Market Profile FAQ

Can You Recommend Additional Resources for Learning About the Market Profile?

Check out our site's sections covering Market Profile Publications, Market Profile Educators and Trainers, and Market Profile Software Providers.

Can the Market Profile be used for day trading?

Yes. In fact, the majority of the traders who use the Market Profile in their trading use it for intraday trading.

 

Yes. For example, if reading is your preference, start with the first 58 pages of Jim Dalton's Mind over Markets, then read Markets in Profile, and then finish the remaining pages of Mind over Markets.

 

The Market Profile does not provide buy / sell or entry / exit trading signals, since it is not a trading system.  It is a decision support tool for traders that provides a value-based context in addition to tracking price movement.

 

Absolutely!  Click here to register for a free introductory video series we've created for the Market Profile.  If you have further questions after watching the series, please get in touch!  We're happy to help.

 

Unfortunately there is no concrete answer to that question because each individual trader has unique experience, innate abilities, and - most importantly - a unique level of commitment they are willing to make to the process.

 

The Market Profile graphic benefits many traders by:
  • Helping them identify the relative importance of key reference areas, assess potential risk management levels (stop placement), and identify potential profit levels (targets).
  • Providing an in-depth view of the market’s developing auction process to support them in identifying trending or trading range sessions.
  • Displaying fairest price levels (value areas) derived from market-generated information, in addition to supporting them in learning to trade value – not price.

 

While there are numerous concepts related to using the Market Profile, we believe some of the most important are:
  • The interpretation of the market auction process
  • The concepts of excess and balance
  • The difference between price and value and the impact of time and contract volume
  • Multiple timeframes, including inventory imbalance
  • The behavior of various market events, represented by patterns such as short-covering, long-liquidation, and directional exhaustion

 

No. The Market Profile is primarily used for reading and interpreting market activity. New traders will initially invest more time on the study of market understanding and gaining experience through deliberate practice. Experienced traders, on the other hand, may find the unlearning of previous concepts and the learning of new ones takes as much time, if not more, to gain a solid understanding of how the Market Profile can facilitate their interpretation of the market’s auction process.