What is Market Profile?

by Andrea Unger

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Transcription

Hi guys, hi from Andrea Unger! Today, I’d like to talk a bit about Market Profile, a topic that is no longer an object of interest for many people. Can learning it be useful?

Market Profile was very popular from the early 2000s to 2008. Then, traders gradually lost their interest in it. Today, there is very little information about it. So, is it a valid method or not?

As a first thing, let’s explain what Market Profile is, for those who don’t know it. It consists in profiling the volume distribution during the day or a certain period of time, finding the level of price at which there were more trades. The graph of this volume distribution can have different shapes and you can use it with certain strategies.

I think this is a valid approach. Nevertheless, I think it works well as a discretionary method only, as it’s hardly applicable in an automated way. There is also a method that is based on market statistics and that revolves around a very similar concept.

If you are interested in this, you can visit the Traders Laboratory forum. There, you can find plenty of very good content. For instance, there was a guy who posted a lot of pieces of information and tutorials about statistical trading and the like. When I discovered he is a programmer, in 2007, I sent him a private message, asking him if he thought that it could be possible to program this approach in an automated way.

He answered that, actually, that would be too complicated. There are too many issues that would make it impossible to program in a unique and definite way. Those issues are actually little things that those who are not programmers cannot neither evaluate nor fully understand.

However, that professional programmer thought that even though he is a programmer and an expert in this approach, he could not merge his knowledge to find an automated solution.

However, I did not dedicate the necessary time to study this in depth. I read the Steidlmayer on Markets book, which is a very good reference to learn about this. As I was focusing on automated trading and automated trading strategies, I obviously could not spend too much time on other approaches.

For those of you who are interested in it, even though today there is not much about it anymore, I believe it’s an interesting topic. So, if you have time and you are interested in it, have a look at it.

Perhaps I will talk about this again in this blog or on my video channel. Stay tuned, guys!

Ciao from Andrea Unger!

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Andrea Unger

Andrea Unger here and I help retail traders to improve their trading, scientifically. I went from being a cog in the machine in a multinational company to the only 4-Time World Trading Champion in a little more than 10 years.

I've been a professional trader since 2001 and in 2008 I became World Champion using just 4 automated trading systems. 

In 2015 I founded Unger Academy, where I teach my method of developing effecting trading strategies: a scientific, replicable and universal method, based on numbers and statistics, not hunches, which led me and my students to become Champions again and again.

Now I'm here to help you learn how to develop your own strategies, autonomously. This channel will help you improve your trading, know the markets better, and apply the scientific method to financial markets.

Becoming a trader is harder than you think, but if you have passion, will, and sufficient capital, you'll learn how to code and develop effective strategies, manage risk, and diversify a portfolio of trading systems to greatly improve your chances of becoming successful.