Allow me to start from the very beginning, which is that market profile as a system is used to track order flow i.e to find the role buyers and sellers are doing at any point of time in a given stock or index.Hence the system functions the best for the intraday player who likes to take decisions based on the chart action on his screen.A good understanding of Market Profile and especially value will help this individual to see much ahead by understanding who is in control on the chart.
Having said this, the profile on a weekly and monthly basis also gives you a good idea of control. All you would need would be weekly/ monthly value areas with stops and targets below and above these.
I will hasten to add here that Value Area though an important part of Market Profile is not the sole criteria in determining the trade.Your study should include day types, buying/ selling tails, initiative/ responsive activity and study of control over a time frame.There are many more but these are a must.
On another note,the market profile is a study of price, volume and time. The value areas are a function of price and time as well as price and volume.You have to differentiate one from the other.The values will be different especially in trending markets.The jury is still out as to which works better, but I have made the switch to price and volume some time back. This is not to say that volume profile is superior.
Again, the profile chart is dependend on accurate data flowing in.The best results are from tick data, though snapshot data can give equally good results.A word of caution for those who rely on yahoo etc. Reuters and esignal are the best.
Also, values for the indices are on futures only as the spot is not traded.The volume shown on some spot indices is derived and not actual so carful there.
I have tried to answer most of the questions recieved, but should there be more I will be happy to assist at
Cheers.
P.S- Appreciate if you can post any more queries here in the comments section, related to the functionality aspect of Market Profile, so that it becomes a learning process for all.
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8 comments:
hi Viren
Good to see your post.
Wanted to ask you. During a discussion in JustNifty tsrini had helped suggesting mypivots.com site to calculate MP. The site input takes in Price alone, and does not look for Volume.
But it gives the result , and also the detailed histogram of MP.
Now, is it possible that without volume the MP can be calculated ? Would be nice if you plz try that site & give your observation. You can try crosschecking with your regular MP values the result you get at mypivots. The site is famous for tech calculators anyway.
Thanks.
hi viren,
thanks for coming up with timely needed post...mok has asked the same thing what i wanted to ask..and to know more about MP i have your 300+ page e-book passed to anuj..will go through that..now coming to datas..i understand we need RT data to access MP values..is it right? i tried with QT but cant get "volume" indicators as you said in one of the post at ilango sir's blog..if you throw some light about sources for MP values that would be of great help!!
Mok,
I am aware of MyPivots.It gives you value based on price and time.The assumption being that if price spends enough time at a particular price it is establishing value.
As mentioned, I moved on to volume price and started using volume profile instead of price-time profile.If you had seen the 100 point drop a few days back in an hour's Time frame, the price time profile IMO would not have been able to give you the value which volume profile would have.
As also mentioned one can follow either or both.My preference is for the volume profile, but I don't claim either to be superior.It is an individual's comfort level.
Regarding values, they will be not very different most of the time in bracketed markets, but will have substantial difference in trending markets.
Markets tend to trend 30 % of the time.
Assortz,
You will get volume for the stocks but not the index.
The index ( spot ) is not traded hence no volume.
Viren,
Thanks, I started looking at MP only after your introduced it.
So, we got 2 subsystems in MP:
1.. mypivots type Price:Time
which gets thro Sideways channelled days.
2.. The more versatile Price:Volume.
which can handle Trending day too.
mmm... we tried mypivot with apr 23rd data only, and that would be tried only on Monday market.
I do not have the 5min data for a 22nd, to checkout the 23rd sudden moves [backtest].
Good points, viren, thanks.
Hope your work is getting done.
All the best.
hi viren
just want to know can we use or find market profile values in amibroker real time/eod,if yes then let me know how to go abt it.
thanx
hi viren,
are there any resources available where we can find out weekly and monthly price*volume=value areas, from my own studies, since u have introduced this concept, i agree that volume profile values are good rather than price *time values.
though im no one to give decision regarding which one is better MP / VP , IM just giving my own view or what i have observed in last almost 2 months.
thanx
regards
Dear Viren,
You are "Value"able for us.We missed you and your comments.
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