Is Market Profile an Outdated Tool?

[TheNegotiator 13]

Simple question really, do you think MP is really a tool for the 21st century fully electronic markets which we trade? Does it fully represent the auction or are important details missed out? What are the alternatives anyway?

[TheNegotiator 13]

My gut instinct is yes and no. The main alternative to MP as I understand it is the use of volume profiles. When market profile was first introduced (in the 80's?) the CBOT reported statistics every 30mins. So this is why the approximation was brought in of using a TPO to represent volume. Volume is now widely available both historically and realtime. It better represents imo, how the auction technically played out and so helps with price specific entries. So what about MP then? If it's just an approximation of what is now available as a Volume Profile, what is the point? Well, the interest it still holds for me is in the means of the approximation itself, whether by design or luck. Time. To me, time is becoming more interesting as a measure of market activity within the auction. One has time, the other has volume. Surely there is an effective way to combine these methods?

[steve46 12]

My gut instinct is yes and no. The main alternative to MP as I understand it is the use of volume profiles. When market profile was first introduced (in the 80's?) the CBOT reported statistics every 30mins. So this is why the approximation was brought in of using a TPO to represent volume. Volume is now widely available both historically and realtime. It better represents imo, how the auction technically played out and so helps with price specific entries. So what about MP then? If it's just an approximation of what is now available as a Volume Profile, what is the point? Well, the interest it still holds for me is in the means of the approximation itself, whether by design or luck. Time. To me, time is becoming more interesting as a measure of market activity within the auction. One has time, the other has volume. Surely there is an effective way to combine these methods?

 

Yes of course, there are several ways to combine the data. I use confluence of both time and volume based data in the form of supply demand nodes and Market Profile....Add time-based pivots and you have the best of both worlds...I realize that the question(s) are meant to elicit an easy to understand, immediately useful solution....and clearly this does not fit in that category, it fits your description, and it works consistently..

[clmacdougall 11]

I would suggest you read the thread "The Evolution of Market Profile" I found it really helpful. Personally I feel MP hides more information than it reveals, but that's just my opinion.

[electroniclocal 10]

There are not many tools that are so misunderstood as Market Profile. Pete Steidlmayer, its inventor, left us to work out how to use it for each of our own styles of trading.

 

Yes, actual volume is more acurate than TPOs but the two are pretty close.

 

The big advantage of TPOs is that the trader can more granularly manipulate the graphic in order to discover the various distributions. Once I've done that, I can clearly see the more hidden support and resistance areas that can be uncovered by that process. I'l have a video on my blog on Monday for anyone interested in seeing how the process of uncovering what "they" are doing is done on the MarketProfile.

 

Market Profile is not a timing tool, IMO. That's why I advocate using the Profile for context and a range bar chart for timing.

 

EL

[BlowFish 10]

There are a couple of problems with MP and there always have been. Having said that many traders obviously find it useful. Clearly the VAH,VAL & POC are watched and traded by enough traders to make them significant. As good an example of 'self fulfilling' that I can think of.

 

It is not so much that it is 'outdated', it was always a heuristic method(rule of thumb). Not only that but one of the premises that it was built on was false (markets are not normally distributed (Gaussian)). Who cares if it gives you a framework to trade within ? Nowadays it is possible to use tools that are based on actual mathematical / statistical principles. Personally I think these tools provide a better framework and I guess strictly speaking that makes MP outdated. Not only that I find them much more 'elegant' and i think they frame price better in many varying circumstances.

 

Vintage cars still go from A->B, arguably in some style . The Lexus practically drives itself.

[djohnsonhot 10]

Would you all consider a point here for discussion about Volume profile? It seems rather obvious to say that MP (or VP) cannot stand alone as an entry tool. The reason I am saying this is because I tracked a "professional" trade VP exclusively, using Keltner tools to enter and exit) and he is at less than 50% in his winners. What I am pointing to is that one must use a tool bag to trade: a) Let's say we know the key POC, VAH and VAL's. We market them on our charts with horizontal lines. b) We are away of the Pivot Points for the day. c) We know where the key levels are from the previous day's price action, and weekly mid-points, etc. Those are our key RES and SUPPORT price levels. Those are marked. d) We observe where the consolidations happened in the previous day sessions and where we might be in the stages of the market (Market Stage theory).

 

AND FINALLY: e) we have pure Price Action: candlestick formations, higher highs and lows and lower lows, etc - - depending on the OVERALL and DAILY trends.

