TAS Boxes + TAS Vega + TAS Compass [TASMarketProfile]

This bundle of 3 TAS Market Profile indicators provides a shaded background that reveals directional bias, colored price bars show clearly when breakout conditions are bullish (green) or bearish (red) as well as 3 real-time dotted lines that show developing commercial balance areas known as “value areas.” These TAS Boxes 3 lines are calculated in real-time and leveraged to identify trade entry zones, trailing stops and targets. The 3 indicators can be activated and applied to a chart simultaneously (as shown) or individually in the Inputs settings tab. This description contains descriptions for all 3 indicators in the order of TAS Boxes, TAS Vega and TAS Compass so you’ll need to scroll below to get to the one you want insight.

∟ ABOUT TAS BOXES:

TAS Boxes (also known as TAS Dynamic Profile) offers a dynamic representation of developing commercial balance areas known as “value areas” and are depicted with 3 colored horizontal dotted lines. Note that the thickness of the dotted lines may be adjusted in the Style settings.

• Red Line- Supply / High Value Area (HVA) / Resistance
  
  
• Cyan Line- Point of Control (POC)
  
  
• Green Line- Demand / Low Value Area (LVA) / Support
  

The TAS Boxes calculate and display in real-time intrabar and are finalized at the close of the bar. The levels may dynamically update intrabar and move and this is viewed as foreshadowing of where new value areas may be attempting to appear next. When the market is between the top and bottom lines, the market is considered “in value” or “in balance.” When the market closes outside the top or bottom lines, the market is considered out of value/unbalanced and in breakout mode in that direction.


INPUT SETTINGS FOR TAS BOXES:

There are 3 inputs for TAS Boxes and below you’ll find the default settings:

• MinSignal_123: 2 (only options are 1, 2, or 3)
  
• Length: 7
  
• MapLength: 7
  

• MinSignal_123 -- Measures how established the commercial interest creating the balance area must be to create a new TAS Box. In other words, this input is a measure of the strength of the box.
  
• Length –- Takes into consideration the relative “momentum” behind the move and how extended the move must be before the formation of new TAS Box levels.
  
• MapLength –- Specifies the number of bars of data used to create the parameters of the TAS Box.
  

In summary, the first two inputs determine how often a new TAS Box will appear. The higher the input numbers the less often and harder it is to establish a new TAS Box, and vice versa. The last input simply determines how much data is included in the calculation of the new TAS Box.

While we recommend the default 2-7-7 as standard inputs for most traders as they work well with any tradable instrument with sufficient liquidity, other input combinations can be explored per the user’s preferences for varying sensitivity to market conditions and how recent of market conditions. Other settings to consider are 2-14-7 or 3-4-50. We invite the user to explore the cause and effect of changing the settings but doing so only after they have mastered an understanding of the strategy deployment with the defaults. The vast majority of users do not change the default settings.

WHAT MARKETS AND TIMEFRAMES CAN BE TRADED?

TAS Boxes can be displayed on Stocks, ETFs, futures, Forex and digital currencies. TAS Boxes can be applied to a chart of any time frame (e.g. 1-minute, 5-minute, 20-minute, daily, weekly, etc.) and will also function with many other style charts such as Range and Renko. Boxes displayed on longer time frames designate more significant balance areas and can be used to locate higher probability entries. Boxes on shorter time frames can be used to identify if the tradable instrument is currently in balance or breaking out, and pinpoint entries accordingly.

INTERPRETATION AND BASIC RULES:

HEIGHT OF BOXES: The height of the TAS Boxes from top line to bottom line is a measure of volatility. When taller Boxes are present and subsequent Boxes expand, this means the volatility of the market has increased. When the height of the Boxes is smaller or contracting, then we are experiencing a market in decreasing volatility or consolidating.

WIDTH OF BOXES: The width of the TAS Boxes are a measure of significance. The longer TAS Boxes have remained at the same levels, the higher the impact they will generally have as support or resistance levels, and in the instances they are breached the market may experience fast and vertical movement.

The TAS Boxes are used to identify high-probability zones for trading both inside the range of the Boxes and also when in breakout mode outside the Boxes:

>>> When price is trading within the boundaries of a normal to wide range commercial
balance area, we can consider trades within the range of the Boxes and should look for entries around the support (green line) or resistance (red line) areas with profit targets around the POC (cyan line) or opposite boundary.

>>> When taking trades near both the upper and lower boundaries, we like to see the POC
near the middle of the box’s range. This is known as a “symmetrical box” as pictured below.


>>> If the POC is plotted tightly close to or at the same price level as the green or red line, we refer to this as forming a “wall” or "plywood" and anticipate stronger commercial interest providing support or resistance in those areas.


