How to use Market Profile

[maildigger 10]

I don't have Market profile chats but I gave access to daily:

 

POC

VAL

VAH

 

How can I use this for my trading decessions?

Can anyone advice me some good online readings about MP ?

[TinGull 10]

Hi maildigger. Surf through this forum (the Market Profile one) and you'll find tons of good reads on how to apply the concepts of Market Profile into your trading. To me, Market Profile isn't just about the raw numbers for val, vah and poc...but its a mindset. Watching price advertising itself to buyers and sellers in order to move the market. While the value areas can give you a good idea of where price wants to be, when it starts hunting outside those areas is when you need to really be on guard.

 

Check this forum and ask questions as you're learning. That's what we're here for.

[notouch 10]

Agree with you 100% TinGull. Today I took another YM long exclusively on the developing Market Profile. There's so much more to MP than yesterday's VAL, VAH and POC. Single-print buying tails signal a great long opportunity in this market.

[MidKnight 12]

Hi notouch,

 

I agree those are a great opportunities. May I ask some specifics though? Single print buying tails of course are not there until some time after has passed. How soon do you recognize them? Or, are you anticipating them? The ideal location would be anywhere below DVAL, which brings up trade mgmt specifics.

 

While I do find locating excess to be ideal when I look at the charts in hindsight, I have a much harder time to positioning in those areas in real-time mainly because I haven't recognized it as excess yet. Know what I mean?

 

Best regards,

MK

[TinGull 10]

Midknight...after enough screen time it gets easier to see when price can't go down further. If you have something like IRT or eSignal or Sierra...anything with playback, you can watch the TPO's in playback mode and start to get used to seeing how price can't go lower. Also...using the ATR on a 10 day period is usually a decent gauge to know whereabouts a bottom for the day *may* form and give you a good odds entry point.

[notouch 10]

I'm not too concerned with the ideal entry any more. One or two half hour periods after the tail gives you time to confirm the tail and gain good trade location. This may not be true of all markets all of the time but right now the indices are getting bought back up in the afternoon after the morning sell off and the single-print buying tail is a good way of getting in after the shakeout but before the up move has gone too far.

[MidKnight 12]

Midknight...after enough screen time it gets easier to see when price can't go down further. If you have something like IRT or eSignal or Sierra...anything with playback, you can watch the TPO's in playback mode and start to get used to seeing how price can't go lower. Also...using the ATR on a 10 day period is usually a decent gauge to know whereabouts a bottom for the day *may* form and give you a good odds entry point.

 

Thx TinGull. I have seen the alexandertrading dude say the same thing with regards to avg daily range. I used to have IRT but had to get rid of it due to its unfriendliness with non USA timezones. Now I just use volume profile in neoticker.

 

Kind regards,

MK

[MidKnight 12]

I'm not too concerned with the ideal entry any more. One or two half hour periods after the tail gives you time to confirm the tail and gain good trade location. This may not be true of all markets all of the time but right now the indices are getting bought back up in the afternoon after the morning sell off and the single-print buying tail is a good way of getting in after the shakeout but before the up move has gone too far.

 

Hi notouch,

 

A pretty key point you make here I think which borders on trade psychology. When day trading the margins are so much smaller, I always felt like I had to get a perfect entry, missing out on a few ticks could be the difference of an R multiple or more. Letting that mentality go is probably the key.

 

It's interesting to discuss. Only in the past few weeks I have been changing my timeframe as an experiment. I have been exploring short-term trading with multi-day holds, sometimes a week if conditions warrant. One thing I noticed in this experiment is that I'm less concerned with getting perfect entries, thus I've been finding the market generated information has become clearer and more useful. I'm trading a lot less, catching bigger moves, and am less concerned about perfect entries.

 

Your point above is a key point to me. Thank you.

 

Kind regards,

MK

[bakrob99 11]

Yesterday - May 14 07 there was a good entry around 14:45 at Friday's POC - LONG anywhere around 13345 (YM) and hold to the close for 45 points. Take the bounce off the POC AFTER the market has shown strength and bounced off the Daily Pivot (YM) at 13333.

 

This was key for me - I didn't want to blindly Fade the Daily Pivot - so waited to see if it would hold and bought the retrace at Friday's POC.

 

This type of setup/support happens a lot.

[darthtrader 10]

i just got Dalton's Mind Over Markets saturday and read the first 3 chapters tonight. I think it came to 21 bucks with shipping on amazon. Already the MP stuff on here makes way more sense. Totally worth 21 bucks.

[TinGull 10]

When you're done with that, grab Markets In Profile. That book should take things to yet another level for you.

[darthtrader 10]

oh yea, don't worry Tin. I might even be ordering it in the next few days so I dont have to wait once done with Mind over Markets. I'm blown away by Dalton.

 

with those 2 books is there anything of value as far as reading Steidlmayer on Markets?

 

another MP book on amazon i found was Dynamic Trading Indicators: Winning with Value Charts and Price Action Profile. anyone ever check that out? only 11 bucks used.

[notouch 10]

Tingull, what does Markets in Profile have that Mind Over Markets doesn't? I've heard it's not really required reading if you've already read MOM. I don't really go for the psychobabble side of trading books so does MIP provide any real facts that MOM doesn't?

[MidKnight 12]

I personally found very very little value in markets in profile over MOM. MIP was poorly edited. Several of the charts are incorrectly subtitled and referred to in the writing which makes it hard to follow a long. That is a minor nitpick though. I honestly didn't find a lot of extra value over MOM. It just said a few things more succinctly but it said the same things.

 

With kind regards,

MK

[TinGull 10]

I found MoM to be a technical going over of Market Profile while MiP was more of a psychological reasoning as to why the profile is what it is. For me it helped solidify the mindset I needed to have to really understand that MP isn't just a couple of lines on a chart to trade off of, but a mindset that can apply to each bar of a chart.

 

Some people may not get out of it what I did. Maybe perhaps they were more versed in Market Profile than I was. I think for someone starting out, both of these books provide great information on the Market Profile.

[notouch 10]

Thanks MidKnight and Tingull, that confirms what others have said. I think I'll wait for the paperback.

[Blu-Ray 10]

TinGull

 

I've just received Markets in Profile, but haven't yet read MoM, would you recommend reading MoM first or just go ahead with MiP.

 

Thanks

 

Blu-Ray

[TinGull 10]

I'd read MoM first. It gives you the nuts and bolts of what MP is all about, technically speaking.

[Blu-Ray 10]

Thanks very much, I'll order one now.

 

Blu-Ray

[ImXotep 10]

Hi! I'm try develop own MarketProfile. I have a problem with VAL and VAH calculation. I read SoulTrader article and calculate ValueArea,but i have very big error by price. Result in attachment xls file.

Thx!

Test ValArea.xls

[Trader_JG 10]

Does the 10day ATR work better with the 24hr range or the RTH range?

 

Jonathan

[TinGull 10]

I use the RTH range...its usually not that much different if at all.