MARKET PROFILE
CONCEPTS AND
MICRO VISUAL
STRUCTURES
Market Profile Learnings
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Creator of OpenAlgo
(Open Source Algotrading Platform)
Trading the Markets Since 2006
onwards. Using Market Profile and
Orderflow Since 2012 onwards
Author of Marketcalls.in
About Me
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What is Market Market Profile is a visualization tool to analyze the
buyers and sellers behavior to understand the market
context and get a bird eye view about the markets.
Profile?
Market Profile explains where stronger traders are taking
controls and where weaker hand traders are likely to be
punished and getting into a trap
Market Profile is a charting technique that uses the
Auction Market Theory to display price and time data,
helping traders identify value areas, market trends, and
potential trading opportunities based on where the
majority of trading activity occurs
It visually represents price distribution and market
sentiment through Time-Price Opportunities (TPOs).
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MARKET
PROFILE AND
BELL CURVE
DISTRIBUTION
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TPO (Time Price A Market Profile chart displays price on the
vertical axis and time on the horizontal axis.
Opportunity) Each half-hour segment of the trading day is
denoted by a letter, forming a Time-Price
Opportunity (TPO).
The aggregation of TPOs creates a distribution
curve, showing where price spent the most
time and indicating high-volume nodes
(HVNs) and low-volume nodes (LVNs).
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Point of Control
and Value Area
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Point of Control, Initial Balance and Value
Area
• Point of Control (POC): The POC is the price level where the most time was spent during a
trading session, reflecting the market's perception of the fairest price.
• Value Area: The Value Area is the range of prices where approximately 70% of the trading
activity occurred, indicating the market's accepted range of fair value for that session.
• Initial Balance (IB): The Initial Balance is the price range established by the market during
the first hour of trading, providing an early indication of market sentiment and potential
breakout levels for the rest of the trading session.
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Buying
and
Selling Tail
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What we can do with Market Profile
Market
Profile
Macro Micro
Structures Structures
Profile Short Term Visual Intraday
Structures References References Nuances
Macro Structures
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Macro Structures
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Micro Visual Structures
• Previous Day High / Low • Early Morning High/Low
• Multi Day High/Low • Intra Bar Weak High/Low
• Poor High/Low • Prev Day Halfback and Intrabar halfback
• Prominent POC
• Todays Open
• Single Print Zone
• Yesterdays Settlement Close
• Buying and Selling Tails
• Mid Day POC (WPOC)
• Rally High/Pull Back Low
• Gaps
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Understanding Micro Visual
Structures Requires Optimal TPO
Size
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Ninjatrader 8
Price Range Description Tick Size Box Size
1 < 100 0.05 0.05 points
TPO Settings Price Per Tick == 1
2 100 - 250 0.05 0.10 points
Price Per Tick == 2
3 250 - 1000 0.05 0.25 points
Price Per Tick == 5
4 1000 - 5000 0.05 0.50 points
Price Per Tick == 10
1 points
5 5000 - 10000 0.05
Price Per Tick == 20
6 10000 - 25000 0.05 2 points
Price Per Tick == 40
7 > 25000 0.05 5 points
Price Per Tick == 100
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INVESTORS NEVER
CARE ABOUT
EXACTNESS. TRADERS
DO!
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What Micro
Structure Shows Dominant Sellers – Smart
Traders
Momentum Traders – Traders
Chase Price Action
Weaker Hand Traders –
Mostly Emotional traders
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How Visual
Structures are Visual Structures Carry Memory
useful?
Help traders to position intraday as
well as for positional trade setups
Help traders in identifying
immediate resistance / support zones
and targets
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Dominant Traders taking control
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Dominant Traders taking control
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Resistance Around Big Single Print Tails
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Series of Poor High as Resistance
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Dominant Buyers with Immediate Support
Zone
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THANKS
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