>>> When trading above or below the current box, price is said to be in breakout/breakdown mode. During these modes, one should be getting out of any opposing positions that are not in the direction of the breakout. Not all breakout/breakdowns are created equal. Moves outside of TAS Boxes when the vertical distance from Top to Bottom is minimal will tend to have more powerful moves, especially in instances when there are recent long-range bars in the direction of the break.

>>> When markets are breaking out or down outside of Boxes, if there is sizeable space before you encounter recent historal TAS Boxes levels that is favorable for good follow through of the move. Prior TAS Boxes levels do serve as as areas the market may encounter friction and go sideways for a period of time.



MANAGING RISK WITH STOP LOSSES:

We highly recommend the use of stop losses when trading. You can place stop losses outside of the 3 lines of TAS Boxes and trail them behind the market as new Boxes appear in the direction of the trade. You may also move trailing stops among the 3 levels to suit your risk tolerance (e.g. when market is in breakout mode, trailing it from out the Boxes to outside the POC level or opposing level). You can start your initial stop outside the opposite of all 3 lines or on the other side of the POC for lower risk.





∟ ABOUT TAS VEGA:

TAS Vega changes the coloring of the price bars to provide a more meaningful interpretation of when markets are in balance (based on TAS Boxes) or in bullish/bearish breakout mode. There are four colors generated for TAS Vega:

• GREEN – Bullish breakout / Don’t be short
  
• RED – Bearish breakdown / Don’t be long
  
• ORANGE – 1st bar back inside TAS Boxes after prior move outside.
  
• GRAY – Balanced, each subsequent bar after the 1st bar closes inside Boxes.
  

INTERPRETATION AND BASIC RULES:

WHEN VEGA IS GREEN:

• Don’t be short.
  
• Consider longs only or retain existing long positions.
  
• Entering on the bar close above the Boxes is higher probability than intrabar entry.
  
• Many consecutive bar closes above Boxes increases probability of eventual move higher.
  

WHEN VEGA IS RED:

• Don’t be long.
  
• Consider shorts only or retain existing short positions.
  
• Entering on the bar close below the Boxes is higher probability than intrabar entry.
  
• Many consecutive bar closes below Boxes increases probability of eventual move lower.
  

WHEN VEGA IS ORANGE:

• If orange due to closing back inside Boxes of your initial entry Box, hold.
  
• If orange due to closing inside a new Box appearing in the direction of your trade (higher Boxes for longs, lower Boxes for short) consider this a potential 1st tier profit-taking opportunity for multi-lot/shares positions. If single units, exit is at the trader's discretion contingent on the extent of the move.
  
• It is prudent risk management to also use the appearance of orange closed bars as a reminder to trail your stop loss behind the new TAS Boxes levels.
  
• Many times you may see many orange bars over a series of bars (not consecutive, however) and this means the market continues to explore both sides of TAS Boxes and is indecisive about intentions. Be cautious at these times.
  

WHEN VEGA IS GRAY:

• Gray bars simply means the bar has closed in balance within the value area of TAS Boxes.
  
• Gray bars are not a cue to exit a position necessarily. It is just a visual that the bar has closed in the value area. Often a trending move will have many periods that the market closes back inside new Boxes that are appearing in the direction of the trend and your largest trades will require that you simply adjust your trailing stop rather than exit with gray bars.
  
• It is prudent risk management to also use the appearance of orange closed bars as a reminder to trail your stop loss behind the new TAS Boxes levels.
  
• Many times you may see many orange bars over a series of bars (not consecutive, however) and this means the market continues to explore both sides of TAS Boxes and is indecisive about intentions. Be cautious at these times.
  

The user can adjust the coloring of the TAS Vega bars in Style settings.



∟ ABOUT TAS COMPASS:

TAS Compass changes the background color of the chart to reveal the directional bias of the market. It may be applied to charts in any timeframe for stocks, ETFs, futures, Forex and digital currencies.

There are two colors generated for TAS Compass:

• GREEN – Bullish directional bias
  
• RED – Bearish directional bias
  

INTERPRETATION AND BASIC RULES:

The directional bias is established (or changes) when a bar closes outside of TAS Boxes levels. When a market closes above the TAS Boxes, it will establish a bullish bias (green background) and this will remain intact until there is a close below the TAS Boxes. At the time there is a bar close below the TAS Boxes, then the TAS Compass bias changes to bearish bias (red background). This sequence continues back and forth indefinitely. When using TAS Compass, one should still follow the prudent rules and best practices of TAS Boxes as there may be opportunities to exit a losing position sooner by doing so even in the instance a TAS Compass directional bias has not changed.

TAS Compass can be used as a stand-alone visual cue on a chart, but will have accentuated value when used in conjunction with TAS Boxes and TAS Vega indicators included within this bundle.

Below is an example showing TAS Compass with TAS Boxes in order to show how the closes outside of TAS Boxes is the trigger to the background color change logic.



Trade Well My Friends,