How to use Market Profile to trade

I have read Mind over Market. There is a lot of information in it. It is great and useful. However, I want to know how people use it trade. Does anyone has experience in using it in real time to trade ? Where to enter and exit a trade ?

Thanks
MAK

kbi: From an RTH perspective if you are talking about the whole session in the E-mini futures market then yes.

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Originally posted by day trading

Who is "he" and was the boot camp face to face in a training room or online using something like PalTalk? Feel free to invite him here to discuss Market Profile with us if he has time.

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His name is reza and his site is profiletraders.com

It was an online seminar...similar to paltalk but it had a whiteboard where he posted charts and then drew on them as he explained things, he also sent out a manual for reference after the bootcamp.

I don't think he participates on forums but his email address is on his site so I'm sure people could email him any questions they may have.

I found the Mind over Market book to be more readable than the Markets in Profile book but I have heard Dalton say that the latter book is the one with the best information of the two if you can digest it.

I would also recommend reading up on the concept of The Wisdom of Crowds as this relates to the concept of normal distribution and standard deviation and is an interesting topic in its own right.

Originally posted by day trading

Welcome Mak!

Plenty of people here use Market Profile to trade in real time. You sound like you are new to Market Profile? If so, I would suggest that you start off by learning basic setups and see how the market that you trade reacts to those basic setups and see if you can understand why this is so.

Here are a list of basic setups:
Market Profile Setups

I suggest that you start by looking at the Value Area High and Low and see how often the market uses these points as support and resistance and see how you could trade and manage a trade around these levels. Try and figure out when it's better to stay off these trades and when the trades have higher probability of success.

Once you've understood that aspect then look at the developing value areas. Then add in the Initial Balance and keep on adding in all aspects of Market Profile until you understand them all.

If your charting software has a playback feature then you can use previous days of historical data to watch these features of Market Profile develop and accelerate your learning.

And then of course ask lots of questions when you don't understand something.

Good luck and keep us posted to your progress.

My philosophy for trading market profile is fairly simple yet comes from sitting in front of a screen for many days over the past few years. Here is how I trade it conceptually:

1. When price above VAH - I have a long bias and typically only trade longs...especially if it has spent 20-30 minutes above that level (opposite for VAL).

2. When inside of VA, I will determine whether to trade the exit of VA or fade touches of VAH or VAL based on the width of the zone and higher time frame structure using the 30 minute & 60 minute charts

3. With the amount of experience I have, there are certain day types I recognize with a lot of confidence and will take small position trades looking for the day type to unfold as I expect. I very rarely use price stops on this type of trade but use conditional stops using time, breadth, & confirmation from the Russell.

Davenet20,

Do you not look at where the value area is in relation to prior value areas or the 5 opening types?

I've learnt about value migration when the most recent value area overlaps the prior value area the market is more balanced.

Additionally when the recent value area the is entirely above or below the preceding value area with no overlap, the market is out of balance and in price probing mode.

I use this amongst other market structure/dev to help give me a heads up on whether I should be fading or going with the trend.

This is usually analyzed as a basic part of their pre-market analysis and I know this is only basic but hopefully makes sense.

I do not, only because I am primarily a scalper of 2-3 points using market profile mainly to aid in my directional bias. If one was a position trader who held trades more than 2-3 minutes, those are concepts that are most likely that can aid in ones conviction.

I think the bottom line is there are many ways to trade market profile concepts...it is a concept that is very valid. I am actually reading Dalton's book a 3rd time right now. I pick up something new every time I read it.

I know other traders who trade it differently than I do who prefer to take position trades around VAH & VAL. Me, I dont make good decisions when holding trades for more than 10-15 minutes, that is why I am more of a scalper and use market profile concepts for directional bias and to read where I think the market is going. Then I look for my set-ups in support of my bias. It works for me.

Just had a live example that prompted me to post again. As mentioned B4, I am primarily a scalper of 2-3 points. My favorite technical set-up was just presented to me and I did not take it because my read of the day type did not support the direction of the trade at the location the set-up occurred. Had I taken it, it would have resulted in a loss.

DaveNet20,

Try looking at the Market Profile Trading graphic in conjunction with the VWAP indicator. I found it to be a useful primer on learning how to trade value area migration as it unfolds.

I also monitor Virgin POCs gaps, overnight inventory, and prior Open, HoD, LoD and Close for key Level.

Originally posted by Davenet20

I think the bottom line is there are many ways to trade market profile concepts...it is a concept that is very valid. I am actually reading Dalton's book a 3rd time right now. I pick up something new every time I read it.

I know other traders who trade it differently than I do who prefer to take position trades around VAH & VAL. Me, I dont make good decisions when holding trades for more than 10-15 minutes, that is why I am more of a scalper and use market profile concepts for directional bias and to read where I think the market is going. Then I look for my set-ups in support of my bias. It works for me.

“I don’t do trade regularly, maybe that’s why I am getting anything here.”

Yes, Market Profile might be considered redundant or less efficient if "Volume at Price" data is readily available for the market being traded.