Coming to the realization that all we hold sacred is
proven BS, myth and magic - I'm OK with that
but what I'm not OK with is enrolling in a five year
university course on 'Market Profile' trading, and
another five years on VSA - You get my drift.
I've been doing some research on FF forum and
some of those guys really like to get as highfalutin
as they can, whether it is just an ego trip or they
really believe Forex needs to be that complex I don't
know - but what a contrast to Big E - so simple and so
Whilst incorporating Market Profile in my strategy I
was wondering how deep do I need to go?
I found it is connected to VSA and I already did a lot
of work with that, but again, so many make it so
I think my very rudimentary grasp is probably
more than enough - I'm not a Market Profile
My take on it is the chart is sort of bell shape
and the more the bell extends this represents
the area of value - when price is away from this
it is out of balance, interestingly the expression
'unfair' was often used.
Now we're getting down to normal conversation.
Market Profile is taking the Auction perspective
which is precisely what the Forex Market is.
If you were at a farmers market and tomatoes were
$10 per pound or 50c per pound, neither would
be a fair price. I'm not American but i guess the
price would vary due to seasonal and other factors
but a fair price would be a zone somewhere
between those two extremes.
So that can be represented graphically on a
Market Profile chart.
Whereas tomatoes don't fluctuate too much in
price during the course of the day, there is
fluctuation after the decimal point in Forex.
The point being if the price is unfair and not
balanced, it should be drawn back into balance
Now how to trade Market Profile when the price is
within the Value area?
I have no idea and I don't care.
I am only interested in the price being out of
the Balance zone and making it's way back into it.
What my research uncovered is that price being
well out of Balance zone invariably equates with
oversold or overbought on Stochastics. No big
but the two are not interchangeable. stochastics
can be OS or OB even when MP shows price in
Balance zone. So MP is by no means superfluous.
Market Profile is far more relevant to what I am
But in the process I note VSA is also very much
in sync with MP
So really, everything should come together at the
It should hit the top of the Autofib chart.
That should be way out of the Value area on MP.
Volume should be peaking.
Invariably price will be drawn back into the Value
area as an imbalance has occurred.
To make it easy to visualize, if tomato price at auction
has gone too high and is 'unfair', out of the value area,
there will be no demand and price will have to fall back
down into the 'value area'. You actually see this happening
on an MP chart.
If tomato price falls right down to an 'unfair' level the buyers
will come in and drive the price back up into the 'value area'
Another curious observation
Right in the heart of the ' value area' you usually find the
I only actually take note of missed weekly pivots so that
was noticed by accident.
It does seem to get hit.
I am not completely clear on the red and green zones but
I would guess buy and sell zones and of particular note
is where they meet
So an 'unfair' price at the bottom of the MP chart will be
in the green zone and will be aiming for the red zone.
So it will hit the red zone and maybe the monthly pivot
but there is no reason to assume it will go any further
Price is now in balance and will stay there until something
happens to knock it out of balance again
This is a highly simplistic overview and so far I see no reason
to get into the complexities.
In the three screenshots I think we see everything I've just
alluded too. If I've got anything wrong it will soon become
In all three screenshots it might be safe to say that the Monthly
pivot would have been hit.
But aiming for where red and green meet should be a very