Profile Period or Column – Key Element of Market Profile

As the market auction process develops for Profile Period or Column, the market moves back and forth along the price ladder and prints TPOs, creating the first period or column on the Profile chart. As previously mentioned the time duration for each period on the Profile chart can be set to the desired time frame. However, the standard or default setting for most daily Profile charts is thirty minutes for each period. The image below displays a total of twenty “A” prints on the chart for the first thirty minutes of the day. Seven “A” prints appear below the letter “O,” which displays the open price TPO print for the period, and we observe thirteen letters “A” TPO prints above the open.

Profile Period or Column

The full “A” column represents the entire range of activity for the first thirty minutes of trading for the day. In Figure 1.2, the full range for the column “A” extended from a low price of 1302.75 to a high of 1307.75. As the trading day progresses, more columns will start to emerge. New letters begin to print and appear on the chart; each new column of activity that is printed will print in a successive sequence of letters.

Look at the image below, we have a developing Profile that is made up of five different columns. The first column starts with the letter “A” and the last column in the sequence ends with the letter “E.” Each letter displays the market activity for each half-hour period. There are two basic ways to display the Profile development on the chart. The Profile can be displayed in the form of a composite as we see in below image, along with a split Profile format.

Profile Period or Column
Developing Profile
Profile Period or Column
Split Profile

The composite Profile chart is the typical display that allows us to view the normal distribution of activity for the day. However, in a split Profile, each letter column appears separate from the other columns on the chart. This allows us to easily identify the range and size of each column relative to the others on the chart. Some traders prefer this visual form since it resembles that of a regular bar chart. As the day’s trading activity progresses and more columns develop on the chart, the Profile structure for the day starts to emerge and is eventually completed for the day. The completed Market Profile chart for the day displays the market activity and price range development for the day. This completed structure offers a plethora of valuable information about the day’s activity. It also allows traders to identify whether the market was balanced or imbalanced (trending or non-trending). It helps traders identify the fair price for the day, the value area, and other useful value parameters for the session. We will examine many of these aspects in the next articles.

Ankit Maheshwari

Ankit is an avid writer with experience of working Investment Banking domain for over 7 years. He has been tracking Indian markets for over 10 years now for educational and learning purpose.

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