Would Market Profile enhance the effectiveness of Drummond Geometry?
Do you recommend it?
PS
DG Effectiveness
Re: DG Effectiveness
Turns out I had just answered this question at length for someone who wrote in the other day. This is probably more than you wanted to know, but here goes...
I worked extensively on Market Profile in the early 90s, spent a lot of time with Pete Steidlmayer at the Chicago Board of Trade and did some writing on the topic. I also spent considerable time with Don Jones and the Cisco variant of MP. I found it very interesting, and conceptually valuable especially when the market is in a well-defined short-term congestion and the parameters of that congestion are well known. It has some flaws (or rather a better word would be some limitations) in that it cannot tell you where longer term support and resistance is, and cannot easily (or at all) distinguish between the intentions and fear/greed pressures of longer term and shorter term traders. This is a significant limitation as it cannot tell you which direction to anticipate in the near-term and furtherout future.
I came to Drummond's work as I began to realize that Market Profile, for all of its conceptual elegance, was not all that helpful except in limited circumstances (it has been found useful by floor traders, for example, who have available to them other information about longer-term traders and can apply that information to overcome the limitations of MP). In any case, at that time, there was a small group in suburban Chicago that was teaching Drummond material; I began with this work and was initially quite confused as the presentation was dry, difficult, and a bit obscure. Through a series of fortunate coincidences I began a correspondence with Charlie Drummond himself, we became friends, met in 1993, became partners in 1996 and have been working on this material jointly as co-authors and partners ever since.
Drummond's breakthrough is in the studied, logical, and above all practical application of multiple time-period support and resistance; he has successfully untangled the web of conflicting intention of larger and longer-term market participants and those with shorter intentions. In concept it is simple: through the use of easily constructed tool, support and resistance in the next, upcoming bar(s) can be accurately determined. But you don't know if that support or resistance will be strong or weak until that information is placed within the context of the support and resistance developed for higher timeframes. Once that information is overlaid on the chart, you have a much clearer idea of what to do; in fact your accuracy has increased by a factor of about three. So that, for example, if up-coming daily resistance occurs in a vacuum, it cannot be said that it will hold and be strong and cause a market turn-around. If , however, the daily resistance occurs at the location of weekly and monthly resistance, and furthermore the weekly and monthly bars are anticipated to complete themselves towards the downside, then daily resistance can be sold with a high degree of confidence. These principles can be applied in any combination of timeframes, up to and including yearly and multi yearly bars, sot hat it is possible in many cases to identify not only the daily high being put in, but the yearly high being put in as well. This is information of incredible power and usefulness. It gives you a leg up on determining direction, and accurate support and resistance levels, and that is the information with which we are able to trade.
Market Profile and DG are complementary everywhere except on the market turning points, where Drummond is far superior. You could say that this is the whole ballgame, and I would agree.
The "How to make money" book was written in 1978 for public consumption. It scratches the surface, but does not get intothe meat of multiple time-period coordination. The remaining 8 books and the Lessons contain far more information, and have never been sold publicly but only to registered students with signed non-disclosure forms.
The information is not widely known because we try to keep it that way; it is of no benefit to us to have DG known on every street corner. In general, our students and colleagues agree with us and keep the information tightly held. Some think we should raise the price of the course to $35,000 to shut off potential demand and get the information off the market completely. We do not sell to corporations, or to funds, or to fund managers, but only to private individuals with whom we are satisfied as to their personal integrity. Thre is an on-going research and program and very substantial amounts of current information are posted by Charlie and myself on the private website for students.
I worked extensively on Market Profile in the early 90s, spent a lot of time with Pete Steidlmayer at the Chicago Board of Trade and did some writing on the topic. I also spent considerable time with Don Jones and the Cisco variant of MP. I found it very interesting, and conceptually valuable especially when the market is in a well-defined short-term congestion and the parameters of that congestion are well known. It has some flaws (or rather a better word would be some limitations) in that it cannot tell you where longer term support and resistance is, and cannot easily (or at all) distinguish between the intentions and fear/greed pressures of longer term and shorter term traders. This is a significant limitation as it cannot tell you which direction to anticipate in the near-term and furtherout future.
I came to Drummond's work as I began to realize that Market Profile, for all of its conceptual elegance, was not all that helpful except in limited circumstances (it has been found useful by floor traders, for example, who have available to them other information about longer-term traders and can apply that information to overcome the limitations of MP). In any case, at that time, there was a small group in suburban Chicago that was teaching Drummond material; I began with this work and was initially quite confused as the presentation was dry, difficult, and a bit obscure. Through a series of fortunate coincidences I began a correspondence with Charlie Drummond himself, we became friends, met in 1993, became partners in 1996 and have been working on this material jointly as co-authors and partners ever since.
Drummond's breakthrough is in the studied, logical, and above all practical application of multiple time-period support and resistance; he has successfully untangled the web of conflicting intention of larger and longer-term market participants and those with shorter intentions. In concept it is simple: through the use of easily constructed tool, support and resistance in the next, upcoming bar(s) can be accurately determined. But you don't know if that support or resistance will be strong or weak until that information is placed within the context of the support and resistance developed for higher timeframes. Once that information is overlaid on the chart, you have a much clearer idea of what to do; in fact your accuracy has increased by a factor of about three. So that, for example, if up-coming daily resistance occurs in a vacuum, it cannot be said that it will hold and be strong and cause a market turn-around. If , however, the daily resistance occurs at the location of weekly and monthly resistance, and furthermore the weekly and monthly bars are anticipated to complete themselves towards the downside, then daily resistance can be sold with a high degree of confidence. These principles can be applied in any combination of timeframes, up to and including yearly and multi yearly bars, sot hat it is possible in many cases to identify not only the daily high being put in, but the yearly high being put in as well. This is information of incredible power and usefulness. It gives you a leg up on determining direction, and accurate support and resistance levels, and that is the information with which we are able to trade.
Market Profile and DG are complementary everywhere except on the market turning points, where Drummond is far superior. You could say that this is the whole ballgame, and I would agree.
The "How to make money" book was written in 1978 for public consumption. It scratches the surface, but does not get intothe meat of multiple time-period coordination. The remaining 8 books and the Lessons contain far more information, and have never been sold publicly but only to registered students with signed non-disclosure forms.
The information is not widely known because we try to keep it that way; it is of no benefit to us to have DG known on every street corner. In general, our students and colleagues agree with us and keep the information tightly held. Some think we should raise the price of the course to $35,000 to shut off potential demand and get the information off the market completely. We do not sell to corporations, or to funds, or to fund managers, but only to private individuals with whom we are satisfied as to their personal integrity. Thre is an on-going research and program and very substantial amounts of current information are posted by Charlie and myself on the private website for students.