Market Profile: What you need to know simplified & explained

market profile

When the word market profile comes across your hearing, what exactly comes to your mind?. Well, it is important to understand what the market profile is about, to know how best it can work for you. Therefore, this article covers every topic on market profile, TAS market profile, target market profile, market profile chart, and trading market profile. So, keep reading to discover more.

Market Profile

The market profile shows all executed trading volumes for each price level. It is opposite to the normal volume indicator, which shows the trading volume based on time. It also allows you to more closely observe the accumulation and distribution of the market. In other to see that every candlestick is not created equal. Meanwhile, some prices have significant trading volume while others have a lower trading price, either accept instantly or decline to return to the “value zone”.

Note: Market profile was devised by J. Peter Steidlmayer, a trader at the Chicago Board of Trade (CBOT), lived 1959-1985.

TAS Market Profile

TAS Market Profile is a well-known leader in the field of market, providing information, and unique technical analysis. They also provide adequate training for day traders. The major intention of the company is to implement the best charts and financial tools in the industry. With these tools, market experts can gather market information and conduct in-depth analyses of the market.

According to the TAS Market profile review, experienced traders, money managers, and banks use these tools to understand market performance. And this helps them in making better market decisions. Meanwhile, market experts use the market intelligence they collect via TAS market profile to identify opportunities, to make traders profitable. However, the company was founded by Steve Dahl, a revered expert on the Market Profile trading method. Notwithstanding, the company has three flagship products which include TAS Charting Indicators, TAS Profile Scanner, and The EDGE.

Read Also: Sell Put Options Overview with Options Trading Examples

Target Market Profile

The focus of market research is to collect data and provide a complete picture of the target market profile. When a company does this, it creates its own customer profile, also known as a persona. Meanwhile, this is the profile of your customer who wants and needs your product and is very detailed. A good customer profile should be as specific as possible. Many companies name and draw images. They can post photos of real people who represent their markets.

The basis of a customer profile is demographic information. You can think of these as personal statistics, which should include the following:

#1. Target Market Demographic Information

  • Age
  • Gender
  • Family structure
  • Marital status
  • Education level
  • Geographical location
  • Occupation
  • Political affiliation
  • Religious affiliation
  • General income level
Read Also: Trading Deep In The Money Options- Risks to consider

#2. Your customer lifestyle and hobbies

Lifestyle and hobbies are also essential. These fall into an important data category called psychological data. Some examples of lifestyle and hobbies data for your target market include the activities of your customer when they have free time, their eating, and health habits. Also, it should cover their smoking and drinking habits, Clubs, and organizations they belong. The places they frequently visit should also be included in this data.

#3. Customer moral and values database

Psychological data centers on the way your target market sees themselves. You also need to clearly define your customer’s attitudes and beliefs about themselves, the world around them, current events, and products like yours. This category includes goals, ideals, and the place they see themselves in the future.

#4. Pain point

Study the places where your customer need you the most and try your possible best to meet their needs in those areas.

#5. Customer shopping habits

The target market profile should also cover how your customers shop in the market. This includes how much they spend, where they shop (online or offline), and how they use your purchased products. Your job as a marketer is to connect your customers to the right products at the time and place they are looking for. That’s why this information is so important.

Read Also: BACKTESTING TRADING: Definition, How It Works and Examples

Market Profile Chart

Market profile charts are useful tools for both short-term and long-term traders. It is usually based on price and quantity information, it combines these factors to display price, quantity, and time ranges in a single graph. Meanwhile, this data shows the value areas and control points of a stock. See the 20+ stock movies you should watch.

However, these charts use standard market data, so no level 2 market data (maximum bid, bid size, minimum requested price, and requested price) is required. However, it is also known by other names such as Sierra Chart TPO (Time Price Opportunity) which is represented by letters on the chart, Sierra Chart Ratio, Volume Chart, etc.

Trading Market Profile

Market profile charts can be used as a complete trading system or as part of a larger trading system. In any case, it is usually traded based on support and resistance prices (if the market cannot support low prices or resist high prices). However, it also determines how prices interact with control points.

Day traders can trade rebounds at the nearest control, which is the same as trading at the support level. Meanwhile, weekly traders can trade breakouts at yesterday or previous control points, which is trading at a price that breaks the resistance or support level.

As with all techniques and methods, using market profiles requires practice. There are many virtual trading simulators that can provide you with the exercises you need to become a comfortable future trader. That’s when you will feel comfortable enough to invest your money. Learn more about the Heikin Ashi candlesticks for further understanding on this topic.

Conclusion

The market profile is a professional way to evaluate the auction process. Exchange trading is a two-sided auction between buyer and seller. Analysts can use a variety of methods to build market profiles to assess the dynamics of daily and long-term trading development.

5 Shares:
Leave a Reply

Your email address will not be published.

You May Also Like