Questions about the Following the Quest for Value course


Another trader question came in over email recently:

I have a couple of questions for you on your “Following the Quest for Value” course. Can you provide some additional details as to what that course covers? Most often when I read turning points, pivot points come to mind which are pretty simply calculated but everything I’ve read (and even seen) is that one of the real reasons that pivot points work is that enough people use them.

Also, is there any prerequisite level of knowledge/experience to really benefit from that course?

Let me answer the second question first.

The only real prerequisite for the FQV course is a basic understanding of technical analysis. Oh, and an open mind helps considerably. In fact, someone with a great deal of experience may not get as much from this as someone relatively new based on the fact that they may not be as able to adjust their mindset.

The main focus of the course is outlining the way I use and apply a charting methodology I refer to as price distribution charting, but which is altnernately known as Market Profile, volume at price, and some other names. No matter what it’s call, basically the concept is to look at the frequency of trading action at the various price levels. Seeing this distribution provides us information about who is in control, where the real support and resistance points are, and where the market is likely to be drawn as it moves.

The course does not outline a specific trading system. It doesn’t use any indicators. While using the price distribution charts – which are becoming more readily available under various names - does offer definite benefits, it is not absolutely required. Price distribution charting is most definitely something heavily in the discretionary side of trading, so you won’t find much you can apply in a mechanical fashion (though I have long had thoughts about ways maybe it could be done and might one day have the time to focus some research in that area).

For me, however, the biggest focal point of the course is changing one’s thinking. It’s about stripping things down and understanding what’s really going on behind the process of price changes.

Hope that helps.

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About the Author
John Forman, author of this blog, has traded for more than 20 years, is a professional market analyst, and authored The Essentials of Trading. He is an active participant in trading forums, consults for trading related businesses, as published literally dozens of trading articles, and has been quoted in a number of books and in the media.
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  • Craig

    John – This appears interesting, but how valid would this be if one didn’t have access to the market profile charting? Also, is market profile charting even available for forex, as my understanding is most people gauge volume by the CFTC report that comes out every Friday afternoon (ie there’s no volume reported as forex is a very distributed market instead of all controlled by a single entity).

    One other item I’d hope you’d be willing to comment on – when devising a trading approach/system, what are some of the items you’d recommend we look at and take into account? Are there any specific indicators/etc that you find have more merit than others? Are you willing to share what indicators you consult on your charts (if any)?

    Thanks again for all the information. Just received my strength/weakness video and plan to sit down and go through it a few times this weekend.

  • http://www.theessentialsoftrading.com John

    Craig: I’ll address your second set of questions seperately in an upcoming blog post. It warrants a bit more space and is on a seperate topic.

    As for the first part, MP charting is absolutely 100% available for forex. Obviously, volume is not something you’ll have in the spot market, but that doesn’t mean you can’t plot the price distribution chart. The fact that spot forex prices are indicative and not traded (as is the case for exchange based instruments) actually could be seen as providing more weight to the price plots.

    In terms of the charting, it definitely helps to have the MP charts, but it’s not critical when you know what you’re looking for. Also, are you sure you don’t have MP charts? Many packages have them now, though relatively few actually call them Market Profile. They use other terms.