[Frank]

<<how do you know E period is an excess ?>>

good question. you will never really know if sellers (buyers) will show up or not in advance. market profile is really more about understanding some core trading concepts and securing good location for your entries.

In this case, following a day of strong trending action -- the market has very high odds of exceeding the high of that day on the following day. 'Inside days' are actually pretty rare (~12%). Thus, you should not be shorting BEFORE the market exceeds the previous day high. But shorting AFTER the penetration of the high and in periods A-E is now a decent idea to consider.

Here is another concept unrelated to Daltons teachings but a helpful guideline. Once the market picks a direction for the day, it will often continue to go that direction for multiple HOURS. Many times (>50%), the market won't make its FINAL high or low until the final hour of the day. It will just chug and chug and chug directionally for hours --- away from the high or low it made in the morning. Thus, if it does make a high in B-E, you will be sitting on a good position that you can ride for hours.

There are many other concepts that can help gauge the odds. Oscillator divergences, Moving Average regression tendencies on certain days of the week, confirmation from other indices (Dow/Nasdaq/Bond Market etc...).

I will try to get some more of these important chapters (6 & 7) done soon.