Month: May 2010

Welcome all to the first trading day of a new month. Our new series of June is also a day old !

What kind of a trading day we saw yesterday : a neutral day, which gives no forward implications.A neutral day can also close at one of the day extremes.

Coming to today’s action, I had a feeling in my last post yesterday that the last hour an hour action was designed to catch some technical analysts on the wrong foot. That trick does not work with the student of profile.

We may see a narrow range again in the morning session and I’m expecting this to break only in the second session of the day.

Trade well !



Value area low is 5022 and Value area high is 5051.Point of control is 5037.

Market is bound btw these levels, so to speak.



I want to add 2 more ref levels besides the 5004 and the 5065 levels given.

These are 4990 and 5079. All NF.

These represent the outer ranges of the short term bracket, we currently find ourselves in.



Here is a price profile chart of the Nifty future for the past 4 sessions.

Nifty Estimates For 1St June

As you can see, Nifty is currently establishing value in the lower part of yesterday’s profile.

The balance of the profile shows the absence of short/ inter mediate term players from the market, who are letting the market churn to negotiate value.

However if you look further, you can see tell-tale signs of selling near our 5065 levels.

This along with the fact that we are moving value downwards, leads me to believe that we will possibly move south towards 4955-4967 levels, where there may be a re-negotiation of value.

If I am right about this, then the market should not get above 5078 NF.



Trade Alert : sell Bank Nifty
Cost : 9164
Sl : 9200
Target : 9087.



Bank Nifty at 9087.

Book out.



We are already at the 4955-4967 levels projected in the chart at 11.50.

I chose to go with the Bank Nifty sell, rather than Nifty but it was the same trade.

Watch for buyers to step up here and rebuild value.

I will post updated chart later.



Estimates for 1st June

What are the different types of days we see in Market Profile?


The Market Profile represents a few different types of days. A good understanding of the different day types and your ability to spot the kind of day developing by 11.30 am or even by  1.00 pm gives you a very big edge into what to expect from the market at the time of the close around 3.30 pm.


Understanding different day types is a very good Market Profile Trading strategy and can help your account significantly to close with good profits by 3.30 pm.


Normal Day


The most basic day structure is the Normal Day. It is easy to follow and understand as most of the day activity is in the initial Balance or the first 60 minutes of the day session. On a Normal day, the bell curve also develops within the range of the initial balance( IB) and does not go much beyond the initial balance. There is often limited range extension and the market returns into the IB for the close.


( To understand the different terms like Initial Balance etc look up –


Normal variation day


This is the most common of the different day auctions we see in Market Profile. On this day we will see a range extension outside the Initial Balance and often the market continues it’s probe on the same side as the break  of the initial Balance and goes to complete  the probe by extending to 2 times the Initial Balance Range ( high to low) and in some cases even 3 times of the IB 

We also see the value built higher/ lower on such days and is a pointer for continuation in the coming sessions.


( To understand the different terms like Range extension  etc look up –

Neutral day


This is again a Day based on the Initial Balance or IB.

In this day we find the Initial balance is slightly smaller than a Normal day or a Normal Variation day. Price makes a move away from this initial balance early in the session but is not successful in creating a good range extension. It then comes back in the IB and travels through the IB and makes an attempt at a range extension on the other side of the IB.

Accordingly based on the second attempt of the range extension we have 2 types of Neutral Days

a) Neutral Center: In this type of day the second attempt of the range extension is also not successful like the first one and the market comes back into the IB and closes near the day center or midpoint or even Vwap or Dpoc. On such days we consider both the buyers and sellers as equal in strength and the close in the middle as a fair close.

b) Neutral Extreme: In this type of day the second attempt of the range extension is successful and the market finishes the day at one extreme which is often the day’s highs or lows as the case may be. In this day type, either the buyer or the seller is considered more stronger than the other and gives us a very good context to watch for continuation.


( To understand the different terms like vwap/ dpoc  etc look up –

Non-trend day


This is characterized by a narrow range day with a fat profile. There seems to be random rotation with little price movement on either side of the profile, thus developing a short and fat profile.


These days can occur prior to important announcements, long weekends or holidays, or at market exhaustion points. Most traders will simply complain that the market is choppy and untradable on these days.


It is when the market is making a narrow range that a large range, and possibly trend day, will occur in the next day or two.


