Profile Flash Cards: Trading Obvious
Ignore the Noise
This week’s lesson will look at really dumbing down the profile to set up great trades.
No need to complicate our lives, especially when money is at stake.
Image 1. Priorities at the Crowstack
Most weeks offer at least two to three trading sessions with very clear profile references. We use this to our advantage to filter for trades that work in our favor, reducing noise and indecision while minimizing risk for maximum reward.
Four great examples, and bonus candle chart setups at the end of the lesson.
Leveraging the Market Profile
As always, recall the study guide from CBOT. No sign-up necessary.
Image 2. ES daily profiles
Each day last week presented a clear, profile-based trade location. Sometimes multiple in one day! Remember, if you don’t understand the action, sit it out.
Identify a reference level of interest, and let the trade come to you. Work out a thesis and deal-breakers in (stops) advance, and test it with your trade!
Tuesday, February 17
The first half of the day was spent filling in the prior day (Monday was a holiday) buying tail, and aside from the short in the B period, trades were exactly easy to plan out.
That was true until the K period.
Image 3. Expanded profiles
Not only was the K period a weak break-out to new highs, it was perfect confluence with the prior day value area high. This is often a point of resistance, and thus a key level we had on watch for the second half of the day.
This short could be taken with exceptionally low risk, selling off nearly 30 points into the close. Clear reference, easy trade.
The next slide is beautiful, and a reminder of the power of singles.
Image 4. Keep your trades to yourself
By that I mean Wednesday: