This page is designed to explain phrases I commonly use on Twitter. Please note I’m not suggesting these are the “right” ways to use these terms I’m simply showing how I am using them.
DTF Control: Day Time Frame control. I use this term to describe a market that I think is under the control of day time frame market participants. This describes traders that generally go home flat each session. The reason this is discussed is that when DTF is in control my expectation typically shifts to an Outside/In trade approach (see def. below) and my expectation is that DTF levels will be respected on the session. What are Day Time Frame levels? This would include, among others, levels such as the previous days high or low, previous days point of control (poc), previous session open and previous session close. Here is an example of what a session looks like when day time frame players are in control of the market. This is Gold on 3/21/16 if you’d like to look at your own charts:
Points worth noting in the chart that lend evidence to day time frame control. 1. Early gap down on the session moves to a previous point of control at 1244 and there is no significant follow-through. Notice also the gap closes roughly 2 hours into the session so higher time frame sellers are not revealing themselves as active. 2. Once the Initial Balance is established the IBHI and the IBLO (see definitions for these below) serve as general resistance/support for the session. 3. The highs for the session respect the low from the previous session and there is no real follow-through above that level. 4. Prices generally mean revert throughout the session between the value area high and value area low (darker blue horizontal lines on the chart). 5. The profile shape is similar to a Gaussian or normal distribution. 5. The MID and VWAP (lighter blue lines you see toward the center of the profile) are also respected throughout the session as support/resistance.
Fireball: Cheap cinnamon flavored whiskey. I am a fan. Yes, I know you don’t like it. I’ve seen some describe drinkers of the Fireball as “human garbage”. If you trade something like Wheat I suggest the jug but here is an example of the standard size:
IB: Initial Balance. This is the high and the low of the first hour of the RTH (Regular Trading Hours, see def. below) session in each market I trade. I use the first hour for the Initial Balance in all of the markets that I trade. When viewing blue background charts they will be marked with yellow horizontal lines with the annotations IBHI/IBLO. See an example here:
MATD: Morning After Trend Day. I picked this phrase up from Don Miller and I use this to describe action I’d look for into the globex trade and up to the next days RTH/pit open after a trend day has completed. There is some subjectivity that I use to describe something as a trend day but generally I’m looking for a market that moves directionally 1.5x or more the size range of the IB and closes in the top 20% of its range for the session. When this takes place my primary trade plan into the overnight session is for MATD action. MATD describes a situation where buyers and sellers are battling each other near a previous days close with no real trend apparent. This takes place as trapped longs, trapped shorts, and profit takers are dominating the auction and it becomes unlikely under these conditions that any side dominates in a manner that would create another trend day in the same direction. Here is an example from 3/1/16 in the ES:
NVPOC: Naked Volume Point of Control. This is a point of control/poc (see def. for poc below) that has not been touched/re-auctioned again since it formed. These will appear as pink horizontal lines on blue background charts that extend right above or below a current days profile. Here you can see NVPOC’s both above and below the current session on this Wheat chart:
O/N: This abbreviation is used to refer to the overnight session/globex trade. It is used to describe all hours outside of the pit/RTH session.
OAIR: Open Auction In Range. Describes a pit/RTH open that is inside of the previous days range.
OAOR: Open Auction Out of Range. Describes a pit/RTH open that is outside of the previous days range.
Outside/In: Describes execution approach where I’m looking for intraday mean reversion trades while looking to trade both long and short during the same session. Here are some examples using the Gold chart listed above under the DTF definition:
- Under this trade approach after first hour of trade I may look to sell the IB high for a rotation back to VWAP/the MID/POC of the session.
- Under this trade approach I may look to buy the IB low for a rotation back to VWAP/the MID/POC of the session.
- Under this approach I may look to sell the Value Area High for a rotation back to VWAP/MID/POC.
- Under this approach I may look to buy the Value Area Low for a rotation back to VWAP/MID/POC.
POC: Point of Control. Describes the price for the session that was most traded (volume) and therefore most accepted by buyers and sellers. These are labeled with pink lines on the blue background charts as can be seen in all of the charts above.
RTH: Regular Trading Hours or the old “pit session” hours. For the markets I trade I use the following for RTH (all times Eastern)
- GOLD: 8:20 am – 1:30 pm
- ES/NQ/TF: 9:30 am – 4:15 pm
- 10 YR NOTES: 8:20 am – 3:00 pm
- CORN/BEANS/WHEAT: 9:30 am – 2:20pm
- CRUDE: 9:00 am – 2:30 pm
Sybil: This is a term I use with great regularity that I picked up from veteran pit traders to describe the Wheat market. Sybil is a 1976 American mystery drama film that originally aired as a made-for-TV miniseries. Sybil suffers from multiple personality disorder. At last count 16 personalities have been identified but I assume there are more to be found. The film stars Sally Field of The Flying Nun and Boniva fame.
TTMAR: Take The Money and Run. Another phrase I picked up from Don Miller. Typically use this phrase when I’m trading Outside/In and looking for tight scales and short position hold times intraday.
VAH/VAL: Value Area High and Value Area Low. These are marked with dark blue horizontal lines on the blue background charts. The Value Area is the area in which 70% of the sessions volume has traded and these blue lines mark the high and low extremes of that value area. See the charts shown above to observe these.