What is price range,poc, value area,bell curve, selling tail & buying tail in Market Profile ?

//What is price range,poc, value area,bell curve, selling tail & buying tail in Market Profile ?

What is price range,poc, value area,bell curve, selling tail & buying tail in Market Profile ?

The total height of the entire profile from high to the low is called as the Price range. As per this screen shot  example, the range is 203 to 196, which is greater than the IB(initial balance). Some time, prices travels above or below the initial balance. Then it  is termed as a range extension. In this screenshot example, the range travels below the initial balance, shows a seller range extension.value area is calculated based on 70% of the trading activity taking place, one standard deviation from the mean The price range where 70% of the trading activity takes place, one standard deviation from the mean. In this screenshot example, it is the area between 201 to 198. If You closely observer it will be in form of  bell curve. The value area represents the acceptance level of price range also called as balance area. The point of control(POC) is the longest line of letters &near to the center of the range. In the screenshot example, 199.40 is considered to be the point of control(POC). At this area most of the trading activity takes place and is considered to be a fair value for the day. M letter period is the closing range and # shows the day’s close at 197.75. The closing price is considered to be very important as it as acts as  reference level for the next trading day activity. When there is a series of single tail letters on either extreme ends , it is called as a single print buying/selling tail. This kind of tail represents a strong reaction by the Other time frame trader(OTF). In this screenshot example, you can find both single print buying and selling tails. Since both are very small with 3 ‘K”letters on the top,shows the response from the other timeframe traders (OTF)were too strong. The buying tail shown by the three “K” letter period proves that the other time frame(OTF) buyer responded fast to lower rates. similarly, three “M” letter period at the top of the Market profile represents that the othertimeframe (OTF)sellers responded fast when the rates moved  above value.

By | 2018-09-26T16:26:39+00:00 September 26th, 2018|market profile|0 Comments

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