
, ,
.
, Long-Term Profile
, , , , , , .
( 4-108) , , 10- Swing Profile
Long-Term Profile.
. ,
, TPOs, Xs.

242

4-108

243

Using Long-Term Profiles


Long-Term Profile .
,
, .
Long-Term Profile,
.
, Long-Term Profile ,
, .
, Long-Term Profile ,
, ,
.
,
, Long-Term Profile ,
.
,
, Long-Term Profile.
,
, .
The Long-Term Profile in Action
, swing,
.
Long-Term Profile Japanese yen,
1989 .
, Long-Term Profile
,
. , ,
(TPOs), , Long Term Profile.
, ,
, , . (.
() - Trending versus Bracketed Markets 3).
Long-Term Profile .
. Long-Term Profile
.
Region A ( 4-109 & 4-110)
(Region A) , ()
, , , ,
7600.
1 , ,
, 8000-8100.
1 Long-Term Profile , .
, Long-Term Profile
, ( 1a 1b).
, .

.
, ( 2).
Long-Term Profile (single prints)
( 1).
( Long-Term Profile , , , ,
single prints .)
, , ,
, , ( 3).
Long-Term Profile
. , .
( 4) ( , Long Term
Profile, , ),
( 5), Long-Term Profile.

244

,
(U.S. dollar's), ( ). , ,
( 5a, 5b 5c Long-Term Profile) , ,
, .
, Long-Term Profile ,
( 4),
(), .

4-109

245

4-110

246

4-110 - 2

247

4-110 - 3

248

Region ( 4-111 & 4-112)


Long-Term Profile ( 4-112) February 15 May 24.
, , ,
.
( 6) , , ( 5),
, .
( 7),
, .
, ( 8),
, Long-Term Profile
. .
( 9 10), ,
Long-Term Profile, ,
.

4-111

249

4-112

Summary
(Long-Term Profile) ,
. ,
, Long-Term Profile
, .

250

Special Situations
.
. ,
, .
, ,
. , ,
, .
, .
, .
? .
, ,
, , , .
. , , .
, , , .
, , .
, - , ,
. , -
. , .
. ,
.
, ,
Market Profile, ,
. .
. :
1. 3-I Days
2. Neutral-Extreme Days
3. The Value-Area Rule
4. Spikes
5. Balance-Area Break-outs
6. Gaps
,
, (
). , , , ,
, , ,
, .

3-I Days 3-I


, 3-I day.
3-I day , TPO count, .
, (3-I buying day) , TPOs
.
( 4-113) 3-I Buying Trend day (TPOs ).
, , (3-I buying day)
. , ,
,
( 3-I selling day).
, 3-I days
(highly leveraged position), .
, (3-I days),
90 , .
, , ,
.
, (3-I Buying day) ,
90 . , , (3-I Buying day)

251

,
Next Day's Close.

3-I day 2I-1R days

2I-1R days ,
(responsive buying tail), (initiative buying
tail) ( 4-114).
, (Treasury bond) June 24,1986, May 29,1987,
. ,
, 3-I 2I-1R
.
, ,
. ,
. :
1. 94% , 3-I day, ,
, 90 ( 3-I buying days 3-I
selling days). 71% , 2I-1R days.
2. , ,
. , ,
.
3. 59% , 3-I day, ,
, , 3% . , 97% ,
3-I day, .
2I-1R days, 82%, 18% .
3-I ,
, TPOs .
,
, , .

252

4-113

253

4-114

254

Neutral-Extreme Days -
(Neutral day)
.
,
.
, (). ,
, ,
, , .
, (Treasury bond) June 24,
1986, August 12, 1987.
3-I day, (Neutral-Extreme days) 90
, .
(Neutral-Extreme days) , , 3-I days.

- Neutral-Extreme days
92% ,
, 90 .

(Neutral day) , (Neutral day) .
73% 45%, , .
, , (Neutral structure) , ,
. , ,
, .
, ,
. , 92%

.
,
. -,
.

The Value-Area Rule


.
- , ,
, ,
.
,
.
,
.
, ,
,
,
.
, (double TPO prints)
, ,
.

255

"Value-Area Rule."

. , ,
.
, ( 4-115), ,
, .

, Value Area Rule.

, ,
( ,
, .)
, ( 4-115), ,
.
(Value-Area Rule) , ,
() .
,
, .
(Value-Area Rule)
:
1. Distance from Value
,
.
.
,
, , , ,
.
, , .
, ,
, .
, ,
, , ,

.
2. Value Area Width
.
, , ,
.
, (Value-Area Rule) , .
3. Market Direction

(momentum), .
, ,
, , .

Summary
(Value-Area Rule) ,
, ,
.
(Value-Area Rule) .
, ,
, (Value-Area Rule)
.

