Profits from understanding value areas and auction rotations
| Strategy Type | Market Profile / Auction Theory |
| Market Outlook | Profits from understanding value areas and auction rotations |
| Risk Profile | Moderate - requires understanding market structure |
| Reward Profile | High probability trades at value extremes (30-150+ points) |
| Time Horizon | Intraday to swing (hours to days) |
| Iv Environment | N/A - Futures/Index based |
| Breakeven | Win rate × Avg win > Loss rate × Avg loss |
| Primary Instruments | FTSE 100 Futures, UK100 CFD, DAX Futures |
| Mas Compliance | MAS regulated brokers required for futures/CFD trading |
| Trading Hours | Build profiles during London session (4 PM - 12 AM SGT) |
| Contract Size | FTSE 100 Futures: £10 per point; Mini: £2 per point |
| Settlement | Cash settled; overnight financing for CFDs |
| Tax Treatment | No capital gains tax for individuals in Singapore |
| Margin Requirements | Standard margin for day/swing positions |
| Cdp Account | Not required for futures/CFD; custody with broker |
| Singapore Relevance | Market Profile ideal for Singapore - analyze profiles in evening, identify value areas, trade rotations during London/US sessions |
Graphical representation of price, time, and volume showing where market spent time at each price level. Reveals value areas, balance/imbalance, and auction dynamics. Developed by Steidlmayer at CBOT in 1980s.
Price range containing 70% of day's TPOs. Represents fair value accepted by market. VAH (top), VAL (bottom), POC (center). Most trading activity occurred within VA.
Point of Control - price level with most TPOs. Shows highest acceptance, where market spent most time. Acts as magnet - price tends to return to POC. Strongest profile level.
On balance days (70% of days): Fade VA extremes. Buy at VAL, sell at VAH. Target POC. On trend days: Don't fade - trade with direction. Day type recognition is critical.
Range of first hour (A+B periods, usually 2×30 min). Sets framework for day. Narrow IB = Breakout potential. Wide IB = Range day likely. IB extensions signal trend.
Normal (bell curve) = Balance. b-shape (fat bottom) = Bullish. p-shape (fat top) = Bearish. D-shape (fat middle) = Balance. Double distribution = Trend day with two value areas.
Multiple TPOs at extreme = Incomplete auction. Likely to be revisited and broken. Not strong S/R. Excess (single TPO) at extreme = Complete auction, strong S/R.
Price levels with only one TPO. Market moved quickly through - rejection zone. Often get filled later as market returns to complete auction. Trade toward single prints.
OWV (Open Within Value): Open inside prior VA, suggests balance day. OOV (Open Outside Value): Open outside prior VA, watch for acceptance (trend) or rejection (return to VA).
Narrow IB (< 0.75× ATR): Breakout potential, wait for extension. Wide IB (> 1.5× ATR): Range day likely, fade extremes. Normal IB: No strong bias, assess as develops.
Initiative: Conviction-driven, breaking balance, moving to new levels, creates single prints. Trade with initiative. Responsive: Reaction-driven, fading extremes, returning to value. Mean reversion.
TPO shows time at price, Volume Profile shows volume at price. VPOC (volume POC) often more significant than TPO POC. HVNs are strong S/R, LVNs are weak (will break). Use both.
Multi-session aggregated profile (weekly, monthly). More significant levels than daily. Shows longer-term value areas. Daily profiles nest within larger composite structures.
Bracket size: Based on volatility (10 pts standard for FTSE). IB periods: Usually 2. Walk-forward test strategies. Track win rate by day type and setup type.
Price probes extreme, fails to find acceptance, reverses. Examples: Failed IB extension, failed break of VA. Strong reversal signal - trade opposite direction of failed probe.
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