Volume Patterns – How to Spot the Professionals at Work

01.04.2010

Volume Patte V e erns – How t Spot the P to t Profess sionals at s Work W
By analyzing average trade size you can se when th Professi y g ee he ionals are at work – buying lo and sell ow ling high.

Summary of wha you’ll l y at learn in the feat ture artic below cle w:
 The B Better Pro Am indicat tors use a proprietary algorithm to analys average trade size y m se e e and identify Pro ofessional a and Amate activity eur y.  Profe essionals ac before the trend changes, bu ct uying on down bars a and selling on up bar g rs. Amat teurs chase the trend buying o up bars and selling on down bars. e d, on g  The S Stopping V Volume and Profit Tak d king volum patterns show Prof me s fessional accum mulation and distribu ution and a seen be are efore a trend change e.  The N Demand No d/No Supp volume patterns show a tren has run out of ste ply s nd n eam.  The R RAMBO (Re eversal of A Amateur B Break Out) volume pa attern is of ften seen at market a turnin points a Amateurs get "wro ng as ong footed d".  The B Better Pro Am volume patterns work in an time fra ny ame (tick t monthly charts) an to y nd for an market (futures, s ny stocks, forex, etc.), however, t h the Profess sional and Amateur A Paint tBars are b best used o tick char on rts.

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Volume Patterns – How to Spot the Professionals at Work

01.04.2010

Professional and Amateur Activity Can Be Seen On Individual Bars…

Volume Patterns: Professionals and Amateurs (Emini 1,500 tick)

The Better Pro Am indicators use a proprietary algorithm to analyse average trade size and identify Professional and Amateur activity. Professional bars are painted blue and Amateur bars are painted yellow (default colors, can be changed). Since Professionals trade in size they need to buy on down bars and sell on up bars – before the trend changes. By contrast, Amateurs are always chasing the trend and buying or selling breakouts – so doing the opposite of Professionals, buying on up bars and selling on down bars.

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Volume Patterns – How to Spot the Professionals at Work

01.04.2010

And Helps Understand Market Structure and Trend Direction

Volume Patterns: Professionals and Amateurs (Emini 1,500 tick)

By looking for these Professional and Amateur volume patterns you can get a good sense of where the Professionals are entering trades and taking profits. In my trading I look for Professional and Amateur activity at price extremes and then watch to see how price reacts to determine trend changes. This approach takes quite a lot of interpretation and practice – but it's well worth it once you get the hang of it. A useful tip, to make things easier, is to ignore Professional and Amateur activity that occurs during price congestion. Concentrate on Professional and Amateur bars on price extremes. Here's another example: Volume Patterns – A New Take on the Double Top. Note: The Professional and Amateur PaintBars are designed to be used on tick charts.

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Volume Patterns – How to Spot the Professionals at Work

01.04.2010

Professional Accumulation and Distribution Is Seen Early…

Volume Patterns: Professional Accumulation & Distribution (Emini 1,500 tick)

Included in the Better Pro Am indicators are 4 of my favorite volume patterns. Three of these volume patterns indicate Accumulation and Distribution:  Stopping Volume (St and St* on chart)  Profit Taking (PT on chart), and  No Demand and No Supply (NoD and NoS on chart) Stopping Volume and Profit Taking show Professionals are reversing their positions. However, the Professionals trade in size and need to scale in and out of positions. So these volume patterns are often seen before the market eventually reverses. The No Demand and No Supply volume pattern is often seen at market tops and bottoms. It indicates there is a lack of buying volume at market tops to push price to new highs, or lack of selling volume at market bottoms. This volume pattern often confirms a change in trend. In my own trading, I use clusters of these 3 volume patterns as confirmation of trend changes, not necessarily as entry signals. Note: The Stopping Volume and No Demand/No Supply volume patterns included in Better Pro Am are improved versions of the free ones available on this website.

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Volume Patterns – How to Spot the Professionals at Work

01.04.2010

And Amateurs Usually Get Wrong Footed

Volume Patterns: RAMBO = Reversal of an Amateur Breakout (Emini 1,500 tick)

The fourth Better Pro Am volume pattern is called "RAMBO" – which is short for Reversal of Amateur Break Out. Marked on the chart with the text 'R'. The logic behind this volume pattern is that break outs led by Amateurs often fail. Amateurs are always chasing price, entering late and expecting a breakout from congestion to turn into a trend move. Professionals will fade this behavior, drive price back into congestion and gun the Amateur stops.

