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Steidlmayer Market Profile then who created Volume Profile?


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Steidlmayer Market Profile then who created Volume Profile?

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  #1 (permalink)
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If Steidlmayer co created Market Profile then who created Volume Profile? I know to some this is a insignificant question but I like to do a bit of history on the tools that I use to better understand their origins and improvements over time.

Understanding who what and why helps me out. Knowing a bit of the inner mechanisms of a tool gives me a better grasp on what it is and how its to be used.

Thanks!

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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.

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TradeAction View Post
If Steidlmayer co created Market Profile then who created Volume Profile? I know to some this is a insignificant question but I like to do a bit of history on the tools that I use to better understand their origins and improvements over time.

Understanding who what and why helps me out. Knowing a bit of the inner mechanisms of a tool gives me a better grasp on what it is and how its to be used.

Thanks!


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.

The "card"....



Ron


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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.

The "card"....



Ron


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Very interesting detail there. It makes sense why they would use time back then. Being that volume would be delayed they needed something that was readily available to them to measure that Bid/Ask activity. Which was TIME.

Simply meaning the more Time that Price would spend at an area would indicate some type of activity was taking place there.

Thanks for the insight.

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I think they are the same and I have heard from one of Mr. Staidlmayer's friends that Volume Profile was just a name to allow TOS to NOT pay trademark or copyright fees.

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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.
...
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.

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bunkerman View Post
I think they are the same and I have heard from one of Mr. Staidlmayer's friends that Volume Profile was just a name to allow TOS to NOT pay trademark or copyright fees.

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.

Bob.

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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.

The "card"....



Ron


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I am truly a trading geek because this picture of the cards excited me, I had never seen one.

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Waiter View Post
BUT, what is volume profile

See my recent threads to see what it is and how to use it.


Fastest answer...Markets are an auction. Auctions seek to balance buyers with sellers. Balance and imbalance creates slow or sharp moves to facilitate trade.

1. It is the price level where the most trading occurred at a given moment. The Point Of Control or POC.
2. 70% of the range around that creates Value Area High and Value Area Low, which can also be important levels or VAH VAL
3. Low Volume Nodes or LVN - within that range can also be important levels.

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TradeAction View Post
If Steidlmayer co created Market Profile then who created Volume Profile? I know to some this is a insignificant question but I like to do a bit of history on the tools that I use to better understand their origins and improvements over time.

Understanding who what and why helps me out. Knowing a bit of the inner mechanisms of a tool gives me a better grasp on what it is and how its to be used.

Thanks!

If you want to go deeper, read/listen to the information from the people mentioned in my latest threads.
There is value in trying to predict the day type (which I have not learned) but if you just want to see nitty gritty uses for the information, see my charts.

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Waiter View Post
BUT, what is volume profile



Just like we have volume plotted on the x-axis, (volume per bar/candle) Volume Profile is simply volume plotted on the y-axis usually called volume at price or vap for short.

This is a the basic requirement. From this we can see which prices are attracting and have attracted more or less volume. There are a good number of ways to then trade this information in combination with other information for example order flow or the breakdown of this volume information into either buys or sells etc.

Ron
Edit: a picture is worth a thousand words....




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Waiter View Post
ohhh man, that chart really looks like $100 bill, tell me honestly is it makes you better trader?
or its more like show off
its sad that you can use market replay on that platform, it chokes not the comp but the powergrid from all that calculating whatever tick dat they copile



I like to think all my tools make me a better trader. I use Rancho Dinero tools and some simple stuff I wrote. But in the end it’s the decisions, and the tool for that is the brain. And keeping this tool working great is an investment (of many kinds) a life style as far as I’m concerned.

Haven’t used market replay so I can’t comment.

I left my charts for other longer term charts without my Volume Profile..... into more spot FOREX and I had a hard time felt lost but couldn’t put my finger on it. It’s actually reflected in my decline in posting here at FIO. Went back to the chart you now see here and I will never again leave them. These tool really help my intuition.

Currently reading.... Embracing Uncertainty: Breakthrough Methods for Achieving Peace of Mind When Facing the Unknown by Susan Jeffers PhD and in that book she mentioned this book: Awakening Intuition: Using Your Mind-Body Network for Insight and Healing by Mona Lisa Schulz MD PhD so I put Embracing Uncertainty on hold to read Awakening Intuition. Both great books. They are pushing me which is the reason I’m reading them.

Ron

Edit: grammar
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Follow me on Twitter Visit my futures io Trade Journal Reply With Quote
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Charles Cochran of CNFT is the main originator of VP. He just passed away on April last

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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.

Bob.


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.

Bob.

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, futures.io > googling.

Thanks for posting!

snax

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Is there a software tool that combines market profile and volume profile in one package? What would you recommend?

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successforum View Post
Is there a software tool that combines market profile and volume profile in one package? What would you recommend?

Which platform do you use?

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Try Sierra Chart Package 5

https://www.sierrachart.com/index.php?page=doc/StudiesReference/TimePriceOpportunityCharts.html


successforum View Post
Is there a software tool that combines market profile and volume profile in one package? What would you recommend?


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