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Quick Review of Trade Profile
By Marc Rinehart
(I put this together recently when I realized there really isn't much written on this subject. By introducing this overview here at this forum, we can open up the discussion how others find value and use with this eSignal, add-on AGET feature. As we generate more examples, we will post them here to build a depository of information and examples for all to benefit. -M.R.)
'Trade Profile' is a proprietary AGET add-on study designed as an internal data scan to identify areas of previous buying and selling. These levels are then displayed as simple buy and/or sell levels, or focal points. Traders should focus on 'thick' and 'longer' levels. Thick levels are high volume areas; longer levels are high price movement areas.
The theory states when a current price hits a previous sell level we anticipate with higher confidence more selling should again return to this area. When a price hits a previous buy level, we anticipate buying to come in or continue.
Another premise behind this tool: a trader who sells at a sell level may be stopped out of a short position if this sell level is violated. We can anticipate with higher confidence if this sell level stays violated it provides additional fuel for a rally. If traders buy at a buy level they may be stopped out of their position if this buy level is violated. If it stays violated it provides additional evidence a decline continues.
Here is what I think is the tricky part. If a price fails to hold a previous sell level, the previous sell level becomes support. This provides a base for further rally attempts. Equally, if a price fails to hold a previous buy level, the previous buy level becomes a resistance area. It serves as a springboard for further sell attempts.
One objection I have with Trade Profile-- buy and sell levels show up and disappear with little or no warning. It is difficult to anticipate well in advance when, where, and sometimes how to really interpret these buy or sell levels.
The biggest concern I have is monitoring Trade Profile on very short or day-trade time frames. That is when Trade Profile buy or sell identification can really change quickly with little warning. One moment it is there, later it disappears. It is possible to change some of the Trade Profile settings and gather the new information to fit the data better, but who can determine which setting is most appropriate for that action? I cannot easily discern which setting is most appropriate after using it for many years. The slow price change dynamics for a daily, weekly or monthly chart is helpful when monitoring Trade Profile.
Trade Profile is an algorithm based on a calculation of volume and previous key price movements.
Consider Trade Profile a nice secondary, supportive type study tool. It is hard to strategize and make good trade decisions well in advance if you are using just Trade Profile to make a trade decision. Yet-- on the other hand-- Trade Profile is well respected enough to help fine-tune an existing trading setup decision when other tools and studies already are applied.
Don’t be afraid to use Trade Profile. It really does have some very attractive qualities. It is simple and easy to use. It quickly points out higher probability buy and sell areas.
I hope this helps better explain the eSignal ‘Trade Profile’ study, an AGET add-on feature. If you would like to see some examples of Trade Profile in action, review the charts and topic at this AGET Forum-- http://forum.esignalcentral.com/show...&threadid=4176
By Marc Rinehart
(I put this together recently when I realized there really isn't much written on this subject. By introducing this overview here at this forum, we can open up the discussion how others find value and use with this eSignal, add-on AGET feature. As we generate more examples, we will post them here to build a depository of information and examples for all to benefit. -M.R.)
'Trade Profile' is a proprietary AGET add-on study designed as an internal data scan to identify areas of previous buying and selling. These levels are then displayed as simple buy and/or sell levels, or focal points. Traders should focus on 'thick' and 'longer' levels. Thick levels are high volume areas; longer levels are high price movement areas.
The theory states when a current price hits a previous sell level we anticipate with higher confidence more selling should again return to this area. When a price hits a previous buy level, we anticipate buying to come in or continue.
Another premise behind this tool: a trader who sells at a sell level may be stopped out of a short position if this sell level is violated. We can anticipate with higher confidence if this sell level stays violated it provides additional fuel for a rally. If traders buy at a buy level they may be stopped out of their position if this buy level is violated. If it stays violated it provides additional evidence a decline continues.
Here is what I think is the tricky part. If a price fails to hold a previous sell level, the previous sell level becomes support. This provides a base for further rally attempts. Equally, if a price fails to hold a previous buy level, the previous buy level becomes a resistance area. It serves as a springboard for further sell attempts.
One objection I have with Trade Profile-- buy and sell levels show up and disappear with little or no warning. It is difficult to anticipate well in advance when, where, and sometimes how to really interpret these buy or sell levels.
The biggest concern I have is monitoring Trade Profile on very short or day-trade time frames. That is when Trade Profile buy or sell identification can really change quickly with little warning. One moment it is there, later it disappears. It is possible to change some of the Trade Profile settings and gather the new information to fit the data better, but who can determine which setting is most appropriate for that action? I cannot easily discern which setting is most appropriate after using it for many years. The slow price change dynamics for a daily, weekly or monthly chart is helpful when monitoring Trade Profile.
Trade Profile is an algorithm based on a calculation of volume and previous key price movements.
Consider Trade Profile a nice secondary, supportive type study tool. It is hard to strategize and make good trade decisions well in advance if you are using just Trade Profile to make a trade decision. Yet-- on the other hand-- Trade Profile is well respected enough to help fine-tune an existing trading setup decision when other tools and studies already are applied.
Don’t be afraid to use Trade Profile. It really does have some very attractive qualities. It is simple and easy to use. It quickly points out higher probability buy and sell areas.
I hope this helps better explain the eSignal ‘Trade Profile’ study, an AGET add-on feature. If you would like to see some examples of Trade Profile in action, review the charts and topic at this AGET Forum-- http://forum.esignalcentral.com/show...&threadid=4176
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