I use Market Profile in my daily pre-market analysis. I look for market structure to determine an opportunity. I look at the shape of the profile to determine the distribution of inventory. I particularly like 'p' and 'b' shape profiles to signal pullbacks and retacements. I have found the market will always gravitate to areas of high volume and move quickly away from low volume areas whicah are very easy to see on a profile.You can get as complex as you want with it but do you need to? I also use a combination of 30M charts and Range and Renko charts to time entries.When I trade I always think about what my competition did and why.
Last edited by Trafford; October 27th, 2011 at 03:26 AM.
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Steidlmayer is very open about his clumsiness as a trader. He cracks jokes about his losses and inability to make the best decisions in many situations. Anyway, it doesn't really matter what his motivation is. What matters, or should matter, is that Market Profile did (or does) work for those who did (or do) use it effectively. If he (Pete) were, in any way, dissatisfied by his decision to sell MP to the CBOT, I'd suppose that would have come to light a long time ago. Let's not forget that MP was conceived in the 70's or 80's. Pete sure did take his sweet time in insisting market dynamics have changed, if his motives are less than honest. Furthermore, Pete has publicly stated that he hopes Volume Strip analysis will get picked up by the CME Group as did his earlier creation. He wants to get paid. So do you. So do I. So what?
Let's take a closer look at Pete's 'angles':
Market Profile was developed at a time when floor traders were prominent. Trading then was different. Floor traders' primary objective was to provide a service; only secondarily did they made money from being 'right'.
Volume Strip analysis was developed on the premise that floor traders have gone the way of the dodo, and that markets are now comprised of singular traders with selfish motives (supply/price vs price/time).
One must recognize that these distinctions are accompanied by real difference. Pete's suggestion that dynamics have changed, are axiomatically so, given the shift from open outcry to electronics. Does this mean that MP no longer is useful? I have no idea. I've never very seriously used MP, but I know Pete now seriously doubts its efficacy. It goes without saying that everyone is entitled to make what conclusions they will from that fact. I am only in the early stages of testing VS (mostly for academic purposes), but I will go as far as saying that his current ideas are logical and perfectly applicable to the current structure of price. Will I use it? I'm not yet certain....
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Without sounding too male chauvinistic, if you give a woman a map to read it is likely to confuse her and she will unlikely reach her destination but give a sat nav and the likely hood is that she will get there. Two different tools that achieve the same thing but just use different methods.