256

4-115

257

Spikes
,
.
, , , ,
( 4-116) S&P, N May 5.
, N (311.00)
308.00.
,
. , ,
(Price x Time Value).
, ,
(follow-through) .
,
, .
Acceptance versus Rejection
, , ,
.
, TPOs ,
.
, ,
, .
,
.
, . , ,
, .
, (),
.
, , ()
.
Openings Within the Spike
, .
, , , , ,
.
( 4-116), , S&P 308.20 May 8, 1989 308.00311.00 , . ,
.
( 4-117), S&P May 2 .
(311.00),

.
, ,
, , (Range
Estimation rules), ( I) .
, ,
. , , .
, ,
, , , .
( 4-117), , May 2 311.30 (
) 309.30, 200 .
200 .

258

4-116

259

4-117

260

Openings Outside the Spike


, ,
.
,
,
.
Bullish Openings
,
.
, (longs) ,
.
( 4-118), 3-
. (longs)
, 20.15 .
, , , , ,
, .
( ), -
, .
, ,
().
, , May 8.
May 9 8- 19.36-19.60 ( 4-119).
,
.

261

4-118

262

4-119

263

Bearish Openings
, ,
( 4-120).
, ,
.
.
,
.

4-120

264

Spike Reference Points


,
( 4-121).
, , ,
. , , ,
.
, ,
, .

, , , , .
()
(double TPOs), , .
8- ( 4-120), (double TPO) 19.98 ,
, , .

4-121

265

Balance Area Break-outs


, .
, . ,
. ,
, .
. , ,
, , .
, .
, (ledge) ( I)
.
(swing trader), , , .
, .
- , .
.
, ,
.
( 4-122), (Treasury bonds)
, - , 97-03 9816.
April 9, , ,
(Double-Distribution Trend day).
, April 3 97-32,
. (),
, ,
.
, , .
, locals ,
( ), ,
.
, ,
.
February 6 ( 4-123), ,
S&P. ,
, D 297.20.
(follow-through)
, , .
, ,
,
300.40.
, , .
.
, , ,
. , , ,
.
, , ,
.
, () ,
, .
, ,
, .

266

4-122

267

4-122 2

268

4-123

269

4-123 2

270

Gaps
, ().
, .
, -
, invisible tail.
, ( ) ,
,
.
:
(1) Break-away gaps
(2) Acceleration gaps - ,
(3) Exhaustion gaps .
, (Break-away gap) ,
. ,
.
(Acceleration gap) ,
.
, (Exhaustion gap) .
, , ,
. , .
, , ,
.
, , ,
, .
(Break-away), (Acceleration), (Exhaustion),
, .
, . ,
, .
Day Timeframe Significance of Gaps
, , , .
, () ,
.
, .
, ,
, , ,
.
( 4-124), . ,
-
(Open-Drive), .
, , 19.98.
, .
(Value Area Rule), , ,
.
( 4-125), the (Swiss franc) 26
.
.
, ,
.
, (),
.
,
.
(Swiss franc) ( 4-125), ,
, , .
, - (two-timeframe
trade) ,
59.87 ( ).

271


, . , ,
.
, , ,
. , , ,
, .
, ,
, , .
(Swiss franc) , . ,
, ,
, (Swiss) , .
, ,
, .
( , ) ,
, , ,
.
, ,
. .
. , ,
,
. , , , .
( 4-126),
. () ,
April 28. .
, , , 379.60
Y .
.
, .
, , ,
, () .

272

4-124

273

4-125

274

4-126

275

Summary
,
. ,
.
(), ,
(leverage) .
, ,
. ,
.

, .

Markets to Stay Out Of


,
.
, , ,
.
, , ,
, ,
. , ,
.
, , ,
. . ,
.
,
:
1. Nontrend Days
2. Nonconviction Days
3. Long-Term Nontrend Markets
4. News-Influenced Markets ,

Nontrend Days
, (Nontrend day).
,
.
( 4-127), (low-volume Nontrend
day), May 8,1989.

276

4-127

277

Nonconviction Days
(Nonconviction
day). , , (Normal, Normal
Variation, Neutral day). , (Nonconviction day)
,
.
(Nonconviction day) (Open-Auction),
.
.
, , ,
, .
, ,
. ,
, .
( 4-128), (Nonconviction day) . (Open-Auction),
,
. (Normal Variation), ,
, .
,
. (Nonconviction day) ,
.

4-128

278

Long-Term Nontrend Markets


,
.
,
.
( 4-129), ,
, . ,
,
.

4-129

279

News-Influenced Markets ,
.
,
.
, , locals
. ,
.

Summary
, , .
,
. , ,
.
:
TPOs . ,
, . ,
, , , .

