Market Profile the technique for successful trading

A market profile is an indicator that shows the number of traded contracts at each price level of a trading instrument. If you want to earn money by trading then you must follow few essential steps they are Observations, studies, and analysis. Stock market speculation has nothing to do with luck but is based on observing trends and developing strategy.

When did the market profile concept start?

The first market profile was shown to the world in 1984. The market profile was developed by Chicago Mercantile Exchange trader Peter Steidlmeier, who also proposed the concept of a market auction. It was believed that the market develops from balance to trend, and then again to balance, and this cycle is constantly repeated. On the chart, the balance can be recognized by a balanced distribution or a bell-shaped curve.

The basic idea:

Every day the market develops a certain range and within it, the value area (area of value), which represents a zone of some equilibrium, where there is an equal number of buyers and sellers.

If prices go beyond the value area, but volumes begin to decline, then there is a possibility that the price will return back to the balance zone. Price movements outside the balance sheet area without significant volumes indicate that the main buyers and sellers are outside the market. The deviation of the price from the balance zone, accompanied by an increase in trading activity, indicates to us that market participants overestimate the existing value.

Popular tool for professionals

Market Profile is an analysis chart, which represents price movements in the market. It was designed by J. Peter Steidlmayer in the 80s and popularized in the 90s by J. Dalton. This financial chart represents the evolution of price volumes and prices, thus allowing us to see the trend and better anticipate their future direction. The Market Profile is used by many industry players, including investors and analysts. Whether the trend is bearish, bullish, or in the range, it can provide essential information for decision-makers. The very purpose of this tool is to contribute to the definition of strategies and decision-making. Due to its efficiency, the Market Profile is constantly used by professionals. And, today, more and more individuals are carrying out their analyzes using this tool, which is just as easy to use.

How does that work?

The market profile is presented as a histogram, in which volume areas and price levels are displayed. The VA or Value Area is specifically the area where 70% of trades were recorded during the session. Val (Value Area Low) represents the lowest level, while VAH (Value Area High) represents the highest level. The POC (Point of control) is the price level most frequently used by the course during the session. The IB (Initial Balance) is the characteristic of the price range during the first 60 minutes of quotation and, finally, the FB (Final Balance) represents the price range during the last hour of quotation. The use of the Market Profile is based on these key elements and above all allows you to anticipate the evolution of the price of an asset.

Market profile indicator and Market profile arithmetic

According to the original theory, in order to work on the market profile, you need to analyze the chart at a 30-minute time interval. The concept of a market profile assumes that there will be some logical form in the market, which consists of price, time, and volume. Typically, the profile corresponds to the mathematical line of the normal distribution.

Every day the market finds a certain zone, which is called the value zone or value area – you can say, the equilibrium zone, where the number of sellers is equal to the number of buyers. Where the current price of an asset is located relative to the equilibrium zone can give you knowledge of what price level you may consider fair to discard speculative prices.

A basic understanding of what a market profile is, how it works, and how to apply it will come in handy for any market participant, with any level of experience and with any trading style. This indicator is developed by us futures market traders and it provides the trader with incredible information about the current state of market affairs. Previously, such data was not available to a simple trader. In the old days, it was known only to traders with "pits" - exchange halls for live trading. The market profile will give a visual representation of the logic of the market and its structure, which is tied to time, trading volume, and price.

The market profile indicator is not an ordinary indicator of technical analysis. It does not give classic signals to enter and exit the market, the trader will have to analyze the incoming data on his own, and make a decision on the entry and exit point himself. The indicator is practically devoid of disadvantages, it will be useful as an independent CU or an addition to any existing trading system because it gives the trader knowledge about where the equilibrium price level is, and who is now gaining a large position to buy or sell.

Strategies for Nifty future trading, that you should know!