( To understand the different terms  look up –


Trend day


A trend day will usually begin with a small initial balance, However, early in the day structure range extension occurs. This range extension does not allow a value area to develop in the initial balance, and the range extension continues throughout the day. These days are seen as having Higher Highs and Higher Lows  ( OR LH/ LL)  in every 30 minute period.

There are often periods of single prints on the profile. Most importantly, there is very little rotation from time period to time period. In other words, each half-hour segment drives prices further in the direction of the trend.

Sometimes one of the time segments will have a bit of rotation in the opposite direction, but the price usually will resume the trend. In such cases, we keep an eye for a pullback high or a pullback low to develop which is the afternoon adjustment of inventory. The range of a trend day is wide and the profile absent, the rotation is thin. Obviously the open will occur at one end of the trend day, and the close will be near the opposite end.


( To understand the different terms like Initial Balance/ Range extension   etc look up –


Double distribution trend day



Market Profile-Day types

Hope everyone had a good weekend.

Returning back, the markets will continue where they left off on friday with no news to alter sentiment as such.

Those who had taken long/ short trades over the weekend will not have much to show by way of profits, because the market profile gave us a neutral day on friday.

So the buyer keeps his advantage because he kept prices over value on friday, but he will be severely tested at 5045-5065.

The seller has shown that he is waiting to sell at the above mentioned prices.He will have control a bit, when prices break 4990.

Let’s see how it resolves.


Trade Alert

Description : Sell Nifty Future

Cost : Below 5030

Sl : 5046

Target : 5005.


It seems like another quite day of trading today.

Notice the open of the future today and the close on friday. This shows that there is no major change of sentiment from friday and buyers/ sellers have more or less agreed on value.

So expect tight movements and a narrow range.

The resolution will happen only when we see some aggressive intermediate term selling/ buying happening during the course of the day.



Stop hit in Nifty sell below call.

Make an exit.

Loss = 16 points.



Markets moved between value area low and the major MP pivot of 5065 NF.

We lost out on a trade, but there were enough set-ups for the studious profiler, including a profitable shorting opportunity at 5050 levels

In the end it was a neutral extreme day, with a close on one side of the profile, though most of the moves were in the last 30 mins ( monthly window dressing again ?? )

Let’s see what the open shows up tomorrow.We will know for sure at the open, whether the move was a real one.


Estimates for 31st May

What is the Market Profile?

The Market Profile is a 3-dimensional approach to trading the markets. Historically only price has been used to graph market activity and we see this in the traditional bar and candlestick charts which are common amongst traders. The Market Profile approach is to plot Price, Volume and Time together on one chart. Price is measured on the vertical or Y axis and Time is measured on the horizontal axis. The interaction of Price and Time creates Volume which is measured on the chart directly.

The Market Profile approach is to view the movement of the market as an auction which has both Buyers and Sellers trying to outdo each other or arrive at a fair price which is called the value of the market.

To build the auction, one has to understand clearly that

a) Price – advertises opportunity. ( and not all price is value)

b) Time – regulates this opportunity

c) Volumes – Measure of the market to tell us whether the opportunity was a success or failed.

Profile Market Profile Terminology

In the chart above we see a 30-minute bar of an instrument which tells us about the movement of the underlying in the color of the bar and a few patterns of the bar called candlestick patterns which are dependent only on the relation between the Open and the close of the bar. In candlestick charts, the entire focus goes on the close of the bar which determines even the color of the bar.

In the Market Profile chart on the right, we see a lot more information and is a truer representation of the process of the buying and selling which has occurred in the market. We go much beyond the Open, High, Low and Close of the bar and the Market Profile gives us more information in terms of where the market has seen the most number of transactions and which part of the day was dominated by the Buyer or the Seller the most.

The Market Profile approach to trading is a truer approach giving a clearer X-ray view to the trader of the Buying and Selling actually happening. It also allows us to know which Time frames are active and we get an insight into their inventory positions, participation, emotional trading etc, not available in traditional charting patterns.

This detailed examination through a Market Profile chart can allow traders to cut losses, decrease risk and increase the chances of profitability in their trading.

Where to watch these Market Profile charts Live?


The Market Profile charts are available for a view in the Vtrender Trading Room. You can see the charts Live in the working hours of the exchange with zero delays. Interpretation and Analysis of the chart in a Live Market Situation is done by active traders and you can also see how they utilize the information to make live trades with the information as it develops.

