Rajandran R Creator of OpenAlgo - OpenSource Algo Trading framework for Indian Traders. Telecom Engineer turned Full-time Derivative Trader. Mostly Trading Nifty, Banknifty, High Liquid Stock Derivatives. Trading the Markets Since 2006 onwards. Using Market Profile and Orderflow for more than a decade. Designed and published 100+ open source trading systems on various trading tools. Strongly believe that market understanding and robust trading frameworks are the key to the trading success. Building Algo Platforms, Writing about Markets, Trading System Design, Market Sentiment, Trading Softwares & Trading Nuances since 2007 onwards. Author of Marketcalls.in

[Premium] : How to Spot High Probability Trade Setups using Market Profile – [Part 1]

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One of the reasons we use market profile is to understand the market conditions and how the other players are positioned and what kind of trade opportunity the market conditions provide and where most of the other people are likely to keep their stops. At times the inferred data points from market profile reveal very high probability trade setups with a very good risk-reward ratio. Here is the interesting chart setup from S&P 500 Futures(ES Mini Futures) and the reason why in a short-term S&P500 will fall 50-60 points from the current level of 2792.

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Here is the simple trade setup in ES Mini which almost 5 back to back poor low setup which indicates short-term trade inventory goes long to too long, in other words, it is called as exponential poor lows. The end result is revisiting of all the exponential poor lows. As the FED announcement is nearing – Generally post the FED announcement such trade setups provide great trading opportunities with extreme risk-reward ratio.

We refer to an auction that terminated through exhaustion as poor or unsecured because of the lack of counter-action; the original auction, after getting a rest, is more likely to make another attempt to crest the hill. The more attempts that are made, the more likely the auction will finally succeed. Poor lows are often the result of excessively short inventory. Over the time as more and more poor lows builds without clearing the old structure it creates exponential odds in revisiting all those poor lows. These inventory imbalances often involve longer-timeframes and therefore take time to balance before continuing in the direction of the prevailing trend.

Poor Low Reference Levels from ES Mini Sep 2018 Futures

1)Poor Low + Weaker Low – 2782
2)Poor Low – 2766
3)Poor Low – 2763
4)Poor Low + Failed Auction – 2751
5)Poor Low – 2742

When such setups are shows 4-5 exponential poor lows its time to pay real attending towards shorts. And it is a very rare occurrence. In a year hardly 1-2 times an index/index futures goes thro such information.

Update before FED Announcement – 13th June 2018 Time : 10:40a.m ET Time

Formation of AB poor low – Higher odds of testing day low

Post FED Announcement – Previous day Poor Low Cleared and New Poor Low Formed

Day 19th Jun 2018 – Trade War Crisis Period

Day 25th Jun 2018 – Trade War Crisis Period

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Rajandran R Creator of OpenAlgo - OpenSource Algo Trading framework for Indian Traders. Telecom Engineer turned Full-time Derivative Trader. Mostly Trading Nifty, Banknifty, High Liquid Stock Derivatives. Trading the Markets Since 2006 onwards. Using Market Profile and Orderflow for more than a decade. Designed and published 100+ open source trading systems on various trading tools. Strongly believe that market understanding and robust trading frameworks are the key to the trading success. Building Algo Platforms, Writing about Markets, Trading System Design, Market Sentiment, Trading Softwares & Trading Nuances since 2007 onwards. Author of Marketcalls.in

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