Nifty future is a very popular term in the trading market. Nifty genuinely represents the market specifically and the economy overall. If you want to know the future contracts on Nifty and Nifty future gives you the best solution. The base lot size of the Nifty is 75 units which make the parcel esteem at a little over Rs.7.50 lakhs. What are the ways to exchange Nifty prospects and what are the Nifty future strategies? Allow us to find some of the most important tips that will help us on the most proficient method to exchange Nifty prospects intraday and for the more extended term.

Strategy 1: Check out the Future spread over spot

In Future trading, the future typically exchanges at a spread over spot cost. Under ordinary circumstances, the prevailing cost of funds decides monthly spread over the spot. It is likewise called the expense of conveying and prospects typically statement along with some built-in costs. Two things you want to recall here. Try not to purchase Nifty prospects when it is at a precarious premium to the spot list as it very well may be an instance of overpricing and an excessive amount of hopefulness. Likewise don't bounce in to purchase when the Nifty fates at a rebate as it very well may be an indication of forceful fates selling. Get the rationale of the spread before exchanging Nifty prospects.

Strategy 2: Utilized this position and treat it appropriately

Like all other future positions nifty future is also leveraged. Whenever you get one parcel of Nifty in close to a month, your edge is around 10% for typical exchanges and 5% for MIS (intraday) exchanges. That implies you get multiple times utilized in an ordinary exchange and multiple times influence in intraday exchanges. This works the two different ways. Influence implies that your benefits can get duplicated however misfortunes can likewise get increased. Consequently, any exchanging Nifty fates must be finished with severe stop misfortunes and benefit targets.

Strategy 3: Before taking a position remember to check open interest data

It generally pays to do a few logical information examinations prior to taking a Nifty futures position. A brief glance at the open interest of the Nifty futures and their aggregation patterns will provide you with a thought of whether the open interest is expanding on the long side or the short side. You can take a more educated view of the Nifty course.

Strategy 4: Try not to get in a liquidity trap

Liquidity is never quite difficult for the Nifty futures as it is perhaps the most fluid agreement however there are events when the Nifty futures can get into your liquidity trap. Initially, on the expiry day, you will ordinarily observe the volumes on the Nifty futures evaporating once the rollovers are significantly finished. Likewise, in a market that is falling forcefully, the spreads can augment considerably expanding your gamble in exchanging Nifty prospects.

Strategy 5: There are various Margin suggestions

Whether you purchase Nifty prospects or you sell Nifty futures, it is a direct situation as it can prompt limitless benefits and losses for the two sides. While stop losses are an absolute necessity while exchanging the Nifty, one likewise needs to get the edges. First and foremost, there is an underlying edge you pay at the hour of taking the position which incorporates the VAR edge and the ELM edges. Presently it is required for agents to gather both these edges and ELM is at this point not discretionary. Also, consistently you really want to pay MTM (imprint to advertise) edges in view of the cost of development. These have capital designation suggestions for you.

Strategy 6: Be careful the short-term risk in Nifty prospects

Regardless of whether you put stop losses during the day, these orders won't cover your short-term risk. For instance, assuming you are long on the Nifty Futures and because of an accident in the Dow on the off chance that the Nifty accidents by 200 on opening, what do you do? Stop misfortunes don't work and you are presented with short-term risk in Nifty futures.

Strategy 7: Look from a counterparty point of view

This is a fascinating part of Nifty futures exchanging. Whenever you are purchasing bank Nifty futures then there is another party that is selling and a similar rationale applies when you are selling Nifty prospects. The other party could be a merchant or a hedger and the open interest information will give you fundamental bits of knowledge. While you are regularly determined by your view on the Nifty, it generally pays to comprehend the counter view as it can give you more noteworthy lucidity in your Nifty view. Here, one should know 8 things to recall while exchanging Nifty Futures

Strategy 8: Keep a tab on the profits, exchanges expenses, and assessment suggestions

Whenever you exchange on Nifty prospects, recall that you are submitting genuine cash and consequently three angles are significant. Finally, Nifty futures are treated as protections for charge purposes so any benefit or misfortune will be treated as a capital increase or a capital misfortune and the duty suggestions will apply in like manner.

