In this video, I’m going to show you a different take on probably the best market profile indicator that you’ve never heard of.
I’m going to show you how no matter what market you trade, whether it’s stocks or futures or even Forex.
I’m going to show you my take on how to use these market profile volume bands to nail beautiful trends in the market as part of, in my opinion, a really successful trading strategy.
So let’s get into my take on using market profile to nail these trends.
Let’s do it.
Worlds #1 Trading Resource
It’s Mark here at dynotrading.com.
The world’s number one resource on learning how to simplify your trading.
The whole idea behind trying to find success in the market, in my opinion is simplifying your charts, looking for low risk setups and more importantly, implementing strategies that have been time tested and proven to work.
So I got a real treat here for you, we’re going to pull the curtains back on market profile.
I’m going to reveal to you all of the secrets behind why market profile is so successful.
And more importantly, I’m going to show you the how and the why volume is mission critical to your trading success.
In fact, if you ask me guys volume is the secret sauce, volume is the holy grail, volume is the reason that you see these impulsive type moves in the market.
Then the market consolidates for a bit.
And once again, volume is the reason why you see impulsive and trend based moves happen repeatedly.
Apply Market Profile to Any Market
This is happening on a daily basis in every single market stocks, futures, and Forex and I’m going to show you how you can apply market profile to any of those markets.
Now, for those of you that are wondering what exactly is bid-ask volume?
And what can it do for you, right?
How is this data extracted and populated into the market profile?
Well, let me show you.
All right, let me show you real quick, how this data is displayed and how I capture it and plug it into the market profile.
So let me draw your attention to the right side of this chart here.
Can you see these two columns here?
We have a B and an A on these rows. B stands for bid, A stands for ask.
That’s pretty obvious.
And on the right side, this right side column here, you can see, this is the volume that’s being listed out here in the market.
This column two right here, the volume column is in my opinion, the holy grail, if you know what to do with it.
Let me go ahead and turn off market profile real quick.
What do you think the reason is for these impulsive moves?
Like why does the market behave like this?
Why did the market rally huge, take a bit of a break and then rally huge again?
This is an honest question. Don’t think too hard about this question.
Just give me something that you think makes sense.
It’s not Bollinger Bands.
It‘s not stochastics or all these garbage indicators.
There has to be a certain amount of buying pressure to push the market up.
And then on the flip side, there also has to be a certain amount of selling pressure to push the market down.
Volume Indicators to Identify Buy and Sell Triggers
And at any point in time, either one of these two triggers, for lack of a better word, a buying trigger or a selling trigger.
Either one of those two concepts are in control of the market.
The market can only do two things.
It can either trend or it can chop.
The market cannot do anything else. Do you understand?
So what I’ve been able to do with my volume-based analysis is plug in that back end of data, that you saw a few moments ago on the bid and the ask volume, I’ve been able to plug it into the charts.
All I do is turn the volume band green, whenever there’s more volume hitting the ask, meaning that there’s more people that want to get into the market.
They’re willing to pay any possible price to buy the market.
And that just tells me that there’s a lot of buying pressure.
And if that happens, you better get on board that train before the train leaves the station.
And same thing on the flip side, whenever the system senses that there’s more sellers that are kind of taking control of the market, or whenever the system senses that the buyers have kind of taken their foot off the gas, or you could say…
Another way of describing that would be, if the buyers are kind of getting exhausted, then the sellers takeover and I turn it red.
And then when the buyers take over again, I turn it green.
I mean, look at the beauty and the simplicity of this chart.
There’s only two colors.
It’s green when it’s time to potentially look for longs and it’s red when it’s time to potentially look for shorts.
And then it’s green again, when it’s time to potentially look for longs again.
Different Takes on Market Profile
Now, listen, I’m fully aware that a lot of you have different takes on market profile.
This is the truth.
I’m going to give it to you straight here.
The truth is there are many ways to display market profile.
In fact, this chart right here is the old fashioned way to draw market profile.
