Priceprofile in Tradestation (with Broadcast) , Nov. 18, 2006 Suri Duddella is the author of a new book Trade Chart Patterns Like The Pros. Suri Duddella is a Private Trader and have been trading futures and equities markets full-time for the past 12+ years. Suri can be reached at suriNotes@gmail.com and his website is: http://www.suriNotes.com PriceProfile concepts have been developed in the 1980s by Peter Steidmayer. PriceProfile is a decision support tool which shows potential support and resitance areas. Priceprofile arranges the data in a bell-curve (normal-distribution) fashion and shows key areas of trading and a single point of control ("POC") where traders percieve this area (POC) as a fair-value. Concept Priceprofile works in all tradable instruments. The basic theory behind Priceprofile is Markets have an equilibrium state of equal buyers and sellers and develops a trading activity around this state of equilibrium. Since markets work on "Supply" and "Demand" ideology, the area of equilibrium shifts constantly. Monitoring this area of "trading activity" helps traders to react positively to the shift of 'Buyers' and 'Sellers'. Profile Construction Price Profile is plotted similar to the normal-distribution curve. Prices are plotted on Y-axis and 'Time' is plotted on the X-axis. A single area of traders' percieved 'equilibrium' is plotted as 'Point of Control' (POC) where most trades are occured. On the profile pattern a skewed distribution helps traders identify where the prices are relative to the 'trading activity'. Normal bar-charts usually give a 2-Dimensional approach and miss the real trading activity plots. On most trading days, normal price-activity falls within ONE-distribution or 70% of total price activity. This area is called 'Value Area' and the top of this range (70% of trading activity area) is called 'Upper Value Area (UVA)' and lower range is called 'Lower Value Area' (LVA). Price Profile in Tradestation Priceprofile in Tradestation can be plotted for any time frame (5m, 30m, 60m...) and can be customized for ValueArea Range, TickSize, Various line colors, line styles etc. How to Trade PriceProfile In Price Profile histogram, the Point of Control (POC) is quite a significant level. As its name suggests, it is the price level where market spent (control) the most of trading time/activity in the previous session. POC level is percieved as key Support and Resitance level or center of gravity level for the current session. On any trading day, the markets have tendency to move closer to this 'POC' level at some point during the trading hours since this level attracts traders. It does not happen everyday, but it happens often enough for traders to notice. Knowledgable traders can use this information into a profitable tradesetup or trade strategy. When POC is not reached on any trading session, this level will be used for key resistance/support for subsequent trading sessions. The area where 'POC' is not breached called as 'Virgin POC' or 'Naked POC'. Traders also use the ValueArea where concept where they watch price-levels within ONE-Standard Distribution or 70% of total price-activity. The boundaries of this Value-Area are called Upper Value Area (UVA) and Lower Value Area (LVA). In weaker markets, Traders use POC as key resistance level (Support in Stronger Markets). Based on the today's market open, traders use this POC level to watch the market direction in combination with other key price-action based indicators. See the following Trading Strategy with Entries, Stops and Targets.   Profile Trading Entries/Stops/Targets This table describes a set of trading strategies in Trending Up and Trending Down markets with potential Entry, Stop and Targets. tOpen : Today's Open pHigh: Previous Trading Day's High pLow: Previous Trading Day's Low Profile Broadcast PriceProfile Indicator in Tradestation can broadcast the POC values to other charts. This will help traders to just plot POC Support/Resistance lines in various Time-Frame Charts (Minute, Tick...) instead of recomputing POC in every chart. Profile Examples References 1. Mind Over Markets by James Dalton 2. Value Based Power Trading by Donald Jones 3. CBOT MarketProfile Handbook