What is the Market Profile?

The Market Profile is a technique used in intra-day charting. The name comes from the fact that it is based on the intra-day candlestick pattern. In other words, this strategy involves putting a line on the chart in the same shape as the current candlestick. It is an excellent method of analyzing the movement of the price in one direction. This method is very accurate and has a great deal of flexibility. Its effectiveness depends on whether it is used in pairs or individual stocks.

The market profile is a type of candlestick chart that represents the highest and lowest closing prices of each half hour. The letters represent the price at the beginning of the hour. The TPOs represent "Time Price Opportunities" and are often referred to as "time-period". The Market Profile can show price fluctuations that occur when the marketplace is unbalanced. This is because the marketplace is full of traders including scalpers, swing traders, and positional traders, and their combined action causes the price to fluctuate.

As with any trading system, the Market Profile works best with key reference points and testing naked POCs. The most important thing when looking at the footprint chart is to look at the volume imbalance and whether or not the price is going to move upward or downward. A lack of excess means the market is oversold or undersold. This may be a sign of the traders stepping into the market, which means that it is not overly balanced.

The Market Profile provides information that is generated by the market. The data is derived from market activity and reflects actual buy and sell orders. Its structure provides insight into how the marketplace functions and how the price moves in real time. This information is particularly useful for emotional trading, which is often caused by the emotions of traders. If the price drops, the auctioneers will lower it to attract more buyers. In order to avoid being undersold, it is best to buy and sell at the initial balance.

The Market Profile is most helpful when trading in short-term markets. It helps traders understand the current market trends. By considering the latest market data, the Market profile offers a more comprehensive view of the marketplace. The Value Area shows two-third of the day's activity. By identifying the Value Area, it is easy to find a good trading opportunity. If you want to invest in the long-term, it is the best time to buy and sell.

The Market Profile is an indicator that helps you understand the behavior of big players. By using the IB Range, you can learn the price of major players in the market. Moreover, it is useful for day traders. A good trading profile should be able to show the daily price range. If the market is volatile, it can help you make decisions that will increase your profit. So, you need to study the Market Profile before you trade. By following these strategies, you will be able to make the right decision and stay ahead of the competition.

Order flow Trading; Professional trader's secret weapon

Do you want professional information about trading order flow? – Then you're right on this page. With many years of experience in the financial markets, we will offer you a world for the flow of trade. For successful and consistently profitable trading in daily trading, it is necessary to know about the flow of the system from the markets. In the next section, you will know exactly why the market is moving and do a system flow analysis.

Daily trading without a flow system is like driving without wheels.

What is order flow trading?

Order flow trading is a type of trading that aims to move the market. When a trader places market orders the market moves based on these sales or purchases. The purpose of order flow trading is to predict large market demands and thus to profit from the movement they make in the market. The flow of orders is usually determined by the large traders in the market such as banks. Banks make up 50% of the forex market, so when the bank executes a trading process, it moves the market.

This type of trading should not be isolated from other types of trades. The idea of trading order flow is to weaken yourself in a place where you can take advantage of the transaction based on the requests of others. Many factors make this movement so that you can other strategic applications to determine how you think about the transaction. What's different about order flow trading is that your ultimate goal is to predict movement based on market demands from others, not necessarily to predict the movement itself.

Differences between order flow trades and chart-based trading

One of the most important differences between order flow trades and technical analysis or chart-based trading is that they are based on movement predictors and order flow trading based on order predictors. This difference may be slight but important because the technical analysis does not always drive the market, but market demands drive the market.

How to recognize the flow of orders?

Order flow traders have a trained eye to be able to know what's going on; many initially trade with charts without indicators or with only a few main indicators where they pay more attention to the current market dynamics of the order flow. Their goal is not what I should do and when, but: what is happening in the market, what is the flow of orders? By recognizing these points, you can more clearly identify the flow of orders; it is also a matter of market experience and interpretation.

