TAS Market Profile Charting Package For Tradestation User s Guide, ver 1.2

Transcription

1 TAS Market Profile Charting Package For Tradestation User s Guide, ver 1.2

2 Table of Contents Introduction Page 3 Installing the TAS Market Profile Charting Package Page 4 Overview Page 9 TAS Boxes Page 11 TAS Vega Page 12 TAS Navigator Page 13 TAS Ratio Page 14 TAS PCLs Page 16 TAS Market Map Page 18 Support Information Page 18

3 Introduction The TAS Market Profile Charting Package is a suite of technical analysis chart indicators that allow users (with no need of advanced chart data) to see the market in completely new ways. There are seven indicators in all, most of which use volume data to create graphics right on the chart that show various useful information. The TAS Market Profile Charting Package is now on Tradestation as part of its TradingApp store. The indicator package is made up of these seven indicators: TAS Market Map delivers a visually-appealing Market Profile layover that reveals volume gaps, congestion and breakout trades. TAS Boxes expose the "fair auction" supply and demand value areas. Trade in breakout mode when outside of these levels or play the range inside. Use them to set volatility-adjusted trailing stops. TAS Vega powers up your price bars in REAL-TIME by replacing traditional coloring with TAS directional bias cues (green = bullish, red = bearish). You'll know when markets are in or out of balance. TAS Navigator is a versatile indicator that identifies when momentum is increasing or decreasing. Know when trend exhaustion is likely and prepare for market turns. TAS Ratio shows price divergence and when markets may be overbought or oversold. It s an exceptional tool for early identification of counter-trend trading opportunities. TAS PCLs (price compression levels) are two related indicators that provide 3 or more levels of support and resistance. "Statics" PCLs remain set for the day and "Floaters" adjust dynamically.

4 Installing the TAS Market Profile Charting Package on Tradestation You ll install the indicator suite through Tradestation s TradingApp store. Your possession of this guide likely means you ve already completed this process but it is described here for those who may need it. 1. After logging into your Tradestation account on search for TAS Market Profile or simply click here to be taken to our product page: ck This URL is subject to change, so we recommend using the TradingApp store s search function to find us. 2. On our product page, choose either the free trial or the subscribe option to optain access to the indicators. As shown below, it s on the top right of the page, below the price. 3. Agree to the terms if you wish, and the site will begin the download process. It will present you with the button to download the actual files the next time you use the Tradestation software.

5 Inserting and Modifying the Indicators on a Chart We have included a sample workspace in your TradingApp store package. We recommend reviewing it when you begin using our software as this will give you a good starting point for building your own workspaces. Recommended input parameters and indicator combinations have been included to give you an idea of common usage of TAS Market Profile indicators. Click on the "Launch" button in the TradeStation TradingApp Store Dashboard to launch a sample workspace for the product. To insert an indicator into a chart, follow these instructions:

6 1. Right-click in any chart and select Insert Analysis Technique 2. In the Indicators tab, select the TAS Market Profile indicator you wish to insert, like in the image. Then click OK.

7 To modify an indicator: 1. Right-click the chart again and choose Format Analysis Techniques. When that window opens, select the indicator to modify and choose the Format button. 2. From here you can adjust colors and parameters, like shown in the image below. You can also adjust scaling of the indicator, which for some indicators (not just TAS) can be used to

8 display the indicator either on the price bars themselves or another axis.

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10 Overview Market participants know the value of accurate, timely, responsive, and distilled market-generated data. By distilled, we mean data that has been stripped of the unwanted market noise and presented to traders as information in a screen-based format that s clearly presented, intuitive, and most importantly actionable. At TAS Market Profile, we believe there are few chart-based market presentation formats that effectively present what a market is trying to do and either succeeding or failing to do as those developed by J. Peter Steidlmayer in his creation of Market Profile in the 1980s. Market Profile is a statistically based method of aggregating market-generated data and presenting it in an informational profile format that reveals the true auction that is taking place in a market. This flexible format allows a two-dimensional view of the markets that clearly illuminates the relationship of two mutually exclusive phases of market activity taking place: Horizontal price development which is a fair price area in the market where supply and demand are in relative balance, accommodating both buyers and sellers Vertical price non-development which is an unfair price area in the market where either supply or demand are in relative imbalance, accommodating either buyers or sellers but not both At TAS Professional, we instinctively knew that Market Profile provided the right answers we wanted to know about the market. But one of the challenges inherent in Market Profile was the steep learning curve associated with gleaning the right information from the profiles. And there was an additional subjectivity in its interpretation that left us wondering: Is there a better way to use the core concepts of Auction Market Theory and Market Profile and yet simplify the presentation to its actionable components? It was the need to overcome these inherent challenges that lead us to develop the TAS Market Profile Charting Package. After years of ongoing development, we developed this suite of trading tools that have allowed us, market analysts, and clients around the world to make some very good market calls. Properly reading and interpreting the market is an endeavor that is as unique of an experience to one person as it is to another. However, when it comes to trading tools, market participants want them to timely and accurately perform six main functions: Provide intelligence and insight into the broader market structure while at the same time, helping us pinpoint precise entries

