Trading Range – Key Concept in Market Profile Trading

Every letter period or column on the Profile chart has a defined range of TPOs. The wider the range, the greater the number of TPOs that are displayed on the chart for the specified period. The Trading range basically extends from the lowest price point to the highest price point during any given period on the chart. Once again, it is important to note when each range shows the extent of a price movement during that period. If multiple trades occur at the same price at different times during the same thirty-minute period, only a single letter print is printed on the chart for that price. A single TPO print is printed only once at a price during any given period on the chart. Multiple prints at the same price only occur when the market trades at that same price during different periods of the day.

When consecutive TPO ranges are expanding directionally, this is usually indicative of a trending market. A shrinking TPO Trading range is often a sign of uncertainty or a resting period in the market. TPO ranges that are expanding in both directions are usually a sign of volatility in the market and maybe a prelude to a directional move.

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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