Market Profile Software Checklist (rev. April 2020)
In 2003, we were invited by the Chicago Board of Trade to give a series of presentations on the Market Profile and WindoTrader. Based on the questions we received during the presentations, we published the first version of our Market Profile Software Checklist.
Our purpose was, and continues to be, providing tools that help traders make more informed decisions regarding their overall trading process.
Some of the Benefits of Market Profile Software
In addition to questions about Market Profile software itself, we also get the question – how does it help my trading? Well, that’s almost impossible to answer because almost every trader trades differently based on their different ways of interpreting, evaluating, and executing trade. For example, the following picture has been used by many educators to illustrate perspectives – look at it and quickly say the first thing you see – the young lady or the old lady?
The answer – either way is correct because it’s from your perspective. It’s the same with looking at Market Profile charts – some of see one thing while others see something very different.
Taking that into account, we offer some of the ways we use Market Profile charts in our preparatory work and our trading. For example, Market Profile charts, when configured to the user’s requirements, can potentially help identify, interpret, and evaluate . . .
…balance and bracketed trading areas for determining potential, high probability trade locations for trade execution (entry, management, and exit points).
…trends and trend strength for determining potential, high probability trade locations for trade execution (entry, management, and exit points).
…the value area and value area relationships to determine market bias based on one’s timeframe (long or short).
…volume and it’s probable impact on price being contained or continuing through predefined key reference levels.
…high and low volume areas in order for determining potential, high probability levels where the market might reverse direction or continue in the current direction.
…key reference points / levels and the quality of those levels, such as previous excess highs and lows (both intraday and end of day), and areas of acceptance and/or rejection.
…the type of opening, initial balance, initial auctions, and range extension (or the lack thereof) for determining potential ‘shape’ of the session before it fully develops.
…the initial balance for determining the session’s potential extremes and whether session will potentially be a directional or balanced session.
The foregoing is offered to illustrate just some of the ways traders using the Market Profile in their trading use it to identify, interpret, evaluate, and execute trades. It is not the holy grail, the magic bullet, or the answer to being a successful trader. The Market Profile, in our opinion, is a unique tool that helps traders make more informed, higher probability, trading decisions.
As you know, trading is a profession that demands and requires a substantial investment of time, energy and money, and, above all, unconditional commitment to the long-term. It is our belief that every tool we use as traders should be an investment that produces an ROI. Furthermore, it’s not only the software itself but each feature and function incorporated in the application including the support services behind the software.
As always, as you go through this checklist and have questions, please ask and we’ll do our best to give you an objective answer. (firstname.lastname@example.org).
Market Profile Software Checklist
The following Market Profile software checklist is provided to help you make an informed decision as to the Market Profile software application and provider that best meets supports you, your trading methodology and trading style.
- Do you require real-time data? Cost?
- Will delayed data satisfy your requirements? Cost?
Market / Contract Requirements:
- The markets / contracts you trade:
- The exchanges who provide data for your markets / contracts? Exchange fees?
Historical Data Requirements:
- How far back do you want to look at data? Cost?
Chart Display Requirements:
- Minimum time increments you want displayed on your charts:
- How do you want them displayed – By tics? By minutes? Volume?
- Chart display requirements in addition to traditional Market Profile: Volume Profile? Cumulative Profiles? Merged Profiles? Expanded Profiles? Multiple Profiles? Multiple Time Templates? Overlay Charts? OHLC Bars? Candlesticks? Point ‘n Figure? Equi-Volume? Line? Kagi? Renko? Range Bars, Etc.
- Technical Analysis Indicators / Oscillators – Moving Averages, Bollinger Bands, Keltner Channels, MACD, Average True Range, RSI, Stochastics, CCI, Advance-Decline, VIX, Accumulation-Distribution, Money Flow, etc..
- Colors? Colors by Time – Period – Volume? Vertical Lines? Horizontal Lines? Trendlines? Shaded Areas? Crosshairs? Support & Resistance Lines (manual & automatic)? Zoom? Docking? Orphan Windows? Multi-Level persistence (saving)? Degree of customization?
- Mouse-over tips on navigation, toolbars, and menus? Drop-down and right-click menus? Access to property management configuration options?
Trading Methodology or System Requirements:
- Make a list of ALL of the display features and functionality required to provide you with an ‘edge’ in your identification, interpretation, evaluation, and execution of high probability trading opportunities.
