MARKET CONFIDENCE USING PROFILE

MAKRET OPEN TYPES AND MEASURING MARKET CONFIDENCE

Market
Market OpeningOpening
Types Types

•Open Drive (OD)

•Open Test Drive (OTD)
•Open Rejection Reverse (ORR)
•Open Auction in Range (OAIR)
•Open Auction Out of Range (OAOR)
Market
Open Drive Opening Type : Open Drive (OD)
•Open Drive exhibit maximum confidence from the OTF
timeframe traders

•Opens Gap up and Never got back into the previous day
range

•Opens Gap up and Trades in the same direction of the

previous day

•Low made in the first 30 min never taken out

throughout the day

•Witnessed more in Bear market counter rally

Market
Open Drive Opening Type : Open Drive (OD)
•Open Drive exhibit maximum confidence from the OTF
timeframe traders

•Opens Gap up and Never got back into the previous day
range

•Opens Gap up and Trades in the same direction of the

previous day

•Low made in the first 30 min never taken out

throughout the day

•Witnessed more in Bear market counter rally

Market
Open TestOpening
Drive Type : Open Test Drive (OTD)
•Price Opens with Gap above/below Previous days range or Price Opens at the edge of the previous days range

•Confidence exhibited by OTF timeframe traders is less than that of Open Drive

•Opens Gap up and price got snaps back into the previous day range or value area in first 30min

•and once test is over Trades in the same direction of the previous day
Market Opening Type : Open Rejection Reverse
Open Rejection Reverse

•Price Opens with Gap above/below Previous days value area

•Looks like a Open Drive

•But soon it faces resistance and later aggressive sellers enter into the market and drive lower

•Emotional traders get caught in this action

•Happens especially at the end of the bear market/bull market

•Market Participants are less confident of such opening

Market Opening Type : Open Auction in Range
Open Auction In Range

(OAIR)
•Price Opens within Value Area

•Trades lackluster, Sideways

•No Confidence from the OTF Participants

•Happens in sideways balancing markets with

overlapping Value area

•Open Auction nothing changed from previous day

context
Market Opening Type : Open Auction Outside
Open Auction In Range

Range (OAOR)
•Market Open Outside Previous days range

•Value forms higher or lower with balanced

•profile

•Price starts balancing around the centre

•Mostly a lackluster day around the open

•Despite a gap up/gap down

 High Buyers Confidence (Strong
Buyers)
Low Buyers Confidence (Weak
Buyers)
Confidence High Sellers Confidence (Strong
Type Sellers)
Low Sellers Confidence (Weak
Sellers)
No Confidence (Neither Buyers nor
Sellers are confident)
Low Confidence Buyers
• Price Opens
Inside the
Day Open Range

• Price took
previous day
high

• POC built
below previous
day high
 “P” shape balance

Short Term “b” shape balance

References
where Double Distribution Balance
confidence Triple Distribution Balance
level needs to
be measured Spike Base

Prominent POC
 Rally High
Intraday
References Pullback Low
where
Multi Day High/Low
confidence
level needs to
Prev Day High/Low
be measured
Prev Week High/Low
 1)DPOC (Todays POC)

Intraday Target 2)Prominent POC

(Low Buying
Confidence/Low
3)Weak High/ Weak Lows
Sellers
Confidence)
4)Single Print Zones for the developing
profile (Fast Trading Zones)

5)Half Back (Intraday Halfback or

Yesterdays Halfback
 Low Buying confidence + One
Intraday Target timeframing down (Should have
(Low Buying Good Volumes) expect day low test
Confidence/Low – Continue in the direction of
Sellers onetimeframing
Confidence) +
One timeframing Low Selling Confidence + One
against the timeframing (should have Good
confidence Volumes ) down expect day high
test - Continue in the direction of
onetimeframing
 Never Trade against the High Confident
Trade Market

Avoid Trading in No Confidence market (i.e

Avoid when neither buyers nor sellers in control)
Key Rules to
Follow Avoid trading against the direction of strong
Avoid momentum

Avoid trading in the direction of weaker

Avoid momentum
 1)Confidence at 2)Confidence at 3)Confidence at
Open 10.00a.m 11.00a.m

How Frequent
4)is the there is a
to Measure possibility of change
in confidence? :
5)Is there is any
other intraday
nuances
6)Are there any
trading
opportunities
Confidence 11:30a.m

and Looking 7)Confidence at 8)Confidence at 9)Confidence at

for 12.00a.m 1.00p.m 2.30a.m

opportunities
10)repeat step 4-6 11)Where the value
12)Is there is a odd
at every confidence area is developing,
of shift in POC
interval where is the POC
 Strong
Momentum Profile View Momentum
Strong Uptrend Bottom in first 30min
Momentum (Letter A period is the low Vs Weaker
for the day
Momentum
Strong Downtrend Top in the first • Weaker Momentum is not
Momentum 30min( Letter A period is a buy/sell signal it is just a
the low for the day indication that strong
momentum is missing.

