Trading Methodology

Learn about the trading methodologies used in SignalP signals and how to apply them.

SignalP signals are based on proven trading methodologies that have been refined for professional futures trading. Understanding these methodologies will help you make better trading decisions.

Market Profile Trading

Market Profile is a methodology that organizes price and time data to reveal market structure and value areas.

Key Concepts:

Value Area - The price range where 70% of trading volume occurred
Point of Control (POC) - The price with the highest volume
Auction Process - How markets discover fair value through buying and selling
Time Price Opportunities (TPOs) - Time-based analysis of price action

Signal Applications:

Identify high-probability entry points based on the "driving input" of the auction structure
Use POC as support/resistance levels
Trade breakouts from established value areas

Volume Profile Trading

Volume Profile analyzes the volume traded at each price level to identify key support and resistance areas.

Key Concepts:

Volume at Price (VAP) - Volume traded at specific price levels
High Volume Nodes (HVN) - Price levels with significant volume
Low Volume Nodes (LVN) - Price levels with minimal volume
Volume Weighted Average Price (VWAP) - Average price weighted by volume

Signal Applications:

Use HVN as support/resistance levels
Trade through LVN areas (low resistance)
Monitor VWAP for trend direction

4Questions Methodology

The 4 Questions Methodology is a process for assessing playbook opportunity. It's a process aimed and helping the trader approach opportunity with a "risk forward" mindset.

Components:

Opportunity - What is the opportunity or more specifically the expected price target?
Risk - What am I willing to risk for this opportunity?
Right - Once I enter the trade, what would tell me I was right?
Wrong - Once I enter the trade, what would tell me I was wrong?

Signal Applications:

Comprehensive analysis before entering trades
Consider all four factors for high-probability setups
Adapt strategy based on current market context

Market Profile Trading

Market Profile is a methodology that organizes price and time data to reveal market structure and value areas.

Key Concepts:

Value Area - The price range where 70% of trading volume occurred

Point of Control (POC) - The price with the highest volume

Auction Process - How markets discover fair value through buying and selling

Time Price Opportunities (TPOs) - Time-based analysis of price action

Signal Applications:

Identify high-probability entry points based on the "driving input" of the auction structure

Use POC as support/resistance levels

Trade breakouts from established value areas

Volume Profile Trading

Volume Profile analyzes the volume traded at each price level to identify key support and resistance areas.

Key Concepts:

Volume at Price (VAP) - Volume traded at specific price levels

High Volume Nodes (HVN) - Price levels with significant volume

Low Volume Nodes (LVN) - Price levels with minimal volume

Volume Weighted Average Price (VWAP) - Average price weighted by volume

Signal Applications:

Use HVN as support/resistance levels

Trade through LVN areas (low resistance)

Monitor VWAP for trend direction

4Questions Methodology

The 4 Questions Methodology is a process for assessing playbook opportunity. It's a process aimed and helping the trader approach opportunity with a "risk forward" mindset.

Components:

Opportunity - What is the opportunity or more specifically the expected price target?

Risk - What am I willing to risk for this opportunity?

Right - Once I enter the trade, what would tell me I was right?

Wrong - Once I enter the trade, what would tell me I was wrong?

Signal Applications:

Comprehensive analysis before entering trades

Consider all four factors for high-probability setups

Adapt strategy based on current market context