Rajandran R Creator of OpenAlgo - OpenSource Algo Trading framework for Indian Traders. Telecom Engineer turned Full-time Derivative Trader. Mostly Trading Nifty, Banknifty, High Liquid Stock Derivatives. Trading the Markets Since 2006 onwards. Using Market Profile and Orderflow for more than a decade. Designed and published 100+ open source trading systems on various trading tools. Strongly believe that market understanding and robust trading frameworks are the key to the trading success. Building Algo Platforms, Writing about Markets, Trading System Design, Market Sentiment, Trading Softwares & Trading Nuances since 2007 onwards. Author of Marketcalls.in

Poor High and Poor Low Market Profile Structure Explained

3 min read

Welcome to the Market Profile Tutorial Series. In the last tutorial, we discussed Failed Auction – Market Profile rules, and in this tutorial, we will be discussing What is Poor High and Poor Low Market Profile Structures and how to play it.

TradEdge 4.0 – June 2024 Edition
80+ hours of Live Online Mentorship Program on Market Profile, Orderflow Analytics, VSA

Live Classes Starting from 1st June 2024 onwards

What is Poor Low and Poor High?

Poor low and Poor High are market profile structures with either a lack of excess or 1 TPO (Single Print) at the tails. Usually, poor highs and poor lows are considered as a trade location where short-term traders tend to dominate around those levels and these levels are considered as auction incompletion levels.

Poor Low/Poor High are Short term trading references such levels need to be carryforwarded in the short term. Usually, I prefer to carryforward up to a month and some special references like AB Poor Low/AB Poor High will carry forward up to 2 months.

Poor Low

Poor Low/Poor High is one form of visual structure where short-term traders tend to initiate traders exactly around the day low/day high during the day.

Trading Inventory and Poor High/Low

When the trading inventory goes long to too long or short to too short at times the markets get exhausted with uncleared poor highs or poor lows followed by a trend reversal where shorter timeframe players actively take control of the market. This generally happens when the market is continuing its trend in one direction and the momentum of the trend starts losing at the peaks which makes the shorter timeframe traders think that the market is too long or too short.

Trading Inventory and Poor High/Low

Uncleared Poor High/Poor Low

Uncleared/Untested Poor Lows often acts like a dominant support zone in rising markets and Untested Poor high in a falling market acts like a dominant resistance in a very short term.

Many beginners in the market profile speculate the formation of poor high/poor low from the intraday perspective. From the intraday perspective, it is been observed that the majority of the time poor high/low forms intraday and clears(revisit) intraday itself. Only the uncleared poor high/poor low needs to be carryforward in the short term.

Crowded Poor High/Poor Lows

When a poor high/poor low is getting too crowded it also indicates that markets could be extremely overbought/oversold and could be due for short covering or long liquidation. In such a case traders need to focus more on the surrounding key visual reference levels and immediate market context and prepare for possible scenarios of short covering/long liquidation. The more Crowded the Poor high/Poor Low more the odds of such poor high/poor low are likely to be revisited in the short term.

Crowded Poor High

How to Identify poor low or poor high?

A trader can able to identify the poor high/poor low near the end of the day. Avoid speculating poor high/poor low during the day as those references during intraday are mostly considered as weaker visual references.

Dominant Traders around Poor High/Poor Low

Usually Poor Low/Poor high are nothing but incomplete auctions dominated by shorter timeframe traders (Dominant traders). Such dominant levels act like short-term supports/resistance. Short-term momentum traders usually take dominance around such visual references.

One of the cardinal rules is never to fight against the short-term dominant trader and better try to align with the short-term dominant trading activity.

Dominant Buyers (Poor Low) acting as an immediate support zone

Dominant Buyers around Poor Low

Super Poor High/Poor Low

When a poor high/poor low is getting more visual around the high/low such a poor high/low can be called as super poor high/super poor low. Though such poor high/low acts like immediate resistance/support at later part these references can become potential targets and price has the odds of revisiting such references in the short term

Super Poor High – Example

the following example shows the super poor high with more crowded trading activity around the highs with letters C,E,E & I with 1 TPO difference.

