Jump to content

Welcome to the new Traders Laboratory! Please bear with us as we finish the migration over the next few days. If you find any issues, want to leave feedback, get in touch with us, or offer suggestions please post to the Support forum here.

  • Welcome Guests

    Welcome. You are currently viewing the forum as a guest which does not give you access to all the great features at Traders Laboratory such as interacting with members, access to all forums, downloading attachments, and eligibility to win free giveaways. Registration is fast, simple and absolutely free. Create a FREE Traders Laboratory account here.

ant

Market Profile Strategies

Recommended Posts

I would like to ask a question regarding your market analysis. Your methods seem very interesting. How do you analyze to determine whether tomorrow will be a trending day or a consolidation day?

 

Do you look for high volume price levels in either direction? For example, if a high volume area is close to the current price, would you expect prices to reverse at these points? If the current price is trading between two high volume areas that are relatively close to each other, would this be enough information to consider a consolidation day?

 

Thank you.

 

Piptrader,

 

As you alluded to, it is critical to determine market condition (consolidation or trending, or in Market Profile parlance, balance or imbalance). You would then adjust your trade strategy accordingly. In a trading range, you would sell the top of the bracket and buy the bottom of the bracket. I stay away from trading in the middle because it offers poor trade location and that's where a lot of the noise is, unless the bracket is getting mature and imbalance is expected, then I would enter at the high volume node with a target to one the extremes of the balance area. If the market trades near the bracket limit, I will then monitor market internals to see if a breakout is likely. You never know what the market is going to do until it reaches a key level and then the market is monitored for strength/weakness. That's one main reason why I don't believe in mechanical systems. You can't follow these guidelines blindly, like fade the POC all the time, you won't be a consistent trader IMO.

 

Once a market breaks out of a balance area, adjust trading strategy again. Follow the trend and buy pullbacks in uptrends and sell rallies in downtrends. Do not fade anymore. The composite Market Profile looks quite different for balance vs imbalance. See attachment. Of course, we have all experienced false breakouts and that's the way the market extends a trading range. How you enter a breakout depends on your personal trading plan, but we will always be wrong at some point and that's where our stops help.

 

In the first attachment, you will see two profiles. The first one is of the ES in a trading range and the second one is the ES trending. My definition of a balance market is one that has at least 3 TPOs at each price level and the market is trading within the upper and lower limit. When the profile starts to look like a well-defined bell-shaped curve with a high volume node near the middle of the distribution, I will be alert for a breakout. That means, I will monitor the extremes of the bracket using market internals and I will also try to enter at the high volume node to try to get into the market before it breaks out, hopefully. When the market starts to trend, I will start to get alert for consolidation again. The markets repeat this cycle over and over again. Notice in the chart what the profile looks like when a market is trending. It is thin and long with low volume areas (single prints) from the range extension. Again, this is not a mechanical system and it takes practice. This trading style will not give you green/red lights and you have to consider the context of what the market is doing. Too many traders do the same thing regardless what the market is doing, and that's a tough way to trade, I think. The key is to enter at "unfair" prices (i.e., away from value). That will give you the best trade location and excellent risk-reward. There are many trading strategies/tactics that one can develop trading market structure and market development using the Market Profile graphic. I gave a just a few ideas.

 

By the way, you can see consolidation and trending on any chart (see second attachment). I know I have oversimplified things quite a bit and some of it is apparrent, but I hope it helps. Good Luck!

ES.GIF.a1d6cb03611c8be99a981a7aeb91cc4b.GIF

ES2.GIF.2aad6fd6f4ea0bf9ab7aa830f9d6e197.GIF

Share this post


Link to post
Share on other sites

Great post and thank you for sharing. I would like to ask a question regarding one trading setup you mentioned. I also use market internals to judge whether the price will hold or a breakout is likely.

 

However, all my breakout plays are entered at the pullbacks to the breakout point. There are cases where the pullback never occurs and I end up entering at a higher price.

 

You mentioned that you will enter before the breakout occurs. I am actually working on this technique but have trouble deciding where the stop would be. Do you use a tight stop for such setups?

 

The only time I actually enter before a breakout is when the TRIN breaks out of its range. I will then enter using a 10 points stop for the YM.

 

Thank you.

Share this post


Link to post
Share on other sites

Breakout entry is one of the areas that I hope to continue to improve on with time. In general, I try to enter a partial position on the breakout using a market order and enter the balance on a retracement, if there is one, using a limit order. For the record, I didn't get into this trend until much later, but here is how one could have played it. Also refer to the previous charts for the profiles.

