Trading Strategies
Using Market Profile Structure
Created by: Diana Pena
Trading Strategies
1. Tag, Bounce and Go – Long Trade
2. Tag, Bounce and Go – Short Trade
3. Poor High / Trapped Longs – Short Trade
4. Poor Low / Trapped Shorts – Long Trade
5. Look Above and Fail – Short Trade
6. Look Below and Fail – Long Trade
7. One Time Framing Up – Long Trade
8. One Time Framing Down – Short Trade
9. Front Running a Level – Reversal Trade
10. Using Single Prints as Reference
11. Gap Rules
Entry:
12. Balance Rules
Stops:
Targets:
Created by: Diana Pena
Tag, bounce and go | Long Trade
•
When a TPO period goes to a very visual
reference.
•
The reference is tagged to the tick.
•
Then price bounces off that reference and
reverses.
What to Look For:
•
A Low was not able to take out the Overnight
Close.
•
Selling shuts off as the level gets tagged.
•
They begin to build a position above that
reference, but don’t tag it again.
Structural Targets in this example:
•Previous Day High
•Overnight High
• T+2 High / Low of Single Prints
•High of Single Prints
Created by: Diana Pena
Tag, Bounce and Go | Long Trade
Trade example – Long
MGI: Selling shuts off, A Low was not able to take out the Overnight Close
• Structural Entry: Between the Open and T+2 Close
• Structural Stop: Overnight Close
• Structural Targets: Previous Day High, Overnight High, T+2 High. The
top of the Single Prints
Position
Built
Selling
shuts off
Open
Tag, bounce
and go - Long
Created by: Diana Pena
Tag, bounce and go – Short Trade
•
When a TPO period goes to a very visual
reference.
•
The reference is tagged to the tick.
•
Then price bounces off that reference and
reverses.
What to Look For:
• B high was not able to get inside the single prints
• Buying shuts off as the level gets tagged.
• They begin to build a position below that reference,
but don’t tag it again.
Structural Targets in this example:
• Overnight High
• Previous Day High
• Previous Day Open/ T+2 Close
• Overnight Close
• Previous Day POC
• Overnight Vol. Value Area Low
Created by: Diana Pena
Tag, Bounce and Go – Short Trade
Trade example – Short
MGI: Buying shuts off, B high was not able to get inside the single prints
Tag,
bounce and
go - Short
• Structural Entry: At/below B period Open
• Structural Stop: At B high which was also Low of single prints
• Structural Targets: Overnight High, Previous Day High, Previous Day
Open/ T+2 Close, ON Close, Previous Day POC, ON Vol. Value Area Low.
Created by: Diana Pena
B period
Open
Buying
shuts off
Position
Built
Poor High/Trapped Longs | Short Trade
•
A Poor High means that a daily/Overnight TPO
range has less than two ticks of excess at its high.
•
A Poor High indicates that there are weak longs at
that high’s level.
What to Look For:
• Buying shuts off and price moves away fast from the
poor high as there are trapped longs at a poor location
(Poor High = Poor Long Entry Location = Trapped Longs).
•This gives an opportunity for a short trade with a
Structural Stop 2 Ticks above the Poor High.
• If the poor high is revisited during a subsequent period
or the next day, there are strong odds that it will break
and move higher.
Structural Targets in this example:
• Previous Day Close
•Overnight Close/Previous Day VPOC
•Overnight Half/ A Low
•Previous Day Half
•T+2 High
Created by: Diana Pena
Poor High/Trapped Longs | Short Trade
Poor High –
Only 1 Tick of
Excess
Trade example – Short
MGI: Poor High = Trapped Longs due to
poor entry. Unable to find acceptance above
the Overnight Open 5 periods in a row.
• Structural Entry: When price came
back inside D period. If waiting for F
period At the ON Open or 1 tick below the
ON Open.
• Structural Stop: 2 Ticks above the
Poor High. If short taken in F period stop
at D high.
