Time Price Opportunity – Key Element of Market Profile Charts

The most basic unit or building block of a Market Profile chart is the time price opportunity, or “TPO”. A time price opportunity is created or printed on the chart as soon as the market touches a specific price at a specific point in time. A time price opportunity is just that, a window of opportunity for a trade at a certain price at a given point in time. Once a single trade takes place at this market opportunity, a print is recorded on the Profile chart. If multiple trades take place at this opportunity during a set period of time, the Profile will still only print a single TPO for that opportunity within the specified period.

A TPO simply identifies for us that at least one trading activity has taken place at a specific price within a specified period of time. If several trades take place at that same price at different times within the specified period, the profile will still only have a single TPO print at that price for the given period.

A TPO on a Profile chart can be visually represented in a number of different ways. It could be as simple as a single colored block or a letter in the alphabet. Most commonly, Profile charts will display TPOs using a letter of the alphabet. Each TPO print appears in front of a price ladder that displays a range of prices.

Time Price Opportunity

In the above illustration, we have two TPO prints represented by the letter “A”. We have one TPO at a price of 1305.50 and another TPO below it at 1305.25. The “O” above the two prints indicates the open of the period and the asterisk “*” indicates the close for the period.

Over time, as the trading session develops, the TPOs will accumulate and display the distribution of letters showing where the market has traveled over the course of the session. Each 30-minute session is represented by a letter of the alphabet during the day. The activity for the day always starts on the left side of the Profile chart. The first time a trade occurs at any price during the day, a TPO is automatically printed in the current active period or column on the chart. When the same price is traded later in the day during a different time period, the reoccurring trade will appear in another new column that will appear to the right of the earlier TPO that was previously printed at that price. When a price is revisited at a later period and a new TPO is printed next to an earlier TPO, the distinction will be obvious because each TPO will have a different letter identifying the period where the time price opportunity occurred.

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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