| > | | | | suggest. Typified by early entry of other-frame |
| The concept of Market Profile has been promoted | | | | buyers or sellers creating a large initial price range. |
| most effectively by J. Peter Steidlmayer. In his | | | | The action then wanders back and forward during |
| excellent work 'Mind Over Markets', Steidlmayer | | | | the day in standard auction fashion as buyers and |
| explains why he thinks Market Profiling is so unique. I | | | | sellers struggle to get the upper hand. |
| have found it useful myself, of course, and offer | | | | * Normal Variation on Normal Day - Less extreme |
| here a quick overview in case you find the topic | | | | initial price action, as if the other-frame buyers/sellers |
| stimulating. | | | | are waiting and watching in order to build their |
| Central to Market Profile theory is the concept of | | | | conviction. Then the market mnakes a more dramatic |
| the 'Value Area'. This is a continuous slice of the | | | | move followed by standard 2 way auctioning to the |
| days's action that holds a standard deviation of the | | | | close. |
| market activity (i.e. roughly two thirds of the day's | | | | * Trend Day - One side of the other-frame is in |
| action is confined to within this area). The Value Area | | | | control right from the open, and for the whole day. A |
| is determined in advance based on yesterday's | | | | succession of higher highs/lower lows forms. Experts |
| action, and can be large or small, depending on (upon | | | | at have determined that this day type shows a high |
| other things) volatility. Markets have 2 kinds of stock | | | | level of directional confidence throughout the day. |
| trader - the short term (locals or 'day frame' | | | | The initial range is often narrow. |
| participants) and long term (other frame) participants. | | | | * Double Distribution Trend Day - This is a variation |
| To consistently make money, it is usually wisest to | | | | on a trend day. Looks similar to a normal variation on |
| prepare to align with the other-frame buyers/sellers, | | | | a normal day, except more time is spend wandering |
| no matter which side is actually winning the battle on | | | | in the first range while the other-frame buyers/sellers |
| a particular day. On a day when there is no strong | | | | build up conviction to make the market move. |
| other-frame conviction present, price is likely to | | | | Something 'changes' mid session to cause a change in |
| rotate up and down in an essentially random support | | | | conviction - perhaps insider news or a report. |
| resistance mode. The trick is to be able to determine | | | | * Non Trend Day - Often looks like a Trend day at |
| who (if anyone) is in control, and when that control is | | | | start (narrow range). Then meanders with no |
| faltering or even reversing. | | | | conviction in a range bound area. Often seen before |
| There are 6 'types' of day identified by using the | | | | a big news announcement as the market waits to |
| Market Profiling technique. | | | | see whether it should jump up or down. |
| * Normal Day - Not as common as the name might | | | | |