Rajandran R Founder of Marketcalls and Co-Founder Algomojo. Full-Time Derivative Trader. Expert in Designing Trading Systems (Amibroker, Ninjatrader, Metatrader, Python, Pinescript). Trading the markets since 2006. Mentoring Traders on Trading System Designing, Market Profile, Orderflow and Trade Automation.

Nifty and Bank Nifty – Market Profile Structure Overview – October Futures

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Wednesday’s profile structure is interesting as it turns out to be a classical trend day. On a Down Trend day market one timeframe lower without breaking the previous bar high. i.e making lower high on a 30min charts. Once the one timeframing broke on Wednesday trading in Nifty Futures.

One timeframing is a sign of market confidence. It is better not to trade against one timeframing rather than getting caught trading against one. Many shorter-term traders trade against one-timeframing.

Though price opens gap up, momentum emotional sellers pushed the price through the previous day range and formed an outside bar or a bearish engulfing bar on the daily bar/candlestick charts. It is emotional sellers because a total of 7 anomalies witnessed on Wednesday’s trading session which is a sign of shorter-term emotional sellers. No Institutional selling in Index Futures witnessed.

Nifty Market Profile Charts

If the Wednesday’s sellers are so serious the market confidence will be continued on Fridays session as well. High confidence selling can come in the form of gap down or breaking three day or four day low and starts building lower activity. Lack of sellers confidence mostly attempts to clear most of the anomalies. Price opening inside the range and staying inside the range or price breaking Wednesdays low and pulled back into previous days range with activity starts building above previous day high are sign of low confidence selling(no so serious sellers).

If the anomalies are more than 3 we call the profile structure as poor structure or weaker structure. Generally it has a high probability of revisit of all those anomalies with makes the poor structure. Price just goes and repair that poor structure often. However if the high selling confidence persist one should go and trade in the direction of confidence rather than attempting/expecting poor structure to revisit. Poor structure is a short-term reference not necessarily it has to clear on very next day itself.

P shape profile balance (short term reference) on 12th Oct at 10430 likely to act as a short term support. Acceptance down below (Fridays POC building below) P shape balance indicates high confidence selling. In such a case trading against the trend (mean reversion trading) rarely helps a short-term trader.

Bank Nifty Profile Charts

Bank Nifty too had a classical trend day on Wednesday trading session with 4 anomalies created indicating a poor structure. Too much of weak stops and poor structure are down below the Wednesdays close. High confidence selling on Friday brings more weakness to Bank Nifty. If any sign of low confidence one can try intraday mean reversion trades towards the clearence of anomalies.

However, keep in mind that momentum sellers controlled the Wednesday trading session. Hence a counter-trend reversal close is much required to think about positional longs. Profile Structure wise Bank Nifty looks more weaker than Nifty Futures.

Rajandran R Founder of Marketcalls and Co-Founder Algomojo. Full-Time Derivative Trader. Expert in Designing Trading Systems (Amibroker, Ninjatrader, Metatrader, Python, Pinescript). Trading the markets since 2006. Mentoring Traders on Trading System Designing, Market Profile, Orderflow and Trade Automation.

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