Market Profile – 80% rule which was first mentioned in The Profile Reports (Dalton Capital Management 1987 – 1991). It says if the market opens either above or below the value area and test the value area high/low within 2 consecutive 30 minutes (i.e letter ‘A’ or ‘B’ touches value area) then there is a 80% chance that it will fill up the complete value area.
Welcome to Market Profile Series. In the last tutorial we seen different types of markets (Balanced and Imbalanced) and in this tutorial we will be discussing about the different types of Market Profile Days. By analyzing the shape of profile one can easily identify who is in control in the market and the conviction among market participant.
In the last tutorial we discussed how to read a market profile charts and in this section we will cover different types of markets (Balanced Markets and Imbalanced Markets) and provide a fair idea when such days occur and who is in control for the day.
Market Profile is not a trading system but a market generated information and a decision supportive system along with your existing trading systems. It provides you knowledge about who is in control in the market (Long Term Players, Short Term Players, Day Traders), directional conviction. Market Profile gives an idea to a day trader about where to take a trade and which trend to play for the day based on trend conviction
Rotation Factor is a sentimental indicator used in Market Profile to Indicate who is control (Buyers/Sellers) in the market for the day. If the rotational factor prints positive values every day then it mean buyers are in control in the market. Negative Values indicates sellers are in control. Same principle can be applied to investing as well.
Nifty Futures 500 Tick Charts Nifty futures enter the buy mode yesterday at the opening of the session however it once again turned to positional sell mode in the noon session and currently the resistance zone is coming near 5548. Reverse your position to positional buy only if the resistance zone breaks on the […]
Nifty futures is in strong sell mode since 3rd April and currently the resistance zone is coming near 5585.3. Reverse your position to positional buy only if the resistance zone breaks on the 500Tick Charts.
Nifty April Futures Daily Profile Charts are shown. Yesterday nifty had formed a double distribution Trend Day pattern. A double distribution trend day occurs when trading is light during the day followed by a sudden expansion of the initial balance by the longer term market participants later in the session.
Nifty opened above Value Areas which itself was bullish sign and the new values were created outside of the previous day’s value. Now for Tuesday an open over 5619 will be Bullish, but if 5619 is breached from the up then we can re-visit 5586