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Showcase of the Power of Market Profile AnalysisMarket Profile analysis is a powerful tool for traders and investors alike to analyze price movements in financial markets. The method is based on the concept that price moves in a predictable way, forming patterns that can be observed and analyzed. The Market Profile chart is a visual representation (not shown here) of market activity, displaying the distribution of price over time. The chart is divided into horizontal sections, each representing a price level. The length of the bar indicates the duration of time during which trades occurred at that price level. The Market Profile chart can be used to identify areas of price support and resistance, as well as areas of high and low volume. The three key components of the Market Profile chart are the Point of Control (POC), the Value Area, and the Single Prints. The Point of Control (POC) is the price level at which the highest volume of trades occurred during the period under analysis. It represents the most actively traded price level during that time frame, and is often seen as a key support or resistance level. The Value Area is the range of price levels that contain a specified percentage of the total trading volume during the period under analysis. The Value Area can be used to identify areas of price support and resistance, as well as potential trading opportunities. Single Prints are price levels where trading activity occurred but did not overlap with any other price levels during the period under analysis. These are areas where price discovery occurred, and can be used to identify areas of potential price support or resistance. By analyzing the Market Profile chart, traders can gain a deeper understanding of market dynamics and make more informed trading decisions. The chart can be used to identify areas of price support and resistance, as well as potential trading opportunities based on the volume and duration of trading activity at specific price levels. Between end of Dec 2022 and end of Jan 2023, the price of the S&P 500 index (SPX) showed major reactions to the price levels drawn by using Market Profile analysis that was done in Oct 2022 . This is a prime example of the power of this trading method. By identifying key levels of support and resistance, traders were able to make more informed trading decisions and take advantage of market opportunities. In conclusion, Market Profile analysis is a powerful tool for traders and investors who want to gain a deeper understanding of market dynamics and make more informed trading decisions. By analyzing the distribution of price and volume over time, traders can identify key levels of support and resistance, and take advantage of market opportunities. The example of the S&P 500 index (SPX) in October of last year showcases the power of this trading method, and demonstrates how it can be used to make profitable trades in a dynamic and ever-changing market.
OANDA:SPX500USDEducation
by PtGambler
Flawed concepts: the way they sell volume & market profilesImagine daily profiles put on each day on the chart, and let the words in purple provoke some fruitful doubts in your mind. The presented and advertised way of using volume & market profiles is essentially a way of approximating the real levels. This way is very bad. 1) The most fundamental and very obvious flaw is that it disregards the sequence of events. You can take a chart, reshuffle bars in order, or lol, just invert it horizontally. and you'll end up with different charts that have the same profile. All good bro? It's time series lol, sequence does matter. That's why you can't use profiles and non-weighted stats unless you have a very specific goal; 2) 70% rule, normal distributions & standard deviations have nothing to do with aggregated tick data. As a process, it can all can be modeled as a morphing distribution, a constant fight between normal and uniform distributions, the double auction dynamic distribution. But yeah, ofc course you can't read it in a book, gotta think for yourself a lil aye? In normal distribution 70% make sense, in the uniform one it makes sense to consider 100% (the whole distribution) as the area of interest. So overall it's somewhere in between 70 and 100. Also, confirmed with my R&D, bots give the best performance when a price channel includes 80-90% of data (mostly 80), best metrics converge around this number; The real way to use profiles is when you consciously need to disregard an order of events within a certain period and have some kind of summary of it. It's applicable when a certain period has some distinguishable significance: when levels are formed, positioned and cleared. There, you are not really interested in order of things within these events, rather in summaries of these events, there you're doing the right thing. Otherwise, POCs of 'every' period doesn't have equal significance. Summarizing volumes within a week/day/months etc, making a profile & taking 70% so you gonna get VAHs and VALs of it won't magically calculate you the real levels, only approximate em, but 4 real there are better and less computationally intensive ways of doing it, just get a box plot with 10th and 90th percentiles. This video might be really mind opening for you, I really respect it & its creator. If you wanna know how to find levels 4 real, check the linked ideas & use it with pleasure.
NYMEX:CL1!Education
by gorx1
🔥🚩POINT OF CONTROL: THE MOST USEFUL TOOL FOR TREND TRADER🔥 Hi friends! Point of control is a part of volume profile indicator and very useful tool to identify upcoming BTC or any other asset move. I will explain you how to use this tool in your trading and make a good profit in this idea. 💹 Horizontal Volume Indicator or Volume Profile is a simple indicator that helps to identify: value areas (support or resistance zones), points of control and liquidity gaps. 📊 HOW TO USE POINT OF CONTROL Point of control (red line on the chart) is the place of the largest accumulation of liquidity. We can say that this is the place of "the biggest battle between bulls and bears": 🔥the point of control becomes a resistance in case of "bears' victory" and crypto start to fall 🔥the point of control becomes a support in case of "bulls' victory and crypto start to grow 🚩 When one of the sides wins the "battle", this is the best time to enter the trade in short or long. ✅ No matter how complicated this tool looks, it is very easy to use: 1. extend the volume profile indicator from the lows to the highs. The indicator automatically shows the largest accumulation of liquidity showing POC (red line). 2. wait until the price tests the POC as support or resistance . From time to time the price can consolidate directly on the POC, which indicates the "battle" of long and short traders. Pay attention to the chart. I have selected for you 4 cases of using POC on the volume profile: 1. Bitcoin just touched the POC at $39,700 and bounced up 72%. 2. the price tested the POC as resistance at $61,100 after which the price fell by 45% from the absolute highs. 3. Bitcoin consolidated around the POC at $39,000 for some time. The price fell by 31%. 4. POC is at the price of $19,150 per Bitcoin. Now you have to expect the price to return to this level and carefully watch the price reaction on POC. 🔥If the POC is tested as resistance , then it is very likely that we will see the level of $13,000-14,000 for BTC. 🔥If the POC is tested successfully as support , then the price will be able to make higher highs and start a bullish trend for Bitcoin. I talked about this scenario in previous ideas. 🚩 HOW TO ADD VOLUME PROFILE INDICATOR WITH POC TO YOUR CHART? 3 steps to add the indicator to your chart: 1. open "prediction and measurement tools" at the left part of chart 2. choose the "Fixed Range Volume Profile" 3. choose the price range from some date till another date. So now you can see all important value areas and point of control. ✅ Point of control help you to identify the power of bulls or bears on different timeframes and make the right trading decision in the most of cases. Personally, I use this tool effectively for swing trading and scalping as well. Traders, do use this indicator and such tools as POC in your trading? What is your favorite idicator for trading? Let me know in the comments. 💻Friends, press the "boost"🚀 button, write comments and share with your friends - it will be the best THANK YOU. P.S. Personally, I open an entry if the price shows it according to my strategy. Always do your analysis before making a trade.
