GBP/USD Nearing Interesting Price

GBP/USD nearing an interesting price. If it were to break lower, it could move quite a way, until it finds the next major support.

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GBP/USD Scalping using High Volume Nodes

When price is moving it is looking for liquidity, i.e. new buyers or sellers. In this case, GBP/USD has been moving lower all day after UK retail sales figures, and on back of strengthening USD. The price is moving lower to find more buyers - this is most likely in areas of previous high volume (High Volume Nodes on the profile). I made small 10 pip scalp trade on just such an area.

Low Volume Nodes can also be a good place to enter, since it shows that price was previously rejected there.

More information on the Composite Profile that I used in this trade can be found here.

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Composite Profile - with new time-based colouring

An example of how I'm using the new time-based colouring effect for the Composite Profile.

In this case, price is entering an older area, which is also an LVN and a big round number "00" level, so it was a long opportunity. In the end, I wasn't happy with the speed of the trade (bit sluggish this morning since it is US NFP in a few hours), so I closed the trade early.

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USD/JPY Scalp using Low Volume Node and Big Round Number

USD/JPY Scalp using Low Volume Node and Big Round Number.

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Composite Profile Release 23

I've just uploaded a new version onto the server.

Release 23:

• Added new date-based colouring effect
• Added new "tool-tip" style

The new colouring effect, colours the profile's price bins according to how "old" they are, i.e. how long since price last touched that level. The colour is generated using the rainbow effect with red as the most recent, and blue as the oldest. 

The new "tool-tip" styles provide additional summary information about the profile and individual price bins when the mouse cursor hovers over the profile.

More information about the Composite Profile can be found here.

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New display mode for the Composite Profile

Just playing around with a new display mode for the Composite Profile. This colours the profile's price bins according to how "old" they are, i.e. how long since price last touched that level. The colouring is using the rainbow effect with red as the most recent, and blue as the oldest.

The idea behind this was to see more clearly on the profile when price was approaching an area that was not visited in a while.

I'm still experimenting with it. It might not make it into the next version.

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GBP/USD Volume Profile and "Big Round Numbers"

Using the Composite/Volume Profile on GBP/USD. High Volume Nodes (HVNs) and Low Volume Nodes (LVNs) and "big round numbers" (e.g. 1.2400, 1.2600, etc.) acting as good trading levels.

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Updated Candle Profile and Composite Profile

Just uploaded updates to these 2 indicators. This is a cosmetic update, which has improved the graphics for the "Real buy/sell volume" mode.

The "Real buy/sell volume" mode, uses FXCM's "Directional Real Volume" indicator to create volume profile of buy and sell volumes, and it also computes the "delta" (as buy volume - sell volume).

The "Directional Real Volume" indicator is available from FXCM Apps. Unfortunately, FXCM only provide this "real volume" data for high liquidity major forex pairs.

Note: Candle Profile and Composite Profile work for any instrument, but in the absence of "real volume" data, only tick volume or TPO can be profiled.

Candle Profile shows the volume distribution on each candle, e.g. for each D1 candles...

Composite Profile shows the volume distribution over longer periods, e.g. for last 20 days...

More information can be found here and here.

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High Volume Nodes (HVN's) act as price magnets

High Volume Nodes (HVN's) are areas where lots of trading has taken place, price will often continue to trade in a choppy fashion around these areas. Previous areas of high volume can act as price "magnets" when the price revisits the level after some time.

In the following chart I have created a volume profile of last 10 weeks. Today's increase inflation data from UK has sent GBP/USD higher, and it reached out to this prominent HVN. It also broke through an LVN, which might provide support in the future (i.e. the rule "prior resistance becomes support").

However, BREXIT and "Article 50" is going to be big issue next week (UK triggering formal leaving EU process on 29th March), so I expect a lot of volatility over the next few days.

More information on the Composite Profile indicator can be found here.

Took a couple of nice trades on the GBP/USD today using this HVN, and the LVN above it.

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Low Volume Nodes (LVNs) for Support / Resistance

Low Volume Nodes (LVN's) are areas where little trading has taken place, usually where price was rejected, or price moved through the area quickly. These can often provide a good objective source of support/resistance levels.

In the following chart of GBP/USD (H1) I've created a 20-day price profile using the Composite Profile indicator, and it's automatically showing LVNs, many of which have been good support/resistance levels.

GBP/USD is currently at an LVN now, that I expect to provide some resistance, and I've already taken 3 scalp trades in this area, for a total of 15 pips so far.

More information on the Composite Profile indicator can be found here.

And some time later, my last trade bags a nice return.

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New Release for Market Profile and Composite Profile

I've just uploaded a new release for the Market Profile and Composite Profile indicators.

Market Profile (Release 19):

• Added �Quarterly profile� option

Composite Profile (Release 21):

• Added option for �Quarterly� profiles (current quarter and previous quarter)

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Composite Profile, Market Profile and Footprint Updates

I've added "label colour" options to these 3 indicators. This is a workaround for a bug in the last version of the MarketScope platform (which set all labels to black, making them not visible with dark backgrounds).

Profile (Release 18):

• Added label colour option

Composite Profile (Release 20):

• Added label colour option

Footprint (Release 12):

• Added label colour option

The updated versions are on the download server. More information on these indicators can be found here.

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