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Hi, all. Just joined the forum, and I have a couple of questions right out of the gate.
I like to use Volume Profile with price action to try spotting trends/ranges and entries and exits. I mainly stick to stocks and ETFs. So, my questions are:
I've read that using VP only works with futures (this came from another website that has their own platform), but I'm not sure why this is true. Why would VP not work with stocks and ETFs? Any ideas on that?
and...
I'm currently using ToS as my platform, but find it a bit cumbersome to plot multiple VP's on the same chart. Ideally, it would be great to just be able to click-drag a marquee around a range and have a VP appear just for that range. I understand SierraCharts can do this, but they don't support Mac. Is there another platform you might recommend that can do fast, multiple VP's like I'm describing? Or perhaps ToS can do this, and maybe it's just a feature I haven't turned on?
Thanks for any help. Good to be here!!
Can you help answer these questions from other members on NexusFi?
I'm assuming they mean because futures have a centralized exchange so all the volume/price data is available from one place to everybody and their volume profiles will look the same (assuming the same session time).
Stocks, spot forex, and I guess ETFs, though I have never traded those, don't have one centralized exchange.
You do not win as a trader, you just get to play again the next day. If that game doesn’t appeal to you then you should not trade. Gary Norden
You basically have two alternatives to true real volume VP: a) timed based profile, such as market profile (with the letters) or something like a the total number of 1-sec bars that intersected the price, plotted as a histogram profile; or b) tick-volume based profile.
I've never applied a tick-volume profile to a stock or etf chart, but I don't see why that could not be a good enough analog. Remember, precision can be a finicky b---- sometimes. Tick volume VP is reasonably effective in the forex world for the same reasons that real volume VP is reasonably effective in futures. Others have argued over this, but I think its close enough to serve the same purpose. Others may disagree. The reason it works well enough is because the proportions still work out to be the same. It's not the exact volume, it's the relation of the volume levels against one another. Since tick volume is distributed in the same proportion as real volume, the tools work.
But, imo, it's less the tool and more how you use it; so you have to use in a way that works for you.
For stocks and ETFs, I think market profile should be fine for determining market structure. Again, I think it's about how you use the tool, more than anything.
To me, trading is a primarily a data-visualization problem combined with mentally understanding the current context (big picture). So I also think that you can find and fit a tool to sing to you; the better it sings for you, the better you do. You can exert some control over the tool.
On that point, I think all the following platforms can do what you ask for with the selectively/arbitrarily drawing VPs: Sierra, I/RT, and NT8. I have no idea why TOS wouldn't have this built in.