11 Speed up analysis of trading conditions in multiple time frames (and quite often in multiple trading instruments) Improve accuracy in reading the market s subtle clues of imminent change in market activity, regardless of time frame being observed Improve decision making ability by offering multiple and simultaneous views and perspectives of varying market conditions and environments Tightly manage risk in all trades while preserving profits in both directional and non-directional trades Help market participants relax, observe, analyze, interpret, and make good decisions about high probability situations while the computer does the laborious background analysis of trading levels, volume, volatility, and the like Specifically, the TAS Market Profile Charting Package will help you to: Clearly read, interpret, and understand where the concentration of crowd activity is located to make incisive interpretations and timely decisions that are suitable to your application Read, understand, and make decisions based on the two phases of market activity the only two events that repeatedly occur in the market Make better decisions by properly interpreting volume-at-price, volatility, pivot levels, momentum characteristics, and other key market attributes and characteristics in all time frames Avoid neutral, low-odds areas in the market saving time, money, energy and frustration on go-nowhere situations Improve market timing and reward-to-risk by understanding where the crowd is lending demand-support in a declining market or supply-capping a rising market Analyze and trade the market on your terms according to your tactics, strategies, and methods which can now be supplemented by the TAS Indicator Suite.

12 TAS Boxes TAS Boxes displays a dynamic representation of developing balance and imbalance areas by measuring volume-at-price, a statistical method for aggregating trading data that has its roots in Auction Market Theory and Market Profile. Profiles are displayed as a series of three horizontal lines. The profiles are calculated based on the price action from the previous profile and new profiles are derived from a proprietary swing and momentum algorithm that dynamically calculates the next Boxes profile. Specifically designed for profiling securities that have a volume component. TAS Boxes is usable on all time frames The longer the time frame, the more robust the support and resistance areas are that are identified by the unfair low and unfair high Use to identify low risk, high probability areas to trade while measuring relative volatility The top/bottom lines of TAS Boxes profiles are the interim unfair high and unfair low areas, respectively. The middle line represents the high volume node or point of control which is the area where the most volume occurred in that balanced area. When price is trading inside TAS Boxes profiles, it depicts an interim state of market balance, an area of trade that is deemed fair to both sides. New profiles form after the market moves away from balance to imbalance when new valuations are detected from market data. When price goes into imbalance, either a new set of TAS Boxes profiles will form or price will be pulled back into the existing profiles.

13 TAS Boxes Applications When price is bracketed inside a TAS Boxes profile, the top line is considered a supply area (resistance) and the bottom line is considered a demand area (support). When price moves outside the top of a TAS Boxes profile (a) a breakout has occurred; (b) the market bias is directional to the upside; (c) and the relative vertical speed of movement through price levels will likely increase. When price moves outside the bottom of a TAS Boxes profile (a) a breakdown has occurred; (b) the market bias is directional to the downside; (c) and the relative vertical speed of movement through price levels will likely increase. When breakouts and breakdowns occur above and below TAS Boxes profiles, there is a high probability that the new directional move will remain intact until a new TAS Boxes profile occurs. Previous TAS Boxes profiles to the left in the chart are support or resistance areas where the market will either pause and reverse or pause, consolidate, and then resume the current directional move. Input Parameters: 1. MinSignal_123: Sets the signal strength to be considered when forecasting market swings. 1 = weak; 2 = medium; 3 = strong. 2. Length: Sets the look-back period for the momentum oscillator from which swings are derived. 3. MapLength: The length, in bars, of the internal profile map that TAS Boxes creates to determine the three key value areas it displays. TAS Vega

14 TAS Vega is a combination indicator that takes several key TAS concepts and wraps them into one easily read indicator. It doesn t get much easier than TAS Vega s stop/go, red/green system. We ve boiled down the best of Market Map, Boxes and other classic TAS algorithms and created Vega to plot trade ideas that are as easy to follow as green for longs and red for short. You ll find TAS Vega in the Paintbar section of Tradestation s indicator list. Input Parameters: 1. SIGNALSTRENGTH: Use this input like TAS Boxes. Enter 1 for quick movements; 2 if you d like to wait for stronger signals; 3 if you re only interested in the strongest signal 2. BOXESLOOKBACK: How many internal Boxes to look back on to find signals. (Note: Boxes are not shown on Vega they are internally calculated and used as part of the algorithm) 3. ATRLOOKBACK: Another factor in creating Vega s internal Boxes, this input determines the length, in bars, you want each box to use in its calculations 4. NUMOFBOXES: Since Vega uses internally-drawn boxes, this input tells Vega how many boxes to use in its calculations when analyzing historical data. Higher number here denotes a longer look back in history 5. COMPTHRESHOLD: Higher numbers here mean you re looking for breakouts (or breakdowns) to be more severe before you re ready for a long or short signal 6. ATRSTOP: Related to Vega s built-in stop functionality. Higher numbers make stops tight 7. ATRPROFITS: Higher numbers make Vega s built-in target system greedier 8. ATRLENGTH: This is used in Vega s calculation of its targets and stops algorithm. Higher values take more historical data into consideration 9. STOPONTOUCH: Since Vega has a built-in stop function, making this 1 will stop Vega out even if a tick hits its stop. Setting to 0 will cause Vega to stop out only if the bar closes beyond its stop price