 

On 9/11, the ES traded to the upper bracket limit at 1314.75 and formed a Volume divergence, as indicated on the chart. Volume was not confirming the breakout. One could have taken a responsive trade and shorted near the upper limit. The target would have been to the middle of the distribution (or the high volume node). Since we were trading above the high volume node (HVN), a bias to the upside would have been appropriate. So if a long trade were taken near the HVN, the target would be to the extreme of the bracket at 1314.75. (Note that volume decreased significantly as the ES approached the HVN, signaling that it is unlikely that the market would trade through the HVN.) However, since the ES was in a short-term balance area, imbalance was expected to follow. When the ES traded to the upper limit, its behavior should be monitored using market internals. In this case, the ES traded through the upper limit on high volume. It's important to know what constitutes high volume for the markets traded. I usually monitor internals on a 1 min and 5 min chart.

 

Soultrader, your breakout trade setup using TRIN is a good one and I will look for it next time. Thanks.

 

Stop Placement: Divide the ES composite range into octants (8 sections). The 8th octant at the upper and lower limits corresponds roughly to the 2nd standard deviation where approximately 95% of prices trade. The range of the ES composite from 9/7 to 9/11 was roughly 1302.50 to 1314.75 or 12.25 points. Dividing 12.25 by 8 yields 1.5 points per octant. A stop can be placed 1.5 points below the upper limit. Also, keep in mind volatility and use the greater of the two values. I won't get into volatility here.

 

There are many ways to trade a breakout and one just needs to find the way that works for them. Another example would be to wait a certain amount of time and if the market is still trading beyond the bracket limit, enter the trade.

Breakout.thumb.GIF.2a27e1d15e2e2ce1135475ceee046674.GIF

Share this post


Link to post
Share on other sites

Thank you ant.. very nice post. Volume divergences is a very powerful signal. I was taught this method early in my trading career from a trading buddy of mine.

 

I have two questions: is the volume indicator just a line chart of volume? I have never quite seen volume plotted that way but it makes alot of sense since I use a line on close TICK chart.

 

Also, regarding the stop loss placement I am still having some difficulties where you would actually place the stop. Lets say you were to buy right before the upper bracket limit breakout around 11314 on 9/12, you would use a 1.5pt stop from your entry?

 

The concept of time and breakout is something I use as well. Whenever I see price hugging the upper extreme bracket, I anticipate a breakout. I do not remember where I learned this concept but I picked it up about 2 years ago.

Share this post


Link to post
Share on other sites

The volume indicator is plotted as a line indicator in the chart instead of a histogram.

 

Putting volatility aside, the stop would have been placed 1.5 points (an octant stop) below the upper bracket limit or 1313.25 on 9/12. If the market trades below the upper octant, the long trade would have been stopped out and a responsive trade could have been taken. A responsive trade would mean entering a short trade at 1313 with a target of the middle of the distribution or the next key reference point (monitoring internals of course). The octant stop is one approach covered in the Cisco-Futures course.

Share this post


Link to post
Share on other sites

I actually like the idea of a volume line chart and will add it on my charts to see how it goes.

 

This octant concept is new to me and I have trouble grasping. I may need to look into the Cisco-Futures course.

 

After reading the posts here, I spent some time thinking about breakout patterns and strategies to play them before they happen. One problem I have relying on volume when playing breakouts is that the breakout bar (tall green candle) occurs on high volume. Wouldn't this be a late entry because you are entering after a volume confirmation?

 

The concept of having a long bias if price is trading above the HVN is a similar concept when using pivot points. Traders hold a bias towards the long side when price is above the daily pivot or PP. Some traders base their pivot on the opening price as well.

 

I do feel comfortable applying time into a breakout strategy. If price is hugging the upper or lower bracket for some time, this could be a good signal for a breakout. However, I will need to create a stricter rule for this setup. Some people use a combination of bollinger bands and keltner channels to anticipate breakouts as well.

 

This topic has become fairly interesting... and I will try to research more on breakout patterns. This is a trading setup that can offer a tremendous edge when mastered because by getting in early, you can completely eliminate risk at the moment of the breakout. The first breakout bar tend to be quick and fast. Therefore, I would like to be in the trade beforehand to cut a portion of my position loose at this first bar.

Share this post


Link to post
Share on other sites

i stopped using mrkt profil in 91 when i left the floor,the es daily range then was 3 points, s&ps around 245-250,i, recentley returned and found it much harder to use,one thing that still works is the wide spot,i used to call it the nipple, on major selloffs where you have a chart of the previous daily nips in front of u,the market uses those as magnets or temp support,say thurs day nip was 1320, fri nip 1346,monday nip 1364,tue1380, then wed opens at 1400 and begins to sell off,it'll stop at 1380 and bounce , not big if it's a trend day',if it keeps falling it,ll stop next at 1364. then tommorrow if dtrend continues it,ll stop at 1320 and so on. If there was a double distributionday or 2 nips then the cleavage btween the 2 also acts like a nip. i still hand chart it in one point increments just so i know where those nips are, .there is a trend day i would guess 3 times a month and it is very useful,those are my most profitable days ,i trade with a lot of confidence bcuz of those nips

Share this post


Link to post
Share on other sites

Try splitting your profile into two preiod (1 hour sections), if your profile chart has volume distribution you will see several bal and imbal levels too play off. I find its a great way to use MP hope it helps.

