Using Tradovate To Trade Axia Futures Strategies Introduction

In this blog post, we will discuss how you can use Tradovate to trade Axia Futures strategies. The Tradovate platform has been developed ground up to offer low-latency execution and order-flow tools that go hand in hand with the approach Axia Futures preaches. At Axia Futures, our core focus is on leveraging tools such as DOM (Price Ladder), Market Profile, Volume Profile, and Footprint charts. All of those are essential parts of the Tradovate platform and we will have a look at the features that enable you to trade many Axia Futures strategies. Let’s get started.

Tradovate Trading Platform Overview

Introduction Into Tradovate

When you start with the Tradovate platform, you will notice that Tradovate built its platform on the principle of flexibility utilizing a grid system. Each block in the grid is called a module. You can add and adjust any module and customize your trading experience based on the information that is important to you.

In the module system, you have the ability to choose from many features that the Tradovate platform offers. A bread-and-butter tool used by every Axia Trader is the DOM aka Price Ladder. Additional tools such as Footprint, TPO, and Volume Profile charts can be found in the Chart section of the platform.

For code geeks, Tradovate also lets you build your own indicators. Head over to Code Explorer to create and modify hundreds of indicators.

When ready, you can save your module layout using the workspace template on the right.

Tradovate Using Footprint

Every order-flow trader must be familiar with the depth of the market. Given the speed of the DOM, many market activities are somewhat hidden from the human eye. For that reason, Tradovate added extra functionalities such as the Footprint Chart. To set up a Footprint Chart, head over to Chart, then click on the Chart Type icon and select Bid-Ask Volume.

The Tradovate Bid-Ask Volume chart is essentially a Footprint Chart. Given the variability that you get from bid-ask interaction, the Tradovate platform offers extensive settings on the Bid-Ask Volume charting.

Tradovate Using Volume and Market Profile

Now zooming in on a second powerful tool used by Axia Traders, we look at the volume and market profile. Again, head over to the TPO Chart type and start using the power of volume and market profile. Tradovate also added functionalities that go beyond the standard market profile package (more on that in the video down below).

If you want to dive right in and start building strategies using the Tradovate market profile and volume profile tool, head over to the webinar that was recorded with Traver Harnett. Traver was previously the CEO of MarketDelta, the company behind the original Footprint charting package.

Last but not least, what is also great about Tradovate is that it offers a unique Market Profile, Volume Profile, and Footprint experience directly from the Tradovate mobile app. We find that this a nice add-on because not a lot of futures trading platforms offer this functionality via mobile app.

Tradovate is a powerful trading platform and for that reason has been acquired by NinjaTrader. For more trading lessons and tutorials, check out our next free webinar here!

Thanks for reading and trade well.

***

Axia Futures
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Contacts:
Demetris Mavrommatis — Co-Founder, Head of Trading
Alex Haywood — Co-Founder Head of Strategy

How To Trade The Squeeze Pattern In S&P500 Introduction

In this blog post, we will look at how to trade the squeeze pattern in S&P500. How this trader has identified a vulnerability in the market and exploited that vulnerability through observing price action around the US Cash Open. How combining price action patterns, footprint, market profile, and price ladder activity gave this trader conviction to pursue his trade. If this toolkit is something you are interested in, check our previous article about “Trading Initial Balance Break Using Market Profile” and continue reading.

This blog post is based on the content from the video down below.

Squeeze Pattern Trading Context

Starting from the bigger picture, this trader has identified that the market has a tendency to put in reversals by squeezing the positioning (see yellow boxes below). This was the reoccurring trade. We are in the uptrend market and pressure is clearly to the upside. Buyers are in control and have formed lately the P shape profile. This clue adds a conviction to the trader’s willingness to execute the squeeze pattern.

As we zoom in on S&P500, we can see that market is truly well bid. We are leading into the month-end and we are leaving behind poor lows unexploited. This is yet another clue, that buyers are in control. With P profile having no excess from the top side, this can be an attractive magnet for already dominant buyers.

Given all the clues this trader has collected, the trade idea is this:

Play open drive squeeze through the Globex positioning block.

Squeeze Pattern Trading Execution

Given the bullish clues this trader has formed he is ready for the cash open action. As you watch his price ladder recording, you can notice several characteristics that stood out on the tape.

