The internet is full of information about the market, some of which may cause more confusion and not helpful. To be successful in the field of stock market trading, a potential trader or investor will need to have all the correct information. But how do you know what information on the web is accurate and what isn’t? Well, this wholly depends on what you are reading and whose advice you follow.
Before going into details of creating a successful career in stock market trading, you would need to know a few basic concepts. One of these concepts is market profile. What exactly is market profile, and why is there so much hype around it today.
Market profile is simply a method of keeping note of the market. Here you plot the time value on one axis and price on the other. Most of the time, this forms a bell-shaped curve. Peter Steindlmayer introduced this concept while he traded at the Chicago Board of Trade (CBOT); the idea was then open to the public during 1985.
Market Profile can help the day trader identify Other Timeframe Participants (simply put big players) who have the power of both money as well as information. Traders can make better decisions by following the big guys who give direction to the market.
What is Market Profile Trading?
With the help of market profile, traders can read the current trends in the market in real-time. It considers the latest data in the market and can provide traders with an excellent analysis based on time, price, and volume so that with the help of the best possible information, the trader can decide what they want to do next.
Market profile is like having a superpower in the world of trading. It gives the trader an X-ray vision of the current market. The best thing about Market profile is that it can work in all market conditions, unlike most trading systems that can work in only specific market conditions example, trending or sideways markets. With Market Profile, you can get a clear picture of balanced and unbalanced conditions of the market all the time irrespective of if it goes up or down.
The Stock Trading Market has several different players, mainly positional traders, day traders, scalpers, swing traders, big buyers, and big sellers. The price fluctuations in the market are primarily because of the actions of all of these players combined. While the big buyers and sellers have their specific prices at which they want to buy/sell the stock, all of the other players form a bridge between them and can provide liquidity in the market. It is this interaction between the big players and the short-term players that distribute the trading volumes and forms the bell-shaped curve that is a characteristic of Market Profile Charts.
The Bell Curve
A Marketplace is usually formed to facilitate trade, and the stock market is no different. Here a script’s price will increase only till the last buyer is done buying, and no one wants to buy the stock at a higher price. This maximum price is known as the Unfair High.
In the same way, the price of the stock decreases only till the last seller has sold the stock. When there is no one left who will sell at a lower price, then that point is defined as the Unfair Low.
We can say that the marketplace helps facilitate trade using the “Dual Auction” process where when the upside auction ends, the downside auction begins and vice versa.
The Value Area is defined as the range between the unfair high and the unfair low.
Market Profile Charts
Many different software can help you effortlessly chart market profiles using data from an excel sheet. First and foremost, you will have to understand how these software works.
Every half an hour in the trading day is designated with the help of a letter. This is called the TPO or Time Price Opportunity.
The first 30 minutes range is donated with an “A” while the next 30 minutes is denoted with a “B”. This process continues till the end of the market range.
Point of Control (POC): POC can be defined as the price level at which most time was spent (Price Profile) or the most trading activity (Volume Profile) takes place during the day. At the end of the day, a market profile chart shows what has happened during the day; at the same time, it also shows who is responsible for the happenings.
How to Read a Market Profile Chart?
As we all know, a Market Profile chart shows the price on the Y-axis and the volume on the X-Axis. The timeframe uses a combination of letters as well as colors. It is easy to understand the price of the stock but volume and time frame is another matter.
Volume on this chart is displayed as a horizontal histogram where the longest horizontal line shows the greater volume of trading. This point is also called the point of control because it is this point that controls most of the market.
The timeframe on the profile chart uses letters as well as colors where every letter represents a unit of time; it can either be 5 minutes or an hour. These, as well as other indicators, can be used to highlight and make notes on a market profile chart. The tails for selling and buying are represented by the lowest buying and selling TPOs for that particular trading period. These value areas can represent about 70% of the TPOs.
We at StockPro understand that these and other concepts of Stock Market Trading are not the easiest to understand. Hence with the help of Dr. Seema Jain, Ph.D. IIT Delhi, we have come up with the Market Profile Combo Course. This course is taught by Mr. Bhavneet Singh, an eminent Trainer, and Mentor at our institution StockPro. He has completed his B.Tech from the National Institute of Technology, Jaipur. He has over 10 years of experience in stock market trading with a particular focus on scalping in Bank Nifty Options. He is a prestigious NISM certified professional for equity derivatives an expert in the field of technical analysis using Market profile, volume profile, and order flow analysis. He is also an expert in Options trading.
