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Stoic Profile picture
@Stoiiic
Jul 31 • 8 tweets • 4 min read Twitter logo Read on Twitter
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CONTINUATION OF MARKET PROFILE SERIES- PART 3

MP terminology & Anomalies covered:

Next, there is some value to understanding the DAILY OPEN TYPES and use it to leverage potential opportunities in terms of how the rest of the day might play out. https://t.co/3jCow6Qcim
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DAILY OPEN TYPES:

- Open Drive
- Open Test Drive
- Open Rejection Reverse
- Open Auction

Let's dive in to the characteristics of each daily open type.
OPEN DRIVE- DETAILS IN IMAGES

Price opens above or below the previous day’s value area and moves in an aggressive/directional manner.

Anecdotally speaking, these typically seem to get reversed from previous significant levels (e.g. previous day VAH). Use w/ context.
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OPEN TEST DRIVE- DETAILS IN IMAGE

Same as an open drive i.e., open above or below the previous day value area. The differentiating factor is that price tests a support/resistance level before reversing for a directional move. Image
OPEN REJECTION REVERSE - DETAILS IN IMAGE

As the name suggests, market opens w/ one-sided movement reaches a significant level and reverses. Image
OPEN AUCTION - DETAILS IN IMAGE

Low volatility + market opens within previous value area and previous days high-low range indicates market is balancing = rotational plays. God knows we've been getting a lot of these lately.... Image
Additional Resources-

1. @abetrade -
(TradingRiot has phenomenal free information available if you're interested in learning)

2. https://t.co/ixIMw2eyY7
3. https://t.co/CJDqYFxVQn https://t.co/aK1uHtpYpLtradingriot.com/market-profile/
atas.net/volume-analysi…
marketcalls.in/market-profile…
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@abetrade Understanding the daily open types can prove helpful to assign probabilities to how the rest of the day will play out = being able to capitalize on directional or mean-reversion opportunities.

RT to share, LIKE & FOLLOW for more insightful content.
Thank you for the support 🙏 Image

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More from @Stoiiic

Stoic Profile picture
Jul 20
Now that we understand what TPO charts are and how they are used -

Let's cover more of the potential capabilities when utilizing TPO charts through identifying some anomalies and how they can be leveraged.

MARKET PROFILE ANOMALIES (A THREAD) https://t.co/EqsxqZlqN3
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Market profile anomalies are of significance because they are "asymmetric" structures within the profile caused by an unfinished auction leading to them being revisited often and can be leveraged by the informed trador.

A list of market profile anomalies include:
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1. BUYING & SELLING TAILS

Can be used to play reversals (in conjunction w/ utilizing orderflow via footprint charts) especially if the buy/sell tail is falling into significant levels such as untested PoC (naked PoC), key support/resistance levels etc (see images for details).

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Read 9 tweets
Stoic Profile picture
Jul 11
Ever wonder what those weird looking distribution charts are that look nothing like candlestick charts?

Wut meanz?

Enter Market Profile/Time-Price Opportunity (TPO), a framework that can help traders to map the environment.

A Case to Utilize TPO Charts - (A SHORT THREAD) Image
TPOs are characterized by letters that mark 30 minute periods. Instead of candles, letters from the alphabets are used to represent each 30 minute session.

The essential goal is to understand where price is spending time.

Time, Volume and Price = Complete Picture of the Mawket Image
The Initial Balance (IB) is the first two TPOs i.e. the first two 30-minute candles of the day.

The IB isn't as significant compared to trad. markets since crypto is 24/7. That being said, 12 AM UTC is when the IB is marked on the chart. Image
Read 10 tweets
Stoic Profile picture
Jul 10
Do you believe market makers are hunting your stops?

Why does it feel like most of your trades get stopped out before price reverts in the other direction leaving you at the train station?

Let's talk about it, as briefly as possible.

LIQUIDITY & "STOP-RUNS" (A SHORT THREAD)
Market making is a delta-neutral strategy that is based on providing liquidity to the market.

MMs make their money when the "spread" is tight.

The ideal situation for a market maker is to provide liquidity in a low volatility environment.
Market Makers prefer doing their business in tight ranging environments. In simple words, volatility and "stop runs" are the least favorable situations for MMs.

I know...time to rethink the "market makers are hunting my stops" narrative.
Read 9 tweets
Stoic Profile picture
Jun 29
Why and how does price move in a market?

If your answer is "due to lack of buyers or sellers", it is time to read this thread.

Some nuances and complexities to this but we'll keep it simple for this one. Promise.

Auction Market Theory (AMT)- A Primer (THREAD)
AMT explains how buyers and sellers interact in markets.

Price is driven by market orders (takers) overwhelming limit orders (makers).

Imagine the limit orders as "walls" (passive) that are attacked by market orders that are cannon balls being hurled at the walls (aggressive)
The auction exists for the purpose of facilitating trades + seek "fair value" of the asset.

Fair Value is the price area where the most amount of trades are facilitated. This is determined by amount of time spent at price + associated volume.
Read 16 tweets

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