Wednesday 16 March 2022

Ultimate Context

 As you will know if you have been reading this blog since 2009, I have been using Market Profile now for over 35 years. I was fortunate enough to learn it from Pete Steidlmayer not long after he released it at the CBOT. There has been, in recent years, a tendency to abandon Market Profile in favour of Volume Profile. I believe that this is a mistake. Market Profile provides different information to Volume Profile so perhaps the answer is to use both. The attached pic shows fin-alg's add-n to NinjaTrader and is able to display MP with VP underlayed.

The additional information of MP is a result of the TPOs. For example, today we had a perfect example of what some call a neutral day where there was range extension on BOTH sides of the initial balance in the RTH profile of NQ. Old time users remember the trade where, if the fit of the MP is correct, that when the second range extension on the second side happens and there is still time in the RTH session, you wait for the order flow to show the range extension finishing and then make a trade for price to go back to at least the POC. 

This easy to see on the MP chart as below - much harder on a VP chart without a bar chart set up to show it.  I will never trade without a Market Profile chart.

 


As you can see, the second range extension was down and it found support at the high of the previous days profile. Once the buying started it was simply a matter of going long with it and exiting in stages at the different resistance spots.

No comments:

Post a Comment