Are you in touch with your trading emotions?

You need to be if you want to have a successful relationship with the markets. Doing so is a lot like learning how to be in a good partnership with a mate — something many of us are still trying to master! When it’s good, it’s really good and you’re on top of the world and congratulating yourself for your success. When it’s bad, it’s volatile and all you want to do is figure out how to get out — FAST — and still have some money left to move on!

Sound familiar? No, we’re not talking about your relationship. 🙂 But, yes, sometimes you do have to cut your losses and move on. However, we all know that sneaky little self-help adage that you take yourself with you wherever you go. So, if you never reflect on what got you to a tough spot in the first place, you’ll miss the opportunity to correct it in the future and recognize a good thing when you see it — and this holds true as much for markets as it does for marriage.

With respect to the markets, understanding what happened in the recent past, very often, allows us to see potential developing opportunities. This weekend’s Highlight Reel focuses on the E-Mini S&P on Tuesday, April 18. The previous day, Monday April 17, was a day dominated by the short-term momentum players. This assumption is made based upon Monday’s market-generated information:

  • Attempted direction was up.
  • Inventory was long on the close.
  • Mechanical buying was taking place at prior 30 minute period lows.
  • The late upward price spike further increased long inventory into the close.
  • NYSE volume was low. The odds favored a short trade opportunity.

Further details are in the Highlight Reel #6 Supporting Document. The download link is below.

If you want to see true trading success, you need to enhance your relationship with the markets and understand that they are driven by emotion. You’ve got to be present for the markets, know when to just listen and know when it’s time to pull out the tool box, roll up your shirtsleeves and act decisively.

Successful short-term trading is enhanced when you are in touch with two sets of emotions: yours and the emotions of those you are competing against. The opportunity we’ve highlighted was created because short-term traders went from being too long to too short based upon their emotions. They wanted to get all there was to get from the day.

In our Highlight Reel and supporting document, you will have a chance to review how this played out and learn how to spot these opportunities in the future and enjoy a much more fruitful, steady and reciprocal relationship with the market.

Lastly, we hope you’ve enjoyed our J Dalton Trading Highlight Reel series. This is our last Highlight Reel as we get ready to start our Market Profile Mastery Series Course May 1. Jim's two daily reports and intraday, real-time chat start Monday, April 24! If you haven’t signed up, you can sign up here. If you have already registered, we can’t wait to work with you in class next week!J-Dalton-Trading-Highlight-Reel-#6-April-18,-2017-Supporting-Document



Were you mesmerized by price during the market on Monday, April 3rd? If you were, you’re not alone. And chances are that you might not have even realized it was happening. Why? Because price is every trader’s Svengali —hypnotizing them with its power of price persuasion.

We spoke with several traders who missed the significance of the widening POC, and found themselves subjugated by price without knowing exactly what had come over them. But you don’t have to fall prey to this charlatan.

The power lies with you! And the best way to release the hold that price has over you is to understand — and respect — the market’s two-way, continuous auction process. The auction process works well for distributing bids and offers. Your job is to learn to read the underlying order flow. Market structure as viewed via the Market Profile organizes the auctions allowing you to better dig beneath the auction process and unmask this ne’er-do-well magician.

Auctions are a fair and efficient mechanism for distributing the constant bids and offers coming into the market. Auctions, by their very nature, are designed to heighten your emotions and turn you into a stimulus response creature — just the right conditions to be easily seduced by price.

And that’s what happened to many of our traders on Monday. Two of the previous Highlight Reels tracked short-term buying opportunities as the market was leaving behind poor structural highs and relatively low short-term, downside NYSE volume during early rotation. Monday’s market was just the opposite leaving behind weak and poor lows during early rotation.

This tricked many of our traders, who told us that they saw the market exactly opposite from us during Monday’s early trade. And several comments we saw suggested that trades were only looking at early price movement without having considered what led to Monday’s break. Others appeared to have been swayed by price having traded higher overnight.

But we’re going to break the Svengali spell of price with this week’s Highlight Reel, which immerses you into the session of Monday April 3!



For this week’s Highlight Reel, we’ve selected the trading day of Thursday, March 30...

CLANG, CLANG, CLANG! The market is open, your adrenaline is pumping and it’s time to employ some fast thinking if you want to be a contender.

But, let’s be clear: Fast thinking is far different than reactionary, panicked thinking. Remember Jim’s Mantra: Let the trade come to you. You don’t want to fall into the all-too-common trap of looking for a trade. To let the trade come to you, however, requires a deliberate, focused mindset in which you are nimble enough to act quickly, yet thoughtfully.

