A Low Volume Node is an area where very little volume was able to be transacted. This represents a past area of rejection.
A High Volume Node is an area of prior acceptance as represented with a high amount of volume that occurred at or around this level.This distribution should be much more prominent then the surrounding volume distributions.
A trading recap on WTI Crude oil has been posted on our blog. I took a trampoline short trade. Take a look here:
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A quick market update on WTI Crude oil with a plain higher time frame top down analysis has been posted on our blog:
ON High is abbreviated for the overnight high or the high that occurred in the non-regular trading hours/globex session. ON Low is the abbreviation for the overnight low that occurred in the non-regular trading hours/globex session.
Looking at the daily timeframe, we can see a one-time-framing higher behavior since the market broke the inside day to the upside.
3.Market explores to the upside; higher prices receive the unexpected response and attract even more buyers. Higher prices are accepted, breakout is successful. Go with price acceptance in the direction of breakout.
However, going further above to the weekly perspective, we can observe that the market tested the balance area high to the tick. Sure, we can argue about this particular balance area but the level was a potential point of resistance in my opinion. Especially if we are seekers of the path of least resistance in order to profit on quick short-term trades. Maybe we will break this level in the near-term future but there was not much to do until the market tested that lovely point of potential resistance.
Keep it simple but do it hard.
After the simple identification of this potential level of resistance we can use whatever short-term trade methodology to get into a possible trade.
An Iceberg Order is a large single order that has been divided into smaller lots, usually through the use of an algorithmic program, for the purpose of hiding the actual order quantity. This order type is often used by a large institutional traders.
Synthetic Orders can be best described as orders that are generated from a computer algorithm. The most commonly used synthetic order would be an
Iceberg Order. This is best used by a trader looking to put a very large order into the market but looking to be discreet about it. An example would be, trying to buy 1,000 ES contracts at a certain price but only showing that you want 100. As soon as that 100 is filled, another 100 will appear and continue to do this in succession until filled.
Other synthetic order types include TWAP (Time Weighted Average Price) also known as a Time Slice order and VWAP (Volume Weighted Average Price). The TWAP execution is a set of orders being executed over a period of specified time at the closest average price for that period. These orders can be passive and they can be aggressive depending on the situation. Also, similar to an Iceberg order, the order only shows a certain amount of contracts to execute and keeps reloading that number by each specified time period. This can be spread out across an entire trading session. An example would be a large trader putting significant capital to work in the market or taking significant capital out of the market while looking to not disturb that particular market’s price and again, being discreet. Same for VWAP but this is measured against the market’s volume but accomplishes the same thing.
This is a term to describe the age of a trend. If there is a break out of balance, a clean break is considered to be a successful breakout where there is a strong elongated bar forming. By observing the success/failure of the breakout (elongated/compressed bar) we can get a feel for age of the trend. When areas of balance overlap this is a sign of a trend maturing and coming to a possible end. The distance between each balance area is the measure of the success or failure of a trend; if there is a large gap between balance areas this shows a strong trend and smaller or overlapping balance areas are a sign of the end of a trend and possibility of a reversal.
Because of yesterday’s close above the mentioned inside day I thought it would be a great idea to look for any buying opportunity in the DAX futures today. However, the market opened with a small gap up and moved quite rapidly to the next liquidity area above a previous positive day high. With that, the initial target for any potential long trade was fulfilled and it was a good idea to look for a sign of price action to short this market with the thought of a possible gap fill. Unfortunately my sell order got never filled to participate in this gap fill as I placed them at higher prices.
As soon as the market filled the gap a balanced behavior was noticeable on the 5 minutes chart which made my gut feeling quite bullish for some long scalp trades. Directly after this there was no expection for any more to come on a nice Friday.