1 Attachment(s) I thought I'd start this thread to supplement the discussions from the indvidual trading forums. This helps keep things organzied and that I will update easily. The benefit is going to be that traders can observe the value curve grow during the month.

For TradeStation users, I've included the ELD if interested.

What's Price Distribution?

The Price Distribution study utilizes cells to show the range of prices for each period inside the price bar. In my case I use 30 minutes. The number of cells distributed on any one row or one of rows reveals a lot of the ActivityData periods the price occurred.

My Price Distribution studies are not Market Profile although quite similar. No volume is used since no volume is currently available for Forex from a centralized exchange.

If you do not understand the value curve, then you should seek out information and study it as it really isn't the intent of the forum to edue it. The intent is just to examine price levels inside the curve for short term trading.

Here we'll concentrate on the monthly development.There are a few simple terms to understand.

The Longest Line - This price amount reflects the price at which the most trading has happened during the month.

The Yellow Value Area - The box pictured represents a 2% deviation from the maximum line. In addition, I compute the 1 percent deviations. I will list all those levels in the updates.

Worth Area Updates - As value grows during the month, the levels will change. It's totally based upon where price trades inside the curve. If the longest line varies, then the deviations will alter. Early in the month, and this is where we are as of the post, the changes are more frequent because the information is spread over a smaller range (nromally). Later in the month, it may take a lot of action to modify values.

I will post updates as necessary and also do my best to maintain up so that you can see how things operate. Of course I refer to other months in my research, but the distance confinements here do not allow me to post big charts. This chart is most likely too big for many already.

I will try to examine what I find to help anyone who's interested. This can be a total methodology if you are so inclined, or you may just like to utilize it as an additional item of information in your current research. As the month progresses, the levels can become very large and this may not match many traders. You might also do this on a weekly basis when wanted.


UPDATED 5/7

2 percent Deviation - 1.5579
1 percent Deviation - 1.5521
Longest Line - 1.5462
-1 percent Deviation - 1.5404
-2 percent Deviation - 1.5359


Beginning Observations

Price traded today just above the base of value near the -2% amount. This is an excellent buy place. If price moves upward, expect an evaluation of their maximum line resistance at 1.5462.

The value area is growing quite well developed, however notice the monthly high price place. (Arrow) This region isn't fully developed. As price approached 1.5650 it had been rejected. Notice how the base of the curve in the highs started to grow and somewhat of a ledge is left. (Options Defense maybe). I've been EURO bearish recently, however that has changed my thoughts. I expect price to re-visit this region as it is unresolved. Now I also discover that the base of the current value place needs to fill in a little greater, so it wouldn't surprise me if price tries to maneuver up to 1.5463 or outside and then down to fill in.

As a result, I'm long out of the bottom of the curve. What occurs is that buyers and sellers will try to extend price to the extremes, beyond the 2% levels, to determine if price is approved. If it's value will grow. If it isn't accepted it will immediately return to the value place. (As was the situation this in the monthly highs of May). We have not test the region beyond the -2 percent yet, so this really is actually the risk. You will find that the 2% levels give an incredible quantity of supply and demand. Lately, in the EURUSD, you can observe that the -2% amount around 1.5360 has held firm. The extreme extensions up or down could be quite competitive and are usually trend days. 1 thing newer traders do not realize is that markets only trend a rather modest percentage of their moment, I've this number around 6 percent. The other 94 percent of this time is spent growing value over the curve as bulls and bears do battle locally. Better know as Range Trading. This is an excellent region to make money. Not easy to define clearly, but this is what the traders do to unsuspecting traders that expect for Porshe 911's early in their career.

Let's see what happens, as we advance this month. If you are a short term trader, try plotting the levels on a spare chart and play them for practice to determine what you think.

Overview

I'm extended at 5417.

Goal is an approach to 1.58 (as of now). I expect price to proceed to 1.5462 and maybe retreat. I could take some profit here and await price to move above 1.5462.

Risk is down a move below 1.5359 where value is approved and starts to build. I'll only cover if price settles below this field.

http://www.morrisfunds.com/storage/f...D 5-8-2008.PNG
https://www.nigeriaforextrading.com/trading-discussion/18-trade-curve.html