• Structural Targets: Previous Day
Close, Overnight Close/Previous Day
VPOC, Overnight Half/ A Low, Previous
Day Half, T+2 High.
Created by: Diana Pena
Buying
shuts off
Position
Built
Poor Low/Trapped Shorts | Long Trade
•
A Poor Low means that a daily/Overnight TPO
range has less than two ticks of excess at its low.
•
A Poor Low indicates that there are weak shorts at
that low’s level.
What to Look For:
• Selling shuts off and price moves away fast from the
poor low as there are trapped shorts at a poor location
(Poor Low = Poor Short Entry Location = Trapped Shorts).
•This gives an opportunity for a long trade with a
Structural Stop 2 Ticks below the Poor Low.
• If the poor low is revisited during a subsequent period or
the next day, there are strong odds that it will break and
move lower.
Structural Targets in this example:
• Previous Day Open
•Overnight Open
•Volume Value Area Low
•T+2 ½
•T+2 Close
•Previous Day High
Created by: Diana Pena
Poor Low/Trapped Shorts | Long Trade
Trade example – Long
MGI: Poor Low = Trapped shorts due to poor
entry. I and J periods are unable to go below the
Previous Day Close.
• Structural Entry: When price backed away
frontrunning the Previous Day Close by 1 tick
forming a Poor low within I and J periods.
• Structural Stop: 1 tick below Previous Day
Close, which would be proper excess low if
taken out.
• Structural Targets: Previous Day Open,
Overnight half, I high, Volume Value Area Low,
T+2 half, T+2 Close, Previous Day High.
Position
Built
Poor Low =
Trapped Shorts
Created by: Diana Pena
Look Above and Fail | Short Trade
•
When a TPO period goes Above a very visual
reference, but fails to find acceptance above it
reversing back inside said reference, in this
case the Overnight High.
•
A look above and fail is a Stop Run. In this case
they take out the short’s stops that are set
above the Overnight High.
•
What to Look For:
• Quick Stop Run above a very visual reference.
• Price fails to find acceptance above that reference.
• Buying shuts off and price comes back below that
reference.
Structural Targets in this example:
• Volume Value area high
• A period high
• Overnight Close (C period OTFD)
• Previous Day High (D Period OTFD)
* OTFD = One Time Framing Down
Created by: Diana Pena
Stops above
ON High
Look Above and Fail | Short Trade
Look Above and
Fail
Trade example – Short
MGI: B period goes above the Overnight
High, but fails to find acceptance above it
reversing back inside the Overnight High.
• Structural Entry: Below the Overnight
High
• Structural Stop: At B period High
• Structural Targets: Volume Value
Area High, A period high, Overnight
Close, Previous Day High.
Created by: Diana Pena
Buying
shuts off
Look Below and Fail | Long Trade
•
When a TPO period goes Below a very visual
reference, but fails to find acceptance below it,
reversing back inside said reference, in this case the
Previous Day Low.
•
A look below and fail is a Stop Run. In this case they
take out the long’s stops that are set below the
Previous Day Low.
•
What to Look For:
• Quick Stop Run below a very visual reference.
• Price fails to find acceptance below that reference.
• Selling shuts off and price comes back above that reference.
Structural Targets in this example:
• Previous All Time High
• Previous Day ½
• Previous Day Close
• T+2 Close (as D period fails to close the single prints from C)
•Previous Day High (as E period fails to close the single prints
from D)
•T+2 High (as G period fails to go below Previous Day High)
Created by: Diana Pena
Look Below and Fail | Long Trade
Trade example – Long
MGI: A and B periods go below a the
Previous Day Low, but fails to find
acceptance below it, reversing back inside
the Previous Day Low.
• Structural Entry: Above the Previous
Day Low
• Structural Stop: Below Previous Day Low
or at A period low.
• Structural Targets:
Previous All Time
High, Previous Day ½, Previous Day Close, T+2
Close, Previous Day High, T+2 High.
Position
Built
Created by: Diana Pena
Look below and
Fail
Using Single Prints as Reference
•
Single Prints are a gap during the trading session.
