Sunday, 29 May 2011

Using Market Profile

I thought that as it was a long week-end, I would do a post on how I use Market Profile in my trading. There is more about this in previous posts and of course a step by step in the training videos available through the training blog here.


The video linked below shows how I start my prep for a trading day. I use Market Profile for context and the range bar chart for timing. The issue for support and resistance areas is that I can't know in advance which ones will "work" so I need to identify them in advance, but look at the order flow at each of them to see whether they are holding. If you are using MarketDelta then the Footprint info can also help to qualify a support or resistance area.


The other thing about Market Profile is that it gives me the ideas for the trade. If I see a support holding and can see that the nearest resistance is far enough away, then I have a potential trade.


Have a look at the vid.



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3 comments:

  1. Anonymous29 May 2011 at 20:51

    Tom, thanks for the video.

    Was the setup you discussed good enough for a short (~1332) based on these same indicators?

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  2. Daniel S31 May 2011 at 12:22

    HI Tom. Thanks for the Vid.

    With regard to RAnge bars. Once you get a bearish engulfing. Do you take it as a warn sign?

    Also...Do you also consider Low volume areas to be S/R

    Thanks

    Daniel

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  3. Electronic Local1 June 2011 at 21:06

    Anon 20:51, if you mean the VAH, then yes.
    Daniel, engulfing is often usual within a trend move. 2 green you get a red, sometimes it engulfs. I look at the surrounding context, looking for failure.

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