Share this post


Link to post
Share on other sites

Hi, i would like to know if u trade using the market Profile of the previous day or current day? i do know that Boltner uses previous day profile to trade and toally ignores the current day. Would u please enlighten me pls...

 

Btw, how would u monitor volume with respect to how its doing at the HVA or LVW ?

 

 

Many thanks

Share this post


Link to post
Share on other sites

Hi I use Volume Profile and use a LVN strategy identifying levels that I confirm with Bookmap and time based volume. I currently use a profile over visible range however do have a daily and a weekly profile up. The question is, do you have session Profiles or a Profile for a 24 hour period? I trade the ES

Share this post


Link to post
Share on other sites

TPO chart shows important zones (levels) like POC, singles, value area). With Volume profiles we'll get information about volume distribution

https://www.quantower.com/blog/tpo-profile-chart-and-trading-on-bitmex

https://www.quantower.com/blog/trade-with-alpaca-markets-via-quantower#tpo-profile-chart-got-more-features-and-improvements

also, we're discussing trading with TPO chart, VWAp, Volume profiles in Quantower Futures Trading group https://t.me/quantower_futures

Screenshot_37.thumb.png.82f00d8da1e9f8f9512b320080ad3bcd.png

Screenshot_38.thumb.png.545132f5423c775a44d259444e33e15f.png

Edited by Quantower

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.