Understanding how our brains process information is crucial for becoming a successful trader, and it’s what we’re focusing on in this week’s Highlight Reel. These silent video clips are designed to help you visualize the Market Profile in action and give you a glimpse into how Jim Dalton uses the Market Profile, as well as other powerful observations he employs to trade the markets.

For this week’s Highlight Reel, we’ve selected: the E-Mini S&P trade on March 30, 2017.

As we observe the markets, we continue to focus on both that part of the brain that processes information in a slower, deeper manner as well as that part that processes information very quickly. Before you view the weekend Highlight Reel, here are some essential tips to begin to integrate into your thinking:

  • Prepare: Learn to employ slow, deeper processing. The first thing any trader should do before the market opens in the morning is complete a top-down review of the market. A top-down review of market and intraday observations on March 30, 2017 can be found in the Highlight Reel #4 Supporting Document. You can download it here.
  • Let the trade come to you: Sometimes, when we open within range, it takes several 30-minute periods for the market to show a trade. The morning of the 30th happened within the first 30 minutes.
  • Remember: You want the trade to come to you rather than be out there looking for a trade.
  • Think about how you think: Understanding how you think is an essential tool of the advanced trader. You can learn more about slow and fast thinking in Daniel Kahneman’s book, Thinking Fast and Slow or the Summary of Thinking Fast and Slow.

J Dalton Trading Highlight Reel #4 - March 30, 2017 Supporting Document

Please read and study this document prior to watching the video.


For this week’s Highlight Reel, we’ve selected the trading day of Monday, March 20. We chose this particular day because it allows you to see day timeframe development resulting in a late afternoon rally, while at the same time allowing you to see a market creating odds for a downside breakout in a higher timeframe.

With that in mind, we give you our…

Top 10 Tips for Watching This Week’s Highlight Reel

  1. Watch as early trade looks below Friday’s low with no immediate downside follow-through re-entering Friday’s range.
  2. Notice that once we re-enter Friday’s range, there is limited upside extension. The market was unable to hold above unchanged.
  3. Value was developing as clearly lower.
  4. Can you see how the high was poor with no excess? This is an extremely low-confidence session.
  5. Observe how the market was attempting to auction higher with little success. The POC was remaining around Friday’s low.
  6. See how a midday break eventually stopped at an exact fill of a gap from 3-14. An exact mechanical stop suggests weaker hands mechanical buying. Stronger institutional buying would not have come from such an exact level. Their size is simply too large to attempt an exact buy. They would likely be scaling in as the market dropped.
  7. Look closely at how the afternoon low provided a very visible 45-degree line. These angles develop because the POC or fairest price doesn’t migrate lower with price. Traders are selling “short-in-the-hole.” OR, said another way: They are selling below value.
  8. Notice the afternoon short-covering opportunity with price rallying back toward the POC. Price traders took prices higher overnight. Overnight inventory was long as we opened on Tuesday.
  9. Observe the slow tempo and lack of upside follow-through as Tuesday began to trade.
  10. Look for the final takeaway: Once price re-entered Monday’s range the rout was on. The biggest piece of information was Monday’s exact gap fill low. The buyers from there forward were likely weaker hand traders. Tuesday’s break was not out of the blue. There was a process in place.

We've summarized these observations in a PDF for safe-keeping. You can download it here:

The Highlight Reel March 20 - 21, 2017 Supporting Document

Please read and study this document prior to watching the video.


We have chosen Tuesday, March 14 for the weekend Highlight Reel because it was a potentially difficult day for short-term traders. Failure to understand the context surrounding a day like this, very often, leads to significant whipsaw losses.

Please download the Highlight Reel March 14, 2017 Supporting Document here.

Please read and study this document prior to watching the video.

We have also issued the Kickstart S&P Report and Preparation Report to bring the discussion into this week of March 20 to help you prepare for S&P trade on Monday. You can download this report here.


We had a great webinar on Thursday, March 9 discussing trend days versus rotational days and how to use the Market Profile to trade them.

We are often asked, “How do I use the Market Profile? What is structure? Prominent points of control, 45° lines, excess, poor highs and lows…..”

So we thought we’d put together a short video clip from E-Mini S&P trade last Wednesday, March 8 and early Thursday, March 9 to show some hands-on examples.

When you watch the 9-minute video you will see many observations that give a glimpse into how Jim Dalton uses the Market Profile and other powerful observations to trade the markets:

  1. Overnight inventory – how it often adjusts, in early pit session trade, a long or short inventory situation
  2. Opening in or out of prior day’s range – how this observation helps guide your early trade decisions
  3. Taking care of ‘current business first’ – why this is key to understanding price action and the auction
  4. Market Profile structure:
    • Prominent points of control
    • The development of the 45° line (we get lots of questions on this)
    • Migration or non-migration of the POC
    • Value area development
    • And more!

You can see it all in the 9 minute video:


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