The Vtrender Trading Room is at-

We also use an advanced form of the Market Profile which is the Volume Profile and have specially crafted Market profile Trading strategies and Volume Profile trading strategies unique to the Room.
A preview of the Vtrender Trading Room and it’s benefits is at –


A bit more on the Market Profile with the Terminology


Timeframes: The market profile recognizes five distinct types of individuals who operate in the markets. These are a) Scalper, b) Day trader, c) Short-term player, d) Intermediate-term player, e) Long-term player. Each of these individuals have a perception which they bring to the market and this perception helps move the markets. The scalper and the day trader are responsible for maintaining the liquidity of the markets.

Value: The perception which all of the above-mentioned players bring to the markets after the bid-ask process helps build what we call “value”. Value is different for each of the mentioned players and they will move the price up or down depending on this perception. For example, if the intermediate term seller thinks that the market is overpriced he will jump in to move price down. On a daily timeframe, the period where 70 % of the volume action takes place is defined as the value area. Similarly, we have a weekly and a monthly value area.

Buyers: Individuals of any timeframe who feel that the present market is underpriced and therefore less in value. These individuals will move price up.

Sellers: Same role as the above except they think that the market is overpriced and will move the price down.

Auction: The activities of buyers and sellers recorded through the bid-ask process is called auction. The auction results in the formation of the value area which the buyers and the sellers agree as the fairest value for the day. As the auction moves away from the value area, buyers and sellers change their definition of value. If higher prices are agreed upon in the auction, the value is supposed to move higher and consequently, the market moves up.

Selling tail: The failure of the auction at higher levels to attract new buyers results in the sellers swiftly moving in forming what is called a selling tail.

Buying tail: The same activity as above, but in the opposite direction. The bigger the size of the tails the more aggressive is the action/ reaction.

Point of Control ( POC) – This is the region where the most activity occurs during the day and has a high volume around it as a result. This POC is also considered the fairest price of the day or the week. The POC is measured across daily, weekly, monthly and even yearly time frames.

Developing Point of Control – The POC of the current day developing

Excess: A buying tail or a selling tail is also called an excess . The excess is the end of one auction and the beginning of the other.

Poor Lows/ Highs: This is an area which puts an end to an existing auction through exhaustion rather than an excess. It is also called an unfinished auction and price returns back to this point for a fresh probe after a small pullback.

Pull back low/ high – This is a very important concept in a trending day especially where the market recovered from an initial probe midday to check on old inventory. Participants use the pullback to adjust positions for the trend of the day. The Pullback high/ low is important for the rest of the sessions also as it is associated with inventory.

Bell curve: The proper statistical distribution where the POC is placed in the middle of the profile chart and 68.7% of the day’s trading Volume is on either side of this POC. On the charts, it looks like a Bell kept sideways and hence called a bell curve

Different day types – Covered in detail here at –

Vwap – This is the weighted average price of the movement of the instrument. It is calculated by using the ratio of price multiplied by the number of shares divided by total shares traded

Close: The final auction of the day

Open The first auction of the day. If there is a large difference in the open and the close then again the perception of value in the market has changed. More types of open are at –

Balance: A region where trade is contained and the price does not move vertically. This area is also called Value. A balance occurs in all timeframes. A balance is also the end of an auction. Excess and balance are considered opposite terms in an auction

Imbalance: The opposite of a balance. Price breaks away from a balance to form an imbalance. Either the Buyer or the seller is more aggressive when an imbalance happens

Initial balance: The first 60 Minutes of a trading day is called the initial balance. As the name suggests, the IB tries to set up the day’s balance or define the value for the day.

Range extension: The movement away from the initial balance is called the range extension. Success or failure of the range extension gives us an indication of the type of day unfolding.

Spike – The movement in the last hour of the day is called a spike. A spike is an auction which is not complete and hence unverified. This happens mostly due to exchange closing hours. The next day needs to be watched for confirmation/ rejection of the spike. More –

Initiative activity: Control by the buyer or seller in the trading day is called initiative activity. As the name suggests, the action determines conviction on the part of the players to move the market. The strength of the initiative activity is useful to determine which party will have a role to play in the day

Responsive activity: This is a response to Initiative activity, the strength of which can determine changes to the trend of the timeframe.