15 TAS Navigator TAS Navigator is a versatile indicator that combines several signals to provide multiple types of actionable information about underlying trading conditions. Navigator is a composite indicator that combines classic trend and volatility indicators to highlight trend, non-trend, momentum, potential exhaustion, and reversal points. Rich colorful display of multiple algorithms that is usable on any time frame Indicates which side of the trade to be on where there is the highest probability of going in the direction of capital flow and which side to avoid where there is lesser capital flow Measures momentum and relative strength or relative weakness of underlying trend Indicates price divergence and peak conditions Shows shifts in market conditions from one phase to the next: uptrend, countertrend short, downtrend, and countertrend long Key Concepts: When the Navigator histogram is green or red, a long or short trend, respectively, is in place. When the Momentum Histogram switches color from green to dark green or red to dark red, trend momentum is slowing and countertrend trade opportunities may be indicated. Magenta bars indicate trend exhaustion / peaking trend conditions and potentially indicate that the end of the present trending move is a high probability even. Use the color-coded zero line to quickly assess relative volatility as well as identify broader areas of support and resistance. Yellow indicates a market that is supply balanced; cyan indicates a market that is supply imbalanced. Relative peaks of the Momentum Histogram will provide further insight on momentum. Consecutive histogram peaks further away from zero line indicate increasing momentum where consecutive peaks closer to the zero line indicate decreasing momentum. Input Parameters: 1. Raw: Sets the lookback period for the histogram 2. Smoothed: Sets the slow-smoothing factor for the histogram

16 3. MABars: Sets the number of historical bars to use for the moving average line 4. SLength: Sets the look back period for calculating market consolidation state which is displayed on center line 5. SDevs: Sets the standard deviation for calculating market consolidation state which is displayed on center line 6. SATRs: Sets the standard deviation for calculating the average true range used 7. PLEN: Another averaging input. Longer periods take more historical data into account TAS Ratio TAS Ratio is a leading indicator which helps with the forecasting of short-term price movements. It is best used for gauging target areas for entry and exits points. Ratio was designed to identify when price movement is confirmed by volume and volatility and when market moves lack momentum, conviction, and follow through Ratio levels are determined using daily data or a defined time range within a 24-hour period, however Ratio is applicable for intraday charts only Ratio provides helpful information for determining potential day trading targets in either direction Key Concepts: Ratio is most helpful at confirming when price may be at an area of divergence to locate and target higher probability entries and exits. As a rule of thumb, price should move freely in same direction of the indicator and in proportionate range of movement. When price fails to move proportionately, as much as Ratio moves or stalls, this divergence alerts you to focus on immediate areas of support or resistance using other TAS Indicators such as Navigator, Statics, Market Map, etc. When price stalls and Ratio does not stall, this is a good indication to seek other confirming factors for a counter-trend trade. Use other TAS Indicators for confirmation such as Navigator, Statics, and Market Map. Input Parameters: 1. RangeBars: Overall historical bars you re considering for calculation 2. AvgBars: A smoothing average is applied based on this number of bars 3. MABars: A second level of moving average is applied using this number of bars

17 4. ExtremeLvl: denotes how far above or below the zero line you want to consider extreme; the color changes for extreme movements TAS PCLs TAS PCLs (price compression levels)use price-volume analysis and multiple time frame confluence to calculate and display areas that have a high probability of providing support and resistance, as well as intraday targets. TAS Statics levels are set upon the open of the trading session and remain at the same levels (hence, static ) throughout the session TAS Floaters use the exact same algorithm but determine the start and end of a trading period based on swings in price. For example, the beginning of the last swing is considered the beginning of the day. The PCLs algorithm determines levels using daily data or a defined time range within a 24-hour period TAS Statics are applicable only to intraday charts; TAS Floaters can be used on any timeframe Provides information for determining support and resistance levels, as well as potential intraday trading targets in either direction Key Concepts: When price is trading inside Center Lines, a market is said to be balanced

