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

[Premium] : How to Spot High Probability Market Profile Trade Setups – [Part 3]

1 min read

Here are two interesting and similar trading setups which help positional traders in spotting very high probability and very high risk-reward ratio using market profile. this tutorial explains how to understand the context of High probability trend exhaustion using short-term inventory conditions and the exponential trading odds with lower risk trade setups.

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Here are the two charts which I took for examples Bank Nifty Futures and HDFCBANK Futures (Jul series). The most common thing between Bank Nifty Futures and HDFCBANK is that

i)it reached major swing high on 18th Jul 2018
ii)Short term Inventory went long to too long
ii)Indicator Sentiment(Bell Trend Analyzer) turned negative
iii)G2 High setup at major swing high – which indicates a potential back to back swing high

Bank Nifty July Futures – Market Profile Charts

From Bank Nifty point of view, short-term inventory went long to too long on 17th Jul where price migrated higher, however, point of control for the day failed to migrate higher. It is more of news based event where price when up as momentum players too the price to higher level in the late afternoon as Finance ministry likely to infuse about Rs 10,000 cr soon in PSU banks

Also Bank Nifty pattern forms G2 High + Hitting Major Swing High + Trading Sentiment holding negative + Inventory getting long to too long all these combinational factors are making me to think on a possible trend exhaustion in Bank Nifty Futures with great positional odds as there is a high probability scenario of trend reversal at higher timeframes.

Bank Nifty Daily Charts – Bell Trend Analyzer

HDFC Bank July Futures – Market Profile Charts

From HDFCBANK point of view short-term inventory went long to too long due to the following combination of factors (for profile picture reference below charts.
i)3 uncleared Prominent POC
ii)2 Double Mechanical reference
iii)One Poor Low and One AB Poor Low

HDFC Bank July Futures – Market Profile Charts (Full View of Reference)

Also HDFCBANK forms G2 High + Hitting Major Swing High + Trading Sentiment holding negative + Inventory getting long to too long all these combinational factors are making me think on a possible trend exhaustion in Bank Nifty Futures with great positional odds as there is a high probability scenario of trend reversal at higher timeframes.

Two Major Events are lined up for HDFCBANK to watch out in a very Near Future.
1)Earnings Results – 21st Jul 2018
2)HDFC AMC IPO Open – 23rd Jul 2018

HDFCBANK Daily Charts – Bell Trend Analyzer

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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

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