 

Are we getting the picture. Well, traders or wannabe's. It has taken me years to determine the various chart techniques to watch for BUT I STILL FIND MYSELF on the WRONG side of many trades, and then either use proper Money Management skills or I do not and let a loser run which puts me in a hole early in the day - - my worst days - - which I then chase with more contracts or rather stupid entries...you name it.

 

The point: it is really difficult to remember to look for MOST of those chart indicators for entries and knowing when a trade is broken.

 

I have recently started a whole new approach: Ambush trades or what one would consider Half-Way Back trades on longer term and short term micro-moves and I will be back here to report whether it works. I am trying to simplify. I am really working at this. Weekends, nights, as this is my chosen profession and I am still under water after over a two-year period of great trades at times and lousy throw-it-all back to the professionals types of trades. It has been painful.

[joshdance 10]

a) Let's say we know the key POC, VAH and VAL's. We market them on our charts with horizontal lines. b) We are away of the Pivot Points for the day. c) We know where the key levels are from the previous day's price action, and weekly mid-points, etc. Those are our key RES and SUPPORT price levels. Those are marked. d) We observe where the consolidations happened in the previous day sessions and where we might be in the stages of the market (Market Stage theory).

 

The point: it is really difficult to remember to look for MOST of those chart indicators for entries and knowing when a trade is broken.

 

Sounds like too many things to watch. POC, VAH, VAL, Pivot, S1, R1, etc., key levels from yesterday or the week, mid-points (c'mon?), consolidations, .... too much info. You're going to have a minimum of 12-15 lines, probably all within a relatively small range. Perhaps that's why you say it's difficult to remember to look for most of these.

 

 

I have recently started a whole new approach: Ambush trades or what one would consider Half-Way Back trades on longer term and short term micro-moves and I will be back here to report whether it works.

 

Would love to hear about your progress with this, hopefully start a separate thread for this.

[joshdance 10]

Clearly the VAH,VAL & POC are watched and traded by enough traders to make them significant. As good an example of 'self fulfilling' that I can think of.

 

Good point BlowFish--the "magical" POC is nothing magical at all. As an aside, if enough people adopt a strategy based on fading the day's (or yesterday's, or..) POC, for example, then it ceases to work.

 

Nowadays it is possible to use tools that are based on actual mathematical / statistical principles. Personally I think these tools provide a better framework and I guess strictly speaking that makes MP outdated. Not only that I find them much more 'elegant' and i think they frame price better in many varying circumstances.

 

Can you give an example of the kind of tool you're referring to?

[tinyboy 10]

if you use a program like Market Delta that allows you to plot TPOs based on volume, then MP is not outdated by any means

 

MP is one of the most basic ways to analyze a chart, and therein lies its power. With all the brand new be all end all indicators, black boxes and the like, it's often times easier to just go back to the basics, and just look at price and volume in their purest form, and thats what MP does.

 

Auction Market Theory is still valid, and will continue to be so going forward.

[TheDude 10]

Would you all consider a point here for discussion about Volume profile? It seems rather obvious to say that MP (or VP) cannot stand alone as an entry tool. The reason I am saying this is because I tracked a "professional" trade VP exclusively, using Keltner tools to enter and exit) and he is at less than 50% in his winners. What I am pointing to is that one must use a tool bag to trade: a) Let's say we know the key POC, VAH and VAL's. We market them on our charts with horizontal lines. b) We are away of the Pivot Points for the day. c) We know where the key levels are from the previous day's price action, and weekly mid-points, etc. Those are our key RES and SUPPORT price levels. Those are marked. d) We observe where the consolidations happened in the previous day sessions and where we might be in the stages of the market (Market Stage theory).

 

AND FINALLY: e) we have pure Price Action: candlestick formations, higher highs and lows and lower lows, etc - - depending on the OVERALL and DAILY trends.

 

Are we getting the picture. Well, traders or wannabe's. It has taken me years to determine the various chart techniques to watch for BUT I STILL FIND MYSELF on the WRONG side of many trades, and then either use proper Money Management skills or I do not and let a loser run which puts me in a hole early in the day - - my worst days - - which I then chase with more contracts or rather stupid entries...you name it.

 

The point: it is really difficult to remember to look for MOST of those chart indicators for entries and knowing when a trade is broken.