First, the offer-and -absorb action in the first seconds of the auction pushed immediately the market higher. It is the first sign, that market starts with a more persistent bid. As the market approaches the Globex block, the idea is that the market should start to squeeze higher above that block. Right at the edge of the Globex block, we can see increased size pressure and a little bit of backing off which is what we have expected. Given the month-end, we can see some large orders aggressively hitting the market producing temporary fast wash which is what happened exactly here. As the trader describes, that surprised him a bit first but gave him a clue for future trade direction. Given his bullish thesis, this washy price action when the market does not auction each price but simply eats many prices is actually a good chance to get long, not to get scared and be hesitant. The market immediately moved back into new highs again. Then market offered again the same opportunity of washy drop that absorbed and started to bid again higher. The opportunity was repeated one more time. From that moment, the market steadily (but rather slowly) moved in a two-way auction higher. Not in a straight line, but rather continuously seeking liquidity higher.

Key Takeaways From Trading The Squeeze Pattern

Given all the information, these are the lessons that this trader has highlighted:

• Fast offers with no auction are likely to be retraced (note also month-end) – remember, that washy action we have described, that was your chance to add into the up-trending market
• Question: “Do these big sell orders in any way invalidate my trade idea?” Answer: ” No. So I shouldn’t let them be an excuse to lighten up my position”
• A squeeze should hunt for liquidity so don’t back away when finds it – not expecting a straight line move is key. The rhythm is more like seek liquidity higher, absorb, offer, absorb, bid. Repeat.

Thanks for reading.

If you liked this type of content, you might check these videos as well:

• How To Manage & Exit A Failed Breakout Trade
• Sign Of A Breakout About To Fail – Price Ladder Trading
• Market Profile Trading: Better Breakouts with Context and Volume Profiling

Do you like what you have been reading? If you would like to improve your game, definitely check one of our courses that teach you all the techniques presented by AXIA traders from a market profile, footprint, or order-flow. If you are someone who likes to trade the news, we have a great central bank course. And if you are really serious about your future trading career, consider taking AXIA’s 6-Week Intensive High-Performance Trading Course.

Thanks for reading again and until next time, trade well.

JK

In this article, we will be looking at how day trading VPOC and market profile can help your futures trading journey. At the end of the day, as traders, we depend on levels and VPOC (Volume Point of Control) is just another reference on the chart. It can become powerful when combined with the market profile context. It is the market profile context, that can give you an additional level of conviction in day trading the VPOC level. Every time we are using any reference point in our trading, we should always ask ourself two key questions:

• What does it mean?
  • Is there an edge in the context entering the trade?
• Where is the trade?
  • How can I access this trade?

What Day Trading Tools We Will Be Using?

In order for us to understand the context, we will be using these market tools:

We will be talking about VPOC and Value Area primarily. In our case, we will focus on using these terms in relation to the daily interval:

• VPOC (Volume Point of Control) – is the price, where most of the volume traded over the day
• Market Profile with prominent VPOC – profile, that has clearly one significant VPOC
• Value Area (Value) – is the range, where most of the volume (70% of the volume) has traded for the day

Building Day Trading Context

In order to get the full context of this day trading concept, please have a look at the video, where an Axia Trader from our trading floor explains this concept in detail.

Market Analysis

We will be looking at Bund charts. First, we will look at value creation, then market profile, and finally how we could have used VPOC in our day trading strategy. In order to understand when we can lean on VPOC more than any other reference point, we will start with the first week when Bund made the lower move. If you have watched the video, you know that Bund price moved lower, but the value area did not shift lower. Although we moved down later in the week, the value did not shift together with the price. This can be the first clue, that market is not fully accepting these prices and we might have a retracement the following week.

In the second week, we have fully retraced the move. Early in week three, we have created a head and shoulders chart pattern at the highs of week one and week two. Now, this is the place where it starts to get interesting.

Let’s zoom out on the market profile to see what is happening early in week 3. By looking at the chart below, you can see that although value shift higher, when we gapped (top of the chart), we could not sustain the move and we have moved back lower the following day (see red arrow up and down), for which we have created a “head” in the head and shoulders chart pattern. Now, this is the moment, where important reference VPOC will be formed. 

On the day of our trading, we have multiple clues lined up. We know we have retraced week 1, but the market did not have the power to continue higher. Our first bearish clue. We know, that market could not sustain the move higher and created this head and shoulders pattern. Our second bearish clue. The right shoulder was formed on a balance day with a pretty prominent VPOC. Now it is our time to use this information and combine it into a tradable idea. We can now answer both our questions that we have presented at the beginning of this article. We know that the trade we want to take is bearish and we know that prominent VPOC (see below) has been formed. It is time for us to define access to this trade. Let’s have a look at the chart and see how this trade developed.

