Market profile was developed by Peter Steidlmayer in the second half of the last century. This is an extremely effective tool if you understand the nature and how to use it. It is not like the usual tools like EMA, RSI, MACD, or Bollinger Bands. It works independently of price, not based on price, but at its core, volume.

Volume is normal too because this stuff is already praised everywhere. But the special thing here is that Market Profile shows volume by price.

For example, at price 1.1 how much volume is matched, at price 1.2 how much volume is matched, and so on ...

Why do we need to know these things? In other words, why is the volume at price levels meaningful to traders?

The answer is: was it true that before you heard of the Market Profile, you were still trying to find resistance/support levels. The essence of resistance/support is the equilibrium of the price, which brings together the most number of buyers and sellers who agree to trade with each other compared to nearby prices resistance/support is the most reasonable price at which both buyers and sellers are satisfied, so they will match the most.

Market Profile will tell us which price the volume of transactions is most matched, or what price brings together the most buyers and sellers. From there, we can easily and accurately identify resistance/support that used to rely on experience to draw.

See the example below:


Above is the cumulative Market Profile chart of the USDJPY pair. You see, Market Profile will provide you with extremely valuable information: at 113.83 buyers and sellers are the most concentrated, match the most orders, and are the most satisfied. Thus, 113.83 is a reliable resistance/support level.

However, this is just one of the useful uses of Market Profile (MP).

Point of Control (POC)

The price 113.83 above is the Point of Control.

The Point of Control, or POC for short, is the price with the most volume among the prices with the most volume.

As you can see in the figure above, the entire purple area is the collection of the most traded prices, but in that area, the price 113.83 has the most volume. Hence, 113.83 is referred to as the POC.

It is not necessary that the POC be in the middle of that area. It can be left or right. Depending on the market supply and demand, we do not know and it has nothing to do with the price.

Here is an example:




OTHER BENEFITS ARE ANYTHING?

Any market, too, has big ears, big faces called Big boys. Their ability is to drive the market momentarily or so. To win the market, you need to pay attention to them and know how they act. Using the Market Profile tool well is to our advantage.

Because once they hit the market the money was not small, and at what price they hit, it all reflected on the Market Profile. That was the next use of Market Profile - in the footsteps of a giant. The rest of us is to follow that footprint and go.

When trading with Market Profile, remember one principle: Big volumes = Big players.

More liquidity = Many big hands

WHAT TIME FRAME IS SUITABLE FOR MARKET PROFILE?

This is a lot to say because depending on your use the Market Profile often accumulates more. Many good things ahead.

For example, the picture above is the cumulative Market Profile of one day on USDJPY pair.

Or as shown below is the cumulative MP for the period 16.8.2017 - 7.3.2017, frame D1.