18 When price is trading below Center Lines, market bias is anticipated be to the downside When price is trading above Center Lines, market bias is anticipated be to the upside Use PCLs as a guide to multiple intraday support and resistance levels for both entries and targets Red PCLs are projected rotational highs and lows. When price is trading outside red PCLs, markets are considered to be trending A tightly compacted concentration or overlapping of Center Lines designates an area of particularly strong support/resistance level that provides a high probability, lower relative risk area for entries of extended directional moves When Center Lines are spread out over a wider range, watch for a more rotational and less directional trading session If a Center Line is plotted Input Parameters: 1. MinSig123: (Floaters only) This is used like Boxes in that it determines the strength of the price swings that are used to determine the beginning and end of the trading session 2. Length: How much historical data, in bars, you want to consider when detecting price swings 3. PlotR1: Show this line, true or false 4. PlotR2: Show this line, true or false 5. PlotR3: Show this line, true or false 6. PlotS1: Show this line, true or false 7. PlotS2: Show this line, true or false 8. PlotS3: Show this line, true or false 9. PlotC1: Show this line, true or false 10. PlotC2: Show this line, true or false 11. PlotC3: Show this line, true or false 12. PlotC4: Show this line, true or false TAS Market Map

19 TAS Market Map dynamically calculates and displays a sideways, color coded frequency distribution histogram by measuring Volume-at-Price, a statistical method for aggregating trading data and measuring probability that has its roots in Auction Market Theory and Market Profile. Market Maps are set to a user-definable fixed number of look back bars and can either remain fixed in place or move forward one bar at a time as new bars are printed on a chart Provides key insights about where the market is likely to move slowly and develop horizontally through time versus where the market is likely to move rapidly and vertically through price levels Adaptable to any time frame or tradable instrument that has volume Ability to place multiple right-facing and/or left-facing Market Maps of different look back lengths on the same chart or repeat a set look back period. To make it face the opposite direction, just switch the values for Bar1 and Bar2 Customizable profile line density (horizontal line resolution) with key-area highlights Key Concepts: Market Maps reveal that markets have the tendency to trade slowly and horizontally while within the red areas of the Market Map and trade rapidly and vertically while outside the developed red areas. Market Maps are especially intuitive in large time frames in terms of orienting traders to the general tone and tempo of the market. When price is inside the red areas, the market bias is horizontal and we anticipate strong support and resistance at the extremes of the value area. Input Parameters: 1. Bar1: The bar number of one end of the Market Map. Uses the Tradestation system of 0 being the current bar. So, for example, Bar1 = 0 and Bar2 = 50 will have one Market Map from the current bar going back 50 bars to the left. 2. Bar2: The bar number of the other end.

20 3. NumPriceBins: How thick, in number of lines, you want the Map to be. Pure aesthetic option. Support If you need support, please visit our support page: Toll-Free: TASHELP U.S.: Risk and Disclosure Statement: There is a risk of loss in trading stocks, commodity futures, options contracts, and forex. This risk can be substantial and therefore investors should carefully consider their financial suitability prior to trading. Investors must fully understand the risks involved and must assume the responsibility for the results. Past performance is not necessarily indicative of future performance. In no event should the content of this website be construed as an express or implied promise, guarantee or implication by or from, TASMarketProfile.com or its affiliates, that you will profit or that losses can or will be limited in any manner whatsoever. Information provided on this website is intended solely for informative purposes and is obtained from sources believed to be reliable. Information is in no way guaranteed and is provided as a courtesy only. Our products are provided solely for educational purposes and in no way should the comments or strategies discussed be considered a solicitation to buy or sell commodity futures, options, securities, ETFs, Forex, or any other financial instrument. Therefore, we do not provide personalized trading advice to individual subscribers and you should contact your brokerage firm directly for assistance specific to your account risk tolerance and capital. Examples of historic price moves or extreme market conditions are not meant to imply that such moves or conditions are common occurrences or are likely to occur. Stop loss orders do not necessarily limit you loss to the stop price because stop orders, if the price is hit, become market orders and, depending on market conditions, the actual fill price can be different from the stop price. If a market reached its daily price fluctuation limit, a "limit move", it may be impossible to execute a stop loss order. THE RESULTS SHOWN ARE BASED ON SIMULATED OR HYPOTHETICAL PERFORMANCE RESULTS THAT HAVE CERTAIN INHERENT LIMITATIONS. UNLIKE THE RESULTS SHOWN IN AN ACTUAL PERFORMANCE RECORD, THESE RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, BECAUSE THESE TRADES HAVE NOT ACTUALLY BEEN EXECUTED, THESE RESULTS MY HAVE UNDER OR OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED OR HYPOTHETICAL PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN. Please realize that TASMarketProfile.com is not a brokerage firm nor do we endorse any particular brokerage firm.