Market Profile - Market Strucutures (The key difference between single…
Market Profile - Market Strucutures
- Single prints are zones where only one TPOs are printed price price line. These are also called secure prints or secure lows/highs if associated with low volume or volume dry-up.
These are generally called wicks in candlesticks, but Market Profile gives a three dimensional view of a wick. We will get an idea about time, volume and price.
A single print gives conviction to the direction. A buying tail (a single print at the bottom of the profile) gives conviction for reversal for buyers and a selling tail gives conviction for a reversal for sellers.
IMPORTANT: A single print is stronger if it is longer. That means the longer the tail or single prints, the stronger the reversal will be.
, this should be associated with volume parameter.
IMPORANT: The volume at single prints should be drying up or low, if it has to be a reversal. Else it will slowly down.
A single print will act as a support or a resistance or a magnet if the volume and conviction are high.
A single print with low volume is a gold mine for rejection. That is conviction.
Poor highs/Poor lows -
Single prints are created by confident order flow. Poor highs and poor lows are created by short-term, unconfident flows. That means, players do not have a confidence in taking a directional or non-leveraged bets.
Poor highs or poor lows are also called insecure highs or lows. They come with very inconfident volume or flow.
Single prints can be made only by real money or non-leveraged players. But poor highs or poor lows can be made by both speculative (leveraged) players and non-levaraged players.
A poor low or high means that there is no urgency for the market to run away. But a single print means that there is resilience there and the market is in urgency to go back in the opposite direction.
The key difference between single prints and poor highs and lows is time. Single prints form in the shortest period of time while poor highs or lows are formed over time, i.e., they take time to form.
When we say single prints, mostly we are talking about tails, i.e., buying tails (single prints at the bottom) and selling tails (single prints at the top)
Single prints is a common term for selling tails, buying tails and single prints in between the profile. When comparing with poor highs or poor lows, you are comparing buying and selling tails.
Ledges - Ledges are structures where short term players are confused or having a lack of power to take the market in one direction. So repeatedly the market is being stopped at a particular level, thus creating a ledge.
When does a ledge usually form? Usually on a high volatile day when some leveraged players' confidence is low or when there is absolute lack of confidence in the market.
The longer the ledge (in terms of TPOs), the stronger the move can be. On volatile days even smaller ledges (with a few TPOs) can bring a big move either side.
Usually ledges either act as supports or resistances. The key theme around these will be acceptance or rejection around the ledge levels.
Minus development -
It is a market structure that can be called a clear anamoly. Ledges are also a kind of anamoly but not as much as a minus development.
Minus developments are formed when the market is too emotional and does not move in an organised fashion. That is when we will see anamolies such as minus developments.
A minus development can be treated as unfinished business. That means the market did not touch or stay at that level because of too hectic move. And later it will come back to fill that zone with liquidity.
When there is just enough liquidity the market will come, touch the minus development and go away in the opposite direction. If the liquidity is too much more than required, it will come, touch, fill in the minus development and then proceed in the same direction.