News
, (Gross National Product, Merchandise Trade, or Producer Price
Index), .
, ,
. ,
, , (
, ).
, .
( ) ,
.
, , ,
. , ,
, , .
.
.
, , ,
. ( Barron's
) , , .
,
, .
. Producer Price Index (PPI),
May 12, 1989, +.06% +.08%.
, , ( 1)
( 4-130).
, , ( 2).
+.04%, , , .
16 ( 4-131). ,
+.07% . , , , PPI
.
90-26. ,
.
, .
12-, ,
:
1. .
2. .
3. .

280

, ,
. (
) May 9, : 9th's (89-16) ,
(89-04).
, , PPI +.06%
+.08%. ,
( 1 4-131) 9th ( 2).
PPI's , .
,
May 9. , .

4-130

281

/ ,
( ).
, , ,
. ,
.

- basic news/market sentiment

Summary
, / ,
, ,
:
1. (), ,
, ( ).
2. ,
.
3. ,
( , ).
4. ,
.
5. , .
, , .

282

4-131

283

Beyond the Competent Trader


, , ,
. ,
. ,
, . ,
. ,
, , .
,
, .
, ,
.
,
. (The Money
Game): , , , .
.
(Market Profile) .
.
, ,
, .
. .
, , .

284


. (Beethoven's "Moonlight Sonata"), ,
. ,
. , ,
. ,
,
. .
, , ,
. . ,
( ) , ,
, .
(), ,
.
() .
, , , .
, . , , ,
. , , , , ,
.
, , (Arnold Palmer),
, .
, , , , , ,
. , 70
. .
. , .
,
.
, ,
, . ,
, .
,
. ,
. ,
.
, ,
.
.

The Results Equation: Market Understanding x


(Self-Understanding+Strategy) = Results1
:
( + ) =

. : , .
, ,
. ,
, .
,
. , ,
.
-
, .

. , ,
, ,

285

. . ,
, . ,
, .

Self-Understanding: Becoming a Successful Trader


: .
,
. ,
,
. , ,
, ? -,
? ,
? , ,
, ?
, , ,
. , , ,
, , , ,
? .
, , ,
. , ,
, , , .
, ,
. , ,
.
, ,
, (
), ,
, .

.
, ,
. , ,
. ,
. ,
. ,
, -,
, , .
, , . , ,
. , ,
, ,
.
, , .
,
.
, .
.
, .
, :
: , , .
, ,
, ,
, . ,
. :
, ,
. , ,
, .
, , ,

286

, ,
, . ,
, 10 , ,
, , . ,
, , ,
. , .
.
,
. , . ,
, , .
, .
, ,
.

Self-Observation

, . ,
. ,
, .
, , ,
, , , . ,
, ,
, , ,
.
, ,
. ,
. ,
. ,
, , ,
, . ,
. , ,
, , ,
. , ,
.

The Whole-Brained Trader


,
, ,
. (Bennett W. Goodspeed) (The Tao Jones Averages):
. . . , ,
. .
, , , , ,

. ;
, .
, ,
. , , , ,
( , ), .
, .
, ,
, .2
,
. / ,
, . ,

287

, ,
, .
.
, , ,
, . ,
(floor traders), ,
, .
, ,
.

.

The Left Hemisphere


, . ,
, ,
. , ,
.
, , ,
. ,
.
,
, . ,
, , , , .
: , .
. ,
, .
, .

The Right Hemisphere


. ,

. , , ,
.

. , , ,
, .
,
, , ,
. ,
.

Combining the Two Hemispheres



. (Bach) . ,
,
, . ,
, ,
. , ,
, , .
() , ,
. ,
. ,
3
, .
(Bears' linebacker Mike Singletary) I 4.
, (Singletary) ,
, . , ,
.

288

, ,
.
, (Mike Singletary) , .
, ,
,
. , , ,
.
, - -
. . / ,
, ,
.

Strategy
(), .
, , .
, () .
() , .
, , ,
,
.
, ,
. , ,

. ,
, , .

A Business Strategy
. , ,
, , , .
, , /.
, , ,
.
, , ,
, , , , .
.
. ,
, , .
Capital
, :
1) , , ; 2) .
, , .
,
, .
, , .
, .
, , , ,
, .
, ,
, ,
, (3-I day).
"tick-watching". ,
, ,
, .

289

Location
, .
, ,
, - , ? ,
/.
, ,
(), , - ?
, ,
.
?
. ,
, , ,
.
,
(, ()
).
.

, , , .
, , ,
. .
, ,
, . ,
, , ,
. ,
, , ,
.
Timing
,
. , ,
. ,
(). () ,
.
, , . ,
, , ,
, .
October 1987. , ,
( ) . ,
, .
Information
,
. ,
, .
, ,
, .
.
. ,
. , ,
.
, .
(Jim Kelvin) , . ,
, . ,
,
.
, .
,
.