They happen between periods when a section of a
Market Profile distribution is only one TPO Wide.
•
Single Prints represent emotional Buying/Selling, and
they could be considered as potential support or
resistance points.
What to Look For:
•
A period opens leaving single prints behind on the
previous period.
•
•
In this case D period opened at C high and it only filled 2
singles from C period.
If single Prints are present and not filled, they can
serve as support, which they did twice in this
example.
Structural Targets in this example:
• Previous Day VPOC
•Previous Day Volume Value Area High
•Previous Day High
•T+2 High
Created by: Diana Pena
Using Single Prints as Reference
Trade example – Long
MGI: D Period opens at C high and it
only filled two of the single prints left in C
period. Then D period Takes out the
Previous Day Open and the T+2 Close. E
Period Opened at D high, it tried to filled
the singles, but it was not able to. We
have also done a Look Below and Failed
in A and B periods, and we were OTFU.
• Structural Entry: At
Previous Day Close/Open.
• Structural Stop: At D
low/Previous Day Close
• Structural Targets: Previous
Position
Built
Day VPOC, Previous Day Volume
Value Area High, Previous Day
High, T+2 High.
B failed to take
out A low
Created by: Diana Pena
Balance Rules
Balance Rules can be used for daily as well as
intraday reference.
A balance day occurs when a session or sessions
finish inside the previous session’s range. Likewise,
a balance period occurs when a TPO period finishes
inside the previous 30 minutes period.
Balance areas are traded based on a breakout or a
breakout fail.
What to Look For:
• If we breakout of the balance area, we want to see
price acceptance.
• If we get price acceptance then we go with the
direction of the break.
• If we fail to find acceptance then the trade becomes a
reversal trade to the opposite direction of the break.
Structural Targets in this example:
•T+2 High
• T+2 Open/Previous Day High
•T+2 Close/Previous Day VPOC
Created by: Diana Pena
Balance Rules
Trade example – Short
MGI: C period is balanced inside B
period. C is unable to take out B high, and
D is unable to take out C high. Then D
period takes out C low by more than two
ticks.
• Structural Entry: When D is
unable take out C high and it reverses
to the downside.
• This example is at an All Time
High and we do not have many
levels as reference, so we have
to use the periods at the high as
reference.
• Structural Stop: At C or B high.
• Structural Targets:
T+2 High,
T+2 Open/Previous Day High, T+2
Close/Previous Day VPOC
Created by: Diana Pena
C is a balance Period
inside B.
11/24/20
Volume Value
Area High
D takes
out C low
Position
Built
One Time Framing Up | Long Trade
•
One Time Framing up is when in an Up-Trend the low
of the previous period is not broken by two ticks or
more.
•
One Time Framing can also be supported by single
prints. Single Prints are a gap during the session, and
when not filled they can serve as support or
resistance.
•
In this example, the single prints are working as support as
price moves higher.
What to Look For:
•
The low of the previous period is not broken by two
ticks or more.
•
If single Prints are present and not filled, they can
serve as support.
Structural Targets in this example:
• Overnight Open
•T+2 ½, Previous Day ½, Overnight High
•Previous Day Close, Previous Day Open, T+2 Close
•Previous Day High
•T+2 High
Created by: Diana Pena
One Time Framing Up | Long Trade
Trade example – Long
MGI: B period fails take out A low
by two ticks or more. A and B
periods go below a the Previous Day
Low, but fails to find acceptance
below it, reversing back inside the
Previous Day Low.
• Structural Entry: Above
•
the Previous Day Low/ Previous
ATH.
Structural Stop: Below
Previous Day Low or at A period
low.
• Structural Targets:
Overnight Open, Overnight High,
Previous Day Close, T+2 Close,
Previous Day High, T+2 High.
Position
Built
B failed to take
out A low
Created by: Diana Pena
One Time Framing Down | Short Trade
•
One Time Framing Down is when in a Down-Trend
the high of the previous period is not broken by two
ticks or more.