What will you learn in the course?
The Course Is Divided Into 6 Modules
MODULE (A): Market Profile Analysis (Estimated Time required: 1 Week)
Introduction to Market Profile Charts and How to make them.
Key Profile Chart Elements and How to Read the Charts.
Auction Framework
Balance and Imbalance.
Market Profile Structures (Both Trending and Non-Trending).
Value Area Relationship.
Types of Market Openings.
Identification of Long-Term Buyers and Sellers through Charts.
Get Free Access to Market Profile Charts.
MODULE (B): Volume Profile Analysis (Estimated Time required: 1 Week)
Introduction to Volume Profile Charts and How to make them.
Key Profile Chart Elements and How to Read the Charts.
Volume Profile Structures and Value Area Relationship.
Identification of Long-Term Buyers and Sellers through Volumes.
MODULE (C): Order Flow Analysis (Estimated Time required: 1 Week)
Introduction to Order Flow, Order Flow Terms, How to read Order Flow Charts.
Understanding Market Imbalance, Significance of Point of Control.
Importance of Delta and Order Flow Price Rejection.
Fair Prices Absorption and Order Flow Support & Resistances.
Order Flow Trade Setup on Reversals and Continuation.
MODULE (D): Miscellaneous (Estimated Time required: 1 Week)
Exclusive Make or Break private live trading session on Bank-Nifty Expiry Day (Minimum 30 LIVE trading sessions)
Combine Market Profile, Profile, and Order Flow to make your Trading Decisions.
Intraday Scalping on Bank-Nifty Options.
Time & Sales Analysis.
MODULE (E): RISK MANAGEMENT, MONEY MANAGEMENT & TRADE MANAGEMENT CLASSES.
Trading Psychology- Most Important Strategy than any other Strategy.
Risk Management
Trade Management
Money Management
MODULE (F): UNDERSTANDING OF OPTIONS
What are options? (CALL/PUT Options)
Options Basics- Option Terminologies, ITM, ATM, OTM, Option Premium, Option Writing, Historical Volatility, Implied Volatility.
Options Buying Vs. Options Selling.
Open Interest Analysis.
Intrinsic Value Interpretation.
Understanding Option Greeks.
What is the specialty of our course?
- The course is designed for everyone; it doesn’t matter whether they are beginners, investors, or advanced traders.
- Our course focuses on intraday trading and is very helpful for those who want to refine their trading skills.
- With exclusive private live trading sessions that we conduct, this course ensures that our students can implement what they learn in class.
- We also provide long-term hand-holding support to all of our students that helps them learn the curve and keep going even after they have completed the course.
- With the help of free resources, we teach how to generate Market Profiles and Volume Profiles.
- Students can also repeat the course for up to 6 months after registering for the course if they do not understand any concepts the first time around. Students also have access to the recorded videos of the classes so that they can refer to it whenever needed.
- Separate sessions are held to clear any doubts our students may have. These clarifications can be done on the Telegram channel during the training or even during the live class.
- We have a distinct telegram channel for the StockPro Market Profile Combo Cours where members can get daily trade ideas directly from us.
- Enrolling in our courses also give members access to our specialized telegram group that was created for the members of the Market Profile Combo Course. Here members will be part of one of the biggest trading communities, and they can interact with like-minded traders and investors for up to 6 months.
- When students enroll in our courses, they are automatically added to all 5 of our premium and rockstar groups.
Free add ons
Customises Excel scanners to help students find potential breakout stocks.
Customized OI sheets of the Index that are automatically updated in real-time.
Complimentary access to the “All in One Trading Course” which is based on technical analysis and fundamental analysis.
If you want to become successful as a stock market trader or investor, then this course is ideal. Not only can you pay for it in installments, but you will recover much more than the amount paid during the training process itself. It is a win—win situation for us all, so why wait? Contact us today for more details.