Steidlmayer Market Profile then who created Volume Profile? | Traders Hideout


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Steidlmayer Market Profile then who created Volume Profile?

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dakine View Post
The creators of market profile and volume profile are the same. TPO's were used as a proxy for volume when computers weren't prevalent. The idea that time spent at a given price = volume. With the advent of computers and the ability to count and display volume intraday we don't have to guess by using TPO's, we get the real volume profile information.


Blash View Post
Back in the day on the floor trading in the pits traders did not have solid idea how much volume was being traded. They wrote down their own volume on paper cards and turned it in at the end of the day. Then looking back they could see how much volume was traded. Hence Market Profile. Because they DID have time and price during the day. Volume Profile is just the nature grow of market profile.
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Ron

These replies are both very good. The original Market Profile showed the areas of price that were visited within 30 minute segments (because there was no real volume information, and 30 minutes was a pretty small period of time when they didn't have tick-by-tick computer feeds. -- Also, pit traders had to turn in their trade cards every 30 minutes, so that was when the data was available.) These gave "TPO's" (Time Price Opportunities) that built up a profile of trading at different price levels that is very similar to the Volume Profile.

When we had reliable trade-by-trade volume data, the same basic idea could be refined using the volume transacted at each price level. Many people will still use both the price-only Market Profile alongside Volume Profile, extracting similar information from each.

(The original question was about who created Volume Profile as opposed to the original Market Profile -- I confess that I am not sure, and do not have time right now to do a good search on it. Perhaps Jim Dalton, author of "Markets in Profile" and "Mind Over Markets" comes to mind. I know he has used both in his webinars. I am not sure who was the first one to do it.)

Once we had good volume information, plotting the volume transacted at each price was a natural application of the basic profile idea, so it was an evolution more than a revolution.

Bob.


Last edited by bobwest; August 13th, 2016 at 10:27 PM.
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