 

I have recently started a whole new approach: Ambush trades or what one would consider Half-Way Back trades on longer term and short term micro-moves and I will be back here to report whether it works. I am trying to simplify. I am really working at this. Weekends, nights, as this is my chosen profession and I am still under water after over a two-year period of great trades at times and lousy throw-it-all back to the professionals types of trades. It has been painful.

 

 

sorry if ive misunderstood you, but from your post i seem to get the impression you look at these vp levels as some kind of magic numbers. theyre not. they are simply reference points. the idea is to see how the market trades around them.

 

apparently there is a big trader in london called david kyte. EL may know of him. i heard once that he trades the bund and uses the val and vah to scalp around, knowing so many look at these levels as as targets and stop levels, so the orders at these levels offer rich easy pickings. of course, you hear so many rumours coming out of kyte group, and a lot of it is clearly rubbish.

[steve46 12]

The idea that a specific trader uses Market Profile (and therefore it may be valid) is probably not the best way to evaluate a systematic approach

The general principles associated with Auction Market Theory have always been valid because they are expressions of basic human behavior. Once you understand that it becomes easier to work within the construct...

For my class we look to buy wholesale value, in a market whose bias is "up". We know that the market consists of multiple agendas including longer term participants interested in bidding the market up to retail levels.

We go along for the ride, selling at retail and banking the profit..That simple principle has worked for centuries.

Once you understand the principles...and assuming you have the basic skill of "tape reading" in place, it is simply a matter of waiting for the market to test a key reference area (a price, or range of prices where longer term players are likely to come in to buy or sell)..

This happens regularly (I would say at least once per day) and allows from 5 to 10 points of profit (given the current volatility) when you enter and manage risk competently.

If you're "unskilled".... and you simply enter "at the number" (assuming you know where that is), you may still make a profit. Generall however you will find that your result is inconsistent...

If you know how to read the tape, and you enter with skill and patience, the risk is usually about 3-5 ticks. I find that skilled participants using that framework can approach 80% correct entries

Friday was an excellent example...as traders looked to get out early for the holiday...most of my students were caught without "a number" to work from...you see they believe...as most of you do apparently that the value area high, POC and VAL are the only numbers that matter..lol

The problem of course is that value is a temporary construct, that can (and does) change depending on the circumstances..AND it also changes based on time frame..with longer and shorter term players finding value at different levels.

 

Anyway, here is the chart with a single entry with a green arrow...there is an elegance to this that doesn't get much appreciation because it is never discussed. You see the first thing that happens is that the market reacts to an economic report (in this case the housing report came out and was badly received)...this activates the short time frame players who take it down to test previous perceived wholesale value...they do this not to find value, but to drive it lower into an area of wholesale value

 

On the first thrust down, they are unable to find sellers...in fact other short and intermediate time frame players come in first thinking that this price level represents value...price retraces up slightly but at this price (and at this time of day) longer term players are still waiting to see if the market is going to sell down further (they are waiting for a second thrust down...When that second thrust happens (as it always does) once there are no interested sellers at those prices (and apparently there are no resting stop orders that can be activated there)....NOW the longer term players become interested, and they express that interest by moving size into the market on marketable buy orders

 

Best Regards

Steve

[MightyMouse 12]

The idea that a specific trader uses Market Profile (and therefore it may be valid) is probably not the best way to evaluate a systematic approach

The general principles associated with Auction Market Theory have always been valid because they are expressions of basic human behavior. Once you understand that it becomes easier to work within the construct...

For my class we look to buy wholesale value, in a market whose bias is "up". We know that the market consists of multiple agendas including longer term participants interested in bidding the market up to retail levels.

We go along for the ride, selling at retail and banking the profit..That simple principle has worked for centuries.

Once you understand the principles...and assuming you have the basic skill of "tape reading" in place, it is simply a matter of waiting for the market to test a key reference area (a price, or range of prices where longer term players are likely to come in to buy or sell)..

This happens regularly (I would say at least once per day) and allows from 5 to 10 points of profit (given the current volatility) when you enter and manage risk competently.

If you're "unskilled".... and you simply enter "at the number" (assuming you know where that is), you may still make a profit. Generall however you will find that your result is inconsistent...

