1

Market Profile

A WEBINAR BY JAY CHANDRAN, A TRADER

WITH 13 YEARS OF EXPERIENCE IN
DAY-TRADING NIFTY AND BANK NIFTY
FUTURES USING MARKET PROFILE AND
PRICE ACTION

JC Trading
 2
 I am Jay Chandran, but the Twitteratti loves to call me
NiftyWizard
 Based out of the South Indian city of Puducherry
 A trader with 13 years of experience in day-trading index
futures – Nifty and Bank Nifty
 Primarily use two tools – Market Profile and Price Action
 Self-taught trader, but still a learner from the market
 Other businesses include agriculture, rice mills and others
 Love meeting people and visiting places – offers huge learning
in life
 Objective in life is to give back to the society

About me  Believer of karma!

 3
 Every trader should make his own hallmark on one system
and practice it – they should not jump from one system to
another.
 Jay follows Price Action along with Market Profile and
Volume Profile.
 Our webinar will focus more on Market Profile and
Volume Profile – at the basic level.
 What is Market Profile.
It is not a ’trading system’. It is a window to observe
the market’s auction process
 Since Market Profile and Volume Profile are not trading
systems, we use Price Action along with them to design
Market Profile our trades.
 4

 Market Profile is not a trading system. Use it along with

your trading system.
 There is no greater indicator of what the market is doing
than the market itself.
 It is a decision-making tool to support your system and
signals.

Market Profile
 5
 Now we will discuss Opening Types. There are four types:
 Open drive
 Open test drive
 Open rejection reverse
 Open auction
 inside range
 outside range
 We will focus on open types for intraday trading
 On any day, price can open either:
 Within yesterday’s value area
Market Profile –  Outside (above or below) yesterday’s value area

for intraday  In Market Profile, we will observe both price and value together
Price should always be seen with respect to value
 Open is within value area means, price is accepted in that value area. If not,
price is rejected by that value area and a new value area is going to form.
 6

 Price opens above or below the previous day’s value area

 Price proceeds unidirectional without any retracement.

Open drive
 7

 After the open, price tests in one direction.

 Then it sharply turns around and drives in the opposite
direction.

Open test drive

 8
 Open auction in range (OAIR) – Price opens inside the
previous day range and rotates around the opening (bottom
chart).
 Open auction outside range (OAOR) – Price opens outside
the previous day range and rotates around the opening (left
chart).

Open auction
 9

 Days when the profile shape is a ‘P’ [capital letter, P] are

short-covering days.
 The letter A or B forms at the bottom, with single prints in
the initial-balance range.
 Price opens at the bottom of the profile.
 Price rotations happen at the top of the profile (i.e., in the
range-extension area).
 Indicates a short-covering rally.
 At times, such days could be a combination of old business
exiting shorts and new money stepping in.
Profile
shapes – P
 10

 Days with profiles shaped as ‘b’ [small letter, b] are long-

liquidation days.
 The letter A or B forms at the top, with single prints in the
initial-balance range.
 Price opens at the top of the profile.
 Price rotations happen at the bottom of the profile (i.e., in
the range-extension area).
 Days like these indicate long liquidation – old money
exiting their longs.
Profile
shapes – b
 11
 New traders begin with following TV, books and Twitter
traders. But they are wrong sources.
 Following them is not wrong – but blindly following them is.
 New traders should design their own system based on
learnings from books and expert traders.
 Most of you have followed me.
But your learning will improve only if YOU practice
trading, NOT when you follow me or my trades.
 Traders fail because of lack of learning and practice.
 This webinar will provide you learning – practice is your
responsibility.
 In summary, traders will avoid failure if they work hard!
Trading failure
 12
 Better to discuss more about trading failures than trading
successes.
 We will discuss more about trading personality than trading
today
 We will discuss nine rules that bring trading failure
 Money focus
 Revenge trading
 Disrespecting risk
 Excessive optimism
 Wanting to be right than profitable
 No proper trading system
 Random trades

Trading failure 


Ignoring one’s trading personality
Following many systems, traders and methods
 T
13
 Focusing only on money
 Money making is important, but it is a by-product of the
trading process; it is not the end in itself
 If you focus on result, you miss the process
 But the real focus should be on the trading process, not the
result
 Need to recover old losses
 It leads to one of the worst enemies of a trader
 That is revenge trading
 The market is too big a beast to take a revenge; would you
take a revenge with a gorilla?
 Not respecting risk

Trading failure 


Would you ignore signals on the road?
The result is what similar when you ignore risk in markets
  Want to win on all trades 14
 Market is an ocean of opportunities
 A mind that seeks to pick up all opportunities will
miss the most
 Focus on the best opportunities to benefit
 Avoid the opportunities that are very risky
 Need to be right before crowd
 When making money is the real job, that is where
focus should be
 If you get into the game of being right, you will
always be wronged by the market
 No proper trading system
 Can you do a business without fixed assets?

Trading failure  A trading system is your fixed asset.

  Want to win on all trades 15
 Market is an ocean of opportunities
 A mind that seeks to pick up all opportunities will
miss the most
 Focus on the best opportunities to benefit
 Avoid the opportunities that are very risky
 Need to be right before crowd
 When making money is the real job, that is where
focus should be
 If you get into the game of being right, you will
always be wronged by the market
 No proper trading system
 Can you do a business without fixed assets?

Trading failure  A trading system is your fixed asset.

  Random trades 16
 Random trades show that a trader’s mind is not
organised
 They show he/she does not have clarity of thought
 Do you know any work that is good without clarity of
thought?
 Not know your trading personality
 Trading is a game between ‘you’ and ‘the market’
 Amateurs look at understanding the market
 Pros look at ‘you’ and ‘the market’
 Following many
 Amateurs think following many trading systems, many
expert traders, many books et al is key

Trading failure  Pros know whom and what to follow!

 17
Thanks

Happy Trade