Monday Bonus Pack – Acme Time and Sales

Folks, if you are as bad at reading the DOM as I am this one may be for you. It’s the Acme Time and Sales Pack which features the debut of the Acme Magic Tape study.

Yes, it is in fact named after 3M’s cellophane tape. Har-dee-har. It just sort of rolled out of my fingers when I was naming it, and it seemed kind of funny, so it stuck. Get it? Stuck? But it is a real space-saver and fills a vital if peripheral role. I use it on my soon-to-be released Acme Volume Footprint chart.

Check it out… and trade ’em well.

P.S. My plan is for this one to remain part of the freely downloadable Standard packs, in case you are curious.

Can a Half Make You Whole?

Maybe.

If we are talking about a phone number, a maple-bacon doughnut (don’t knock it ’til you try it) or having only 50 cents in your pocket at the Dollar Store… probably not. In any of those cases, you’re gonna need the entire thing.

On the other hand, if we are talking about the ES or the NQ it’s quite possible that a half may be even better than a whole. Half a gap, that is. The half-gap’s simplicity is really a beautiful thing and it sets up some very frequent and consistent trades. So what is a half-gap, exactly? It’s just half the distance between the previous RTH closing price and the current RTH opening price. You’re dubious. Seems too easy, right? Read on…

Both of these instruments love to tag, roll around on and (dare I say it) caress the half-gap (HG) line. Many traders focus manically on the gap fill, and in doing so they fail to notice how important the half-gap level is intraday. The HG level is very frequently in confluence with another important level, such as a IB, range midpoint, daily pivot or Fibonacci level. When evaluating a potential level, I look for confluence. Said another way, when the half-gap lines up with market structure I’m often lining up to trade it.

The HG line is something I’ve been drawing manually on my charts for quite a while now, and it’s been on my list of features to add to the Acme Volume Profile for some time. Well, it’s finally available in the Deluxe Edition.

Unsure? Want more? Here are several recent examples from both the ES and the NQ.

Let’s start with the ES on 8/19. Often the levels price conspicuously rocket through are just as important the levels at which it bounces or pauses. Notice how price behaved in the morning, and then returned to probe and then back-test the HG line:

ES Half-Gap 8/19

Again the ES, but on 8/16 and 8/17. Notice the clean bounces on 8/16 at the start and end of the day. Then on 8/17, the ES reversed 2 ticks shy of the HG level but then came back later to pause and back-test on the way down to the LOD:

ES Half-Gap 8/16 + 8/17Final ES example, this time from 8/5. This is the kind of caressing or “flirtation” I was referring to. Several probes of the HG from underneath, then a failure and race down to the VPOC. But not before a back-testing the level… twice!

ES Half-Gap - 8/5“What about  the NQ?”, you ask. I’m glad you did because I have some examples for it too. On 8/19 again, we see a similar behavior to the ES with a race-through early in the day and a followed by a double-tap in the middle of the session:

NQ Half-Gap - 8/19Then on 8/11 and 8/12 we have a nice clean reversal on the morning of the 11th, and follow up on the 12th with the shoulders of an ugly inverted H & S pattern resting right on the HG level:

NQ Half-Gap - 8/11 + 8/12And our final NQ example from 8/9. Here we have another very deliberate-looking morning bounce off the HG followed by a pierce, then pause then headfake-backtest:

NQ  Half Gap - 8/9

Draw it yourself or let the Acme Volume Profile Pack (Deluxe Edition) do it for you. But don’t reject the half-gap. It can give you a “Whole Lotta Love.”

Trade ’em well… should be an exciting week.

Time vs. Ticks: You Make the Call

I know that I’ve made kind of a fuss about tick data being unnecessary for volume profiling. If I had to “bottom line” the issue, I certainly think it’s true. I am positive that you can be a successful volume profiler using only minute data.

But we tend to learn as we get older that truth is not the binary concept many would like it to be. In a very practical sense, it’s possible for a statement or an idea to be kind of true. Mostly true. Or even only sometimes true.

Well, so it is with volume profiling (and basically everything about trading).

As I have stated, I am an engineer by training and at heart. That means that I love precision, and I do my best to be precise. But precision has a price, and to be a really good engineer you have to go deeper than just designing and building precise stuff. You have to weigh the cost of precision against a multitude of other factors. A very precise design can be turn out to be a poor invention ill-suited to its purpose because of what it sacrifices in other important areas for that precision.

Take the Acme Profile Pack. No it’s not an example of a “poor invention.” Not what I meant at all (ha!). I was being philosophical about trade-offs and the costs of precision at the extremes. No, it’s a fact that using minute data greatly speeds up the loading of profiles… sometimes by a factor of 10x or more depending on the amount of time and volume to be profiled. But that boost in speed comes at the cost of a small and admittedly variable degree of imprecision. 90% or more of the time, this is a profitable trade-off.

At other times though, for more advanced profilers, precision pays. And thus as of today I’m offering a Deluxe Edition to Rancho Dinero members which can build profiles with minute or tick data. You can use either type to build session profiles, micro-composite profiles and composites too. You can switch back and forth at will, with only a few clicks. You can even mix-and-match. Say you want to build session profiles with tick data and composites with minute data to maximize the speed benefits of lots of minute data. Totally do-able.

And as for the differences between profiles, I’ve created some high resolution images of minute data-based session profiles juxtaposed with tick data-based session profiles. Feel free to download and examine them up close, nose right up to the monitor, and explore the differences. Tick-based profiles on the left, minute-based profiles on the right:

Acme Volume Profile: Tick vs Minute Session ProfilesHere are composite profiles covering the last 30 days, again with ticks on the left and minutes on the right:

Acme Volume Profile: Tick vs Minute Composite ProfileTake a look and decide for yourself. Ticks or minutes? With the Deluxe Edition you get the best of both worlds and you’ll always have the right tool for the job.

Double Feature Sunday – 2 New Packs

I’ve released two new packs today… the much asked-for Acme Volume Balance & Breakdown as well as the Acme Trend Analysis packs.

Got questions? Don’t forget to have a look through the FAQs first. Your answer just may be in there.

Get ’em while they are hot and, of course, trade ’em well…