One Time Frame behavior: A trending situation or an imbalance driven by Initiative activity



The Market Profile approach to Trading is discussed extensively with Live Market Analysis in the Vtrender Trading Room. We have a large community of Market Profile Traders who come together to watch the Market profile charts and discuss trading strategies for intraday and positional trading based on the information provided by these unique market profile charts.
Whatsapp Image 2018 09 09 At 13.13.55 Market Profile Terminology
For more information visit-

You may wish to check a few more writings on Market Profile on this blog. Look up for more Intraday Trading strategies and Other Market Profile trading strategies –

There is also the newest information on the evolution of Market Profile at –




Market Profile Terminology

5065 was the level we had mentioned one week back where the intermediate seller had showed up and managed to take the market all the way to 4785 levels.This was the action on May the 19th and documented here.

The gap down from this level, will be matched up with a gap up.

But need to see this level resolve for further direction.

5065 is on watch. We will see rotation at this level today.



Description : short Nifty June
Price : 5032
Sl : 5065
Target : 4990.



@ All,

I have modified the comment settings to include your ID when you post comments. Please comment with a user name. I don’t want to be talking to several anons, without knowing one from the other.

Please oblige for the mutual benefit of all.



Take some profits off the table here at 4999.

keep Sl for remaining at 5020.



We were targeting 4990, we have got 4996 so far.

The seller has shown his hand from the morning and his inclination to defend his territory near 5065. It’s now upto the buyers to stand up.

5020 and 5035/45 are some short term reference points for the bulls.Need to climb above them.

This will be a volatile 60 point range and a battle zone. so trade quickly and keep booking profits when you see them.



Posting an intra chart of Nifty spot 30 mins. The shaded blue is the value areas.

Nifty1 Estimates For 28Th May

The shaded blue areas are the value areas.

Price above value infers that buyers are in control. However on  a longer term chart, you can see the seller’s footsteps, with the succession of value being driven lower.

The buyers have gotten stronger recently. Three value areas showing up move.



Trailing stop at 5020 taken. make an exit.



Interesting action so far.

Sellers ( or bears in your terminology ) have tried their hand at a lower range extension and failed.

Now Buyers will make an attempt.

5035/ 5045 will be short term reference lines above which is the crucial 5065.

Above that there may be a slight pause at 5092, beyond which we will get 5172 easily.

On the downside 4990 is first and then yesterday’s 4967/ 4952 which should provide support for the market.

Trade accordingly.



No resolution yet in the day time-frame.

Buyers have not managed to take the initiative.

Markets trading between 5005 and 5025. We’ll wait.



I know it’s been a tiring day of trade today, with no clear indications of short-term direction.

Sometimes the market goes through these kind of days digesting information.

We just have to wait and see it resolve and base our decisions on the message the market gives us.

Let’s not be compulsive traders and trade just because the market is open.We will have plenty of good set-ups in the coming days on both sides with risk-reward ratios favoring our style of trading.

Today’s session has been a neutral day with range extension on either side which failed.

Bias is divided and the market will give us fresh inputs on Monday.

We have our levels and we will react accordingly.



Estimates for 28th May

Some interesting feedback on the Expiry calculations done here yesterday.

But allow me to gently tell you, that now that the market is open, we trade on the information available. As traders we live in the “Now”.

So though we are tar-getting 4985-4995, let’s remember the order flow coming to our screens today should communicate to us our yesterday’s targets.

Supports are at 4887 NF and 4862 and resistances at 4935 and 4968 NF of May.

Trade well.



First resistance at 4935 playing out.

I have edited the second resistance to 4968 NF ( May ). Please note.



Early signs of a trend day developing.If this is true then the market should not come below 4930 NF (may) today.



Markets are playing out at 4970 levels.

I suggest partial booking of longs here.

We may still get to 4995 levels.Those who want to hold can hold with a SL below 4950 Nifty spot levels and I suggest to move to June Future here.



Deepak asks,

Dear Shai as per your old post i was checking the close this expiry – the range comes to 4828 to 5006 – since the OI in 4900 puts and 5000 calls is very high – based on your analysis the closing should be close to 5006 – can we assume closing to be at 4990 levels – best regards Deepak

I made the post yesterday:

Based on Open Interest the projected high was to be 4991 NF. We made it to 4972 so far. I had also pointed out that 4968 was to be a resistance area and I put in a post to book some longs there.

