Trading with Market Profile

Market Profile is in fact the basic of descriptive statistics : it is the REAL frequency distribution of price statistically opposed to THEORICAL distribution - many assumed to be normal whereas there is no reason to do such ad hoc hypothesis it is really astonishing that there can be even debates on that as for other scientific domains one wouldn't postulate normal law. And frequency distribution can be characterised by average but also by median, mode (which is renamed POC) and quantiles: which one to chose depends on the nature of the distribution and to some statistical efficiency criterias. When the distribution is not symetrical it is judicious to chose the mode (so the POC) and as for quantiles one has just to cumulate and chose a cut off percentage.

I can even explain statistically other things like wedge or gann lines in regard to statistical techniques used in statistical process control field but it will be for another day perhaps :).

Quote from They:

Ok, lets see if we can get a discussion going on Market Profile.

I am trading the ES using the previous day's Market Profile levels (upper value area, lower value area and POC) also using the weekly POC/HVL (high volume level) and weekly LVL (low volume level)

Most trades using the previous day's levels I use a 2 pt target / 2 pt stop. If levels are close I may let a trade move against me to the next level and add another.

If I enter trades off of the weekly levels HVL/LVL then I use a 3 to 5 pt target / 3 pt stop


Support and resistance are all there is, everything else is just a giver of confidence.
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Yes I "like" MP because it is rationally based on descriptive statistics and so tries to be objective . Nevertheless descriptive statistics alone doesn't predict by itself it is a static and PAST description of thing. That one can make inference to near future depends on the dynamic law of the system not on the frequency distribution per se but by one's knowledge and observation of the behavior of the market. In conclusion yes it can be useful for traders - as for me I don't use MP it's too fuzzy compared to my model.

P.S.: in previous post I was just making the link with classical statistics field so that market profile appears as an obvious approach.

Quote from Siwash:

Forgive me, but I'm a little lost.

Do you like MP? Do you think it is useful for traders?
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for those of you who use mp, how would you reccomend go about learning the fundamentals. is the mind over markets book a good resource? i have the websites, and am sorting through them. thanks for any words.
 
how can market profile be used for swing trading and longer time frames? can it be used to initiate long term positions(two days-two weeks)?
 
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