LEARN MARKET PROFILE WITH NEW TPO CHARTS
The newish TPO charts are a great representation of the thory of Market Profile. TPO charts give you an idea of when buyers are stepping in and when a move up or down is running out of steam. Here is my take on last week's ES and how I will go into Monday.
Since the spike on 3/20 Fed meeting, the market has been in a balance from 5322.75 down to 5263 and all of last week occured in this range, establishing an inside week. When using Market Profile methodology, inside days (or weeks) are like a spring and when it breaks out in either direction its an actionable event. The charts are telling me the way we are going is up and I'll explain why.
Within this chart we have three spikes, which are telling when viewed through the context of Market Profile. A "spike" is a move at the end of the day that doesnt have enough time to establish itself as an accepted level or not. When a market trades for two periods at one price level it is considered "acceptance" and infers that the market participants have agreed on that level as a fair price. In terms of spikes, this acceptance or rejection of price levels happens the next day. The 3/20 spike up was accepted on 3/21 and prices have not returned to below the spike since. In fact, we had a chance to go down when we spiked lower on Tuesday the 26th. The next day we traded in the spike for a while so there was a chance at acceptance. But it never filled the spike and in fact went above it. When the price moves away from the spike the level is rejected. The move above the spike base is rejection and a buy signal. After this rejection on the 27th we had a spike up as demand was strong in the afternoon. Thursday the 28th we accepted the spike, signifying fair value at the higher levels.
Going into Monday, we have accepted prices near the all time highs and we are primed to break out of the inside week. As time accrues at the higher levels the base continues to be strengthened. If we break above the old high and stay up there for multiple periods, it's bullish and we should look for range extension to the upside.
Many traders are not familiar with Market Profile or TPO charts, but now that they are officially on Tradingview, give them a chance. I think they have a lot of value. They don't tell always tell you exactly when to trade but they improve your knowledge of the structure of the market. I am planning on putting up charts and observations from time to time on here, so if you are looking to learn Market Profile give me a follow or visit my website. I welcome feedback or if you just want to connect and share ideas.
Since the spike on 3/20 Fed meeting, the market has been in a balance from 5322.75 down to 5263 and all of last week occured in this range, establishing an inside week. When using Market Profile methodology, inside days (or weeks) are like a spring and when it breaks out in either direction its an actionable event. The charts are telling me the way we are going is up and I'll explain why.
Within this chart we have three spikes, which are telling when viewed through the context of Market Profile. A "spike" is a move at the end of the day that doesnt have enough time to establish itself as an accepted level or not. When a market trades for two periods at one price level it is considered "acceptance" and infers that the market participants have agreed on that level as a fair price. In terms of spikes, this acceptance or rejection of price levels happens the next day. The 3/20 spike up was accepted on 3/21 and prices have not returned to below the spike since. In fact, we had a chance to go down when we spiked lower on Tuesday the 26th. The next day we traded in the spike for a while so there was a chance at acceptance. But it never filled the spike and in fact went above it. When the price moves away from the spike the level is rejected. The move above the spike base is rejection and a buy signal. After this rejection on the 27th we had a spike up as demand was strong in the afternoon. Thursday the 28th we accepted the spike, signifying fair value at the higher levels.
Going into Monday, we have accepted prices near the all time highs and we are primed to break out of the inside week. As time accrues at the higher levels the base continues to be strengthened. If we break above the old high and stay up there for multiple periods, it's bullish and we should look for range extension to the upside.
Many traders are not familiar with Market Profile or TPO charts, but now that they are officially on Tradingview, give them a chance. I think they have a lot of value. They don't tell always tell you exactly when to trade but they improve your knowledge of the structure of the market. I am planning on putting up charts and observations from time to time on here, so if you are looking to learn Market Profile give me a follow or visit my website. I welcome feedback or if you just want to connect and share ideas.
Comment:
I just tried to post and I dont know if you can see the TPO charts on here even though I'm using the Tradingview indicator. You can see my markup. Open your own TPO chart and read my description, hopefully you can see my points. I am going to request to TV that they make those charts shareable