Trading with Market Profile

Quote from mokwit:

I did check it out and as I said above couldn't really see anything that I was not already seeing, which was the point of my thread. Hence the question to try and get some feedback on wether there was nothing really there or I just wasn't seeing it.

Thank you, I can get a pretty good idea on whose posts are based on trading experience and worth placing weight on and who are the buzzword regurgitators.

Yes I know its an intuitive decision support tool for reading auction markets that gives no signals per se (so it's positioned as a non signal decision support tool?). and yes I know what a normal distribution is, and even what Kurtosis is, and yes I read the books and even looked at it real time in markets I trade - both equity and futures

So far Nobody has actually said "This is how I use it to make money" have they? Even experts on it with names like 'bundlemaker'. Are your comments based on actual daily profitable usage or a few MP buzzwords from Dalton's book or a website? And guess what, I am posting here to avoid the situation of spending time on something that may not be worth spending time on. Learning from other peoples mistakes is called 'wisdom' and you have to be a few years out of high school before it kicks in.

If MP is being developed in significant ways by various parties I would love confirmation of that fact but it seems to me to be a gimmick that fell by the wayside and is being brought to the fore again because there is a new generation who have not tried it. Stiedlmeyer appears not to be one of the parties developing it in various significant ways as far as I can tell.

Ditch, Thanks for the book rec. I thought it was a good insightful book on market's per se and far more useful than yet another book on wedges and MA crossover even for those parties not looking to take up MP and develop it in meaningful ways.
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In Mind over Markets J. Dalton describes a couple of special situations, one of them is the double print in the VA, which is mentioned by trdinglife in this thread. With a little imagination you can come up with losts of profitable setups. One of the setups I trade is the following: If the markets trades below the VA during the open enter short upon the first opportunity where the $tick peaks above yesterday's VA. Opposite for longs. Target and stop both 2 pts.
 
I just started looking into market profile. Would you be kind enough to indicate who do you use to provide these charts ?

Also, what does the second set of charts mean ? (07)

Thanks in advance
 
In addition to this thread in ET, there is a discussion group for users of Steidlmeyer's newest software CapitalFlow, but it's mostly inactive now.

There is an active discussion at Reefcap forum. And some argue it's not useful at all:

http://www.reefcap.com/ubb/Forum19/HTML/000034.html

Peter Steidlmayer the developer of MP once describe his theory "three basic relationships hold the key to understanding the nature of the markets. These relationships take the past to the present and into the future, thus giving us an insight into the markets"
The whole concept is based on discretionary interpretation. So as one trader looks at the price structure and takes a bullish view another might be looking at the same formation and taking a bearish view. Why is that? Because the both have differnet lagging indicators at the bottom of their charts, so the concept is flawed on my view.

I hope people know that the basis of Mprofile is based on statistics and the presumption of price trading inside the standard deviation. In 'normal' market conditions about two thirds of market action will fall within one standard deviation and 95% will fall within 2 standard deviations.

You know what other indicator uses the standard deviation as a stand alone tool, "the Bollinger Band" and you know how erratic that is.

You can basically get a better idea of price action with a standard Boll band and 2 moving averages than using MProfile.

MProfile in my opinion should be thrown in the same basket as Gann/Astro and any other market nonsense that has varing intrepration.

ALL i'm seeing in the forum regarding market profile is the simple price action turned into something complex with silly theories that a moving average will tell the same thing.

I spent enough years with MP to say its totally flawed.

Anyhow in saying that, i believe the concept isn't as flawed as i might sound. I think the theory that is in the market place atm is flawed but the statisitcal theory of price returning to value areas isn't.

The notion of taking mathematical equations and provding extended ranges to trade too have a small percentage of it reaching within the alloted timeframe. This is where Elliot waves also can fall on its face because the extended target theory continually moves forward.

But if you can find a method using extended price theory and the statistical information of price returning to the "dynamic mean" then you have add an edge.

How you do that is something that is always subject to interpretation. Because the subject of statistics is discretionary on how the trader curve fits it into his trading method.

So it get back to what Peter the guru first said 'take whats past,now and into the future.
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"gekko

I just started looking into market profile. Would you be kind enough to indicate who do you use to provide these charts ?"

The major charting software vendors provide Market Profile (with an additional fee because of the CBOT copyright). More info at

http://www.cbot.com/cbot/pub/page/0,3181,1183,00.html

"Also, what does the second set of charts mean ? (07)"

That would be the (NYSE) tick - not MP related !++
 
Quote from Vince1:

"gekko

I just started looking into market profile. Would you be kind enough to indicate who do you use to provide these charts ?"

The major charting software vendors provide Market Profile (with an additional fee because of the CBOT copyright). More info at

http://www.cbot.com/cbot/pub/page/0,3181,1183,00.html

"Also, what does the second set of charts mean ? (07)"

That would be the (NYSE) tick - not MP related !++
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You can also run a MP study on the $tick, however I set the calculation of the VA to 90% instead of 70%.
 
Quote from mtzianos:

In addition to this thread in ET, there is a discussion group for users of Steidlmeyer's newest software CapitalFlow, but it's mostly inactive now.

There is an active discussion at Reefcap forum. And some argue it's not useful at all:

http://www.reefcap.com/ubb/Forum19/HTML/000034.html
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As I recall correct already around 1990 D. Jones of Cisco futures addressed the problem of the lack of the predicting value of the daily VA. He introduced the concept of multiday VA's, of which the initiator of the discussion obviously wasn't aware.
 
The major charting software vendors provide Market Profile (with an additional fee because of the CBOT copyright). More info at


Thanks Vince1

More stuff to look at for me now. I have found the market shaman room to be real good for MP education

Cheers
 
mtzianos,

interesting post about the value of MProfile...what I got from that discussion thread you pasted in was that the guys he had been talking to were trying to pass MProfile off as some holy grail of charting...and as such, deserve this guys disdain...

having said that, I use MProfile almost exclusively as a means to chart the days price action...yes there are various setups that the MProfile provides as a means to enter and exit trades with relatively high probability results...but guess what, those who know candlestick charting inside and out would probably say the same thing about them...

In my opinion the real point being missed here is that MProfile is not really to be used as an Indicator like stochastics, or gann lines, or fibonacci...it is merely a different graphical representation of what occurs between price and time throughout the day...I like it because it is easier to read these profiles than any other charting tool I have used...but, I use the MProfile in conjuction with price action; I use it to give me an idea of where support and resistance levels occur; I use it to show me where price spikes and Value Areas occur: and so on...MProfile has allowed me to observe recurring patterns and in my opinion does this in an extremely trader friendly fashion...

at the end of the day you either like it or don't...but frankly I think it's worth a serious look...

I use CQG as my provider...expensive but as with most things in life and trading, you get what you pay for...
 
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