Listen, I’ve looked at this. I’ve sampled this. I’ve beta tested this old fashioned way to use market profile.
This version of market profile has been around for the last 50 years.
And I don’t know how anybody on earth thinks that they can navigate this market profile display.
I mean, what am I looking at here?
What’s a buy signal look like?
What’s a sell signal look like?
Now if I go back and show you my market profile that uses the same data guys, all I’m doing is I’m re-displaying the exact same set of data that these people are doing, except I’ve organized it to be very visually pleasing to the eye.
This version of market profile, which does the exact same thing as the old fashioned one is in my opinion, again, you guys can make up your own minds here on which one you think is the better chart display, all right, of market profile.
But again, in my opinion, I kind of feel that everybody out there, every Joe Schmo out there can appreciate this version of market profile, where the buy signals and the sell signals are obvious to you.
There’s not a lot of guesswork.
So now that you have a market profile chart that does a much better job of actually displaying the volume profiles for you, the next question I’m sure you’re going to ask me is, “Hey, mark, what does an entry look like?
How do you physically take a potential trade?
Where does the stop go?”
Example Trade Using Market Profiles
Glad you asked that question.
In 10 seconds I’m going to show you what an entry looks like and where to place your stop.
Let’s zoom in here.
Let’s just really zoom into the volume change.
So just to remind you again, whenever the volume changes.
So whenever the selling pressure ends and the buying pressure starts, meaning that the volume has now shifted to the buyers and the buyers are now in control at this exact color change here.
What I do is I draw an arrow and what will happen on your chart is an arrow gets drawn at this exact moment in time.
And you’re going to hear a loud audio alert.
So this bar right over here is your clue that it’s now time to think about potentially going long this market, meaning that the sellers are exhausted.
It appears to be the case that now the buyers have taken control and you want to try to participate in that move, right?
You want to trade with the trend.
You ever heard that saying the trend is your friend?
This is what they’re talking about.
Stick with the trend.
Now, listen, you don’t know for sure if the market’s going to rip like it did in this case.
So watch this.
I’m going to show you a really simple way to get into this potential trade and to place your stop.
You would potentially go long on the very next bar.
It makes sense.
And you’d use the trigger bars low as your stop.
So when I said that I’m going to show this to you in 10 seconds I wasn’t joking about that.
Now once again, if I show you the old fashioned version of market profile and volume TPO analysis, right?
Honestly, good luck trying to figure out where your entry goes, where your stop goes.
I can’t make out heads or tails of what’s happening on this old fashioned market profile chart that guys were using 100 years ago.
Now on this version of market profile where the color bands are simply changing and rotating between red and green, it becomes so obvious on where your entry goes and more importantly, where your stop goes.
Like I said, this is not open to interpretation.
It’s a very mechanical type of strategy, which forces you to remove all of your emotions from your trading and just follow a rule-based system.
And the rules are so simple.
Volume turns green, wait for the bar to close, potentially go long on the next bar and place your stop on the bar to the left of your entry bar.
Does this make sense?
Using Market Profile in Any Market
Listen, this version of market profile is not unique to stocks.
We happen to be looking at a chart on apple, but here’s a Forex chart.
Can you tell me if market profile assisted you in looking for really good setups?
Here’s a futures chart.
Again, same question for you guys.
Can you tell me on this futures chart, if market profile did a good job, helping you identify the starting point of a trend.
That’s going to do it for today’s video on learning how to trade with market profile.
I can almost guarantee you that you are going to love the visual display on how this market profile looks like on your market, on your favorite symbol.
You need to get involved with market profile.
This is the only version that uses volume technical analysis and incorporates bid-ask volume into the market profile.
I think you’re going to love it.
So listen, if you want a free one-on-one demo, guys, I’m happy to hook you up.
Get in touch via phone, via text, via email, whatever’s convenient and I’d love to show you how this market profile chart can potentially transform your trading forever.
Thanks for watching this video and market profile and I’ll see you on the next one. Great.