CISCO Futures
1-303-306-1521 1-800 800 7227 Fax 1-303-306-1572
Internet http//www.cisco-futures.com
Email dljones@cisco-futures.com

Day Trading Information

A short term trader makes profits by capturing market appreciation. You have only two problems to solve for succesful trading:

   1. Finding where/when a trend starts.
   2. Locating the place where/when the subsequent congestion starts.

Simple indeed to say. Not so simple to do. It helps to understand the market, what it is telling you. You do not need to predict the future. You do need to know how to read the present and recent past.

Trends often start with a breakout from congestion. Trends usually end in a congestion. Short time frame congestion is physically seen as an accumulation of TPOs in the Market Profile.

Recognizing congestion is where most traders most need training.
Since all trends run and pause, run and pause, etc., until the trend is over, the trader must be a student of the end game. How can you recognize a pause as differentiated by the normal jerkiness of a trend? How can you know if you are observing the final pause?

You never can know for sure what phase the market is in until a move is completely over and you can look back on it. But you can understand how your market behaves. You can understand market structures such as the short covering rally in the Applications section of Auction Market Theory. You can understand a Market Profile deforming during the day. You can understand half-hour bars beginning to lengthen or shorten up during your trade. Ultimately you will make a trading decision based on your reading of the market and your own trading strategy. It helps to know what to look for.
Auction Market Theory.
Trading Model Development.

The goal of market analysis is to pin down value. In the stock market, Edwards and McGee work with projected annual returns to find value. This is for investing, holding long term equities.

Traders are not investors. A year is an eternity to a trader. The trader asks "what is the value today?". "What was it yesterday?" "How is the value changing right now?" Value determination on several near term timeframes is the nub of Auction Market Analysis. The trader who understands value has an edge over anyone getting signals from price alone.

Auction Market Analysis Analyzes Trading Value, not Price.
Longer term value comes from the Overlay Demand Curve. If a market is in balance, you know the support and resistance prices for that value. This is valuable information for the both day and swing traders. The swing trader can trade breakouts. The day trader also has price regions for trading alerts--near the upper resistance for a short, near the lower support for a long. The middle of the balance is the center of the congestion. This is a good place to avoid for both day and swing trader.
Swing Trader Package.

Near term (yesterday) value comes from the Market Profile. The center of value is around the fat part of the profile curve. The profile curve is bell shaped (normal distribution). The central seventy percent of the profile defines the Value Area'. Volatility is the average of the half-hour bars from which the profile is assembled.
Intra-Day Data.

Today value is marked by the Initial Balance.
During the early part of the trading day the professionals set the tone. This is a trader's first read of the value for the new day.

Value is physically seen as an accumulation of TPOs in the Market Profile. Market Profile data are in the Day Trader Package, the Swing Trader Package and in the Liquidity Data Bank reports.

Auction Market Analysis offers a way to read markets for value.
Auction Market Theory.

All CISCO data support value based trading. Our courses teach you how to recognize value.
Short HomeStudy Course.


The elements of successful daytrading are covered by Auction Market Theory

A Few Rules for putting together your daytrading information
   1in. First find market condition. Is your market balancing? Trending?
     Use Trader Control Package and Visual Graphic
    Example of trading with TCP data visual graphic
    Explanation of Visual Graphic

   2in. Find the support/resistance points
     Upper and Lower Limits on the Overlay Demand Curve
     Previous day Value Area from Market Profile
     Current day Initial Balance
    Example of trading with TCP data visual graphic

   3in. Check reference points for potential movement e.g.
     Volume movement past several days
     Volatility change last two days
     Yesterday commercial capping (top or bottom or both)
     Internal movement in the Overlay
    Example of trading with TCP data visual graphic

   4out. Once in, you immediately start looking for congestion
     Watch for TPO bunching
     Estimate the pace of the movement, is it slowing?
     Check if the half-hour range is decreasing
     Is the market nearing the original breakout point?
     Intra-Day Data.