Why didn’t I wait for my target of 4991 ?

It’s only two words. Risk : Reward.
At resistance or supports you evaluate whether you are still getting a good deal out of your position.The lower support was 4951 twenty points away and the target was also 20 points away. So I suggested we take some profits.

The actual support is 4930 NF but the risk reward did not suggest giving the market back 40 points to get a gain of 20 points.Not good business in my opinion.



Estimates for 27th may

Well Manu had requested for a projection as to how nifty would end up tomorrow.
Based on the excel calculations in the post above the range works out to 4991 on the higher side and 4825 on the lower side.
Now for the open interest tables :
Oi1 Nifty Expiry
It’s self expanatory you can see a clear movement in the smart money towards the 5000 strike.
I have also put up the open Interst for the month of June just to back up the claim.
So are we looking at an expiry closer towards 5000 in the range 4880-4995.
Well that’s what the charts above seem to tell. They have been right for the past three months, off by only 5-15 points.
So an expiry at 4980-4995 is predicted.
Just when I thought I’ll close the post, I got a hunch about checking the above data through market profile.
So here goes :
Niftymonth Nifty Expiry
The blue lines represent the value area of the month.
The chart is a 60 min profile chart of the Nifty Future for the May Expiry starting from the friday of last month up upto today.
As you can see the largest volume has occured at 5004 for this expiry.
I’m going to shut right here and be back tomorrow with the same chart.
Something very interesting just happened.
All the best for tomorrow.


Nifty Expiry

The markets have moved between 4855 and 4887, two of the pivots we identified yesterday.Refer to this.

The move which we were waiting for yesterday, has materialized today.Never mind.

I was clear that a break of 4824 did not present a good risk-reward opportunity for a short in the short term.

I’ll post some short term charts shortly.



Trade Alert : Nifty

Description : Buy Nifty

Price : Above 4891

Sl : 4870

Target : 4922



On the downside 4844 needs to be protected today by the bulls.



The market is not efficient; however, the mechanism
for establishing the current trade-able price.


Those who followed out positive bias call from Friday afternoon should be a happy lot, by this morning.

We are at 5000 Nifty spot levels at the time of this post.

I see a possibility of a move down to 4954 Nifty spot, from where buying should re-emerge back to these levels and more.

Alternatively if we drift here for a few more hours, without going down, then we can see 5066 Nifty spot by tomorrow itself.So 4954-5003-5066 are my pivots ( all Nifty spot).

There is a problem with the mail delivery system due to which some mails have failed.We are working on it.
Appreciate your patience.


Here is the email which was sent out last night. The link is to 4shared.

Sending across a power-point presentation on Market profile.

I am not the original author of this file, but it has been with me for such a long time that I have forgotten the person who had sent it to me.It’s now yours and the first step to understand the role of profile in charting.

This presentation covers most of the theory behind implementing the system and a solid understanding of this would help you in getting a foothold in this system of trading.

There has been suggestions that we provide another platform for the questions related to this topic. We already have a great platform at the blog and you are welcome to ask your questions over there in the comments section.Those with further doubts can correspond through email as well.

During the course of the next few weeks we will examine all the material in detail together with real time charts of our very own Nifty.

The link :



5026 NF is temporary halt and place for booking some longs from lower levels. At the moment, this upmove is safe above 4998 NF.

If it continues towards 5066 Nifty spot levels, then it presents an excellent opportunity to buy into some shorts with good risk : reward ratio.


Break of 4972 NF to be watched.Should bring 4945 NF or our 4954 spot from morning.


Aggresive trade :

Buy Bank Nifty at current levels ( 9125-9135)

Sl 9090

Target : will update


Bank Nifty aggressive trade stop hit.

Make an exit.

Saw 9170 after my entry at 9126


Estimates for today

I am just returning to my inbox after a two day hiatus from the markets and am overwhelmed with the volume of mail I have received for the newsletter and the market profile study material.

To those who have written to me about their views, I will respond to each and every query of yours.

This blog is always been about you. Infact you will not find a profile of me or Viren or what we have done.It’s not important as we are more about the difference we can do to you rather than what we are or were in the past!

