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Trading with Market Profile
- Thread starter They
- Start date
TPO = Time Price opportunity (a point on a Market Profile chart where price has traded, represented by a the letters A,B,C,D,E,F,G,H,I,J,K,L,M,N â each letter representing a 30 minute period of the day, A/9:30 â 10:00, B/10:00 â 10:30, etcâ¦
POC = Point Of Control (the price at which the most TPOâs are in the Market Profile chart)
VA = Value Area (70% of the days range, in general the POC will fall near the middle of the Value Area
UVA = Upper Value Area
LVA = Lower Value Area
HVL = High Volume Level (the price at which the most volume has been traded) most of the time this lines up with the POC, but not always
IB = Initial Balance (the first hour of the trading day)
CR = Closing Range ( the last hour of the trading day)
NOTE: when a day has a small range many times Pivot, Support 1 and Resistance 1 will be close to the POC, UVA and LVA - personally I have found the MP levels to be tradable(for my style) where as the others could only be used as reference points
POC = Point Of Control (the price at which the most TPOâs are in the Market Profile chart)
VA = Value Area (70% of the days range, in general the POC will fall near the middle of the Value Area
UVA = Upper Value Area
LVA = Lower Value Area
HVL = High Volume Level (the price at which the most volume has been traded) most of the time this lines up with the POC, but not always
IB = Initial Balance (the first hour of the trading day)
CR = Closing Range ( the last hour of the trading day)
NOTE: when a day has a small range many times Pivot, Support 1 and Resistance 1 will be close to the POC, UVA and LVA - personally I have found the MP levels to be tradable(for my style) where as the others could only be used as reference points
How do you go about determining the Value area? If it is 70% of the day's range, is it a simple statistical exercise to put the value levels after 15% of the activity on each side of the range? Is there a reason why the value area is defined as 70% and not some other % like 90% or 80%?
to get the excact Value Area you need to count TPO's
The Value Area is where price was accepted by the "majority" of the market participants
When Steidalmeyer and the CBOT developed market Profile I am sure their research found that 70% was the cutoff, thats probably the only reason.
many traders use many indicators, range division(retracements/projection), swing hi/lo's for the level they want to trade off of
for my style of trading I have found the 3 levels created by building a market profile of yesterdays data and the levels created by looking at 5 and 20 day profile charts to be the most reliable
one quick example;
the market gaps up, the market begins to sell off, where will it stop? at yesterdays highs? maybe, many traders will jump in at that level only to have the market go down another few points in to the previous day's range and stop them out, I have found that it will have it's best playable bounce at the previous day's Upper Value Area.
The Value Area is where price was accepted by the "majority" of the market participants
When Steidalmeyer and the CBOT developed market Profile I am sure their research found that 70% was the cutoff, thats probably the only reason.
many traders use many indicators, range division(retracements/projection), swing hi/lo's for the level they want to trade off of
for my style of trading I have found the 3 levels created by building a market profile of yesterdays data and the levels created by looking at 5 and 20 day profile charts to be the most reliable
one quick example;
the market gaps up, the market begins to sell off, where will it stop? at yesterdays highs? maybe, many traders will jump in at that level only to have the market go down another few points in to the previous day's range and stop them out, I have found that it will have it's best playable bounce at the previous day's Upper Value Area.
Originally posted by They
NihabaAshi,
Results are good,
around 80% for the 2/-2 previous day's level trades
around 70% for the 3-5/-3 weekly level trades
Market Profile levels are the most reliable support and resistance levels I have found.
That's a phenomenal win rate. What did you study to learn about this stuff? Any good websites? Did you have any good trades today?