Market Profile Trading Rules

1)  The first trade in the early morning is always the best trade..hesitating when the model has a strong signal, and then waiting for another chance at the same entry tends to be a losing proposition, as the existence of the second opportunity decreases the strength of the signal.
2)  Supply imbalance conditions are strong forces that are clearly visible.  If there is any doubt, then the probability that the condition actually exists decreases.
3)  Don't be afraid of switching the direction of your trade (going from short to long) if your read of the market changes.
4)  When the market is random and tethered to fair value, then buy the low...sell the flat in the middle...and always watch for a vertical move from the low to the high (or vice versa)  to be an initiating trend.
5) Initiating new trends are the highest probability trades in all trading (90%)...these should be played with maximum size and leverage.
6)  The first trade in the early morning is always the best first learn rule #1 and wake up before 4am

Here is the guts of the model
Rule 1)  When tethered to value, fade movements away from the center of value, and get flat at the center of value, constantly re-evaluating volatility around the center of value..
Rule 1a)  Constantly re-evaluate if the center of value has shifted and trade accordingly
Rule 2)  Always be monitoring for the transition FROM tethered TO trending.
Rule 3)  When trending, only have positions in the direction of the trend.
Rule 4)  When a new trend is identified, the outer edge of value will rarely be offered.  This requires aggressive trading behavior (at the bulb of the "P" or "b").  The important point is to get on the trend at all costs.
Rule 5)  When in a trending position, stay on until the trend is over, often for a minimum of 24 hrs.

1 comment:

  1. This is inSANE, can't believe I found this...on a fluke!

    bravo good sir, excellent rules and insight