Market Profile Indicator
The Market Profile indicator depicts price action over time, highlighting key areas with a high trading volume.
Peter Steidlmayer is the Market Profile’s developer. In 1985, he was the first to offer the Market Profile to traders at the Chicago Board of Trade (CBOT). Before Steidlmayer, the technical analysis simply had the volume per time unit.
Let’s see how to use Steidlmayer’s Market Profile Indicator on MT5-
How to Create The Indicator
The indicator develops a histogram or a bar-like structure when the market achieves its real price or equilibrium. Its primary goal was to provide price and time data collected during a trading session in an easy-to-understand format for traders.
You can create the indicator by integrating data from the volume, elapsed time, and the number of ticks at specific levels between M1 and M30.
The Market Profile indicator looks at where the most price action is at any one time in a currency pair or other market.
How The Indicator is Calculated
The indicator is calculated using the most precise tick data available – every market moves and creates the base on this, the Market Profile indicator creates the histogram.
The histogram simply shows a high volume of trade and price action at specific price levels and zones. The Market Profile indicator generates a histogram from right to left. In contrast to the traditional left-to-right arrangement, concentrating on the present trading session without confusing its chart.
With this indicator, you’ll always know the most important price levels and zones for future price fluctuations in any market.
The Market Profile indicator, which may be used on timescales ranging from M1 to M30, depicts trading session profiles.
Market Profile Indicator Settings on MT5
The default settings for the Market Profile indicator are:
- Session: The default value is daily. It displays the current session for the indicator.
- StartFromDate: Specifies the date from which the indicator will start plotting.
- StartFromCurrentSession: Mentions the session from which the indicator will start drawing.
- SessionToCount: The default value is 2. It indicates the number of sessions.
- Enable Developing POC: Shows the horizontal lines of Point of Control.
- ValueAreaPercentage: The default value is 70. It describes the percentage of value is of the indicator.
- ColorScheme: It displays the indicator’s colors from blue to red.
- SingleColor: This color mentions market profiles.
- Colorbullbear: Illustrates the color of bullish and bearish blocks.
- MedianColor: Shows the color of the control line.
- ValueAreasSidesColor: Depicts the value of the side borders.
- ValueAreaHighLowColor: The color of the top and bottom of the value area.
- MedianStyle: The style of the median line.
- MedianRayStyle: Illustrates the style of the point of control ray line.
- ValueAreaSidesStyle: Tells the style of value area side borders.
- ValueAreaHighLowStyle: The style of top and bottom borders of the value area.
- ValueAreaRayHighLowStyle: The style of top and bottom rays of the value area.
- MedianWidth: The default value is 1. It is the width of the median line.
- MedianRayWidth: The default value is 1. It is the width of the point of the control ray line.
- ValueAreaSideWidth: The default value is 1. It is the width of the value area’s side borders.
- ValueAreaHighLowWidth: The default value is 1. It is the width of the value area’s top and bottom borders.
- ValueAreaRayHighLowWidth: The default value is 1. It is the width of the value area’s top and bottom rays.
- ShowValueAreaRays: It plots the value area’s high and low levels on the right side of the chart.
- ShowMedianRays: Draws median lines rays to the right side of the chart.
- RaysUntilIntersection: Defines the way median line and value area rays will intersect each other.
- TimeShiftMinutes: The default value is 0. It depicts the time shift from a session in minutes.
- ShowKeyValues: Shows the value area’s high and low and the point of control on the left side.
- KeyValueSize: The default value is 8. It is the size of the value area’s high and low and point of control line.
- ShowSinglePrint: Marks the single print profile from left to right.
- SinglePrintRays: Mentions single print edges with rays.
- SinglePrintRayWidth: The default value is 1. It is the width of a single print line.
- ProminentMedianColor: It is the color of the prominent median line.
- ProminentMedianStyle: Tells the style of the prominent median line.
- ProminentMedianWidht: The default value is 1. It is the width of the prominent median line.
- RightToLeft: Draws the indicator’s histogram from right to left.
- PointMultiplier: The default value is 0. Its higher value multiplies the price boxes of the indicator.
- ThrottleRedraw: The default value is 0. It reduces the indicator’s load of the computer.
- DisableHistogram: When selected, it disables the histogram of the indicator.
- EnableIntradaySessionN: Draws the market profile according to intraday sessions.
- IntradaySessionNStartTime: The start time of the intraday session.
- IntradaySessionNEndTime: The end time of the intraday session.
- IntradaySessionNColorScheme: Depicts the color scheme of the intraday session.
- SaturdaySunday: Tells you how to manage Saturdays and Sundays sessions.
- DisableAlertsOnWorngTimeframes: Disables alerts on wrong timeframes.
- Percentage of Median TPOs: The default value is 101. It considers the prominent lines that include the TPOs on the current timeframe.
How to Trade With The Market Profile indicator?
The Market Profile indicator is primarily used to determine the value area and the median line.
As the market advances during a session, the price will vary up and down with buying and sell orders. Therefore, a value region is generated by combining time and volume in this indication.
This price range represents the median line between current supply and demand levels. Value area creates two tails which are top and bottom VA.
The area below and above the value area reflects price regions that the market has rejected. At certain price levels, the bottom VA indicates that buyers outperform sellers. On the other hand, the top VA indicates that sellers surpass buyers at the various price levels.
In addition, the Market Profile indicator draws a histogram from right to left. Thus, you may utilize it for the current trading session, unlike the standard left-to-right display.
The histogram, which depicts market volume, is a key component of the indicator. Although you can disable the histogram, it is better to use it with the Market Profile Indicator.
Market Profile Indicator Buy Setup
- Find the value area’s bottom on the chart.
- Wait for the price to continue its course.
- Enter the trade at the value area’s bottom.
- Put a stop-loss near the low of buying point.
- Exit the trade when the value area’s top appears or where the market profile block ends.
Market Profile Indicator Sell Setup
- Find the value area’s top on the chart.
- Wait for the price to continue its course.
- Enter the trade at the value area’s top.
- Put a stop-loss near the high of a selling point.
- Exit the trade when the value area’s bottom emerges or where the market profile block ends.
Summary of Market Profile Indicator
Market Profile indicator is a great tool for locating every single price move in a current period. The only concern is that it can only show trends between M1 and M30 timeframes. So, it’s better to use it with other technical indicators.
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