Education
by Yuriy_Bishko
7
How to trade using Value Areas and POC?A few key concepts when using Market Profile in your trading: 1) Point of Control (POC) acts as price magnets, as they represent the price level where most time was spent during a trading day. Price tends to gravitate towards them. 2) Naked (Not visited) POC acts as stronger magnets than visited POCs. 3) When price enters / breaks into a Value Area, which represents a range of "fair value", price tends to visit the other end of the Value Area. For example above, the price breaks up from the Value Area Low before end of day yesterday, hit the Value Area High this morning. You definitely won't find these key levels and ranges with traditional support and resistance lines drawing methods. Using Market Profile will give you the edge to become a better trader. See my previous 2 posts:
OANDA:SPX500USDEducation
by PtGambler
2
Sea Ltd stock analysis w/ boxes and Volume ProfileHi everyone, This time I am analyzing NYSE:SE stock movement using volume profile besides my usual boxes setup. NYSE:SE stock price has shown very persistent up-trend strenght for the past year. When we have the equity soaring up like NYSE:SE does, it is helpful to use Volume Profile to see a bigger picture. I added three volume profiles for different timeframes: 9 months, 5 months and 2 months. What does it show us? As we can see in the past 9 months the biggest trading volume occured around 273 level. That is where our long-term POC is. However, a decent volume profile started developing from 308 level and above. For the last 4 months the highest volume has been seen at 323 level. Both 2 and 4 month profiles have universal volume distribution with same POC level. That means that higher price level has been accepted and stock is consolidated on a higher time-frame. What now? As volume profile is dynamic, I expect long-term POC to migrate to 320 level. However, for that to happen we will need to see a lot of volume at 320, which is 7% lower than the current price. AND that would be happening at the uptrend support line, which is dangerous. IF that is broken, we could see a return to 273 POC to repair long-term profile structure. IF we continue higher from here, we would get unevenely distributed profile, which could be bad in the long-run. Let me know what you think of NYSE:SE movement and if it is sustainable. Trade wisely and good luck! ----------------------------------------------------------------------------------------------------------------- Disclaimer!!! This is not financial advise.
NYSE:SEEducation
by AyBe_Invest
2
Tutorial | How To Identify Potentially Strong Trend DaysI got smoked shorting the MNQ today. And it was avoidable. The MNQ1! and the MES1! were flashing warning signs since the Sunday open to NOT fade the move. I stayed off the sell side for the opening 30 minute candle, but then got sucked in at a level. The entry was a violation of one of the Golden Rules of Range Trading - STAY AWAY from Outside Days! In this video, I discuss how to identify Outside Days and look for Untested Prior Session POCs as signs that conditions are pointing to trending price action.
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CME_MINI:NQU2021Education
by RodCasilli
40
Tutorial | Lesson 4: Key Levels When Trading 24 Hour MarketsLet's look at some key levels to identify before each trading session, especially when trading around the clock markets like futures. Before the cash session bell, what are the prices for the following levels? Prior Session High/Low Overnight High/Low Developing Value Area High/Low And then, at 8:30a ET, is price above or below the prior session high or low? Are we seeing an inside or outside day? Other levels worth consideration are prior sessions POC, High Volume Nodes (HVN) for possible areas of support or resistance, and price relative to our trend filter.
CME_MINI:ESU2021Education
by RodCasilli
8
Tutorial | Lesson 1: How To Interpret & Trade Volume Profiles In this first in a 5 Part Video Idea Series, I cover the cleanest volume profile distribution that I've named the "Indian Arrow." This profile is best suited to support and resistance levels, and mean reversion trading within well establish channels. Key Concepts: 1) Volume at price is very different from typical volume over time. 2) Be sure to read the Help Center article about the Visible Range profile before watching the video. 3) The point of control (POC) in the Indian Arrow is the target for longs entered at value area low (VAL) and/or shorts taken from value area highs (VAH). 4) The Visible Range script will display a dynamic profile based on the amount of data "visible" on your screen. In this video I'm looking at 8H candles. 5) Settings in this video for the Visible Range are most appropriate for futures, forex, and crypto products. Settings for equity profiles in a later video.
CME_MINI:RTY1!Education
by RodCasilli
6