Before starting about Market Profile it is important to add why and what is discretionary approach, so that there wont be further confusion among visitors If you are discretionary trader and want to understand market in better context like i want then this thread is for you, this thread is not about 'show me the money honey', if your understanding of market is sound successful trades comes along with it, if u focus on money ur vision get clouded ... well there is need to explain in detail and this is the thing which was keeping me away from making a new thread one b'cuz out of laziness, two b'cuz it may sound controversial and i dnt want to engage in those things...anyhow manage to add some inputs ...
before proceed go through this one single page, borrowing words of Dalton
Discretionary trading, which is to say we're not "systematic" traders, offering tactical, rules-based trading information & traders who want to understand how markets function, and who appreciate how important their individual role is to their financial success.
Consider this simple metaphor to illuminate the rigors of the learning process…to acquire a new language, you must first memorize words and verb tenses and parts of speech - which is itself a challenging prospect. Then it takes years of study to become conversational. But then it takes a quantum leap of intuition and deep knowledge to think in a new language. One of the indicators of fluency, in fact, is when you begin to actually dream in a second tongue.
In short, you must be able to view any given rule contextually, or else the rule has no value.Rules that are not understood and applied contextually may even serve to accomplish the opposite of their original intent; it is the lack of a "contextual rule" that casts doubt on most trading systems.
The appeal of a systematic approach is obvious: reduced emotional stress, sure profits, lack of personal responsibility, and im-mediate results - without years of building expertise. And if the rules don’t make money for you, then the blame can be placed on the rules, and not you. At the same time, you can accept credit for all profits since, after all, you selected the system.
Dictionary.com defines a rule as “a basic generalization that is accepted as true and that can be used as a basis for reasoning….” Nothing is said about the rule being tested for validity, or how the rule was derived. We are asked to accept it and move on.We all have rules-ingrained patterns of thinking that we mistake for truth and that when rule “ruts” form, all conflicting ideas are ignored .Rules stunt innovative thinking because they seem so right. They hide the numerous superior situations that exist, but are outside our rules,our experiences, mistaken assumptions, half-truths, misplaced generalities, and habits keep us from finding reliable solutions.
There is a bewildering range of variables that affect any commodity, futures contract, or stock. And there are nearly limitless combination and permutations of these variables. If a purely rules-based system were to be truly effective, it would have to offer a rule for each possible arrangement - an impossibility. Discretionary trading is about building a solid foundation, upon which one can make reasoned judgments based upon constantly changing conditions and a highly developed fluid intelligence. ( “fluid intelligence,” which is wholly dependent upon mental flexibility EXACT OPPOSITE OF crystal intelligence which work on previous memory)
Rules-based systems do not account for contextual market conditions, and are not adaptive to constantly evolving market conditions. On the other hand, discretionary traders can quickly alter the way they view and interpret shifting market data. The discretionary trader needs to understand how markets perform under an extraordinarily wide set of circumstances. Rules-based, or mechanical systems, can be implemented immediately, whereas discretionary traders must spend considerable time learning and acquiring the necessary knowledge to trade.Rules-based approaches, providing they are followed religiously, are not faced with the psychological short-comings, biases, or lack of discipline that often effect discretionary traders. Discretionary traders are constantly performing their own market analysis, and are required to spend considerably more time and effort both before and during market hours. This time requirement also limits the number of markets or securities discretionary traders can successfully follow. Therefore i limit our study for nifty futures.
Now about Market Profile in next post ...
Edit/Add - For the convenience of members, Posting the link of page 4 post 31 ( To do list for profilers before market opens )
http://www.traderji.com/technical-a...-market-profile-discretionary-approach-4.html
Added link of CBOT study guide on Market Profile
http://www.trading-naked.com/MarketProfile.htm]Common terminology on MP
before proceed go through this one single page, borrowing words of Dalton
Discretionary trading, which is to say we're not "systematic" traders, offering tactical, rules-based trading information & traders who want to understand how markets function, and who appreciate how important their individual role is to their financial success.
Consider this simple metaphor to illuminate the rigors of the learning process…to acquire a new language, you must first memorize words and verb tenses and parts of speech - which is itself a challenging prospect. Then it takes years of study to become conversational. But then it takes a quantum leap of intuition and deep knowledge to think in a new language. One of the indicators of fluency, in fact, is when you begin to actually dream in a second tongue.
In short, you must be able to view any given rule contextually, or else the rule has no value.Rules that are not understood and applied contextually may even serve to accomplish the opposite of their original intent; it is the lack of a "contextual rule" that casts doubt on most trading systems.
The appeal of a systematic approach is obvious: reduced emotional stress, sure profits, lack of personal responsibility, and im-mediate results - without years of building expertise. And if the rules don’t make money for you, then the blame can be placed on the rules, and not you. At the same time, you can accept credit for all profits since, after all, you selected the system.
Dictionary.com defines a rule as “a basic generalization that is accepted as true and that can be used as a basis for reasoning….” Nothing is said about the rule being tested for validity, or how the rule was derived. We are asked to accept it and move on.We all have rules-ingrained patterns of thinking that we mistake for truth and that when rule “ruts” form, all conflicting ideas are ignored .Rules stunt innovative thinking because they seem so right. They hide the numerous superior situations that exist, but are outside our rules,our experiences, mistaken assumptions, half-truths, misplaced generalities, and habits keep us from finding reliable solutions.
There is a bewildering range of variables that affect any commodity, futures contract, or stock. And there are nearly limitless combination and permutations of these variables. If a purely rules-based system were to be truly effective, it would have to offer a rule for each possible arrangement - an impossibility. Discretionary trading is about building a solid foundation, upon which one can make reasoned judgments based upon constantly changing conditions and a highly developed fluid intelligence. ( “fluid intelligence,” which is wholly dependent upon mental flexibility EXACT OPPOSITE OF crystal intelligence which work on previous memory)
Rules-based systems do not account for contextual market conditions, and are not adaptive to constantly evolving market conditions. On the other hand, discretionary traders can quickly alter the way they view and interpret shifting market data. The discretionary trader needs to understand how markets perform under an extraordinarily wide set of circumstances. Rules-based, or mechanical systems, can be implemented immediately, whereas discretionary traders must spend considerable time learning and acquiring the necessary knowledge to trade.Rules-based approaches, providing they are followed religiously, are not faced with the psychological short-comings, biases, or lack of discipline that often effect discretionary traders. Discretionary traders are constantly performing their own market analysis, and are required to spend considerably more time and effort both before and during market hours. This time requirement also limits the number of markets or securities discretionary traders can successfully follow. Therefore i limit our study for nifty futures.
Now about Market Profile in next post ...
Edit/Add - For the convenience of members, Posting the link of page 4 post 31 ( To do list for profilers before market opens )
http://www.traderji.com/technical-a...-market-profile-discretionary-approach-4.html
Added link of CBOT study guide on Market Profile
http://www.trading-naked.com/MarketProfile.htm]Common terminology on MP
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