The Market Profileconcept is an intra-day charting devised by J. Peter Steidlmayer, a trader at the Chicago Board of Trade (CBOT) which should not be confused with cTrader's use of the name cBot for an automated trading system. I would like to stress that this is not like the other indicators that you are probably used to, instead, it works quite differently as it shows volume at price and this means that it shows a histogram on the vertical axis of the chart that shows how much volume was traded at that particular price level.
The histogram is shown in the chart below which shows at what price levels and zones heavy trading activity and Price Action is happening, so you will always quickly know the most important price levels and zones in any market.
With the cTrader Market Profile indicator, you will be able to easily explore where the heavy price action is occurring in a market.
When you look at the Market Profile histogram, you can easily see where the most important price moves and trading activity is located and the widest bars show the most important price levels. so with this information, you can plan your trades. Some very important areas are shown with this indicator which is the Value Area's (VA), Point of Control (POC) level.
The indicator can be toggled left or right and the location can be adjusted on the chart.
Value Area (VA)
This is the area of the market where 70% of the volume is located and where the price has spent most of its time in those levels, each bar level that is formed show a strong support and resistance level. This means is that 70% of the total volume transacted on the chart had happened cumulatively at these price levels. This indicator has a default VA value of 70% and cannot be adjusted.The value area bar colour can be changed in the settings.
- The value area above is shown as red.
- The outside value area is shown as green.
Price is consolidating
- Value Area will be located in the centre of the volume profile.
- The price will jump between the high and low volumes.
Price is trending upward
- The value area will be located on the bottom of the volume profile.
- The price will likely retrace to Value Area High
Price is trending downward
- The value area will be located on the top of the volume profile.
- The price will likely retrace to the value area low.
Point of Control (POC)
The Point of Control is the highest volume on the volume profile and it is the longest volume bar on the volume profile and there will be many volumes of transactions that have occurred around this price. Many traders use the POC area as support and resistance or as an important point where retesting can happen. The POC is shown in the charts above as the blue line in the centre is the most significant level of the session.
Option to show or hide the value-added areas so that only the Pont of Control line is visible.
Harmonic Pattern Scanner & Market Profile
Here is an interesting combination of the Harmonic Scanner and the market profile tool on EURUSD 5-min chart. There were two points of control when the price reached the upper lime green bars which are where most of the historical price action happened and many sellers were waiting. The price reversed with a big wick, to trade this you would have opened a buy position on the harmonic signal and placed a take profit below the POC line and a stop loss just below the entry point for a low-risk trade. Harmonic scanner not included.
Need Help Using the Indicator?
If you need help with using this indicator and changing the settings once it is attached to a chart just take some time to read the user manual.
Watch a Video Explainer
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How To Install
First, make sure you have the cTrader trading platform installed and then simply unzip the file and double-click on it to automatically install onto the platform.
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Product User Guide
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