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This detail may give you a hand.. What is Market Profile? Market Profile ® is defined as the study of price and volume over a period of time. Market Profile charts depict volume horizontally, as opposed to vertically, which is how most charts and platforms show volume. Market Profile illustrates price development, how price is moving, and the amount of volume trading at a particular price in real-time. It can also show a composite representation of price movement and development over a specific amount of time. Why use Market Profile? It is imperative for a trader to know and understand Market Profile. Recognizing how price is moving and developing in conjunction with volume will assist traders with placing high probability trades. A composite presentation of the Market Profile presents a detailed history of price movement and development. This gives traders additional information when attempting to identify long-term, intermediate-term, and short-term trends to trade with. Additionally, Market Profile's horizontal representation of volume is crucial in identifying major areas of support and resistance, which trades are taken against. Best trade!

A question I often receive is, "How can there be more buyers or sellers at one price? Isn't there a buyer for every seller and a seller for every buyer?" The answer is yes, but people are forgetting one important thing. There is a bid and an ask (or offer), and only one of them can be traded at a time. A bid is an expression of willingness to buy at a price; an ask (or offer) is an expression to sell. If the ES is trading at 1200.50, the bid is either 1200.25 or 1200.50. The answer depends on which way the market has just traded. Let's make it easy and simply say the ES is between 1200.25 & 1200.50, making the bid 1200.25. In order for the market to move from 1200.25 to 1200.50, someone must pay up to get filled. You may not be in a hurry and attempt to wait to buy 1200.25, but that will usually only happen when the bid/ask drops to 1200.00 & 1200.25 and you are actually filled on the ask. If you are trying to buy and really want to get filled, you must pay up at the offer or risk missing the trade. Conversely, if you really want to get filled on a sale, you must hit the bid, or reach down to get filled. Sure, there is someone on the other side of the trade, but without you choosing to reach up and pay the offer the market stands still. Therefore when trades are executed at the offer it is said to be done by the buyers even though there are sellers at that price taking the other side. Every buy will be filled on the offer and every sell will be filled on the bid, period. Let's say we once more have a number of 1200.50 and we see that over time (sometimes just a few seconds) the fills were 100 x 1300. We can say that there were 1200 more buyers than sellers at 1200.50 because of how traders reacted to the bid/ask spread when it was at 1200.25 x 1200.50 and higher at 1200.50 x 1200.75 (called the spread.) When the market was at the lower spread, 1300 buyers reached UP to pay the 1200.50 offer. When the market was at the higher spread, 100 sellers reach DOWN to sell the 1200.50 bid. When the spread traded around this price range there truly were more buyers than sellers at 1200.50. Understanding bid and ask can open up other realms of technical analysis. There are some traders who will look at the bid and ask order flows to try to get clues to potential movement in the market based on what buyers and sellers are doing. This is often referred to as reading order book flow or depth-of-market. If you look at the number of orders for each bid and ask around the current market price you can see the probable number of transactions available at those levels. Reading this information is the key to certain kinds of volume based trading systems and other trading methods that follow the book order flow. Best Trades to you, Larry Levin Founder & President- Trading Advantage

If you know your way around a price chart then you are ready to learn a little more about technical analysis. This kind of analysis is defined as an attempt to try to forecast price movements based on patterns observed in price changes on charts, or other changes that are not rooted in fundamental observations. For technical analysts the key to observing the market lies in signals and patterns Technical analysts (or technicians as they are sometimes called) are looking for all kinds of things in the rates of price changes, the patterns that price changes might be making, shifts in volume and open interest, and more! They are trying to find anything that could be used to show a potential trading opportunity - something that could help them forecast possible future movements. It is important to add a disclaimer here – Past performance is not necessarily indicative of future results. There is no way that finding a pattern or indicator in a chart will be a guarantee of what will happen in the market. They are all subject to the same personal bias and are just as fallible as any other forecasting method. Why would anyone use technical indicators? Technical analysis is a means of trying to decipher the market trend or a possible reversal of that trend. Like any other kind of analysis, it is meant to be used in tandem with other observations, ideas, and fundamentals to give a bigger picture when planning possible trades. Even the most basic patterns in technical analysis can be used for trade entry and exit points. Here are some examples: An uptrend may be present when there are a run of trading periods with higher high prices and higher low prices. Identify an uptrend, and you might get an idea for a long trade. A downtrend could be characterized by a period with lower highs and lower lows. At that time, you might want to find a place to play a short trade. If the market is seeing pretty equal highs and lows, it could be stuck in a sideways trend or channel. Even those have trading opportunities since the high spots could be identified as overhead resistance, where prices will go and then stop and retreat as selling enters the market. The low prices could be showing you key areas of support when the prices get to a point where buying occurs and the market doesn't seem to go any lower. Past performance is not necessarily indicative of future results. Chart courtesy of Gecko Software. Support and resistance offer interesting entry or exit opportunities. It would be a much more improbable trade if you decided to go long (buy a contract) right as the market was hitting an area of potential resistance. Likewise, it might be riskier to enter a sell order just as the market is getting to an area previously known as support. This isn't to say that your trade wouldn't work, it is just good to know these spots and understand what is behind them – it'll make designing your trade a little more effective. Perhaps you would want to play these areas in case support or resistance is forecast to be broken based on your fundamental analysis or a piece of news due out in the market; or, perhaps other technical signals are telling you that the trend is about to be broken. Here are some other basic signals technicians might look for: Head and shoulders patterns are formed when the market prices make a peak (first shoulder) and then decline, subsequently rise above the former peak (the head) and decline again, and finally make another peak (shoulder) not higher than the head and decline once more. This pattern is seen as a possible trend reversal. It is a bearish pattern in an uptrend. Inverse or reverse head and shoulders are also possible, marked by spikes downwards and then recovery resulting in the reverse should-head-shoulder pattern described above. This is seen as a bullish pattern if it occurs in a downtrend. Triangles, pennants and flags are also key patterns technicians keep an eye on. They can be bullish or bearish depending on the prevailing trend and the way they are formed. Flags and pennants are seen as signals of a continuation where the market sees a kind of consolidation of action before making a move in another leg of the trend. Volume also comes into play with flags and pennants, usually lower or weakening volume. Find patterns, find a trade If you can back up your trading bias with actual technical observations or patterns that might indicate the market is trending or about to see a reversal, then you have a trading opportunity! Rather than boldly (and blindly) placing buy or sell orders and hoping the market moves in your favor, taking the time to learn and understand how the market behaves can make or break your trade design. Other people are looking at the same information and furthering your education can never really be a bad thing! Best Trades to you, Larry Levin Founder & President- Trading Advantage