Market Profile Introduction
Why Use Market Profile Charts For Analyzing And Trading The Markets?
Some Common Problems A Trader Faces As A Beginner
- Losing Trades – Frequent losing trades. Stop Losses getting hit all the time. Frequent losses makes a dent in your confidence in yourself and your trading method. And the most common reason for frequent losses is taking trades impulsively.
- Poor Entries And Exits – Unable to find advantageous entry points. (I actually did not understand what “advantageous”really meant till I started using Market Profile)
- Low Confidence – Unable to attach confidence to my trades. Lack of confidence often led to a lot of Stress.
- Trading Logic – Unable to decide on logical exits for the trades. Often getting out too early or overstaying my welcome. Either way not being satisfied with my exits.
- Improper Risk management – Not able to define my risk properly. Subsequently not able to decide exactly how much I should trade, often leading to Overtrading and equally harmful to your trading Undertrading. The main reason for inability of defining risk in a trade is the lack of understanding of where the Smart Money is buying and selling.
Who Will Help You Learning Market Profile And Auction Market Theory?
Chief MentorDean has over 12 years of experience trading in Indian Financial Markets. He uses Market Profile as primary tool for analyzing the markets. Market Profile provides the context in which current market development is occuring. Once the context is clear Trade Timing Tools such as Order Flow and Volume Spread Analysis are used to pin point low risk Trade Locations.
How Does Market Profile Help?
- Trade With Smart Money – You would be able to understand when and where and why the Smart Money is choosing to trade or not to trade. Being able to track Smart Money gives you a fair chance to match them, with your trades.
- Using Logic To Decipher Smart Money Activity – Learning how SM works and trying to trade with them will give you confidence in your decisions. There are no magic indicators that show you SM Buyers in Dark Green and SM Sellers in Dark Red, you have to rely on Logic to come up with that assessment.
- Reading Market In The Now – And the next benefit of using Market Profile is you will take decisions based on Crystal Clear Logic. No statistics, mathematical probabilities, hit rates, etc but Pure Unadulterated Logic telling you what the markets are doing now!
- Understanding Trading Logic offers its own benefits,
- It will help you reduce the conflict in your mind about taking and exiting trades.
- You dont have to fight with yourself about entering or exiting a trade.
- Often your intuition tells you one thing and markets are doing something else, this situation causes a lot of confusion and stress.
- Trading Logic helps you cut through the noise and spot what SM is doing helping you make the choice in your mind without the stress and confusion.
- Reduced Stress – So entering and exiting trades based on Sound Logic will increase your profitability and reduce your stress a win win. Stress has been one of the biggest hurdle in becoming a consistently profitable trader. Stress piles up when you dont know “why you are doing something”. Market Profile will answer the “why” beautifully and will help you reduce the stress in making trading decisions.