If you know how to read the tape, and you enter with skill and patience, the risk is usually about 3-5 ticks. I find that skilled participants using that framework can approach 80% correct entries

Friday was an excellent example...as traders looked to get out early for the holiday...most of my students were caught without "a number" to work from...you see they believe...as most of you do apparently that the value area high, POC and VAL are the only numbers that matter..lol

The problem of course is that value is a temporary construct, that can (and does) change depending on the circumstances..AND it also changes based on time frame..with longer and shorter term players finding value at different levels.

 

Anyway, here is the chart with a single entry with a green arrow...there is an elegance to this that doesn't get much appreciation because it is never discussed. You see the first thing that happens is that the market reacts to an economic report (in this case the housing report came out and was badly received)...this activates the short time frame players who take it down to test previous perceived wholesale value...they do this not to find value, but to drive it lower into an area of wholesale value

 

On the first thrust down, they are unable to find sellers...in fact other short and intermediate time frame players come in first thinking that this price level represents value...price retraces up slightly but at this price (and at this time of day) longer term players are still waiting to see if the market is going to sell down further (they are waiting for a second thrust down...When that second thrust happens (as it always does) once there are no interested sellers at those prices (and apparently there are no resting stop orders that can be activated there)....NOW the longer term players become interested, and they express that interest by moving size into the market on marketable buy orders

 

Best Regards

Steve

 

Have some dignity and pay to advertise. I am glad to see that your accuracy went back up to 80%.

[UrmaBlume 10]

Simple question really, do you think MP is really a tool for the 21st century fully electronic markets which we trade? Does it fully represent the auction or are important details missed out? What are the alternatives anyway?

 

My gut instinct is yes and no. The main alternative to MP as I understand it is the use of volume profiles. When market profile was first introduced (in the 80's?) the CBOT reported statistics every 30mins. So this is why the approximation was brought in of using a TPO to represent volume. Volume is now widely available both historically and realtime. It better represents imo, how the auction technically played out and so helps with price specific entries. So what about MP then? If it's just an approximation of what is now available as a Volume Profile, what is the point? Well, the interest it still holds for me is in the means of the approximation itself, whether by design or luck. Time. To me, time is becoming more interesting as a measure of market activity within the auction. One has time, the other has volume. Surely there is an effective way to combine these methods?

 

I would suggest you read the thread "The Evolution of Market Profile" I found it really helpful. Personally I feel MP hides more information than it reveals, but that's just my opinion.

 

 

Market Profile Theory as taught by Peter Steidlmayer at week long seminars at his ranch on the Feather River in Northern California in the early 80's is classic and completely valid today. The market profile as a tool or as trade decision support technology is dated, almost useless and made completely obsolete by modern technologies.

 

The first change to obsolete the profile graphic as a tool was the availability of online volume. In those days there was no online volume from the pits and to see volume you had to wait until the end of the day and download it from a database sponsored by the CBOT. Today everybody can see the size of every transaction and further can see the motivation of the transaction.

 

Peter taught that to trade successfully one only needed to understand and be able to quantify the order flow, the balance of trade, recognize the footprint of the value or longer than day time frame trade and be able to spot and classify commercial trade.

 

His idea then and it seems very much true today was that it was the value/longer term or commercial trader turned the market. That this group of traders actually did less volume than the day time frame trades but than when they appeard the turned/established the extremes in the market.

 

This was demonstraded as fact almost every day in the Liquidity Data Bank reports from Cisco futures. The report issued each night showed the volume at each price along with the degree of commercial participation. It was and is a constant today that the more significant the extreme, the greater the rejection at the extreme the greater the commercial particiaption.

 

Then as it is today in commodities there are long term, size natural buyers and sellers. The sellers are usually the producers that see a high price they would like to capture. The buyers are users who come in with much vigor when they believe the price to be cheap and that have the opportunity to hedge against rising prices. For years Southwest Airlines was profitable when so many other airlines were not solely because of their hedging/forward buying agains the rising price of fuel.

 

He made the further point that very seldom was the commercial/longer term buyer present on the same day as the seller. That day time frame trade would auction up to find the loner term/value seller and down to find the buyer.

 

Today's commercial/value trade is most often executed by algorithms that go to great pains to disguise their trade. They can hide their intentions but they cannot hid the fact of their transactions. Operating in the millisecond time frame there are indicators that can spot this trade as being conducted at a velocity, size and agressiveness that only commercials are capable of. Retail traders do not trade size and they do not operate in the millisecond or microsecond time frame.

 

 

 

A running tally of Net New Trade can track both order flow and the balance of trade.

