Optimal Unfinished Auction
Optimal Unfinished Auction
The concept of “unfinished auction” is generally less well-known than delta or volume profile but is nonetheless a useful tool, since it highlights a short-term imperfection in the market that can be used to build a game-plan.
The underlying logic is simple. When a new high correctly forms, the end of the upward market auction is characterized by 0 contracts traded at the Bid (there are no more buyers).
Volumetric Bars showing a finished auction on the high of a bar
An unfinished auction occurs when the high has both buy and sell volume. The presence of bid trades at the high of a bar could mean that upward movement has not yet been exhausted and there is a probability that price will return to that level soon to complete the process.
Volumetric Bars showing an unfinished auction on the high of a bar
The converse applies in downtrends. The presence of contracts traded at the Ask on the low of the bar could indicate that the downward movement has not yet been exhausted and that price will return back down to that level.
Standard Volumetric Bars showing an unfinished auction on low of bar
Optimal Unfinished Auction
auto-highlights these areas on a bar without needing to overlay footprint bars or to manually track bid/ask numbers. This makes it very easy to bring unfinished-auction information to your trading.
The following chart illustrates how these levels can act as price magnets which can help us with trade planning:
Optimal Unfinished Auction shows that unfinished auctions frequently act as price magnets.
Optimal Unfinished Auction
The concept of “unfinished auction” is generally less well-known than delta or volume profile but is nonetheless a useful tool, since it highlights a short-term imperfection in the market that can be used to build a short term game-plan.
The underlying logic is simple. When a new high correctly forms, the end of the upward market auction is characterized by 0 contracts traded at the Bid (there are no more buyers).
Volumetric Bars showing a finished auction on the high of a bar
An unfinished auction occurs when the high has both buy and sell volume. The presence of bid trades at the high of a bar could mean that upward movement has not yet been exhausted and there is a probability that price will return to that level soon to complete the process.
Volumetric Bars showing an unfinished auction on the high of a bar
The converse applies in downtrends. When there are no more contracts traded at the Ask on the low of a bar, the auction is finished since there are no more sellers. The presence of contracts traded at the Ask on the low of the bar could indicate that the downward movement has not yet been exhausted and that price will return back down to that level.
Standard Volumetric Bars showing an unfinished auction on low of bar
Optimal Unfinished Auction
auto-highlights these areas on a bar without needing to overlay footprint bars or to manually track bid/ask numbers. This makes it very easy to bring unfinished-auction information to your trading.
The following chart illustrates how these levels can act as price magnets which can help us with trade planning:
Optimal Unfinished Auction
shows that unfinished auctions frequently act as price magnets
Risk Disclosure –Futures and forex trading contains substantial risk and is not for every investor. An investor could potentially lose all or more than the initial
investment. Risk capital is money that can be lost without jeopardizing one's financial security or lifestyle. Only risk capital should be used for trading and only those with sufficient risk capital should consider trading. Past performance is not necessarily indicative of future results.
Hypothetical performance results have many inherent limitations, some of which are described below. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown; in fact, there are frequently sharp differences between hypothetical performance results and the actual results subsequently achieved by any particular trading program. One of the limitations of hypothetical performance results is that they are generally prepared with the benefit of hindsight. In addition, hypothetical trading does not involve financial risk, and no hypothetical trading record can completely account for the impact of financial risk of actual trading. for example, the ability to withstand losses or to adhere to a particular trading program in spite of trading losses are material points which can also adversely affect actual trading results.
Trademarked Materials – “NinjaTrader® is a registered trademark of NinjaTrader Group, LLC. No NinjaTrader company has any affiliation with the owner, developer, or provider of the products or services described herein or any interest, ownership or otherwise, in any such product or service, or endorses, recommends or approves any such product or service.”
Testimonials – Testimonials appearing on this website may not be representative of other clients or customers and is not a guarantee of future performance or success.
Risk Disclosure –Futures and forex trading contains substantial risk and is not for every investor. An investor could potentially lose all or more than the initial
investment. Risk capital is money that can be lost without jeopardizing one's financial security or lifestyle. Only risk capital should be used for trading and only those with sufficient risk capital should consider trading. Past performance is not necessarily indicative of future results.
Hypothetical performance results have many inherent limitations, some of which are described below. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown; in fact, there are frequently sharp differences between hypothetical performance results and the actual results subsequently achieved by any particular trading program. One of the limitations of hypothetical performance results is that they are generally prepared with the benefit of hindsight. In addition, hypothetical trading does not involve financial risk, and no hypothetical trading record can completely account for the impact of financial risk of actual trading. for example, the ability to withstand losses or to adhere to a particular trading program in spite of trading losses are material points which can also adversely affect actual trading results.
Trademarked Materials – “NinjaTrader® is a registered trademark of NinjaTrader Group, LLC. No NinjaTrader company has any affiliation with the owner, developer, or provider of the products or services described herein or any interest, ownership or otherwise, in any such product or service, or endorses, recommends or approves any such product or service.”
Testimonials – Testimonials appearing on this website may not be representative of other clients or customers and is not a guarantee of future performance or success.
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