The Eight Market Profile Day Types Presented to The OC Traders Group on June 30, 2012 by Ray De Golia

8- Day Types Non-Trend Normal Normal Variation Neutral Vertical Double Distribution Trend P b

1. Normal Day 85% or more of day's range is formed in the Initial Balance period. Any Range Extension is slight and occurs late in the day. Short-term trader is in control. Short-term trader sets the parameters that contain the range. A Normal Day is a term used to describe a profile structure that is characterized by a wide ranging initial balance, the first two time periods of the day create a wide range. As activity develops for the day, the distribution will generally develop within the range of the initial balance. As long as there is no long term aggressive market participation, range extensions will be limited. That is to say that the market may extend beyond the initial balance by only a small amount to the top or bottom of value, and then return back into the value area. Some normal day structures will not have any range extensions at all.

2. Normal Variation Characterized by a wide, but somewhat limited initial balance. The initial balance usually represents about half of the finished profile structure, with a range extension early in the day to create a fairly normal bell curve.

3. Trend Range Extension is considerably more than double the Initial Balance area The market moves in one direction and closes on the directional extreme. The longer-term trader is in control. The market is moving directionally in search of a fair price.

4. Neutral There is Range Extension in both directions. One Range Extension generally cancels out the other. Longer-term trader has no net influence on the session. Therefore, the short-term trader is basically in control. A Neutral Day describes a profile structure for a trading day with limited range extensions on both sides of the initial balance. Neutral days are formed as a result of market uncertainty and lack of directional conviction.

5. Double Distribution Two value areas separated by single prints fair price suddenly changes due to news, events or changes in the market. This sudden change causes the market to locate and distribute around another new fair price. In either case the market will create a new distribution around the new fair price, thus creating a double distribution for the session.

6. Non-Trend The longer-term trader extends the range past the INITIAL BALANCE area. The short-term trader's initial parameters do not hold. There is some directional movement which extends the range and sets a new high or low parameter. RANGE EXTENTION - wider than the initial balance, (LT trader in control). Maximum range extension is roughly double initial balance area. It's important to keep in mind, however, that this is the maximum. The range extension on a normal variation day isn't always that wide. It can be anywhere from a few ticks to about double the initial balance. Naturally, the wider the range extension, the greater the influence of the longer-term trader.

7. The Letter ‘P’ A profile structure that is shaped like the letter (P) is narrow at the lower portion and developed or wide at the top. Usually the result of short covering rallies.

P This is a chart of the ESU2 future contract for 6/22 & 6/23-2012. Source: www.shadowtrader.net/blog.

8. the letter “b” The profile is long and narrow at the top and wide at the bottom. This structure is usually the result of heavy selling at the top of the profile.

References: www. mypivots. com/dictionary/definition/116/market-profile-day-types en.wikipedia. org/wiki/Market_profile www. strategictrading. net/site_map.html www. askmarketprofiletrading. com/sample-market-profile-charts/ tradinglib.com/education/market-profile-basics f) Market Profile Basics, by Jayanthi Gopalakrishnan, Stocks & Commodities Magazine g) shadowtrader. net/blog h) www.eminitradingschool. com

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