Our VPOC is marked with red arrow. But how to access this idea? One of the strategies we can use for the access of this trade is to observe price action around VPOC. We know, that for a prominent VPOC such as this one, buyers would like to hold above. In this trade, we have one more bearish clue and that is open drive move down, which is a sign of early weakness. To access this trade we can:

• Use more initiative approach – use a breakout strategy to short through the VPOC. One such strategy can be for example combination of the VPOC and break of the Initial Balance.
• Use more passive approach – use a passive continuation strategy to access the trade once the price gets below and retraces back to VPOC.

Trading Summary

It should be now more obvious, that day trading VPOC without context can produce mediocre results. The moment you connect the context of value, price action, and chart patterns, you can get more conviction on your trades. Then it is all about accessing trade and trade management. In case you are interested in finding out more about trader training to learn how to trade like these, check out our futures trading course that teaches you exactly that. If you would like to find out more about market profile, I would highly recommend our market profile trading course. In my next article, we will look at how we can template this VPOC approach and build repeatable principles that can provide a good trading edge. 

If you liked this article, you might check these as well:

• How To Use Market Profiles In Your Morning Prep
• Why is Day Trading Futures Not Simple
• Eurostoxx Initial Balance High

Thanks for reading and until next time, trade well.

JK

A Market Profile Ledge is visually easy to spot. It shows up as a line of TPOs (letters) all at the same price with little below it – for example 4 TPOs at 80 with just 1 TPO at 79. The important part is what this is telling us: essentially it means that the market has been forcibly stopped at a one price and therefore has not completed the auctioning process. Imagine at an auction every time the price of a certain item hits $100 the seller stops the auction and sells to the person bidding $100. This creates an artificially low price and does not complete the auction; an auction should end when the last buyer is found. If this auction was a Market Profile it would show a TPO ledge at $100 – time and again the price hits $100 but does trade above, even though traders may be willing to pay a higher price they are not able to.

What Does This Mean For a Market Profile Day Trader?

This a trading opportunity, the ledge at some point should break creating a delayed trade opportunity. The skill is recognising when the the break is on and whether the trade can be taken with appropriate management of risk

• Ledge Break to the Upside
• How To Trade Absorption On A Volume Ledge

Trade 1: Profile Ledge Break

Once a market profile ledge has been established it gives a clear target (break the ledge to complete the auction) the difficult part of it is finding an entry point so you are already in a position when the profile ledge breaks. Remember the ledge should break to complete the auction so being in before it gets there means that if the ledge only breaks by 1 tick you can still get out for a profit. Understanding how and why the ledge has been created will enhance the ability to to assess not only how to play the break but also what is likely to happen after the break. In weekly mentored session on 1st July, I look at a ledge formed by buyers trying to stop a move down in GBPUSD and the steady break from mid range, where a bounce from the ledge meets resistance giving a passive entry for the break and continuation as the buyer at the ledge is no longer there. This contrasts with a profile ledge break in Bund that had been created by selling stopping a bounce, once this ledge breaks the play can come as a passive entry for a grind higher. Recognising these distinctions will help you learn to trade and categorise different ledge break and other profile patterns.

Trade 2: Positioning Reversal Trade

There is a flip side to spotting a ledge and learning to trade the breakout. Because a ledge is a relatively obvious reference point, it is easy for participants to start anticipating and positioning for the break. This leads to a lot of short term (day traders) all waiting for the same outcome, all with similar stops. If the ledge doesn’t break there will be a point where those traders scramble for the exit creating a fast move in the opposite direction to the ledge. As can be seen in the image below, shorts in Oil, playing for the ledge break to continue a move down, liquidate on move up through the highs of the recent range. The key to trading a move like this is, first, learning to trade the ledge break which will increase understanding of how others will be trading the same trade, and where their stops are likely to be, then comes the liquidation order flow – as pace suddenly picks up a trade can be entered to break the level where stops are expected to be placed.

I’ll be back next week with the next installment of Why Day Trading Is Not Simple Part III. Part I and II can found here

Richard.

Learn To Trade Market Profiles & More

If you’d like to learn to trade futures and develop your career as an elite trader then start now with one of our Trader ​Training courses on offer. Our flagship 8 Week Career Programme is the most immersive experience available and can be attended live on our London Trading Floor or from anywhere in the world as an online trading couse. It is the most comprehensive futures training programme from within the proprietary​ ​futures​ ​trading industry and is based​ ​upon years of successful in-house skill​s ​development​ with top performing traders.