Technical conditions

Many order flow traders operate in the futures markets, which guarantees them high liquidity and high-quality market data. This includes an accurate real-time chart (some order flow traders use tick charts), as well as a list of orders executed in the market.

In addition, the order flow trader must have a very direct exchange connection so that his trades are executed with the lowest possible latency.

Advantages of demand flow trading:

• See why the market is moving
• Learn about important support and comfort areas
• Use it for accurate entries and exits of trades
• Be faster than regular chart traders
• See market liquidity and where there is no liquidity

Orderflow trading strategies suggests that you trade based on understanding and anticipating orders that are about to change the market, rather than waiting to see if orders will occur. This is called selecting levels. When you select levels and place your requests at these levels, you can use narrow loss stops to minimize losses.

Following the flow of requests will help you see when the transaction will occur. By maintaining the order flow book, the broker can see the price and volume of the trade. Brokers can see the plans of all their customers for their benefit and that of their customers because they can advise when there will be a large volume of applications and they can refer to their customers to take advantage of these requests.

Order flow traders sometimes benefit from reverse trading. This is uncomfortable, but it can be very profitable if it succeeds. Order flow trading is more suitable for very expert traders. Financial institutions are in a privileged position when it comes to flow trading and can be very profitable for them.

The easiest way to gain more at less risk is to invest from option trading

 If you want to invest in the market with the facility of hedging, options trading will be the right choice as compared to future trading. Trading in the option gives you a chance to benefit from the share price without paying the full value of the share. By trading in the option or bank Nifty option, you can get limited control over the stock with much less money than the money required buying the stock completely.

Insurance covers security from fluctuations in security prices

Insurance cover of loss can also be charged by paying some premium during options trading. These insurance covers protect you from fluctuations in the prices of certain security. This is the same as when a car is insured by a scratch, a theft, or an accident. in simple terms, the option is a good option to compensate for the losses caused by price fluctuations.

In futures trading, you buy a lot of gold at the price of 30,000 rupees, but the price of gold breaks by rs. 1000 and comes down to 29,000 rupees. In such a situation, you have to lose one lakh rupees on a lot. On the other hand, if you have purchased the call option in options trading, the loss comes down to just rs. 5000 if you pay a premium of rs. 50 per ten grams.

The future market does not have a hedging tool i.e. leave the deal open or put a stop loss. when a stop loss is imposed, the deal is cut on its own at that level, but the damage does. If the stop loss is not imposed, the loss is more, while the put option can hedge the purchased deal. Similarly, sold deals can limit losses through call options.

Hedging is used to avoid such adverse conditions if prices invested in shares of a company suddenly fall during futures contracts in the stock market. This is done through counterbalancing i.e. in other words, hedging is done through investment in two investment options that have a negative correlation.

There are two types of options.

• Call option: A call option is a contract that empowers the investor to buy calls in an asset at a fixed price within a certain time frame. The pre-fixed price is called the strike price, which is known as the expiry date. the call option allows you to buy 100 shares. You can sell call options at profit or loss before the contract expires. When an investor feels that a commodity should bet on a boom they can use this. It has to pay the premium, where the investor loses the maximum.

• Put option: The put option is contrary to the call option, it gives the holder the right to buy shares. Put options give the holder the right to sell the underlying shares at the closing date or the strike price before that. When investors feel that the market is on the verge of a further slowdown they can use this. In this case, he either exits the market or buys more as per his requirement.

• The first thing to do is to have a trading account to start options trading in the commodity market. If you already have an account in the futures market, your broker will have to give a memorandum of understanding for options trading.

• It is through this account that investors can buy or sell a deal in the future or option on commodity exchanges. The same happens in Bank Nifty future and option trading. If you are opening a new account, you will have to fill a separate form for business in the option like future.

• The broker through whom the trading account is being opened must be a member of the multi-commodity exchange and the national derivatives exchange. At the same time, the broker should be properly identified in the market.