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Volume Patterns – How to Spot the Professionals at Work

01.04.2010

Volume Patterns Are Best Traded with Confirming Indicators

Volume Patterns: Better Pro Am, Sine Wave and Momentum (Emini 1,500 tick)

Nothing is perfect and I don't believe you can trade with these Professional and Amateur volume patterns alone. However, in my own trading they are an essential part of confirming a change of trend and signaling entry points. I use Better Sine Wave and Better Momentum to confirm high probability trades:  Better Pro Am shows me what the Professionals and Amateurs are doing  Better Sine Wave shows me price cycles and trends, and  Better Momentum shows me buying and selling volume momentum The chart above shows a trend change and how these 3 indicators came together: 1. 2. 3. 4. 5. Better Momentum signaled exhaustion selling volume Professionals take profits on their Short trades and get Long An early false rally is led by the Amateurs and the lows are re-tested Amateurs are expecting a break to new lows but the Professionals step in Bullish divergence on Better Momentum coincides with an "End of Trend" warning signal on Better Sine Wave

The market ends up putting in a low at 1,060 and rallying to 1,075 before Professionals take profits and we get exhaustion buying volume.

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Volume Patterns – How to Spot the Professionals at Work

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What's The Difference Between Better Pro Am & Better Volume?
The Better Pro Am PaintBars (blue and yellow bars) identify Professional and Amateur activity using average trade size. Professionals trade in size; Amateurs trade in singles and doubles. So analyzing average trade size directly identifies Professional and Amateur activity. Better Volume infers Professional activity by looking for large volume but relatively small range bars – "High Churn" bars. The assumption is that Professionals can enter/exit without moving price significantly. Part of the reason they can do this is that they enter/exit at price extremes. Amateurs are seen on low volume bars. In my personal trading I've switched 100% to Better Pro Am from Better Volume. Better Volume was/is a great volume indicator – I made a lot of money with it plus got recognition and website traffic by releasing it as a free indicator. But times change, trading methodologies evolve and it's time to move on.

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Volume Patterns – How to Spot the Professionals at Work

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What People Are Saying About The Better Pro Am Indicators
“I think your Better Pro Am indicator is brilliant … It's a really clever idea measuring the average trade size to check the Pro's and Am's. There is nothing else out there like it that I know of.” Mark L. “Better Pro Am has really helped me … yesterday the paint bar showed the Professionals loading up in the morning before the big drop. As the market cycled back and forth every time it made it back to the top of it's range the Pros stepped in. Thank you.” Paul P. “Just love the Better Pro Am, thanks so much. This morning made 4 small trades and all winners. Knowing what the Pro's are doing makes all the difference.” Herb C.

The Better Pro Am Indicators
The Better Pro Am indicators shown in the videos and charts above are now available for sale and immediate download. Here's what you get:  Better Pro Am Indicator, PaintBar & ShowMe for TradeStation or MultiCharts  Professional and Amateur PaintBars (blue and yellow bars)  No Demand and No Supply volume patterns ("NoD" and "NoS")  Profit Taking volume pattern ("PT")  RAMBO (Reversal of Amateur Breakout) volume pattern ("R")  Stopping Volume pattern (two variations "St" and "St*")  EasyLanguage Function to program your own systems & indicators  All the indicators have alerts so you can be warned when new signals occur  Locked code Better Pro Am FAQs More Screenshots Volume Patterns

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Volume Patterns – How to Spot the Professionals at Work

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Distribution: You may distribute this report freely, and/or bundle it as a free bonus with other products, as long as it is left completely intact, unaltered and delivered via this PDF file. You may also republish excerpts as long as they are accompanied by an attribution link back to http://Emini–Watch.com. This report contains no affiliate links. Disclaimer: Futures and options trading have large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the futures and options markets. Don't trade with money you can't afford to lose. This is neither a solicitation nor an offer to buy or sell futures, stocks or options. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed here. The past performance of any trading system or methodology is not necessarily indicative of future results. If you decide to invest real money, all trading decisions should be your own. CFTC Required Disclaimer: Hypothetical or simulated performance results have certain inherent limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not actually been executed, the results may have under– or over–compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation in being made that any account will or is likely to achieve profits or losses similar to those shown.
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