 

 

When the NNT line is flat, trade is balanced. The greater the slope the greater the imbalance and the net is the balance for the session.

 

This indicator is very good at demonstrating divergences between the velocity of price and the power of the buying and selling beneath it.

 

 

Some scalpers can project the values of the next bar from the price action and balance of trade in the current bar. Useful when contemplating and entry or exit.

 

 

Cheers

 

UrmaBlume

 

 

These concepts and indicators are part of a growing technical evolution of Market Profile Theory. Market profile as a theory is classic, alive and thriving. The market profile graphic as a technology is dated and being replaced by an evolving technical base.

[clmacdougall 11]

UB, you put it eloquently as usual, "Today everybody can see the size of every transaction and further can see the motivation of the transaction." The motivation of the transaction is what must be attempted to be understood.

There is no way this "motivation" can be understood by an outdated structural understanding of the market as attempted by the MP methodology, but what it theoretically tried to reveal was in earnest the truth of what can move the market in a single direction, instead of rotationally.

[djohnsonhot 10]

Hi, Dude....actually I was trying to say that Vol Profile can be taken into account more like a support or resistance area - - esp. if those levels coincide with Pivots, or your normal support and resistance areas...not by themselves....I have watched them for years and at times, I see no price action alone and watch the action pass right through those profile areas.

[Tradewinds 12]

The market profile graphic as a technology is dated and being replaced by an evolving technical base.

 

Looks impressive, and very accurate. I'm interested in the fact that the charts show pre-market hours. So I'm assuming that the data being used is not dependent upon regular market hours.

[UrmaBlume 10]

Looks impressive, and very accurate. I'm interested in the fact that the charts show pre-market hours. So I'm assuming that the data being used is not dependent upon regular market hours.

 

Thank you for the kind words.

 

It is not volume that drives price. It is an imbalance in that volume that drives price - that is how you can get such big moves on such small volume during the night session.

[djohnsonhot 10]

There is a fella named Michael Jardine, at his website, Enthios Economics | Real world markets, live commentary by Michael Jardine, and he posts his Market Profile high and low value areas almost daily (he travels and works, and thus for days he may not get on the computer and do his work). You can see for yourselves how well this works. My observations of his trades is that he is stopped out quite a bit and his winners are in ticks, and not points. And, he wrote a book on the subject. Now, if his trades are limited to ticks, then I am guessing his scale is quite large compared to most retail traders

[UrmaBlume 10]

UB, you put it eloquently as usual, "Today everybody can see the size of every transaction and further can see the motivation of the transaction." The motivation of the transaction is what must be attempted to be understood.

There is no way this "motivation" can be understood by an outdated structural understanding of the market as attempted by the MP methodology, but what it theoretically tried to reveal was in earnest the truth of what can move the market in a single direction, instead of rotationally.

 

I couldn't agree more and thanks for the kind words.

 

Price is and has never been as much of an indicator of future prices as is the degree to which trade is imbalanced plus the degree of commercial participation in that imbalance.

 

So many often ask about the big price movements on very little total volume during the night session. They occur because night trade is almost all commercial trade and all of that trade is usually on the same side thus - no significant opposing activity.

 

If the book, depth of market, is grossly out of balance, big price moves on little total volume will be the result. This explains why higher than normal volume does not necessarily confirm a move but can signify the presence of opposing trade.

 

This is confirmed by the fact that the days that have the biggest price moves do not have as much volume as strong key reversal days, i.e., both long term/value buy and seller present.

 

This dynamic is often demonstrated on local and session extremes when the momentum of day/local trade runs into unlimited opposing trade. At the formation of these extremes there is usually not a big amount of trade as compared with the high volume prices of the day but the transactions occur at a greatly increased velocity as price momentum day traders run into an unlimited stream of auto orders placed by "house" value traders.

 

Another interesting point about the formation of these extremes is that many bottoms are formed by trade on the bid. This is recorded as selling volume by most data vendors and is the one point where thay are wrong. The explanation is that momentum has run into stronger opposing activity, that the activity is conducted by commercial traders and that is confirmed by the facts that 1) that the velocity of trade is such that it can only be conducted by machine ordered trade and 2) even though the trade is on the bid prices don't continue down, price in fact reverses because the bid is bigger than the market.

 

All of this happens in the second or sub-second time frame and yet the total volume of the event that establishes the extreme is but a fraction of the total volume done on the high volume price of the day.

