Key Learnings from James Dalton – Market Profile Guru – Traderscarnival 2016

Here is the storified version of James Dalton’s(Market Profile Guru) talk at Traderscarnival 2016 – Bangkok. Lots of leanings, thought process as a takeaway from the master which could help improvise your trading decisions.

1. Use Market Profile to Organize Information

I don't trade #MarketProfile I use it to organise the info which helps me to take a decision. – Jim Dalton

— रिशी 🇮🇳 (@ProAMTraider) May 15, 2016

I don’t trade MarketProfile I use it to organise the info which helps me to take a decision. – Jim Dalton

Many traders rely on indicators and price levels, but Dalton emphasizes that true market understanding comes from reading market-generated information (MGI)—the data that the market itself provides through price action, time, and volume.

• Price is just an advertising mechanism. It signals opportunity but doesn’t dictate whether that opportunity is valid.
• Time regulates those opportunities. A move sustained over time suggests stronger conviction.
• Volume measures success or failure. If volume dries up, a move is likely to fail. If volume increases, the move may have legs.

2. Emotional Capital Vs Financial Capital

"Emotional Capital is far more important than Financial Capital" says @JDaltonTrading during his session at #TC2016

— Sumeet सुमित 🇮🇳 (@JainSumeetS) May 18, 2016

Dalton noted that the market has lacked significant institutional participation for weeks, meaning most of the activity is driven by short-term, emotional traders.

Understanding whether “adults are in the room” can help determine if a move is sustainable. 

Markets dominated by short-term traders tend to be volatile and unpredictable.

Institutional participation provides stability—if they’re absent, price action becomes more erratic.

3. Don’t need lot of capital to listen markets

U don't need a lot of money to make money if u can listen to what the mkt is telling u #TC2016 #JDalton

— AP (@ap_pune) May 18, 2016

The market constantly auctions from low to high and high to low, searching for fair value. Traders need to understand this auction process rather than just reacting to price.

• If a market move fails to attract volume, it has lower odds of continuing.
• When price moves higher but volume is weak, it signals a potential reversal.
• The market’s goal is to find a price where two-sided trade can take place—if that fails, expect a reversion.

4. My Initial Position is always speculative long Put or a long Call

#TC2016, Day 2. Learned from Dalton how his initial position is always a speculative long Put or a long Call. pic.twitter.com/gBhcMiwYFv

— Vashistha Iyer (@uptickr) May 18, 2016

Many traders focus too much on price, but without context, price means little.

• Dalton suggests always looking at price in relation to time, volume, and market structure.
• Example: A move higher with declining volume suggests weak demand and possible reversal.
• If a market break happens on low volume, it’s likely to retrace rather than continue.

5.Which Book to Start with Market Profile

Q. Which is the better book? Dalton: “Markets in Profile, if you really want to understand all this.” #TC2016 https://t.co/RNJiU0DYEN

— Vashistha Iyer (@uptickr) May 20, 2016

Dalton is famous for his work with Market Profile, but he clarifies that he is not strictly a “profile trader.” Instead, he uses it as a tool to organize market data.

• Market Profile organizes auction data to make sense of price action.
• Volume Profile complements it by showing where meaningful participation occurs.
• Traders should use both tools together to assess market strength and structure.

6.Value Area Traders are Emotional Players

Many people are too obsessed to play to the exactness of the Value area too. Those are also no better than emotional players – Jim Dalton

— रिशी 🇮🇳 (@ProAMTraider) May 20, 2016

Dalton emphasized that markets are inherently random, and traders often struggle because they seek certainty where none exists.

• The market doesn’t care about what a trader wants or needs.
• Traders get trapped in their own expectations rather than reacting to what the market is actually doing.
• The best approach is to stay flexible, focus on probabilities, and react to new information as it emerges.

7. Failed Auction do not really work

#MarketProfile does not give any targets..it's just a visual representation of a dataset. 80% rule and FA do not really work – Jim Dalton

— रिशी 🇮🇳 (@ProAMTraider) May 18, 2016

One of the most powerful takeaways from Dalton’s discussion is the need for self-awareness.

• Are you always trying to fade the market? (Buying dips, selling rallies?)
• Do you struggle to hold winners? If so, you may need to work on discipline.
• Are you reacting emotionally rather than using MGI?

