Benefits of Trading with Market Profile Charts

Benefits of Trading with Market Profile Charts

The Market Profile is a unique charting tool that prepares traders to observe the two-way auction process that drives all market movement—the ebb and flow of price over time — in a way that reveals patterns in herd behavior.  Put another way, the Profile is simply a constantly developing graphic that records and create auction data.

Even though MP charts were developed about 30 years ago, there is still a great deal of misapprehension and confusion about them.  Many traders still do not know what MP Charts can and cannot do. Unfortunately, this prevents many traders from being able to truly study and harness the power of the profile.

The profile offers many advantages that are not accessible on any other type of chart. The original decisive of the Market Profile was to provide traders with real time access to trading volume data. Now, remote traders can share the same type of helpful information that floor traders had access to by being in the pit.  The profile development was accepted by professional traders and continued to be the tool of choice for many of them. 

1. MP gives traders with an X ray vision into market activity

The first benefits of the profile chart are that, it provides traders with the best real time view of market activity. The profile chart when joined with a footprint chart gives us what I call x-ray vision into the market.  A trader can actually see what is experience in the market as it happens.  Once you are able to know what is happening in the present, you are able to build far better decisions about what might happen in the future.

2. The MP forces traders to know the market dynamics

The second major benefit of market profile charts is the fact that in order to use it a trader must first know how the market works.  This is a great benefit, it actually forces a trader to know and understand the key market concepts that lead to successful trading.  Some traders that use a signal system are generally trading in the dark.  They never know how the market works and are at the mercy of a signal.  Many others commit on indicators or trade setups, again without understanding market behavior.  Unfortunately, without a consistent understanding of the market, it is very difficult for any trader to be consistently successful. 

3. Market Profile describe where value is in the market

Value is a necessary concept for both buyers and sellers of any item or service in any market.  The same holds true for buyers and sellers in the financial markets.  All professional traders base their trading decisions on their approach of value in the market.  Therefore, it is important for traders to be able to determine and detect where value is in the market. The MP provides us with the best check and view of value in the market.  Imagine as a trader, being able to know where true value is in the market at any given point of time at the time the day.

As trading activity occurs in the market, the profile graphic emerge and shows us where value is in the market.  There is no other charting tool accessible that will display market value like a profile chart will.  Many day traders usually trade without any indication as to where value is in the market. 

4. MP fully works in all Market Conditions

Many indicators and signal systems are arranged to only work under unique market conditions. Some will fully work in trending markets, while others will only implement well in a sideways market. The market profile, on the other hand, gives us with an correct picture of market behavior in all types of market conditions.  It works equally well in a trending market just as it does in a obliquely market.

5. MP is useful for both swing and day trading

The MP gives some great benefits for swing traders; it can show them where the market is fair or unfair, helping them in detecting potential directional moves. In inclusion, analyzing a array of day profiles or creating a single composite profile for a specific number of days can yield a treasure trove of valuable information for both day traders as well as swing traders.

These advantages make the profile an unhelpful part of any serious trader’s arsenal. However, in order for a trader to effectively use Market Profile Charts, a trader must invest some time and energy in learning and understanding this powerful thorough tool. The accolades are certainly well worth the effort. As a trader becomes more and more efficient in applying profile concepts, they will wonder how in the world they could have ever traded without it.

About Author:

Our domain has been always Market Profile and Order Flow and there is a huge difference between working with Vtrender and Others. For one, we are interested in ensuring that you get the education needed to succeed in these markets. And two, we are there with you to ensure that the education we talk about is adapted appropriately to a Live Market Situation and daily. There is a huge gap between what people are taught and what they learn experience wise. We will help you connect the dots.