Detailed chart analysis of past trading action
Identified where reversion and break-out trading occurred
The image below is the chart of iShares Leh 20yr Treasury Bond TLT ( ARCX Ticker Symbol: TLT ).
It is a multi-days chart showing Composite Time Price Opportunity (TPO) Profile on the left side and Composite
Volume Profile on the right side.
This is an unique charting technique and requires some explanation on how to read the chart.
This chart shows more information than the conventional graphical chart. Reading this chart will stimulate
your whole brain. The left hemisphere of your brain which is responsible for logical, rational and analytical
functions will be engaged by the numerical data portion of the chart. The right hemisphere of your brain
which is responsible for the intuitive and subjective functions will be engaged by the graphical portion of
the chart. This gives you an advantage of engaging your whole mind when it comes to trading instead of using
just a section of it.
Time Price Opportunity (TPO)
Profile side-by-side to Volume Profile gives you a quick synopsis of
- which price levels received the most trading volume
- at what time during the trading session had it traded there
- how many times it had backfilled to those price levels
- where reversion trades worked for traders fading the move as price traded back and forth to form a cluster node
- see where and when break-out trades occurred as price spends very little time trading there
- VAH = Value Area High
- VAL = Value Area Low
- POC = Point of Control (i.e. where most of the trading volume had occurred)
- VWAP = Volume-Weighted Average Price
- BOO = Break-out Octet. Minimum stop loss risk on false break-outs
- BDO = Break-down Octet. Minimum stop loss risk on false break-downs
- Each TPO letter represents half hour intervals
- TPO letter A marks the beginning of the regular trading session
- TPO letter M marks the end of the regular trading session