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Is Volume Profile worth learning or is it an outdated concept?


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Is Volume Profile worth learning or is it an outdated concept?

  #51 (permalink)
 
Gary Fullett's Avatar
 Gary Fullett   is a Vendor
 
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Market profile I believe is still relevant I studied this with Wyckoff in the 1980s while a CME pit trader in the S&p pit.
I use wyckoff only but market profile is still a great tool to use to understand price and action
Wyckoff involves volume with price and the reading of the tape to me most important

I hope that helps

Gary Fullett
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  #52 (permalink)
 
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 bobwest 
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Gary Fullett View Post
Market profile I believe is still relevant I studied this with Wyckoff in the 1980s while a CME pit trader in the S&p pit.
I use wyckoff only but market profile is still a great tool to use to understand price and action
Wyckoff involves volume with price and the reading of the tape to me most important

I hope that helps

Gary Fullett
For informational purposes only

Yeah, I agree. Let me just say that I find the "is x an outdated concept" question kind of odd. (I know it started out with the thread "is order flow an outdated concept," but I thought that was add too. )

No offense meant, if someone thinks they might be outdated, but I don't quite get it.

Either of the types of profiles, volume or price ("market profile" or "TPO" profile) just show where traders have been active, and show their levels of activity. If you look backward on a price chart and notice things like support and resistance or trend and consolidation, you are doing the exact same thing. You probably are doing it for the same reasons.

Profile traders have developed a lot of subtlety in interpreting different profile patterns and variations, and this can get involved, perhaps more than many want to get into. But everything is, if you dig into it very far.

I don't use profile, but I have, and it does just what it is meant to do, show levels that may prove important. You may want to use this, or you may not, but it's just a simple tool, very much like other simple tools that also do what they are meant to do.

None of them will make anyone a great trader just by themselves, but many can add to a trader's results, by showing what is going on in the market in a different way.

So, not outdated.

And an odd question.

Bob.

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-- Cervantes, Don Quixote
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  #53 (permalink)
QuantDawg
Oklahoma City, OK USA
 
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I recently stumbled across an unfamiliar platform which had a take on the subject:
Unfortunately, I'm too new to this forum to use links. Search the net for the following phrase (in quotes):
"How to use a horizontal volume and raise trading profitability"

That said, while I agree with the concept and use of volume profiles, I disagree that they need to be regularly shown on the chart. For me, regular display of the volume profile is visual noise and distraction. A good indicator will process that information on your behalf and annotate your chart with a minimum of mark-ups necessary to communicate any conclusions from a price/volume analysis. If you have any questions, then might you pull up the chart for manual inspection and confirmation.

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  #54 (permalink)
 SpeculatorSeth   is a Vendor
 
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FuturesTrader71 View Post
There seems to be a misunderstanding of what Volume Profiling is. It is being discussed like it is a trading system or indicator. It is neither. It is a way of organizing actual market info. It is just a chart type and a way of looking at price and volume. I don't think it can ever be outdated, because it isn't an edge on its own.

As with every other way of looking at the market there's going to be common strategies or signal setups that arise. Whether it was intended or not people will start to perform technical analysis techniques with it by looking for signals and testing their historical performance. There are certainly popular setups in volume profile. For instance, fading the edge of the value zone or trading towards the previous day's POC. There will always be someone selling a setup of some sort.

From there I think there's a few general categories that most people fall into. This is usually based on what they believe about the benefits and limitations of technical analysis as a whole:

1) The tool and its popular setups produce trade signals with positive expectancy.
2) The tool may provide signals with positive expectancy, but you would have to mine and discover them on your own.
3) The tool may provide useful signals when combined with other tools.
4) The tool provides useful information for looking at the markets, but should not be used for signals.
5) The tool provides no edge whatsoever.

So I think the question "is it an outdated concept" is implying that maybe at one time 1 was true, but that edge has been arbitraged out and now it's somewhere between 3-5.

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  #55 (permalink)
 
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 AllSeeker 
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bobwest View Post
Yeah, I agree. Let me just say that I find the "is x an outdated concept" question kind of odd. (I know it started out with the thread "is order flow an outdated concept," but I thought that was add too. )

No offense meant, if someone thinks they might be outdated, but I don't quite get it.

Either of the types of profiles, volume or price ("market profile" or "TPO" profile) just show where traders have been active, and show their levels of activity. If you look backward on a price chart and notice things like support and resistance or trend and consolidation, you are doing the exact same thing. You probably are doing it for the same reasons.

Profile traders have developed a lot of subtlety in interpreting different profile patterns and variations, and this can get involved, perhaps more than many want to get into. But everything is, if you dig into it very far.

I don't use profile, but I have, and it does just what it is meant to do, show levels that may prove important. You may want to use this, or you may not, but it's just a simple tool, very much like other simple tools that also do what they are meant to do.

None of them will make anyone a great trader just by themselves, but many can add to a trader's results, by showing what is going on in the market in a different way.

So, not outdated.

And an odd question.

Bob.

As usual, sensible bobwest is killing all the noise casually.

I'm curious though, what kind of things are on your chart now? I've seen you say this thing quite a lot, so I'm really curious to see whats on chart of someone who has been trading since 80's, can you share one chart? Pretty please?

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  #56 (permalink)
 
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 bobwest 
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LastDino View Post
As usual, sensible bobwest is killing all the noise casually.

I'm curious though, what kind of things are on your chart now? I've seen you say this thing quite a lot, so I'm really curious to see whats on chart of someone who has been trading since 80's, can you share one chart? Pretty please?

Price, moving averages. Nothing much to see.

Sometimes I put something new on, and generally take it off as a distraction after a while.

Which doesn't mean anything about what others should do, by the way. What matters is how you construe the markets, much more than whatever you use to do it.

Bob.

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-- Cervantes, Don Quixote
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  #57 (permalink)
 
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 AllSeeker 
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bobwest View Post
Price, moving averages. Nothing much to see.

Sometimes I put something new on, and generally take it off as a distraction after a while.

Which doesn't mean anything about what others should do, by the way. What matters is how you construe the markets, much more than whatever you use to do it.

Bob.

Haha, its good to see even the most experienced players have similar problem of "playing with something new and then finding it to be only adding to noise"- I struggle quite a lot with this.

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