The document discusses using market profile as the basis for a trade plan. It outlines the benefits of the market profile approach, which include providing more accurate support and resistance information than other methods and enabling more objective decision making. The market profile method works by analyzing time, price, and volume data to understand market structure and identify high probability trade setups.
The document discusses using market profile as the basis for a trade plan. It outlines the benefits of the market profile approach, which include providing more accurate support and resistance information than other methods and enabling more objective decision making. The market profile method works by analyzing time, price, and volume data to understand market structure and identify high probability trade setups.
The document discusses using market profile as the basis for a trade plan. It outlines the benefits of the market profile approach, which include providing more accurate support and resistance information than other methods and enabling more objective decision making. The market profile method works by analyzing time, price, and volume data to understand market structure and identify high probability trade setups.
The document discusses using market profile as the basis for a trade plan. It outlines the benefits of the market profile approach, which include providing more accurate support and resistance information than other methods and enabling more objective decision making. The market profile method works by analyzing time, price, and volume data to understand market structure and identify high probability trade setups.
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Using Market Profile as the Basis for a Trade Plan
Presented by Tom Alexander Alexandertrading.com
The Market Profile Based Trade Plan
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It provides a statistically valid concept It provides a depth and breadth of information other methodologies cannot It provides more consistently accurate support and resistance information than any other methodology It helps determine, in an objective manner, the potential risk/reward of taking a trade at any given level during the trading day It is logical and is based on natural market development 2
The Market Profile Based Trade Plan
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It makes for more objective, relaxed trading It enables the identification of trades with the greatest potential It helps cure the overtrading tendency so many traders have It is robust across time frames and markets It is based on market generated information and simplifies the decision making process at the execution level.
The Ultimate Reason to Use Market Profile
It Works
What is Different about a Market Profile Chart?
It is multi-dimensional: Time Price Volume
Critical Concept:
Time + Price = Volume (VALUE)
Value: Two Phases
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Balance = Horizontal Development (consolidation) Imbalance + Vertical Development (trend)
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Market Development Constant process of cycling in phases from Imbalance to Balance. This creates consistent inflection points that help define market condition and helps to identify and quantify trade opportunity.
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Market Profile Charts Market Development
Market Structure gives clues to the present state of market development Market Structure provides areas of potential resistance and support Market structure enables one to objectively evaluate the risk/reward equation of taking a trade
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Understanding Market Development Provides Certain Useful Statistical Tendencies of Value to a Trader Markets spend more time consolidating (Horizontal Development) than trending (Vertical Development) The tendency of the market is overwhelmingly statistically in favor of rotation
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Inflection Points = Key Reference Areas
KRAs are based on Value (or lack thereof) in the market. Remember: Price + Time = Volume (VALUE)
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Composite Profiles Help to define Value outside the day timeframe This can help us make better trade decisions while trading the present day timeframe. Each day is merely a piece of larger market development 19
Key Reference Areas
KRAs in the present day timeframe can be lined-up with KRAs of developing market structure to help define trades location and risk/reward.
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Benefits of Trading Market Structure
Helps remove randomness from trade decisions Provides an objective means to quantify risk AND reward Allows for more structured, less stressful trading
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Benefits of Trading Market Structure
Provides important context for entry gimmicks at the execution level Makes understanding short-term market internals even more valuable and practical tp use volume, TICK, breadth, intramarket divergences
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www.alexandertrading.com
Free Newsletter with an emphasis on education and practical, tradable analysis Seminars: Atlanta, August 12-14; San Diego, Sept. 30-Oct. 2 Mentoring
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The CBOT Market Profile is a registered trademark of the Chicago Board of Trade, which holds an exclusive copyright to the Market Profile graphics. Graphics reproduced herein under the permission of The Chicago Board of Trade. The views expressed in this seminar are solely those of he author and are not to be construed as the views of the Chicago Board of Trade in any way responsible for the contents hereof. Charts courtesy of CQG, INC. www.cqg.com
The Market Maker's Edge: A Wall Street Insider Reveals How to: Time Entry and Exit Points for Minimum Risk, Maximum Profit; Combine Fundamental and Technical Analysis; Control Your Trading Environment Every Day, Every Trade
The Market Maker's Edge: A Wall Street Insider Reveals How to: Time Entry and Exit Points for Minimum Risk, Maximum Profit; Combine Fundamental and Technical Analysis; Control Your Trading Environment Every Day, Every Trade