Risk / Money Management Requirements:
- Is risk / money management functionality a requirement in your selected trading application? If so, define the requirements.
- Does the software provide any risk or money management features or functionality? If so, what are they and how can you benefit from them?
Order Management Requirements:
- Is on-screen order entry, position management, and position termination functionality a requirement in your selected trading application? If so, define the requirements.
- Does the software support on-screen order entry, position management, and position termination? What brokerage firms are compatible with the application?
Software Provider Expectation:
- Expectations of subscriber – What does the provider expect from you? Can you meet these expectations – if you do, will the relationship be win-win?
- End-User-License-Agreement (EULA) – What does the provider’s EULA require from their subscribers? Can you agree to these requirements?
The Application’s Elective or Optional Features / Functionality:
- Alerts – Does the application have visual / audio alerts based on both time and location?
- Back-Testing – Availability? Do it meet your requirements?
- Cancellation – What is the provider’s policy regarding cancellation?
- Compatibility – Is the application compatible with other applications such as Microsoft Excel and Google Docs?
- How easy and straightforward in the importing and exporting of information? Can the process be automated to maintain reports in a current state?
- Cost – One-time fee? Monthly? Annually (discounted)? Lifetime payment (discounted)? Does it fit your budget?
- Demonstrations – Video? One-to-one? Personalized?
- Extensibility – Can you add third party ‘apps’? If so – to what extent available?
- Flexibility – Can it be configures to meet your concept of an ‘ideal’ display? If so, how and can you do it or does it take a third party? If not – can it provide workable alternatives? How manageable?
- Installation – How easy is it to install and set-up? Are there easy-to-follow printed materials? Are there helpful videos? Is there personal assistance for the installation and initial configuration?
Performance – Boot up / execution / configuration / display refreshing?
- Print Options – Does the application support printing?
- Replay Functionality – Does the application support replaying of previous sessions? What are the limitations?
- Training – What types of training are available? Is it free – if so, for how long? Are there different levels of training – if so, what are they and what do they cost?
- Trial Period – Terms? Conditions? Full version or ‘trial / sample’ version?
- Saving Work – What is the procedure for saving charts and workspaces?
- Scalability – Add to or delete features and/or functionality as wants and/or needs change?
- Scripting Language – Does the application provide user a user scripting feature for the designing, configuring, and implementing custom indicators, oscillators, and studies? How easy is it to learn, make changes to, and become proficient in using? Are there training sessions available? Does support cover scripting?
- Support Channels – Phone? E-Mail? Chat? Forum? Blog? KnowledgeBase? User Videos? Bug Reporting? Support Ticket? On-Demand? FAQ? Remote Connectivity?
- Support Team – Availability (Days and Hours)? Accessibility (How to Contact or Access)? Responsiveness (Policies per Channel)? Technical Proficiency? Trading Experience? Is the support team available to help the configure the application to the user’s methodology? Glossary? Links? Are there different levels of support – if so, what are they and what do they cost?
- System / Hardware requirements – What are the minimum hardware requirements? If you hardware is below the minimum requirements – what would it cost to meet the minimum requirements? Processor – Speed? RAM? Video Card(s) Types? HardDrive Capacity? Internet Connection? Other Applications?
- Upgrades – Costs? Frequency? Procedures? Ability to ‘go-back’ to prior version?
- User Education – Does the provider offer educational support to help the user maximize the application’s capabilities? If so – how?
- User Interface – How ‘friendly’ is the user interface in regards to both learning how to use it and using it? How ‘friendly’ is the navigation? How easy is it to navigate to or find the control to configure it the way you want the displays to look?
- Vendor – How long has the company provided software for traders? What do their subscribers say about them? What do their operating values and mission statements communicate?
- Other requirement ‘A’? ___________________________________________________ .
- Other requirement ‘B’? ___________________________________________________ .
- Other requirement ‘C’? ___________________________________________________ .
As you can see, we have attempted to address the primary issues related to selecting a software application for displaying the Market Profile. Please, remember, even though we developed this checklist for traders who use the Market Profile, it can be used, with modification, to help you
make an informed decision as to what software application best meets their requirements.
And, last but not least, our goal with this Market Profile software checklist is to make it a helpful tool for traders considering subscribing or doing a review of their current Market Profile software application. To achieve this objective, we invite your ideas, suggestions, and critiques.
Thank you in advance for your input and feedback. The WindoTrader Team