TIMESTAMPS
00:01 – INTRO
00:54 – UTILITY
Profile trading has existed since the late 1800s.
The original concept of trading was made on the trading floor, or the infamous “trading pit”.
Floor traders would keep track of trades on specific assets using the Market Profile, also known as the TPO profile - Time, Price, Opportunity.
With the advent of digital trading, data could be mined in terms of transactional size. Hence, the Volume Profile was born.
Most believe you can trade Volume without Time, but we believe it is an incomplete picture of what is really going on.
The Market Profile is more effective on the traditional markets than in crypto (for now) due to the surge in volume brought from the NY trading session.
In the mid-1860’s, Chicago’s Trading Group created a method of trade to combat fluctuating prices in the economy.
Drought in the corn market? Prices will increase. Too many cows? Prices will decrease.
Market prices revolved around conditions where a buyer and seller would agree to a “FUTURE” price.
That future price is now what we call a “FUTURES” contract.
Both profiles have 3 areas of interest: VAH/POC/VAL
The Volume Point of Control, known effectively as the vPOC, is the price with the HIGHEST accumulated number of executed contracts that have been traded within a Volume Profile.
The VAH and VAL (Value Area High/Low) are 70% of executed orders in relation to the POC. Commonly used sessions are on the Daily time frames for CME/Futures.
---
The Time Point of Control, known effectively as the tPOC, is the price with the HIGHEST accumulated amount of TIME within a Volume Profile.
The VAL and VAL are still 70% of the executed orders in relation to the tPOC.
Commonly used sessions are on NY time frames only for CME/Futures.
06:08 – IMPLEMENTATION
The concept of BALANCE vs IMBALANCE.
The concept of building value versus searching for untested value.
How to identify a break in balance versus remaining in balance.
06:30 – MISCONCEPTIONS + JARGON
In our opinion, in order to better understand Time vs Volume, one must understand the basic concepts of Market Depth, Time & Sales, Order Book, and Order Flow… (They are not the same).
Having a basic understanding of these concepts will assist a trader in utilizing the key concepts of the Volume and Time-based profiles.
🔎07:15 Example of Market Depth, aka the DOM.
*You only see limit orders here.
*A market order always fills a limit order.
🔎07:33 Example of Time & Sales, aka the Tape.
*These are the executed market orders that filled the limit orders of the DOM.
*Slippage / Fills / Buys / Sells - terminology to be understood.
Contrary to popular belief, you need liquidity for the market to move.
Institutions provide liquidity. Bigger hands have bigger plans.
“Order book”, this phrase can be used interchangeably, but the correct example is the book or orders that institutions are willing to trade on a given day.
They ARE the order book.
Finally, Order Flow…
Order Flow is not market depth and not Time & Sales.
Order Flow is an analysis of COMPLETED executed price action that assists a trader in determining which side is in control of the market.
But how do we then VISUALIZE all of this data? The PROFILE!
12:19 – VOLUME vs TIME
Volume Profile and Market Profiles are NOT the same indicator.
Volume Profiles are based on Volume, while Market Profiles are based on Time.
Market Profiles are commonly referred to as TPO Charts, for Time, Price, Opportunity.
Mastering BALANCE! We will cover Volume Profiles first…
🔎13:09 Example of Volume Profiles on a Daily time frame in TradingView.
26:59 – TIPS & TRICKS
★ Watch Rivalry AMA 3 onwards, as there are many Golden Nugget of wisdom, and you can see how this type of analysis is done regularly.
★ Ask your questions! Use this AMA session to ask about anything that makes you unsure.
★ Volume in itself is NOT a complete method.
★ Profile trading in its complete form combined with Volume and Time is a powerful tool.
29:20 – FINAL THOUGHTS