The marketprofile window in eSignal is a powerful way to view the price, volume and time distributions for a variety of markets. To the layperson, a market profile may appear to be nothing more than alphabet soup, but to the astute trader it is a tool to isolate complex market patterns that provide insight into whether a stock or future is trending or range bound. The various components that make up marketprofile can provide useful insight into whether a stock is hitting critical support and resistance levels.

Let’s take a look at this window in detail and begin to analyze what this chart type is telling us.

One of the most evident features of the marketprofile window is the series of letters that appear to the left of the volume bars. These letters are referred to as Time Price Opportunities (TPOs). In a nutshell, TPOs are upper and lower case letters that represent a specific 30-minute time period in a 24-hour day.

As trading begins on a particular stock or future, the TPOs are distributed and correlated to the price levels that are met during the trading session. With each TPO, letters are added to the corresponding price levels. This correlation is designed to show at what time the various price levels were met. This information can illustrate how long a stock or future spent at a level of support or resistance.

To the right of the TPO distribution is the volume indicator. Within the marketprofile distribution, we can use the blue horizontal bars to see how much volume is being traded at the various price levels.

In eSignal, it is quite simple to view the TPOs and their correlating 30-minute cycle. By right clicking in the marketprofile window, you can choose Segment Properties to view the letters that are assigned to each 30-minute cycle.

The TPOs and horizontal volume bars are not the only way to interpret the marketprofile distribution. The red vertical line is a way to determine the Initial Balance, the trading range that occurred during the first two TPOs of the trading session.

The next indicator is the vertical purple line. This line represents the Value Area, the trading range that encompasses at least 70 percent of the TPOs for the trading session. Keeping this in mind, we can see how the current distribution is shaping up compared to the prior day's distribution.

If you are interested in learning more about marketprofile, please view the following two videos from the eSignal Central video library:

In addition, take some time to read through our marketprofile window article in the eSignal KnowledgeBase.

Beyond these resources, the book Steidlmayer on Markets by J. Peter Steidlmayer and Steven B. Hawkins is an excellent source for gaining advanced insight into how invaluable this type of window is and how you can use the eSignal marketprofile to its fullest potential.

*marketprofile is a registered trademark of the Chicago Board of Trade (CBOT).