Observations, studies and analyses are essential steps if you want to earn money by trading. Stock market speculation has nothing to do with luck, but is based on observations of trends and strategy development. And, fortunately, various tools are now available to traders to make their work easier. The Market Profile is, among other things, one of the most widely used tools in the field, which is easy to use. A
popular tool for professionalsThe
Market Profile is an analysis graph, representing price movements on the market. It was designed by J. Peter Steidlmayer in the 1980s and first popularized in the 1990s by J. Dalton. This financial graph represents the evolution of volumes and prices of prices, thus making it possible to see their trend and better anticipate their future direction. The Market Profile is used by many players in the field, including investors and analysts. Whether the trend is bearish, bullish or in range, it can provide essential information to the decision-maker. The very purpose of this tool is to help in the establishment of strategies and decision-making. Due to its efficiency, the Market Profile is permanently used by professionals. And, today, more and more individuals are also carrying out their analysis using this tool, which is just as easy to use.
How does it work?
The Market Profile is presented as a histogram, where volume areas and price levels are displayed. A few points are made to facilitate interpretation. The VA or Value Area is in particular the area where 70% of the exchanges were recorded during the session. The VAL (Value Area Low) represents the lowest level, while the VAH (Value Area High) represents the highest level. The POC (Point of control) is the price level most frequently used by the course during the session. The IB (Initial Balance) is the feature of the price range during the first 60 minutes of quotation and finally, the FB (Final Balance) represents the price range during the last hour of quotation. The use of the Market Profile is based on these key elements and above all makes it possible to anticipate the evolution of an asset’s price. This tool is free to download and can be installed on the MetaTrader platform found in most Forex brokers such as FXCM or Avatrade, which you can directly access via this link