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Mentoring - Market Profile - Trader behaviour in value and non value areas…
Mentoring - Market Profile - Trader behaviour in value and non value areas
There are two types of players in terms of Market Profile and order flow.
The first type is initiative players and the second type are called responsive players.
Initiatve players can be initiative buyers or initiative sellers
Responsive players can be responsive buyers and responsive sellers.
Initiative players are also called active players; responsive players are also called restive or passive players.
Initiative buyers enter above VAH and sometimes even at the day high.
Initiative sellers enter below VAH and sometimes even at day low.
Responsive buyers enter below VAL and sometimes even at day low.
Responsive sellers enter above VAH and even at day highs.
The movement of a price is based on the interaction of these players.
Overall, these players are active all over the profile. In a value area, both types of players are active, because that is the zone where maximum business is done and both are in agreement.
In non-value areas, the market spends very less time and volume. But occasionally on event days or on some news or on expiry, the volume in a non-value area can be more.
How do we measure time in a Market Profile graphic. Time is measured in terms of TPOs, or time price opportunities.
In Market Profile graphic, both players are trying to find a trading opportunity. That means traders are in a constant search for opportunity. In doing so, they are traversing up and down and also horizontally.
While finding opportunities, there are places where they spend most of the time while there are places they get trapped and spend very least amount of time.
Non-value area is the place where players spend least amount of time. This is the zone which is beyond one SD either side.
Because they spend less time, a profile structure can offer unique insights here.
If players are only staying for a single TPO, then that area is called a single TPO zone or a tail.
The single TPO zone if formed in the midst of a profile is called an anamoly or sometimes minus development.
If the single TPO zone is formed at the edges, that is on the top or bottom, it is called a tail.
A tail formed on the top is called a selling tail. A tail formed on the bottom is called a buying tail.
If single prints are forming within the profile, they are called anamolies or single print zone.
If the single print zone comprises only one TPO, then that is a minus development. It is a very strong support or resistance.
The opposite behaviour of single prints at extremes (tails) is poor lows or poor highs. They are also called insecure highs and insecure lows.
Tails are called secure highs and secure lows. Secure means conviction. They act as supports and resistances.