Markets in Profile

Markets in Profile explores the confluence of three disparate philosophical frameworks: the Market Profile, behavioral finance, and neuroeconomics in order to present a unified theory of how markets work.

Auteur

JAMES F. DALTON has been a pioneer in the popularization of the Market Profile, a unique method of identifying trading/investment opportunities. Most recently, Mr. Dalton was director of research for managed accounts at UBS Financial Services. He began his career in the investment industry as a broker with Merrill Lynch and Shearson Lehman. ROBERT BEVAN DALTON is a freelance writer and creative director for a variety of agencies, organizations, and nonprofits in the great northwest.

ERIC T. JONES has observed markets and investors throughout his twenty-three years of developing investment products and leading investment manager research teams.

Texte du rabat

Praise for MARKETS in PROFILE "Good books teach, but the best books enlighten. Markets in Profile is much more than a lucid explanation of the Market Profile and its application; it is an enlightening perspective on auction markets and the principles underlying all trading, regardless of time frame. Clearly written with many practical examples, Markets in Profile moves seamlessly from trading how-to's to trading psychology and back again, emphasizing the trader's dual challenge of understanding markets and understanding self. In so doing, authors Dalton, Dalton, and Jones have produced a worthy successor to their classic Mind over Markets." --Brett N. Steenbarger, PhD, author of The Psychology of Trading and Enhancing Trader Performance "Markets in Profile is a brilliant, insightful work that should be required reading for any trader. Dalton, Dalton, and Jones will transform your trading technique through their unique knowledge of the markets and understanding of trading psychology." --Martin Sheridan, commodities trader, NYMEX member "This book provides a fresh approach to behavioral finance--ideas that I have used to great benefit." --Gregory A. Ehret, Senior Managing Director, State Street Global Advisors "Few people understand the dynamics of the auction process as well as Jim Dalton. Market Profile offers a graphic representation of this process and Markets in Profile illustrates Jim's mastery of it." --Steve Dickey, Vice President of Market Data Products, Chicago Board of Trade "Market data speak volumes and Jim Dalton has deciphered the code. In Markets in Profile, Jim shares his techniques of profitable trading in a most readable and entertaining format. Serious traders, both professional and amateur, should benefit from the application of Jim's volumetric approach to reading what investors are telling us through their collective buy-sell transactions." --Walter Sall, professional investor

Contenu

Preface xi

Acknowledgments xix

Chapter 1 The Only Constant 1

The Creation of ERISA 4

The Rise and Fall of Relative Performance 4

The Fall of the Great Bull 6

The Rise of Absolute Return 7

Succeeding in an Absolute Return Market Environment 8

Pure, Unbaised Information 10

People Change Markets, Markets Change People 13

Chapter 2 Information 15

Fundamental Information 16

Rational or Irrational? 18

Market-Generated Information 19

The Auctions 20

Fair Value 21

Market Profile Fundamentals 22

Authors' Note 22

Demystifying Market Behavior 27

Chapter 3 Timeframes 29

Breaking Down Market Timeframes 31

Scalper 32

Day Trader 32

Short-Term Traders 32

Intermediate Traders/Investors 33

Long-Term Investors 35

Your Timeframe Is your Strategy Cornerstone 39

Chapter 4 Auctions and Indicators 41

The Search for Value 42

Concept Review 45

Key Market-Generated Indicators 48

Perfecting the Art of Visualization 56

Chapter 5 Long-Term Auctions 59

Auctions in Action 60

The Compound-Auction Process 61

The EBB and Flow of Balance 62

Where Do Trends End and Brackets Begin? 64

Clarity in the Maelstrom 66

The Big Picture 68

Asymmetric Opportunities and Risk 72

Long-Term Strategy Development 74

Assembling the Big Picture: Context within Context 75

Chapter 6 Intermediate-Term Auctions 77

Convergence and the Bracketing Process 77

Defining the Intermediate Term 79

The Transition from Bracket to Trends 80

The Transition from Trend to Bracket 82

The Convergence of Intellect and Emotion 85

Accelerate the Learning Process 86

Prelude to a Sea Change 87

Hear the Bells A-Ringing 94

Countertrend Auctions 94

The Quest to Do Better than ''Normal'' 96

Oh, the Difference a Few Points Makes 97

Chapter 7 Short-Term Trading 99

Analyzing Short-Term Markets 101

Common Mind Traps 104

When and Where to Look for Short-Term Trades 105

Opportunities Around Intermediate-Term Brackets 106

Technical Indicators 106

Your Own Worst Enemy: Your Brain 110

Seeking the ''Exceptionally Tasty Patterns'' 112

All Prices and Opportunities Are Not Equal 116

Ongoing Forensic Investigation 121

Looking for the All-Important Reference Points 124

Never Be a Laggard 129

A Golden Opportunity 130

Fade the Extremes, Go with Breakouts 132

''The Expert Reasons Contextually'' 137

Chapter 8 Day Trading Is for Everyone 141

What's a Day Trader to Do? 142

What You Don't Do May Be More Important than What You Do 145

The Real World in Action 146

Top Down 152

Lack of Conviction 152

Flight to Safety 153

Inventory Imbalances 154

Correction of Inventory Imbalances 155

Trend Traders' Trap 157

Market Condition 158

Yesterday's Trade 162

Example 1 162

Example 2 165

Example 3 167

Trader Checklist 170

The Market Is Open 171

Open-Drive 171

Open-Test-Drive 175

Open-Rejection-Reverse 178

Open-Auction 181

Day Trader's Checklist 181

Example 1 183

Example 2 185

Example 3 188

Practice, Practice, Practice 190

Chapter 9 Profiting from Market-Generated Information 193

Timeframe Diversification 194

The New Paradigm 196

Appendix A: Market Update 199

About the Authors 201

Index 203