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Steidlmayer Market Profile then who created Volume Profile?

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bobwest View Post
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.


bobwest View Post
Volume profile existed long before ThinkOrSwim, which is only a few years old, and it is different, although they will render fairly similar profiles of trader activity at different price levels. Market Profile is based on whether a given price level was visited, even once, during the trading day. Volume Profile shows the actual volume transacted at each price level.

It is true that the CME has the rights to the price-based Market Profile, and it does even today extract a fee from platforms that use it (which they generally pass on to their users.) Volume profile, which many find more useful, does not have any such issues.

TOS has a "TPO" profile indicator, which is the same as Market Profile but is not limited to 30-minute bars, and a "Monkey Bars" bar type, which is standard time-based Market Profile. I don't know how they deal with intellectual property issues, other than the fact that they are not fixed on 30-minute time spans. TOS also has a Volume Profile, which gets around the CME property rights simply by being based on different statistics, as are all Volume Profiles.


I had to resurrect this old thread, I hope the admins don't mind. I wanted to thank @bobwest for this valuable explanation.

I have started reading "Mind over Markets" and I am really enjoying learning about the market structure and why they did these things the way they did. I was wondering how volume profile fit into this picture too. These posts are worth more than 100 google-searches. I'm finding this to be a general pattern, > googling.

Thanks for posting!


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