 

Of benefit to stock index futures traders is that many time when this activity occurs it happens in all of the major index futures at exactly the same time. This is a great confirmation that the reversal is real and is demonstrated in the chart below which shows blue/buying volume spikes across NQ, ES & YM that formed a session top - tops formed on an exhaustion of buying and bottoms formed on an exhaustion of selling at a very high velocity and density of trade.

 

 

Again, thanks for the kind words and when you have a minute if you still have my phone number please give me a call or PM me with yours, I have some new, unpublished work I would like to show you.

 

cheers

 

pat

[BlowFish 10]

Good point BlowFish--the "magical" POC is nothing magical at all. As an aside, if enough people adopt a strategy based on fading the day's (or yesterday's, or..) POC, for example, then it ceases to work.

 

 

 

Can you give an example of the kind of tool you're referring to?

 

Take a look at Jperls 'Trading with Market Statistics' threads. A couple of pretty cool tools and a bunch or ways of using them. A good starting point.

[edakad 10]

Volume has a skew in itself as it is high during open and close. I find TPO charts more beneficial. The gaussian distribution is an ideal situation we find rarely, however we analys each days distribution in its deviations from the ideal Gaussian distribution.

[KeyToTheCastle 10]

Every now and then I see a subject that I'd like to respond to but just don't have the time or the need to get into a pissing match, cause we all know thats where it seems many threads wind up going. Hopefully this thread doesn't follow suit.

 

Anyway, I don't know if it's a case of MP/VP being out dated as much as it is the fact that traders try to turn MP/VP into a system. (btw personally I prefer to use volume based profiles vs. TPO's and time based profiles)

 

I've been there...early on in my career, when I first came across MP, I tried to use it as a system. I read most of the books and I tried every which way I could to develop an edge based on the IB, day type, tpo counts, the 80% rule, etc..... but I was never able to find anything robust that worked for me.

 

I eventually came to the realization that VP is best utilized solely as a way to organize and present market information, just like the purpose of any other chart.

 

Specifically I use VP to help me to shape value and observe price discovery (acceptance and rejection.)

 

This in turn allows me to quickly identify previous areas of supply/demand imbalance which is where most of my focus lies. Sometimes these areas come from low volume points, other times they come from within high volume areas of balance (value areas). I know there are traders who say volume is unimportant and therefore a volume based value zone doesn't confirm much and in a general sense I agree . On the same token I realize that imbalance can form anywhere and at any time....in areas of low volume or high volume. Yes, imbalance is usually more visually obvious in low volume areas where price was swiftly rejected. But within any previous high volume value zone, or area of balance, there had to be a period of imbalance at some point otherwise price would have never left the balance area in the first place.

 

I keep my trading as simple as possible. My first priority is to identify previous areas of supply/demand imbalance. Then, as price comes back into these areas, I monitor the real time order flow for a shift in supply/demand which will confirm a trading opportunity. One other important piece of info I use is a real time dynamic value channel which serves as a filter to confirm that I'm buying wholesale levels and selling retail levels (relevant to the time frame I'm trading on).

 

I'll post a chart from today illustrating some of what I look at in a bit.

[KeyToTheCastle 10]

Here's an intraday chart of GBP/USD from this afternoon.

 

It shows the market coming down into a previously defined value zone ( created using volume profile) which also represented an area of demand imbalance.

 

Rather then using the zone as an area to initiate a long position, I used it instead to close out remaining short inventory from an overnight short position. Either way the same principles apply.

 

1) Identify previous area of demand imbalance.

2) Use dynamic value channel to confirm wholesale pricing levels.

3) Monitor real time order flow for a shift in supply/demand for trade entry confirmation

[UrmaBlume 10]

More important than noting past areas of support and resistance by price is locating strong, sudden buying or selling by commercial/value/longer term traders. These are the guys that drive price in the time frame longer than the day time frame.

 

The good news is that they can not hide the strength, one-sidedness or velocity of their transactions and thus can be detected as they establish local and session extremes.

 

Today was no exception. At 0934 PST there was a huge but very short-lived spike that established the low of the day at the low price tick of the day and gave 30 seconds before prices rose dramatically.

 

Changes in price are a result of an imbalance in commercial trade and spikes like the one below that perfectly demonstrated today's low tick are not obviated by any version of the profile - yet the design for them is completely based on profile theoy.

 

 

 

cheers

 

 

UrmaBlume