Learn Market Profile

In a hurry? The quick reference below covers the vocabulary; the chapters teach you to think in it.

1. 01Where is price vs yesterday's value?

   Inside value favors two-sided trade; acceptance outside favors continuation. Treat both as hypotheses, not promises.

2. 02Overnight inventory.

   If the overnight session is net long (price near the top of its range), an early fade is common.

3. 03The opening gap.

   Check the gap size and the historical fill rate before assuming it closes.

4. 04Initial Balance extremes.

   A clean break of the first hour's range with follow-through often sets the tone.

5. 05Naked POCs and poor highs/lows above and below.

   They are structural references and potential objectives, but context decides whether price responds or trades through.

TPO

Time-Price Opportunity. Each letter marks one 30-minute period that traded at a price, so a stack of letters shows where the market spent its time. The first period is A, the second B, and so on (lowercase for the overnight session). A wide row of letters = a price the auction kept coming back to.

POC

Point of Control: the price with the most TPOs in the session, showing the greatest time-based acceptance. It is not necessarily the volume point of control. Price tends to rotate around the POC on balanced days; a POC migrating up or down is directional information.

VPOC

Volume Point of Control: the price with the most traded volume. When VPOC and POC disagree, time and volume are telling different stories.

Value Area

The price band holding ~70% of the session's activity, bounded by VAH (value area high) and VAL (value area low). 'Value' = where business got done. Opening inside value suggests balance; opening outside value and being accepted there suggests a directional move.

VAH

Value Area High: the top of the ~70% value band. Acceptance above supports a bullish hypothesis; rejection can favor rotation back into value.

VAL

Value Area Low: the bottom of the ~70% value band. Acceptance below supports a bearish hypothesis; rejection can favor rotation back into value.

Initial Balance

The range of the first hour of the regular session (first two 30-min periods). A break out of the IB with follow-through often sets the day's direction.

Naked POC

A prior session's POC that price has not revisited since. It is a structural reference and potential objective, not a guaranteed magnet. Shown on the chart as a dashed line extended to the present with a ⌀ marker.

Poor High / Low

A session extreme with no single-print taper, so the auction ended flat instead of excess. Often revisited and repaired later.

Excess

A tail of single prints at a session extreme, where buyers or sellers rejected those prices decisively. A sign of a finished auction at that end.

Single prints

Prices traded in only one 30-min period, meaning the market moved through them fast. They mark initiative activity and often get revisited.

Overnight inventory

Where price sits inside the overnight (ETH) range near the open: near the high = traders are net long, near the low = net short. Skewed inventory often corrects after the open.

Gap fill

Today's open vs yesterday's close. 'Filled' means price traded back to the prior close; the fill rate is how often that historically happens for this market.

Balance area

Several sessions whose value areas overlap, showing sustained two-sided trade. A breakout matters when price and value gain acceptance outside the balance.

Bias

The engine's read of the day, derived from how price treats prior value: balanced, trending up/down, failed auction (breakout that died), or liquidation risk.

RTH / ETH

RTH = the regular day session (08:30–15:00 Chicago for equity index futures). ETH = the overnight electronic session. Each builds its own profile.