Market Profile
A Market Profile is an intra-day charting technique (price vertical, time/activity horizontal) devised by J. Peter Steidlmayer, a trader at the Chicago Board of Trade (CBOT), ca 1959-1985. Steidlmayer was seeking to evaluate market value as it developed in the day time frame. Steidlmayer’s charts displayed a bell shape, fatter at the middle prices, with activity trailing off at the higher and lower prices. In this structure he recognized the ‘Normal’, gaussian distribution he had met with in college statistics, (3).
The Market Profile graphic was introduced to the public in 1985 as a part of a CBOT product, the CBOT Market Profile (CBOTMP1) (2). CBOTMP1 included the new Liquidity Data Bank (LDB) data; end-of-day clearings, identified by the class of trader in the pits ( (1) local, (2) commercial, (3) members filling for other members and (4) members filling orders for the public). The Profile was proposed as a trading methodology for using these new data. CBOTMP1 advertised the Profile/LDB as the way to ‘Improve Performance’. It is described as “the only variable-cost ticker service in the commodities industry.”
The promotional material says the Profile is to be the link between the CBOT data and the market. A Profile graphic is to be used to tell “what the market is doing”; the LDB data is for finding the market’s ‘condition’. As a part of the data-display connection in CBOTMP1, the price of the peak cleared volume is identified as the Point of Control (POC). Following the normal distribution analogy, the central seventy percent of trading activity about POC (+/- one standard deviation) is termed the ‘Value Area’.
Source : wikipedia.org
Monthly Market Volume Profile Values – Nifty Stocks – June 2014 taken for reference from the May Monthly Volume Profile ending 30-05-2014. Monthly Market Volume Profile Values – Nifty & BankNifty Futures – June 2014 taken for reference from the May Monthly Volume Profile ending 30-05-2014. DISCLAIMER : The Monthly Market Volume Profile Values –…
Monthly Market Volume Profile Values – Commodities – June 2014 taken for reference from the May Monthly Volume Profile ending 30-05-2014. DISCLAIMER : The Monthly Market Volume Profile Values – Commodities – June 2014 in the above sheet are for educational & reference purpose only. Trading in commodities/stocks/derivatives has high risk involved and the…