Here’s a deeper approach to confirming entries using market profile, statistical edges, and range analysis:
Market Profile Levels: Check where the price is in relation to recent profile levels like the Point of Control (POC), Value Area High (VAH), and Value Area Low (VAL). If a support level aligns with the VAL or POC, it adds a statistical edge for a bounce, as these are areas where price has previously found balance.
Expected Range and Statistical Edge: Compare the current price movement with the expected intraday range. For example, if the price is nearing a key support level like 5730 but has already covered a large portion of its average daily range, the likelihood of a significant bounce might be higher, giving an edge for an entry. Tools like ATR (Average True Range) can help estimate whether the price has extended to a statistically significant range for the day.
Internals for Confirmation: Market internals, such as advance/decline ratios, tick readings, or even sector strength, can provide additional insight. For example, if broader market internals are showing strong buying, a pullback to a key support level might hold more firmly.
Alternative Approach if You Can't Watch Intraday: If you can’t monitor these levels live, consider adjusting your position sizing or strategy. For example, using smaller initial sizes with the intention to add at the next level can help manage risk. You might also consider using wider stop-losses or deploying a more conservative strategy, such as selling an out-of-the-money put spread instead of buying puts directly if you’re bearish.
Layering Entries: If you expect some volatility around the levels, layering your entries across several support or resistance points (e.g., entering partially at 5730, then adding at 5680 if it breaks) can help improve your overall cost basis and reduce the impact of false breakouts.
I like the new format, thanks
"Wait for confirmation before entering, as these levels are often traps designed to trigger stops before the market moves decisively."
What kind of confirmation if you don't mind to elaborate please?
Thank you
Here’s a deeper approach to confirming entries using market profile, statistical edges, and range analysis:
Market Profile Levels: Check where the price is in relation to recent profile levels like the Point of Control (POC), Value Area High (VAH), and Value Area Low (VAL). If a support level aligns with the VAL or POC, it adds a statistical edge for a bounce, as these are areas where price has previously found balance.
Expected Range and Statistical Edge: Compare the current price movement with the expected intraday range. For example, if the price is nearing a key support level like 5730 but has already covered a large portion of its average daily range, the likelihood of a significant bounce might be higher, giving an edge for an entry. Tools like ATR (Average True Range) can help estimate whether the price has extended to a statistically significant range for the day.
Internals for Confirmation: Market internals, such as advance/decline ratios, tick readings, or even sector strength, can provide additional insight. For example, if broader market internals are showing strong buying, a pullback to a key support level might hold more firmly.
Alternative Approach if You Can't Watch Intraday: If you can’t monitor these levels live, consider adjusting your position sizing or strategy. For example, using smaller initial sizes with the intention to add at the next level can help manage risk. You might also consider using wider stop-losses or deploying a more conservative strategy, such as selling an out-of-the-money put spread instead of buying puts directly if you’re bearish.
Layering Entries: If you expect some volatility around the levels, layering your entries across several support or resistance points (e.g., entering partially at 5730, then adding at 5680 if it breaks) can help improve your overall cost basis and reduce the impact of false breakouts.
Thank you V for taking time explaining, very much appreciated