  • Topics

  • Posts

    • Date: 11th July 2025.   Demand For Gold Rises As Trump Announces Tariffs!   Gold prices rose significantly throughout the week as investors took advantage of the 2.50% lower entry level. Investors also return to the safe-haven asset as the US trade policy continues to escalate. As a result, investors are taking a more dovish tone. The ‘risk-off’ appetite is also something which can be seen within the stock market. The NASDAQ on Thursday took a 0.90% dive within only 30 minutes.   Trade Tensions Escalate President Trump has been teasing with new tariffs throughout the week. However, the tariffs were confirmed on Thursday. A 35% tariff on Canadian imports starting August 1st, along with 50% tariffs on copper and goods from Brazil. Some experts are advising that Brazil has been specifically targeted due to its association with the BRICS.   However, the President has not directly associated the tariffs with BRICS yet. According to President Trump, Brazil is targeting US technology companies and carrying out a ‘witch hunt’against former Brazilian President Jair Bolsonaro, a close ally who is currently facing prosecution for allegedly attempting to overturn the 2022 Brazilian election.   Although Brazil is one of the largest and fastest-growing economies in the Americas, it is not the main concern for investors. Investors are more concerned about Tariffs on Canada. The White House said it will impose a 35% tariff on Canadian imports, effective August 1st, raised from the earlier 25% rate. This covers most goods, with exceptions under USMCA and exemptions for Canadian companies producing within the US.   It is also vital for investors to note that Canada is among the US;’s top 3 trading partners. The increase was justified by Trump citing issues like the trade deficit, Canada’s handling of fentanyl trafficking, and perceived unfair trade practices.   The President is also threatening new measures against the EU. These moves caused US and European stock futures to fall nearly 1%, while the Dollar rose and commodity prices saw small gains. However, the main benefactor was Silver and Gold, which are the two best-performing metals of the day.   How Will The Fed Impact Gold? The FOMC indicated that the number of members warming up to the idea of interest rate cuts is increasing. If the Fed takes a dovish tone, the price of Gold may further rise. In the meantime, the President pushing for a 3% rate cut sparked talk of a more dovish Fed nominee next year and raised worries about future inflation.   Meanwhile, jobless claims dropped for the fourth straight week, coming in better than expected and supporting the view that the labour market remains strong after last week’s solid payroll report. Markets still expect two rate cuts this year, but rate futures show most investors see no change at the next Fed meeting. Gold is expected to finish the week mostly flat.       Gold 15-Minute Chart     If the price of Gold increases above $3,337.50, buy signals are likely to materialise again. However, the price is currently retracing, meaning traders are likely to wait for regained momentum before entering further buy trades. According to HSBC, they expect an average price of $3,215 in 2025 (up from $3,015) and $3,125 in 2026, with projections showing a volatile range between $3,100 and $3,600   Key Takeaway Points: Gold Rises on Safe-Haven Demand. Gold gained as investors reacted to rising trade tensions and market volatility. Canada Tariffs Spark Concern. A 35% tariff on Canadian imports drew attention due to Canada’s key trade role. Fed Dovish Shift Supports Gold. Growing expectations of rate cuts and Trump’s push for a 3% cut boosted the gold outlook. Gold Eyes Breakout Above $3,337.5. Price is consolidating; a move above $3,337.50 could trigger new buy signals. Always trade with strict risk management. Your capital is the single most important aspect of your trading business.   Please note that times displayed based on local time zone and are from time of writing this report.   Click HERE to access the full HFM Economic calendar.   Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding of how markets work. Click HERE to register for FREE!   Click HERE to READ more Market news.   Michalis Efthymiou HFMarkets   Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
    • Back in the early 2000s, Netflix mailed DVDs to subscribers.   It wasn’t sexy—but it was smart. No late fees. No driving to Blockbuster.   People subscribed because they were lazy. Investors bought the stock because they realized everyone else is lazy too.   Those who saw the future in that red envelope? They could’ve caught a 10,000%+ move.   Another story…   Back in the mid-2000s, Amazon launched Prime.   It wasn’t flashy—but it was fast.   Free two-day shipping. No minimums. No hassle.   People subscribed because they were impatient. Investors bought the stock because they realized everyone hates waiting.   Those who saw the future in that speedy little yellow button? They could’ve caught another 10,000%+ move.   Finally…   Back in 2011, Bitcoin was trading under $10.   It wasn’t regulated—but it worked.   No bank. No middleman. Just wallet to wallet.   People used it to send money. Investors bought it because they saw the potential.   Those who saw something glimmering in that strange orange coin? They could’ve caught a 100,000%+ move.   The people who made those calls weren’t fortune tellers. They just noticed something simple before others did.   A better way. A quiet shift. A small edge. An asymmetric bet.   The red envelope fixed late fees. The yellow button fixed waiting. The orange coin gave billions a choice.   Of course, these types of gains are rare. And they happen only once in a blue moon. That’s exactly why it’s important to notice when the conditions start to look familiar.   Not after the move. Not once it's on CNBC. But in the quiet build-up— before the surface breaks.   Enter the Blue Button Please read more here: https://altucherconfidential.com/posts/netflix-amazon-bitcoin-blue  Profits from free accurate cryptos signals: https://www.predictmag.com/ 
    • What These Attacks Look Like There are several ways you could get hacked. And the threats compound by the day.   Here’s a quick rundown:   Phishing: Fake emails from your “bank.” Click the link, give your password—game over.   Ransomware: Malware that locks your files and demands crypto. Pay up, or it’s gone.   DDoS: Overwhelm a website with traffic until it crashes. Like 10,000 bots blocking the door. Often used by nations.   Man-in-the-Middle: Hackers intercept your messages on public WiFi and read or change them.   Social Engineering: Hackers pose as IT or drop infected USB drives labeled “Payroll.”   You don’t need to be “important” to be a target.   You just need to be online.   What You Can Do (Without Buying a Bunker) You don’t have to be tech-savvy.   You just need to stop being low-hanging fruit.   Here’s how:   Use a YubiKey (physical passkey device) or Authenticator app – Ditch text message 2FA. SIM swaps are real. Hackers often have people on the inside at telecom companies.   Use a password manager (with Yubikey) – One unique password per account. Stop using your dog’s name.   Update your devices – Those annoying updates patch real security holes. Use them.   Back up your files – If ransomware hits, you don’t want your important documents held hostage.   Avoid public WiFi for sensitive stuff – Or use a VPN.   Think before you click – Emails that feel “urgent” are often fake. Go to the websites manually for confirmation.   Consider Starlink in case the internet goes down – I think it’s time for me to make the leap. Don’t Panic. Prepare. (Then Invest.)   I spent an hour in that basement bar reading about cyberattacks—and watching real-world systems fall apart like dominos.   The internet going down used to be an inconvenience. Now, it’s a warning.   Cyberwar isn’t coming. It’s here.   And the next time your internet goes out, it might not just be your router.   Don’t panic. Prepare.   And maybe keep a backup plan in your back pocket. Like a local basement bar with good bourbon—and working WiFi.   As usual, we’re on the lookout for more opportunities in cybersecurity. Stay tuned.   Author: Chris Campbell (AltucherConfidential) Profits from free accurate cryptos signals: https://www.predictmag.com/   
    • DUMBSHELL:  re the automation of corruption ---  200,000 "Science Papers" in academic journal database PubMed may have been AI-generated with errors, hallucinations and false sourcing 
    • Does any crypto exchanges get banned in your country? How's about other as Bybit, Kraken, MEXC, OKX?
×
×
  • Create New...

Important Information

By using this site, you agree to our Terms of Use.