Market Profile organises price data into 30-minute periods called TPOs (Time Price Opportunities), creating a bell-curve distribution that reveals market behaviour patterns. Developed by J. Peter Steidlmayer at the CBOT, Market Profile identifies day types (Normal, Trend, Double Distribution, etc.) and provides a statistical framework for understanding auction market theory.
TPO (Time Price Opportunity): each 30-minute letter block, Initial Balance (IB): first hour of trading range, Day types: Normal, Normal Variation, Trend, Double Distribution, Neutral, p-shape profile: rally with buying tail (potential short), b-shape: decline with selling tail (potential long), D-shape: balanced/rotational, Single prints: fast moves through price levels (future support/resistance)
Normal day: trade within the value area. Trend day: trade in trend direction only. Double distribution: trade breakout of initial range. Opening outside the previous value area on a gap: trend day likely. IB extension trades in the direction of the break.
Rotation day exit: opposing value area boundary. Trend day exit: trail using 30-minute TPO structures. IB extension target: 1×, 1.5×, or 2× the IB range projected in the extension direction.
30M TPO periods are the standard unit. Session analysis on daily. Weekly composite for context.
Market Profile is most useful for understanding the type of day you're in. A trend day requires different behaviour than a rotation day. Identifying the day type early (by the third or fourth TPO period) gives you an edge for the rest of the session.
Footprint charts display the actual volume traded at each price level within a candle, broken down by aggressive buyers (market orders hitting the ask) and aggressive sellers (market orders hitting the bid). This granular view reveals exactly where buying and selling pressure occurs, exposing absorption, exhaustion, and imbalance patterns invisible on standard charts.
The Point of Control is the single price level at which the most volume was traded during a specified period. It represents the 'fair value' according to market participants and acts as a magnet — price tends to gravitate toward the POC. The naked POC (from a prior session that was never revisited) is one of the most reliable support/resistance levels in order flow trading.
Order book and liquidity analysis examines the distribution and behaviour of resting orders across all price levels to map where significant liquidity pools exist. By aggregating order book data over time through heatmaps and liquidity visualisations, traders can identify where large players intend to transact, anticipate areas of support and resistance, and gauge market microstructure health.
The Depth of Market, also known as the order book ladder, displays all resting limit orders at each price level above and below the current market price. DOM analysis reveals where institutional participants have placed large orders, helping traders identify genuine support and resistance levels created by actual liquidity rather than historical price patterns alone.