Futures and options business properties and flaws

When you are learning about how to do business in the future and options, you should also know what you are going to do. Certainly, investing in futures and options has many advantages, such as effectiveness. But futures and options can also be risky. High impact ability enables you to take a bigger position, and if the market does not go in your favour, there will be huge losses.

So before trading take care of these things as much as possible.

Market Profile trading strategies for successful intraday trading

 Are you curious to know about intraday trading as a stock market trader? well, intraday trading involves buying and selling shares on the same day to gain financial gains. Just focus on square off your open position before the end of the day's trading session instead of considering factors like distribution dates, demats, etc. Intraday trading is not easy at all. To get good return you need to focus on several things. As a key rule, you should understand that market profile, intraday trading in stock markets is subject to greater market volatility than regular investment. Also, you need to make a proper assessment of your risk appetite before starting your trading journey.

5 Market Profile trading strategies for successful intraday trading

1. Understand the basic techniques of intraday trading:

Do your research: Before buying shares of a particular company, do extensive research to estimate important standards to know about signs showing the company's strength and weakness.

Risk-management and risk-benefit ratio: As a new investor, you should always invest only the amount you can bear losing. One of the basic intraday trading strategies to invest is to invest in a stock that has a risk profit-ratio of 3:1. This will allow you to lose the amount that will not bother you, as well as provide an opportunity to get good returns. Another technique of risk management is to avoid investing more than 2% of its entire trading capital in the same business.

Select liquid shares: you can select some large-cap shares, instead of investing in many small and mid-cap stocks. 

Set market time: when you buy stocks, market experts recommend avoiding trending for the first hour of the trading session. 

Avoid emotions and pre-determine returns and risks: Setting your entry level and target price in advance for intraday trading is another basic technique. 

2. Use intraday trading time analysis:

The second position in the list of intraday trading strategies is to analyse the daily chart carefully. Daily charts illustrate price movement between opening and closing hours during a day's trading session. You can analyse price fluctuations between short and medium term through daily charts. For intraday trading, you can study a variety of charts such as a 15-minute chart, a five-minute chart, a two-minute chart, and a tick-tack chart.

3. Follow strong intraday trading strategies:

The third in the list of intraday trading strategies is to follow reliable strategies. You can follow the techniques below:

Using opening range breakout (orb) to map resistance and support: 

Opening range stockprices fluctuate at the start of a one-day trading session whether it can be high or low. Orb duration can be from 30 minutes to 3 hours. As resistance, after identifying the highest point and assuming the lowest point to be support, you can take different conditions.

For demand-supply imbalances, see: This intraday trading strategy is used to identify stocks, with considerable imbalances between supply and demand, and are used as entry points. 

Use relative strength index (RSI) with average directional index (ADX): While RSI is a technical indicator ofmore purchased (over-purchased)and more sold (over-sold) stocks, ASI is a trend indicator supporting the decision to buy and selltraders. Combining the two can help you make informed intraday trading decisions.

4. Understand the difference between investment and trading:

The fourth position in the list of intraday trading strategies is to understand the difference between investment in stock markets and intraday trading. Both trading and investment require different strategies. Investing in stocks requires a more fundamental approach, while intraday trading is more technical.

5. Remember that the market is unpredictable:

Even if you are an experienced businessman with state-of-the-art equipment, you cannot predict the fluctuations in prices with absolute certainty. At times, despite tech indicators predicting the market to be bullish, prices may fall. If the market runs against your expectations, remember to get out of your position immediately.

Conclusion:

Since you know how to do intraday exchanging, follow these intraday exchanging techniques or market profile trading strategies, and amplify your profits. You should always remember to rely on a trusted financial partner to open your intraday trading account. 

Hope this article is helpful to you. Share your views with us!

Futures and Options Strategy: To be successful in trading!

