Market Profile

The Market Profile indicator provides a visual representation of price distribution over a specified time interval, identifying key levels such as the Point of Control (POC) and Value Area. This tool helps traders understand where the majority of trading activity occurred, highlighting areas of high liquidity and potential support or resistance.

Usage

The indicator can be used to identify institutional activity and market balance. When price is trading within the Value Area, the market is considered to be in "balance." A breakout from the Value Area suggests a potential trending move.

• Point of Control (POC): Represented as a central area, this signifies the price level where the most time was spent during the session.
• Value Area High/Low (VAH/VAL): These areas represent a specific percentage of the total Time Price Opportunities (TPO), typically set at 70%, identifying where most trading volume occurred.
• Open Session Lines: Displays the opening price of the session as a horizontal reference line.

Details

The script calculates the frequency of price action across 20 distinct price sections (TPO sections) derived from the session's high-low range. Unlike traditional profiles that use a single line for the POC, this version utilizes a POC area to better represent the price range with the highest frequency. The Value Area is then expanded symmetrically from the POC until the target percentage of the total TPO count is reached.

Settings

• Session timeframe: Determines the duration of each profile (e.g., Daily, Weekly, Monthly).
• Percent of TPO: Sets the percentage of activity to include within the Value Area (default is 0.70 or 70%).
• Open session lines: The number of historical session open lines to display on the chart.
• Sessions to display: Limits the number of historical profiles shown to optimize performance.
• Point of control: Customization options for the POC background, line color, and width.
• VAH/VAL: Customization options for the Value Area High and Value Area Low background colors.

FAQ

How do I interpret the POC area?

The POC area represents the price range where the market found the most equilibrium during the session. It often acts as a magnet for price or a significant pivot point.

Can I change the session length?

Yes, you can adjust the "Session timeframe" in the settings to create profiles for different intervals, such as "D" for daily or "W" for weekly.

How do I access Market Profile?

You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.