It takes time to build structure. Thus, while the Profile structure reveals a lot, the sheer fact that time must transpire suggests that fundamental changes occur in the market before they are revealed by structure. Structure acts as the market's translator, and translated information is second-hand information. The market has already spoken in the form of time and logic. Traders who rely exclusively on structure without integrating time and logic will be late in entering and exiting the market.
Later recognition leads to later entry and exit, which in turn leads to less desirable trade location. For example, range extension (structure) confirms that other timeframe buyers have entered the market. But when did they enter the market? If we rely solely on structure, we do not realize the other timeframe buyer's point of entry until the point of range extension, that is, when price is on the day's high. Buying the high results in poor trade location.
In many cases, it is possible to know that buyers are assuming control before the actual structural confirmation (range extension) through an understanding of market time and trading logic.
Trading based on structure provides the greatest level of comfort and confidence, for there is obvious proof on which to base a decision. The more information we have in our favor, the more comfortable we are with a trade. Unfortunately, visible information and
opportunity are inversely related. The more structural information present, the less an opportunity still exists. Thus, if a trader waits for too much information, chances are good that the real opportunity has been missed. If all the evidence is present and visible, then you are far from the first to have acted on it and probably have poor trade location.
Although the Market Profile is best known for the Profile graphic, or structure, experience has shown that understanding the influence of time and trading logic is more important to reaching a holistic view of the marketplace. Putting hi the extra effort to fully understand the building blocks of structure—market time and trading logic—will better prepare traders to anticipate and take
advantage of trading opportunities as they develop, not after they have passed.
Summary: Logic creates the impetus, time generates the signal, and structure provides the confirmation.
Later recognition leads to later entry and exit, which in turn leads to less desirable trade location. For example, range extension (structure) confirms that other timeframe buyers have entered the market. But when did they enter the market? If we rely solely on structure, we do not realize the other timeframe buyer's point of entry until the point of range extension, that is, when price is on the day's high. Buying the high results in poor trade location.
In many cases, it is possible to know that buyers are assuming control before the actual structural confirmation (range extension) through an understanding of market time and trading logic.
Trading based on structure provides the greatest level of comfort and confidence, for there is obvious proof on which to base a decision. The more information we have in our favor, the more comfortable we are with a trade. Unfortunately, visible information and
opportunity are inversely related. The more structural information present, the less an opportunity still exists. Thus, if a trader waits for too much information, chances are good that the real opportunity has been missed. If all the evidence is present and visible, then you are far from the first to have acted on it and probably have poor trade location.
Although the Market Profile is best known for the Profile graphic, or structure, experience has shown that understanding the influence of time and trading logic is more important to reaching a holistic view of the marketplace. Putting hi the extra effort to fully understand the building blocks of structure—market time and trading logic—will better prepare traders to anticipate and take
advantage of trading opportunities as they develop, not after they have passed.
Summary: Logic creates the impetus, time generates the signal, and structure provides the confirmation.
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