Super Poor High

AB Poor Low/AB Poor High

AB Poor Low/AB Poor High are special situations where the days high/low is formed with a poor high/poor low with letter A & B combinations and AB Poor High/Low can extend TPO at the tails with a maximum of two TPO differences.

AB Poor High

Usually AB Poor Low/AB Poor High forms intraday and clearly intraday mostly. However, uncleared AB Poor Low is nothing but a temporary support zone and uncleared AB Poor High is nothing but a temporary resistance zone. Usually, AB Poor High/AB Poor Low gets cleared in the short term and needs to be carried forward up to 2 months from the occurrence of AB Poor Low/High.

AB Poor Low

Which Poor High/Poor Low Needs to be Discarded?

Poor High or Poor Low which is clearing immediately the very next day doesn’t have any trading odds. Usually, such references don’t provide any trading value. such references need to be discarded. Only the uncleared poor high/poor low needs to be carried forward in the short term. In an ongoing short-term trend, such behavior is very common.

Immediate Clearence of Poor High/Poor Low

How to Play Poor High/Poor Low?

At what location a poor high/poor low is forming decides the trading content.

1)Uncleared Poor High at Major Swing High – Trading Inventory goes long to too long. Traders should anticipate long liquidations (inventory adjustment).

2)Uncleared Poor Low at Major Swing Low – Trading Inventory goes short to too short. Traders should anticipate short covering (inventory adjustment)

3)Intermediate Uncleared Poor High or Poor Lows – such poor high/poor low will be acting as a potential resistance zone/support zone.

4)More Crowded Poor High/Poor Lows – Traders need to evaluate the surrounding market context to use those poor lows/poor highs as potential destination targets.

Optimal TPO Settings are recommended for visualizing the poor high/poor low as it is very critical to use the right poor high/poor low to understand the underlying market structure correctly. Here are the recommended optimal TPO Settings for Ninjatrader 7/8 platform.

Learn More about Poor Low/Poor High

If you’re just starting with Market Profile and want to deepen your understanding of the trading context it provides, here’s an introductory guide to accelerate your learning and take your Market Profile knowledge to the next level.

In the next tutorial, we will be discussing more in-depth about Excess- End of Auction Concepts.

Rajandran R Creator of OpenAlgo - OpenSource Algo Trading framework for Indian Traders. Telecom Engineer turned Full-time Derivative Trader. Mostly Trading Nifty, Banknifty, High Liquid Stock Derivatives. Trading the Markets Since 2006 onwards. Using Market Profile and Orderflow for more than a decade. Designed and published 100+ open source trading systems on various trading tools. Strongly believe that market understanding and robust trading frameworks are the key to the trading success. Building Algo Platforms, Writing about Markets, Trading System Design, Market Sentiment, Trading Softwares & Trading Nuances since 2007 onwards. Author of Marketcalls.in

Understanding Gap Events – Market Profile Tutorial

A known event that causes a significant gap up or gap down in the market is typically referred to as a "Gap Event". These gaps...
Rajandran R
2 min read

Weaker Hand Traders Vs Stronger Hands – Market Profile…

Weak-hand traders are typically characterized by their short-term focus, limited capital, and emotional trading behavior. They often rely on very precise price levels and are...
Rajandran R
1 min read

Nifty and Bank Nifty May Futures – Short Term…

Nifty and Bank Nifty showed late selling pressure on Tuesday trading session. Nifty market profile structure ended with Poor High and Genuine Reverse Spike....
Rajandran R
38 sec read

3 Replies to “Poor High and Poor Low Market Profile Structure Explained”

  1. I was wondering if you have your market profile training all organized together. I wanted to send a link to my father to help him but there does not seem to be a beginning middle and end to your market profile information. I really like the way you present the material.

  2. Hi I just came across your name. Being from India it made interested to contact you. My name is Radha.

    I have been seeing lot of talk about Market profile. I would like to learn more about it. Please tell me how can I get info

Leave a Reply

Get Notifications, Alerts on Market Updates, Trading Tools, Automation & More