I knew that we had a silent majority of observers out there. I too was a silent observer when I was learning the ropes, silently going through blogs, never once appearing in the comments section and hoping that somebody else would ask that question for me.The blog would always be a means of communication and a real-time network between all of us, but the emails would be for you to step out, ask questions and seek answers.

We decided against the open link, as a one-time download will not help you understand the subject ( which is huge) or have doubts. Instead we will look at one aspect every week, give you the opportunity to ask questions and move along as a group searching for real time situations of the study during the week.We are ready to roll-out the first study tonight.

About the newsletter, Viren is just finishing with a training program and would be free shortly to start work on that.Look forward to that one.

Last week if you had followed our views in this post here, you would be a happy man today.

For the week ahead, let’s look at the same chart updated :

Nifty 231 Housekeeping/ Next Week Nifty

This recent downmove began when the intermediate seller showed up at 5060 levels Hence 5060 has to be taken out by the bulls for a reversal to happen. Above 5060 you can get a quick move to 5162-5172 levels where a pause and a rethink are in order.Before we get to these levels though, the first hurdle is at 4955-69 followed by 5010-5015.

On the downside, 4887-4870 are important supports followed by 4824.A close below 4824 you can expect 4660 levels immediately.

Hull moving average :

Viren has suggested that those using sma’s and ema’s in their charts move to HMA or Hull moving average.The Hull Moving Average eliminates lag and makes the average more responsive to current price activity whilst maintaining the curve smoothness. I will post charts about the advantage of HMA v/s EMA and SMA in my next post. Till then..


Housekeeping/ Next week Nifty

I’ve had a delayed start to my day today…

From the comments posted, I presume that there is a problem with Blogger, so I hope all goes through well.

Anyways I’ll keep posting the market action as I see it from now on.



Description : Buy Axis bank
Cost : 1197
Sl : 1187
Target : 1211, 1233.



Axis bank at target 1. @ 1211 now.

Book out 50 % and bring SL of  balance to cost at 1197.



24 points above my buy point in Axis bank, my broker is asking me to look at Axis bank,now at 1220 for a buy spot.
I told him to check Vtrender. We called it at 11.34. LOL.



Axis bank @ 1227 and running into resistance a little before our 1233 level.

I suggest booking these 30 odd points we have made here as the larger market is also at resistance.Those who want to hold can do so with SL below 1210.


Nifty spot struggling at VAL 4957 for past several mins.

Odds of a move down increasing. Watch on at 4926 NF for a confirmation.


A very noisy last 30 mins of trade.More often than not it is designed to take out a few technical analyst presumptions or to ramp up volume in a dull day.

In  Mp it is the least important of all the other half hour time frames.

Hope you had a good day.




The action this morning is between 4987 and 5020 levels we have discussed often from early this week.

The gap down open  has come in contrast to the close yesterday, quite simply because it is outside of range and value.

This points to the presence of inter-mediate term selling activity which does not give me confidence that 4987 will be held.So Viren’s level of 4882 will play out.

I’ll keep you posted.

Update at 11.00 am.

The high low so far is 5019-4988 within one point each of our pivots at 4987 and 5020.

I’m on the sidelines waiting for a resolution.

Though my bias is slightly to the short side I will not hesitate to buy above 5022 for 5044 and 5067.

Update at 12.10.

Though 4987 has been breached, I have not put out a short alert.

Not confident with the volume action here.

Let the market prove itself .

At 12.30.

Vindicated. 5012 now.

But the market will have to do a lot more than these 25 points to give me confidence.


Long at 4987. SL 4974. target 5020-5044.

High Risk. Intra.

5006 Now.

Still high risk. Bringing Sl to cost.

Will be comfy above 5022.


Out of position at 5008


Waited all morning for this move. Missed it.

4955 will be the first port of call.

New positional shorts initiated between 4955 and 4965. Will add on bounces.

Intra shorts can book out here around 4925-32 partially.

Viren’s pivot level mentioned in the post above is 4887 not 4882.We  may get there today.


4905 low of day so far. 4887 is what we want. 18 points away now.
Seemed distant in the morning. Not now.

15: 16

4901 is the low of the day and 14 points away Viren’s 4887.

I closed some shorts at 4910 and will look to re-initiate them at higher levels.

Hope you all had a good trading day.


Estimates for today