Within these parameters, the situat

Within these parameters, the situation will not always be clearcut, but market activity in a two-timeframe market at interim and long-term tops and bottoms should demonstrate first responsive and then initiative activity opposite the recent direction. In other words, when a market has topped, first responsive selling and then initiating selling becomes apparent. With these distinctions in mind, an individual with a market understanding can see that market activity always begins to change long before the trend turns or the extreme has been seen. Contrary to popular belief, futures markets are like all other markets in that they don't "change on a dime." This is because change is caused when the mix of short timeframe to long timeframe participants changes. It is important to understand how profound this statement is: individuals with different timeframes impact the market differently. In other words, in the absence of long timeframe participants, the market is dominated by short timeframe participants, those who seek fair value. But when long timeframe participants enter the market, they are competing with the short timeframe participants for the same timeprice opportunities and hence upsetting the existing balance in the marketplace. The major point is that a market's directional change is caused by a readable occurrence. Thus, a change in market activity signals to the participant with a market understanding that change, not continuation, is occurring. Yet most participants focus on price alone and thus do not see market activity showing that the condition of the market is changing due to the change in the mix of timeframe participation. Characteristics of The Futures Markets In all of business, it is necessary to understand what it is one is working with in order to understand it and how it works. It is therefore no surprise that few understand how to consistently profit from markets, since how they work seems mysterious. There is no mystery. All futures markets are essentially ongoing auctions in an all-encompassing sense. One needs to know the degree of underlying activity in the auction structure to determine whether the auction is continuing its direction or ending. If a large action is proceeding, information is generated constantly by the ensuing initiating and responsive market activity of the other timeframe trader. Information is also being generated concerning the degree to which the market is facilitating trade. In simple everyday markets, it was demonstrated that if one can isolate and understand an individual's timeframe, his interests could be understood.