The futures and options market is more diverse than the foreign exchange market, so it provides more opportunities. It requires professionalism, but it gives a deeper understanding of trading strategies and experience that you can successfully apply later in the foreign exchange market. The first thing you should learn about trading is the derivatives that include Nifty future and Nifty option strategies.

Futures and options are a type of derivatives, derivative financial instruments. A derivative is a written contract for some actions about the underlying assets. 

Options and Futures Trading

By choosing this type of trading, you can master all the features of the stock exchange game. When buying and selling futures and options, traders try to predict how the prices of the underlying assets will change. Due to this, make a profit. 

Trading on the rise

If you expect futures or options prices to rise, it is profitable for you to buy them for further resale at a new price. Waiting for a period of rapid price increases, you can get multiple profits from the game increase. The risk here is that options and futures have expiration dates. And within these terms, price growth cannot wait.

Short Trading

Anticipating a fall in prices, it is profitable to engage in the sale of futures and options. There are risks here, too. First, you could expect prices to rise, and they begin to fall, and you have to sell at a price lower than you bought. Second, you can sell everything and prices will go up. Then you will lose the possible profit. 

Nifty option strategies

If you happen to meet with an options trader, his conversation may be full of complex and incomprehensible jargon. You can hear turns like "butterflies and boxes, jam rolls and conversions" in particular. Despite the incomprehensibility, here we describe Nifty option strategies, and if you internalize the four main types of options trades, you will be able to make sense of more complex transactions.

Let's first consider the attributes and risk factors of the four simple basic methods of applying options.

Buying a call option

- Motivation: "Bullish"; Sale options when investors do not expect the prices of options assets to rise.

- Risk: Unlimited.

– Remuneration: Limited by the amount of the premium received.

Selling a Call Option

- Motivation: "Bear"; Bring options in anticipation of the increase in the prices of options assets.

Risk: Limited by the amount of premium paid.

- Reward: Potentially unlimited.

Buying a put option

- Motivation: "Bear"; Bring options in anticipation of a fall in the prices of the relevant assets.

– Risk: Limited to the premium paid.

- Remuneration: Almost unlimited. Achieve the maximum profit when asset prices fall to zero.

Selling a put option

- Motivation: "Bullish"; Sell the option when the investor does not expect asset prices to fall.

- Risk: Almost unlimited. You can get the maximum loss when the prices of the corresponding asset fall to zero.

– Remuneration: Limited by the amount of the premium received.

How to Trade Options?

Options trading provides a whole new psychology of trading, as there is an extra-value that is beyond price shifts – that's time.

Have price targets

When we talk about price, we usually think of the stock price. But you can also have a price target for the option as well. With a lot of analytics software available today, it's not that difficult.

Have temporary goals

Options have a time component, which is a critical variable that most young traders bypass when planning trades. Suppose you opened a 5-hit bullish put of 1.00. This means that your maximum reward will be 1.00 and your maximum risk will be 4.00. Expiration is 45 days.

Install Deltas

Options do not have a constant directional position. There's a gamma there that shows changes in the price rate of an option (delta) versus a change in the underlying price. Calculating your deltas is an important aspect of trade management.

Convert to option spreads

Options trading offers you many ways to reduce risk, increase your premium and calculate the likely opportunities in trading. You can do this by "developing" trading. 

Nifty future strategies

Futures Spreads

Also, build Spreads in the futures markets. There are two types of futures spreads – Inter market and Intra market spreads.

Inter market spreads are futures trades in which futures with a specific delivery month are bought and sold in the delivery month under a contract for a related asset.

One of the important Nifty future strategies is Studying the history of price dynamics for related products, it is often possible to find the relationship of prices, i.e. the price of crude oil is in a certain way related to the prices of petroleum products. 

Intra market spreads are futures trades in which futures with one delivery month is bought and sold the same futures with another delivery month. The price of a future with some months of delivery exceeds its justified value.

Hope this article will help you to understand the details about the Nifty option and Nifty future strategies. Stay tuned with us to know more about trading.