•
One Time Framing can also be supported by single
prints. Single Prints are a gap during the session, and
when not filled they can serve as support.
•
In this example, the single prints are working as support as
price moves higher.
What to Look For:
•
The low of the previous period is not broken by two
ticks or more.
•
If single Prints are present and not filled, they can
serve as support.
Structural Targets in this example:
• Previous Day Close
•Overnight Close/Previous Day VPOC
•Overnight Half/ A Low
•Previous Day Half
•T+2 High
Created by: Diana Pena
One Time Framing Down | Short Trade
Poor High – Only
1 Tick of Excess
Buying
shuts off
Trade example – Short
MGI: E period starts OTFD and it takes out the
stops below D, C, B periods. F period is an
inside/balanced period, G breaks F low by more
than two ticks. We also have a Poor High = Trapped
Longs due to poor entry. And we were unable to
find acceptance above the Overnight Open 5
periods in a row.
• Structural Entry: We can use the Poor High
Strategy and follow through as we start OTFD,
Trailing our stop as price moves down, or taking
some profits as price moves down.
• Structural Stop: 2 Ticks above the Poor High.
If short taken in F period below the Overnight
Open, then stop at D high.
• Structural Targets: Previous Day Close,
Overnight Close, Overnight Half/ A Low, Previous
Day Half, T+2 High.
Created by: Diana Pena
Position
Built
One Time
Framing
Down
OTFD and Single
Prints
Front Running a Level | Reversal Trade
•
When a TPO period goes towards a very
visual reference, but it doesn’t touch it
•
The reference is missed by 1 tick or more.
•
Then price bounces off right before
touching the reference.
What to Look For:
• C period goes to a very visual reference T+2 Close but
it front-runs it by 1 tick.
•Price quickly reverses as selling shuts off.
•They begin to build a position above that reference,
but don’t tag it.
Structural Targets in this example:
•T+2 High
• A Low
•B Low
•Overnight Close / Overnight ½
•Overnight Open
Created by: Diana Pena
Front Running a Level | Reversal Trade
Trade example – Long
MGI:
C period goes to a very visual
reference T+2 Close but it front-runs it by 1
tick. Price quickly reverses as selling shuts
off.
Structural Entry: At or above
Overnight Low.
Structural Stop: At C low.
Structural Targets: T+2 High, A Low,
B Low, Overnight Close / Overnight ½,
Overnight Open.
Position Built
Selling shuts off
Level is Front
Ran by 1 tick
Created by: Diana Pena
Gap Rules
Gap rules are guidelines that can be used when the
Regular Trading Session opens outside of the
Previous Day Range.
1. If the gap doesn’t fill right at the open, go with the direction
of the gap.
2. Larger gaps are usually harder to fill on the first day.
3. If the gap fills, but price cannot get into overlapping value,
we have higher odds of a late day rally (on a gap up) or late
day selloff (On a gap down)
What to Look For:
• If we fail to completely fill the gap, then we can look at taking a
reversal trade, towards the direction of the gap.
• In this example - B period looked inside the gap and failed. So,
we go with the direction of the gap again.
• In this example - The gap and early single prints in B and C
periods, indicate selling is shut off and we have strong long
opportunities.
Structural Targets in this example:
• Current Session Open
•VPOC from 11/18/20
• The Poor High from 11/18/20
Created by: Diana Pena
Gap Rules
Trade example – Long
MGI: In this example - B period looked
inside the gap and failed. So, we go with the
direction of the gap again. The gap and
early single prints in B and C periods,
indicate selling is shut off and we have
strong long opportunities.
Structural Entry: When A period
Front ran 11/18 Volume Value Area Low or
When B period Looked inside the Gap and
failed coming back above it
Structural Stop: If long after A period
reversal, then Stop at A low. If Long take
when B period came back above the Gap,
then Stop at B low.
Structural Targets:
Current Session
Open, VPOC from 11/18/20, The Poor High
from 11/18/20.
Created by: Diana Pena
15 handles/points
Gap
Position Built