290

.
, , ,
. ,
, .
100 % .
.
Know Your Competition
() ,
, .
, , ? (General Motors)
, (Japanese car makers)
. .
, .
,
, ( ) "too long" "too
short". , , ,
, b , , , "too long".
, , , ,
(long liquidation) .
,
.
Know Yourself
, .
? ? ,
,
(Midas) (McDonald's). ,
, , .
(), . ,
.
. .
, ,
. , ,
.
.
Consistent, Daily Execution ,
.
. ,
, , .
.
.
.
( ) , ,
. ,
, , .
Inventory
,
. , , . ,
, , ,
. ,
.
, , ,
. , , ,
.

291

, , ,
. , ,
, .
, -. ,
locals ,
, ,
, . , ,
, .
, ,
. ( ), .
, ,
, .
, ,
.
, , , .
, ,
, .
Risk
. ,
, (short odds), (long odds),
, . ,
. , , ,
. , ,
, , ,
70 80 , .
, ,
.
, ,
(, ).
, .
, , .
, ( ,
).
, ,
, , , ,
.
. ,
,
, .
Goals
, . ,
, .
. ,
. , ,
.
Record Keeping and Performance
IRS ( ).
.
?
? ? ?
. ,
.
, . ,
, ,
. ,
, , .

292

Dedication
, ,
, .
. , ,
, .
, .
, , .
. , .
.

Applications
(minute-to-minute) (day-to-day)
, . ,
.
,
. , ,
, ,
.

:
1: .
2: ,
.
,
, .
Capital
Timing
Location
Knowing Your Competition

Knowing Yourself
Consistency

Information
Inventory
Risk
Goals
Record Keeping/Performance
/
Dedication

,
.
3: ,
,
.
, .
, , ,
, . ,
,
, .
( 5-1) , ,
.
, .
, ,
, .

293

5-1

Summary
Wall Street,
.
From The Tao Jones Averages, by Bennett W. Goodspeed.
,
, .
,
, , .
, ,
, . , ,
.

, .
,
, .
, ,
.
.

294


, ,
, . ,
, . .
, ,
.
, ,
, .
, ,
. , ,
.
-, , .
.
, , .
12-16 . ,
.
,
, .
, , ?
, ,
, . , ,
.
(Benjamin Hoff) The Tao of Pooh 1,
, , ,
.
,
.
, , ,
, ,
, , .
, ,
,
.

295

APPENDIX 1 1

Value-Area Calculation
(value area)
(value) , , 70%
. , (/) ,
TPOs, .

Volume Value-Area Calculation


( -1) , (value area).
-, , . , ,
,
. .
70 .
( -1) (22,168) 96-12.
96-12 34,491 ( ), 43,773.
, , .
, (96-15 96-16), 96-10 96-11, .
, , .
, 70
.

-1

296

TPO Value-Area Calculation


TPO , .
-, TPOs, (single prints). 70
, , TPOs 70
. ,
TPOs . 70 TPOs.

-2

297

APPENDIX 2 2

1. Markets & Market Logic, Trading & Investing with a Sound Understanding and Approach, J. Peter Steidlmayer
and Kevin Koy, Porcupine Press, Chicago, 1986. Introduction to theory.
2. CBOT Market Profile (Manual 1), A Time Distribution Analysis That Explains Market Behavior, J. Peter
Steidlmayer and the Chicago Board of Trade, Chicago Board of Trade, Chicago, 1984. Out of press and available
only in photo-copy form. Basic theory and reference guide to using the Liquidity Data Bank.
3. The Profile Report, Results Through Market Understanding, Self Awareness and Strategy, Dalton Capital
Management, Inc., Chicago, established in February, 1987. Monthly journal on market-generated education,
research and trading.
4. Applications Of The Market Profile, A Trader's Guide to Auction Markets, Donald L. Jones, CISCO, Chicago,
1988. Concise reference guide to available literature, with direct applications.
5. Steidlmayer On Markets, A New Approach to Trading, J. Peter Steidlmayer, John Wiley & Sons, New York, 1989.
Steidlmayer background, some theory and new concepts.

( )
1. Roger von Oech, A Whack on the Side of the Head (New York Warner Books, 1983), p. 49.
2. J. Peter Steidlmayer and Kevin Koy, Markets and Market Logic (Chicago: The Porcupine Press, 1986), p. 66.
3. J. Peter Steidlmayer and Kevin Koy, Markets & Market Logic, The Free Press, Chicago, 1986.
4. Peter Steidlmayer and Kevin Koy, Markets & Market Logic, The Porcupine Press, Chicago, 1986, p. 5.
5. Bennett W. Goodspeed, The Tao Jones Averages, Penguin Books, New York, 1983, pp. 22-23
6. Bennett W. Goodspeed, The Too Jones Averages, Penguin Books, New York, 1983, pp. 49-50
7. Benjamin Hoff, The Tao of Pooh (New York Penguin Books, 1982), p. 29.

298