Weaker Momentum Day bottom/top is not in

first 30min
 Acceptance Type Confidence Level Interpretation

Acceptance above Previous Day POC building above Rally High or High Buyers Confidence
Rally High or any other short any other short term reference (Look for trend following)
term reference

Rejection above Previous Day POC building below rally High or Low Buyers Confidence (Look for
Acceptance/Rejection above Short Rally High or any other short any other short term reference Mean Reversion )
term reference
term Reference Cheat sheet

Acceptance below Previous Day POC building below Pullback Low High Sellers Confidence
Pullback Low or any other short or any other short term reference (Look for trend following)
term reference

Rejection below Previous Day POC building above Pullback Low Low sellers confidence
Pullback Low or any other short or any other short term reference (Look for Mean Reversion)
term reference
Special Case If more than 6-8 TPO trading activity is
Monitoring if happening at the key reference level, then
one has to monitor last 45min of price action
TPO is
greater than If the price action in last 45min stays above
the key reference level then initiate long
or equal to 6
at Key If the price action in the last 45min stays
reference below the key reference level then initiate
positional short.
level
Open Type Confidence Level Interpretation

Price Opens Gap Up High Buyers Confidence Go with the Direction of Confidence (Trend Follow)

Price Open Gap Down High Sellers Confidence Go with the Direction of Confidence (Trend Follow)

Price Opens Gap Down Get Low Sellers Confidence if POC build into previous days Weak Early Morning Sellers Look for Mean Reversion
Back into Previous Day Range range

Price Opens Gap Up Get Low Buyers Confidence if POC build into previous days Weak Early Morning Buyers
Back into Previous Day Range range Look for Mean Reversion

Price Opens inside the range with no immediate critical No Confidence Do Nothing
reference levels to monitor (i.e no rally high , pullback low,
spike reference…etc)

Opening Confidence Cheatsheet

Mid of Day Confidence Cheatsheet

Open Type Confidence Level Interpretation

More Activity inside the preious days range 5 or more
TPOs wide
Mid of the day price break the previous day low/two
day low with one timeframing and got back into the
range
1)Low Confidence Zone converts to Good selling Weak Mid Day sellers
confidence Look for Mean Reversion
2)Price getting back into previous day range
indicates lack of sellers confidence

More Activity inside the preious days range 5 or more
TPOs wide
Mid of the day price break the previous day high/two
day high with one timeframing higher and got back
into the range
1)Low Confidence Zone converts to Good selling Weak Mid Day buyers
confidence Look for Mean Reversion
2)Price getting back into previous day range
indicates lack of buyers confidence
Acceptance/Rejection above Short term
Reference Cheat sheet
Acceptance Type Confidence Level Interpretation
Acceptance above POC building above High Buyers Confidence
Downward Spike Base Downward Spike Base (Look for trend following)

Rejection below Downward POC building below Low Buyers Confidence

Spike Base Downward Spike Base (Look for Mean Reversion )

Acceptance below Upward POC building below High Sellers Confidence

Spike Base Upward Spike Base (Look for trend following)

Rejection above Upward POC building above Low sellers confidence

Spike Base Upward Spike Base (Look for Mean Reversion)
Acceptance/Rejection above Short term
Reference Cheat sheet
Acceptance Type Confidence Level Interpretation
Acceptance above P Shape POC building above P High Buyers Confidence
Profile Balance shape Balance (Look for trend following)

Rejection below P shape POC building below P Low Buyers Confidence

Balance shape Balance (Look for Mean Reversion )

Acceptance below b shape POC building below b High Sellers Confidence

balance shape balance (Look for trend following)

Rejection above b shape POC building below b Low sellers confidence

balance shape balance (Look for Mean Reversion)
 Gap Up/Gap Down

How to Spot One Timeframing Up/Down

High
Confidence Doube Distribution/Triple
Markets Distribution

Spike Up/Spike Down

Recommended
Books
Questions?
Thank You!
S e e Yo u N e x t Ti m e