8. Larger the Gaps lower the odds of filling the same day

"Larger the gaps, lower the odds it will get filled, in my experience…" – @JDaltonTrading @Traderscarnival #TC2016 pic.twitter.com/jHi2QFit3x

— Vashistha Iyer (@uptickr) May 18, 2016

Markets spend 85% of the time in balance and only 15% of the time trending.

• Most traders struggle because they only trade mean reversion and miss trend days.
• The best way to recognize a potential trend day is to assess early market confidence (e.g., strong price moves with high volume).
• If a market is breaking out of balance with conviction, traders should be prepared to go with the move instead of fading it.

9.Trading Sideways Market

A trend trader can trade sideways market as good as a trending market with #MP as he knows tht its time to fade the moves – Jim Dalton

— रिशी 🇮🇳 (@ProAMTraider) May 18, 2016

Dalton explained that traders often hesitate on the best trades because of self-doubt and lack of preparation.

• The best trades often feel uncomfortable because they go against instinct.
• Example: Today’s session saw a low-volume rally—Dalton immediately recognized the risk and hedged using options.
• Hesitation is a sign that a trader is thinking instead of acting on well-practiced intuition.

10.Which timeframe is in control

Have a Top down approach monthly weekly & daily then drill down to #MP on daily to estimate what TF traders are in control – Jim Dalton

— रिशी 🇮🇳 (@ProAMTraider) May 18, 2016

11. Jim Dalton about other Market Profile Traders

Jim Dalton – who has polished and lived #MarketProfile does not even know 50% of what few expert profilers know. Amazing.. isn't it !!

— रिशी 🇮🇳 (@ProAMTraider) May 18, 2016

12.Should Look for a Buy or Sell?

Most wanna know the level at which 1 shd buy or sell and what SL to keep while doing so. Very few are interested in the process – Jim Dalton

— रिशी 🇮🇳 (@ProAMTraider) May 15, 2016

13.Who Drives Short Covering?

"Who drives a short covering?" Jim Dalton: "A Bill, a John, a Terry" 🙂 #TC2016

— Deepak Shenoy (@deepakshenoy) May 18, 2016

14.Cognitive Dissonance

Jim Dalton: The number one thing that kills traders is Cognitive Dissonance. You don't want to believe the market.

— Deepak Shenoy (@deepakshenoy) May 18, 2016

15.Dont Trade during Educational Programs

Jim Dalton: ""In my view, the majority of people who trade during an educational program have very horrible profit and loss statements" 🙂

— Deepak Shenoy (@deepakshenoy) May 18, 2016

16.Let the trade come to you. Dont look for instant trades

"Let the trade come to u." Like batting in cricket? Let the ball come to u …. #JDalton

— AP (@ap_pune) May 18, 2016

17. You need to know when the Economic Numbers are going to released not what the numbers are

U need to only know WHEN r any economic numbers, not WHAT #JDalton

— AP (@ap_pune) May 18, 2016

18. About Markets

It never happens when u think it's gonna happen #JDalton

— AP (@ap_pune) May 18, 2016

19. No Need to be in the trade all the time

Just because u r paying for the equipment and data doesn't mean u need to be in a trade all the time #JDalton

— AP (@ap_pune) May 18, 2016

20.Teaching Markets?

Do not try to teach the market a lesson #JDalton

— AP (@ap_pune) May 18, 2016

Listen here to know about what James Dalton thinks about US Market.

Read the entire Dalton’s Interview here

Dalton’s Photo Made of Market Profile Letters – Gift from Rishi(ProAMTtraider) to James Dalton

Eklavya's gift to Dronacharya @ProAMTraider pic.twitter.com/x6VVXbBaf7

— AP (@ap_pune) May 20, 2016

And last but not least me with the master!

With the Master @JDaltonTrading #TC2016 pic.twitter.com/SEFX2cwlzj

— Marketcalls (@marketcallsHQ) May 20, 2016

It was a great opportunity and learning experience for me to learn directly from the master! #TC2016

Dalton ended the session with a reality check:

• If you’re new to trading or struggling, be prepared for a two-year journey just to break even.
• The best traders constantly learn, reassess, and refine their approach.
• Understanding Market Profile and Market Generated Information won’t make you rich overnight—but it will give you a major edge over traders who only follow price.

Dalton’s insights remind us that trading is a skill that requires patience, discipline, and deep market understanding. If you’re serious about improving, focus on context, embrace uncertainty, and use Market Profile to read the auction process like a professional.